Pioneer Group Inc – ‘PREM14A’ on 6/23/00

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     The Pioneer Group, Inc.                              247   1.21M 

Document Table of Contents

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SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT 

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 

FILED BY THE REGISTRANT [X]       FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
--------------------------------------------------------------------------------

Check the appropriate box:                                                      
[X] Preliminary Proxy Statement                                                 
[ ] Confidential, for Use of the Commission Only (as permitted by Rule          
14a-6(e)(2))                                                                    
[ ] Definitive Proxy Statement                                                  
[ ] Definitive Additional Materials                                             
[ ] Soliciting Material Pursuant to Rule 14a-12                                 

THE PIONEER GROUP, INC. 
(Name of Registrant as Specified In Its Charter)

N/A 
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):                              
[ ] No fee required.                                                            
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.    

1) Title of each class of securities to which transaction applies: The    
Pioneer Group, Inc. Common Stock                                    

 2) Aggregate number of securities to which transaction applies: 29,019,546,
of which 26,821,182 shares are currently issued and outstanding and 
2,198,364 shares are issuable pursuant to employee benefit plans    

  3) Per unit price or other underlying value of transaction computed pursuant
      to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
    calculated and state how it was determined): $43.50, which is the merger
  consideration per share to be paid in the merger of The Pioneer Group,
Inc. with a subsidiary of UniCredito Italiano S.p.A.                

4) Proposed maximum aggregate value of transaction: $1,227,274,021*       

5) Total fee paid: $245,455                                               

[ ] Fee paid previously with preliminary materials.                             

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 
0-11(a)(2) and identify the filing for which the offsetting fee was paid
  previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                     

1) Amount Previously Paid:                                                

2) Form, Schedule or Registration Statement No.:                          

3) Filing Party:                                                          

4) Date Filed:                                                            
--------------------------------------------------------------------------------
* Proposed maximum aggregate value of transaction assumes the exercise of       
options to purchase 2,141,406 shares of common stock of The Pioneer Group,  
Inc. being exercised at the average weighted exercise price of $16.38 per   
share.                                                                      

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[PIONEER LOGO]

JULY  --, 2000

Dear Stockholder:                                                               

   You are cordially invited to attend a special meeting of the stockholders
of The Pioneer Group, Inc. to be held at Hale and Dorr LLP, 26th floor, 60 State
Street, Boston, Massachusetts 02109, on August --, 2000 at --, local time.      

   At the special meeting, you will be asked to adopt and approve the merger
agreement between The Pioneer Group, Inc. and UniCredito Italiano S.p.A. and the
proposed merger of Pioneer and a wholly-owned subsidiary of UniCredito, pursuant
to which Pioneer will become a wholly-owned subsidiary of UniCredito.           

   If stockholders of record holding a majority of the outstanding shares of
our common stock adopt and approve the merger agreement and the merger and the  
merger is consummated, stockholders of record on the effective date of the      
merger, other than stockholders who perfect appraisal rights, will receive a    
cash payment of $43.50 for each share of Pioneer common stock. In addition,     
immediately prior to the effective time of the merger, Pioneer will distribute  
to its stockholders all of the outstanding common shares of Harbor Global       
Company Ltd., a newly formed entity which will own certain of Pioneer's current 
businesses.                                                                     

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
MERGER.                                                                         

   The attached proxy statement provides detailed information concerning the
special meeting and the proposed merger. Please read these materials carefully. 
Your vote is very important. Whether or not you plan to attend the special      
meeting, I urge you to complete, date, sign and promptly return the enclosed    
proxy card to ensure that your shares will be voted at the meeting. The proposed
merger will only be completed if it is approved by the affirmative vote of      
Pioneer stockholders holding a majority of the outstanding shares of Pioneer    
common stock. If you fail to return your proxy card and do not vote in person at
the special meeting, the effect will be the same as a vote against the merger   
agreement and the merger.                                                       

    On behalf of the Board of Directors, I thank you for your support and urge
you to vote FOR adoption and approval of the merger agreement and the merger.   

      Sincerely,

                  /s/ John F. Cogan, Jr.

              John F. Cogan, Jr.

                                  President, Chief Executive Officer and
                 Chairman of the Board

THIS PROXY STATEMENT IS DATED JULY  --, 2000 AND IS FIRST BEING MAILED TO       
STOCKHOLDERS OF THE PIONEER GROUP, INC. ON OR ABOUT JULY  --, 2000.             

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THE PIONEER GROUP, INC. 
60 State Street 
Boston, Massachusetts 02109 
(617) 742-7825

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST --, 2000

JULY --, 2000 

  A special meeting of the stockholders of The Pioneer Group, Inc. will be
held at the offices of Hale and Dorr LLP, 26th Floor, 60 State Street, Boston,  
Massachusetts 02109 on August --, 2000 at --, local time, to consider and act   
upon the following matters:                                                     

 1. To consider and vote upon a proposal to adopt and approve the merger
 agreement between The Pioneer Group, Inc. and UniCredito Italiano
      S.p.A., dated as of May 14, 2000, pursuant to which Pioneer will merge
       with a wholly-owned subsidiary of UniCredito Italiano S.p.A. and, among
        other things, each outstanding share of Pioneer common stock, other than
      shares held by stockholders who perfect appraisal rights, will convert
into the right to receive a cash payment of $43.50; and         

    2. To transact such other business as may properly come before the meeting
or any adjournment thereof.                                     

    YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER IS ADVISABLE AND IN
THE BEST INTERESTS OF PIONEER AND YOU AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE  
TO ADOPT AND APPROVE THE MERGER AGREEMENT AND THE MERGER. WE DESCRIBE THE MERGER
MORE FULLY IN THE ACCOMPANYING PROXY STATEMENT, WHICH WE URGE YOU TO READ.      

  If you are a stockholder of record at the close of business on --, 2000,
you are entitled to notice of and to vote at the meeting.                       

We cordially invite all stockholders to attend the meeting.           

                               By Order of the Board of Directors,

                  /s/ John F. Cogan, Jr.

              John F. Cogan, Jr.

                                  President, Chief Executive Officer and
                 Chairman of the Board

July --, 2000                                                                   

YOUR VOTE IS IMPORTANT. TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE       
SPECIAL MEETING, YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN 
TO ATTEND THE SPECIAL MEETING IN PERSON. YOU MAY REVOKE YOUR PROXY IN THE MANNER
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT HAS BEEN    
VOTED AT THE SPECIAL MEETING. YOU MAY VOTE IN PERSON AT THE SPECIAL MEETING EVEN
IF YOU HAVE RETURNED THE PROXY.                                                 

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TABLE OF CONTENTS 

                                                                [Download Table]
                                                                  
Questions and Answers About the Merger......................     1
Summary.....................................................     5
Forward Looking Statements..................................    15
The Pioneer Special Meeting.................................    16
Information About Pioneer and UniCredito....................    19
The Merger..................................................    21
The Merger Agreement........................................    59
Relationships and Transactions Between UniCredito and             
  Pioneer...................................................    67
Common Stock Market Price and Dividend Information..........    68
Security Ownership of Certain Beneficial Holders and              
  Management of Pioneer.....................................    69
Stockholder Proposals.......................................    71
Where You Can Find More Information.........................    71

ANNEX A -- Merger Agreement.................................   A-1
ANNEX B -- Harbor Global Information Statement..............   B-1
ANNEX C -- Opinion of Merrill Lynch & Co. ..................   C-1
ANNEX D -- Opinion of Salomon Smith Barney Inc..............   D-1
ANNEX E -- Section 262 of Delaware General Corporation            
  Law.......................................................   E-1
ANNEX F -- Voting Agreement.................................   F-1

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QUESTIONS AND ANSWERS ABOUT THE MERGER

                                                                [Download Table]
                                                                 
Q:   WHAT AM I BEING ASKED TO VOTE UPON?                         
A:   You are being asked to vote to adopt and approve the merger 
     agreement between The Pioneer Group, Inc. and UniCredito    
     Italiano S.p.A. and the merger.                             
     If we complete the merger, each share of Pioneer common     
     stock, other than shares held by stockholders who perfect   
     appraisal rights, will convert into the right to receive a  
     cash payment of $43.50. Stockholders of Pioneer will have no
     ongoing ownership stake in the continuing business of       
     Pioneer, which will survive as a wholly-owned subsidiary of 
     UniCredito. See the merger agreement attached as Annex A and
     "The Merger."                                               
     In addition to the cash payment of $43.50, Pioneer will     
     distribute to its stockholders immediately prior to the     
     completion of the merger one common share of Harbor Global  
     Company Ltd. for every five shares of Pioneer common stock  
     held. Immediately after the distribution, all of Harbor     
     Global's common shares will be owned by the former          
     stockholders of Pioneer. See Harbor Global's information    
     statement attached as Annex B and "The                      
     Merger -- Distribution of Harbor Global Interests."         
Q:   WHY IS THE BOARD OF DIRECTORS OF PIONEER AND A SPECIAL      
     COMMITTEE OF THE BOARD OF DIRECTORS RECOMMENDING THE MERGER 
     WITH UNICREDITO?                                            
A:   A special committee of our board of directors and our board 
     of directors have determined that the merger agreement and  
     the merger are advisable, fair to you, and in your best     
     interests. The special committee and our board of directors 
     recommend that you vote to adopt and approve the merger     
     agreement and the merger. For more information on the       
     reasons for the recommendations of the special committee and
     the board of directors, see "The Merger -- Reasons for the  
     Merger."                                                    
Q:   WHAT IS UNICREDITO?                                         
A:   UniCredito is an Italian financial institution based in     
     Milan, Italy. UniCredito is currently the largest banking   
     group in Italy based on market capitalization and the       
     eighteenth largest in Europe in terms of total assets.      
     UniCredito had consolidated total assets of approximately   
     E169 billion ($168 billion) at December 31, 1999, and net   
     income of E1.3 billion ($1.3 billion) for its fiscal year   
     ended December 31, 1999. In addition, through its asset     
     management group of subsidiaries branded EuroPlus,          
     UniCredito is one of Europe's largest and fastest growing   
     asset managers with approximately $80 billion in assets     
     under management at December 31, 1999. See "Information     
     About Pioneer and UniCredito."                              
Q:   IS UNICREDITO'S FINANCIAL CONDITION RELEVANT TO A DECISION  
     TO VOTE IN FAVOR OF THE MERGER?                             
A:   No. UniCredito's obligation to complete the merger is not   
     subject to its ability to pay the consideration for all of  
     the Pioneer common stock. UniCredito has advised Pioneer    
     that it has available cash to pay the merger price. After   
     the merger, you will no longer have any continuing financial
     interest in Pioneer, and you will not receive any interest  
     in UniCredito.                                              
Q:   WHAT WILL I RECEIVE IF THE MERGER IS APPROVED?              
A:   Each share of Pioneer common stock that you own as of the   
     effective date of the merger will convert into the right to 
     receive a cash payment of $43.50. You also will receive one 
     common share of Harbor Global for every five shares of      
     Pioneer common stock that you hold at the time of the       
     merger.                                                     
Q:   WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?              
A:   We are working toward completing the merger as quickly as   
     possible after the special meeting. We must obtain          
     stockholder, client and regulatory approvals first. Our     
     current expectation is that the merger will close in        
     September 2000.                                             

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                                                        [Enlarge/Download Table]
                                                                                                                  
Q:  WHAT IS HARBOR GLOBAL?                                                                                        
A:  In addition to the cash merger consideration, you will also receive one common share of Harbor Global for each
    five shares of Pioneer common stock that you hold at the time of the merger. Harbor Global is a newly formed  
    Bermuda limited duration company owned by Pioneer that will own or operate our businesses and assets that     
    UniCredito is not acquiring. These businesses include Pioneer's Russian gold exploration operations, timber   
    harvesting and sales, real estate management and investment management, and Polish and Eastern European real  
    estate management and venture capital businesses. Harbor Global will liquidate these assets over a five year  
    period, which may, in the discretion of Harbor Global's board of directors, be extended for up to three       
    additional one year periods. Harbor Global will distribute any proceeds from such liquidations, net of        
    expenses and other liabilities, to its shareholders.                                                          
    Pioneer will distribute the common shares of Harbor Global pro rata to Pioneer's stockholders immediately     
    prior to the merger. The receipt of Harbor Global common shares will be taxable to Pioneer stockholders. We   
    currently estimate that we will report for federal income tax purposes that the common shares of Harbor Global
    received in the distribution will have a value of approximately $-- - $-- with respect to each share of       
    Pioneer common stock held at the time of the merger (equating to a value of the Harbor Global common shares of
    approximately $-- - $-- per share). However, the actual value we ascribe to the Harbor Global common shares   
    for federal income tax purposes may differ from this estimate due to, among other things, changes in the value
    of Harbor Global's assets between December 31, 1999 and the date of the distribution and the number of shares 
    of Pioneer common stock outstanding at the effective time of the merger. We will provide you with information 
    regarding the value of the Harbor Global common shares you receive in the distribution. However, this         
    information is not binding on the Internal Revenue Service, which may assert a different (and possibly higher)
    value for the Harbor Global common shares you receive. Accordingly, there can be no assurance as to the exact 
    amount of gain you may recognize as a result of the merger and the distribution, in such a circumstance. The  
    value estimated for tax purposes is not necessarily indicative of the price at which you may be able to sell  
    Harbor Global common shares.                                                                                  
    The Harbor Global common shares are registered with the Securities and Exchange Commission and are            
    transferable. However, there is no current public trading market for Harbor Global common shares, and they    
    will not be listed on a securities exchange or The Nasdaq Stock Market(R). Furthermore, Harbor Global does not
    intend to take any actions to facilitate the development of an active trading market. See Harbor Global's     
    information statement attached as Annex B.                                                                    
Q:  WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES TO ME OF THE MERGER?                                             
A:  In general, we believe you will recognize gain or loss for federal income tax purposes equal to the difference
    between the cash merger consideration and the value of the Harbor Global common shares that you receive and   
    your adjusted basis in your shares of Pioneer common stock. Such gain or loss generally will be capital gain  
    or loss. However, if the receipt of Harbor Global common shares is treated for tax purposes as a separate     
    transaction, it would be a distribution taxable as a dividend at ordinary income tax rates to the extent of   
    our current or accumulated earnings and profits, including earnings and profits resulting from the            
    distribution of such shares. We cannot assure you that the Internal Revenue Service or the courts will not    
    contend that the distribution of Harbor Global common shares is a separate transaction. You may also be       
    required to recognize certain income as a result of holding Harbor Global common shares. We urge you to       
    consult your own tax advisor regarding the specific tax consequences of the merger and the distribution, as   
    well as all tax return reporting requirements, the applicability of federal, state, local and foreign tax laws
    and the effect of any proposed change in the tax laws. For a discussion of certain United States federal      
    income tax consequences of the merger and the distribution of Harbor Global common shares, see "The           
    Merger -- Material United States Federal Income Tax Consequences."                                            

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                                                                [Download Table]
                                                                 
Q:   WHAT IS THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS?    
A:   In March 2000, our board of directors determined that we    
     should actively pursue strategic alternatives for Pioneer,  
     including the possible sale of the company. In order that   
     the consideration of potential bids for the company was free
     from conflicts of interest, the board of directors          
     established a special committee to evaluate any offer for   
     the company and to recommend the acceptance of a bid to the 
     board of directors and Pioneer stockholders. The special    
     committee is comprised of three directors who are not       
     officers of Pioneer.                                        
Q:   WHEN AND WHERE IS THE SPECIAL MEETING?                      
A:   The special meeting will take place at the offices of Hale  
     and Dorr LLP, 26th floor, 60 State Street, Boston,          
     Massachusetts 02109, on August --, 2000 at --, local time.  
     Stockholders of record at the close of business on -- are   
     entitled to notice of and to vote at the meeting.           
Q:   WHAT DO I NEED TO DO NOW?                                   
A:   We urge you to read this proxy statement carefully,         
     including its annexes, consider how the merger affects you  
     as a stockholder and to vote. You also may want to review   
     the documents referenced under "Where You Can Find More     
     Information."                                               
Q:   HOW DO I VOTE?                                              
A:   You can vote in one of the following ways:                  
     - Indicate on your proxy card how you want to vote, and sign
     and mail your proxy card in the enclosed return envelope as 
       soon as possible so that your shares will be represented  
       at the special meeting. If you sign and send in your proxy
       and do not indicate how you want to vote, your proxy will 
       be counted as a vote for adoption and approval of the     
       merger agreement and the merger;                          
     - [Call --, toll-free and vote by telephone, or visit the   
     website www.eproxy.com/-- and vote on the Internet; or]     
     - Attend the special meeting and complete a ballot at that  
       time.                                                     
Q:   IF MY BROKER HOLDS MY SHARES IN "STREET NAME," WILL MY      
     BROKER VOTE MY SHARES FOR ME?                               
A:   Your broker will not vote your shares for you unless you    
     provide instructions on how to vote. It is important,       
     therefore, that you follow your broker's directions on how  
     to vote your shares. Because stockholders of record holding 
     a majority of the outstanding shares of Pioneer common stock
     must adopt and approve the merger agreement and the merger, 
     broker non-votes will have the same effect as votes against 
     adoption and approval of the merger agreement and the       
     merger.                                                     
Q:   MAY I CHANGE MY VOTE?                                       
A:   Yes. You may change your vote at any time before your proxy 
     is voted at the special meeting. You may do this in one of  
     three ways. First, you may send a written notice stating    
     that you would like to revoke your proxy. Second, you may   
     complete and submit a new proxy card. If you choose either  
     of these two methods, you must submit your notice of        
     revocation or your new proxy card to us at our principal    
     office, to the attention of the secretary. Third, you may   
     attend the special meeting and vote in person. Simply       
     attending the special meeting, without voting in person,    
     will not revoke your proxy. If you have instructed a broker 
     to vote your shares, you must follow directions received    
     from your broker to change your vote or to vote at the      
     special meeting.                                            
Q:   SHOULD I SEND IN MY STOCK CERTIFICATES NOW?                 
A:   No. If we complete the merger, we will send you written     
     instructions on how to receive a cash payment for your      
     shares.                                                     
Q:   DO I HAVE APPRAISAL RIGHTS UNDER DELAWARE LAW?              
A:   You are entitled to appraisal rights in connection with the 
     merger if you follow the procedure described under "The     
     Merger -- Dissenting Stockholders' Appraisal Rights." If you
     exercise appraisal rights and follow the specified          
     procedures, you can receive the judicially determined fair  
     value of your shares of Pioneer common stock rather than    
     $43.50 per share.                                           

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                                                                [Download Table]
                                                              
Q:   WHO CAN HELP ANSWER YOUR QUESTIONS?                      
A:   If you have more questions about the proposed merger or  
     would like additional copies of this proxy statement, you
     should contact our proxy solicitor:                      
     D.F. King & Co., Inc.                                    
     77 Water Street                                          
     New York, NY 10005                                       
     [1-800-829-6554]                                         

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SUMMARY 

     This summary highlights selected information from this document and may not
contain all the information that is important to you. To understand the merger  
fully and for a more complete description of the legal terms of the merger, you 
should read carefully this entire document and the documents we incorporate by  
reference. See "Where You Can Find More Information" on page 71. We have        
included page references parenthetically to direct you to a more complete       
description of the topics in this summary.                                      

THE COMPANIES (PAGE 19)                                                         

The Pioneer Group, Inc.                                                         
60 State Street                                                                 
Boston, MA 02109                                                                
(617) 742-7825                                                                  

Pioneer conducts its businesses through three strategic units: Pioneer          
Investment Management, Pioneer International Financial Services and Pioneer     
Global Investments. Pioneer Investment Management includes investment management
and other services for the U.S. registered mutual funds, the offshore funds     
registered in Ireland and private institutional accounts. Pioneer International 
Financial Services includes investment management and financial services        
operations in different parts of the world. Pioneer Global Investments includes 
diversified strategic businesses of international venture capital management and
investing, real estate management and advisory services, timber harvesting and  
sales and gold exploration operations.                                          

UniCredito Italiano S.p.A.                                                      
Piazzo Cordusio                                                                 
20123 Milan, Italy                                                              
011-39-02-88621                                                                 

UniCredito is an Italian financial institution based in Milan, Italy. UniCredito
is currently the largest banking group in Italy based on market capitalization  
and the eighteenth largest in Europe in terms of total assets, with consolidated
total assets of approximately E169 billion ($168 billion) at December 31, 1999  
and net income of E1.3 billion ($1.3 billion) for the year then ended. In       
addition, through its asset management group of subsidiaries, branded EuroPlus, 
UniCredito is one of Europe's largest and fastest growing asset managers with   
approximately $80 billion in assets under management at December 31, 1999.      

THE MERGER (PAGE 21)                                                            

Pursuant to the Agreement and Plan of Merger dated as of May 14, 2000, between  
Pioneer and UniCredito, UniCredito will organize a new subsidiary which will be 
merged with Pioneer. After the merger, Pioneer will be a wholly-owned subsidiary
of UniCredito. Pioneer's directors will not become directors of UniCredito. Each
share of Pioneer common stock, other than shares held by stockholders who       
perfect appraisal rights, will convert into the right to receive $43.50 in cash,
without interest. The merger agreement is attached to this proxy statement as   
Annex A. We encourage you to read it.                                           

DISTRIBUTION OF HARBOR GLOBAL (PAGE 27)                                         

In connection with the merger, Pioneer intends to distribute to its stockholders
of record immediately prior to the effective time of the merger all of the      
outstanding common shares of Harbor Global Company Ltd. This distribution will  
enable you to have a continuing interest in certain of Pioneer's operations in  
addition to receiving the merger consideration. At the time of the distribution,
we expect that Harbor Global's assets will consist primarily of the following   
businesses and assets currently owned or operated by Pioneer:                   

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

- the proceeds from the sale of our Teberebie gold mine in Ghana; and 

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- $25 million in cash.                                                

Harbor Global's liabilities, other than the liabilities of its subsidiaries,    
will consist primarily of certain indemnification obligations to Pioneer, the   
payment to Pioneer of up to $5 million of the proceeds from the sale of the     
Teberebie gold mine, certain funding obligations with respect to the Polish and 
Eastern European real estate management operations and the obligation to make   
payments to some officers or employees of Harbor Global or its subsidiaries or  
employees of Calypso Management, which has agreed to provide services to Harbor 
Global, in connection with the termination of their employment with Pioneer or  
the continuation of their employment with Harbor Global or its subsidiaries.    
Harbor Global will liquidate its assets over a five year period, which may, in  
the discretion of Harbor Global's board of directors, be extended for up to     
three additional one year periods. Harbor Global will distribute any proceeds,  
net of expenses and other liabilities, to its shareholders.                     

You will receive one common share of Harbor Global for every five shares of     
Pioneer common stock you hold immediately prior to the effective time of the    
merger. Fractional shares of Harbor Global will not be distributed, but Harbor  
Global's distribution agent will aggregate and seek to sell fractional shares,  
and the aggregate net cash proceeds, if any, will be distributed pro rata to    
Pioneer stockholders entitled to a fractional interest. The receipt of Harbor   
Global common shares by Pioneer stockholders will be a taxable distribution to  
Pioneer stockholders. We currently estimate that we will report for federal     
income tax purposes that the Harbor Global common shares received in the        
distribution will have a value of approximately $-- - -- with respect to each   
share of Pioneer common stock held at the time of the merger (equating to a     
value of the Harbor Global common shares of approximately $-- - $-- per share). 
However, the actual value we ascribe to the Harbor Global common shares for     
federal income tax purposes may differ due to, among other reasons, changes in  
the value of Harbor Global's assets between December 31, 1999 and the date of   
the distribution and the number of shares of Pioneer common stock outstanding on
the effective date of the merger. We will provide you with information regarding
the value of the Harbor Global common shares you receive in the distribution.   
However, this information is not binding on the Internal Revenue Service, which 
may assert a different (and possibly higher) value for the Harbor Global common 
shares you receive. Accordingly, there can be no assurance as to the exact      
amount of gain you may recognize as a result of the merger and the distribution,
in such a circumstance. The value estimated for tax purposes is not necessarily 
indicative of the price at which you may be able to sell Harbor Global common   
shares. It is possible that no trading market for the Harbor Global common      
shares will develop. The Harbor Global common shares are registered with the    
Securities and Exchange Commission and are transferable. However, there is no   
current public trading market for Harbor Global common shares, and they will not
be listed on a securities exchange or The Nasdaq Stock Market(R). Furthermore,  
Harbor Global does not intend to take any actions to facilitate the development 
of an active trading market.                                                    

A copy of the information statement included in the registration statement for  
Harbor Global is attached hereto as Annex B. This information statement includes
more information regarding Harbor Global, including certain risk factors. You   
should read the information statement carefully. If Pioneer stockholders adopt  
and approve the merger agreement and the merger, we intend to proceed with the  
distribution of Harbor Global's common shares.                                  

VOTE REQUIRED (PAGE 16)                                                         

Adoption and approval of the merger agreement and the merger require the        
affirmative vote of a majority of the outstanding shares of Pioneer common      
stock. Pioneer executive officers entitled to vote approximately 16.2% of the   
outstanding shares of Pioneer common stock have entered into a voting agreement 
with UniCredito in which they agreed to vote in favor of the merger agreement   
and the merger.                                                                 

BACKGROUND TO THE MERGER (PAGE 21)                                              

In response to the changing nature of the domestic and global investment        
management business, our board of directors retained in February 2000 Merrill   
Lynch & Co. and Salomon Smith Barney Inc. to conduct financial reviews of       
Pioneer's businesses and to advise our board of                                 

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directors on strategic alternatives. Based on their reviews, our board concluded
that Pioneer would require a substantially more significant presence to continue
to compete successfully in the mutual fund industry and that Pioneer's principal
business is likely to be increasingly dominated by large, globally operating    
financial institutions. Because our board of directors did not believe that the 
capital resources necessary to develop such a franchise were available to       
Pioneer, our board of directors determined to actively pursue strategic         
alternatives, including a possible sale of Pioneer. The investment banks advised
Pioneer's board that a sale of Pioneer's investment management operations would 
be significantly facilitated if the investment management business was separated
from the businesses of Pioneer Global Investments and the real estate and       
investment management operations in Russia. During this period, Lens Investment 
Management, LLC, a 4% stockholder of Pioneer, began the solicitation of proxies 
for an alternative slate of directors of Pioneer. Lens announced its intention  
to cause the company to be sold if its nominees were elected.                   

While continuing to consider the alternatives available to Pioneer, the board of
directors established a special committee of independent members of the board of
directors and authorized the investment banks to solicit offers to acquire the  
company. Pioneer undertook an auction process in which it contacted a broad     
range of potential acquirers and allowed such parties to conduct due diligence. 
Pioneer received a significant number of offers for the purchase of its         
investment management business. UniCredito submitted the most favorable final   
offer, and Pioneer entered into negotiation of the merger agreement with        
UniCredito. The special committee evaluated the UniCredito offer in comparison  
to the other offers for Pioneer as well as to Pioneer's other strategic         
alternatives. Pioneer's investment banks delivered oral opinions on the fairness
of the UniCredito offer from a financial point of view to Pioneer's             
stockholders.                                                                   

At meetings on May 10th and May 14th, the special committee, first meeting      
separately and then with the entire board, evaluated all offers and recommended 
that the UniCredito offer be accepted by the board of directors and stockholders
of Pioneer. The board of directors, at a meeting held on May 14, 2000,          
unanimously authorized Pioneer to enter into the merger agreement.              

RECOMMENDATION OF PIONEER'S BOARD OF DIRECTORS TO STOCKHOLDERS (PAGE 27)        

The Pioneer board of directors, including the special committee, voted          
unanimously to adopt and approve the merger agreement and the merger. The board 
of directors and the special committee believe that the merger is advisable,    
fair to you and in your best interest and recommends that you vote FOR the      
proposal to adopt and approve the merger agreement and the merger. In reaching  
these conclusions, the special committee and the board of directors were        
influenced by several factors, including:                                       

     - In February 2000, our board of directors retained Merrill Lynch & Co. and
       Salomon Smith Barney Inc. to conduct a review of Pioneer's businesses and
evaluate Pioneer's strategic alternatives. The special committee  
 subsequently authorized these investment banks to solicit offers to
  purchase Pioneer. Pioneer received offers from a number of potential
     acquirers. UniCredito's offer was the most favorable offer to Pioneer's
stockholders.                                                     

    - The price to be paid per share represents a 40% premium over the closing
     price of the Pioneer common stock on May 12, 2000, the last trading day
before the announcement of the terms of the merger agreement with 
  UniCredito, a nearly 100% premium over the closing price on March 2,
     2000, the day prior to our announcement that the board of directors had
authorized the investment banks to actively explore strategic     
    alternatives, including a possible sale of Pioneer, and a 159% premium
over the closing price on February 10, 2000, the day before our   
       announcement that we had retained investment banks to conduct a review of
      Pioneer's businesses and to assist the board of directors and management
in evaluating strategic alternatives. We believe that if we do not
   complete the merger, absent other factors, our stock price may revert
back to its historical trading range.                             

   - We believe that long-term success in the investment management business
requires                                                          

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significant domestic and global growth and a global presence,     
       particularly in Europe. Without that growth, we risk a continuing loss of
     assets under management and market share. We do not believe we have the
financial resources required to achieve substantial domestic and  
international growth unless we become part of a large financial   
institution.                                                      
    - The equity markets in the second half of the 1990s favored managers that
    employed growth and index investment strategies. Pioneer's traditional
      value investment strategy has generally produced returns during the past
    five years below the returns achieved by the general market indicators
and investment advisors focusing on technology weighted growth    
      strategies. These trends, which have continued this year, have adversely
     affected our ability to attract and retain assets in our funds. The net
assets under management in our United States open-end investment  
    companies were approximately $22.0 billion at December 31, 1998, $23.4
billion at December 31, 1999, and $23.2 billion at March 31, 2000.

WHAT HOLDERS OF PIONEER COMMON STOCK WILL RECEIVE (PAGE 21)                     

At the effective time of the merger, each share of Pioneer common stock, other  
than shares held by stockholders who perfect appraisal rights, will convert into
the right to receive a cash payment of $43.50.                                  

In addition, immediately prior to the effective time of the merger, Pioneer will
distribute to its stockholders of record all of the outstanding common shares of
Harbor Global.                                                                  

The following table shows the last reported sale price of Pioneer common stock  
on The Nasdaq Stock Market(R) (i) on February 10, 2000, the day before our      
announcement that we had retained two investment banks to conduct a financial   
analysis of Pioneer's businesses and to assist the board of directors and       
management in evaluating strategic alternatives, (ii) on March 2, 2000, the     
prior to our announcement that the board of directors had authorized the        
investment banks to actively explore strategic alternatives, including a        
possible sale of the company, (iii) on May 12, 2000, the last trading date prior
to our announcement of the terms of the merger agreement with UniCredito and    
(iv) on June 22, 2000, the day before the date of this proxy statement. The     
table also indicates the premium that $43.50 per share represents over these    
closing prices.                                                                 

                                                                [Download Table]

DATE                   CLOSING PRICE    PREMIUM
----                   -------------    -------
                                               
February 10, 2000....     $16.78          159% 
March 2, 2000........     $21.87         99.7% 
May 12, 2000.........     $31.00           40% 
June 22, 2000........     $42.25            3% 

WHAT HOLDERS OF PIONEER RESTRICTED STOCK AND OPTIONS WILL RECEIVE (PAGE 46)     

Prior to the merger, each unvested share of restricted stock issued under       
Pioneer's 1995 Restricted Stock Plan and Amended and Restated 1997 Stock        
Incentive Plan and each unvested stock option issued under Pioneer's Amended and
Restated 1997 Stock Incentive Plan and 1988 Stock Option Plan, as amended, will 
become fully vested. At June 22, 2000, 556,982 shares of unvested restricted    
stock and options to purchase 2,141,406 shares of common stock were outstanding.
At the effective time of the merger, each share of restricted stock will convert
into the right to receive a cash payment of $43.50. Holders of restricted stock 
also will participate in the distribution of Harbor Global common shares. As    
soon as practicable after the merger, each holder of an unexercised option for  
Pioneer common stock will receive a cash payment equal to the excess of $43.50  
over the per share exercise price of such option, multiplied by the number of   
shares subject to the option. Unless holders of options exercise their options  
prior to the effective time of the merger, they will not participate in the     
distribution of Harbor Global common shares.                                    

INTERESTS OF EXECUTIVE OFFICERS AND DIRECTORS OF PIONEER IN THE MERGER (PAGE 47)

In considering the recommendation of the Pioneer board of directors, you should 
be aware that executive officers and certain directors of Pioneer               

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have interests in the merger that differ from the interests of other            
stockholders. These include:                                                    

 - Certain executive officers and directors of Pioneer have entered into
retention agreements which will entitle them to payments if their 
       employment is terminated or their duties are materially changed following
     the merger. It is expected that certain of these officers and directors
    will be entitled to receive severance benefits as a consequence of the
merger and related transactions.                                  

- John F. Cogan, Jr., Pioneer's president, chief executive officer and
     chairman of the board, will receive a special bonus payment of $700,000
from Pioneer if we complete the merger.                           

- While not a condition to the merger, we anticipate that some of our 
   executive officers will be offered employment with UniCredito and its
      subsidiaries after the merger. In particular, it is anticipated that Mr.
       Cogan will become deputy chairman of UniCredito's global asset management
       business and non-executive chairman of UniCredito's U.S. asset management
    operations and David D. Tripple will become chief executive officer of
UniCredito's U.S. asset management operations.                    

  - Pioneer's executive officers and directors beneficially own a total of
      5,488,879 shares of Pioneer common stock. Of these shares, 73,003 shares
       of restricted stock and 893,700 shares subject to options will vest on an
accelerated basis due to the merger.                              

- Certain officers of Pioneer will become executive officers of Harbor
 Global. In addition, certain of these officers will own and operate
   Calypso Management LLC, which has agreed to manage the liquidation of
Harbor Global and operate Harbor Global's assets until they are   
  liquidated. Harbor Global has agreed to pay Calypso a portion of the
       proceeds from the liquidation of it assets available for distributions as
 compensation for Calypso's services. See "Certain Relationships and
       Related Transactions" in the Harbor Global information statement attached
as Annex B to this proxy statement.                               

     - The members of our board of directors who are also members of the special
committee will be directors of Harbor Global.                     

   - Pioneer officers and directors have customary rights to indemnification
against liabilities.                                              

In considering the fairness of the merger to Pioneer stockholders, the board of 
directors and the special committee took these potential conflicts of interest  
into account.                                                                   

OPINIONS OF MERRILL LYNCH & CO. AND SALOMON SMITH BARNEY INC. (PAGE 29)         

In deciding to approve the merger, the special committee and the Pioneer board  
of directors received opinions from Merrill Lynch & Co. and Salomon Smith Barney
Inc. that the aggregate consideration to be received by the Pioneer stockholders
in the merger and the distribution of shares of Harbor Global is fair, from a   
financial point of view, to the Pioneer stockholders. In their analyses, the    
investment banks made numerous assumptions with respect to Pioneer and Harbor   
Global. Such assumptions and estimates contained in their analyses, and the     
valuation ranges resulting from their particular analyses, are not necessarily  
indicative of actual values or predictive of future results or values, which may
be significantly more or less favorable than those suggested by such analyses.  
The opinions of the investment banks are dated as of the date of this proxy     
statement and opine as to the fairness as of that date only. The investment     
banks are not obligated to update their opinions. Events could occur prior to   
the date of the special meeting which could result in a different valuation or  
conclusion if the opinions were reissued on that date. Copies of the fairness   
opinions of the investment banks are attached as Annex C and Annex D to this    
proxy statement.                                                                

FEES AND EXPENSES (PAGE 60)                                                     

UniCredito estimates that the total amount of funds required to pay the merger  
consideration to Pioneer stockholders will be approximately $1.2 billion. In    
addition, UniCredito and Pioneer estimate that there will be approximately $--  
in filing, legal, accounting and other fees and expenses payable by UniCredito  
and Pioneer in connection                                                       

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with the merger and the distribution of Harbor Global common shares.            

UniCredito has advised Pioneer that UniCredito currently has available from     
operations the funds necessary to complete the proposed merger.                 

CONDITIONS TO THE MERGER (PAGE 63)                                              

The completion of the merger depends on a number of conditions, including:      

  - the approval of Pioneer stockholders pursuant to this proxy statement;

    - the expiration or termination of all applicable waiting periods, and any
      extensions of these periods, under antitrust regulations including those
of the Council of the European Union;                             

- the approval of the Bank of Italy;                                  

     - the approval of the merger or qualification of UniCredito by the Board of
Governors of the Federal Reserve System;                          

  - approval of new management contracts, on terms similar to those in the
   existing management contracts, between Pioneer Investment Management,
      Inc. and the United States investment companies in the Pioneer Family of
  Funds representing at least 92.5% of the total assets in the Pioneer
Family of Funds;                                                  

     - the exercise by holders of not more than 15% of the outstanding shares of
Pioneer common stock of appraisal rights;                         

 - the distribution of the outstanding common shares of Harbor Global to
Pioneer's stockholders; and                                       

     - other customary contractual conditions specified in the merger agreement.

NO SOLICITATION BY PIONEER (PAGE 62)                                            

With certain exceptions and subject to the fiduciary obligations of Pioneer's   
board of directors to recommend any superior proposal to Pioneer stockholders,  
Pioneer has agreed that neither it nor any of its subsidiaries will:            

- solicit, initiate or encourage any proposal that might lead to an   
   alternative transaction pursuant to which a third party acquires more
   than 20% of the outstanding shares of Pioneer common stock or Pioneer
      assets having a total book value of more than 20% of all Pioneer assets;

- engage in negotiations or discussions concerning, or provide any    
       non-public information to any person relating to, any such acquisition of
Pioneer common stock or assets; or                                

     - agree to recommend any such acquisition of Pioneer common stock or assets
to the Pioneer stockholders.                                      

Pioneer has agreed further to cause each of its officers, directors, employees, 
financial advisors, representatives and agents, as well as the officers,        
directors, employees, financial advisors, representatives and agents of its     
subsidiaries, not to take any of these actions.                                 

TERMINATION OF THE MERGER AGREEMENT (PAGE 64)                                   

Pioneer and UniCredito mutually can agree to terminate the merger agreement     
without completing the merger, and either Pioneer or UniCredito can terminate   
the merger agreement upon the occurrence of a number of events, including:      

    - the other party breaches representations, warranties or covenants in the
  merger agreement which result in the conditions to closing not being
     satisfied and fails to exercise reasonable efforts to cure such breach;

- the merger is not completed by February 15, 2001; or                

- Pioneer stockholders do not approve the merger.                     

In addition, if our board of directors exercises its fiduciary obligation to    
recommend another offer, does not recommend against a tender offer or if the    
stockholders accept a tender offer, UniCredito may terminate the merger         
agreement.                                                                      

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If the merger agreement is terminated under certain circumstances, either       
Pioneer or UniCredito may be required to pay the other party's costs and        
expenses incurred in connection with the merger and the other transactions      
contemplated by the merger agreement. In addition, if the merger agreement is   
terminated because the Pioneer board of directors fails to support the merger or
the Pioneer stockholders fail to approve the merger and Pioneer enters into a   
subsequent transaction within 18 months with respect to a sale of Pioneer,      
UniCredito would be entitled to a payment from Pioneer of $37,500,000.          

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES (PAGE 51)                

It is generally anticipated that each stockholder will recognize capital gain or
loss equal, in each case, to the difference between the cash proceeds received  
pursuant to the merger and the value of the shares of Harbor Global distributed 
in connection with the merger and the stockholder's adjusted tax basis in the   
Pioneer common stock surrendered in exchange therefor. However, if the receipt  
of Harbor Global common shares is treated for tax purposes as a separate        
transaction, it would be a distribution taxable as an ordinary income dividend  
to the extent of our current or accumulated earnings and profits, including     
earnings and profits resulting from the distribution of such shares.            

In addition, because Harbor Global intends to be treated as a partnership for   
United States federal income tax purposes, you will generally recognize a       
proportionate share of Harbor Global's income, gain, loss and credit, including 
gain or loss from the sale of Harbor Global subsidiaries, determined in         
accordance with your interest in Harbor Global. You may also be required to     
recognize a proportionate share of the income earned by any Harbor Global       
subsidiary that is classified as a foreign personal holding company or a passive
foreign investment company. You are urged to consider whether making a qualified
electing fund election with respect to each passive foreign investment company  
would be beneficial to you.                                                     

BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER ARE COMPLEX AND THE DISTRIBUTION 
MAY VARY DEPENDING ON THE PARTICULAR CIRCUMSTANCES OF EACH STOCKHOLDER, WE      
RECOMMEND THAT HOLDERS OF PIONEER COMMON STOCK CONSULT THEIR TAX ADVISORS       
CONCERNING THE FEDERAL (AND ANY STATE, LOCAL AND FOREIGN) TAX CONSEQUENCES OF   
THE MERGER AND THE DISTRIBUTION IN THEIR PARTICULAR CIRCUMSTANCES.              

PIONEER STOCKHOLDER APPRAISAL RIGHTS (PAGE 57)                                  

Pioneer stockholders are entitled under Delaware law to appraisal rights in     
connection with the merger. If you exercise appraisal rights and follow the     
specified procedures, you can receive the judicially determined fair value of   
your shares of Pioneer common stock rather than $43.50. The judicially          
determined fair value may be more or less than $43.50 per share. To exercise    
appraisal rights, a Pioneer stockholder must satisfy the following criteria:    

- provide written notice of his, her, or its intention to exercise    
       appraisal rights before the vote is taken at the special meeting, even if
    the Pioneer stockholder is not entitled to vote at the Pioneer special
meeting;                                                          

   - vote against approval of the merger agreement and the merger or abstain
from voting; and                                                  

 - comply with other procedures of the Delaware General Corporation Law,
including Section 262.                                            

A copy of Section 262 of the Delaware General Corporation Law is attached to    
this proxy statement as Annex E.                                                

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SELECTED FINANCIAL DATA                                                         

  We have derived the selected financial information presented below as of
December 31, 1999 and 1998 and for each of the fiscal years ended December 31,  
1999, 1998 and 1997, from our consolidated financial statements, which Arthur   
Andersen LLP, our independent public accountants, audited, as indicated in their
report. We incorporate these financial statements by reference into this proxy  
statement from our Annual Report on Form 10-K for the fiscal year ended December
31, 1999. We have derived the selected financial information as of and for the  
fiscal years ended December 31, 1996 and 1995, from our consolidated financial  
statements which Arthur Andersen LLP audited but which we have not included or  
incorporated by reference in this proxy statement. We have derived the selected 
information as of and for the three month periods ended March 31, 2000 and 1999 
from our consolidated financial statements, which are not audited. We           
incorporate these unaudited financial statements by reference into this proxy   
statement from our Quarterly Report on Form 10-Q for the fiscal quarter ended   
March 31, 2000. You should read this information in conjunction with our        
consolidated financial statements and related notes that we incorporate by      
reference into this proxy statement.                                            

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA                                    

                                                        [Enlarge/Download Table]

                                THREE MONTHS ENDED                                                                           
                                     MARCH 31,                                 YEAR ENDED DECEMBER 31,                       
                             -------------------------   ------------------------------------------------------------------- 
                                2000          1999          1999          1998          1997          1996          1995     
                             -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
                                                      DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS                          
                                                                                                                             
Results of operations                                                                                                        
Revenues and sales.........  $    59,646   $    57,759   $   249,904   $   247,545   $   241,029   $   145,867   $   106,092 
Costs and expenses.........       68,049        50,575       216,098       241,432       194,050       131,134        92,743 
Unrealized and realized                                                                                                      
  (gains) losses on venture                                                                                                  
  capital and marketable                                                                                                     
  securities investments,                                                                                                    
  net......................       (1,549)        3,292         1,082        (4,418)      (27,460)      (12,279)       (9,345)
Interest expense...........        1,867         2,227         7,013        11,897         8,629         3,181           746 
Equity in (earnings) losses                                                                                                  
  of affiliated                                                                                                              
  companies................        1,232         2,178        11,291            --            --            --            -- 
Public offering costs......           --            --            --            --            --            --         4,863 
                             -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Income (loss) from                                                                                                           
  continuing operations                                                                                                      
  before provision for                                                                                                       
  income taxes and minority                                                                                                  
  interest.................       (9,953)         (513)       14,420        (1,366)       65,810        23,831        17,085 
Provision (benefit) for                                                                                                      
  income taxes.............      (12,167)          675         9,256         9,384        28,202        10,405         7,820 
                             -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Income (loss) from                                                                                                           
  continuing operations                                                                                                      
  before minority                                                                                                            
  interest.................        2,214        (1,188)        5,164       (10,750)       37,608        13,426         9,265 
Minority interest (income)                                                                                                   
  expense..................          156         1,216         2,339        (4,349)        5,365           576         1,158 
                             -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Net income (loss) from                                                                                                       
  continuing operations....        2,058        (2,404)        2,825        (6,401)       32,243        12,850         8,107 
Net income (loss) from                                                                                                       
  discontinued                                                                                                               
  operations...............           --        (6,044)      (73,682)      (27,067)       (3,077)        5,987        14,704 
Cumulative effect of change                                                                                                  
  in accounting                                                                                                              
  principle................           --       (12,112)      (12,112)           --            --            --            -- 
                             -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Net income (loss)..........  $     2,058   $   (20,560)  $   (82,969)  $   (33,468)  $    29,166   $    18,837   $    22,811 
                             ===========   ===========   ===========   ===========   ===========   ===========   =========== 

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                                                        [Enlarge/Download Table]

                                THREE MONTHS ENDED                                                                          
                                     MARCH 31,                                 YEAR ENDED DECEMBER 31,                      
                             -------------------------   -------------------------------------------------------------------
                                2000          1999          1999          1998          1997          1996          1995    
                             -----------   -----------   -----------   -----------   -----------   -----------   -----------
                                                      DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS                         
                                                                                                                            
Diluted earnings (loss) per                                                                                                 
  share:                                                                                                                    
Continuing operations......  $      0.08   $     (0.09)  $      0.11   $     (0.25)  $      1.26   $      0.50   $      0.32
Discontinued operations....           --         (0.24)        (2.82)        (1.07)        (0.12)         0.24          0.58
Cumulative effect of change                                                                                                 
  in accounting                                                                                                             
  principle................           --         (0.47)        (0.46)           --            --            --            --
                             -----------   -----------   -----------   -----------   -----------   -----------   -----------
Total diluted earnings                                                                                                      
  (loss) per share.........  $      0.08   $     (0.80)  $     (3.17)  $     (1.32)  $      1.14   $      0.74   $      0.90
                             ===========   ===========   ===========   ===========   ===========   ===========   ===========
Cash dividends per share...           --            --            --   $      0.20   $      0.40   $      0.40   $      0.40
                             ===========   ===========   ===========   ===========   ===========   ===========   ===========
Diluted shares                                                                                                              
  outstanding..............   26,558,000    25,791,000    26,184,000    25,350,000    25,630,000    25,460,000    25,311,000
                             ===========   ===========   ===========   ===========   ===========   ===========   ===========
Long-term notes payable....  $    23,867   $    20,147   $    63,892   $    99,035   $   126,406   $   101,890   $     8,950
Total assets...............  $   275,657   $   302,224   $   299,832   $   439,218   $   404,054   $   378,533   $   300,002
Stockholders' equity.......  $    90,932   $    91,019   $    87,098   $   154,802   $   183,687   $   162,473   $   150,343
Stockholders' equity per                                                                                                    
  share....................  $      3.39   $      3.46   $      3.28   $      5.93   $      7.28   $      6.50   $      6.05

OTHER FINANCIAL DATA                                                            

   The following information regarding assets under our management and sales
and redemptions of funds shown is not audited or derived from our audited       
financial statements.                                                           

Assets Under Management at:                                                     

                                                        [Enlarge/Download Table]

                                                                              DECEMBER 31,                  
                                                  MARCH 31,  -----------------------------------------------
                                                    2000      1999      1998      1997      1996      1995  
                                                  ---------  -------   -------   -------   -------   -------
                                                                     DOLLARS IN MILLIONS                    
                                                                                                            
U.S. funds.......................................  $23,187   $23,364   $21,985   $19,635   $15,704   $12,701
Irish funds......................................      616       551       398       226        54         5
Closed-end and subadvised funds and private                                                                 
  institutional accounts*........................      164       158       574       691       769       764
                                                   -------   -------   -------   -------   -------   -------
                                                    23,967    24,073    22,957    20,552    16,527    13,470
Polish and Czech funds...........................      457       418       416       489       454       275
                                                   -------   -------   -------   -------   -------   -------
         Total...................................  $24,424   $24,491   $23,373   $21,041   $16,981   $13,745
                                                   =======   =======   =======   =======   =======   =======

-------------------------                                                       
* Excludes assets of funds managed by foreign joint ventures and venture capital
pools.                                                                      

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Sales of Mutual Fund Shares:                                                    

                                                        [Enlarge/Download Table]

                                                   THREE MONTHS        TWELVE MONTHS ENDED DECEMBER 31,     
                                                      ENDED       ------------------------------------------
                                                  MARCH 31, 2000   1999     1998     1997     1996     1995 
                                                  --------------  ------   ------   ------   ------   ------
                                                                     DOLLARS IN MILLIONS                    
                                                                                                            
U.S. REGISTERED MUTUAL FUNDS:                                                                               
Sales*...........................................    $   770      $3,691   $3,971   $2,866   $2,602   $1,752
Redemption of shares.............................      1,771       4,005    2,410    2,106    1,431    1,050
                                                     -------      ------   ------   ------   ------   ------
Net sales of shares..............................    $(1,001)     $ (314)  $1,561   $  760   $1,171   $  702
                                                     =======      ======   ======   ======   ======   ======

                                                        [Enlarge/Download Table]

                                                   THREE MONTHS        TWELVE MONTHS ENDED DECEMBER 31,      
                                                      ENDED       ------------------------------------------ 
                                                  MARCH 31, 2000   1999     1998     1997     1996     1995  
                                                  --------------  ------   ------   ------   ------   ------ 
                                                                     DOLLARS IN MILLIONS                     
                                                                                                             
NON-U.S. REGISTERED MUTUAL FUNDS:                                                                            
Sales*...........................................    $    64      $  171   $  241   $  410   $  217   $   25 
Redemption of shares.............................         81         193      160      147       81      381 
                                                     -------      ------   ------   ------   ------   ------ 
Net sales of shares..............................    $   (17)     $  (22)  $   81   $  263   $  136   $ (356)
                                                     =======      ======   ======   ======   ======   ====== 

-------------------------                                                       
* Includes reinvestment of dividends, but excludes money market funds and funds 
managed by foreign joint ventures.                                          

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FORWARD LOOKING STATEMENTS

   This proxy statement and the documents that are incorporated by reference
into this proxy statement include statements that are subject to risks and      
uncertainties and are based upon the beliefs and assumptions of our management. 
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"   
for these forward-looking statements. For this purpose, a forward-looking       
statement is any statement that is not a statement of historical fact.          
Forward-looking statements include those about our plans or strategies for our  
domestic and international financial services and global investment management  
businesses, our anticipated revenue growth, changes we expect in the amount or  
composition of our assets under management, our anticipated expenses, our       
liquidity and capital resources and our expectations about market conditions.   
You can identify forward-looking statements by the words "may," "believes,"     
"anticipates," "plans," "expects," "estimates" and similar expressions. Our     
forward-looking statements are based on currently available information and     
management's expectations of future results but necessarily involve certain     
assumptions. Forward-looking statements include the information concerning      
possible and assumed future results of our operations set forth:                

- under "Questions and Answers About the Merger," "Summary" and "The  
Merger" in this proxy statement;                                  

   - under "Business" and "Management's Discussion and Analysis of Financial
    Condition and Results of Operations" in our Annual Report on Form 10-K
     for the year ended December 31, 1999, that is incorporated by reference
into this proxy statement; and                                    

  - under "Management's Discussion and Analysis of Financial Condition and
 Results of Operations" in our Quarterly Report on Form 10-Q for the
    fiscal quarter ended March 31, 2000, that is incorporated by reference
into this proxy statement.                                        

    Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. The future results and stockholder values 
of Pioneer may differ materially from those expressed in the forward-looking    
statements. Many of the important factors that will determine these results and 
values are beyond our ability to control or predict. You should not put undue   
reliance on any forward-looking statements. We caution readers that our         
assumptions involve substantial risks and uncertainties. Consequently, any      
forward-looking statement could turn out to be wrong.                           

    You should understand that the following important factors, in addition to
those discussed elsewhere in the documents which are incorporated by reference  
into this proxy statement, could affect the future results of Pioneer and could 
cause results to differ materially from those expressed in such forward-looking 
statements:                                                                     

 - competitive pressures among financial services companies may increase
significantly;                                                    

     - general economic conditions, either internationally or nationally, or the
     performance of the domestic or international securities markets, may be
less favorable than expected; and                                 

    - legislative or regulatory changes may adversely affect the businesses in
which Pioneer is engaged.                                         

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THE PIONEER SPECIAL MEETING 

   We are furnishing this proxy statement to holders of Pioneer common stock
in connection with the solicitation of proxies by the Pioneer board of directors
for use at the special meeting of the Pioneer stockholders to be held on August 
--, 2000, and any adjournment or postponement of the meeting.                   

     We are first furnishing this proxy statement to the Pioneer stockholders on
or about July --, 2000.                                                         

DATE, TIME AND PLACE                                                            

   The special meeting will be held on August --, 2000 at --, local time, at
the offices of Hale and Dorr LLP, 26th floor, 60 State Street, Boston,          
Massachusetts 02109.                                                            

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING                                 

   At the special meeting of the Pioneer stockholders and any adjournment or
postponement of the special meeting, we will ask Pioneer stockholders:          

- to consider and vote upon the adoption and approval of the merger   
agreement and the merger; and                                     

   - to transact such other business as may properly come before the special
meeting.                                                          

RECORD DATE                                                                     

Only stockholders of record of Pioneer common stock at the close of   
business on --, 2000 are entitled to notice of and to vote at the special       
meeting.                                                                        

VOTING AND REVOCATION OF PROXIES                                                

We request that the Pioneer stockholders complete, date and sign the  
accompanying proxy and promptly return it in the accompanying postage-paid      
envelope or otherwise mail it to Pioneer. You may also vote by calling -- toll  
free and voting by telephone or visit www.eproxy.com/-- and vote on the         
Internet. Brokers holding shares in "street name" may vote the shares only if   
the beneficial stockholder provides instructions on how to vote. Brokers will   
provide beneficial owners instructions on how to direct the brokers to vote the 
shares. All properly executed proxies that Pioneer receives prior to the vote at
the special meeting that are not revoked will be voted in accordance with the   
instructions indicated on the proxies. If no direction is indicated, the proxies
will be voted to adopt and approve the merger agreement and the merger.         

     The Pioneer board of directors does not currently intend to bring any other
business before the special meeting and, so far as the Pioneer board of         
directors knows, no other matters are to be brought before the special meeting. 
If other business properly comes before the special meeting or any postponement 
or adjournment, the proxies will be voted in accordance with the judgment of    
Pioneer's management.                                                           

     A stockholder may revoke his, her or its proxy at any time prior to its use
by:                                                                             

     - delivering to the secretary of Pioneer a signed notice of revocation or a
later-dated, signed proxy; or                                     

- attending the special meeting and voting in person.                 

Attendance at the special meeting does not in itself constitute the   
revocation of a proxy.                                                          

VOTE REQUIRED                                                                   

 As of the close of business on --, 2000, the record date, there were --
shares of Pioneer common stock outstanding and entitled to vote. The            
stockholders holding a majority of the outstanding shares of Pioneer common     
stock must adopt and approve the merger agreement and the merger. The           
stockholders holding a majority of the shares of Pioneer common stock entitled  
to vote and that are present or represented by proxy at the Pioneer meeting must
approve the grant to the Pioneer board of directors of                          

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the discretionary authority to adjourn the special meeting to solicit additional
votes. Pioneer stockholders have one vote per share of Pioneer common stock     
owned on the record date.                                                       

As of May 31, 2000, the directors and executive officers of Pioneer   
beneficially owned an aggregate of 5,488,879 shares of Pioneer common stock     
(including shares of restricted stock and shares subject to options) or         
approximately 20.06% of the shares of Pioneer common stock outstanding on that  
date. Under a voting agreement attached as Annex F to this proxy statement,     
certain officers of Pioneer have agreed to vote all of the shares of Pioneer    
common stock they beneficially own or over which they exercise voting control in
favor of the merger agreement and the merger. As of May 31, 2000, [THE DIRECTORS
AND EXECUTIVE OFFICERS OF UNICREDITO DID NOT OWN ANY SHARES OF PIONEER COMMON   
STOCK.] See "The Merger -- Interests of Executive Officers and Directors of     
Pioneer in the Merger."                                                         

QUORUM; ABSTENTIONS AND BROKER NON-VOTES                                        

    The required quorum for the transaction of business at the special meeting
is a majority of the shares of Pioneer common stock issued and outstanding on   
the record date. Abstentions and broker non-votes each will be included in      
determining the number of shares present and voting at the special meeting for  
the purpose of determining the presence of a quorum. Because adoption and       
approval of the merger agreement and the merger requires the affirmative vote of
a majority of the outstanding shares of Pioneer common stock entitled to vote,  
abstentions and broker non-votes will have the same effect as votes against     
adoption and approval of the merger agreement and the merger. In addition, the  
failure of a Pioneer stockholder to return a proxy or vote in person will have  
the effect of a vote against the adoption and approval of the merger agreement  
and the merger. Broker non-votes will not be included in the vote totals and    
will have no effect on the outcome of the vote on the proposal to grant the     
Pioneer board of directors the discretionary authority to adjourn the special   
meeting. Abstentions, however, will have the same effect as a vote against these
proposals. Brokers holding shares for a beneficial owner cannot vote on the     
actions proposed in this proxy statement without the beneficial owner's specific
instructions. Accordingly, Pioneer stockholders are urged to return the enclosed
proxy card marked to indicate their vote.                                       

SOLICITATION OF PROXIES AND EXPENSES                                            

     Pioneer has retained the services of D.F. King & Co., Inc. to assist in the
solicitation of proxies from its stockholders. The fees to be paid to D.F. King 
& Co., Inc. for its services by Pioneer are expected to be approximately $7,500,
plus its expenses.                                                              

    In addition to solicitation by mail, the directors, officers and employees
of Pioneer may solicit proxies from Pioneer's stockholders by telephone,        
facsimile, e-mail or in person. Brokerage houses, nominees, fiduciaries and     
other custodians will be requested to forward soliciting materials to beneficial
owners and will be reimbursed by Pioneer for their reasonable expenses incurred 
in sending proxy materials to beneficial owners.                                

RECOMMENDATION OF THE PIONEER BOARD OF DIRECTORS AND SPECIAL COMMITTEE          

The Pioneer board of directors and a special committee of the board of
directors have determined that the merger agreement and the merger are          
advisable, fair to, and in the best interests of, Pioneer's stockholders.       
Accordingly, the Pioneer board of directors and the special committee have each 
unanimously approved the merger agreement and unanimously recommended that the  
Pioneer stockholders vote for approval and adoption of the merger agreement and 
the merger. See "The Merger -- Background to the Merger."                       

     In considering the recommendation of the Pioneer board of directors and the
special committee, the Pioneer stockholders should be aware that Pioneer's      
executive officers and certain directors have interests in the merger that are  
different from, or in addition to, those of Pioneer's other stockholders. See   
"The Merger -- Interests of Executive Officers and Directors of Pioneer in the  
Merger."                                                                        

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     THE MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING ARE OF GREAT IMPORTANCE
TO THE PIONEER STOCKHOLDERS. ACCORDINGLY, PIONEER STOCKHOLDERS ARE URGED TO READ
AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS PROXY STATEMENT, AND TO
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENCLOSED     
POSTAGE-PAID ENVELOPE.                                                          

PIONEER STOCKHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR
PROXY CARDS. A transmittal letter with instructions for the surrender of        
certificates will be mailed to Pioneer stockholders promptly after completion of
the merger. For more information regarding the procedures for exchanging Pioneer
stock certificates, see "The Merger Agreement -- Exchange of Certificates."     

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INFORMATION ABOUT PIONEER AND UNICREDITO

PIONEER                                                                         

The operations of Pioneer and its wholly-owned subsidiaries consist of
three strategic business units: (i) Pioneer Investment Management, (ii) Pioneer 
International Financial Services, and (iii) Pioneer Global Investments.         

Pioneer Investment Management.  The business of this unit includes:   

- Investment management, marketing and distribution of 21 registered  
       open-end investment companies (comprised of 40 investment portfolios) and
     one registered closed-end investment company based in the United States
     and available to domestic and certain non-U.S investors, as well as ten
  offshore open-end investment funds based in Ireland and available to
non-U.S. investors;                                               

   - Shareholder servicing for the open-end mutual funds and offshore funds;
and                                                               

- Separate account management services for institutional investors.   

Pioneer International Financial Services.  The business of this unit  
includes investment management and financial services operations in:            

     - Warsaw, Poland, where we manage and distribute units of four mutual funds
    available to Polish citizens, operate a unitholder servicing agent for
the mutual funds and own 70% of a private pension fund management 
company;                                                          

 - Prague, the Czech Republic, where we manage, distribute and service a
Czech open-end mutual fund;                                       

- Moscow, Russia, where we manage, distribute and service two small   
    open-end mutual funds available to Russian citizens and manage and own
   approximately 52% of the Pioneer First Investment Fund, an investment
   fund with its primary assets consisting of real estate investments in
Moscow;                                                           

  - Madras, India, where we own 47.61% of an Indian company that serves as
       the investment adviser, distributor and shareholder servicing agent to 22
private sector mutual funds available to Indian citizens; and     

- Taiwan, where we own a 10% interest in an investment management     
operation.                                                        

     Pioneer Global Investments.  The business of this unit includes diversified
strategic businesses of:                                                        

- International venture capital management and investing;             

- Real estate management;                                             

- Timber harvesting and sales; and                                    

- Gold exploration operations.                                        

Pioneer was incorporated under the laws of Delaware in 1956 and its   
principal executive offices are located at 60 State Street, Boston,             
Massachusetts 02109. Its telephone number is 617-742-7825.                      

  We are subject to the disclosure requirements of the Securities Exchange
Act of 1934 and are required to file reports, proxy statements and other        
information with the Securities and Exchange Commission. See "Where You Can Find
More Information."                                                              

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UNICREDITO                                                                      

 UniCredito is a corporation organized under the laws of the Republic of
Italy, and its shares trade on the Milan Stock Exchange. Now the holder of eight
major Italian banks, UniCredito is Italy's largest banking group based on market
capitalization and the 18th largest in Europe in terms of total assets.         
UniCredito was formed in 1998 by the merger between Credito Italiano S.p.A., one
of Italy's major banks, and Unicredito S.p.A., an Italian bank holding company. 
Through approximately 3,600 branches worldwide, UniCredito offers a range of    
services relating to, among other things, banking, life and property/casualty   
insurance and equipment leasing.                                                

   UniCredito's asset management group of subsidiaries, branded EuroPlus, is
one of Europe's largest and fastest-growing asset managers, with approximately  
$80 billion in assets under management, 90 established mutual funds (in Italy   
and Luxembourg) and 13 new funds ready to be launched. EuroPlus currently serves
approximately 200 institutional clients and over 5,000 high net worth clients.  
Its share of the retail and institutional markets in Italy and Europe makes     
EuroPlus the largest institutional account manager in Italy, the third largest  
mutual fund manager in Italy and the fifth largest mutual fund manager in       
Europe. EuroPlus operates primarily through two arms: EuroPlus Research and     
Management in Dublin and EuroPlus SGR in Milan.                                 

 Upon completion of the merger, Pioneer and the EuroPlus subsidiaries of
UniCredito will be owned by Pioneer Global Asset Management, a new wholly owned 
Italian subsidiary of UniCredito with combined assets under management of over  
$100 billion. Pioneer Global Asset Management will conduct its asset management 
business through three operational units: Pioneer Research & Management         
(currently EuroPlus Research and Management), Pioneer SGR (currently EuroPlus   
SGR) and Pioneer U.S. (currently Pioneer).                                      

The corporate seat of UniCredito is located in Genoa, Italy, where    
UniCredito was founded in 1870. The principal executive offices of UniCredito   
are located at Piazza Cordusio, 20123 Milan, Italy and its telephone number is  
011-39-02-88621.                                                                

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THE MERGER

OVERVIEW OF THE MERGER                                                          

The merger provides for the acquisition of Pioneer's global investment
management business by UniCredito. To accomplish the acquisition, Pioneer will  
be merged with a wholly-owned subsidiary of UniCredito, with Pioneer as the     
surviving corporation. In the merger, each outstanding share of Pioneer common  
stock, other than shares held by stockholders who perfect appraisal rights, will
convert into the right to receive $43.50 in cash, and UniCredito will be issued 
the entire equity interest in the corporation surviving the merger. Pioneer will
distribute to its stockholders of record immediately prior to the effective time
of the merger, all of its common shares of Harbor Global Company Ltd. Harbor    
Global is a newly-formed Bermuda subsidiary of Pioneer to which certain of      
Pioneer's businesses and assets will be transferred prior to the effective time 
of the merger. This distribution will permit UniCredito to acquire only the     
investment management portion of Pioneer's operations that it intends to conduct
in the future and will permit holders of Pioneer common stock to be able to     
receive the proceeds from the liquidation of the businesses and assets          
transferred to Harbor Global, net of expenses and other liabilities, within a   
limited period of time.                                                         

While UniCredito is expected to merge a wholly-owned subsidiary into  
Pioneer, UniCredito may elect instead to merge Pioneer into a wholly-owned      
subsidiary of UniCredito. Under the merger agreement, Pioneer has also agreed,  
if requested by UniCredito, to negotiate in good faith to sell to UniCredito    
certain assets of Pioneer's global investment management business in a          
transaction separate from the merger. Pioneer is under no obligation to agree to
such a sale. No matter what acquisition structure UniCredito elects, each share 
of Pioneer common stock, other than shares held by stockholders who perfect     
appraisal rights, will convert into the right to receive a cash payment of      
$43.50.                                                                         

BACKGROUND TO THE MERGER                                                        

     Strategic Review.  Over the last few years, Pioneer's senior management and
its board of directors have engaged in an ongoing strategic review of Pioneer's 
global businesses. These reviews led to two primary conclusions. First, the     
investment management industry, particularly in the United States, is undergoing
rapid change and becoming increasingly competitive, and significant capital     
resources would be necessary to address adequately this changing competitive    
landscape. Second, Pioneer's non-investment management businesses have generated
significant losses and earnings volatility and have hurt overall stock          
performance. In response to these conclusions, Pioneer embarked in late 1998 on 
a restructuring that was designed to refocus management on Pioneer's core       
competency, investment management, and to ensure that adequate resources were   
available to address the changing nature of the investment management industry. 
As part of this process, Pioneer committed to divest its natural resource       
businesses, more specifically timber and gold. These strategic efforts continued
throughout 1999 and into 2000.                                                  

As part of the ongoing strategic review process, Pioneer's board of   
directors, on February 10, 2000, engaged Merrill Lynch & Co. and Salomon Smith  
Barney Inc. to conduct an analysis of Pioneer's businesses, including U.S.      
investment management operations, international financial services and the      
global investment segments, and to assist the board and management in evaluating
strategic alternatives. Over the course of the next three weeks, representatives
of Merrill Lynch and Salomon Smith Barney conducted extensive due diligence     
meetings with members of Pioneer's senior management. In addition, the          
investment banks reviewed all of Pioneer's businesses, historical financial     
statements, budgets, financial projections and business plans and conducted     
extensive peer group analyses to understand better the competitive environment  
in which Pioneer operates.                                                      

On March 2, 2000, the board of directors along with members of Pioneer
senior management and its legal counsel met with representatives of Merrill     
Lynch and Salomon Smith Barney to review the results of their engagements. The  
investment banks concurred with the assessment that the financial services      

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industry as a whole, and more particularly the investment management segment of 
that industry, is becoming increasingly competitive. Concerns over slower       
earnings growth, customer retention, and control over distribution and its      
increasing cost are the driving forces behind these competitive pressures. The  
response to these pressures is at an early stage; however, it is likely to lead 
to an industry that is increasingly dominated by large, globally operated       
financial institutions that have the resources necessary to compete on a global 
basis. The investment banks noted that Pioneer is not immune to these           
competitive pressures despite its long-standing and strong investment management
brand in the United States and in Germany, its established reputation as a value
manager, its strong, well-diversified distribution system in the United States  
and its well positioned opportunity to capture market share in the emerging     
economies of Central and Eastern Europe. The size, retail focus and distribution
strength of Pioneer's investment management business are, however, extremely    
attractive to many types of strategic partners. The investment banks also       
believed that Pioneer's non-core businesses have depressed earnings, constrained
capital resources, hurt valuations and limited the company's ability to attract 
analyst coverage because of the significant diversity in businesses.            

 During the meeting on March 2, 2000, the investment banks also reviewed
with the board of directors the strategic alternatives available to Pioneer. Due
to the continuing competitive pressures in the investment management industry   
and Pioneer's lack of resources to address adequately these pressures, the      
possibility of stockholder activism in response to Pioneer's depressed stock    
price, and uncertainty associated with the timing of the company's articulated  
strategy of disposing of its natural resource businesses, the board of directors
concluded that remaining an independent publicly traded company was not a       
value-maximizing alternative for Pioneer's stockholders. The board also reviewed
with the investment banks whether Pioneer could acquire another asset manager   
with complimentary capabilities and concluded that Pioneer lacked the financial 
flexibility and time necessary to pursue this strategy. In addition, pursuing   
this strategy still did not adequately address the continuing concerns regarding
Pioneer's non-investment management businesses. For the same reasons, the board 
of directors, with the advice of the investment banks, determined that a joint  
venture, leveraged or management buy-out, merger-of-equals or other strategic   
partnering arrangements were not attractive strategies. Accordingly, the board  
concluded that a sale of the company was the strategic alternative most likely  
to permit Pioneer to continue to grow the franchise and to maximize stockholder 
value. In this regard, the investment banks advised the board that they         
anticipated that there would be significant interest in Pioneer's franchise and 
that most of the likely acquirers were strategic in nature.                     

     As part of their review of Pioneer's strategic alternatives, the investment
banks advised the board of directors that a sale of Pioneer could be made more  
difficult because certain of Pioneer's assets are in non-investment management  
businesses and/or are involved in high risk environments. The board of directors
concluded that, because a buyer was unlikely to emerge which would want to      
purchase both the investment management businesses and the non-core operations, 
Pioneer was unlikely to obtain fair value for the non-continuing businesses     
through a sale of the company as a whole. Also, a sale of the investment        
management businesses in a transaction not involving a merger would not be tax  
advantageous to Pioneer's stockholders and Pioneer. The sale of the             
non-continuing businesses prior to a sale of the investment management          
businesses was not viewed as desirable since such a sale might cause substantial
delay in the sale of the investment management business and the market for the  
gold, timber and Russian real estate assets was viewed as depressed and not     
reflective of their long-term value.                                            

  Because of these concerns, the board of directors determined that, while
prepared to sell the company as a whole, Pioneer would transfer the             
non-investment management businesses to a newly formed subsidiary prior to any  
sale of the company. Pioneer then could distribute the shares of this           
subsidiary, Harbor Global, to its stockholders in connection with the sale of   
the company. Harbor Global will liquidate these assets over a five year period, 
which may, at the discretion of Harbor Global's board of directors, be extended 
for up to three additional one year periods. Harbor Global will distribute any  
proceeds, net of expenses and other liabilities, to its shareholders. This      
arrangement would provide the potential for Pioneer stockholders to realize     
additional value from the ultimate liquidation of these                         

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assets within a reasonable time frame while permitting the sale of Pioneer's    
primary businesses to proceed expeditiously.                                    

Establishment of the Special Committee.  In light of the potential    
conflicts of interest of members of the board of directors who are also members 
of management (see "The Merger -- Interests of Executive Officers and Directors 
of Pioneer in the Merger"), the board of directors at the March 2, 2000 meeting 
established a special committee of the board, which was given authority to      
supervise the solicitation of offers for the purchase of Pioneer and to make a  
recommendation to the board of directors and stockholders with respect to any   
bids that were received. The members of the special committee are John D. Curtin
Jr., W. Reid Sanders and John H. Valentine. None of the members of the special  
committee is an officer of Pioneer or has any interest in the sale of Pioneer   
that differs from the interests of stockholders. The members of the special     
committee received a fee of $5,000 for serving on the special committee. The    
special committee was authorized to retain its own advisors; however, in light  
of the work that the investment banks retained by the board of directors had    
performed to that date, the special committee determined to continue to use the 
same investment banks in connection with its evaluation of any bids that were   
received.                                                                       

The Auction Process.  After considering the recommendations of Merrill
Lynch and Salomon Smith Barney, the board of directors and the special committee
at the meeting on March 2, 2000 authorized the investment banks to solicit      
offers to purchase Pioneer. On March 17, 2000, the special committee along with 
members of Pioneer's management met with the investment banks to review the     
status of the solicitation process and to consider structuring issues relating  
to the distribution of the Harbor Global common shares to Pioneer stockholders. 
In late March and early April 2000, the investment banks contacted over 80      
financial institutions and investment advisors to determine their interest in   
acquiring Pioneer. Of those companies, over 50 companies entered into           
confidentiality agreements with the company and received information with       
respect to Pioneer's investment management business.                            

  After receiving preliminary, non-binding indications of interest from 16
potential acquirors, the investment banks reviewed the preliminary bids with the
special committee, certain members of management and the company's legal counsel
at a meeting held at the offices of the company on April 13, 2000. The          
investment banks provided an evaluation of the preliminary bids and recommended 
that the next step should be to invite a limited number of bidders to conduct a 
more thorough due diligence review of Pioneer. Based upon the investment banks' 
recommendations as to the number and identity of the potential purchasers that  
should be invited to conduct due diligence, the special committee invited eight 
potential purchasers to conduct more extensive, on-site due diligence. The      
selection was based principally on the value of the bidders' preliminary        
indications of interest. At the meeting, the special committee also considered  
the acceptability of the distribution of Harbor Global common shares to Pioneer 
stockholders.                                                                   

During the period from April 17, 2000 through May 5, 2000, members of 
Pioneer's management met on-site with representatives of the selected bidders,  
their legal counsel and financial advisors. The selected bidders were directed  
to submit final, binding bids by May 9, 2000. The potential bidders were also   
provided with a draft merger agreement and were directed to submit any comments 
on that agreement with their bids.                                              

After receiving the bids on May 9, 2000, the special committee held a 
meeting at the offices of Hale and Dorr LLP, in Boston, Massachusetts, legal    
counsel to Pioneer, on the evening of May 10, 2000. All members of the special  
committee were present at that meeting. Representatives of Hale and Dorr LLP    
reviewed with the members of the special committee their fiduciary              
responsibilities in connection with the potential sale. The investment banks    
then reviewed with the special committee the determination to pursue a sale of  
the company, the financial terms of each bid and the financial terms of the     
various offers. Hale and Dorr LLP then reviewed the other terms of the offers,  
including changes that each bidder proposed to make to the draft merger         
agreement and any regulatory or other conditions to the offers. Hale and Dorr   
LLP also reviewed the issues in the merger agreement that would need to be      
negotiated with UniCredito. The members of the special committee also asked     
representatives of Hale and Dorr LLP and Pioneer's                              

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management to confirm that the bid by UniCredito did not provide for any special
financial arrangements for Mr. Cogan, Mr. Tripple or other members of senior    
management. Based upon such review, the special committee recommended that the  
board authorize management and Pioneer's legal and financial advisors to        
negotiate a definitive merger agreement with UniCredito.                        

     Immediately following the meeting of the special committee on May 10, 2000,
the entire board of directors held a meeting at the offices of Hale and Dorr    
LLP. All members of the board of directors were present at the meeting in person
or by phone. Representatives of the investment banks, Hale and Dorr LLP and     
Pioneer's management also participated in the meeting. The members of the       
special committee advised the board of directors that they had reviewed the bids
and determined that the offer by UniCredito was the most favorable to Pioneer's 
stockholders. The special committee recommended that the management of Pioneer  
be directed to conduct negotiations of a definitive merger agreement with       
representatives of UniCredito. The investment banks reviewed the terms of the   
UniCredito offer with the board of directors. Hale and Dorr LLP discussed the   
contractual issues that required negotiation, UniCredito's proposed conditions  
to closing, including the required regulatory approvals, and the non-financial  
terms of the other offers. Hale and Dorr LLP also reviewed the board of         
directors' fiduciary obligations in the context of an auction of Pioneer. Hale  
and Dorr LLP noted that the proposed form of merger agreement permitted the     
board of directors to accept an alternative offer if it was more favorable to   
the company's stockholders, provided that UniCredito receive a $37.5 million    
break-up fee from Pioneer. Based upon such review and the recommendation of a   
special committee, the board of directors authorized management and Pioneer's   
legal and financial advisors to negotiate a definitive merger agreement with    
UniCredito.                                                                     

   During the period from May 11, 2000 through May 14, 2000, representatives
of Pioneer and its legal and financial advisors met with representatives of     
UniCredito and its legal and financial advisors to negotiate the terms of a     
definitive merger agreement. These negotiations were completed on May 14, 2000. 

   A telephonic meeting of the special committee was held at noon on May 14,
2000. All members of the special committee were present at the meeting, as were 
representatives of the investment banks and Hale and Dorr LLP. Hale and Dorr LLP
reported on the progress of the negotiations and that all open issues discussed 
with the special committee on May 10, 2000 had been resolved to the satisfaction
of Pioneer's management. No material terms of the transaction had changed in a  
manner adverse to Pioneer. The differences between the proposed contract and the
final agreement were reviewed. Merrill Lynch then reviewed again the previous   
analysis of Pioneer's strategic alternatives, the financial and other terms of  
the offer and the terms of the competing bids. Merrill Lynch also delivered its 
oral opinion that the terms of the merger are fair from a financial point of    
view to Pioneer's stockholders. Salomon Smith Barney separately discussed the   
merger and provided its oral opinion as to the fairness, from a financial point 
of view, of the consideration to be paid in the merger. See "The                
Merger -- Opinions of Merrill Lynch and Salomon Smith Barney." Based upon such  
analysis, the special committee voted to recommend the approval of the merger   
agreement and the merger with UniCredito to the board of directors and the      
Pioneer stockholders.                                                           

   A telephonic meeting of the entire board of directors was held on May 14,
2000 immediately following the meeting of the special committee. All of the     
members of the board of directors were present at the meeting in person or by   
telephone, as were representatives of the investment banks, Hale and Dorr LLP   
and Pioneer's management. The special committee advised the board of directors  
of its recommendation. Hale and Dorr LLP and the investment banks then reviewed 
the terms of the merger agreement for the board of directors. Each financial    
advisor orally advised the board of directors of its opinion that the           
consideration to be paid in the merger is fair to Pioneer's stockholders from a 
financial point of view. The board of directors then unanimously determined that
entering into the merger agreement was in the best interests of Pioneer and its 
stockholders and voted to authorize Pioneer to enter into the merger agreement  
and to recommend the merger to Pioneer's stockholders.                          

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   On the afternoon of May 14, 2000, Pioneer and UniCredito entered into the
merger agreement. Pioneer issued a press release announcing the proposed merger 
with UniCredito prior to the opening of trading of its common stock on May 15,  
2000.                                                                           

   Lens Investment Management, LLC.  On February 2, 2000, Southeastern Asset
Management, Inc., the Pioneer's largest stockholder, filed a Schedule 13D       
reporting that it had engaged in an unsolicited conversation with a third party 
regarding the potential sale of Pioneer. Previously, Southeastern had reported  
its ownership of Pioneer common stock on Schedule 13G as a passive investment.  
On February 15, 2000, Pioneer received official notification from Lens          
Investment Management, LLC that it intended to nominate four nominees for       
election to Pioneer's board of directors at Pioneer's annual meeting in May     
2000. The purpose of the alternative slate of directors was to proceed with a   
sale of the company. On February 23, 2000, Lens filed with the Securities and   
Exchange Commission a preliminary proxy statement in which it indicated that it 
would be soliciting proxies for its alternative slate of directors at Pioneer's 
annual meeting. Lens stated in its proxy statement that the total value of      
Pioneer's equity may exceed $28 per share and that the proceeds from a sale of  
Pioneer's investment management business could exceed $38 per share. On March   
17, 2000, Lens notified Pioneer that rather than nominate four nominees for     
election to Pioneer's board, it now proposed to nominate five nominees. On March
22, 2000, Lens filed another preliminary proxy statement reflecting the increase
in the number of nominees. Lens filed its definitive proxy statement on April   
10, 2000. In the definitive proxy statement Lens reiterated its intent to       
proceed with a sale of the company if its nominees were elected. Lens also      
stated that the total value of Pioneer's equity could be more than $29 per share
and as much as $42 per share. At the annual meeting of stockholders, which took 
place shortly after the announcement of the terms of the merger, Lens voted its 
shares in favor of the current management.                                      

REASONS FOR THE MERGER                                                          

As discussed above, in February 2000, the board of directors began an 
evaluation of Pioneer's strategic alternatives that resulted in the execution of
the merger agreement. In reaching their determination to approve the merger     
agreement and recommend that Pioneer stockholders vote to adopt and approve the 
merger agreement and the merger, the special committee and the board of         
directors considered the following material factors:                            

     - The board of directors retained Merrill Lynch and Salomon Smith Barney to
review Pioneer's strategic alternatives. Those reviews confirmed  
       management's belief that the nature of the investment management business
had fundamentally changed in recent years, giving companies with  
    substantial amounts of assets under management and global operations a
       significant competitive advantage over smaller investment advisers. Based
     upon their reviews, the board of directors concluded that Pioneer would
      require a substantially more significant presence to continue to compete
       in the long term in the mutual fund industry and that Pioneer's principal
business is likely to be increasingly dominated by large, globally
operating financial institutions. Because the significant capital 
   resources necessary to develop such a franchise were not available to
Pioneer, the board of directors determined to pursue strategic    
     alternatives. Pioneer's management concluded, based upon the investment
banks' analyses and other factors, that long-term success in the  
investment management business required that Pioneer experience   
    significant domestic and global growth. Due in part to the significant
   costs required to establish a substantial international presence, the
     board of directors concluded that it is unlikely that Pioneer currently
 has the financial resources to undertake such an expansion, whether
     through internal growth or acquisitions. The board of directors did not
       believe that Pioneer could achieve sustainable domestic and international
     growth unless it became part of a larger financial institution. Without
   such growth, Pioneer risks a continued loss of market share to larger
   competitors and a corresponding reduction in assets under management.

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   - The financial condition and results of operations of Pioneer, including
the losses that it has incurred during the past two years, and the
prospects of both Pioneer's investment management operations and  
non-continuing businesses.                                        

- A review of the possible alternatives to the merger, including:     

   - The prospect and risks of continuing operations as they are
        presently conducted including the challenges of competing with
large, global financial services companies;           

     - The possibility that the future performance of our investment
           management business could result in a lower valuation of Pioneer;

       - The sale of the non-core businesses and the continuation of the
investment management business as a separate business;

 - The acquisition by Pioneer of other investment management
businesses; and                                       

     - The establishment of a joint venture, leveraged or management
   buy-out, a merger-of-equals or other strategic partnering
arrangement.                                          

- The equity markets in the second half of the 1990s have favored     
      investment advisers which follow growth and index investment strategies.
    Pioneer's traditional value investment strategy has generally provided
  returns during the past five years below the returns achieved by the
   general market indices and investment advisers focusing on technology
      weighed growth strategies. These trends, which have continued this year,
       have adversely affected Pioneer's ability to attract and retain assets in
   its funds. The net assets under Pioneer's management in U.S. open-end
   investment companies were approximately $22.0 billion at December 31,
      1998, $23.4 billion at December 31, 1999, and $23.2 billion at March 31,
       2000. This represents an average annual growth in assets under management
      of 7.7% since December 31, 1997. During that same period, the Standard &
       Poor's 500 Index has increased at an average annual rate of 21.3%. During
1999, Pioneer experienced net redemptions (the amount by which    
    redemptions by stockholders in Pioneer's funds exceed new sales of our
funds) equivalent to approximately $1.0 billion of assets under   
      management in our U.S. funds. Prior to 1999, Pioneer had not experienced
    net redemptions since 1992. We continued to experience net redemptions
during the first half of 2000.                                    

    - The price to be paid per share represents a 40% premium over the closing
 price of Pioneer common stock on May 12, 2000, the last trading day
before our announcement of the terms of the merger agreement with 
  UniCredito, a nearly 100% premium over the closing price on March 2,
 2000, the day prior to announcement that the board of directors had
authorized the investment banks to actively explore strategic     
    alternatives, including a possible sale of Pioneer, and a 159% premium
over the closing price on February 10, 2000, the day before our   
       announcement that we had retained investment banks to conduct a review of
      Pioneer's businesses and to assist the board of directors and management
    in evaluating strategic alternatives. We believe that if the merger is
     not completed, absent other factors, our stock price may revert back to
its historical trading range. Given the long bull market in equity
  securities, we also believe that this is a favorable time to sell an
investment advisory business.                                     

  - The opinions of Merrill Lynch and Salomon Smith Barney that, as of the
date of this proxy statement, and based upon and subject to the   
     assumptions set forth in their opinions, the aggregate consideration to
     be received by Pioneer's stockholders in connection with the merger and
      the Harbor Global distribution, consisting of the cash consideration and
   the shares of Harbor Global, is fair to Pioneer's stockholders from a
financial point of view.                                          

- The structure of the transaction is more likely to allow Pioneer    
   stockholders to maximize the values from the liquidation of Pioneer's
 non-continuing businesses through the distribution of the shares of
      Harbor Global. While the board of directors considered the current value
of such assets difficult to                                       

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     determine and dependent upon improvement in the market for such classes
   of assets, the distribution permits Pioneer's stockholders to benefit
from any realization of the value of these assets.                

- The special committee and the board of directors considered that the
     auction process offered the best means of determining that UniCredito's
offer was fair to Pioneer's stockholders and, together with the   
      appointment of a special committee, provided for a process that was fair
to Pioneer's stockholders.                                        

     In view of the variety of factors considered in connection with the special
committee's and the board of directors' evaluation of the merger, neither the   
special committee nor the board of directors attempted to assign any relative   
weight to the forgoing factors. The recommendation of the special committee and 
the board of directors is based upon the totality of the information presented  
to and considered by them. However, the financial measures cited below under    
"The Merger -- Opinions of Merrill Lynch and Salomon Smith Barney" and the      
premium of $43.50 to the recent market prices of Pioneer's common stock were    
noted as particularly favorable by the special committee and the board of       
directors. The special committee and the board of directors considered, but did 
not place particular emphasis upon, valuation, based upon book value, going     
concern value or liquidation value, because the investment banks advised that   
such measures are not an appropriate means of valuing an investment management  
business.                                                                       

RECOMMENDATION OF PIONEER'S BOARD OF DIRECTORS                                  

The special committee and Pioneer's entire board of directors have    
unanimously concluded that the merger is fair to, and in the best interest of,  
Pioneer's stockholders. Pioneer's board of directors and the special committee  
unanimously recommend that the stockholders vote to adopt and approve the merger
agreement and the merger.                                                       

DISTRIBUTION OF HARBOR GLOBAL INTERESTS                                         

Pioneer currently owns or operates certain assets and businesses that 
UniCredito does not wish to acquire. In order that UniCredito may acquire only  
those portions of Pioneer's businesses that it wishes to purchase while         
structuring the transaction as a merger and also to provide Pioneer's           
stockholders with the potential to maximize the value of these other businesses,
Pioneer has established a Bermuda limited duration company, Harbor Global       
Company Ltd. Pioneer's non-continuing businesses will be transferred to Harbor  
Global prior to the effective time of the merger. Pioneer will distribute to its
stockholders of record immediately prior to the effective time of the merger all
of the common shares of Harbor Global. Each Pioneer stockholder as of the record
date of the distribution will receive one share of Harbor Global for every five 
shares of Pioneer common stock. Fractional shares of Harbor Global will not be  
distributed. Rather, Harbor Global's distribution agent will aggregate and seek 
to sell fractional shares, and the aggregate net cash proceeds, if any, will be 
distributed pro rata to Pioneer stockholders entitled to a fractional interest. 
See Annex B.                                                                    

At the time of the distribution, Harbor Global's assets will consist  
primarily of the following businesses and assets currently owned, operated or   
owned by Pioneer:                                                               

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

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 - the proceeds from the sale of Pioneer's gold mine in Ghana to Ashanti
     Goldfields Teberebie Limited (which proceeds will consist of $5 million
       in cash and a $13.8 million promissory note payable to Pioneer Goldfields
II Limited, a wholly-owned subsidiary of Harbor Global); and      

- $25 million in cash.                                                

     At the time of the distribution, Harbor Global's principal liabilities will
include:                                                                        

  - the obligation to pay to Pioneer up to $5 million of the proceeds from
      the sale of the Teberebie gold mine if indemnification claims by Ashanti
  Goldfields are less than the aggregate proceeds from the sale of the
mine;                                                             

     - indemnification obligations to Pioneer under a distribution agreement and
a tax separation agreement between Pioneer and Harbor Global;     

    - certain severance and retention payments payable to certain officers and
    employees of Harbor Global in connection with the termination of their
  employment with Pioneer or the continuation of their employment with
Harbor Global subsidiaries; and                                   

    - capital commitments to entities established by the Eastern European real
estate business.                                                  

The distribution of the shares of Harbor Global will be a taxable     
transaction. See "The Merger -- Material United States Federal Income Tax       
Consequences." We currently estimate that we will report for federal tax        
purposes that the Harbor Global common shares received in the distribution will 
have a value of approximately $-- - $-- with respect to each share of Pioneer   
common stock held at the time of the merger (equating to a value of the Harbor  
Global common shares of approximately $---$-- per share). However, the actual   
value we ascribe to the Harbor Global common shares for federal tax purposes may
differ due, among other reasons, to changes in the value of Harbor Global's     
assets between December 31, 1999 and the date of the distribution and the number
of shares of Pioneer common stock outstanding on the effective date of the      
merger. We will provide you with information regarding the value of the Harbor  
Global common shares you receive in the distribution. However, this information 
is not binding on the Internal Revenue Service, which may assert a different    
(and possibly higher) value for the Harbor Global common shares you receive.    
Accordingly, there can be no assurance as to the exact amount of gain you may   
recognize as a result of the merger and the distribution, in such a             
circumstance. The value estimated for tax purposes is not necessarily indicative
of the price at which you may be able to sell Harbor Global common shares. It is
possible that no trading market for the Harbor Global common shares will        
develop. The Harbor Global common shares are registered with the Securities and 
Exchange Commission and are transferable. However, there is no current public   
trading market for Harbor Global common shares, and they will not be listed on a
securities exchange or The Nasdaq Stock Market(R). Furthermore, Harbor Global   
does not intend to take any actions to facilitate the development of an active  
trading market. See Harbor Global's information statement attached as Annex B.  

     Pioneer currently does not expect to distribute the shares of Harbor Global
unless the merger is approved and is expected to be completed.                  

A copy of the information statement included in Harbor Global's       
registration statement on Form 10 under the Securities Exchange Act of 1934 is  
attached as Annex B to this proxy statement. It contains information regarding  
Harbor Global, including Harbor Global's financial statements and risk factors. 
You should read it carefully in considering whether to adopt and approve the    
merger agreement and the merger.                                                

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OPINIONS OF MERRILL LYNCH AND SALOMON SMITH BARNEY                              

Opinion of Merrill Lynch & Co.                                        

    Merrill Lynch has acted as financial advisor to Pioneer in connection with
a review of Pioneer's strategic alternatives, the merger and the distribution of
common shares of Harbor Global and has assisted the Pioneer board of directors  
in its examination of the fairness, from a financial point of view, of the      
merger consideration and shares of Harbor Global to be received by Pioneer's    
stockholders.                                                                   

     On May 14, 2000, Merrill Lynch orally advised the special committee and the
Pioneer board of directors that, based upon and subject to the limitations of   
its analyses, as of such date, the merger consideration was fair, from a        
financial point of view, to the Pioneer stockholders. In connection with the    
preparation of this proxy statement, Merrill Lynch rendered its opinion to the  
effect that, based upon and subject to the considerations set forth in the      
opinion, as of the date of this proxy statement, the aggregate consideration to 
be received by the Pioneer stockholders in the merger and the distribution of   
Harbor Global common shares is fair, from a financial point of view, to the     
holders of Pioneer common stock.                                                

THE FULL TEXT OF MERRILL LYNCH'S OPINION, WHICH CONTAINS MANY OF THE  
ASSUMPTIONS MERRILL LYNCH MADE, THE MATTERS IT CONSIDERED AND THE LIMITATIONS ON
THE REVIEW IT UNDERTOOK IN CONNECTION WITH ITS DELIVERY OF THIS OPINION, IS     
INCLUDED AS ANNEX C AND IS INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT. 
MERRILL LYNCH'S OPINION IS DIRECTED TO THE PIONEER BOARD OF DIRECTORS AND       
ADDRESSES ONLY THE FAIRNESS OF THE CONSIDERATION FROM A FINANCIAL POINT OF VIEW.
IT DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER OR THE DISTRIBUTION OF HARBOR
GLOBAL COMMON SHARES OR ANY RELATED TRANSACTIONS AND DOES NOT CONSTITUTE A      
RECOMMENDATION TO ANY PIONEER STOCKHOLDER AS TO HOW THAT HOLDER SHOULD VOTE AT  
THE PIONEER SPECIAL MEETING. THE FOLLOWING SUMMARY OF MERRILL LYNCH'S OPINION   
SET FORTH BELOW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF   
SUCH OPINION. STOCKHOLDERS ARE URGED TO READ THE MERRILL LYNCH OPINION CAREFULLY
AND IN ITS ENTIRETY.                                                            

  In connection with rendering its opinion of the same date as the date of
this proxy statement, Merrill Lynch, among other things:                        

- reviewed certain publicly available information concerning Pioneer; 

 - reviewed certain other financial information with respect to Pioneer,
    including financial forecasts relating to the business, earnings, cash
     flow, assets and prospects of Pioneer, that Pioneer provided to Merrill
Lynch;                                                            

- conducted discussions with members of senior management of Pioneer  
concerning the businesses and prospects of Pioneer;               

  - reviewed certain publicly available information concerning the trading
of, and the trading market for, Pioneer common stock;             

- compared the results of operations of Pioneer's global investment   
management business with those of certain other companies;        

  - compared the financial terms of the merger with those of certain other
transactions;                                                     

  - reviewed the results of the efforts of Merrill Lynch and Salomon Smith
       Barney to solicit proposals for an acquisition of Pioneer in its entirety
or its global investment management business;                     

- reviewed the merger agreement;                                      

 - reviewed the terms of the distribution of shares of Harbor Global and
 drafts of the related distribution agreement and the tax separation
agreement;                                                        

- reviewed a letter regarding the solvency and financial viability of 
    Harbor Global and discussed its contents with Pioneer's management and
the third party which prepared such letter; and                   

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- reviewed certain other financial studies and analyses and performed 
       certain other investigations as Merrill Lynch deemed necessary, including
 Merrill Lynch's assessment of general economic, market and monetary
conditions.                                                       

In preparing its opinion, Merrill Lynch relied upon the accuracy and  
completeness of all information supplied or otherwise made available to it by   
Pioneer, discussed with or reviewed by or for it, or publicly available, and    
Merrill Lynch did not assume any responsibility for independently verifying any 
of such information. Merrill Lynch did not undertake an independent appraisal of
the assets or liabilities (contingent or otherwise) of Pioneer and did not make 
or obtain or assume any responsibility for making or obtaining any independent  
appraisals of any of such assets or liabilities. In addition, Merrill Lynch did 
not assume any obligation to conduct, nor did it conduct, any physical          
inspection of the properties or facilities of Pioneer. With respect to the      
financial forecast information provided by Pioneer, Merrill Lynch assumed that  
the estimates had been reasonably prepared and reflected the best currently     
available estimates and judgments of the management of Pioneer as to the future 
financial performance of Pioneer. Merrill Lynch expressed no view with respect  
to the estimates of Pioneer's management or the assumptions on which they were  
based. In giving their opinion to the board of directors on May 14, 2000,       
Merrill Lynch assumed that the merger agreement, when executed and delivered,   
would not contain any terms or conditions that differed materially from the     
drafts Merrill Lynch reviewed. Merrill Lynch assumed that the merger will be    
consummated in accordance with the terms of the merger agreement, without waiver
of any of the conditions to the merger contained in the merger agreement. In    
addition, Merrill Lynch relied upon the conclusion set forth in the solvency    
letter referred to above.                                                       

   Merrill Lynch's opinion was necessarily based on information available to
it and on general market, economic and other conditions as they existed and     
could be evaluated on the date of its opinion. Merrill Lynch did not address the
merits of the underlying decision by Pioneer to engage in the merger and the    
distribution of shares of Harbor Global. Merrill Lynch expressed no view with   
respect to the value of the Harbor Global common shares to be distributed to    
Pioneer stockholders or as to how the Harbor Global common shares could be      
expected to trade following their issuance.                                     

    Merrill Lynch made a presentation to Pioneer's special committee and board
of directors on May 14, 2000 with respect to certain financial and comparative  
analyses performed by Merrill Lynch in evaluating the fairness of the merger    
consideration which also provided in substantial part the basis for Merrill     
Lynch's opinion dated the date of this proxy statement. The following is a      
summary of the material financial analyses furnished by Merrill Lynch to        
Pioneer's special committee and board of directors. However, it does not purport
to be a complete description of the analyses performed by Merrill Lynch or of   
its presentations to Pioneer's special committee and board of directors. The    
following summary includes information presented in tabular format. In order to 
understand fully the financial analyses used by Merrill Lynch, these tables must
be read together with the text of each summary. The tables alone do not         
constitute a complete description of the financial analyses. The following      
quantitative information, to the extent it is based on market data, is, except  
as otherwise indicated, based on market data as it existed at or prior to May   
14, 2000 and is not necessarily indicative of current or future market          
conditions.                                                                     

The preparation of a fairness opinion is a complex analytic process   
involving various determinations as to the most appropriate and relevant methods
of financial analysis and the application of those methods to the particular    
circumstances and, therefore, such an opinion is not readily susceptible to     
partial or summary description. No company, business or transaction used in     
those analyses as a comparison is identical to Pioneer, the merger or the       
distribution of shares of Harbor Global, nor is an evaluation of the results of 
those analyses entirely mathematical; rather, it involves complex considerations
and judgments concerning financial and operating characteristics and other      
factors that could affect the transactions, public trading or other values of   
the companies, business segments or transactions being analyzed. The estimates  
contained in those analyses and the ranges of valuations resulting from any     
particular analysis are not necessarily indicative of actual or predictive of   
future results or values, which may be significantly more or less favorable than
those suggested by those analyses. In addition, analyses relating to the value  
of businesses or securities are not appraisals and may not reflect the prices at
which businesses, companies or                                                  

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securities actually may be sold. Accordingly, these analyses and estimates are  
inherently subject to substantial uncertainty.                                  

    In arriving at its opinion, Merrill Lynch made qualitative judgments as to
the significance and relevance of each analysis and factor considered by it.    
Accordingly, Merrill Lynch believes that its analyses must be considered as a   
whole and that selecting portions of its analyses and factors, without          
considering all analyses and factors, could create an incomplete view of the    
processes underlying such analyses and its opinion. In its analyses, Merrill    
Lynch made numerous assumptions with respect to Pioneer, industry performance   
and regulatory environment, general business, economic, market and financial    
conditions, as well as other matters, many of which are beyond the control of   
Pioneer and involve the application of complex methodologies and educated       
judgment.                                                                       

As the distribution of shares of Harbor Global is designed to vest    
separately in the holders of Pioneer common stock full ownership of the         
businesses comprising Harbor Global, Merrill Lynch did not perform any          
independent valuation analyses with respect to those businesses. Rather, Merrill
Lynch's analyses focused exclusively on the merger consideration, and were      
generally grouped into four categories: an analysis of the solicitation by      
Merrill Lynch and Salomon Smith Barney of proposals for the acquisition of      
Pioneer or its global investment management business; analyses comparing the    
merger consideration with the trading prices of companies comparable to the     
global investment management business; analyses comparing the merger            
consideration with the consideration paid in certain comparable merger and      
acquisition transactions; and analyses comparing the merger consideration with  
the present value of the projected free cash flows and terminal value of global 
investment management business.                                                 

     Review of Solicitation Process.  Merrill Lynch included in its presentation
to the Pioneer board a summary of the results of the efforts of Merrill Lynch   
and Salomon Smith Barney to solicit proposals for the acquisition of Pioneer and
its global investment management business. Merrill Lynch noted that a total of  
82 parties had been contacted, of which:                                        

    - 52 signed confidentiality agreements and were provided with copies of an
information memorandum regarding Pioneer;                         

   - 16 submitted preliminary indications of interest (of which 13 conformed
      to the requirements outlined by Merrill Lynch and Salomon Smith Barney);

   - eight performed a detailed on-site due diligence review of Pioneer; and

- four submitted definitive offers to purchase Pioneer.               

   Of the four definitive offers received, UniCredito's proposal offered the
highest purchase price for Pioneer and included other favorable terms.          

     Summary of Valuation Analyses.  Merrill Lynch prepared a separate valuation
of Pioneer's global investment management business using several methodologies, 
including a comparable company trading analysis, a comparable transactions      
analysis and a discounted cash flow analysis. Each of these methodologies was   
used to generate ranges of average reference enterprise value for the global    
investment management business, which were then compared to the merger          
consideration of $43.50 per share. The following table shows the ranges of      
average reference enterprise values per share of Pioneer common stock derived   
for the global investment management business under each of these methodologies.
This table                                                                      

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should be read together with the more detailed summary of each of these         
valuation analyses set forth below.                                             

                                                        [Enlarge/Download Table]

                                                             RANGE OF AVERAGE REFERENCE
VALUATION METHODOLOGY                                             ENTERPRISE VALUE     
---------------------                                        --------------------------
                                                                                       
Comparable Company Analysis.................................      $15.98 - $26.89      
Comparable Transactions Analysis............................      $18.89 - $39.55      
Discounted Cash Flow Analysis...............................      $23.94 - $37.34      

For informational purposes, Merrill Lynch also compared the enterprise
value represented by the merger consideration to the historical trading prices  
for the Pioneer common stock, as set forth in the following table:              

                                                                [Download Table]

MERGER CONSIDERATION COMPARED TO:                             % PREMIUM
---------------------------------                             ---------
                                                                       
February 3, 2000 Closing Price(1)...........................    203.9% 
May 12, 2000 Closing Price(2)...............................     40.3% 
30 Day Average Closing Price(3).............................     77.0% 
All Time High Closing Price(4)..............................     30.3% 

-------------------------                                                       

(1) Date of announcement by Southeastern Asset Management, Inc. that it would   
  consider strategic alternatives with respect to its investment in Pioneer.

(2) Last trading date preceding the announcement of the transaction.            

(3) Average closing price for the 30 trading days preceding the announcement of 
the transaction.                                                        

(4) Closing price on December 4, 1997.                                          

Comparable Company Analysis.  Merrill Lynch reviewed certain publicly 
available financial, operating and stock market information for Pioneer and     
eight other publicly-traded asset management companies (Franklin Resources,     
Inc., BlackRock Inc., Eaton Vance Corporation, Federated Investors, Inc.,       
Gabelli Asset Management, Inc., Neuberger Berman, Inc., T. Rowe Price           
Associates, Inc., and Waddell & Reed Financial, Inc.) (the comparable           
companies). Merrill Lynch considered these companies to be reasonably similar to
Pioneer insofar as they participate in business segments similar to the global  
investment management business, but noted that none of these companies has the  
same management, makeup, size and combination of businesses as the global       
investment management business.                                                 

For each of the comparable companies and for the global investment    
management business, Merrill Lynch calculated and compared, among other things, 
the ratio of the closing stock price on May 12, 2000 (or, in the case of the    
global investment management business, the merger consideration) to: (1) 1999   
earnings per share, (2) estimated 2000 earnings per share (using management's   
estimates in the case of Pioneer and First Call consensus estimates for the     
other companies), (3) 1999 per share earnings before                            

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interest, taxes, depreciation and amortization (EBITDA), (4) 1999 revenues per  
share and (5) assets under management as of April 30, 2000. The following table 
sets forth the results of these calculations.                                   

                                                        [Enlarge/Download Table]

                                                        COMPARABLE COMPANIES  PIONEER (MERGER
RATIO OF CLOSING PRICE ON MAY 12, 2000 TO:                     (MEAN)         CONSIDERATION) 
------------------------------------------              --------------------  ---------------
                                                                                             
1999 earnings per share................................         14.8x              40.3x     
First Call 2000 earnings per share estimates...........         14.5x              38.1x     
1999 EBITDA per share..................................          8.0x              18.0x     
1999 revenues..........................................          3.4x               5.5x     
Assets under management (at April 30, 2000)............          2.6%               5.2%     

As shown in the table, the ratios implied by the merger consideration 
compared favorably to those obtained with respect to the comparable companies.  
Based on the ratios obtained with respect to the comparable companies, Merrill  
Lynch derived a range of reference enterprise values for the global investment  
management business of $15.98 to $26.89 per share of Pioneer common stock.      

For reference purposes, Merrill Lynch also compared the historical    
performance of Pioneer common stock with the performance of selected groups of  
the comparable companies and the Standard & Poor's index of 500 industrial      
stocks (S&P 500). The following table shows the comparison for the one year     
period, the two year period (annualized), the three year period (annualized) and
the five year period (annualized) preceding February 4, 2000. The groups of     
comparable companies were selected based on the public availability of          
historical performance data with respect to their common stocks over the        
relevant period of time.                                                        

                                                        [Enlarge/Download Table]

                                                         PIONEER   COMPARABLE COS.  S&P 500
                                                         -------   ---------------  -------
                                                                                           
1-Year Return...........................................  (21.6)%       42.5%(1)     12.0% 
2-Year Return...........................................  (28.8)%       17.7%(2)     19.0% 
3-Year Return...........................................  (13.4)%       30.2%(2)     21.9% 
5-Year Return...........................................  (15.8)%       35.3%(2)     22.4% 

-------------------------                                                       

(1) Consists of Franklin Resources, Inc. Eaton Vance Corporation, Federated     
Investors, Inc., T. Rowe Price Associates, Inc. and Waddell & Reed      
Financial, Inc.                                                         

(2) Consists of Franklin Resources, Inc., Eaton Vance Corporation and T. Rowe   
Price Associates, Inc..                                                 

As shown in the table, Pioneer significantly underperformed both the  
comparable companies and the S&P 500 during each of the periods examined.       
Merrill Lynch similarly observed that Pioneer compared poorly relative to the   
comparable companies with respect to other financial parameters, such as stock  
trading multiples, operating margin, EBITDA margin and earnings growth. In      
Merrill Lynch's view, these observations enhance its conclusion that the merger 
consideration compares favorably to the stock trading prices of the comparable  
companies.                                                                      

  Analysis of Selected Merger and Acquisition Transactions.  Merrill Lynch
analyzed certain publicly available financial, operating and stock market       
information for 17 selected merger and acquisition transactions in the asset    
management business with a value in excess of $150 million since 1996. The      
precedent transactions reviewed were: Allianz A.G./PIMCO Advisors L.P.;         
ReliaStar Financial Corporation/Pilgrim Capital Corp; PIMCO Advisors            
L.P./Oppenheimer Capital (2/97); Affiliated Managers Group, Inc./Tweedy; Fleet  
Financial Corporation/Columbia Management Company; J.P. Morgan/ American        
Century; Zurich/Scudder Stevens & Clark; Commerzbank A.G./Montgomery Asset      
Manage-                                                                         

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ment; PIMCO Advisors LP/Oppenheimer Capital (11/97); INVESCO PLC/AIM Management 
Group; First Union/Keystone; Franklin Resources, Inc./Heine Securities; Morgan  
Stanley and Co. Inc./Van Kampen American Capital; Mellon Bank/Founders; Phoenix 
Investment Partners/Engemann; Phoenix Investment Partners/Zweig; and American   
International Group/John McStay. In each case, the first-named company          
represents the acquiring company in the transactions (comparable to UniCredito  
in the merger) and the second-named company represents the acquired company in  
the transactions (comparable to Pioneer in the merger). Merrill Lynch considered
the precedent transactions to be reasonably similar to the merger, but none of  
these transactions is identical to the merger.                                  

    For each of the precedent transactions, Merrill Lynch derived, among other
things, (1) the ratio of the estimated transaction value to: (a) assets under   
management; (b) revenues for the latest twelve months prior to the announcement 
of the transaction, and (c) EBITDA for the latest twelve months prior to the    
announcement of the transaction, and (2) the ratio of the estimated equity value
of the acquired company (determined as of the last trading day preceding        
announcement of the transaction) to latest twelve months' net income. The       
following table sets forth the results of these calculations.                   

                                                        [Enlarge/Download Table]

                                                                  PRECEDENT TRANSACTIONS      
                                                             ---------------------------------
                                                                  RANGE         MEAN    MEDIAN
                                                             ---------------    ----    ------
                                                                                              
Ratio of Transaction Value to: assets under management......  1.4%   -   8.4%   3.2%      3.1%
  latest twelve months' revenues............................  1.9x   -   7.8x   5.0x      4.9x
  latest twelve months' EBITDA..............................  8.0x   -  18.1x   10.7x    10.2x
Ratio of Estimated Equity Value to: latest twelve months'                                     
  net income................................................ 12.4x   -  22.0x   17.5x    17.6x

   From its analysis of the precedent transactions, Merrill Lynch derived an
implied value per share of Pioneer common stock ranging from $18.89 to $39.55.  

   Discounted Cash Flow Analysis.  Merrill Lynch also performed a discounted
cash flow analysis pursuant to which the value of Pioneer common stock was      
estimated by adding (1) the estimated present value of the future stream of the 
free cash flows of the global investment management business for the years 2000 
through 2010, plus (2) the estimated present value of the terminal value per    
share of the global investment management business at the end of the year 2010. 
For purposes of such analysis, Merrill Lynch utilized discount rates ranging    
from 12% to 15%, and perpetual growth rates ranging from 2% to 4%. From this    
analysis, Merrill Lynch derived a reference range of implied value for the      
global investment management business per share of Pioneer common stock of      
$23.94 to $37.34.                                                               

   Other Factors.  Merrill Lynch is an internationally recognized investment
banking firm and, as a part of its investment banking business, is regularly    
engaged in the valuation of businesses and securities in connection with mergers
and acquisitions. The Pioneer board selected Merrill Lynch as its financial     
advisor because of Merrill Lynch's experience, expertise and familiarity with   
Pioneer and its businesses.                                                     

   Pioneer has agreed to pay Merrill Lynch a fee of approximately $4,750,000
for its financial advisory services in connection with the transaction, payable 
as follows:                                                                     

- $250,000 upon the execution of the engagement letter between Merrill
Lynch and Pioneer;                                                

- $450,000 upon the signing of a definitive agreement; and            

- $4,050,000 payable upon the closing of the transaction.             

Pioneer also has agreed to reimburse Merrill Lynch for its reasonable 
out-of-pocket expenses, including the reasonable fees and disbursements of legal
counsel, and to indemnify Merrill Lynch against liabilities arising out of      
business combination contemplated by the engagement letter or to contribute to  

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payments Merrill Lynch may be required to make in respect of the liabilities for
which indemnification is contemplated but for which indemnification is          
unenforceable.                                                                  

  In the ordinary course of its business, Merrill Lynch and its affiliates
may actively trade the equity securities of Pioneer, the Pioneer Family of Funds
and the debt and equity securities of UniCredito for their own accounts and for 
the accounts of customers. Accordingly, Merrill Lynch and its affiliates may at 
any time hold a long or short position in those securities. Merrill Lynch may   
provide investment banking services to Pioneer and UniCredito in the future, and
may receive fees for rendering these services.                                  

Opinion of Salomon Smith Barney Inc.                                  

Salomon Smith Barney was also retained to act as financial advisor to 
Pioneer in connection with the exploration of strategic alternatives for        
Pioneer. Pursuant to Salomon Smith Barney's engagement letter, Salomon Smith    
Barney rendered oral advice to the Pioneer board of directors on May 14, 2000 to
the effect that, as of such date, the merger consideration was fair, from a     
financial point of view, to the Pioneer stockholders.                           

     Salomon Smith Barney subsequently rendered a written opinion dated the date
of this proxy statement to the effect that, based upon and subject to the       
considerations set forth in such opinion, the aggregate consideration to be     
received by the Pioneer stockholders in the merger and the distribution of      
Harbor Global common shares is fair, from a financial point of view, to such    
holders. The full text of Salomon Smith Barney's opinion, which sets forth the  
assumptions made, general procedures followed, matters considered and limits on 
the review undertaken, is included as Annex D to this proxy statement. The      
summary of Salomon Smith Barney's opinion set forth below is qualified in its   
entirety by reference to the full text of such opinion. STOCKHOLDERS ARE URGED  
TO READ THE SALOMON SMITH BARNEY OPINION CAREFULLY AND IN ITS ENTIRETY.         

  In connection with rendering its opinion, Salomon Smith Barney reviewed,
among other things, the following:                                              

   - the merger agreement and held discussions with certain senior officers,
    directors and other representatives and advisors of Pioneer concerning
its business, operations and financial prospects;                 

     - certain publicly available business and financial information relating to
      Pioneer as well as certain financial forecasts and other information and
  data for Pioneer, which were provided to or otherwise discussed with
Salomon Smith Barney by Pioneer's management;                     

     - the financial terms of the merger as set forth in the merger agreement in
       relation to, among other things, current and historical market prices and
   trading volumes of Pioneer common stock, the historical and projected
   earnings and other operating data of the global investment management
    business and the historical and projected capitalization and financial
 condition of Pioneer and the global investment management business;

   - the results of the efforts of Salomon Smith Barney and Merrill Lynch to
       solicit proposals to acquire Pioneer and the global investment management
business;                                                         

- certain publicly available information with respect to certain other
  companies that Salomon Smith Barney believed to be comparable to the
       global investment management business and the trading markets for certain
of such other companies' securities;                              

- certain publicly available information prepared by third parties,   
     including equity research analysts, concerning the business, operations
       and financial prospects of Pioneer and the sectors in which they operate;

- the terms of the distribution of Harbor Global common shares and the
drafts of the related distribution agreement and tax separation   
agreement;                                                        

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    - a letter regarding the solvency and financial viability of Harbor Global
  and discussed their contents with Pioneer's management and the third
party that prepared such letter;                                  

     - certain publicly available information concerning the trading of, and the
trading market for, Pioneer common stock; and                     

     - certain publicly available information concerning the nature and terms of
      certain other transactions that Salomon Smith Barney considered relevant
to its inquiry.                                                   

Salomon Smith Barney also considered such other information, financial studies, 
analyses, investigations and financial, economic and market criteria that it    
deemed relevant. Salomon Smith Barney also discussed the past and current       
business operations and financial conditions of Pioneer as well as other matters
Salomon Smith Barney believed relevant to its inquiry.                          

  In its review and analysis and in arriving at its opinion, Salomon Smith
Barney assumed and relied upon the accuracy and completeness of all of the      
financial and other information provided to it or publicly available and neither
attempted independently to verify nor assumed any responsibility for verifying  
any of such information and further relied on assurances of management of       
Pioneer that it was not aware of facts that would make any of such information  
inaccurate or misleading. Salomon Smith Barney did not conduct a physical       
inspection of any of the properties or facilities of Pioneer or UniCredito, and 
did not make or obtain or assume any responsibility for making or obtaining any 
independent evaluations or appraisals of any of such properties or facilities.  
With respect to financial forecasts and other information and data provided to  
or otherwise reviewed by or discussed with Salomon Smith Barney regarding       
Pioneer, Salomon Smith Barney relied on estimates from the management of        
Pioneer, and, at the advice of the management of Pioneer, assumed that the      
estimates had been reasonably prepared and reflected the best currently         
available estimates and judgments of the management of Pioneer as to the future 
financial performance of the global investment management business. Salomon     
Smith Barney expressed no view with respect to the estimates of Pioneer         
management or the assumptions on which they were based. Salomon Smith Barney    
assumed that the merger and the distribution of Harbor Global common shares will
be consummated in a timely fashion in accordance with the terms of the merger   
agreement, without waiver of any of the conditions contained in the merger      
agreement. In addition, Salomon Smith Barney relied upon the conclusions set    
forth in the solvency letter referred to above.                                 

In conducting its analysis and arriving at its opinion, Salomon Smith 
Barney considered such financial and other factors as it deemed appropriate     
under the circumstances including, among others, the following:                 

   - the historical and current financial position and results of operations
of Pioneer;                                                       

     - the historical and current market for Pioneer common stock and the equity
      securities of certain other companies that Salomon Smith Barney believed
to be comparable to the global investment management business; and

     - the nature and terms of certain other merger and acquisition transactions
that Salomon Smith Barney believed to be relevant.                

Salomon Smith Barney also took into account its assessment of general 
economic, market and financial conditions existing and disclosed to Salomon     
Smith Barney as well as its experience in connection with similar transactions  
and securities valuation generally. Salomon Smith Barney was not asked to       
consider, and its opinion does not address, the relative merits of the          
transaction as compared to any alternative business strategy that might exist   
for Pioneer. Salomon Smith Barney's opinion necessarily was based on conditions 
as they existed and could be evaluated on the date thereof, and Salomon Smith   
Barney assumed no responsibility to update or revise its opinion based upon     
circumstances or events occurring after such date. SALOMON SMITH BARNEY'S       
OPINION DOES NOT CONSTITUTE AN OPINION OR IMPLY ANY CONCLUSION AS TO THE PRICE  
AT WHICH PIONEER COMMON STOCK WOULD TRADE FOLLOWING ANNOUNCEMENT OF THE MERGER  
OR THE PRICE AT WHICH HARBOR GLOBAL COMMON SHARES WILL TRADE FOLLOWING ITS      
DISTRIBUTION. SALOMON SMITH BARNEY'S OPINION WAS PROVIDED FOR THE INFORMATION OF
THE BOARD OF DIRECTORS IN ITS EVALUATION OF THE                                 
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MERGER AND THE DISTRIBUTION OF THE HARBOR GLOBAL COMMON SHARES AND, IN ANY      
EVENT, LIMITED TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE AGGREGATE
CONSIDERATION TO BE RECEIVED BY THE PIONEER STOCKHOLDERS IN THE TRANSACTION.    
SALOMON SMITH BARNEY'S OPINION DID NOT ADDRESS PIONEER'S UNDERLYING BUSINESS    
DECISION TO EFFECT THE TRANSACTION NOR DID IT CONSTITUTE A RECOMMENDATION OF THE
TRANSACTION TO PIONEER OR A RECOMMENDATION TO ANY PIONEER STOCKHOLDER AS TO HOW 
SUCH STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE TRANSACTION.                   

    In connection with rendering its advice to Pioneer's special committee and
Pioneer board of directors on May 14, 2000, Salomon Smith Barney made a         
presentation with respect to certain analyses performed by it in evaluating the 
fairness of the merger consideration. The following is a summary of this        
presentation. The summary of certain of the financial analyses includes         
information presented in tabular format. IN ORDER TO UNDERSTAND FULLY THE       
FINANCIAL ANALYSES USED BY SALOMON SMITH BARNEY, THESE TABLES MUST BE READ      
TOGETHER WITH THE TEXT OF EACH SUMMARY. THE TABLES ALONE DO NOT CONSTITUTE A    
COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES. The following quantitative      
information, to the extent it is based on market data, is, except as otherwise  
indicated, based on market data as it existed at or prior to May 14, 2000 and is
not necessarily indicative of current or future market conditions. Because the  
distribution of Harbor Global shares is intended to vest full ownership of the  
businesses and assets comprising Harbor Global in the Pioneer stockholders,     
Salomon Smith Barney did not perform any independent valuation analyses with    
respect to those businesses in connection with its opinion dated the date of    
this proxy statement.                                                           

May 14, 2000 Presentation                                             

   Transaction Overview.  The presentation included an overview of the terms
of the transaction, including:                                                  

     - aggregate purchase price, the purchase price per Pioneer common stock and
certain valuation multiples;                                      

- form of consideration;                                              

- tax treatment;                                                      

- options and deferred compensation;                                  

- anticipated timing;                                                 

- regulatory approvals required; and                                  

- the formation of Harbor Global and the distribution of Harbor Global
common shares.                                                    

  For a more detailed discussion of the structure and terms of the merger,
see "The Merger."                                                               

     Overview of Pioneer.  Salomon Smith Barney provided a financial overview of
Pioneer which sets forth, among other things, Pioneer's assets under management 
("AUM") (organized by value and location) and its AUM growth, Pioneer's         
distribution network, Pioneer's annual net investment flows from 1995 through   
1999 and its monthly net investment flows from January 1999 through April 2000, 
the annualized returns of Pioneer's five largest funds, financial statements    
with respect to Pioneer and the global investment management business, the      
trading history of Pioneer common stock and a summary of the views of financial 
analysts with respect to Pioneer common stock.                                  

Comparative Operating Statistics.  Salomon Smith Barney provided a    
comparison of certain operating information (historical EBITDA margin, earnings 
before taxes ("EBT") margin (earnings before taxes as a percentage of revenues),
total revenue as a percentage of AUM, advisory revenues as a percentage of AUM, 
EBT as a percentage of AUM, ratio of compensation expense to total revenue and  
profitability) with respect to Pioneer, the global investment management        
business and 13 selected publicly-traded asset                                  

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management companies that are structured as corporations (the "peer group"). The
peer group included Affiliated Managers Group, Inc., AMVESCAP PLC, BlackRock    
Inc., Eaton Vance Corporation, Federated Investors, Inc., Franklin Resources,   
Inc., Gabelli Asset Management Inc., John Nuveen, Neuberger Berman Inc., Phoenix
Investment Partners, T. Rowe Price Associates, Inc., United Asset Management    
Corp. and Waddell & Reed Financial Inc. The comparison was made using           
information available as of December 31, 1999. The following tables show the    
results of these comparisons:                                                   

                                                        [Enlarge/Download Table]

                                                 EBITDA MARGIN               EBT MARGIN        
                                             ----------------------    ----------------------  
                                             1997     1998    1999     1997     1998    1999   
                                             -----    ----    -----    -----    ----    -----  
                                                                                               
Pioneer..................................... (15.4)%  15.9%   (48.2)%  (24.6)%  5.2%    (57.8)%
Global Investment Management Business.......  39.9%   34.1%    30.6%    28.6%   25.0%    21.2% 
Rank of Global Investment Management                                                           
  Business..................................     6     10        12        7      8        11  
Peer Group Mean.............................  41.9    42.0     38.2     28.2    28.6     32.4  

                                                        [Enlarge/Download Table]

                                                    TOTAL REVENUE         ADVISORY REVENUE   
                                                     AS % OF AUM            AS % OF AUM      
                                                 --------------------   -------------------- 
                                                 1997    1998    1999   1997    1998    1999 
                                                 ----    ----    ----   ----    ----    ---- 
                                                                                             
Pioneer......................................... 1.15%   1.06%   1.02%  0.58%   0.61%   0.60%
Global Investment Management Business........... 0.87%   0.92%   0.91%  0.58%   0.61%   0.60%
Rank of Global Investment Management Business...   6       5       4      4       4        4 
Peer Group Mean................................. 0.63    0.67    0.65   0.45    0.50    0.48 

                                                        [Enlarge/Download Table]

                                                                         COMPENSATION EXPENSE 
                                                  EBT AS % OF AUM          TO TOTAL REVENUE   
                                               ----------------------    -------------------- 
                                               1997     1998    1999     1997    1998    1999 
                                               -----    ----    -----    ----    ----    ---- 
                                                                                              
Pioneer....................................... (0.28)%  0.06%   (0.59)%  29.8%   37.3%   40.0%
Global Investment Management Business.........  0.25%   0.23%    0.19%   29.8%   32.4%   36.2%
Rank of Global Investment Management                                                          
  Business....................................     6      6         8      9       8        6 
Peer Group Mean...............................  0.20    0.21     0.23    31.5    30.5    29.8 

                                                        [Enlarge/Download Table]

                                          LAST TWELVE MONTHS PROFITABILITY STATISTICS            
                                 --------------------------------------------------------------  
                                                                           AS % OF AUM           
                                          MARGIN (%)              -----------------------------  
                                 -----------------------------     TOTAL      ADVISORY           
                                 EBITDA     EBT     NET INCOME    REVENUE     REVENUE      EBT   
                                 ------    -----    ----------    --------    --------    -----  
                                                                                                 
Pioneer......................... (48.2)%   (57.8)%    (33.2)%       1.02%       0.60%     (0.59)%
Global Investment Management                                                                     
  Business......................  30.6      21.2       13.7         0.91        0.60       0.19  
Peer Group High.................  47.9      47.5       28.7         1.04        0.68       0.43  
Peer Group Median...............  38.9      33.5       22.4         0.58        0.49       0.21  
Peer Group Mean.................  38.2      32.4       19.2         0.65        0.48       0.23  
Peer Group Low..................  22.6      12.1        6.9         0.23        0.22       0.05  

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                                                        [Enlarge/Download Table]

                                        LAST TWELVE MONTHS                                       
                                     PROFITABILITY STATISTICS                                    
                               ------------------------------------   3 YEAR CUMULATIVE AVERAGE  
                                                    COMPENSATION         GROWTH RATE (CAGR)      
                               ADVISORY/TOTAL      EXPENSE/TOTAL     --------------------------- 
                                  REVENUE             REVENUE         AUM     REVENUE    EBITDA  
                               --------------    ------------------  -----    -------    ------- 
                                                                                                 
Pioneer.......................      58.9%               40.0%        13.0%       1.2%        NM  
Global Investment Management                                                                     
  Business....................      66.2                36.2         13.0       90.4       (3.7)%
Peer Group High...............     100.0                49.7         62.7      117.5      146.5  
Peer Group Median.............      83.6                31.8         24.3       21.7       29.6  
Peer Group Mean...............      78.3                29.8         26.7       29.7       40.8  
Peer Group Low................      50.1                  --          5.8       (0.4)      (3.8) 

     Overview of UniCredito.  Salomon Smith Barney provided a financial overview
of UniCredito, noting that it is one of Italy's largest banks when measured in  
terms of market capitalization and that its group of asset management           
subsidiaries, EuroPlus, has approximately $80 billion in assets under           
management.                                                                     

Valuation Analyses                                                    

    The following is a summary of the material valuation analyses performed by
Salomon Smith Barney in connection with the advice it rendered on May 14, 2000. 

    Summary.  Salomon Smith Barney prepared a separate valuation of the global
investment management business using several methodologies, including normalized
price analysis, public market comparable company trading analysis, precedent    
transaction analysis and discounted cash flow analysis. Each of these           
methodologies was used to generate a reference range for the value of the global
investment management business, which was then compared to the $31.00 per share 
trading price of Pioneer common stock as of May 12, 2000 and the $43.50 per     
share merger consideration as part of Salomon Smith Barney's evaluation of the  
fairness of the merger consideration. The following table shows the reference   
ranges of values per share of Pioneer common stock derived for each of these    
methodologies. THIS TABLE SHOULD BE READ TOGETHER WITH THE MORE DETAILED SUMMARY
OF EACH OF THESE VALUATION ANALYSES SET FORTH BELOW.                            

                                                                [Download Table]

                                                             IMPLIED REFERENCE RANGE
VALUATION METHODOLOGY                                          OF PER SHARE VALUE   
---------------------                                        -----------------------
                                                                                    
Normalized Price Analysis...................................       $14.39           
Public Market Comparable Company Trading Analysis                                   
-- Peer Group...............................................  $22.25 - $27.42       
-- Selected Peer Group......................................  $26.07 - $32.09       
Precedent Transaction Analysis..............................  $21.93 - $26.91       
Discounted Cash Flow Analysis...............................  $24.84 - $30.52       

 Normalized Price Analysis.  As an initial step in its analyses, Salomon
Smith Barney determined a normalized share price for Pioneer common stock as of 
May 12, 2000 by multiplying the market price for the Pioneer common stock as of 
February 2, 2000, one day prior to the announcement by Southeastern Asset       
Management, Inc. that it was exploring possible strategic transactions for      
Pioneer by the ratio of the aggregate market capitalization of the companies    
comprising the peer group as of May 12, 2000 to the aggregate market            
capitalization of such companies as of February 2, 2000. This "normalized" share
price is designed to represent an approximation of the market price for the     
Pioneer common stock as of May 12, 2000 absent public statements regarding a    
potential transaction and was used by Salomon Smith Barney as a reference point 
for its other valuation analyses. Salomon Smith Barney determined that the      
aggregate market capitalization of the peer group increased by 0.6% during the  
measurement period. Applying this                                               
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percentage increase to the market price per Pioneer common stock as of February 
3, 2000, Salomon Smith Barney obtained a "normalized" price for the Pioneer     
common stock of $14.39 per share as of May 12, 2000.                            

In considering the results of its various financial analyses set forth
below, Salomon Smith Barney compared the implied valuation ranges resulting from
such analyses to the actual trading price for Pioneer common stock as of        
February 2, 2000 of $14.31 per share, the actual trading price for Pioneer      
common stock as of May 12, 2000 of $31.00 per share and the "normalized" price  
for Pioneer common stock as of May 12, 2000 of $14.39 per share.                

Public Market Comparable Company Analysis.  Using publicly available  
information, Salomon Smith Barney analyzed, among other things, the operating   
performance and market valuation of two groups of publicly-traded asset         
management corporations considered by Salomon Smith Barney to be comparable to  
Pioneer and its global investment management business. The first group utilized 
by Salomon Smith Barney was the peer group. The second group consisted of       
publicly-traded asset management corporations that was a subset of the peer     
group whose business or growth characteristics (such as AUM) more closely       
resembled those of the global investment management business (the "selected peer
group"). The selected peer group consisted of AMVESCAP PLC, Eaton Vance         
Corporation, Federated Investors, Inc., Franklin Resources, Inc., Gabelli Asset 
Management Inc. and T. Rowe Price Associates, Inc.                              

 In order to analyze market valuation, Salomon Smith Barney calculated a
variety of trading multiples, including (1) firm value as a percentage of AUM   
and (2) firm value as a multiple of the last twelve months' ("LTM") (a) revenues
and (b) EBITDA, (3) market capital as a multiple of LTM earnings before taxes   
and (4) the ratio of the closing stock price on May 12, 2000 as a multiple of   
estimated (a) 2000 earnings per share and (b) 2001 earnings per share (as       
provided by I/B/E/S).                                                           

The results of these analyses are summarized as follows:              

- Peer Group Analyses                                                 

                                                        [Enlarge/Download Table]

                                                  GLOBAL                               
                                                INVESTMENT                             
                                                MANAGEMENT                             
                                      PIONEER    BUSINESS   HIGH   MEDIAN  MEAN   LOW  
                                      -------   ----------  ----   ------  ----   ---- 
                                                                                       
Firm Value as % of AUM..............     3.8%       3.5%    3.4%     2.1%  2.1%    0.9%
Firm Value as Multiple of LTM                                                          
  Revenues..........................     3.7x       3.9x    5.0x     3.5x  3.3x    1.7x
Firm Value as Multiple of LTM                                                          
  EBITDA............................    (7.8)x     12.7x    12.9x    8.7x  8.7x    5.8x
Market Capital as Multiple of LTM                                                      
  Earnings Before Taxes.............    (5.7)x     18.1x    24.0x    8.5x  10.4x   5.4x
Market Capital as Multiple of LTM                                                      
  Net Income........................   (10.0)x     27.2x    55.8x   15.2x  18.6x   9.7x
Ratio of Closing Stock Price as                                                        
  Multiple of Estimated 2000 Earning                                                   
  Per Share ("EPS").................    33.3x      25.8x    20.0x   13.5x  14.5x  11.0x
Ratio of Closing Stock Price as                                                        
  Multiple of Estimated 2001 EPS....     N/A       17.6x    17.1x   11.8x  12.7x   8.8x

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- Selected Peer Group Analyses                                        

                                                        [Enlarge/Download Table]

                                                 GLOBAL                               
                                               INVESTMENT                             
                                               MANAGEMENT                             
                                     PIONEER    BUSINESS   HIGH   MEDIAN  MEAN   LOW  
                                     -------   ----------  ----   ------  ----   ---- 
                                                                                      
Firm Value as % of AUM..............    3.8%       3.5%    3.4%     2.6%  2.6%    2.0%
Firm Value as Multiple of LTM                                                         
  Revenues..........................    3.7x       3.9x    5.0x     3.7x  3.9x    3.2x
Firm Value as Multiple of LTM                                                         
  EBITDA............................   (7.8)x     12.7x    12.9x    9.4x  9.9x    8.3x
Market Capital as Multiple of LTM                                                     
  Earnings before Taxes.............   (5.7)x     18.1x    24.0x   11.0x  12.5x   8.4x
Market Capital as Multiple of LTM                                                     
  Net Income........................  (10.0)x     27.2x    55.8x   16.0x  22.6x  13.8x
Ratio of Closing Stock Price as                                                       
  Multiple of Estimated 2000 EPS....   33.3x      25.8x    18.0x   14.1x  14.6x  11.8x
Ratio of Closing Stock Price as                                                       
  Multiple of Estimated 2001 EPS....    N/A       17.6x    15.6x   12.7x  12.8x   9.9x

  Using the comparable operating data for the global investment management
business and the average multiple for the measures of value described above,    
Salomon Smith Barney calculated reference values for the global investment      
management business. Salomon Smith Barney then applied a 30% takeover premium to
such reference values to derive the respective valuation ranges.                

Based upon such analysis, Salomon Smith Barney determined an implied  
valuation range of $22.25 to $27.42 per share of Pioneer common stock based on  
the peer group and $26.07 to $32.09 per share of Pioneer common stock based on  
the selected peer group.                                                        

 Precedent Transaction Analysis.  Salomon Smith Barney reviewed publicly
available information with respect to seven precedent transactions occurring    
from 1996 to 1999 involving the acquisition of asset management corporations    
that were considered by Salomon Smith Barney to be comparable to the global     
investment management business with respect to size and/or business mix. These  
transactions involved transaction values ranging from $250 million to $1.6      
billion. The transactions were as follows:                                      

   - the acquisition of Pilgrim Capital Corporation, valued at $258 million,
by ReliaStar Financial Corporation in July 1999;                  

- the acquisition of Warburg Pincus Asset Management, valued at $602  
million, by Credit Suisse Group in February 1999;                 

    - the acquisition of Oppenheimer Capital, valued at $793 million, by PIMCO
Advisors L.P. in November 1997;                                   

   - the acquisition of Columbia Management Company, valued at $550 million,
by Fleet Financial in August 1997;                                

   - the acquisition of Montgomery Asset Management, valued at $250 million,
by Commerzbank AG in March 1997;                                  

- the acquisition of AIM Management Group, valued at $1.6 billion, by 
INVESCO PLC in November 1996; and                                 

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     - the acquisition of Van Kampen American Capital, valued at $1.175 billion,
by Morgan Stanley in June 1996.                                   

   For each precedent transaction, Salomon Smith Barney calculated a variety
of transaction multiples, including (1) purchase price as a percentage of AUM   
and (2) purchase price as a multiple of (a) LTM revenues, (b) LTM EBITDA, (c)   
LTM earnings before taxes and (d) LTM net income.                               

The results of these analyses are summarized as follows:              

                                                        [Enlarge/Download Table]

                                                   PIONEER  HIGH   MEDIAN  MEAN   LOW  
                                                   -------  ----   ------  ----   ---- 
                                                                                       
Purchase Price as % of AUM........................  5.00%   3.41%   2.74%  2.65%  1.91%
Purchase Price as Multiple of LTM Revenues........   5.5x   5.7x     4.4x  4.3x    2.8x
Purchase Price as Multiple of LTM EBITDA..........  18.0x   12.6x   10.0x  9.6x    5.9x
Purchase Price as Multiple of LTM Earnings Before                                      
  Taxes...........................................  26.7x   14.7x   12.8x  12.0x   8.1x
Purchase Price as Multiple of LTM Net Income......  40.3x   21.3x   20.4x  19.9x  17.6x

Using comparable data for the global investment management business,  
Salomon Smith Barney calculated the implied valuation range for the global      
investment management business based upon the average multiple for each of the  
measures of value described above of $21.93 to $26.91 per share of Pioneer      
common stock.                                                                   

     Discounted Cash Flow Analysis.  Salomon Smith Barney performed a discounted
cash flow ("DCF") analysis with respect to the global investment management     
business to determine an implied valuation range for the global investment      
management business by discounting (1) projected free cash flows for the five   
years ending in 2004 and (2) a terminal value of the global investment          
management business based on projected 2004 free cash flows.                    

     Salomon Smith Barney first reviewed a "base case" scenario, which assumed a
discount rate of 14% and a 9.0x terminal value multiple. In addition, Salomon   
Smith Barney reviewed the sensitivity of this analysis by calculating the value 
of the global investment management business assuming a range of discount rates 
from 13% to 14% and a range of terminal value multiples from 8.0x to 10.0x.     
Based upon such analysis, Salomon Smith Barney obtained the following implied   
value for the global investment management business per share of Pioneer common 
stock:                                                                          

                                                                [Download Table]

                                                             IMPLIED VALUE PER SHARE
                                                             OF PIONEER COMMON STOCK
                                                             -----------------------
                                                                                    
Base Case...................................................       $27.71           
Sensitivity Analysis........................................  $25.37 - $31.33       

    The foregoing is a summary of the material financial analyses furnished by
Salomon Smith Barney to the Pioneer board of directors but it does not purport  
to be a complete description of the analyses performed by Salomon Smith Barney  
or of its presentations to the Pioneer board of directors. The preparation of   
financial analyses and fairness opinions is a complex process involving         
subjective judgments and is not necessarily susceptible to partial analysis or  
summary description. Salomon Smith Barney made no attempt to assign specific    
weights to particular analyses or factors considered, but rather made           
qualitative judgments as to the significance and relevance of the analyses and  
factors considered. Accordingly, Salomon Smith Barney believes that its analyses
(and the summary set forth above) must be considered as a whole, and that       
selecting portions of such analyses and of the factors considered by Salomon    
Smith Barney, without considering all of such analyses and factors, could create
a misleading or incomplete view of the processes underlying the analyses        
conducted by Salomon Smith Barney and its opinion. With regard to the comparable
public company analysis summarized above, Salomon Smith                         

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Barney selected comparable public companies on the basis of various factors,    
including the size of the public company and similarity of the line of business;
however, no public company utilized as a comparison in such analysis, and no    
transaction utilized as a comparison in the comparable transaction analyses     
summarized above, is identical to Pioneer, any business segment of Pioneer or   
the merger. As a result, these analyses are not purely mathematical, but also   
take into account differences in financial and operating characteristics of the 
comparable companies and other factors that could affect the transaction or     
public trading value of the comparable companies and transactions to which      
Pioneer, the business segments of Pioneer and the merger are being compared. In 
its analyses, Salomon Smith Barney made numerous assumptions with respect to    
Pioneer, UniCredito, industry performance, general business, economic, market   
and financial conditions and other matters, many of which are beyond the control
of Pioneer and UniCredito. Any estimates contained in Salomon Smith Barney's    
analyses are not necessarily indicative of actual values or predictive of future
results or values, which may be significantly more or less favorable than those 
suggested by such analyses. Estimates of values of companies do not purport to  
be appraisals or necessarily to reflect the prices at which companies may       
actually be sold. Because such estimates are inherently subject to uncertainty, 
none of Pioneer, UniCredito, the Pioneer board of directors, Salomon Smith      
Barney or any other person assumes responsibility if future results or actual   
values differ materially from the estimates.                                    

 Salomon Smith Barney's analyses were prepared solely as part of Salomon
Smith Barney's analysis of the fairness of the merger consideration and were    
provided to the Pioneer board of directors in that connection. The opinion of   
Salomon Smith Barney was one of the factors taken into consideration by the     
special committee and the Pioneer board of directors in making its determination
to approve the merger agreement and the merger.                                 

  Salomon Smith Barney is an internationally recognized investment banking
firm engaged, among other things, in the valuation of businesses and their      
securities in connection with mergers and acquisitions, restructurings,         
leveraged buyouts, negotiated underwritings, competitive biddings, secondary    
distributions of listed and unlisted securities, private placements and         
valuations for estate, corporate and other purposes. Pioneer selected Salomon   
Smith Barney to act as its financial advisor on the basis of Salomon Smith      
Barney's international reputation and Salomon Smith Barney's familiarity with   
Pioneer. Salomon Smith Barney and its predecessors and affiliates had previously
rendered and is rendering investment banking and financial advisory services to 
Pioneer unrelated to the merger, for which they received and will receive       
customary compensation. Salomon Smith Barney has also acted as financial advisor
to Pioneer in connection with the disposition of Pioneer's Ghana gold mining    
operations. In addition, in the ordinary course of its business, Salomon Smith  
Barney and its affiliates (including Citigroup and its affiliates) may actively 
trade the debt and equity securities of both Pioneer and UniCredito for its own 
account and for the accounts of customers and, accordingly, may at any time hold
a long or short position in such securities. Salomon Smith Barney and its       
affiliates (including Citigroup and its affiliates) may maintain relationships  
with Pioneer (and Citigroup and its affiliates).                                

    Pursuant to Salomon Smith Barney's engagement letter, Pioneer (1) has paid
a fee to Salomon Smith Barney of $250,000, upon execution of the engagement     
letter, and (2) will pay approximately $4,750,000, 10% of which was paid        
promptly upon the signing of definitive documentation related to the merger, and
the remainder of which, less the $250,000 paid in clause (1) and not previously 
credited, will be payable upon consummation of the merger. Pioneer has also     
agreed to reimburse Salomon Smith Barney for its reasonable travel and other    
out-of-pocket expenses incurred in connection with its engagement, including the
reasonable fees and disbursements of its counsel, provided that the aggregate   
amount of legal expenses to be reimbursed hereunder (other than expenses to be  
reimbursed pursuant to a separate indemnity agreement) will not exceed $75,000  
without the consent of Pioneer, such consent not to be unreasonably withheld.   
Pursuant to a separate indemnity agreement, Pioneer has agreed to indemnify     
Salomon Smith Barney against certain liabilities and expenses relating to or    
arising out of its engagement, including certain liabilities under the federal  
securities laws.                                                                

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As noted under the caption "The Merger -- Reasons for the Merger," the
opinion of Salomon Smith Barney was only one of several factors considered by   
the Pioneer board of directors in determining to adopt and approve the merger   
agreement and the merger.                                                       

PROJECTED FINANCIAL DATA                                                        

Pioneer does not, as a matter of course, make public forecasts or     
projections as to future revenues, earnings or other income statement data, cash
flows or balance sheet and financial position information. However, in          
connection with the merger, UniCredito and our financial advisors had access to 
our projections for the stand alone global investment management businesses for 
fiscal years 2000 through 2004.                                                 

     We have included a summary of these projections below. These projections do
not reflect any of the effects of the merger, including transaction costs, or   
other changes that may in the future be appropriate concerning Pioneer and its  
assets, businesses, operations, properties, policies, corporate structure,      
capitalization and management in light of the circumstances then existing. These
projections also do not include the businesses and assets being transferred to  
Harbor Global. Pioneer believes that the assumptions were reasonable at the time
they were prepared, given the information known by our management.              

    Pioneer did not prepare the projections for fiscal years 2000 through 2004
with a view toward public disclosure or compliance with published guidelines of 
the Securities and Exchange Commission or the American Institute of Certified   
Public Accountants regarding forward-looking information or generally accepted  
accounting principles. Neither our independent auditors, nor any other          
independent accountants, have compiled, examined or performed any procedures    
with respect to the prospective financial information contained in these        
projections nor have they expressed any opinion or given any form of assurance  
on this information or its achievability. We assume no responsibility for, and  
disclaim any association with, this prospective financial information.          

In preparing our projections for fiscal years 2000 through 2004, we   
necessarily made numerous assumptions, many of which are beyond our control and 
may prove not to have been, or may no longer be, accurate. Except as otherwise  
indicated, this information does not reflect revised prospects for our business,
expenditures associated with the sale of Pioneer, including the consummation of 
the transaction with UniCredito, changes in general business and economic       
conditions or any other transaction or event that has occurred or that may occur
and that we did not anticipate at the time we prepared this information.        
Accordingly, this information is not necessarily indicative of current values or
future performance, which may be significantly more favorable or less favorable 
than as set forth below, and you should not regard our including these          
projections in this prospectus as a representation that they will be achieved.  

  The projections for fiscal years 2000 through 2004 are not guarantees of
performance. These projections involve risks, uncertainties and assumptions. The
future financial results and our stockholder value may differ materially from   
those expressed in these projections. Many of the factors that will determine   
these results and values are beyond Pioneer's ability to control or predict. You
should not place undue reliance on these projections. Our future financial      
results may vary materially from these projections. We do not intend to update  
or revise these projections.                                                    

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                                                        [Enlarge/Download Table]

                                        ACTUAL                                        BUDGETED                                    
                              ---------------------------   PROJECTED   -------------------------------------            CAGR     
                               1997      1998      1999       2000       2001      2002      2003      2004    '97-'99  '99-'04   
                              -------   -------   -------   ---------   -------   -------   -------   -------  -------  -------   
                                                                     (DOLLARS IN MILLIONS)                                        
                                                                                                                                  
ASSETS UNDER MANAGEMENT:                                                                                                          
Beginning of Period - Assets                                                                                                      
  Under Management..........  $16,978   $21,037   $23,362    $24,503    $25,917   $29,001   $32,712   $37,329    17.3%     11.1%  
  Net Sales.................      465     1,440    (1,030)       681      1,267     1,674     2,309     2,665      NA      31.4(1)
  Market Appreciation.......    3,595       885     2,171        733      1,817     2,037     2,308     2,631   (22.3)      3.9   
                              -------   -------   -------    -------    -------   -------   -------   -------                     
End of Period - Assets Under                                                                                                      
  Management................  $21,037   $23,362   $24,503    $25,917    $29,001   $32,712   $37,329   $42,624     7.9      11.7   
                              =======   =======   =======    =======    =======   =======   =======   =======                     
Average Assets Under                                                                                                              
  Management................   19,007    22,200    23,933     25,210     27,459    30,857    35,021    39,977    12.2      10.8   
INCOME STATEMENT:                                                                                                                 
Revenue:                                                                                                                          
  Investment Management                                                                                                           
    Fees....................  $ 121.4   $ 142.3   $ 147.2    $ 163.1    $ 184.7   $ 212.0   $ 245.6   $ 284.4    10.1%     14.1%  
  Shareholder Service                                                                                                             
    Fees....................     27.3      31.6      43.7       47.1       50.4      54.4      59.5      65.3    26.6       8.3   
  Underwriting                                                                                                                    
    Commissions/Distribution                                                                                                      
    Fees....................     23.3      26.5      14.5       17.8       18.1      19.6      22.7      26.2   (21.0)     12.5   
  Trustee Fees..............      4.4       5.5       5.3        4.0        4.2       4.4       4.7       5.0    10.3      (1.2)  
  Other Income..............      7.7       9.2      11.5        3.7        3.8       3.8       3.9       3.9    21.9       1.1(1)
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Revenue.....................    184.1     215.1     222.2      235.6      261.2     294.3     336.4     384.8     9.9      11.6   
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Costs and Expenses:                                                                                                               
  Compensation and                                                                                                                
    Benefits................     54.9      69.7      80.4       88.1       98.4     112.9     131.3     152.9    21.0%     13.7%  
  Selling Expenses..........     19.5      29.6      29.7       38.3       39.3      42.7      49.6      57.4    23.6      14.0   
  Depreciation and                                                                                                                
    Amortization............     18.4      23.1      14.8       15.0       10.8      11.0      11.3      11.5   (10.4)     (4.9)  
  Space and Other                                                                                                                 
    Expenses................     36.3      42.4      44.0       38.2       40.1      42.1      44.2      46.4    10.2       9.7   
                              -------   -------   -------    -------    -------   -------   -------   -------                     
         Total Expenses.....    129.1     164.9     169.0      179.5      188.6     208.7     236.4     268.2    14.4       9.7   
                              =======   =======   =======    =======    =======   =======   =======   =======                     
Operating Income............     55.0      50.3      53.3       56.1       72.6      85.6     100.0     116.6    (1.6)     17.0   
  Interest Expense..........      2.9       3.3       0.1        0.0        0.0       0.0       0.0       0.0                     
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Earning Before Taxes........     52.1      47.0      53.2       56.1       72.6      85.6     100.0     116.6     1.1      17.0   
  One-Time Gains                                                                                                                  
    (Losses)(2).............      0.6       6.8      (1.2)      (8.0)       0.0       0.0       0.0       0.0      NA        NA   
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Pre-Tax Income..............     52.7      53.7      52.0       48.1       72.6      85.6     100.0     116.6    (0.7)     17.5   
  Taxes.....................     21.0      21.8      17.5       15.4       25.3      29.7      34.7      40.3                     
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Net Income..................     31.6      32.0      34.5       32.7       47.3      55.8      65.3      76.3     4.5      17.2   
  Minority Interest.........     (0.1)     (0.0)     (0.1)       0.0        0.0       0.0       0.0       0.0                     
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Net Income (Loss)...........     31.7      32.0      34.7       32.7       47.3      55.8      65.3      76.3     4.6      17.1   
  Change in Accounting                                                                                                            
    Principle...............      0.0       0.0      (0.2)       0.0        0.0       0.0       0.0       0.0                     
                              -------   -------   -------    -------    -------   -------   -------   -------                     
Net Income..................  $  31.7   $  32.0   $  34.4    $  32.7    $  47.3   $  55.8   $  65.3   $  76.3     4.3      17.2   
                              =======   =======   =======    =======    =======   =======   =======   =======                     
Earning Before Interest,                                                                                                          
  Taxes, Depreciation and                                                                                                         
  Amortization..............  $  73.4   $  73.4   $  68.1    $  71.1    $  83.4   $  96.6   $ 111.2   $ 128.1    (3.7)     13.5   
                              =======   =======   =======    =======    =======   =======   =======   =======                     

-------------------------                                                       
(1) Cumulative average growth rate (CAGR) from 2000 through 2004.               

(2) Represents unrealized and realized gains on venture capital, marketable     
   securities and long-term investments and also includes an $8.1 million gain
  from the sale of Class B share rights in 1998 and $8.0 million of budgeted
one-time discretionary spending in 2000.                                

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  The projections for the years 2001 through 2004 are based on a number of
assumptions, including, but not limited to, the following:                      

  - Asset flows, including gross sales, market performance and redemptions
     are projected separately for the six largest U.S. mutual funds and nine
     other assets under management "buckets." The projections reflect trends
within funds or groups of funds.                                  

- 3.0% equity market appreciation rate in 2000 and 7.5% thereafter.   

  - Management fees were adjusted for assumed performance enhancements and
    specific contractual fee adjustments based on assets under management.

- Other Revenues:                                                     

      Shareholder services fees -- assumed to grow at a rate equal to the growth
in net assets under management, excluding market performance.       

     Underwriting commissions -- calculated as a percentage of gross sales. In
1998, Pioneer entered into an agreement to sell to a third party its
      rights to receive future distribution fees and deferred sales charges from
  the sale of Class B shares through September 30, 2001. The projections
assume this program continues after September 30, 2001.             

Trustee fees -- assumed to grow at a rate equal to the growth in net
assets under management, excluding market performance.              

Other income -- no assumed growth.                                  

- Expenses:                                                           

 Compensation and Benefits -- calculated as a percentage of investment
management revenues, consistent with Pioneer's budget for 2000.     

      Selling Expenses -- assumed to be constant as a percentage of gross sales.

Other Expenses -- 5% annual growth rate assumed.                    

Taxes -- An effective tax rate of approximately 35% has been used.  

Depreciation -- 3% annual growth rate assumed.                      

Amortization -- goodwill amortization from the 1993 Mutual of Omaha 
acquisition at $1.5 million annually through 2009; amortization of  
    commission on sales of Class C shares of U.S. mutual funds assumed to be
flat at $2.4 million annually.                                      

TREATMENT OF PIONEER OPTIONS AND RESTRICTED STOCK                               

We have issued and outstanding under our 1988 Stock Option Plan, as   
amended, and Amended and Restated 1997 Stock Incentive Plan, options to purchase
2,141,406 shares of Pioneer common stock at a weighted-average exercise price of
$16.38 per share. Options to purchase 1,093,006 of these shares were unvested at
June 22, 2000, and options to purchase 1,048,400 shares were vested and         
unexercised on that date. We have also issued to current employees 1,583,474    
shares of restricted stock under our 1995 Restricted Stock Plan and Amended and 
Restated 1997 Stock Incentive Plan at a purchase price of $0.10 per share, of   
which 556,982 shares were unvested at June 22, 2000. Immediately prior to the   
merger, each unvested share of restricted stock and each unvested stock option  
will become fully vested. At the effective time of the merger, each share of    
restricted stock will convert to the right to receive a cash payment of $43.50. 
Holders of restricted stock also will receive the distribution of Harbor Global 
common shares. As soon as practicable after the merger, each holder of an option
to purchase shares of Pioneer common stock will receive a cash payment equal to 
the excess of $43.50 over the per share exercise price of such option,          

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multiplied by the number of shares subject to the option. Unless option holders 
exercise their options prior to the effective time of the merger, option holders
will not be record holders of Pioneer common stock and, consequently, will not  
be entitled to participate in the distribution of shares of Harbor Global.      

INTERESTS OF EXECUTIVE OFFICERS AND DIRECTORS OF PIONEER IN THE MERGER          

  In considering the recommendation of the Pioneer board of directors with
respect to the merger, you should be aware that the executive officers and      
certain directors of Pioneer have interests in the merger that are in addition  
to your interests as a stockholder of Pioneer generally. The Pioneer board of   
directors and the members of the special committee were aware of these potential
conflicts and considered them in approving the merger. In addition, certain     
executive officers and directors of Pioneer are significant stockholders of     
Pioneer and will receive substantial consideration for their shares. See        
"Security Ownership of Certain Beneficial Holders and Management of Pioneer."   

Stock Ownership and Voting                                            

  Four of the officers of Pioneer, Mr. Cogan, Mr. Tripple, Eric W. Reckard
and Robert P. Nault, have entered into a voting agreement with UniCredito       
relating to the proposed merger. As of the record date, these parties           
collectively owned or had beneficial control over 4,495,875 shares of the       
outstanding shares of Pioneer common stock (including restricted stock but      
excluding stock issuable upon the exercise of options), or approximately 16.2%  
of the outstanding shares of Pioneer common stock. In the voting agreement,     
these parties agreed to vote all of the shares of Pioneer common stock they     
beneficially own or over which they exercise voting control in favor of the     
merger, against any competing merger proposal and against any action that would 
result in a breach of Pioneer's representations and warranties in the merger    
agreement.                                                                      

Acceleration of Unvested Stock Options and Restricted Stock           

   All unvested options and restricted stock granted by Pioneer under any of
its plans or arrangements, including the options and restricted stock held by   
the executive officers and directors of Pioneer, will become fully vested on an 
accelerated basis immediately prior to the effective time of the merger,        
including:                                                                      

  - options to purchase 203,000 shares of Pioneer common stock held by Mr.
     Cogan, the president, chief executive officer and chairman of the board
of directors of Pioneer;                                          

 - options to purchase 103,000 shares of Pioneer common stock and 12,653
shares of restricted stock held by Mr. Tripple, an executive vice 
president and a director of Pioneer;                              

- options to purchase 85,000 shares of Pioneer common stock and 4,387 
 shares of restricted stock held by Mr. Reckard, the chief financial
officer and an executive vice president of Pioneer;               

 - options to purchase 104,000 shares of Pioneer common stock and 11,077
     shares of restricted stock held by Stephen G. Kasnet, an executive vice
president of Pioneer;                                             

- options to purchase 90,000 shares of Pioneer common stock and 8,554 
     shares of restricted stock held by Alicja K. Malecka, an executive vice
president of Pioneer;                                             

- options to purchase 95,000 shares of Pioneer common stock and 11,594
    shares of restricted stock held by William H. Smith, Jr., an executive
vice president of Pioneer;                                        

- options to purchase 15,000 shares of Pioneer common stock and 15,000
shares of restricted stock held by Adriana Stadecker, senior vice 
president and director of human resources of Pioneer;             

- options to purchase 73,000 shares of Pioneer common stock and 6,552 
     shares of restricted stock held by Mr. Nault, senior vice president and
general counsel of Pioneer;                                       

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   - options to purchase 100,000 shares of Pioneer common stock held by Alan
J. Strassman, vice chairman and a director of Pioneer; and        

- options to purchase 25,700 shares of Pioneer common stock and 3,186 
    shares of restricted stock held by Dr. Jaskaran S. Teja, a director of
Pioneer.                                                          

Executive Retention Agreements                                        

    All executive officers (other than Mr. Cogan) as well as Mr. Strassman and
Dr. Teja, who are directors of Pioneer, have entered into executive retention   
agreements with Pioneer. Each retention agreement contains provisions to        
compensate the executive in the event of a change in control of Pioneer. Upon   
the occurrence of a change in control, each outstanding option to purchase      
shares of Pioneer common stock becomes immediately exercisable in full and each 
outstanding share of restricted stock is deemed to be fully vested and no longer
subject to a right of repurchase by Pioneer. For purposes of the retention      
agreements, the merger and transactions contemplated by the merger agreement    
constitute a change in control of Pioneer. Additionally, each retention         
agreement provides that in the event of a change in control and subsequent      
termination of employment other than for cause, or by the executive for good    
reason, within 24 months (12 months in the case of Dr. Teja) of the change in   
control, the executive will be entitled to receive from Pioneer a single lump   
sum payment equal to the total of:                                              

   - three times (or one in the case of Dr. Teja) the sum of the executive's
annual base salary and the executive's full normal annual bonus   
compensation immediately prior to termination of employment; plus 

     - the sum of the executive's base salary through the date of termination of
 employment, plus the executive's prorated annual bonus compensation
    immediately prior to the termination of employment, plus the amount of
       any deferred compensation and vacation time, plus any accrued earnings or
interest, each to the extent not already paid.                    

    For purposes of the foregoing, normal annual bonus compensation is assumed
to be 100% of the executive's annual base salary.                               

     In the event of termination of employment under the circumstances described
in the paragraph above, Mr. Cogan, Mr. Tripple, Mr. Smith, Mr. Kasnet and Ms.   
Malecka, will receive cash payments of $0, $2,550,000, $1,800,000, $1,800,000   
and $1,800,000, respectively; and the aggregate cash payments under such        
circumstances for all executive officers (as well as Mr. Strassman and Dr. Teja)
would be $13,810,002. It is not expected that Mr. Kasnet will be entitled to    
such a payment as a result of his acceptance of employment with Harbor Global.  

If a severance payment is subject to an excise tax pursuant to Section
280(G) of the Internal Revenue Code, the severance payment will be reduced to   
eliminate the excise tax provided such a reduction would improve the executive's
after-tax proceeds.                                                             

In addition to the cash compensation described above, each covered    
executive will be entitled to remain a participant in all employee benefit plans
maintained by Pioneer at the time of the termination of employment for a period 
of 24 months (12 months in the case of Dr. Teja) after such termination.        
Finally, each retention agreement provides that the executive will receive      
conventional outplacement services having a value of not more than 20% of the   
executive's annual base salary.                                                 

    At his request, Mr. Cogan was not provided a retention agreement. However,
the compensation committee of the board of directors of Pioneer concluded that  
his participation in any transaction involving Pioneer would be essential. As a 
result, Pioneer has agreed to pay a $700,000 bonus fee to Mr. Cogan upon the    
consummation of a significant transaction affecting the company, including the  
proposed transactions with UniCredito. Additionally, Mr. Cogan will be entitled 
to remain a participant in all employee welfare benefit plans maintained by     
Pioneer at the time of his termination of employment                            

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following a change in control of Pioneer for a period of 24 months after such   
termination. In the event that Mr. Cogan's employment is terminated either      
before or after any change in control of Pioneer, Pioneer is not contractually  
obligated to make any payment to Mr. Cogan. Mr. Cogan's $700,000 bonus is       
triggered only by the closing of a significant transaction affecting Pioneer    
and, therefore, is not considered a substitute for the type of severance        
payments to which the other executive officers are entitled under the           
circumstances described above.                                                  

Employment Arrangements                                               

   While not a condition to the closing of the merger, some of the executive
officers of Pioneer are expected to continue to be officers of Pioneer or other 
affiliates of UniCredito. Pioneer anticipates, for example, that Mr. Cogan will 
become deputy chairman of UniCredito's global asset management business and     
non-executive chairman of UniCredito's United States asset management operations
and Mr. Tripple will become chief executive officer of UniCredito's U.S. asset  
management operations. As of the date of this proxy statement, none of the      
executive officers has entered into an employment agreement with UniCredito or  
any of its affiliates.                                                          

Affiliation with Harbor Global                                        

  Certain directors and officers of Pioneer will be affiliated with Harbor
Global. Mr. Curtin, Mr. Sanders and Mr. Valentine, each of whom is a director of
Pioneer and a member of the special committee, are expected to constitute the   
board of directors of Harbor Global. In addition, certain officers of Pioneer   
will own and operate Calypso Management LLC, which has agreed to manage the     
liquidation of Harbor Global and operate its assets until they are liquidated.  
It is expected that Harbor Global will pay the operating expenses of Calypso    
Management incurred in connection with the provision of services to Harbor      
Global. As compensation for its provision of services to Harbor Global, Calypso 
Management is expected to receive a portion of the net proceeds distributed from
the liquidation of the assets of Harbor Global, generally according to the      
following schedule:                                                             

- with respect to the first $36 million in net proceeds available for 
      distribution, Calypso Management shall receive a payment equal to 10% of
such net proceeds;                                                

- with respect to the next $72 million in net proceeds available for  
       distribution, Calypso Management shall receive a payment equal to 7.5% of
such net proceeds; and                                            

 - with respect to any additional net proceeds, Calypso Management shall
receive a payment equal to 10% of such net proceeds.              

Net proceeds will not include any unexpended portion of the $25 million         
contributed by Pioneer to Harbor Global. The proceeds received by Pioneer       
Goldfields II in connection with the sale of its Ghanaian gold mine to Ashanti  
will not be subject to the preceding schedule. Instead, Calypso Management will 
receive only 5% of the Ashanti proceeds that are distributed, if any. Harbor    
Global will also pay Mr. Kasnet a signing and retention bonus of $1.8 million if
he remains employed by Calypso Management and Calypso Management continues to   
provide services to Harbor Global on the second anniversary of the distribution 
date, or if Mr. Kasnet is terminated without cause prior to the second          
anniversary of the distribution date. See "Certain Relationships and Related    
Transactions" in the Harbor Global information statement attached as Annex B to 
this proxy statement.                                                           

Indemnification Arrangements                                          

Under the merger agreement, UniCredito has agreed, for a period of six
years after the effective date of the merger, to continue all rights to         
indemnification, advancement of expenses, exculpation, limitation of liability, 
and any similar rights, existing at the time of the merger in favor of the      
employees, agents, directors or officers of Pioneer. UniCredito has also agreed 
to provide each individual who served as a                                      

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director or officer of Pioneer at any time prior to the merger with liability   
insurance for a period of six years after the merger no less favorable in       
coverage and amount than was in effect prior to the merger.                     

REGULATORY APPROVALS                                                            

  Foreign Approvals.  Under the laws of some foreign countries, the merger
and the related transactions may not be consummated unless certain approvals are
obtained from these countries' regulatory authorities. In the following         
countries, the designated agency must approve certain aspects of Pioneer's      
business and/or the merger and the related transactions; provided that only the 
approval of the Bank of Italy and the Central Bank of Ireland are conditions to 
the closing of the merger.                                                      

- In Italy, the Bank of Italy;                                        

     - In Ireland, the Central Bank of Ireland and the Department of Enterprise,
Trade and Employment;                                             

- In Hong Kong, the Futures and Securities Commission; and            

- In the Czech Republic, the Czech Securities and Exchange Commission.

 Additionally, in some countries, Pioneer and UniCredito are required to
notify certain governmental agencies of the transactions contemplated by the    
merger agreement. In particular, under the laws of each of the following        
countries, the designated agency has been or will be notified of the merger and 
the related transactions. However, none of the following regulatory filings is a
condition to the closing of the merger.                                         

- In Taiwan, Securities and Exchange Commission;                      

- In India, the Securities Exchange Board of India; and               

     - In Germany, the German Banking Authorities and Bundesaufsichtsamt fur das
v Kreditwesen.                                                    

     In addition, the establishment of Harbor Global and the transfer of certain
Pioneer businesses to Harbor Global involve various foreign regulatory consents,
including approvals of certain Russian authorities. Because the establishment   
and distribution of interests in Harbor Global are conditions to the closing of 
the merger, such approvals must be obtained prior to closing the merger.        

   Banking and Antitrust Approvals.  Under the merger agreement, UniCredito,
as a condition to closing, must either (i) qualify as a "financial holding      
company" under the U.S. Bank Holding Company Act of 1956, as amended by the     
Gramm-Leach-Bliley Act of 1999 or (ii) obtain the approval of the Board of      
Governors of the U.S. Federal Reserve System prior to its acquisition of        
Pioneer. UniCredito will file an application with the Federal Reserve Board to  
obtain prior approval of the acquisition. There can be no assurances that such  
approval will be obtained or that conditions unacceptable to UniCredito will not
be imposed in connection with any such approval. Because UniCredito is required 
to obtain the approval of the Federal Reserve Board to complete the transaction,
Pioneer and UniCredito are required only to make a notice filing under the      
Hart-Scott-Rodino Antitrust Improvements Act at least 30 days before            
consummation of the merger, and no waiting period will be imposed.              

  In Europe, UniCredito must obtain the approval of the Bank of Italy, its
primary regulator, in order to complete the merger. Obtaining such approval is a
condition to the closing of the merger. There can be no assurance that the Bank 
of Italy will approve the transaction.                                          

   Because both UniCredito and Pioneer have operations in Europe, the merger
may be subject to approval under regulation (EC) No. 4054189, as amended, of the
Council of the European Union. While Pioneer does not believe that the merger   
raises any significant anti-trust issues, there can be no assurance as to the   
timing or the outcome of such anti-trust approval by the European Union.        

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The filings and approvals referenced above are still pending. Pioneer 
cannot predict whether it or UniCredito will obtain all the required regulatory 
approvals within the time frame contemplated by the merger agreement or without 
becoming subject to burdensome conditions.                                      

General.  Except as described in this section, we are not aware of any
other material filing, approval or other action by any federal or state         
governmental or administrative authority that Pioneer must obtain in connection 
with the merger. Should any other similar approval or action be required,       
Pioneer currently contemplates seeking that approval or taking that action, but 
such approvals or actions are not conditions to the closing of the merger.      

State Anti-Takeover Statutes.  Section 203 of the Delaware General    
Corporation Law prohibits business combination transactions involving a Delaware
corporation, such as Pioneer, and an "interested stockholder" for three years   
following the time the person became an interested stockholder. Section 203     
defines an interested stockholder in general as any person that directly or     
indirectly beneficially owns 15% or more of the outstanding voting stock of the 
subject corporation. The prohibitions in Section 203 do not apply if special    
requirements are met or exceptions apply, including that prior to the time a    
person became an interested stockholder the board of directors of the subject   
corporation approved either the business combination or the transaction which   
resulted in such person being an interested stockholder. The merger is not      
prohibited by Section 203 of the Delaware General Corporation Law.              

  A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have  
substantial assets, stockholders, principal executive offices or principal      
places of business, or whose business operations otherwise have substantial     
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme  
Court of the United States invalidated on constitutional grounds the Illinois   
Business Takeover Statute, which, as a matter of state securities law, made     
takeovers of corporations meeting the statute's requirements more difficult.    
However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court  
held that the state of Indiana may, as a matter of corporate law, and, in       
particular, with respect to those aspects of corporate law concerning corporate 
governance, constitutionally disqualify a potential acquiror from voting on the 
affairs of a target corporation without the prior approval of the remaining     
stockholders. The state law before the Supreme Court was by its terms applicable
only to corporations that had a substantial number of stockholders in that state
and were incorporated there.                                                    

Pioneer, directly or through our subsidiaries, conducts business in a 
number of states throughout the United States, some of which have enacted       
anti-takeover laws. We do not know whether any of these laws will, by their     
terms, apply to the merger, and we have not necessarily complied with any such  
laws. Should any person seek to apply any state anti-takeover law to the merger,
Pioneer will take such action as then appears desirable, which may include      
challenging the validity or applicability of any such statute in appropriate    
court proceedings. In the event it is asserted that one or more state           
anti-takeover laws is applicable or valid as applied to the merger, Pioneer may 
be required to file information with, or receive approvals from, the relevant   
state authorities. In addition, if enjoined, we may be delayed in consummating  
the merger.                                                                     

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES                          

The following is a general summary of certain material United States  
federal income tax consequences to the Pioneer stockholders of the merger,      
including the receipt of Harbor Global common shares, but does not purport to be
a complete analysis of all potential tax considerations relating thereto. No    
foreign, state or local tax considerations are addressed, nor are federal tax   
considerations other than income tax considerations. This summary is based on   
current provisions of the Internal Revenue Code of 1986, as amended, currently  
applicable Treasury regulations, and judicial and administrative decisions and  
rulings. Legislative, judicial or administrative changes or interpretations may 
be forthcoming that could alter or modify these statements. Any such changes or 
interpretations could be retroactive and could affect the tax consequences to   
the Pioneer stockholders. This summary applies only to the Pioneer stockholders 

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who hold their shares as capital assets and does not discuss all of the United  
States federal income tax consequences that may be relevant to particular       
Pioneer stockholders subject to special treatment, such as:                     

- banks;                                                              

- tax-exempt organizations;                                           

- insurance companies;                                                

- mutual funds;                                                       

- traders in securities who elect to apply a mark-to-market method of 
accounting;                                                       

- dealers in securities or foreign currencies;                        

     - stockholders who received their Pioneer common stock through the exercise
of employee stock options or otherwise as compensation;           

- stockholders who are not United States taxpayers;                   

   - stockholders who hold Pioneer common stock as part of a hedge, straddle
or conversion transaction;                                        

    - stockholders who hold Pioneer common stock through a partnership, trust,
 or other entity that is treated as a pass through entity for United
States federal income tax purposes; or                            

- stockholders subject to the alternative minimum tax.                

Receipt of Cash for Pioneer Common Stock                              

The exchange of the shares of Pioneer common stock for cash will be a 
taxable transaction to the holders of such shares for federal income tax        
purposes. In general, each stockholder will recognize gain or loss in an amount 
equal to the difference between the cash received and such stockholder's        
adjusted tax basis in the stockholder's shares. Such gain or loss will be a     
capital gain or loss if a stockholder has held his, her or its shares as a      
capital asset. Capital gain or loss will be a long-term capital gain or loss if 
a stockholder has held his, her or its shares for more than 12 months as of the 
closing of the merger. There are certain limitations on the deductibility of    
capital losses. Capital gains of individuals derived in respect of capital      
assets held for more than 12 months are eligible for reduced rates of taxation. 
It is the responsibility of each stockholder to determine the adjusted tax basis
of his, her or its shares.                                                      

     Neither Pioneer nor Harbor Global has sought or will seek a ruling from the
Internal Revenue Service or a legal opinion regarding any tax matter discussed  
in this proxy statement, including any tax consequences relating to the         
formation of Harbor Global or the tax consequences of the merger and the        
distribution or the holding of Harbor Global common shares. Neither Pioneer nor 
Harbor Global can assure you that the Internal Revenue Service would not assert,
or that a court would not sustain, a position contrary to any of the tax        
consequences described below.                                                   

Receipt of Shares of Harbor Global                                    

The United States federal income tax consequences to you of receiving 
Harbor Global common shares in the distribution may differ significantly        
depending on whether the distribution and merger are treated as a single        
integrated transaction or as two separate transactions for United States federal
income tax purposes. Although there is no specific authority directly on point, 
UniCredito, Pioneer and Harbor Global intend to characterize the merger and the 
distribution as a single integrated transaction for United States federal income
tax purposes. Notwithstanding this intention, because the issue is not free from
doubt, you should consult your tax advisor with respect to the proper treatment 
of the distribution of Harbor Global common shares.                             

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     In general, the receipt by you of Harbor Global common shares in connection
with the merger and the distribution will be a taxable event. If the merger and 
the distribution are treated as a single, integrated transaction, the receipt by
you of cash and Harbor Global common shares will be treated as an exchange of   
shares of Pioneer for both cash and shares of Harbor Global common shares. Under
this treatment, you will generally recognize capital gain or loss for United    
States federal income tax purposes equal to the difference between (1) the      
amount of cash received plus the fair market value at the time of the           
distribution of the Harbor Global common shares you receive and (2) the adjusted
tax basis in Pioneer common stock you surrender in exchange for the cash and    
Harbor Global common shares.                                                    

  Such gain or loss will be long-term capital gain or loss if your holding
period for Pioneer common stock you exchange is more than 12 months as of the   
closing of the merger. If you own more than one block of shares of Pioneer      
common stock, the cash and Harbor Global common shares you receive must be      
allocated ratably among the blocks in the same proportion that the number of    
shares in a particular block bears to the total number of shares owned by you.  
Your holding period for the Harbor Global common shares you receive in the      
distribution will begin on the day following the date of the distribution, and  
you will have an initial tax basis in the Harbor Global common shares equal to  
their fair market value.                                                        

If the merger and distribution are not treated as a single integrated 
transaction for United States federal income tax purposes, the receipt of cash  
in exchange for shares of Pioneer common stock would result in the recognition  
of gain or loss as described above, while the receipt of Harbor Global common   
shares may instead be taxable to you as a distribution from Pioneer under       
section 301 of the Internal Revenue Code.                                       

If the receipt of the Harbor Global common shares were treated as a   
distribution under section 301 of the Internal Revenue Code, the amount of such 
distribution for United States federal income tax purposes would be the fair    
market value of the Harbor Global common shares at the time of the distribution.
Under section 301 of the Internal Revenue Code, your receipt of the Harbor      
Global common shares would be taxable to you as a dividend at ordinary income   
tax rates to the extent of Pioneer's current or accumulated earnings and        
profits, including earnings and profits arising from the deemed sale by Pioneer 
of the Harbor Global common shares as a result of the distribution. The value of
Harbor Global common shares that exceeds the earnings and profits of Pioneer    
would first be treated as a non-taxable return of capital to the extent of your 
basis in your shares of Pioneer common stock, and your adjusted tax basis in    
such stock would be reduced accordingly (but not below zero). To the extent that
the value of Harbor Global common shares you receive were to exceed your        
adjusted tax basis in your shares of Pioneer common stock, such excess would be 
treated as long-term or short-term capital gain from the sale or exchange of    
Pioneer common stock, depending on the period of time you held such stock.      

  As discussed above, the amount of income, gain or loss, if any, that you
will recognize will depend, in part, on the fair market value of the Harbor     
Global common shares you receive in the distribution. Harbor Global will        
undertake to provide you with its determination regarding the fair market value 
of the Harbor Global common shares you receive in the distribution. However, any
such determination will not be binding on the Internal Revenue Service, which   
may assert a different, and possibly higher, value for the shares of Harbor     
Global common shares you receive. Accordingly, there can be no assurance as to  
the exact amount of income, gain or loss you may recognize as a result of the   
merger and the distribution.                                                    

    You may also be subject to information reporting and to backup withholding
at a rate of 31% of amounts paid to you, unless you provide proof of an         
applicable exemption or a correct taxpayer identification number, and otherwise 
comply with applicable requirements of the backup withholding rules.            

Bermuda and United States Tax Status of Harbor Global                 

   Harbor Global believes that it will not be subject to taxation in Bermuda
and that interest, dividends and gains distributed by Harbor Global to you will 
not be subject to taxation in Bermuda.                                          

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    For United States federal income tax purposes, Harbor Global will elect to
be classified as a partnership. Harbor Global believes that it will not be      
classified as a "publicly traded partnership" or otherwise classified as a      
corporation for United States federal income tax purposes. It is anticipated    
that for United States federal income tax purposes you will be treated as a     
partner in the Bermuda partnership and your Harbor Global common shares will    
represent partnership interests.                                                

United States Federal Income Tax Consequences of Holding Harbor Global
Common Shares                                                                   

    By reason of its classification as a partnership for United States federal
income tax purposes, Harbor Global will not itself be subject to United States  
federal income tax. Instead, items of income, gain, loss, deduction and expense 
will pass through to you, and you will be treated as a partner in Harbor Global 
for United States federal income tax purposes.                                  

  As a partner in Harbor Global, you will be required to take into account
your allocable share of Harbor Global's items of income, gain, loss, deduction  
and credit. The amount of your allocable share of Harbor Global's items of      
income, gain, loss, deduction and credit will be determined in accordance with  
your interest in Harbor Global. Your adjusted tax basis in the Harbor Global    
shares generally will be equal to the fair market value of the Harbor Global    
shares you receive at the time of the distribution and will be (1) increased by 
your allocable share of Harbor Global's items of income and gain that you are   
required to take into account as described above and (2) decreased, but not     
below zero, by the allocable share of Harbor Global's items of deduction and    
loss and the amount of any cash or other distribution made by Harbor Global to  
you. Cash distributions that Harbor Global makes to you generally will not be   
taxable to you, except to the extent that such distributions exceed your        
adjusted tax basis in your Harbor Global common shares.                         

     Because Harbor Global will not be required to make current distributions of
its earnings, it is possible that your United States federal income tax         
liability directly (as described below under the heading "Investments in Foreign
Corporations"), or with respect to your allocable share of Harbor Global's items
of income, gain, loss, deduction and credit, in a particular taxable year could 
exceed the cash distributions, if any, to you for that year. In this case, you  
may have a liability for tax which must be paid by you out of other funds.      

     Harbor Global's disposition of businesses or assets may generally give rise
to income, gain or loss, which will pass through to you, as described above.    
Except as described below under the heading "Passive Foreign Investment         
Company," this gain will be treated as long-term capital gain if Harbor Global's
holding period in the stock is more than 12 months at the time of the sale. For 
this purpose, Harbor Global's holding period will include any period during     
which the stock was held as a capital asset by Pioneer. Harbor Global expects to
distribute proceeds from the sale of its assets, net of its expenses and any    
contingent liabilities, pro rata to you.                                        

Investments in Foreign Corporations                                   

As a result of the structure of Harbor Global, you may be required to 
recognize a proportionate share of the income earned by any majority or minority
owned Harbor Global subsidiary that is classified as a Foreign Personal Holding 
Company or a Passive Foreign Investment Company. You are urged to consult your  
tax advisor as to whether making a qualified electing fund election, as         
described below, with respect to each Passive Foreign Investment Company would  
be beneficial to you.                                                           

Foreign Personal Holding Company                                      

    Harbor Global believes that one or more of its foreign subsidiaries may be
classified as a "foreign personal holding company" (an "FPHC"). In general, a   
foreign corporation will be classified as an FPHC if in any taxable year if (1) 
five or fewer individuals who are United States citizens or residents own or are
deemed to own more than 50% (measured by the total voting power of all classes  
entitled to vote or the total value) of the foreign corporation's shares (the   
"ownership test") and (2) at least 60% (50% in some cases) of the foreign       
corporation's gross income consists of "foreign personal holding company        
income,"                                                                        
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which generally includes passive income such as dividends, interests, gains from
the sale or exchange of shares or securities, rent and royalties (the "income   
test").                                                                         

For purposes of determining whether a foreign corporation meets the   
ownership test described above, you will be treated as owning your proportionate
share of stock in any foreign corporation held by Harbor Global, and the shares 
that are treated as owned by you will be attributed to all other shareholders of
Harbor Global. Therefore, any foreign corporation owned by Harbor Global will   
generally be treated as owned, through attribution, by each Harbor Global       
shareholder in the same proportion that such company is owned by Harbor Global, 
so that the ownership test will be satisfied with respect to any company that is
owned more than 50 percent by Harbor Global. As a result, any foreign           
corporation that is more than 50% owned by Harbor Global will be treated as an  
FPHC based solely on whether the income test is satisfied. In addition, Harbor  
Global believes that one or more of the subsidiaries of Harbor Global will have 
substantial passive income, and as a result may be classified as an FPHC under  
the income test.                                                                

    In the event that any foreign subsidiary of Harbor Global is classified as
an FPHC, you will be required to include in income your proportionate share of  
the subsidiary's undistributed foreign personal holding company income,         
regardless of whether you receive corresponding distributions of cash.          

    Harbor Global will undertake to provide you with information regarding the
classification of any Harbor Global subsidiary as an FPHC and your allocable    
share of the subsidiary's income, as described above. However, Harbor Global    
cannot assure you that it will be able to provide you with this information.    

Passive Foreign Investment Company                                    

   One or more of Harbor Global's subsidiaries could also be classified as a
passive foreign investment company (a "PFIC"). In general, a foreign corporation
will be a PFIC if, for any taxable year, either (1) 75% or more of its gross    
income is "passive income," which includes interest, dividends, and some types  
of rents and royalties, or (2) the average percentage of the corporation's      
assets that produce or are held for the production of "passive income" is 50% or
more. If any of the foreign corporations owned directly or indirectly by Harbor 
Global is a PFIC during any year in which you own Harbor Global common shares,  
you will be treated as directly owning your proportionate share of such PFIC.   
Unless a qualified electing fund election is made, as described below, you will 
be subject to tax on gains on dispositions of PFIC shares by Harbor Global or a 
subsidiary of Harbor Global and on certain "excess distributions" by a PFIC to  
Harbor Global as if the gain or distribution were ordinary income earned ratably
over each of the years during the period in which the subsidiary was classified 
as a PFIC and you are treated as owning an indirect interest in the PFIC. You   
generally will be liable to pay tax at the ordinary income rates prevailing     
during each of the years to which the gain or distribution is allocable, except 
that in the case of gains and distributions allocable to prior years in which   
the foreign corporation was a PFIC, (1) the tax rate will be the highest in     
effect for that taxable year and (2) the tax will be payable generally without  
regard to offsets from deductions, losses and expenses. You will also be subject
to an interest charge with respect to any tax described above that is allocated 
to a prior year.                                                                

    Alternatively, you may make an election with respect to each PFIC in which
you are treated as owning shares to have the PFIC treated as a "qualified       
electing fund" ("QEF"). In general, such an election would require you to       
include in gross income each year your share of the PFIC's ordinary income and  
net capital gain for the year, even if the PFIC does not distribute cash or     
other property in respect of such income. You may only make a QEF election if   
the PFIC satisfies certain reporting requirements with respect to its ordinary  
income and net capital gains.                                                   

In addition, subject to specific limitations, shareholders treated as 
owning marketable shares in a PFIC may make an election to mark those shares to 
market annually, rather than being subject to the above-described rules. Amounts
included in or deducted from income under this mark-to-market election and      
actual gains and losses realized upon disposition, subject to specific          
limitations, would be treated as ordinary gains or losses.                      

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As mentioned above, Harbor Global expects that one or more of its     
subsidiaries will have substantial passive income. Accordingly, Harbor Global   
expects that one or more of its subsidiaries will be classified as a PFIC, in   
which case such company will likely be classified as both a PFIC and an FPHC. In
that event, unless a QEF election is made, you will be required to include the  
portion of the foreign corporation's income that is required to be included     
under the FPHC rules, described above, and also be subject to tax under the PFIC
rules with respect to gains on disposition and excess distributions, including  
the interest charge, as described above. However, if you have made a QEF        
election with respect to a company that is treated as both a PFIC and an FPHC,  
you will include your proportionate share of the foreign corporation's income as
provided in the FPHC rules, as described above, and any remaining income under  
the QEF rules, as described above. Accordingly, you will include your           
proportionate share of the subsidiary's income, but only once, and you will not 
be subject to the PFIC rules regarding gains from disposition and excess        
distributions, including the interest charge described above in the PFIC rules. 

   Harbor Global will undertake to obtain from any PFIC, and provide to you,
the information necessary to allow you to make, and maintain, a QEF election    
with respect to any PFIC. However, Harbor Global cannot assure you that it will 
be able to provide all the necessary information to satisfy the PFIC            
requirements or that you will be permitted to make and maintain a QEF election. 

    YOU ARE STRONGLY URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO HOW THE
PASSIVE FOREIGN INVESTMENT COMPANY RULES AFFECT YOUR TAX SITUATION AND WHETHER  
MAKING A QUALIFIED ELECTING FUND ELECTION WITH RESPECT TO EACH PASSIVE FOREIGN  
INVESTMENT COMPANY OWNED BY HARBOR GLOBAL WOULD BE BENEFICIAL TO YOU.           

Controlled Foreign Corporation                                        

Any foreign corporation that is held directly or indirectly by Harbor 
Global could be treated as a "controlled foreign corporation" if more than 50%  
of the total voting power or value of the shares is owned, directly or          
indirectly, by shareholders that are citizens or residents of the United States,
United States domestic partnerships or corporations or estates or trusts other  
than foreign estates or trusts, indirectly owning 10% or more of the total      
combined voting power of all classes of shares in the foreign corporation. This 
classification would have many complex results, including requiring the         
shareholders to include in income their pro rata shares of the controlled       
foreign corporation's "Subpart F Income," as defined by the Internal Revenue    
Code. In addition, with respect to any such shareholder who is or was a 10% or  
greater shareholder at any time during the five year period ending with the sale
or exchange of shares in a controlled foreign corporation by Harbor Global or   
any of its subsidiaries, gain from such sale or exchange will be treated as     
ordinary dividend income to the extent of the controlled foreign corporation's  
earnings and profits attributable to the shares sold or exchanged.              

     Pioneer believes that any foreign corporation that will be held directly or
indirectly by Harbor Global immediately following the distribution will not be a
controlled foreign corporation. However, we cannot assure you that a foreign    
corporation owned by Harbor Global will not qualify as a controlled foreign     
corporation in the future.                                                      

Receipt of Cash on Exercise of Appraisal Rights                       

Generally, a Pioneer stockholder who exercises appraisal rights with  
respect to the stockholders' shares of Pioneer common stock will recognize      
capital gain (or loss) on the receipt of cash from the exercise of appraisal    
rights if the stockholders holds his, her or its Pioneer common stock as a      
capital asset.                                                                  

  THE TAX CONSEQUENCES OF THE MERGER AND THE DISTRIBUTION OF HARBOR GLOBAL
COMMON SHARES APPLICABLE TO YOU ARE COMPLEX AND WILL DEPEND ON THE FACTS OF YOUR
PARTICULAR SITUATION. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE 
SPECIFIC TAX CONSEQUENCES OF THE MERGER AND THE DISTRIBUTION, INCLUDING TAX     
RETURN REPORTING REQUIREMENTS, THE APPLICABILITY OF FEDERAL, STATE, LOCAL AND   
FOREIGN TAX LAWS                                                                

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AND THE EFFECT OF ANY PROPOSED CHANGE IN THE TAX LAWS. WE ALSO URGE YOU TO READ 
THE TAX DESCRIPTIONS, INCLUDING THE TAX CONSEQUENCES THAT MAY ARISE FROM HOLDING
HARBOR GLOBAL SHARES, DESCRIBED IN HARBOR GLOBAL'S INFORMATION STATEMENT WHICH  
IS ATTACHED TO THIS PROXY STATEMENT AS ANNEX B.                                 

DISSENTING STOCKHOLDERS' APPRAISAL RIGHTS                                       

    Section 262 of the Delaware General Corporation Law is attached as Annex E
to this proxy statement and incorporated herein by reference. You should read   
Annex E carefully in its entirety for a complete understanding of its terms. If 
you wish to exercise statutory appraisal rights or wish to preserve the right to
do so, the failure to comply with the procedures set forth under Section 262    
will result in the loss of appraisal right.                                     

You are entitled to appraisal rights under Section 262 of the Delaware
General Corporation Law and may, instead of accepting the merger consideration  
to be issued in the merger, demand the fair value of your shares as determined  
by a Delaware court. However, to do so, you must comply with the conditions     
established by Section 262, which are complex.                                  

Here are some of the conditions to preserving and exercising appraisal
rights:                                                                         

- you must own the shares of Pioneer common stock for which you demand
  appraisal on the date you deliver the demand for appraisal described
below;                                                            

    - you must continue to own those shares through the closing of the merger;

- before the vote is taken at the special meeting, you must deliver a 
  properly executed written demand for appraisal of your shares to our
secretary. The demand will be sufficient if you sign it, and it   
 reasonably informs us of your identity and your intent to demand an
appraisal of your shares. Any written demands should be sent to:  

The Pioneer Group, Inc.                           
60 State Street                                   
Boston, Massachusetts 02109                       
Attention: Secretary                              

- you must NOT have voted in favor of the proposed merger, either in  
      person, by proxy or by written consent. You can meet this requirement by
either not voting or by voting against the merger;                

Important: You must separately comply with each of the last two       
requirements listed above. Under Delaware law, to not vote in favor of the      
proposed transaction, or to vote against it, is not considered a written demand 
for appraisal of your shares.                                                   

 - you must file a petition for appraisal of your shares in the Delaware
     Court of Chancery, as more fully described below, within 120 days after
the closing of the merger;                                        

  - within 20 days after you file your petition with the Delaware Court of
     Chancery, you must send a copy of it to us. Send it to the same address
      to which your written demand is sent (see the third bullet point above);
and                                                               

   - you must satisfy the other conditions described more fully below and in
Annex E.                                                          

     Availability of Information About Other Dissenting Stockholders.  Within 10
days after the closing of the proposed merger, we will notify each stockholder  
who has complied with the procedures described above that the merger has become 
effective. Within 120 days after the closing of the proposed merger, if you have
complied with the conditions for appraisal of your shares, you may request in   
writing, and we will send you, a statement regarding the number of shares of    
Pioneer common stock not voted in favor of the transaction, the number of shares
for which we have received a written demand for appraisal and the number of     
stockholders who own those shares. We are required to mail this statement to you
within                                                                          

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10 days after receiving your request. You should send any such request to the   
same address to which your written demand is sent (see the third bullet point   
above).                                                                         

  What You Would Receive by Exercising Appraisal Rights.  If you intend to
demand an appraisal of your shares, keep in mind that the fair value of your    
shares as determined under Delaware law could be more than, the same, OR LESS   
THAN the merger consideration you would receive if you did not demand an        
appraisal of your shares. Section 262 requires the fair value of the shares to  
be determined exclusive of any element of value arising from the accomplishment 
or expectation of the acquisition. A discussion of the other factors considered 
by the Delaware Court of Chancery in appraising your shares is beyond the scope 
of this summary.                                                                

     Expenses of the Appraisal Proceeding.  The cost of the appraisal proceeding
may be determined by the court and allocated among the parties to the proceeding
as the court deems equitable. Also, on application by a dissenting stockholder, 
the court may order that all or a portion of the expenses incurred in the       
appraisal proceeding by all dissenting stockholders be charged pro rata against 
the value of all shares of stock entitled to appraisal.                         

   Termination of Rights as a Stockholder.  If you properly demand appraisal
of your shares, you will lose your right to vote those shares on any matter or  
to receive payment of dividends or other distributions on such shares. Keep in  
mind, however, we do not currently anticipate paying any dividends on Pioneer   
common stock.                                                                   

Withdrawal of a Demand for Appraisal.  You may withdraw a demand for  
appraisal, and accept the consideration received by other stockholders of       
Pioneer, at any time within 60 days after the closing of the merger. After this 
60-day period has passed, you may not withdraw your demand for appraisal unless 
we consent to the withdrawal. If you take all the other actions required to     
exercise your appraisal rights but fail to file a petition in the Delaware Court
of Chancery within 120 days after the transaction closes, you will lose your    
appraisal rights. However, you then will be entitled to receive the             
consideration the other stockholders of Pioneer receive in the transaction.     

 The failure to take any step required to preserve or exercise appraisal
rights may result in the loss of those rights. In view of the complexity of     
exercising appraisal rights under Delaware law, if you are considering          
exercising these rights you should consult with your legal counsel.             

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THE MERGER AGREEMENT

   The following is a brief summary of the material provisions of the merger
agreement, a copy of which is attached as Annex A to this proxy statement and is
incorporated by reference into this summary. The summary description is not     
complete and is qualified in its entirety by reference to the merger agreement. 
We urge all Pioneer stockholders to read the merger agreement annexed to this   
proxy statement in its entirety for a more complete description of the terms and
conditions of the merger and related matters.                                   

GENERAL                                                                         

   Following the adoption of the merger agreement, approval of the merger by
the Pioneer stockholders and the satisfaction or waiver of the other conditions 
to the merger, Pioneer will merge with a wholly-owned subsidiary of UniCredito. 
Pioneer will survive the merger as a wholly-owned subsidiary of UniCredito. If  
all conditions to the merger are satisfied or waived, the merger will become    
effective at the time the surviving corporation files a duly executed           
certificate of merger with the Secretary of State of the State of Delaware.     

TREATMENT OF PIONEER COMMON STOCK                                               

   At the effective time of the merger, each issued and outstanding share of
Pioneer common stock, other than shares held by stockholders who perfect        
appraisal rights, will convert into the right to receive a cash payment of      
$43.50. In connection with the merger, Pioneer will distribute to its           
stockholders of record immediately prior to the effective time of the merger all
of the equity interest in Harbor Global.                                        

TREATMENT OF UNVESTED RESTRICTED STOCK OF PIONEER                               

   Prior to the effective time of the merger, each unvested restricted share
of Pioneer common stock granted by Pioneer under the 1995 Restricted Stock Plan 
and the Amended and Restated 1997 Stock Incentive Plan will become fully vested.
In the merger, all shares of restricted stock will convert into the right to    
receive a cash payment of $43.50. Holders of restricted stock also will receive 
Harbor Global common shares in connection with the distribution.                

TREATMENT OF PIONEER STOCK OPTIONS                                              

    Prior to the effective time of the merger, each unvested option granted by
Pioneer under Pioneer's Amended and Restated 1997 Stock Incentive Plan and 1988 
Stock Option Plan will become fully vested. In the merger, each holder of a     
stock option will receive from UniCredito, as soon as practicable following the 
effective time of the merger, a cash payment equal to the excess of $43.50 over 
the per share exercise price of his or her option, multiplied by the number of  
shares subject to such option. Thereafter, all options to purchase Pioneer      
common stock will be of no further force or effect.                             

    Unless they exercise their options prior to the merger, holders of options
will not participate in the distribution of Harbor Global common shares.        

EXCHANGE OF CERTIFICATES                                                        

Payment Agent; Payment Procedures; No Further Ownership Rights        

     As soon as practicable after the effective time of the merger, UniCredito's
payment agent will mail to each record holder of Pioneer common stock a letter  
of transmittal and instructions for surrendering their certificates. Only those 
holders who properly surrender their certificates in accordance with the        
instructions will receive a cash payment. Upon the surrender of each certificate
with a completed and executed letter of transmittal, UniCredito's payment agent 
will pay the stockholder $43.50 multiplied by the number of                     

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shares represented by each certificate held by such stockholder, without any    
interest. The surrendered certificates representing shares of Pioneer common    
stock will then be cancelled.                                                   

     HOLDERS OF PIONEER COMMON STOCK SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL
THEY RECEIVE A LETTER OF TRANSMITTAL FROM THE PAYMENT AGENT.                    

Lost Certificates                                                     

 If any certificate representing shares of Pioneer common stock is lost,
stolen or destroyed, the Pioneer stockholder must provide an appropriate        
affidavit of that fact. UniCredito may require the Pioneer stockholder to       
deliver a bond as indemnity against any claim that may be made against          
UniCredito with respect to such certificates alleged to have been lost, stolen  
or destroyed.                                                                   

REPRESENTATIONS AND WARRANTIES                                                  

  The merger agreement contains representations and warranties of Pioneer,
UniCredito and UniCredito's wholly-owned subsidiary. These representations and  
warranties relate to:                                                           

     - their organization, existence, good standing, corporate power and similar
corporate matters;                                                

  - the authorization, execution, delivery, required filings and consents,
    performance and the enforceability of the merger agreement and related
matters;                                                          

- financing arrangements related to the merger;                       

   - the absence of conflicts, violations and defaults under their corporate
charters and by-laws and other agreements and documents;          

- brokers and related fees;                                           

- litigation; and                                                     

- the accuracy of information provided in connection with this proxy  
  statement and proxy statements mailed to stockholders of the Pioneer
Family of Funds.                                                  

Pioneer also represented and warranted as to:                         

- certain of its subsidiaries;                                        

- its capitalization;                                                 

- filings with the Securities and Exchange Commission;                

- its financial statements;                                           

- the absence of certain changes in its business;                     

- transactions with affiliates;                                       

- environmental matters;                                              

- employee benefit plans;                                             

- owned and leased real properties;                                   

- liens on its assets;                                                

- taxes and tax returns;                                              

- licenses and permits;                                               

- compliance with laws;                                               

- intellectual property;                                              

- the absence of undisclosed liabilities;                             

- fairness opinions;                                                  

- material contracts;                                                 

- insurance;                                                          

- investment advisory activities;                                     

- registered investment companies;                                    

- non-registered funds;                                               

- the distribution of Harbor Global common shares;                    

- the actions by its board of directors that make Section 203 of the  
Delaware General Corporation Law inapplicable to this merger;     

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- compliance with the regulations of the Bank of Italy;               

- the vote of stockholders required to approve the merger;            

- compliance with state antitakeover laws; and                        

- Harbor Global.                                                      

CERTAIN COVENANTS                                                               

Except as contemplated by the merger agreement or the distribution    
agreement relating to the organization of Harbor Global, Pioneer has agreed that
it and its subsidiaries will carry on their business in the ordinary course in  
substantially the same manner as previously conducted. Specifically, Pioneer has
agreed that neither it nor certain of its subsidiaries will, without the prior  
consent of UniCredito:                                                          

    - issue, sell, grant, pledge, encumber or dispose of any shares of capital
    stock or other securities, except pursuant to the exercise of options,
  pursuant to the employee stock purchase plan or pursuant to deferred
compensation arrangements;                                        

  - other than with respect to its subsidiaries, declare, set aside or pay
  any dividends or other distributions on its shares of capital stock;

   - effect a stock split, combine or reclassify any of its capital stock or
   authorize the issuance of any other securities in substitution of its
shares of capital stock;                                          

     - with certain exceptions, purchase, redeem or otherwise acquire any shares
of its capital stock;                                             

- amend its charter or by-laws;                                       

  - acquire any corporation, partnership or other business organization or
division or make any investment in any such entity;               

- sell, lease, pledge or encumber any material assets;                

- enter into an agreement with respect to any merger, consolidation,  
       liquidation or business combination, or any acquisition or disposition of
all or substantially all of its assets or securities;             

     - incur or assume any indebtedness, make any loans or advances or issue any
debt securities;                                                  

 - enter into an agreement with respect to the disposition of a material
amount of assets or securities;                                   

- transfer the stock of any subsidiary to any other subsidiary or any 
assets or liabilities to any new or existing subsidiary;          

     - change any assumption underlying, or method of calculating, any bad debt,
contingency or other reserve;                                     

- except as required by law or in accordance with generally accepted  
       accounting principles, revalue any of its assets or materially change any
existing accounting principle, method or practice;                

- authorize, recommend or propose any material change in its          
capitalization;                                                   

- make any capital expenditure or commitment for which it is not      
 contractually bound at the date of the merger agreement, except for
      capital expenditures or commitments not to exceed $2,500,000 per year in
the aggregate;                                                    

     - enter into any new material contract, or modify in any respect materially
 adverse to Pioneer or any of its subsidiaries any existing material
contract;                                                         

   - settle any material actions, suits, proceedings or investigations other
  than any settlement which involves only the payment of damages in an
  amount less than $1,000,000 and does not involve injunctive or other
equitable relief;                                                 

  - adopt or amend any bonus, compensation, deferred compensation or other
employee                                                          

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benefit plan, increase the compensation or fringe benefits of any 
individual or pay any benefit not required by any existing plan,  
arrangement or agreement;                                         

- take any action other than in the ordinary course of business with  
      respect to the grant of any severance or termination pay or with respect
    to any increase of benefits payable under its severance or termination
pay policies in effect on the date of the merger agreement;       

   - make any tax election or settle or compromise any federal, state, local
or foreign tax liability; or                                      

    - agree to take any action which would result in Pioneer's representations
     and warranties in the merger agreement being untrue or incorrect in any
       material respect or that would result in the conditions of the merger set
  forth in the merger agreement not being satisfied in a material way.

     Pioneer and UniCredito have also agreed to cooperate in obtaining necessary
authorizations and approvals related to the merger from the boards of directors 
or trustees of Pioneer's registered investment companies and/or their           
stockholders, as required by applicable law.                                    

PIONEER IS RESTRICTED FROM TRYING TO SELL PIONEER TO ANOTHER PARTY              

Pioneer has agreed that neither it nor any of its subsidiaries will,  
directly or indirectly through their officers, directors, employees, financial  
advisors or agents:                                                             

 - solicit, initiate, or encourage any proposal that could reasonably be
     expected to lead to a tender offer for more than 20% of the outstanding
       shares of Pioneer common stock, an exchange offer, merger, consolidation,
     or sale of assets representing more than 20% of the total book value of
all Pioneer assets;                                               

   - engage or participate in any negotiations or discussions concerning, or
     provide any non-public information to any person or entity relating to,
any such acquisition proposal; or                                 

- recommend any such acquisition proposal to the Pioneer stockholders.

  However, Pioneer and the Pioneer board of directors may comply with Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to such an  
acquisition proposal. In addition, Pioneer and the Pioneer board of directors   
may furnish non-public information to, or enter into discussions or negotiations
with, any person or entity in connection with an unsolicited bona fide written  
proposal to acquire more than 20% of the outstanding shares of Pioneer common   
stock or Pioneer assets having a fair market value equal to more than 20% of the
total book value of all Pioneer assets, enter into an agreement to consummate   
any such acquisition and recommend such acquisition to Pioneer stockholders, if 
and only to the extent that:                                                    

     - the Pioneer board of directors believes in good faith, after consultation
     with its financial advisor(s), that the proposal constitutes a superior
    proposal to this merger and in the best interests of the stockholders;

     - prior to furnishing non-public information to, or engaging in discussions
      or negotiations with a person, that person provides to the Pioneer board
   of directors an executed confidentiality agreement not less favorable
    than the confidentiality agreement between UniCredito and Pioneer; and

    - prior to recommending a superior proposal, Pioneer gives UniCredito five
 business days' prior notice of its intent to recommend the superior
proposal in order to provide UniCredito an opportunity to make a  
counterproposal which Pioneer and its advisors will negotiate with
UniCredito during this five day period.                           

  Pioneer has agreed to notify UniCredito promptly in reasonable detail of
receipt of any acquisition proposal or request for non-public information.      
Pioneer has agreed to continue to keep UniCredito                               

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informed on a current basis of the status of any discussions or negotiations and
all material terms being discussed or negotiated.                               

DIRECTOR AND OFFICER INDEMNIFICATION                                            

The merger agreement provides that for a period of six years after the
effective time of the merger, UniCredito will continue all rights to            
indemnification, advancement of expenses, exculpation, limitation of liability, 
and any similar rights, existing at the time of the merger in favor of the      
employees, agents, directors or officers of Pioneer. UniCredito has also agreed 
to provide each individual who served as a director or officer of Pioneer at any
time prior to the merger with liability insurance for a period of six years     
after the merger no less favorable in coverage and amount than was in effect    
prior to the merger.                                                            

CONDITIONS TO OBLIGATIONS TO EFFECT THE MERGER                                  

    The obligations of UniCredito and Pioneer to effect the merger are subject
to the satisfaction or waiver of the following conditions:                      

- the Pioneer stockholders must have approved and adopted the merger  
agreement and the merger;                                         

- all applicable waiting periods, and any extensions of these periods,
under the Hart-Scott-Rodino Antitrust Improvements Act and the EC 
Regulation must have expired or been terminated;                  

- the parties must have obtained certain authorizations and consents; 

- there must be no order, executive order, stay, decree, judgment or  
 injunction, or statute, rule or regulation in effect that makes the
merger illegal;                                                   

- the distribution of Harbor Global shares to the Pioneer stockholders
shall have been completed;                                        

    - the merger agreement and the merger shall have been approved by the Bank
of Italy; and                                                     

   - either UniCredito shall have qualified as a "financial holding company"
       under the Bank Holding Company Act or the merger shall have been approved
      under the Bank Holding Company Act by the Board of Governors of the U.S.
Federal Reserve System.                                           

   In addition, the obligation of Pioneer to effect the merger is subject to
the satisfaction or waiver of the following conditions:                         

 - the representations and warranties of UniCredito and its wholly-owned
   subsidiary in the merger agreement must be true and correct as of the
    effective time of the merger, unless made as of another date, in which
       case they must be true as of such date and except where the failure to be
true and correct does not, and is not reasonably likely to, have a
material adverse effect on UniCredito; and                        

 - UniCredito and its wholly-owned subsidiary must have performed in all
      material respects all obligations required to be performed by them under
   the merger agreement at or prior to the effective time of the merger.

    In addition, the obligations of UniCredito and its wholly-owned subsidiary
to effect the merger are subject to the satisfaction or waiver of the following 
conditions:                                                                     

 - the representations and warranties of Pioneer in the merger agreement
     must be true and correct as of the effective time of the merger, unless
     made as of another date, in which case they must be true and correct as
   of such date and except where the failure to be true and correct does
    not, and is not reasonably likely to have a material adverse effect on
       Pioneer, provided, however, that any untrue statements are not the result
of intentional fraudulent conduct of Pioneer;                     

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- Pioneer must have performed in all material respects all obligations
      required to be performed by it under the merger agreement at or prior to
the effective time of the merger;                                 

 - the number of shares held by stockholders exercising appraisal rights
      does not exceed 15% of the total of outstanding shares of Pioneer common
stock; and                                                        

  - the proposals to be acted upon by the stockholders of Pioneer's United
       States registered investment companies shall have been approved by United
       States registered investment companies representing at least 92.5% of the
assets under management of all such funds.                        

TERMINATION; EXPENSES AND TERMINATION FEES                                      

The merger agreement may be terminated by written notice from the     
terminating party under the following circumstances at any time prior to the    
effective time of the merger:                                                   

- by mutual written consent of the parties;                           

- by either Pioneer or UniCredito if the merger is not completed by   
   February 15, 2001, unless the delay is due to the terminating party's
failure to fulfill any obligation under the merger agreement;     

- by either UniCredito or Pioneer if at the special meeting of Pioneer
stockholders, Pioneer does not obtain the requisite vote of its   
stockholders in favor of the merger agreement;                    

   - by UniCredito, if (1) the Pioneer board of directors fails to recommend
approval of the merger to the Pioneer stockholders or withdraws or
modifies its recommendation; (2) the Pioneer board of directors   
    recommends to the Pioneer stockholders an alternative transaction with
       another person or entity meeting the requirements set forth in the merger
  agreement; or (3) a third party commences a tender offer or exchange
     offer for 20% or more of the outstanding shares of Pioneer common stock
    and the Pioneer board of directors fails to recommend that the Pioneer
    stockholders reject the offer or takes no position with respect to the
offer; or                                                         

- by either UniCredito or Pioneer, if there has been a breach of the  
     representations, warranties, covenants or agreements by the other party
    so that the conditions to closing are not being satisfied which is not
 curable or which is curable but such party does not make reasonable
efforts to cure.                                                  

In the event the merger agreement is terminated due to a breach of any
representation, warranty, covenant or agreement as described above, the party in
breach shall reimburse the other party all reasonable costs and expenses        
incurred by it in connection with the merger agreement and the merger.          

    If either UniCredito or Pioneer terminates the merger agreement because of
any of the reasons above, all obligations of the parties under the merger       
agreement will terminate (with certain exceptions) and there will be no         
liability, except for any liability for willful breaches of the merger agreement
on the part of UniCredito, Pioneer, UniCredito's wholly-owned subsidiary or     
their respective officers, directors, stockholders or affiliates. The mutual    
confidentiality agreement dated March 23, 2000 between UniCredito and Pioneer   
will survive any termination of the merger agreement.                           

Except as described below, UniCredito and Pioneer will bear their own 
expenses incurred in connection with the merger.                                

   Pioneer has agreed to pay UniCredito a $37,500,000 termination fee if the
merger agreement is terminated under the following circumstances:               

- by UniCredito, because (1) the Pioneer board of directors fails to  
       recommend approval of the merger to the Pioneer stockholders or withdraws
or modifies its recommendation; (2) the Pioneer board of directors
    recommends to the Pioneer stockholders an alternative transaction with
another                                                           

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person or entity meeting the requirements set forth in the merger 
  agreement; or (3) a third party commences a tender offer or exchange
     offer for 20% or more of the outstanding shares of Pioneer common stock
    and the Pioneer board of directors fails to recommend that the Pioneer
    stockholders reject the offer or takes no position with respect to the
offer; or                                                         

  - by UniCredito or Pioneer because Pioneer fails to obtain the requisite
      vote of Pioneer stockholders to approve the merger agreement and Pioneer
     consummates a sale of the company within 18 months of such termination.

RELATED MATTERS AFTER THE MERGER                                                

   At the time of the merger, a subsidiary of UniCredito will be merged with
Pioneer. Pioneer will become the surviving corporation in the merger and a      
wholly-owned subsidiary of UniCredito. Each share of the subsidiary's common    
stock issued and outstanding immediately prior to the merger will be converted  
into one validly issued, fully paid and nonassessable share of common stock of  
the surviving corporation. The certificate of incorporation of the subsidiary,  
in effect immediately prior to the time of the merger, will become the          
certificate of incorporation of the surviving corporation, except that the name 
shall be Pioneer Global Asset Management. The by-laws of the subsidiary will    
become the by-laws of the surviving corporation, except that the name shall be  
changed to the name of Pioneer Global Asset Management.                         

  The merger is intended to qualify for the treatment described in Section
15(f) of the U.S. Investment Company Act of 1940, as amended. In this regard,   
UniCredito shall, (i) use reasonable efforts to assure that, for a period of    
three years after the effective time of the merger, at least 75% of the board of
directors or trustees of each registered investment company are not "interested 
persons" of Pioneer or UniCredito, as that term is defined under the Investment 
Company Act; and (ii) refrain from imposing, for a period of two years after the
effective time of the merger, any "unfair burden" on any registered investment  
company, within the meaning of the Investment Company Act.                      

UniCredito has agreed for a period of at least 12 months following the
effective time of the merger to:                                                

- provide each continuing employee cash compensation that is no less  
    favorable to the employee than the compensation prior to the effective
time; and                                                         

- maintain employee benefit plans and arrangements, other than stock  
       incentive plans, that are no less favorable than the benefit arrangements
in effect prior to the effective time.                            

  The forgoing is not intended to restrict UniCredito from terminating the
employment of any employee.                                                     

AMENDMENT                                                                       

Prior to obtaining approval of the merger agreement from the Pioneer  
stockholders, Pioneer and UniCredito may agree in writing to amend the merger   
agreement. Any amendment which would reduce the cash payment to the Pioneer     
stockholders or which would be materially adverse to the Pioneer stockholders   
must also be approved by the Pioneer stockholders.                              

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FEES AND EXPENSES                                                               

The estimated aggregate costs and fees of UniCredito and Pioneer in   
connection with the merger agreement and the merger and Pioneer's costs related 
to the distribution are as follows:                                             

                                                                [Download Table]

                                                       TO BE PAID BY  TO BE PAID BY
                                                        UNICREDITO       PIONEER   
                                                       -------------  -------------
                                                                                   
Investment Banking Fees and Expenses..................  $              $ 9,500,000 
Filing Fees...........................................                     245,455 
Legal Fees and Expenses...............................                   1,875,000 
Accounting Fees and Services..........................                     220,000 
Printing, Mailing and Vote Solicitation Fees..........                     300,000 
Expenses in Connection with Approval of U.S.                                       
  Registered Investment Companies.....................                   1,084,000 
Miscellaneous Fees....................................                     775,545 
                                                        -----------    ----------- 
          Total.......................................  $              $14,000,000 

The merger agreement provides that each party is to pay the fees and  
expense incurred by it, except if the merger agreement is terminated under      
certain circumstances. See "The Merger Agreement -- Termination; Expenses and   
Termination Fees."                                                              

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RELATIONSHIPS AND TRANSACTIONS BETWEEN UNICREDITO AND PIONEER 

   Except as described under "The Merger -- Background to the Merger," there
have been no negotiations, transactions or material contacts between UniCredito 
and Pioneer concerning a merger, an acquisition of Pioneer's common stock, a    
tender offer for Pioneer's common stock, the sale of Pioneer's assets or the    
election of Pioneer's directors during the past two years.                      

There are currently no present or proposed material agreements,       
arrangements or understandings between UniCredito, or any of its affiliates, and
Pioneer. If Pioneer becomes a wholly-owned subsidiary of UniCredito, it is      
possible that agreements, such as subadvisory arrangements between Pioneer and  
EuroPlus, may be entered into between Pioneer and UniCredito and its affiliates 
that may be material to Pioneer.                                                

  Pioneer and Harbor Global have entered into a distribution agreement and
tax separation agreement that relate, among other things, to the transfer of    
assets to Harbor Global, Pioneer's distribution of Harbor Global's common shares
to Pioneer stockholders, the allocation of certain tax liabilities between      
Pioneer and Harbor Global, certain indemnification obligations between Harbor   
Global and Pioneer and the provision by Pioneer of certain services to Harbor   
Global on a temporary basis. These arrangements will remain in effect after the 
effective time of the merger. In addition, Pioneer and Harbor Global may enter  
into an agreement for the provision of some corporate administrative,           
information and technology systems, human resources and other support to Harbor 
Global for a limited transition period. To find out more about these agreements,
see Harbor Global's information statement attached as Annex B to this proxy     
statement.                                                                      

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COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

PIONEER MARKET PRICE INFORMATION                                                

Pioneer common stock is traded on The Nasdaq Stock Market(R) under the
symbol "PIOG." As of May 31, 2000, there were approximately 4,400 stockholders  
of record. Pioneer currently does not pay dividends to stockholders.            

  The table below sets forth, for the periods indicated, the reported high
and low sale prices of Pioneer common stock on The Nasdaq Stock Market(R).      

                                                                [Download Table]

                                                                   PIONEER      
                                                                 COMMON STOCK   
                                                              ------------------
                                                               HIGH        LOW  
                                                              -------    -------
                                                                                
FISCAL 1998                                                                     
  First Quarter.............................................  $ 31.25    $25.125
  Second Quarter............................................  $33.875    $ 24.75
  Third Quarter.............................................  $28.625    $14.906
  Fourth Quarter............................................  $20.625    $ 9.562
FISCAL 1999                                                                     
  First Quarter.............................................  $ 21.25    $ 14.75
  Second Quarter............................................  $19.687    $ 14.75
  Third Quarter.............................................  $18.875    $14.125
  Fourth Quarter............................................  $ 18.50    $ 10.00
FISCAL 2000                                                                     
  First Quarter.............................................  $ 24.00    $12.437
  Second Quarter (through June 22, 2000)....................  $42.437    $21.687

RECENT CLOSING PRICES                                                           

The following table sets forth the closing prices per share of Pioneer
common stock as reported on The Nasdaq Stock Market(R) on (1) February 10, 2000,
the last trading day prior to the public announcement that Pioneer had retained 
two investment banks to conduct analyses of the company's businesses and to     
assist the board and management in evaluating strategic alternatives, (2) March 
2, 2000, the last trading day prior to the public announcement that we had      
authorized our investment banks to actively explore strategic alternatives,     
including a possible sale of the company, (3) May 12, 2000, the last full       
trading day prior to the public announcement that Pioneer and UniCredito had    
entered into the merger agreement and (4) June 22, 2000, the last full trading  
day for which closing prices were available at the time of the printing of this 
proxy statement.                                                                

                                                                [Download Table]

                                                                PIONEER    
                                                                COMMON     
DATE                                                          SHARE PRICE  
----                                                          -----------  
                                                                           
February 10, 2000...........................................    $    16.781
March 2, 2000...............................................    $    21.871
May 12, 2000................................................    $    31.00 
June 22, 2000...............................................    $    42.25 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND
MANAGEMENT OF PIONEER 

  The following table sets forth information as to the number of shares of
Pioneer common stock beneficially owned as of May 31, 2000, unless otherwise    
indicated, by:                                                                  

     - each person that beneficially owns more than 5% of the outstanding shares
of Pioneer common stock,                                          

- each director of Pioneer,                                           

  - the chief executive officer and the four other most highly compensated
executive officers of Pioneer and                                 

- Pioneer executive officers and directors as a group.                

                                                        [Enlarge/Download Table]

                                                                                PERCENT    
                                                                               OF SHARES   
NAME AND ADDRESS OF BENEFICIAL                                 NATURE OF    OF COMMON STOCK
OWNER, EXECUTIVE OFFICER OR DIRECTOR     NUMBER OF SHARES(1)  OWNERSHIP(1)  OUTSTANDING(2) 
------------------------------------     -------------------  ------------  ---------------
                                                                                           
John F. Cogan, Jr. .....................     2,548,294        Direct              9.31%    
  The Pioneer Group, Inc.                 1,277,708(3)          Indirect          4.76%    
  60 State Street                                                                          
  Boston, MA 02109                                                                         
Southeastern Asset Management, Inc. ....  3,194,100(4)        Indirect           11.89%    
  6140 Poplar Avenue                                                                       
  Suite 900                                                                                
  Memphis, TN 38119                                                                        
Gabelli Funds, Inc. ....................  1,857,300(5)        Indirect            6.92%    
  One Corporate Center                                                                     
  Rye, NY 10580                                                                            
David D. Tripple........................       461,485        Direct              1.70%    
John D. Curtin Jr. .....................            --        --                    --     
Alyce J. Lee............................            --        --                    --     
W. Reid Sanders.........................            --        --                    --     
Alan J. Strassman.......................       120,000        Direct                 *     
Jaskaran S. Teja........................        53,636        Direct                 *     
John H. Valentine.......................         4,000        Direct                 *     
Stephen G. Kasnet.......................       159,265        Direct                 *     
Alicja K. Malecka.......................       214,655        Direct                 *     
William H. Smith, Jr. ..................       411,448        Direct                 *     
All directors and executive officers as                                                    
  a group (14 persons)..................  4,211,171(6)        Direct             15.39%    
                                         1,277,708(3)(6)        Indirect          4.76%    

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---------------                                                                 

*  Denotes ownership of less than 1% of outstanding shares of common stock.     

(1) The inclusion herein of any shares of common stock deemed beneficially owned
 does not constitute an admission of beneficial ownership of those shares.
Unless otherwise indicated, each stockholder referred to above has sole 
voting and investment power with respect to the shares listed.          

(2) For purposes of this table, the number of outstanding shares of common stock
 of Pioneer is adjusted for each director and executive officer to include
the number of shares of common stock into which any options held by such
  director or executive officer are exercisable due to the full acceleration
of vesting in connection with the merger.                               

(3) Includes an aggregate of 1,167,410 shares of common stock held by family    
  trusts of which Mr. Cogan is the sole trustee and with respect to which he
    has sole voting and investment power. Includes an aggregate of 74,340 shares
    of common stock held in trusts with respect to which Mr. Cogan may be deemed
  to be a beneficial owner by reason of his position as a trustee and/or his
interests as a beneficiary, over which shares Mr. Cogan exercises shared
    voting and investment power. Includes 35,958 shares of common stock held for
    the benefit of Mr. Cogan in Pioneer's deferred compensation plan, over which
shares Mr. Cogan exercises no voting power and sole investment power.   

(4) Consists of shares of common stock held by a variety of investment advisory 
clients, over which shares Southeastern Asset Management, Inc. exercises
   sole, shared or no voting authority and exercises sole or shared investment
power. The foregoing is based solely on information provided by the     
stockholder in Amendment No. 1 to Schedule 13G dated June 7, 2000, with 
respect to shares held on June 7, 2000.                                 

(5) Consists of shares of common stock held by a variety of investment advisory 
and investment company clients, over which shares Gabelli Funds, Inc.,  
Gabelli Asset Management, Inc. or one of their affiliates exercises sole
    voting authority and sole investment power. The foregoing is based solely on
   information provided by the stockholder in Amendment No. 13 to Schedule 13D
dated June 16, 2000, with respect to shares held on June 14, 2000.      

(6) Of the shares beneficially owned by the directors and executive officers as 
   a group, an aggregate of 4,495,875 shares are subject to a voting agreement
that Mr. Cogan, Mr. Tripple, Mr. Nault and Mr. Reckard entered into in  
 connection with the merger agreement and pursuant to which each agreed to
vote his shares in favor of the merger agreement and the merger.        

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STOCKHOLDER PROPOSALS 

   If the proposed merger is completed, there will be no public stockholders
of Pioneer and no public participation in any future meetings of Pioneer        
stockholders. If the proposed merger is not completed, Pioneer intends to hold  
its next annual meeting of stockholders in May 2001. In that case, Pioneer's    
stockholders would continue to be entitled to attend and participate in         
Pioneer's stockholders meetings.                                                

  Pioneer will consider appropriate stockholder proposals for inclusion on
the agenda of its 2001 annual meeting of stockholders. Proposals of stockholders
made in accordance with Rule 14a-8 of the Exchange Act, and intended to be      
presented at the 2001 annual meeting must be submitted in writing to the        
attention of the chief financial officer of The Pioneer Group, Inc., 60 State   
Street, Boston, Massachusetts 02109 no later than December 15, 2000 for         
inclusion in the proxy statement for that meeting. In addition, Pioneer's       
by-laws require that Pioneer be given advance notice of stockholder nominations 
for election to the board of directors and of other matters which stockholders  
wish to present for action at an annual meeting of stockholders (other than     
matters included in Pioneer's proxy statement in accordance with Rule 14a-8).   
The required notice must be made in writing, include the information required by
the by-laws, be delivered or mailed by first class United States mail, postage  
prepaid, to the chief financial officer of The Pioneer Group, Inc., 60 State    
Street, Boston, Massachusetts 02109, and be received not less than 60 days nor  
more than 90 days prior to the 2001 annual meeting; provided, however, that if  
less than 70 days notice or prior public disclosure of the date of the meeting  
is given to stockholders, such nomination or other proposal shall have been     
mailed or delivered to the chief financial officer of Pioneer not later than the
close of business on the 10th day following the date on which the notice of the 
meeting was mailed or such public disclosure made, whichever occurs first. While
Pioneer has not set the date of the 2001 annual meeting, assuming it was held on
May 16, 2001 (the same day as this year's meeting), notice of a stockholder     
proposal or director nomination would need to be made no earlier than February  
15, 2001 and no later than March 17, 2001.                                      

WHERE YOU CAN FIND MORE INFORMATION 

   Pioneer files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information that UniCredito or Pioneer files at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
SEC filings are also available to the public from commercial document retrieval 
services and at the Web site maintained by the SEC at "http://www.sec.gov."     

     The SEC allows us to "incorporate by reference" information into this proxy
statement, which means that Pioneer can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this proxy statement, except  
for any information superseded by information in this proxy statement. This     
proxy statement incorporates by reference the documents set forth below that    
Pioneer has previously filed with the SEC. These documents contain important    
information about Pioneer and its finances.                                     

                                                        [Enlarge/Download Table]

PIONEER SEC FILINGS (FILE NO. 0-8841)                        PERIOD                   
-------------------------------------     --------------------------------------------
                                                                                      
Annual Report on Form 10-K............... Fiscal year ended December 31, 1999         
Quarterly Report on Form 10-Q............ Fiscal quarter ended March 31, 2000         
Current Reports on Form 8-K.............. Report dated May 16, 2000                   
Definitive Proxy Statement on Schedule                                                
  14A.................................... Meeting of Stockholders held on May 16, 2000

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Pioneer is also incorporating by reference additional documents that  
Pioneer may file with the SEC between the date of this proxy statement and the  
date of the special meeting of Pioneer stockholders.                            

   UniCredito has supplied all information contained in this proxy statement
relating to UniCredito, and Pioneer has supplied all information contained in   
this proxy statement relating to Pioneer.                                       

Documents incorporated by reference are available from Pioneer without
charge, excluding all exhibits unless Pioneer has specifically incorporated by  
reference an exhibit in this proxy statement. Stockholders may obtain documents 
incorporated by reference in this proxy statement by requesting them in writing 
or by telephone from the secretary of Pioneer at the following address:         

The Pioneer Group, Inc.                           
60 State Street                                   
Boston, Massachusetts 02109                       
Attention: Investor Relations                     
Telephone: (617) 742-7825                         
Internet address: http://www.pioneerfunds.com     

     If you would like to request documents from Pioneer, please do so by August
--, 2000 to receive them before the Pioneer special meeting.                    

You should rely only on the information contained or incorporated by  
reference in this proxy statement to vote on the merger. UniCredito and Pioneer 
have not authorized anyone to provide you with information that is different    
from what is contained in this proxy statement. This proxy statement is dated   
--, 2000. You should not assume that the information contained in this proxy    
statement is accurate as of any date other than --, 2000, and the mailing of the
proxy statement to Pioneer stockholders shall not create any implication to the 
contrary.                                                                       

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                                                                         ANNEX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF MAY 14, 2000

BETWEEN 

UNICREDITO ITALIANO S.P.A.

AND 

THE PIONEER GROUP, INC. 

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                     PAGE
                                                                     ----
                                                                         
ARTICLE 1 THE MERGER...............................................   A-1
  1.1  The Merger..................................................   A-1
  1.2  Effect of the Merger........................................   A-2
  1.3  Consummation of the Merger..................................   A-2
  1.4  Certificate of Incorporation; By-Laws; Directors and           A-2
       Officers....................................................      
  1.5  Conversion of Securities....................................   A-2
  1.6  Company Stock Options and Plans.............................   A-3
  1.7  Exchange of Certificates....................................   A-3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE           
  PURCHASER........................................................   A-5
  2.1  Organization and Qualification..............................   A-5
  2.2  Authority...................................................   A-5
  2.3  Compliance..................................................   A-5
  2.4  Commission Filings..........................................   A-6
  2.5  Broker's Fees...............................................   A-7
  2.6  Financing...................................................   A-7
  2.7  Litigation..................................................   A-7
  2.8  Parent's Knowledge..........................................   A-7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............   A-7
  3.1  Organization and Qualification..............................   A-7
  3.2  Subsidiaries................................................   A-8
  3.3  Capitalization..............................................   A-8
  3.4  Authority...................................................   A-9
  3.5  Compliance..................................................   A-9
  3.6  Commission Filings..........................................  A-10
  3.7  Litigation..................................................  A-11
  3.8  Changes.....................................................  A-11
  3.9  Transactions with Affiliates................................  A-11
 3.10  Environmental Matters.......................................  A-11
 3.11  Employee Benefits and Contracts.............................  A-11
 3.12  Real Property and Leases; Liens on Assets...................  A-13
 3.13  Taxes.......................................................  A-14
 3.14  Compliance with Laws; Permits...............................  A-15
 3.15  Intellectual Property.......................................  A-15
 3.16  No Undisclosed Material Liabilities.........................  A-15
 3.17  Fairness Opinion, Brokers...................................  A-15
 3.18  Investment Advisory Activities..............................  A-15
 3.19  Registered Investment Companies.............................  A-16
 3.20  Non-Registered Funds........................................  A-19
 3.21  Material Contracts..........................................  A-20

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                                                                [Download Table]

                                                                     PAGE
                                                                     ----
                                                                         
 3.22  Insurance...................................................  A-21
 3.23  State Takeover Statutes.....................................  A-21
 3.24  Vote Required...............................................  A-21
 3.25  Harbor Global...............................................  A-21
 3.26  Bank of Italy Requirements..................................  A-22
 3.27  Company's Knowledge.........................................  A-22
 3.28  Schedules and Exhibits......................................  A-22
 3.29  No Implied Representation...................................  A-22
ARTICLE 4 CONDUCT OF BUSINESS......................................  A-22
  4.1  Conduct Prior to Effective Time.............................  A-22
  4.2  Commission Filings..........................................  A-24
  4.3  Approval of New Fund Contracts..............................  A-24
ARTICLE 5 ADDITIONAL AGREEMENTS....................................  A-25
  5.1  Preparation of Proxy Statement..............................  A-25
  5.2  Disposition of the Shares...................................  A-25
  5.3  Fees and Expenses...........................................  A-25
  5.4  Additional Agreements.......................................  A-26
  5.5  No Solicitation.............................................  A-26
  5.6  Notification of Certain Matters.............................  A-27
  5.7  Access to Information.......................................  A-28
  5.8  Indemnification and Insurance...............................  A-28
  5.9  Fair Price Structure........................................  A-28
 5.10  Certain Post-Closing Fund Matters...........................  A-28
 5.11  Severance Agreements........................................  A-29
 5.12  Parent Guaranty.............................................  A-29
 5.13  Continuation of Employment..................................  A-29
 5.14  Incorporation of the Purchaser..............................  A-29
ARTICLE 6 CONDITIONS...............................................  A-29
  6.1  Conditions to Obligation of Each Party to Effect the          A-29
       Merger......................................................      
  6.2  Conditions to Obligation of the Company to Effect the         A-30
       Merger......................................................      
  6.3  Conditions to Obligation of the Parent and the Purchaser to   A-30
       Effect the Merger...........................................      
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER........................  A-31
  7.1  Termination.................................................  A-31
  7.2  Effect of Termination.......................................  A-32
  7.3  Amendment...................................................  A-32
  7.4  Waiver......................................................  A-32
  7.5  Expenses; Termination Fee...................................  A-32
ARTICLE 8 HARBOR GLOBAL............................................  A-33
  8.1  Formation of Harbor Global..................................  A-33
  8.2  Certain Agreements With Respect to Harbor Global............  A-33
  8.3  Distribution of the Harbor Global Interests.................  A-34

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                                                                [Download Table]

                                                                     PAGE
                                                                     ----
                                                                         
ARTICLE 9 GENERAL PROVISIONS.......................................  A-34
  9.1  Closing.....................................................  A-34
  9.2  Publicity...................................................  A-34
  9.3  Notices.....................................................  A-34
  9.4  Interpretation..............................................  A-35
  9.5  Representations and Warranties; etc.........................  A-35
  9.6  Miscellaneous...............................................  A-36
  9.7  Validity....................................................  A-36

Disclosure Schedule                                                             

Exhibit A -- Distribution Agreement                                             

Exhibit B -- Tax Separation Agreement                                           

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TABLE OF DEFINED TERMS

                                                                [Download Table]
                                                                        
Acquisition Proposals.......................................        5.5 
Administration Agreement....................................       3.19 
Agreement...................................................    Recital 
Applicable Laws.............................................      2.3(b)
Assets......................................................       3.12 
Balance Sheet...............................................       3.12 
BHCA........................................................        2.3 
Business Employees..........................................       5.13 
Cash Consideration..........................................        1.5 
CERCLA......................................................       3.10 
Certificate of Merger.......................................        1.3 
Certificates................................................        1.7 
Client Contracts............................................       3.18 
Closing.....................................................        9.1 
Closing Date................................................        9.1 
Code........................................................        1.7 
Commission..................................................        2.4 
Commission Filings..........................................        3.6 
Company.....................................................    Recital 
Company Material Adverse Effect.............................        3.1 
Company Stockholder Approval................................        6.1 
Company Stockholders' Meeting...............................        5.1 
Continuing Subsidiaries.....................................        3.2 
Deferred Compensation Shares................................        1.5 
Delaware Law................................................        1.1 
Designated Assets...........................................        1.1 
Disclosure Schedule.........................................  Article 3 
Dissenting Shares...........................................        1.5 
Distribution................................................        8.2 
Distribution Agreement......................................        8.1 
EC Regulation...............................................        2.3 
Effective Time..............................................        1.3 
Encumbrances................................................       3.12 
Environmental Law...........................................       3.10 
ERISA.......................................................       3.11 
ESPP........................................................        3.3 
Exchange Act................................................        2.3 
Fee.........................................................        7.5 
Financial Advisors..........................................       3.17 
Funds.......................................................       3.18 
Fund Annual Financial Statements............................       3.19 
Fund Approvals..............................................        4.3 
Fund Financial Statements...................................       3.19 
Fund Interim Financial Statements...........................       3.19 
Fund Material Adverse Effect................................       3.19 
Fund Stockholders...........................................       3.19 
Fund Tax Returns............................................       3.19 

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                                                                [Download Table]
                                                                       
Funds.......................................................       3.18
Governmental Entity.........................................       3.10
Harbor Global...............................................        8.1
Harbor Global Entities......................................       3.25
Harbor Global Interests.....................................        8.2
Hart-Scott-Rodino Act.......................................        2.3
Indemnified Parties.........................................        5.8
Intellectual Property.......................................       3.15
Investment Advisers Act.....................................        2.3
Investment Company Act......................................        2.3
Leases......................................................       3.12
Management Stockholders.....................................    Recital
Material Contracts..........................................       3.21
Materials of Environmental Concern..........................       3.10
Merger......................................................    Recital
NASD........................................................        2.3
Non-Fund Clients............................................       3.18
Non-Registered Funds........................................       3.18
Non-Registered Funds Annual Financial Statements............       3.20
Non-Registered Funds Financial Statements...................       3.20
Non-Registered Funds Interim Financial Statements...........       3.20
open taxable years..........................................       3.19
Options.....................................................        3.3
Parent......................................................    Recital
Payment Agent...............................................        1.7
Payment Fund................................................        1.7
PFD.........................................................       3.19
PIM.........................................................       3.18
Plans.......................................................        3.3
Proxy Statement.............................................        2.4
PSC.........................................................       3.19
Purchaser...................................................    Recital
Qualified Acquisition Proposal..............................        5.5
Qualified Commercial Bank...................................        1.7
Reports.....................................................       3.19
Securities Act..............................................        2.3
Services Agreement..........................................       3.19
Shares......................................................        1.5
Stockholders................................................        1.5
Subsequent Action...........................................        5.5
Subsequent Sale.............................................        7.5
Subsidiaries................................................        3.2
Surviving Corporation.......................................        1.1
Tax Returns.................................................       3.14
Tax Separation Agreement....................................        8.1
Terminating Company Breach..................................        7.1
Terminating Parent Breach...................................        7.1
Third Party.................................................        5.5
Trustee Materials...........................................        4.3

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                                                                [Download Table]
                                                                       
Underwriting Agreement......................................       3.19
12b-1 Plan..................................................       3.19
1997 Plan...................................................        3.3
1988 Plan...................................................        3.3

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AGREEMENT AND PLAN OF MERGER

   THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 14,
2000, is between UniCredito Italiano S.p.A., a corporation organized under the  
laws of the Republic of Italy (the "Parent"), and The Pioneer Group, Inc., a    
corporation organized under the laws of the State of Delaware (the "Company").  

BACKGROUND

  A. The respective Boards of Directors of the Parent and the Company have
each duly approved the merger of a corporation to be organized under the laws of
the State of Delaware and to be a wholly owned subsidiary of the Parent (the    
"Purchaser") with and into the Company on the terms and subject to the          
conditions of this Agreement (the "Merger") and the Board of Directors of the   
Company has resolved to recommend approval of the Merger by the Stockholders.   

 B. In addition to receiving the Cash Consideration provided for in this
Agreement, the Stockholders are receiving Harbor Global Interests in connection 
with the Merger.                                                                

  C. The respective Boards of Directors of the Parent and the Company have
each duly approved all of the other transactions contemplated by this Agreement.

D. In order to induce Parent to enter into this Agreement, certain    
Stockholders who are executive officers of the Company (the "Management         
Stockholders") and the Parent have simultaneously herewith entered into voting  
agreements, whereby such Management Stockholders have agreed, among other       
things, to vote in favor of this Agreement, the Merger and the other            
transactions contemplated hereby.                                               

   NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration the receipt and  
adequacy of which are hereby acknowledged, the Parent, the Purchaser and the    
Company hereby agree as follows:                                                

ARTICLE 1 

THE MERGER

  1.1  The Merger.  (a) At the Effective Time (as hereinafter defined), in
accordance with this Agreement and the General Corporation Law of the State of  
Delaware ("Delaware Law"), the Purchaser shall be merged with and into the      
Company, the separate existence of the Purchaser shall cease and the Company    
shall continue as the surviving corporation. Notwithstanding the foregoing, the 
Parent may elect, prior to the Merger, instead of merging Purchaser with and    
into the Company, as provided above, to merge the Company with and into the     
Purchaser; provided, that the Company shall not be deemed to have breached any  
of its representations, warranties or covenants set forth in this Agreement, and
no closing condition contained herein shall be deemed not satisfied, solely by  
reason of such election. The Company (or in the case of an election by the      
Parent pursuant to the immediately preceding sentence, the Purchaser) is        
hereinafter sometimes referred to as the "Surviving Corporation."               

   (b) Notwithstanding anything in the Agreement to the contrary, the Parent
may identify certain assets owned by the Company (including stock of the        
Continuing Subsidiaries) or assets owned by the Continuing Subsidiaries (the    
"Designated Assets") that the Parent desires to purchase directly, or that the  
Parent desires one of its affiliates to purchase. In such event, the Company and
the Parent (or such affiliate of the Parent) shall negotiate in good faith a    
purchase and sale agreement with respect to the Designated Assets; provided,    
however, that the Company shall be under no obligation to enter into any such   
agreement. Any purchase and sale agreement with respect to the Designated Assets
shall close simultaneously with the Effective Time, on such terms (including    
appropriate indemnities provided by the Parent for liabilities arising from such
sale) arrived at between the parties in good faith. If the Parent so            

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directs, the net proceeds from such sale of assets shall be used as part of the 
Cash Consideration and will reduce the other Cash Consideration provided by the 
Parent such that the Stockholders shall receive the same aggregate Cash         
Consideration provided for herein as if the Parent had not so directed the use  
of such net proceeds.                                                           

1.2  Effect of the Merger.  At the Effective Time, the Surviving      
Corporation shall continue its corporate existence under the laws of the State  
of Delaware and the Merger shall have the effects set forth in Section 251 of   
the Delaware Law.                                                               

1.3  Consummation of the Merger.  As soon as is practicable after the 
satisfaction or waiver of the conditions set forth in Article 6 hereof, the     
parties hereto will cause the Merger to be consummated by delivering to the     
Secretary of State of the State of Delaware a Certificate of Merger (the        
"Certificate of Merger") in such form or forms as may be required by, and       
executed and acknowledged in accordance with, the relevant provisions of the    
Delaware Law, and shall make all other filings and recordings required by the   
Delaware Law in connection with the Merger. The Merger shall become effective at
the time that the Certificate of Merger is filed with the Secretary of the State
of the State of Delaware in accordance with the relevant provisions of the      
Delaware Law (or at such later time, which shall be as soon as reasonably       
practicable, specified as the effective time in the Certificate of Merger). The 
term "Effective Time" shall mean the date and time of the filing of the         
Certificate of Merger with the Secretary of the State of the State of Delaware  
(or such later time, which shall be as soon as reasonably practicable, as may be
specified in the Certificate of Merger).                                        

  1.4  Certificate of Incorporation; By-Laws; Directors and Officers.  The
Certificate of Incorporation and By-laws of the Purchaser as in effect          
immediately prior to the Effective Time shall be the Certificate of             
Incorporation and By-laws of the Surviving Corporation until thereafter amended 
as provided under the Delaware Law, except that (1) the name of the corporation 
set forth therein shall be changed to the name of the Company and (2) the       
identity of the incorporator set forth in the Certificate of Incorporation shall
be deleted. The directors of the Purchaser immediately prior to the Effective   
Time will be the initial directors of the Surviving Corporation, and the        
officers of the Company immediately prior to the Effective Time will be the     
initial officers of the Surviving Corporation, in each case until such time as  
changed in accordance with the provisions of Delaware Law and the By-laws of the
Surviving Corporation or until their successors are duly elected and qualified. 

1.5  Conversion of Securities.                                        

   (a) At the Effective Time, by virtue of the Merger and without any action
on the part of the Purchaser, the Company, the Surviving Corporation or the     
holder of any of the following securities:                                      

         (i) subject to Section 1.5(b), (A) each share of the Company's common
 stock, par value $0.10 per share (the "Shares"), issued and outstanding
    immediately prior to the Effective Time (other than Shares to be cancelled
     pursuant to clause (ii) below and any Dissenting Shares (as defined below))
and (B) the 35,958 Shares held in the treasury pursuant to a deferred 
    compensation arrangement (the "Deferred Compensation Shares"), which on or
    prior to the Effective Time shall for purposes of this Agreement be deemed
  to be held by the beneficiary of said deferred compensation arrangement,
   shall in the case of clauses (A) and (B) be cancelled and extinguished or
    retired and be converted into and become a right to receive $43.50 in cash
per Share without any interest thereon (the "Cash Consideration");    

      (ii) each Share held in the treasury of the Company (other than as
provided in clause (i)(B) above) and each Share that is issued and    
outstanding immediately prior to the Effective Time and owned by the  
   Parent, the Purchaser or the Company or any direct or indirect subsidiary
of the Parent, the Purchaser or the Company, shall be cancelled and   
retired, and no payment shall be made with respect thereto; and       

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(iii) each share of the Purchaser's capital stock issued and
     outstanding immediately prior to the Effective Time shall be converted into
     and become one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.                                   

     (b) Notwithstanding Section 1.5(a), Shares outstanding immediately prior to
the Effective Time and held by a holder who, acting in accordance with Section  
262 of Delaware Law, (A) prior to the meeting at which the Company's            
stockholders (the "Stockholders") vote to approve the Merger, has delivered to  
the Company written notice of such holder's intention to demand payment for his 
Shares if the Merger is effectuated and (B) has not voted in favor of the Merger
("Dissenting Shares"), shall not be converted into a right to receive the Cash  
Consideration, unless such holder withdraws or otherwise loses his right to     
demand payment for his Shares. If, after the Effective Time, such holder        
withdraws or loses his right to demand payment for his Shares, such Shares shall
be treated as if they had been converted as of the Effective Time into the right
to receive the Cash Consideration payable in respect of such Shares pursuant to 
Section 1.5(a)(i).                                                              

  (c) The Company shall give the Parent and the Purchaser prompt notice of
any demands for payment, or notices of intent to demand payment, received by the
Company with respect to Shares in accordance with Section 262 of Delaware Law,  
and the Parent and the Purchaser shall have the right to participate in all     
negotiations and proceedings with respect to such demands. The Company shall    
not, except with the prior written consent of the Parent and the Purchaser or as
otherwise required by law or pursuant to a final order of a court of competent  
jurisdiction, make any payment with respect to, or settle, or offer to settle,  
any such demands.                                                               

   1.6  Company Stock Options and Plans.  The Company shall take all actions
necessary to ensure that (a) all Options (as defined in Section 3.3 below)      
outstanding under the Plans (as defined in Section 3.3 below), to the extent not
exercised prior to the Effective Time, shall, if not currently vested, be fully 
vested immediately prior to the Effective Time and shall terminate and be       
cancelled as of the Effective Time and in consideration thereof each holder     
shall receive from the Purchaser, as soon as practicable following the Effective
Time, a cash payment equal to the excess of the Cash Consideration (if any) over
the per share exercise price of such Option, multiplied by the number of shares 
subject to such Option (as the case may be), and thereafter such Options shall  
be of no further force or effect, (b) all restricted common stock granted under 
any Plan shall, if not currently vested, be fully vested immediately prior to   
the Effective Time and (c) all Plans shall terminate as of the Effective Time.  
Any such payment shall be subject to all applicable federal, state and local tax
withholding requirements.                                                       

1.7  Exchange of Certificates.                                        

(a) From and after the Effective Time, a bank or trust company to be  
designated by the Parent or the Purchaser and consented to by the Company (such 
consent not to be unreasonably withheld, delayed or conditioned) (the "Payment  
Agent") shall act as payment agent in effecting the exchange, for the Cash      
Consideration multiplied by the number of Shares formerly represented thereby,  
of certificates (the "Certificates") that, prior to the Effective Time,         
represented Shares entitled to payment pursuant to Section 1.5(a)(i). From time 
to time, the Parent shall, or shall cause the Purchaser to, deposit with the    
Payment Agent in trust for the benefit of the holders of Certificates, such     
amount of the Cash Consideration in immediately available funds needed to pay   
promptly for surrendered Shares as provided in this Section 1.7 (the "Payment   
Fund"). Promptly after the Effective Time (but in any event within two business 
days thereof), the Payment Agent shall mail to each record holder of            
Certificates that immediately prior to the Effective Time represented Shares a  
form of letter of transmittal (in form and substance reasonably satisfactory to 
the Parent) and instructions for use in surrendering such Certificates and      
receiving the Cash Consideration therefor. Upon the surrender of each such      
Certificate together with a duly completed and executed letter of transmittal,  
the Payment Agent shall pay the holder of such Certificate the Cash             
Consideration multiplied by the number of Shares formerly represented by such   
Certificate, without any interest thereon, in exchange therefor, and such       
Certificate shall forthwith be cancelled. Delivery shall be effected, and risk  
of loss and title to the Certificate shall pass, only upon                      

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proper delivery of the Certificate to the Payment Agent, and the letter of      
transmittal shall so reflect. Until so surrendered and exchanged, each such     
Certificate (other than Certificates representing Shares held by the Parent, the
Purchaser or the Company or any direct or indirect subsidiary of the Parent, the
Purchaser or the Company or Dissenting Shares) shall represent solely the right 
to receive the Cash Consideration multiplied by the number of Shares represented
by such Certificate, without any interest thereon. If any cash is to be paid to 
a person other than the holder in whose name the Certificate representing Shares
surrendered in exchange therefor is registered, it shall be a condition to such 
payment that the person requesting such payment shall pay to the Payment Agent  
any transfer or other taxes required by reason of the payment of such cash to a 
person other than the registered holder of the Certificate surrendered, or such 
person shall establish to the satisfaction of the Payment Agent that such tax   
has been paid or is not applicable. Notwithstanding the foregoing, neither the  
Payment Agent nor any party hereto shall be liable to a holder of Shares for any
Cash Consideration delivered to a public official pursuant to applicable        
abandoned property, escheat and similar laws.                                   

(b) To the extent not immediately required for payment for surrendered
Shares as provided in Section 1.7(a), the Payment Fund shall be invested by the 
Payment Agent, as directed by the Parent (so long as such directions do not     
impair the rights of holders of Shares), in direct obligations of the United    
States of America, obligations for which the full faith and credit of the United
States of America is pledged to provide for the payment of principal and        
interest, commercial paper rated of the highest quality by Moody's Investors    
Services, Inc. or Standard & Poor's Ratings Group, or certificates of deposit   
issued by a commercial bank having at least $300,000,000 in assets (a "Qualified
Commercial Bank"); and any net earnings with respect thereto shall be paid to   
the Parent as and when requested by the Parent.                                 

     (c) The Payment Agent shall, pursuant to irrevocable instructions, make the
payments referred to in Section 1.5(a)(i) out of the Payment Fund. Promptly     
following the date that is nine months after the Effective Time, the Payment    
Agent shall deliver to the Parent all cash, certificates and other documents in 
its possession relating to the transactions described in this Agreement, and the
Payment Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a Share may surrender such Certificate to the Surviving   
Corporation or the Parent and (subject to applicable abandoned property, escheat
and similar laws) receive in exchange therefor the Cash Consideration, without  
any interest thereon but shall have no greater rights against the Surviving     
Corporation or the Parent than may be accorded to general creditors of the      
Surviving Corporation or the Parent under applicable law.                       

(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares. If, after the        
Effective Time, Certificates formerly representing Shares are presented to the  
Surviving Corporation or the Payment Agent, they shall be cancelled and         
exchanged for the Cash Consideration, as provided in this Article 1, subject to 
applicable law in the case of Dissenting Shares.                                

    (e) From and after the Effective Time, holders of certificates theretofore
evidencing Shares shall cease to have any rights as Stockholders, except as     
provided herein or by law. After the Effective Time, the Surviving Corporation  
shall be entitled to cause the Shares to be delisted from the Nasdaq Stock      
Market(R).                                                                      

   (f) Each of the Surviving Corporation and the Parent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this   
Agreement to any holder of Shares such amounts as it is required to deduct and  
withhold with respect to the making of such payment under the Internal Revenue  
Code of 1986, as amended (the "Code"), or any provision of state, local or      
foreign tax law (other than any such tax that may arise due to the status of the
Parent as a non-U.S. corporation). To the extent that amounts are so withheld by
the Surviving Corporation or the Parent, as the case may be, such withheld      
amounts shall be treated for all purposes of this Agreement as having been paid 
to the holder of the Shares in respect of which such deduction and withholding  
was made by the Surviving Corporation or the Parent, as the case may be, and    
shall promptly be paid by the Parent or the Purchaser, as the case may be, to   
the applicable taxing authority.                                                

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    (g) If any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such Certificate to  
be lost, stolen or destroyed and, if required by the Surviving Corporation, the 
posting by such person of a bond, in such commercially reasonable amount and on 
such commercially reasonable terms as the Surviving Corporation may direct, as  
indemnity against any claim that may be made against it with respect to such    
Certificate, the Parent shall issue in exchange for such lost, stolen or        
destroyed Certificate, the Cash Consideration.                                  

    (h) Except for the distribution of shares of Harbor Global contemplated by
Article 8, the Cash Consideration shall be appropriately adjusted to reflect any
stock split, reverse stock split, stock dividend, recapitalization, exchange,   
subdivision, combination of, or other similar change in the Shares that shall be
effective or be authorized after the date of this Agreement and prior to the    
Effective Time.                                                                 

ARTICLE 2 

REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER 

 The Parent represents and warrants to the Company as of the date hereof
and, as of the Closing Date, the Parent and the Purchaser each represents and   
warrants to the Company as follows:                                             

  2.1  Organization and Qualification.  The Parent is and the Purchaser on
the Closing Date will be an entity duly organized, validly existing and in good 
standing under the laws of its jurisdiction of organization and has or, with    
respect to the Purchaser, shall have all requisite power to carry on its        
business as now conducted or contemplated to be conducted. The Parent is and the
Purchaser on the Closing Date will be duly qualified as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character  
of its properties owned or leased or the nature of its activities makes such    
qualification necessary, except for failures to be so qualified or in good      
standing which would not, individually or in the aggregate, materially impair   
the ability of the Parent and the Purchaser to perform their obligations        
hereunder.                                                                      

     2.2  Authority.  The Parent has the requisite corporate power and authority
to enter into this Agreement. The Parent has and the Purchaser on the Closing   
Date will have the requisite corporate power to perform its obligations         
hereunder and to consummate the transactions contemplated hereby. The execution 
and delivery of this Agreement by the Parent and the consummation by the Parent 
and the Purchaser of the transactions contemplated hereby have been, in the case
of the Parent, and will be, in the case of the Purchaser, duly authorized by the
respective Boards of Directors of the Parent (including as sole stockholder of  
the Purchaser) and the Purchaser and no other corporate proceedings on the part 
of the Parent are or, in the case of the Purchaser will be, necessary to        
authorize the execution, delivery and performance of this Agreement and the     
transactions contemplated hereby. This Agreement has been duly executed and     
delivered by the Parent and constitutes a valid and binding obligation of the   
Parent, enforceable against the Parent in accordance with its terms.            

2.3  Compliance.                                                      

    (a) Neither the execution and delivery of this Agreement by the Parent nor
the consummation by the Parent and the Purchaser of the transactions            
contemplated hereby nor compliance by the Parent and the Purchaser with any of  
the provisions hereof will (i)(x) violate, conflict with or result in a breach  
of any provision of the charter documents or by-laws of the Parent or the       
Purchaser or (y) violate, conflict with, or result in a breach of any provision 
of, or constitute a default (or an event that, with notice or lapse of time or  
both, would constitute a default) under, or result in the termination of, or    
accelerate the performance required by, or result in a right of termination or  
acceleration under, or result in the creation of any lien, security interest,   
charge or encumbrance upon any of the material properties or assets of the      
Parent or the Purchaser or any other direct or indirect subsidiary of the Parent
under, any of the terms, conditions or provisions of any note, bond, mortgage,  
indenture, deed of trust, license, lease, agreement or                          

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other instrument or obligation to which the Parent or the Purchaser is a party, 
or to which any of them, or any of their respective properties or assets, may be
subject, or (ii) subject to the exceptions and compliance with the statutes and 
regulations referred to in the next paragraph, violate any judgment, ruling,    
order, writ, injunction, decree, statute, rule or regulation applicable to the  
Parent or the Purchaser or any of their respective properties or assets; except,
in the case of each of clauses (i)(y) and (ii) above, for such violations,      
conflicts, breaches, defaults, terminations, accelerations or creations of      
liens, security interests, charges or encumbrances that, individually or in the 
aggregate, would not materially impair the ability of the Parent and the        
Purchaser to perform their obligations hereunder.                               

   (b) Other than in connection with or in compliance with the provisions of
Delaware Law, the U.S. Securities Act of 1933, as amended (the "Securities      
Act"), the U.S. Securities Exchange Act of 1934, as amended (the "Exchange      
Act"), the U.S. Investment Advisers Act of 1940, as amended (the "Investment    
Advisers Act"), the U.S. Investment Company Act of 1940, as amended (the        
"Investment Company Act"), the "takeover" or "blue sky" laws of various states, 
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and      
regulations thereunder (the "Hart-Scott-Rodino Act"), Regulation (EC) No.       
4054189, as amended, of the Council of the European Union or any other national 
antitrust regulation applicable in Europe (the "EC Regulation"), the Bank       
Holding Company Act of 1956, as amended by the Gramm-Leach-Bliley Act of 1999   
(the "BHCA"), the rules and regulations of the Board of Governors of the Federal
Reserve System, the rules and regulations of the Bank of Italy, and the rules   
and regulations of the National Association of Securities Dealers, Inc. (the    
"NASD") (each of such laws, rules or regulations being referred to as the       
"Applicable Laws"), no notice to, filing with, or authorization, consent or     
approval of, any domestic or foreign public body or authority or any            
governmental or non-governmental self-regulatory organization or agency is      
necessary for the consummation by the Parent or the Purchaser of the            
transactions contemplated by this Agreement, unless the failure to give such    
notices, make such filings, or obtain such authorizations, consents or approvals
would, individually or in the aggregate, not materially impair the ability of   
the Parent and the Purchaser to perform their obligations hereunder.            

    (c) As of the Effective Time, neither the Parent nor the Purchaser nor any
other person "associated" (as defined under the Investment Advisers Act) with   
the Parent or the Purchaser is subject to disqualification pursuant to Section  
203(e) of the Investment Advisers Act or to serve as an investment adviser or as
an associated person to a registered investment adviser, or subject to          
disqualification pursuant to Rule 206(4) -- 3 under the Investment Advisers Act 
or subject to disqualification to serve as a broker-dealer under Section 15 of  
the Exchange Act or the subject of a rebuttable presumption pursuant to Rule    
206(4) -- 4(b) under the Investment Advisers Act unless in each case the Parent 
has received exemptive relief from the Commission with respect to such          
disqualification. As of the Effective Time, neither the Parent nor the Purchaser
nor any "affiliated person" (as defined under the Investment Company Act)       
thereof is subject to disqualification as an investment adviser or any other    
capacity contemplated by the Investment Company Act for any investment company  
under Section 9(a) of the Investment Company Act unless in each case the Parent 
has received exemptive relief from the Commission with respect to such          
disqualification.                                                               

2.4  Commission Filings.                                              

   (a) The information supplied by the Parent or the Purchaser for inclusion
in the proxy statement of the Company to be mailed to the Stockholders in       
connection with their approval of the Merger (the "Proxy Statement"), on the    
date the Proxy Statement is filed with the Securities and Exchange Commission   
(the "Commission"), on the date the Proxy Statement is first sent or given to   
security holders, and on the date of the meeting of the Stockholders, will      
comply in all material respects with the provisions of applicable U.S. federal  
securities laws and will not contain any untrue statement of a material fact or 
omit to state any material fact required to be stated therein or necessary in   
order to make the statements therein, in light of the circumstances under which 
they were made, not misleading. The Parent agrees to provide in writing all     
information concerning the Parent and its affiliates required to be included in 
the Proxy Statement under the Exchange Act and the rules and regulations        
thereunder. The Parent                                                          

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agrees promptly to correct the Proxy Statement if and to the extent that it     
shall have become false or misleading in any material respect.                  

   (b) The information supplied by the Parent or the Purchaser for inclusion
in each of the proxy solicitation materials to be distributed to the            
shareholders of each Fund (as defined in Section 3.18) will include all         
disclosures of information regarding the Parent and the Purchaser as is         
necessary in order to make the disclosure of information therein satisfy the    
requirements of Section 14 of the Exchange Act, Section 20 of the Investment    
Company Act and the rules and regulations thereunder and such information shall 
not contain (at the time such information is distributed) any untrue statements 
of a material fact or omit to state a material fact necessary in order to make  
the statement made therein, in light of the circumstances under which they were 
made, not misleading. The Parent agrees to provide in writing all information   
concerning the Parent and its affiliates required to be included in a Fund's    
proxy statement under the Exchange Act, the Investment Company Act or the rules 
and regulations thereunder. The Parent agrees to promptly correct such          
information if and to the extent that the information regarding the Parent and  
its affiliates in a Fund's proxy statement becomes false or misleading in any   
material respect.                                                               

2.5  Broker's Fees.  Except for Morgan Stanley & Co. Incorporated, no 
agent, broker, person or firm acting on behalf of the Parent or the Purchaser is
or will be entitled to any advisory, commission or broker's or finder's fee from
any of the parties hereto in connection with any of the transactions            
contemplated herein.                                                            

   2.6  Financing.  The Parent has, and at the Effective Time the Parent and
the Purchaser will have, funds and financing arrangements available to them     
sufficient to provide the funds necessary to consummate the Merger and to       
fulfill their obligations hereunder.                                            

2.7  Litigation.  There is no suit, action or legal, administrative,  
arbitration or order, proceeding or governmental investigation pending or, to   
the knowledge of the Parent, threatened, to which the Parent or the Purchaser is
a party which, considered individually or in the aggregate, is reasonably likely
to materially adversely affect the Parent's or the Purchaser's ability to       
perform its obligations under this Agreement.                                   

2.8  Parent's Knowledge.  For purposes of this Agreement and all      
certificates and other documents delivered in connection herewith, the term     
"Parent's knowledge" or "Parent's best knowledge" or similar phrases shall mean 
the knowledge of each member of the board of directors of the Parent and Pietro 
Modiano (Head of Finance of the Parent), which shall be deemed to include the   
knowledge that such person would have had if he or she had made reasonable      
inquiry.                                                                        

ARTICLE 3 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

     The Company represents and warrants to the Parent and the Purchaser, except
as set forth on a disclosure schedule previously delivered to the Parent (the   
"Disclosure Schedule") with respect to any representation or warranty set forth 
below, as of the date hereof and as of the Closing Date as follows:             

 3.1  Organization and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of 
Delaware and has all requisite corporate power and authority to carry on its    
business as it is now being conducted. The Company is duly qualified as a       
foreign corporation to do business, and is in good standing, in each            
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except for failures to be 
so qualified or in good standing which would not, individually or in the        
aggregate, reasonably be expected to have a Company Material Adverse Effect (as 
defined below). Copies of the Certificate of Incorporation and By-Laws of the   
Company have heretofore been delivered to the Parent and the Purchaser and such 
copies are accurate and complete as of the date hereof. For purposes of this    

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Agreement, "Company Material Adverse Effect" shall mean any change, effect or   
circumstance that is materially adverse to the assets, the financial condition, 
business or operations of the Company and its Subsidiaries (as defined in       
Section 3.2) taken as a whole (other than changes that result from economic     
factors affecting the economy as a whole or changes that are the result of      
factors generally affecting the mutual fund industry); provided, that (i)       
Company Material Adverse Effect shall not include any adverse change, effect or 
circumstance arising out of or resulting from actions contemplated by the       
parties in connection with this Agreement or that is attributable to the        
announcement or performance of this Agreement or the transactions contemplated  
by this Agreement other than the Distribution and (ii) any adverse change in the
Company's stock price shall not be taken into account in determining whether    
there has been a Company Material Adverse Effect.                               

     3.2  Subsidiaries.  The only direct or indirect subsidiaries of the Company
(the "Subsidiaries") are those named in Exhibit 21 to the Company's Annual      
Report on Form 10-K for the Fiscal Year ended December 31, 1999 as filed with   
the Commission and heretofore delivered to the Parent or as otherwise set forth 
in the Disclosure Schedule or the Commission Filings (as defined in Section     
3.6). The term "Continuing Subsidiary" shall mean any Subsidiary of the Company 
that is not being transferred to Harbor Global in accordance with Article 8 of  
this Agreement and pursuant to the Distribution Agreement.                      

No securities of any of the Continuing Subsidiaries are or may become 
required to be issued by reason of any options, warrants, scrip, rights to      
subscribe to, calls or commitments of any character whatsoever relating to, or  
securities or rights convertible into or exchangeable for, shares of any capital
stock of any Continuing Subsidiary. There are no contracts, commitments,        
understandings or arrangements by which any Continuing Subsidiary is bound to   
issue additional shares or purchase shares of its capital stock (or its         
equivalent) or securities convertible into or exchangeable for such shares or   
similar interests and there are no agreements or understandings to which the    
Company or any of its Continuous Subsidiaries is a party with respect to voting 
the capital stock (or its equivalent) of any Subsidiary. All of such shares or  
similar interests so owned by the Company are validly issued, fully paid and    
non-assessable and are owned by the Company free and clear of any claim, lien,  
encumbrance or agreement of any kind with respect thereto.                      

     Each Continuing Subsidiary is a corporation or other entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of     
incorporation or organization and has the requisite power and authority to carry
on its business as it is now being conducted. Each Continuing Subsidiary is duly
qualified as a foreign corporation to do business, and is in good standing, in  
each jurisdiction where the character of its properties owned or leased or the  
nature of its activities makes such qualification necessary, except for failures
to be so qualified or in good standing that would not, individually or in the   
aggregate, reasonably be expected to have a Company Material Adverse Effect.    
Copies of the charter documents and by-laws of each Continuing Subsidiary have  
heretofore been made available to the Parent and are accurate and complete as of
the date hereof.                                                                

Except as disclosed in Section 3.2 of the Disclosure Schedule or the  
Commission Filings filed prior to the date hereof, the Company does not directly
or indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar interest in, any 
other corporation, partnership, joint venture or other business association or  
entity.                                                                         

    3.3  Capitalization.  The authorized capital stock of the Company consists
of 60,000,000 shares of Common Stock, $0.10 par value. As of the date of this   
Agreement:                                                                      

         (i) 26,806,500 Shares were validly issued and outstanding, fully paid
and nonassessable;                                                    

      (ii) 36,195 Shares were held in the treasury of the Company, which
includes the Deferred Compensation Shares;                            

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 (iii) 2,275,000 Shares were reserved for issuance pursuant to
outstanding Options heretofore granted under the Company's 1997 Stock 
Incentive Plan (the "1997 Plan") and 1988 Stock Option Plan (the "1988
Plan"); and                                                           

  (iv) 500,000 Shares were reserved for issuance pursuant to the
  Company's 1995 Employee Stock Purchase Plan (the "ESPP" and collectively
   with the 1997 Plan, the Company's 1995 Restricted Stock Plan and the 1988
Plan (the "Plans").                                                   

  Of the shares of restricted common stock issued by the Company under the
1997 Plan and the 1995 Restricted Stock Plan, 556,982 shares of which remain    
subject to restrictions as of the date of this Agreement. The options granted   
under the Plans are hereinafter referred to collectively as the "Options" and   
individually as an "Option." Accurate and complete copies of all of the Plans   
have heretofore been made available to the Parent and the Purchaser. Set forth  
in Section 3.3 of the Disclosure Schedule is a list of all individuals who, as  
of the date of this Agreement, had Options or restricted common stock pursuant  
to the Plans. Except as set forth above in this Section 3.3, there are no other 
shares of capital stock or other securities of the Company outstanding and no   
other outstanding options, warrants, rights to subscribe to (including any      
preemptive rights), calls or commitments of any character whatsoever to which   
the Company is a party or may be bound requiring the issuance, transfer or sale 
of any shares of capital stock or other securities of the Company or any        
securities or rights convertible into or exchangeable or exercisable for any    
such shares or securities, and there are no contracts, commitments,             
understandings or arrangements by which the Company or any of its Continuing    
Subsidiaries is or may become bound to issue additional shares of their capital 
stock or options, warrants or rights to purchase or acquire any additional      
shares of their capital stock or securities convertible into or exchangeable or 
exercisable for any such shares. To the best of the Company's knowledge, none of
the Shares is subject to any voting trust, transfer restrictions or other       
similar arrangements, except for vesting arrangements pursuant to agreements    
with the Company or restrictions on transfer imposed by the Securities Act and  
state securities laws.                                                          

3.4  Authority.                                                       

  (a) The Company has all requisite corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the 
transactions contemplated hereby. The execution and delivery of this Agreement  
by the Company and the consummation by it of the transactions contemplated      
hereby have been duly authorized by the Company's Board of Directors and, except
for the approval of its Stockholders as set forth in Section 6.1 of this        
Agreement, no other corporate proceedings on the part of the Company are        
necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby; provided that the Parties recognize   
that the Board of Directors of the Company has not taken on the date of this    
Agreement all actions necessary to establish and distribute the interests in    
Harbor Global as contemplated by Article 8, all of which shall have been taken  
prior to the Effective Time. This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company,   
enforceable against the Company in accordance with its terms.                   

(b) The Company's Board of Directors have duly adopted resolutions (i)
approving the Merger and this Agreement, and the transactions contemplated      
hereby, (ii) determining that each of the transactions contemplated by this     
Agreement, including the Merger, are fair to, advisable and in the best         
interests of the Stockholders, and (iii) recommending adoption and approval of  
the Merger pursuant to the Delaware Law by holders of Shares.                   

3.5  Compliance.                                                      

  (a) Neither the execution and delivery of this Agreement by the Company,
nor the consummation by the Company of the transactions contemplated hereby, nor
compliance by the Company with any of the provisions hereof will (i)(x) violate,
conflict with, or result in a breach of any provision of the charter or by-law  
of the Company or any of its Continuing Subsidiaries, or (y) violate, conflict  
with, or result in a breach of any provision of, or constitute a default (or an 
event that, with notice or lapse of time or both,                               

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would constitute a default) under, or result in the termination of, or          
accelerate the performance or payment required by, or result in a right of      
termination or acceleration under, or result in the creation of any lien,       
security interest, charge or encumbrance upon any of the properties or assets of
the Company or any of its Continuing Subsidiaries, under any of the terms,      
conditions or provisions of any note, bond, mortgage, indenture, deed of trust, 
license, lease, distribution agreement, joint venture agreement or any other    
agreement or instrument or obligation to which the Company or any of its        
Continuing Subsidiaries is a party or to which any of them or any of their      
respective properties or assets may be subject or (ii) subject to the exceptions
and compliance with the statutes and regulations referred to in the next        
paragraph, violate any judgment, ruling, order, writ, injunction, decree,       
statute, rule or regulation applicable to the Company or its Continuing         
Subsidiaries or any of their respective properties or assets; except, in the    
case of each of clauses (i)(y) and (ii) above, for such violations, conflicts,  
breaches, defaults, terminations, accelerations or creations of liens, security 
interests, charges or encumbrances that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect, and would 
not materially adversely affect the Company's ability to perform its obligations
under this Agreement.                                                           

   (b) Other than in connection with or in compliance with the provisions of
Applicable Laws, authorizations, consents or approvals necessary in order to    
effect any deemed assignment of any agreement between the Company or any of its 
Continuing Subsidiaries and a Fund or other Client, under the Investment Company
Act or the Investment Advisers Act, or as set forth in Section 3.5 of the       
Disclosure Schedule, no notice to, filing with, or authorization, consent or    
approval of, any domestic or foreign public body or authority or any            
governmental or non-governmental self-regulatory organization or agency is      
necessary for the consummation by the Company of the transactions contemplated  
by this Agreement, unless the failure to give such notices, make such filings,  
or obtain such authorizations, consents or approvals would not, individually or 
in the aggregate, materially impair the ability of the Company to perform its   
obligations hereunder and would not, individually or in the aggregate,          
reasonably be expected to have a Company Material Adverse Effect.               

3.6  Commission Filings.                                              

(a) The Company and its Continuing Subsidiaries have filed with the   
Commission all required reports, schedules, forms, statements and other         
documents required to be filed under the Securities Act, the Exchange Act, the  
Investment Company Act and the Investment Advisers Act from January 1, 1998     
through the date hereof. All documents (including exhibits) filed by the Company
and its Continuing Subsidiaries with the Commission pursuant to the Securities  
Act, the Exchange Act, the Investment Company Act and/or the Investment Advisers
Act since January 1, 1998 are referred to herein as the "Commission Filings."   
The Commission Filings (i) were prepared, in all material respects, in          
accordance with the applicable requirements of the Securities Act, the Exchange 
Act, the Investment Company Act and/or the Investment Advisers Act, as the case 
may be, and the rules and regulations thereunder, (ii) did not at the time they 
were filed contain any untrue statement of material fact, (iii) did not at the  
time they were filed omit to state a material fact necessary to make the        
statements therein, in light of the circumstances in which they were made, not  
misleading, and (iv) in the event of subsequent modifications of the            
circumstances or the basis on which they had been made, were, to the extent     
required by the Securities Act, the Exchange Act, the Investment Company Act or 
the Investment Advisers Act, as the case may be, timely amended in order to make
them not misleading in any material respects in the light of such new           
circumstances or basis.                                                         

 (b) Each of the audited consolidated financial statements and unaudited
interim consolidated financial statements (including, in each case, any related 
notes or schedules) included in the Commission Filings was prepared in          
accordance with generally accepted accounting principles applied on a consistent
basis, except as may be indicated therein or in the notes or schedules thereto, 
and fairly presented in all material respects the consolidated financial        
position of the Company and Subsidiaries as at the dates thereof and the        
consolidated results of their operations and cash flows for the periods then    
ended, subject,                                                                 

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in the case of the unaudited interim financial statements, to normal year-end   
audit adjustments and the absence of complete notes.                            

(c) The Proxy Statement and any written information provided by or on 
behalf of the Company which is included in the Proxy Statement, on the date the 
Proxy Statement is filed with the Commission, and on the date the Proxy         
Statement is first published, sent or given to security holders and on the date 
of the meeting of Stockholders, as the case may be, will comply in all material 
respects with the provisions of applicable federal securities laws and will not 
contain any untrue statement of a material fact or omit to state any material   
fact required to be stated therein or necessary in order to make the statements 
therein, in light of the circumstances under which they were made, not          
misleading, provided that no representation or warranty is made pursuant to this
Section 3.6(c) with respect to any written information provided by or on behalf 
of the Parent or the Purchaser for inclusion in the Proxy Statement. The Company
agrees promptly to correct the Proxy Statement if and to the extent that it     
shall have become false or misleading in any material respect (provided that,   
with respect to any false or misleading information provided by or on behalf of 
the Parent or the Purchaser for inclusion in the Proxy Statement, the Parent or 
the Purchaser shall have provided the Company with correct information) and the 
Company shall take all steps necessary to cause the Proxy Statement as so       
corrected to be filed with the Commission and mailed to the Stockholders to the 
extent required by the Exchange Act.                                            

3.7  Litigation.  There are no actions, suits, proceedings or         
investigations pending or, to the best knowledge of the Company, threatened     
against the Company or any of its Continuing Subsidiaries, nor is the Company or
any of its Continuing Subsidiaries subject to any order, judgment, writ,        
injunction or decree, except in either case for matters that, individually or in
the aggregate, would not reasonably be expected to have a Company Material      
Adverse Effect and would not materially adversely affect the Company's ability  
to perform its obligations under this Agreement.                                

3.8  Changes.  Except as specifically set forth in this Agreement, in 
Section 3.8 of the Disclosure Schedule or as disclosed in the Commission Filings
filed prior to the date hereof, since December 31, 1999 (a) the Company and its 
Continuing Subsidiaries, taken as a whole, have conducted their businesses only 
in the ordinary course of business and in a manner consistent with past         
practice, (b) there has not been any event, change or effect which, individually
or in the aggregate, has resulted in a Company Material Adverse Effect, and (c) 
neither the Company nor any of its Continuing Subsidiaries has taken any action 
that, if taken after the date of this Agreement, would constitute a breach of   
any of the covenants set forth in Section 4.1(b), Section 8.2 or Section 8.3.   

   3.9  Transactions with Affiliates.  Except as disclosed in the Commission
Filings filed prior to the date hereof, since January 1, 1997, neither the      
Company nor any of its Continuing Subsidiaries has entered into any transaction 
with any current director or officer of the Company or any Continuing Subsidiary
or any transaction which would be subject to proxy statement disclosure under   
the Exchange Act pursuant to the requirements of Item 404 of Regulation S-K.    

3.10  Environmental Matters.                                          

(a) The Company and the Continuing Subsidiaries have complied in all  
material respects with all applicable Environmental Laws (as defined below).    
There is no civil or criminal litigation, written notice of violation,          
administrative proceeding or investigation, inquiry or information request by   
any court, arbitration tribunal, administrative agency or commission or other   
governmental or regulatory authority or agency (a "Governmental Entity") pending
or, to the knowledge of the Company, threatened relating to any Environmental   
Law involving the Company or any of its Continuing Subsidiaries. For purposes of
this Agreement, "Environmental Law" means any foreign, federal, state or local  
law, statute, rule or regulation or the common law relating to the environment  
or occupational health and safety, including without limitation, any statute,   
regulation or order pertaining to (i) treatment, storage, disposal, generation  
or transportation of industrial, toxic or hazardous substances or solid or      
hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of   
industrial, toxic or hazardous substances, or solid or hazardous waste,         
including without                                                               

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limitation emissions, discharges, injections, spills, escapes or dumping of     
pollutants, contaminants or chemicals; (v) the protection of wildlife, marine   
sanctuaries and wetlands, including without limitation all endangered and       
threatened species; (vi) storage tanks, vessels and containers; (vii)           
underground and other storage tanks or vessels, abandoned, disposed or discarded
barrels, containers and other closed receptacles; (viii) health and safety of   
employees and other persons; and (ix) manufacture, processing, use,             
distribution, treatment, storage, disposal, transportation or handling of       
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or oil or petroleum products or solid or hazardous waste. As used above, the    
terms "release" and "environment" shall have the meaning set forth in the       
federal Comprehensive Environmental Compensation, Liability and Response Act of 
1980 ("CERCLA").                                                                

   (b) There have been no releases of any Materials of Environmental Concern
(as defined below) into the environment by the Company or any of its Continuing 
Subsidiaries, or, to the knowledge of the Company, by any other party at any    
parcel of real property or any facility formerly or currently owned, operated or
controlled by the Company or any of its Continuing Subsidiaries which,          
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect. With respect to any such releases of Materials of      
Environmental Concern, the Company has given all notices required to be given by
the Company or any of its Continuing Subsidiaries to Governmental Entities      
(copies of which have been provided to the Parent). The Company is not aware of 
any releases of Materials of Environmental Concern at parcels of real property  
or facilities other than those owned, operated or controlled by the Company or  
any of its Continuing Subsidiaries that would, individually or in the aggregate,
have a material impact on the real property or facilities owned, operated or    
controlled by the Company or any of its Subsidiaries. For purposes of this      
Agreement, "Materials of Environmental Concern" means any chemicals, pollutants 
or contaminants, hazardous substances (as such term is defined under CERCLA),   
solid wastes and hazardous wastes (as such terms are defined under the federal  
Resources Conservation and Recovery Act), toxic materials, oil or petroleum and 
petroleum products, or any other material subject to regulation under any       
Environmental Law.                                                              

    (c) Section 3.10(c) of the Disclosure Schedule describes all environmental
reports, investigations and audits conducted by or on behalf of the Company or  
any of its Continuing Subsidiaries or, to the knowledge of the Company,         
conducted by or on behalf of a third party (whether done at the initiative of   
the Company or any of its Continuing Subsidiaries or directed by a Governmental 
Entity or other third party) issued or conducted during the past five years     
relating to premises currently or previously owned or operated by the Company or
any of its Continuing Subsidiaries. Complete and accurate copies of each such   
report, or the results of each such investigation or audit, have been provided  
to the Parent if in the possession or control of the Company.                   

   (d) The Parties agree that the only representations and warranties of the
Company herein as to any environmental matters are those contained in this      
Section 3.10.                                                                   

3.11  Employee Benefits and Contracts.                                

   (a) Neither the Company nor any of its Continuing Subsidiaries is a party
to any collective bargaining agreement.                                         

    (b) Section 3.11(b) of the Disclosure Schedule lists all material employee
benefit plans (as defined in Section 3(3) of the U.S. Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) and all bonus, stock option, stock  
purchase, restricted stock, incentive, deferred compensation, retiree medical or
life insurance, supplemental retirement, severance or other benefit plans,      
programs or arrangements, and all employment, termination, severance or other   
contracts or agreements, whether legally enforceable or not, to which the       
Company or any Continuing Subsidiary is a party, with respect to which the      
Company or any Continuing Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Continuing Subsidiary for the 
benefit of any employee, officer or director or former employee, officer or     
director of the Company or any Continuing Subsidiary maintained by the Company  
or any Continuing Subsidiary. Each of such employee benefit plans complies in   
all material respects with all requirements of applicable law. No "prohibited   
transaction" (as such term                                                      

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is defined in ERISA) has occurred with respect to any such plan which will      
result in material liability to the Company.                                    

  (c) Neither the Company nor any affiliate thereof has ever maintained an
employee benefit plan subject to Section 412 of the Code or Title IV of ERISA.  
Each employee benefit plan of the Company or any affiliate intended to be       
qualified under Section 401(a) of the Code has received a favorable             
determination letter from the Internal Revenue Service confirming such          
qualification and nothing has occurred that would cause such qualified status to
be jeopardized. Neither the Company nor any affiliate has ever had an obligation
to contribute to a "multiemployer plan" as defined in Section 4001(a)(3) of     
ERISA. There are no unfunded obligations under any employee benefit plan of the 
Company or any affiliate providing benefits after termination of employment to  
any employee, officer or director or former employee, officer or director,      
including but not limited to retiree health coverage and deferred compensation, 
but excluding continuation of health coverage required to be continued under    
Section 4980(B) of the Code. Each employee benefit plan of the Company or any   
affiliate may be amended or terminated by the Company or such affiliate without 
the consent or approval of any other person. Except as set forth herein, there  
is no employee benefit plan, stock option plan, stock appreciation right plan,  
restricted stock plan, stock purchase plan, or severance benefit plan of the    
Company or any affiliate, any of the benefits of which will be increased or the 
vesting of the benefits under which will be accelerated by the occurrence of any
of the transactions contemplated by this Agreement or the benefits under which  
will be calculated on the basis of the transactions contemplated by this        
Agreement.                                                                      

 (d) Except for acceleration of vesting of Options and restricted common
stock under the Plans, which the Company represents will not exceed $60,500,000 
and $27,500,000, respectively, neither the Company nor any Subsidiary is        
obligated to make any parachute payment, as defined in Section 280G(b)(2) of the
Code but without regard to Section 280G(b)(4) of the Code, nor will any         
parachute payment be deemed to have occurred as a result of or arising out of   
any of the transactions contemplated by this Agreement. Except for acceleration 
of vesting of Options and restricted common stock under the Plans, the Company  
has no contract, agreement, obligation or arrangement with any employee or other
person, any of the benefits of which will be increased or the vesting of the    
benefits under which will be accelerated by any change of control of the Company
or the occurrence of any of the transactions contemplated by this Agreement or  
the benefits under which will be calculated on the basis of the transactions    
contemplated by this Agreement.                                                 

3.12  Real Property and Leases; Liens on Assets.                      

  (a) The Company and its Continuing Subsidiaries have sufficient title to
all their properties and assets to conduct their respective businesses as       
currently conducted, with only such exceptions as would not, individually or in 
the aggregate, reasonably be expected to have a Company Material Adverse Effect.

    (b) The assets, including any real property in which the Company or any of
its Continuing Subsidiaries has an interest, reflected in the balance sheet of  
the Company for the fiscal year ended December 31, 1999 included in the         
Company's Annual Report on Form 10-K (the "Balance Sheet") or acquired in the   
ordinary course of business since December 31, 1999 (the "Assets") (except those
Assets sold or disposed of in the ordinary course of business for full and fair 
consideration), (i) are free and clear of all mortgages, security interests,    
pledges, liens and encumbrances (collectively, "Encumbrances") other than (A) as
reflected in the Balance Sheet, (B) Encumbrances on assets which, individually  
or in the aggregate, are not material to the Company and its Continuing         
Subsidiaries, taken as a whole, and (C) liens for state and local property taxes
not in arrears and liens arising by operation of law and (ii) are neither       
subject to any governmental decree or order to be sold nor are being condemned, 
expropriated or otherwise taken by any public authority with or without payment 
or compensation therefor, nor, to the knowledge of the Company, has any such    
condemnation, expropriation or taking been proposed, except as would not,       
individually or in the aggregate, reasonably be expected to have a Company      
Material Adverse Effect.                                                        

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 (c) Section 3.12(c) of the Disclosure Schedule lists all leases of real
property leased for the use or benefit of the Company or any Continuing         
Subsidiary to which the Company or any Continuing Subsidiary is a party, and all
amendments and modifications thereto (the "Leases"). All Leases are in full     
force and effect and have not been modified or amended, and there exists no     
default under any such lease by the Company or any Continuing Subsidiary, nor   
any event which with notice or lapse of time or both would constitute a default 
thereunder by the Company or any Continuing Subsidiary, except as would not,    
individually or in the aggregate, reasonably be expected to have a Company      
Material Adverse Effect.                                                        

3.13  Taxes.                                                          

(a) The Company and each Subsidiary have timely filed all material tax
returns, statements, reports and forms required to be filed with any tax        
authority having jurisdiction over the Company or any Continuing Subsidiary     
(collectively, "Tax Returns") and have paid when due all taxes owed by the      
Company and any Subsidiary (whether or not shown on any such Tax Returns) to any
such tax authority. There are no liens on any of the assets of the Company or   
any Continuing Subsidiary that arose in connection with any failure (or alleged 
failure) to pay any tax except for liens that would, individually or in the     
aggregate, not reasonably be expected to have a Company Material Adverse Effect.

    (b) No dispute or claim concerning any tax liability of the Company or any
Subsidiary has been claimed or raised by any authority in writing nor to the    
Company's knowledge, otherwise.                                                 

(c) Neither the Company nor any Continuing Subsidiary has waived any  
statute of limitations in respect of taxes or agreed to any extension of time   
with respect to a tax assessment or deficiency.                                 

(d) Neither the Company nor any Subsidiary has filed a consent under  
Section 341(f) of the Code concerning collapsible corporations. Neither the     
Company nor any Subsidiary has any liability for the taxes of any person (other 
than the Company and the Continuing Subsidiaries) under Treas. Reg. Section     
1.1502-6 (or any similar provision of state, local or foreign law), as a        
transferee or successor, by contract, or otherwise.                             

     (e) (i) For United States federal income tax purposes, neither the Company,
nor any Subsidiary nor any Fund is expected to have any income reportable for a 
period ending after the Effective Time but attributable to a transaction, such  
as an installment sale, occurring in, or a change in method of accounting made  
for, a period ending on or prior to the Effective Time that resulted in a       
deferred reporting of income from such transaction or from such change in method
of accounting (other than a deferred intercompany transaction); (ii) immediately
after the Merger, neither the Company nor any Subsidiary will be a United States
real property holding corporation within the meaning of Section 897(c)(3) of the
Code; (iii) the Company has provided or made available to the Parent a copy of  
any tax-sharing or allocation agreement or arrangement involving the Company or 
any of its Continuing Subsidiaries or between a Harbor Global Entity and the    
Parent or any Continuing Subsidiary and a description of any such unwritten or  
informal agreement or arrangement; (iv) all Taxes required to be withheld,      
collected or deposited by the Company or any Subsidiary or Fund have been timely
withheld, collected or deposited and, to the extent required, have been paid to 
the relevant Tax authority; (v) except for the transaction contemplated by this 
Agreement, neither the Company nor any Subsidiary has engaged in any "deferred  
intercompany transactions" within the meaning of Section 1.1502-13 of the       
regulations under the Code, and all "intercompany transactions" within the      
meaning of the same Section 1.1502-13 have been made on an arm's-length basis;  
(vi) none of the Continuing Subsidiaries has an "excess loss account," as       
defined in Section 1.1502-19 of the regulations under the Code, in the stock of 
any other corporation; and (vii) for all open taxable years, the Company and    
each Continuing Subsidiary and all Funds managed thereby are in compliance with 
respect to all backup withholding and information reporting requirements in the 
Code and the regulations thereunder, including, but not limited to all necessary
due diligence mailings and the proper and timely filing of Forms W-3, and such  
Funds are similarly in compliance with all withholding and information reporting
requirements of any state, local or foreign jurisdiction to which any of them   
may be subject, except in the case of clauses (iv) and (vii) for such instances 
of non-compliance which,                                                        

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individually or in the aggregate, would not reasonably be expected to have a    
Company Material Adverse Effect.                                                

(f) Notwithstanding anything in this Section 3.13 to the contrary, the
Company shall not be deemed to have made any representation or warranty under   
this Section 3.13 with respect to any liability, obligation, action or failure  
to act for which the Company or a Continuing Subsidiary is indemnifiable under  
the Distribution Agreement or the Tax Separation Agreement.                     

3.14  Compliance with Laws; Permits.  Neither the Company nor any     
Continuing Subsidiary (a) is in violation of, or has violated, any applicable   
provisions of any laws, statutes, ordinances or regulations (including any rules
or regulations of any non-governmental self-regulatory organization or agency)  
or (b) since January 1, 1998, has received any notice from any non-governmental 
self-regulatory organization or agency, governmental body, agency, official or  
authority or any other person that either the Company or any Continuing         
Subsidiary is in violation of, or has violated, any applicable provisions of any
material laws, statutes, ordinances or regulations, except in the case of       
clauses (a) and (b) for violations or alleged violations which, individually or 
in the aggregate, would not reasonably be expected to have a Company Material   
Adverse Effect. The Company and each of its Continuing Subsidiaries have all    
permits, licenses and franchises from Governmental Entities required to conduct 
their businesses as now being conducted, except for such permits, licenses and  
franchises the absence of which would not reasonably be expected to have a      
Company Material Adverse Effect.                                                

     3.15  Intellectual Property.  The Company, or a Continuing Subsidiary, owns
or has all necessary rights to use each patent, patent application, trademark   
(whether or not registered), trademark application, trade name, service mark,   
copyright and other trade secret or proprietary intellectual property           
(collectively, "Intellectual Property") used in and material to their respective
businesses, and none of the previous or current development, manufacture,       
marketing or distribution of products or services of or by the Company or any   
Continuing Subsidiary infringes the right of any other person, except for any   
such infringements that would not, individually or in the aggregate, reasonably 
be expected to have a Company Material Adverse Effect. Except as disclosed in   
the Commission Filings filed prior to the date hereof, no other person is       
infringing the rights of the Company or any Continuing Subsidiary in any such   
Intellectual Property, except for any such infringements that would not,        
individually or in the aggregate, reasonably be expected to have a Company      
Material Adverse Effect.                                                        

3.16  No Undisclosed Material Liabilities.  Except as disclosed in the
Commission Filings filed prior to the date hereof and except for liabilities not
required by generally accepted accounting principles to be recorded on a balance
sheet or liabilities arising since December 31, 1999 in the ordinary course of  
business as of the date hereof, there are no liabilities of the Company or any  
Continuing Subsidiary of any kind whatsoever, whether accrued, contingent,      
absolute, determined, determinable or otherwise, that would, individually or in 
the aggregate, reasonably be expected to have a Company Material Adverse Effect.

3.17  Fairness Opinion, Brokers.                                      

    (a) The Company has received the oral opinion of Merrill Lynch & Co., Inc.
and Salomon Smith Barney, Inc. (the "Financial Advisors") that, as of the date  
that such opinion was given, the Cash Consideration is fair to the Stockholders 
from a financial point of view.                                                 

 (b) Except for the Financial Advisors, no agent, broker, person or firm
acting on behalf of the Company is or will be entitled to any advisory          
commission or broker's or finder's fee from any of the parties hereto in        
connection with any of the transactions contemplated herein. Accurate and       
complete copies of all agreements between or among the Company and the Financial
Advisors relating to such transactions have been provided to the Parent.        

3.18  Investment Advisory Activities.                                 

     (a) Section 3.18(a) of the Disclosure Schedule contains a list, as of April
30, 2000, of (1) all of the investment companies registered under the Investment
Company Act (the "Funds") for which Pioneer                                     

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Investment Management, Inc. ("PIM") or any other Continuing Subsidiary acts as  
investment adviser, (2) each pooled investment fund for which PIM or any other  
Continuing Subsidiary acts as investment adviser and which is not required to   
register under the Investment Company Act ("Non-Registered Funds") and (3) any  
other investment advisory clients ("Non-Fund Clients") of PIM or any other      
Continuing Subsidiary of the Company, showing the aggregate amount of assets    
under management with the Company and its Continuing Subsidiaries as of such    
date.                                                                           

    (b) The Company has previously made available to the Parent copies of each
investment advisory agreement with any of the Funds, Non-Registered Funds or    
Non-Fund Clients listed in Section 3.18(b) of the Disclosure Schedule (the      
"Client Contracts").                                                            

(c) Each Client Contract and any subsequent renewal has been duly     
authorized, executed and delivered by the applicable Continuing Subsidiary or   
the Company and is a valid and legally binding agreement, enforceable against   
such Continuing Subsidiary or the Company and, to the knowledge of the Company, 
each other party thereto, except (with respect to each such other party) as     
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,   
reorganization, moratorium or other similar laws relating to or affecting the   
rights of creditors generally and by equitable principles, including those      
limiting the availability of specific performance, injunctive relief and other  
equitable remedies and those providing for equitable defenses.                  

   (d) None of the Continuing Subsidiaries is currently in default under any
of the terms of any Client Contract other than defaults which would not,        
individually or in the aggregate, reasonably be expected to have a Company      
Material Adverse Effect.                                                        

(e) None of the Company, any of its Continuing Subsidiaries that are  
registered under the Investment Advisers Act or any other person "associated"   
(as defined under the Investment Advisers Act) with the Company or any of such  
Continuing Subsidiaries is subject to disqualification pursuant to Section      
203(e) of the Investment Advisers Act or to serve as an investment adviser or as
an associated person to a registered investment adviser, or subject to          
disqualification pursuant to Rule 206(4) -- 3 under the Investment Advisers Act 
or subject to disqualification to serve as a broker-dealer under Section 15 of  
the Exchange Act or the subject of a rebuttable presumption pursuant to Rule    
206(4)-4(b) under the Investment Advisers Act. None of the Company, any of its  
Continuing Subsidiaries or any "affiliated person" (as defined under the        
Investment Company Act) thereof is subject to disqualification as an investment 
adviser or any other capacity contemplated by the Investment Company Act for any
investment company under Section 9(a) of the Investment Company Act.            

(f) PIM is registered as an investment adviser under the Investment   
Advisers Act. Pioneer Funds Distributor, Inc. ("PFD") is registered as a        
broker-dealer under the Exchange Act and is a member in good standing of the    
NASD. Pioneering Services Corporation ("PSC") is registered as a transfer agent 
under the Exchange Act. Pioneer Management (Ireland) Limited is registered as a 
transfer agent under the Exchange Act.                                          

   (g) PIM and each Fund have adopted a written code of ethics and a written
policy regarding personal trading. Such code and policy currently comply, and   
have complied, in all material respects with Section 17(j) of the Investment    
Company Act, Rule 17j-1 thereunder, and Section 204A of the Investment Advisers 
Act, as the case may be. To the knowledge of the Company, there has been no     
violation of PIM's code of ethics and personal trading policy that has not been 
reported to the Board of Trustees of the Funds and would constitute a fraud upon
any of the Funds.                                                               

3.19  Registered Investment Companies.                                

  (a) Each Fund is, and at all times required under the Investment Company
Act has been, duly registered with the Commission as an investment company under
the Investment Company Act and has been duly organized, and is validly existing 
and in good standing under the laws of the jurisdiction of its                  

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organization and has the requisite power and authority to carry on its business 
as it is now being conducted.                                                   

   (b) The Company has made available to the Parent and the Purchaser copies
of the (i) audited financial statements for each of the Funds for each of their 
respective fiscal years ended in 1999 (the "Fund Annual Financial Statements")  
and (ii) any audited or unaudited semi-annual financial statements for a Fund   
for its semi-annual period, if any, ended after the date of the Annual Financial
Statements and on or prior to February 29, 2000 (the "Fund Interim Financial    
Statements" and, together with the Fund Annual Financial Statements, the "Fund  
Financial Statements"). Each Fund Financial Statement has been prepared in      
accordance with generally accepted accounting principles consistently applied by
the Fund on a consistent basis, except as may be indicated therein or in the    
notes thereto, and fairly presents in all material respects the financial       
position and statement of net assets as of the date thereof and the results of  
operations for the period then ended, subject, in the case of the Fund Interim  
Financial Statements, to normal year-end adjustments and to the absence of      
complete notes. None of the Funds has incurred any obligation or liability      
(contingent or other) that, individually or in the aggregate, is or when        
accrued, would be, material to the financial condition or results of operations 
of such Fund, except as reflected in its Fund Financial Statements or as may be 
incurred in the ordinary course of its investment operations since the date of  
the Fund Interim Financial Statements and which would not, individually or in   
the aggregate, reasonably be expected to have a Fund Material Adverse Effect.   
For purposes of this Agreement, "Fund Material Adverse Effect" shall mean any   
change, effect or circumstance that is, or is reasonably likely to result in,   
liability to the Company or any of its Continuing Subsidiaries that would have a
Company Material Adverse Effect or which would be materially adverse to the     
business or operations of the Funds and Non-Registered Funds, taken as a whole, 
other than changes that result from economic factors affecting the economy as a 
whole or the industry or geographical region in which the Fund or Non-Registered
Fund invests, changes in the net assets of such Funds or Non-Registered Funds   
due to redemptions, changes in the market value of portfolio securities or      
changes that are the result of factors generally affecting the mutual fund      
industry.                                                                       

  (c) Each Client Contract with a Fund, the Administration Agreement among
the Funds and PIM (the "Administration Agreement"), each Underwriting Agreement 
(the "Underwriting Agreement") between PFD and a Fund, and each agreement (the  
"Services Agreement") between PSC and a Fund, and any subsequent renewal of any 
such agreement, has been duly authorized, executed and delivered by PIM, PFD or 
PSC, as the case may be, and the Fund and is a valid and legally binding        
agreement, enforceable against PIM, PFD, PSC, as the case may be, and the Fund  
and, if applicable, has been adopted in compliance with Section 12(b) or Section
15 of the Investment Company Act.                                               

   (d) Each current prospectus (which term, as used in this Agreement, shall
include any related statement of additional information), as amended or         
supplemented, relating to each Fund has been supplied or made available to the  
Parent and the Purchaser. Each such prospectus, as amended or supplemented, is  
in substantial compliance with the requirements of the Securities Act and the   
Investment Company Act, and, where applicable, the rules of the NASD, except for
such non-compliance which would not, individually or in the aggregate,          
reasonably be expected to have a Fund Material Adverse Effect. Each of the Funds
has filed all prospectuses, financial statements, other forms, reports, sales   
literature, and advertising, and any other documents required to be filed with  
applicable Governmental Entities, and any amendments thereto (the "Reports"),   
the failure to file which would not, individually or in the aggregate, have a   
Fund Material Adverse Effect. The Reports have been prepared in accordance with 
the requirements of applicable law, except for such non-compliance which would  
not, individually or in the aggregate, reasonably be expected to have a Fund    
Material Adverse Effect.                                                        

(e) Except as set forth in the Fund Financial Statements or current   
prospectuses, none of the Client Contracts with a Fund, the Administration      
Agreement, the Underwriting Agreements or the Services Agreements contains any  
undertaking by PIM, PFD or PSC, as the case may be, to cap fees or to reimburse 
any or all fees thereunder.                                                     

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     (f) A copy of each distribution plan adopted by the Board of any Fund under
Rule 12b-1 under the Investment Company Act ("12b-1 Plan") (or form of 12b-1    
Plan adopted by similar series or classes of shares offered by a Fund) has been 
made available to Parent; and all payments due since December 31, 1998 and prior
to the most recently ended payment period under each distribution plan or       
principal underwriting agreement to which any Fund is a party have been made in 
compliance with the related 12b-1 Plan.                                         

(g) Each of the proxy solicitation materials to be distributed to the 
shareholders of each Fund in connection with the approvals described in Section 
4.3 will contain all information necessary in order to make the disclosure of   
information therein satisfy the requirements of Section 14 of the Exchange Act, 
Section 20 of the Investment Company Act and the rules and regulations          
thereunder and such materials (except to the extent supplied by or related to   
Parent or its affiliates) will be complete in all material respects and will not
contain (at the time such materials are distributed, filed or provided at the   
time of the relevant vote of the shareholders of each Fund in connection with   
the approvals described in Section 4.3) any untrue statement of a material fact 
or omit to state any material fact necessary in order to make the statements    
made therein, in the light of the circumstances under which they were made, not 
misleading or necessary to correct any statement or any earlier communication   
with respect to the solicitation of a proxy for the same meeting or subject     
matter which has become false or misleading.                                    

  (h) Neither the execution and delivery of this Agreement by the Company,
nor the consummation by the Company of the transactions contemplated hereby, nor
compliance by the Company with any of the provisions hereof will (i) (x)        
violate, conflict with, or result in a breach of any provision of the charter,  
by-laws or similar organizational documents of any of the Funds, or (y) violate,
conflict with, or result in a breach of any provision of, or constitute a       
default (or an event that, with notice or lapse of time or both, would          
constitute a default) under, or result in the termination of, or accelerate the 
performance or payment required by, or result in a right of termination or      
acceleration under, or result in the creation of any lien, security interest,   
charge or encumbrance upon any of the properties or assets of any of the Funds, 
under any of the terms, conditions or provisions of any note, bond, mortgage,   
indenture, deed of trust, license, lease, distribution agreement, or joint      
venture agreement to which any of the Funds is a party or to which any of them  
or any of their respective properties or assets may be subject or (ii) violate  
any judgment, ruling, order, writ, injunction, decree, statute, rule or         
regulation applicable to any of the Funds or any of their respective properties 
or assets; except, in the case of each of clauses (i)(y) and (ii) above, for    
such violations, conflicts, breaches, defaults, terminations, accelerations or  
creations of liens, security interests, charges or encumbrances that,           
individually or in the aggregate, would not reasonably be expected to have a    
Fund Material Adverse Effect.                                                   

   (i) Each of the Funds is governed by a board of trustees consisting of at
least 50% of trustees who are not "interested persons" (as defined in the       
Investment Company Act) of such Fund.                                           

    (j) None of the Funds (a) is in violation of, or since January 1, 1998 has
violated, any applicable provisions of any laws, statutes, ordinances or        
regulations (including any rules or regulations of any non-governmental         
self-regulatory organization or agency) or (b) has received any notice from any 
non-governmental self-regulatory organization or agency, governmental body,     
agency, official or authority or any other person that any Fund is in violation 
of, or has violated, any applicable provisions of any laws, statutes, ordinances
or regulations, except in the case of clauses (a) and (b) for violations or     
alleged violations which, individually or in the aggregate, would not reasonably
be expected to have a Fund Material Adverse Effect. Without limiting the        
generality of the foregoing, none of the Funds has been enjoined, indicted,     
convicted or made the subject of disciplinary proceedings, consent decrees or   
administrative orders on account of any violation of the Securities Act, the    
Exchange Act, the Investment Company Act or any similar law of a non-U.S.       
jurisdiction. The Funds have all permits, licenses and franchises from          
Governmental Entities required to conduct their businesses as now being         
conducted, except for such permits, licenses and franchises the absence of which
would not, individually or in the aggregate, reasonably be expected to have a   
Fund Material Adverse Effect.                                                   

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(k) Each Fund has elected to qualify and, for all taxable years that a
Continuing Subsidiary served as investment adviser and with respect to which the
applicable statute of limitations (including any extensions) has not expired    
("open taxable years"), has continuously qualified to be treated as a "regulated
investment company" under Subchapter M of the Code and has continuously been    
eligible to compute, and has for each such taxable year computed, its federal   
income tax under Section 852 of the Code and has no earnings and profits        
accumulated in any taxable year that is not an open taxable year. At the        
Effective Time, all federal, state, local and foreign tax returns with respect  
to taxes for any taxable period for which the applicable statute of limitations 
(including any extensions) has not expired and during which a Continuing        
Subsidiary has served as investment adviser that were or are required to be     
filed on or before such date by or on behalf of a Fund ("Fund Tax Returns') were
or shall have been timely filed and were or shall be complete and correct in all
material respects and all federal and other taxes, including interest,          
penalties, and additions to tax, shown or required to be shown as due on such   
returns, shall have been paid or provided for. No such Fund Tax Return or other 
filing is currently under audit, no assessment has been asserted with respect to
such Fund Tax Returns or other filings, and no requests for waivers of the time 
to make any such assessment are pending. None of the Funds is delinquent in the 
payment of any material tax, assessment, or governmental charge.                

   (l) There are no actions, suits, proceedings or investigations pending or
to the best knowledge of the Company, threatened against any of the Funds, nor  
is any Fund subject to any order, judgment, writ, injunction or decree naming   
such Fund, except in either case for matters that, individually or in the       
aggregate, would not reasonably be expected to have a Fund Material Adverse     
Effect.                                                                         

    (m) The books and records of each Fund reflecting, among other things, the
investment transactions undertaken on behalf of each Fund, the purchase and sale
of shares of that Fund by its holders of shares of beneficial interests         
(collectively, "Fund Stockholders"), the number of issued and outstanding Fund  
shares owned by each Fund Stockholder, and the state or other jurisdiction in   
which those Fund shares were offered and sold, are, to the knowledge of the     
Company, complete and accurate in all respects, except for such omissions or    
errors which, individually or in the aggregate, would not reasonably be expected
to have a Fund Material Adverse Effect.                                         

     (n) Each Fund has in full force and effect such insurance as is required by
the Investment Company Act and has directors' and officers' and errors and      
omissions insurance policies. Copies of all insurance policies of the Funds have
been made available to Parent. All premiums that are due and payable under such 
policies have been paid.                                                        

     (o) Since December 31, 1999, there has not been any event, change or effect
which, individually or in the aggregate, has resulted in a Fund Material Adverse
Effect.                                                                         

3.20  Non-Registered Funds.                                           

(a) Each Non-Registered Fund has been duly organized, and is validly  
existing and in good standing under the laws of the jurisdiction of its         
organization and has the requisite power and authority to carry on its business 
as it is now being conducted.                                                   

(b) The Company has made available to Parent copies of the audited    
financial statements for each of the Non-Registered Funds for each of their     
respective fiscal years ending in 1999 (the "Non-Registered Fund Annual         
Financial Statements") and, to the extent that the Company or any Continuing    
Subsidiary is contractually obligated to produce such financial statements, the 
unaudited financial statements for each of the Non-Registered Funds for each of 
their respective fiscal periods ended after the date of the Non-Registered Funds
Annual Financial Statements and on or before February 29, 2000 (the             
"Non-Registered Fund Interim Financial Statements" and, together with the       
Non-Registered Fund Annual Financial Statements, the "Non-Registered Fund       
Financial Statements"). Each Non-Registered Fund Financial Statement has been   
prepared in accordance with such accounting principles as the Non-Registered    
Fund purports to comply in any report provided to the holders of the shares or  
other equity interests in the Non-Registered Funds. None of the Non-Registered  
Funds has incurred any obligation or liability (contingent                      

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or other) that, individually or in the aggregate, is or when accrued, would be, 
material to the financial condition or results of operations of such            
Non-Registered Fund, except (i) as reflected in its Non-Registered Fund         
Financial Statements, (ii) as may be incurred in the ordinary course of its     
investment operations since the date of the Non-Registered Fund Financial       
Statements, or (iii) which would not, individually or in the aggregate,         
reasonably be expected to have a Fund Material Adverse Effect.                  

    (c) There are no actions, suits, proceedings or investigations pending or,
to the best knowledge of the Company, threatened against any of the             
Non-Registered Funds, nor is any Non-Registered Fund subject to any order,      
judgment, writ, injunction or decree naming such Non-Registered Fund, except in 
either case for matters that, individually or in the aggregate, would not       
reasonably be expected to have a Fund Material Adverse Effect.                  

   (d) None of the Non-Registered Funds (a) is in violation of, or has since
January 1, 1998 violated, any applicable provisions of any laws, statutes,      
ordinances or regulations (including any rules or regulations of any            
non-governmental self-regulatory organization or agency) or (b) has received any
notice from any non-governmental self-regulatory organization or agency,        
governmental body, agency, official or authority or any other person that any   
Non-Registered Fund is in violation of, or has violated, any applicable         
provisions of any laws, statutes, ordinances or regulations, except in the case 
of clauses (a) and (b) for violations or alleged violations which, individually 
or in the aggregate, would not reasonably be expected to have a Fund Material   
Adverse Effect. Without limiting the generality of the foregoing, none of the   
Non-Registered Funds has been enjoined, indicted, convicted or made the subject 
of disciplinary proceedings, consent decrees or administrative orders on account
of any violation of the Securities Act, the Exchange Act, the Investment Company
Act or any similar law of a non-U.S. jurisdiction. The Non-Registered Funds have
all permits, licenses and franchises from Governmental Entities required to     
conduct their businesses as now being conducted, except for such permits,       
licenses and franchises the absence of which would not, individually or in the  
aggregate, reasonably be expected to have a Fund Material Adverse Effect.       

  3.21  Material Contracts.  Except as disclosed in the Commission Filings
filed prior to the date hereof, as of the date hereof, neither the Company nor  
any of its Continuing Subsidiaries is a party to or bound by any written or oral
contract:                                                                       

     (a) with respect to the employment of any directors or officers, other than
noncompetition and confidentiality agreements with such persons and other than  
contracts terminable by the Company upon no more than 60 days' notice without   
penalty;                                                                        

 (b) that is a "material contract" of the Company (as is defined in Item
601(b)(10) of Regulation S-K of the Commission) to be performed after the date  
of this Agreement;                                                              

     (c) that, after the Effective Time, will materially restrict the conduct of
any line of business by the Company or its Continuing Subsidiaries or upon      
consummation of the Merger will materially restrict the ability of the Surviving
Corporation to engage in any line of business in which it may lawfully engage;  

    (d) with a labor union (including any collective bargaining agreement); or

   (e) any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any Stockholder     
approval or the consummation of any of the transactions contemplated by this    
Agreement, or the value of any of the benefits of which will be calculated on   
the basis of any of the transactions contemplated by this Agreement.            

  All of the foregoing, together with the Client Contracts, Administration
Agreement, Underwriting Agreements and Service Agreements, are collectively     
called "Material Contracts." To the extent Material Contracts are evidenced by  
documents, copies thereof have been delivered or made available to Parent.      
Section 3.23 of the Disclosure Schedule sets forth a description of the material
terms of each Material Contract that has not been reduced to writing. Each      
Material Contract is in full force and effect and is enforceable against the    
Company or the applicable Continuing Subsidiary, as the case may be, in         

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accordance with its terms, except where the failure to be in full force and     
effect would not, individually or in the aggregate, reasonably be expected to   
have a Company Material Adverse Effect. There does not exist under any Material 
Contract any material default or condition or event that, after notice or lapse 
of time or both, would constitute a default on the part of the Company or its   
Continuing Subsidiary or, to the knowledge of the Company, on the part of any   
other parties to such Material Contracts except for such defaults which,        
individually or in the aggregate, would not reasonably be expected to have a    
Company Material Adverse Effect.                                                

3.22  Insurance.  The Company and its Continuing Subsidiaries maintain
policies of insurance on terms, and in amounts, that have previously been       
disclosed to the Parent.                                                        

   3.23  State Takeover Statutes.  The Board of Directors of the Company has
taken all action necessary to ensure that the restrictions on business          
combinations contained in Section 203 of Delaware Law will not apply to the     
Merger and the other transactions contemplated by this Agreement. To the        
knowledge of the Company, no other state takeover statute is applicable to the  
Merger or the other transactions contemplated by this Agreement.                

    3.24  Vote Required.  The affirmative vote of the holders of a majority of
the Shares is the only vote of the holders of any class or series of capital    
stock of the Company necessary to approve this Agreement and the Merger.        

3.25  Harbor Global.                                                  

     (a) As of the Effective Time, shares of equity, intercompany obligations or
similar equity or debt interests in the entities to be transferred to Harbor    
Global pursuant to the Distribution Agreement (the "Harbor Global Entities") and
cash in an amount not to exceed $25 million (or such lesser number that is equal
to $25 million minus the aggregate amount of the Company's obligations (but not 
obligations in connection with Options or restricted stock) to employees of     
Harbor Global under severance or termination agreements between such employees  
and the Company to the extent such obligations are not assumed by Harbor Global 
with the consent of such employees) will be the only assets that are owned,     
leased or licensed by Harbor Global which were previously owned, leased or      
licensed by the Company or any Continuing Subsidiary.                           

     (b) Except as disclosed in Section 3.25(b) of the Disclosure Schedule or as
set forth in Schedule 4.2(a) of the Distribution Agreement and except for such  
other liabilities as shall not exceed $35 million, Harbor Global has no         
liabilities of any kind whether accrued, contingent, absolute, determined,      
determinable or otherwise.                                                      

   (c) Except as disclosed in Section 3.25(c) of the Disclosure Schedule and
except for liabilities (but not in an amount in excess of $7.5 million) with    
respect to which the Company is indemnifiable by Harbor Global pursuant to the  
Distribution Agreement or has obtained a release therefrom, none of the Company 
or any of its Continuing Subsidiaries is liable (whether on a contingent,       
determinable or other basis) for any liabilities of any kind (whether accrued,  
contingent, absolute, determined, determinable or otherwise) of the Harbor      
Global Entities, including, without limitation, pursuant to any indemnification 
arrangement, capital commitment or guarantee.                                   

 (d) Section 3.25(d) of the Disclosure Schedule sets forth a list of all
agreements or arrangements between or among the Company or any of its Continuing
Subsidiaries, on the one hand, and any Harbor Global Entity, on the other hand, 
or to which the Company or any of its Continuing Subsidiaries, on the one hand, 
and any Harbor Global Entity, on the other hand, are parties. The Parent agrees 
that the Company shall be entitled, from time to time, to supplement Section    
3.25(d) of the Disclosure Schedule to provide for intercompany services and     
subleases. If the Parent shall reasonably object to any such addition to Section
3.25(d) of the Disclosure Schedule, the Company shall use commercially          
reasonable efforts to implement alternatives not involving the Company or any   
Continuing Subsidiary as promptly as reasonably practicable and if such         
alternative cannot be implemented, the Company shall not implement              

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the proposed arrangement with Harbor Global without the Parent's consent, which 
consent shall not unreasonably be withheld, conditioned or delayed.             

  3.26  Bank of Italy Requirements.  As of the Effective Time, the Company
and its Continuing Subsidiaries have or will implement prior to the Effective   
Time the systems necessary to comply with the requirements of the Bank of Italy 
regarding the activities of the Italian banking groups, a summary of which has  
previously been provided by the Parent to the Company.                          

3.27  Company's Knowledge.  For purposes of this Agreement and all    
certificates and other documents delivered in connection herewith, the term     
"Company's knowledge" or "Company's best knowledge" or similar phrases shall    
mean the knowledge of the Chief Executive Officer, President, Chief Financial   
Officer and General Counsel of the Company, PIM, PFD or PSC, which shall be     
deemed to include the knowledge that such person would have had if he or she had
made reasonable inquiry.                                                        

3.28  Schedules and Exhibits.  Disclosure of any fact or item in the  
Disclosure Schedule (or any update thereto) shall be deemed to modify (a) only  
the corresponding section of this Agreement and (b) other sections of this      
Agreement to the extent it is reasonably clear (notwithstanding the absence of a
specific cross reference) from a reading of the disclosure that the disclosure  
is applicable to such other sections.                                           

 3.29  No Implied Representation.  Notwithstanding anything contained in
this Article 3 or any other provision of this Agreement, it is the explicit     
intent of the Parent and the Purchaser that the Company is making no            
representation or warranty whatsoever, express or implied, beyond those         
expressly given in this Agreement, including, but not limited to, any implied   
warranty or representation as to condition, merchantability, suitability or     
fitness for a particular purpose as to any of the properties or assets of the   
business conducted by the Company and the Subsidiaries and, except as expressly 
represented in this Agreement, it is understood that the Parent and the         
Purchaser take such business, properties and assets on an "as is" and "where is"
basis. It is understood that any cost estimates, projections, or other          
predictions contained or referred to in the Confidential Descriptive Memorandum,
dated March 2000, distributed by the Financial Advisors, or, unless expressly   
provided otherwise in this Agreement, otherwise provided by the Company or the  
Financial Advisors, are not and shall not be deemed to be representations or    
warranties of the Company.                                                      

ARTICLE 4 

CONDUCT OF BUSINESS 

     4.1  Conduct Prior to Effective Time.  Except as otherwise specifically set
forth herein or as disclosed in the Disclosure Schedule, the Company covenants  
and agrees that, unless the Parent shall otherwise consent (which consent shall 
not be unreasonably withheld or delayed), prior to the Effective Time:          

  (a) The business of the Company and its Continuing Subsidiaries shall in
all material respects be conducted only in, and the Company and its Continuing  
Subsidiaries shall not take any matter or action except in, the ordinary course 
of business, and the Company shall use commercially reasonable efforts, to      
maintain and preserve its and each Continuing Subsidiary's business             
organization, assets, employees and advantageous business relationships;        

(b) Neither the Company nor any of its Continuing Subsidiaries shall  
directly or indirectly do any of the following (except as contemplated by this  
Agreement or the Distribution Agreement):                                       

          (i) other than upon exercise of Options outstanding on the date hereof
pursuant to the Plans, the sale of Shares pursuant to the ESPP or the 
issuance of Shares pursuant to any deferred compensation arrangement, 
     issue, sell, pledge, dispose of or encumber, or authorize, propose or agree
  to the issuance, sale, pledge, disposition or encumbrance of, any shares
of, or any options, warrants or rights                                

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     of any kind to acquire any shares of, or any securities convertible into or
   exchangeable or exercisable for any shares of, capital stock of any class
of the Company or any of its Continuing Subsidiaries or any other     
securities in respect of, in lieu of, or in substitution for Shares   
outstanding as of the date hereof;                                    

          (ii) sell, lease pledge or encumber any assets material to the Company
  and its Continuing Subsidiaries taken as a whole, except in the ordinary
course of business;                                                   

(iii) amend its charter or by-laws or similar organizational
documents;                                                            

        (iv) split, combine or reclassify any shares of its capital stock or
     declare, set aside for payment or pay any dividend or distribution, payable
   in cash, stock, property or otherwise, with respect to any of its capital
stock other than, with respect to dividends or distributions, cash    
    dividends and distributions by a wholly-owned Subsidiary of the Company to
 the Company or to a Subsidiary all of the capital stock of which (other
   than directors' qualifying shares) is owned directly or indirectly by the
Company;                                                              

          (v) redeem, purchase or otherwise acquire or offer to redeem, purchase
    or otherwise acquire any of its capital stock or rights to acquire capital
   stock, except the repurchase by the Company of restricted common stock in
accordance with the terms of the Plans;                               

     (vi) except pursuant to Section 5.5, enter into an agreement with
    respect to any merger, consolidation, liquidation or business combination,
     or any acquisition or disposition of all or substantially all of the assets
or securities of the Company;                                         

      (vii) except pursuant to Section 5.5, enter into an agreement with
     respect to the disposition of a material amount of assets or securities, or
any release or relinquishment of any material contract rights, or any 
comparable event (including, but not limited to, the sale or other    
disposition of any treasury stock (other than in connection with the  
 issuance of Shares pursuant to any deferred compensation arrangement));

       (viii) transfer the stock of any Continuing Subsidiary to any other
    Subsidiary or any assets or liabilities to any new or existing Subsidiary;

     (ix) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or make any investment either by purchase of stock or
securities, contributions to capital (other than to wholly-owned      
   Subsidiaries), property transfer or purchase of any property or assets of
     any other individual or entity (other than providing the initial capital of
any investment company sponsored by a Continuing Subsidiary);         

(x) other than in the ordinary course of business, incur any
 indebtedness for borrowed money or issue any debt securities or assume,
     guarantee, endorse or otherwise as an accommodation become responsible for,
 the obligations of any other individual or entity, or make any loans or
advances;                                                             

   (xi) authorize, recommend or propose any material change in its
capitalization;                                                       

         (xii) change any assumption underlying, or method of calculating, any
bad debt, contingency or other reserve;                               

(xiii) (A) revalue any assets of the Company or any of its  
     Subsidiaries, other than reevaluations that are required in accordance with
    generally accepted accounting principles or for purposes of Section 244 of
   Delaware Law or (B) change or modify in any material respect any existing
accounting principle, method or practice other than as required by    
generally accepted accounting principles;                             

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        (xiv) make any capital expenditure or commitment for which it is not
    contractually bound at the date hereof, except for capital expenditures or
commitments not to exceed $2.5 million per year in the aggregate;     

         (xv) enter into any new Material Contract (other than in the ordinary
 course of business), or modify in any respect materially adverse to the
Company or any of its Continuing Subsidiaries any existing Material   
Contract;                                                             

(xvi) settle any material actions, suits, proceedings or    
     investigations other than any settlement which involves only the payment of
   damages in an amount less than $1 million and does not involve injunctive
or other equitable relief; or                                         

      (xvii) authorize or propose any of the foregoing, or enter into or
    modify any contract, agreement, commitment or arrangement to do any of the
foregoing.                                                            

   (c) Notwithstanding the foregoing, the Company shall be permitted to, and
shall use commercially reasonable efforts to, enter into an agreement to sell or
otherwise dispose of, and sell or otherwise dispose of, the Company's interest  
in Pioneer Universal Pension Fund Company prior to the Effective Time. The      
Company shall consult with the Parent in structuring and carrying out the       
disposition of Pioneer Universal Pension Fund Company. In addition,             
notwithstanding the foregoing, the Company and the Parent shall cooperate in    
good faith regarding the status of Beijing Pioneer Zhong Investment Consulting  
Co., Ltd. as a Continuing Subsidiary and the Company shall use commercially     
reasonable efforts to effect any mutually acceptable arrangement regarding      
Beijing Pioneer Zhong Investment Consulting Co., Ltd.                           

    (d) Neither the Company nor any of its Continuing Subsidiaries shall adopt
or amend (except as may be required by law or under this Agreement) any bonus,  
profit sharing, compensation, stock option, stock purchase, pension, retirement,
deferred compensation, employment or other employee benefit plan, agreement,    
trust, fund or other arrangement for the benefit or welfare of any director,    
officer or employee or former director, officer or employee or, except in the   
ordinary course of business, increase the compensation or fringe benefits of any
employee or former director, officer or employee or pay any benefit not required
by any existing plan, arrangement or agreement;                                 

   (e) Neither the Company nor any of its Continuing Subsidiaries shall take
any action other than in the ordinary course of business with respect to the    
grant of any severance or termination pay or with respect to any increase of    
benefits payable under its severance or termination pay policies in effect on   
the date hereof;                                                                

   (f) Neither the Company nor any of its Continuing Subsidiaries shall make
any tax election or, except in the ordinary course of business, settle or       
compromise any federal, state, local or foreign tax liability; and              

     (g) Neither the Company nor any of its Continuing Subsidiaries shall agree,
in writing or otherwise, to take any of the foregoing actions or any action     
which would make any representation or warranty in Article 3 hereof untrue or   
incorrect in any material respect, or would materially impair or prevent the    
occurrence of any condition in Article 6 hereof.                                

     4.2  Commission Filings.  The Company shall promptly provide the Parent (or
its counsel) with copies of all filings made by the Company with the Commission 
or any other state or federal Governmental Entity in connection with this       
Agreement and the transactions contemplated hereby. The Parent and the Purchaser
shall promptly provide the Company (or its counsel) with copies of all filings  
made by them with the Commission or any other state or federal Governmental     
Entity in connection with the Agreement and the transactions contemplated       
hereby.                                                                         

     4.3  Approval of New Fund Contracts.  The Parent, Purchaser and the Company
recognize that the transactions contemplated by this Agreement shall constitute 
an assignment and termination of certain of the Client Contracts, the           
Underwriting Agreement and the Rule 12b-1 Plans under the terms thereof and     

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the Investment Company Act. The Parent, Purchaser and the Company agree to use  
commercially reasonable efforts and cooperate in obtaining as promptly as       
practicable such authorizations and approvals of the Boards of Directors or     
Trustees of the applicable Funds (including any separate approvals of           
disinterested directors or trustees) and/or the shareholders thereof, as may be 
required by the Investment Company Act, of new contracts, on substantially the  
same terms and conditions as the Client Contracts, Underwriting Agreement and   
the Rule 12b-1 Plans to be terminated (the "Fund Approvals"). The Parent and    
Purchaser agrees to provide such information, for provision to the Board of     
Directors or Trustees of one or more Funds ("Trustee Materials") or for         
inclusion in a proxy statement to the shareholders thereof, as may be required. 

ARTICLE 5 

ADDITIONAL AGREEMENTS 

5.1  Preparation of Proxy Statement.                                  

(a) The Company shall:                                                

        (i) (A) prepare, in cooperation with the Parent, the Proxy Statement
and use its commercially reasonable efforts to obtain and furnish the 
information required to be included by it in the Proxy Statement, and 
     respond promptly to any comments made by the Commission with respect to the
 Proxy Statement and any preliminary version thereof and cause the Proxy
     Statement to be mailed to its Stockholders at the earliest practicable time
    following the execution of this Agreement and (B) except and to the extent
 otherwise permitted pursuant to Section 5.5 below, through its Board of
    Directors recommend approval and adoption of this Agreement and the Merger
and use its commercially reasonable efforts to obtain the necessary   
    approval of the Merger by its Stockholders at a Stockholders' meeting (the
   "Company Stockholders' Meeting") as promptly as practicable following the
execution of this Agreement; and                                      

     (ii) if at any time prior to the Effective Time of the Merger any
  event shall occur which is required to be set forth in an amendment or a
  supplement to the Proxy Statement, the Company will promptly prepare and
mail such an amendment or supplement.                                 

    (b) Notwithstanding any withdrawal, modification or change in any approval
or recommendation of the Board of Directors of the Company pursuant to Section  
5.5, the Company agrees to hold the Company Stockholders' Meeting to submit the 
approval of and adoption of this Agreement and the Merger to Stockholders in    
accordance with the time period specified in Section 5.1.                       

  5.2  Disposition of the Shares.  The Parent and the Purchaser shall not,
and they shall cause their direct and indirect subsidiaries not to, sell,       
transfer, assign, encumber or otherwise dispose of the Shares beneficially owned
by the Parent or the Purchaser or any director or indirect Subsidiary of the    
Parent or the Purchaser, as of the date of this Agreement, or acquired prior to 
the meeting of the Stockholders, if any is required, pursuant to which the      
Shares are voted with respect to the Merger; provided, however, that this       
Section 5.2 shall not apply to the sale, transfer, assignment, encumbrance or   
other disposition of any or all of such Shares in transactions involving solely 
the Parent, the Purchaser and/or one or more of their direct or indirect        
subsidiaries or in connection with any Qualified Acquisition Proposal (as       
defined in Section 5.5).                                                        

5.3  Fees and Expenses.                                               

     (a) Except as otherwise provided in this Section 5.3, Section 7.5 or in the
Distribution Agreement, each party shall bear all of the fees and expenses      
incurred by it in connection with the negotiation and performance of this       
Agreement, and neither party may recover any such fees and expenses from the    
other party upon any termination of this Agreement. The Company agrees to bear  
all of the fees and expenses incurred by the Funds in connection with the       
transactions contemplated by the Agreement.                                     

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(b) The provisions contained in this Section 5.3 shall survive any    
termination of this Agreement.                                                  

 5.4  Additional Agreements.  Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use commercially reasonable      
efforts to take, or cause to be taken, all actions and to do, or cause to be    
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement, and 
to cooperate with each of the other parties hereto in connection with the       
foregoing, including using commercially reasonable efforts: (A) to obtain all   
necessary waivers, consents and approvals from other parties to loan agreements,
leases and other contracts as set forth on Schedule 6.1(b) hereto; (B) to obtain
all necessary consents, approvals and authorizations as are required to be      
obtained under any federal, state or foreign laws or regulations as set forth on
Schedule 6.1(b) hereto; (C) to lift or rescind any injunction or restraining    
order or other order adversely affecting the ability of the parties to          
consummate the transactions contemplated hereby; (D) to effect all necessary    
registrations and filings, including, but not limited to, filings under the     
Hart-Scott-Rodino Act and the EC Regulation and submissions of information      
requested by governmental authorities; (E) to obtain the approvals of the Bank  
of Italy as contemplated by Section 6.1(e) of this Agreement and the Board of   
Governors of the Federal Reserve System as contemplated by Section 6.1(f); and  
(F) to fulfill all conditions to this Agreement. The Company will use such      
commercially reasonable efforts as the Parent shall request (at the expense of  
the Parent) to keep available to the Parent and the Surviving Corporation the   
present key officers and employees of the Company and its Continuing            
Subsidiaries and to preserve for the Parent and the Surviving Corporation the   
present relationships and good will of the Company and its Continuing           
Subsidiaries with their respective lenders, suppliers, customers and other third
parties having business relations with them. For purposes of the foregoing, the 
obligation of the Company, the Parent and the Purchaser to use "commercially    
reasonable efforts" or "reasonable efforts" to obtain waivers, consents and     
approvals to loan agreements, leases and other contracts shall not include any  
obligation to agree to a modification of the terms of such documents, except as 
expressly contemplated hereby or to make any guaranty or monetary payment in    
consideration of such waiver, consent or approval.                              

5.5  No Solicitation.                                                 

 (a) None of the Company or any of the Continuing Subsidiaries or any of
their respective officers, directors, employees, representatives and agents     
(including, without limitation the Financial Advisors) shall, directly or       
indirectly, solicit, initiate, engage or participate in discussions or          
negotiations with, or provide any non-public information to, any corporation,   
partnership, person or other entity or group other than the Parent, the         
Purchaser or another affiliate of the Parent (a "Third Party") and other than in
connection with this Agreement, concerning (or concerning the business of the   
Company or any Continuing Subsidiary in connection with) any tender offer for   
more than 20% of the Shares on a fully-diluted basis (in calculating the number 
of fully-diluted Shares for this purpose, only (A) Shares covered by Options,   
and (B) Shares reserved for issuance pursuant to the ESPP, being considered     
dilutive), exchange offer, merger, consolidation, sale of assets representing   
more than 20% of the total book value of all assets outside of the ordinary     
course of business, recapitalization, accumulation of Shares or proxy           
solicitation (other than as contemplated by this Agreement) or other business   
combination involving the Company or any Continuing Subsidiary (any such        
proposed tender offer, exchange offer, merger, consolidation, sale of material  
assets, recapitalization, accumulation of Shares or proxy solicitation or other 
business combination being referred to herein as "Acquisition Proposals").      
Notwithstanding the foregoing, the Company, its Continuing Subsidiaries, and    
their respective officers, directors, employees, representatives and agents (i) 
may, in the case of a Qualified Acquisition Proposal (as hereinafter defined),  
furnish or cause to be furnished information concerning the Company's and its   
Continuing Subsidiaries' businesses, properties or assets to a Third Party      
(subject to such Third Party executing a confidentiality agreement on terms no  
less favorable to the Company than those in the Confidentiality Agreement       
between the Parent and the Company dated March 23, 2000), (ii) may, in the case 
of a Qualified Acquisition Proposal only, enter into, participate in, conduct or
engage in discussions or negotiations with such Third Party, (iii) may take any 
position with respect to an Acquisition Proposal in accordance with Rules 14a-9 
and 14e-2 promulgated under the Exchange Act, and (iv) may, in the case of a    
Qualified                                                                       

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Acquisition Proposal and in compliance with the provisions of clause (c) of this
Section 5.5, enter into an agreement to consummate a Qualified Acquisition      
Proposal. As used herein, "Qualified Acquisition Proposal" means a bona fide,   
written Acquisition Proposal at a price per Share that the Company's Board of   
Directors (after consultation with a financial advisor of nationally recognized 
reputation) believes in good faith to be superior to the Cash Consideration and 
in the best interests of the Stockholders.                                      

  (b) The Company will promptly notify the Parent of, and will disclose to
the Parent all material details of any Acquisition Proposal it receives         
(including, without limitation, the identity of the Third Party making such     
Acquisition Proposal). In the event that the Company furnishes any nonpublic    
information to any party other than the Parent, it shall simultaneously provide 
the Parent with copies of or access to all such information. Nothing in this    
paragraph (b) shall be construed as interfering with the Company's obligations  
to its Stockholders under Rule 14e-2 promulgated under the Exchange Act.        

(c) Except as expressly permitted by this Section 5.5(c), neither the 
Company's Board of Directors nor any committee thereof shall or shall resolve to
(i) not recommend or withdraw its approval or recommendation of the Merger, this
Agreement or any of the transactions contemplated hereby, (ii) modify or qualify
such approval or recommendation in a manner adverse to the Parent or the        
Purchaser, (iii) approve or recommend any proposed Acquisition Proposal or (iv) 
cause the Company to enter into any letter of intent, agreement in principle,   
acquisition agreement or other similar agreement relating to an Acquisition     
Proposal (or publicly propose to do any of the foregoing). Notwithstanding the  
foregoing, in the event that prior to the Company Stockholders' Meeting the     
Company's Board of Directors determines in good faith, after it has received a  
Qualified Acquisition Proposal and after consultation with outside counsel, that
it must take such action to comply with its fiduciary duties to the Stockholders
under applicable law, then the Company's Board of Directors may (subject to this
sentence) take any of the actions contemplated by clauses (i), (ii), (iii) and  
(iv) of the preceding sentence (a "Subsequent Action"), but only (i) at a time  
that is after the fifth business day following delivery by the Company to the   
Parent of a written notice advising the Parent that the Company's Board of      
Directors has received a Qualified Acquisition Proposal specifying the material 
terms and conditions of such Qualified Acquisition Proposal, identifying the    
person making such Qualified Acquisition Proposal stating that it intends to    
make or take a Subsequent Action; (ii) if the Parent does not, within such five 
business days following delivery of such notice, offer to make such adjustments 
in the terms and conditions of this Agreement such that the Company's Board of  
Directors by majority vote determines in its good faith judgment (after         
consultation with a financial advisor of nationally recognized reputation) to be
as favorable to the Stockholders as such Qualified Acquisition Proposal; and    
(iii) if the Company has complied with this Section 5.5.                        

(d) The Company shall immediately cease and cause to be terminated any
activities, discussions, or negotiations, existing on the date hereof, with any 
person with respect to any Acquisition Proposal, and will promptly request that 
each such person return or destroy all confidential information previously      
produced to that person by the Company or its Subsidiaries.                     

     5.6  Notification of Certain Matters.  The Company shall give prompt notice
to the Parent, of (i) the obtaining by it of actual knowledge as to the matters 
set forth in clauses (x) and (y) of clause (ii) of this sentence, or (ii) the   
occurrence, or failure to occur, of any event which occurrence or failure to    
occur causes (x) any representation or warranty made by the Company and         
contained in this Agreement to be untrue or inaccurate in any material respect  
at any time from the date hereof to the Effective Time, or (y) any material     
failure of the Company or of any officer, director, employee or agent thereof,  
to comply with or satisfy any covenant, condition or agreement to be complied   
with or satisfied by it under this Agreement; provided, however, that no such   
notification shall be deemed to cure any breach or otherwise affect the         
representations or warranties of the Company or the conditions to the           
obligations of the parties hereunder. The Parent shall give prompt notice to the
Company of (i) the obtaining by it of actual knowledge as to the matters set    
forth in clauses (x) and (y) of clause (ii) of this sentence, or (ii) the       
occurrence, or failure to occur, of any event which occurrence or failure to    
occur causes (x) any representation or warranty made by the Parent or the       
Purchaser contained in this Agreement to be untrue                              

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or inaccurate in any material respect at any time from the date hereof to the   
Effective Time, or (y) any material failure of the Parent or the Purchaser, or  
of any officer, director, employee or agent thereof, to comply with or satisfy  
any covenant, condition or agreement to be complied with or satisfied by it     
under this Agreement; provided, however, that no such notification shall be     
deemed to cure any breach or otherwise affect the representations or warranties 
of the Parent or the Purchaser or the conditions to the obligations of the      
parties hereunder.                                                              

5.7  Access to Information.  Except as prohibited by confidentiality  
agreements to which the Company is a party or as restricted under applicable    
law, the Company shall, and shall cause its Continuing Subsidiaries, and the    
Company's and such Continuing Subsidiaries' respective officers, directors,     
employees and agents to, afford to the Parent and to the officers, employees and
agents of the Parent complete access at all reasonable times, from the date     
hereof to the Effective Time, to the Company's and any Continuing Subsidiary's  
officers, employees, agents, properties, books, records and contracts, and shall
furnish the Parent all financial, operating and other data and information as   
the Parent, through its officers, employees or agents, may reasonably request.  

 5.8  Indemnification and Insurance.  The Parent and the Purchaser agree
that all rights to indemnification, advancement of expenses, exculpation,       
limitation of liability and any and all similar rights now existing in favor of 
the employees, agents, directors or officers of the Company and its Continuing  
Subsidiaries (the "Indemnified Parties") as provided in their respective        
charters or by-laws in effect on the date hereof (copies of which have been     
provided to the Parent), shall survive the Merger and shall continue in full    
force and effect for a period of six years from the Effective Time; provided,   
however, that in the event any claim or claims are asserted or made within such 
six-year period, all rights to indemnification in respect to any such claim or  
claims shall continue until the disposition of any and all such claims. The     
Parent agrees to provide each individual who served as a director or officer of 
the Company or its Continuing Subsidiaries at any time prior to the Effective   
Time with liability insurance for a period of six years after the Effective Time
no less favorable in coverage and amount than any applicable insurance in effect
immediately prior to the Effective Time; provided, however, that the Parent may 
reduce the coverage and amount of liability insurance to the extent that the    
cost thereof would exceed 200% of the cost of any such insurance in effect      
immediately prior to the Effective Time. The Indemnified Parties shall be deemed
third party beneficiaries of this provision and shall be entitled to bring      
actions to enforce the obligations of the Parent and the Purchaser under this   
Section 5.8.                                                                    

5.9  Fair Price Structure.  If any "fair price" or "control share     
acquisition" or "anti-takeover" statute, or other similar statute or regulation 
or any state "blue sky" statute shall become applicable to the transactions     
contemplated hereby, the Company and the Company's Directors shall grant such   
approvals and take such actions as are reasonably necessary so that the         
transactions contemplated hereby and thereby may be consummated as promptly as  
practicable on the terms contemplated hereby and thereby, and otherwise act to  
minimize the effects of such statute or regulation on the transactions          
contemplated hereby or thereby.                                                 

5.10  Certain Post-Closing Fund Matters.  The Parent and Purchaser    
acknowledge that the sale of the Shares is intended to qualify for the treatment
described in Section 15(f) of the Investment Company Act. In this regard, the   
Parent and Purchaser shall, and from and after the Effective Time shall cause   
the Company and each of its Continuing Subsidiaries to, (i) use all reasonable  
efforts to assure that, for a period of three years after the Effective Time, at
least 75% of the Board of Directors or Trustees of each Fund or any permitted   
successor thereto are not "interested persons" of the Company, the Parent or the
Purchaser, as that term is defined under applicable provisions of the Investment
Company Act and interpreted by the Commission; such efforts to include causing  
any employee, officer, director or agent of the Company, the Parent or any      
affiliate of the Parent who shall be a director or trustee of any fund to resign
when otherwise required to maintain such percentage, (ii) refrain from imposing 
or seeking to impose, for a period of two years after the Effective Time, any   
"unfair burden" on any Fund, within the meaning of the Investment Company Act,  
and (iii) to use all reasonable efforts to ensure that all vacancies in the     
Board of Directors or Trustees of any Fund shall be filled by a person who is   
not a                                                                           

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"interested person" of the Parent or the Company and who has been selected and  
proposed for election by a majority of the Directors or Trustees who are not    
such interested persons.                                                        

 5.11  Severance Agreements.  Simultaneously with the Merger, the Parent
shall assume and agree to perform the Company's obligations under the severance 
benefit agreements (complete and accurate copies of which have been provided to 
the Parent) listed in the Disclosure Schedule.                                  

  5.12  Parent Guaranty.  The Parent hereby unconditionally guarantees the
Purchaser's obligations under this Agreement and, if the Merger is consummated, 
the indemnification obligations set forth in Section 5.8, and agrees to be      
liable for any breach of this Agreement by the Purchaser (or a breach of Section
5.8).                                                                           

  5.13  Continuation of Employment.  The Parent shall give (or cause to be
given) credit for past service for all purposes to the employees of the Company 
and its Continuing Subsidiaries (the "Business Employees"). Starting at the     
Effective Time, the Parent shall, for a period ending on the date twelve (12)   
months after the Effective Time, provide (or cause to be provided) to each      
Business Employee who continues his or her employment after the Effective Time  
with total cash compensation (including base salary and bonus opportunity at    
least equal to those in effect on the date hereof) that is no less favorable in 
the aggregate to such employee's total cash compensation immediately prior to   
the Effective Time. Starting at the Effective Time, the Parent shall also, for a
period ending on the date twelve (12) months after the Effective Time, maintain 
(or cause to be maintained) employee benefit plans, agreements, programs,       
policies and arrangements for the benefit of each such Business Employee that   
are no less favorable in the aggregate than the employee benefit plans in effect
with respect to such Employees immediately prior to the Effective Time, other   
than employee benefit plans, agreements, programs, policies and arrangements    
providing for stock options, stock purchase rights, restricted stock or other   
employer stock-based compensation and other than any employer stock provisions  
of any qualified retirement plan maintained by the Company or any of its        
Continuing Subsidiaries. Nothing in this Section 5.13 shall prevent the Parent, 
the Surviving Corporation or its Continuing Subsidiaries from terminating the   
employment of any of the Business Employees at any time after the Effective     
Time. The Business Employees shall be deemed to be third party beneficiaries of 
this provision and shall be entitled to bring action to enforce the obligations 
of the Parent and the Purchaser under this Section 5.13.                        

 5.14  Incorporation of the Purchaser.  The Parent shall incorporate the
Purchaser as a Delaware corporation promptly after the date hereof and cause the
Purchaser to make the representations, warranties, covenants and agreements and 
to assume the obligations hereunder of the Purchaser; provided, however, that if
the Parent is prohibited under Applicable Laws from incorporating the Purchaser 
prior to the Effective Time, then either (i) the Parent may designate in writing
to the Company an existing direct or indirect wholly-owned subsidiary of the    
Parent to be the Purchaser and shall cause such subsidiary to make the          
representations, warranties, covenants and agreements and to assume the         
obligations hereunder of the Purchaser or (ii) the Parent shall be deemed to    
have agreed to have made the representations, warranties, covenants and         
agreements and to have assumed the obligations hereunder of the Purchaser.      

ARTICLE 6 

CONDITIONS

6.1  Conditions to Obligation of Each Party to Effect the Merger.  The
respective obligations of each party to effect the Merger shall be subject to   
the fulfillment at or prior to the Effective Time of each of the following      
conditions:                                                                     

   (a) this Agreement and the Merger shall have been approved and adopted by
the requisite vote or consent of the Stockholders required by the Delaware Law  
and the Company's Certificate of Incorporation;                                 

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(b) any waiting period (and any extension thereof) applicable to the  
consummation of the Merger under the Hart-Scott-Rodino Act and the EC Regulation
shall have expired or been terminated and the Company or the Parent shall have  
received the consents or approvals, if any, listed on Section 6.1(b) of the     
Disclosure Schedule;                                                            

(c) the Distribution (as defined in Section 8.2 below) shall have been
completed and the Company and Harbor Global shall have performed all obligations
and complied with all covenants set forth in Article 8;                         

     (d) no preliminary or permanent injunction or other order, decree or ruling
issued by (nor shall any proceeding brought by any governmental authority       
seeking any of the foregoing be pending before) a court of competent            
jurisdiction or by a governmental, regulatory or administrative agency or       
commission nor any statute, rule, regulation or executive order promulgated or  
enacted by any governmental authority shall be in effect, which would make the  
acquisition or holding by the Parent or its subsidiaries of the Shares or shares
of common stock of the Surviving Corporation illegal or otherwise prevent the   
consummation of the Merger; provided, that the party seeking to assert this     
condition shall have complied with its obligations under Section 5.4 of this    
Agreement;                                                                      

   (e) this Agreement and the Merger shall have been approved by the Bank of
Italy in compliance with applicable provisions of the Italian Banking Act       
(Decree of the President of Italy no. 385 of 1993) and the regulations of the   
Bank of Italy for the implementation thereof; and                               

(f) either (i) the Parent shall have qualified as a "Financial Holding
Company" under the BHCA or (ii) the Merger shall have been approved by the Board
of Governors of the Federal Reserve System under the BHCA.                      

 6.2  Conditions to Obligation of the Company to Effect the Merger.  The
obligation of the Company to effect the Merger is further subject to fulfillment
(or waiver by the Company) of the following conditions:                         

(a) The representations and warranties of the Parent and the Purchaser
contained herein shall be true and correct in all respects (without giving      
effect to any references to material adverse effect contained in any specific   
representation or warranty) as of the Effective Time with the same effect as    
though made as of the Effective Time except (x) for changes specifically        
permitted by the terms of this Agreement, (y) that the accuracy of              
representations and warranties that by their terms speak as of the date of this 
Agreement or some other date will be determined as of such date and (z) where   
any such failure of the representations and warranties to be true and correct in
all respects would not, individually or in the aggregate, reasonably be expected
to have material adverse effect on the Parent or the Purchaser;                 

    (b) The Parent and the Purchaser shall each have performed in all material
respects all obligations and complied in all material respects with all         
covenants required by this Agreement to be performed or complied with by it     
prior to the Effective Time; and                                                

     (c) The Parent and the Purchaser shall each have delivered to the Company a
certificate, dated the Effective Time and signed by a duly authorized officer to
the effect that each of the conditions specified in clauses (a) and (b) of this 
Section 6.2 is satisfied in all respects.                                       

    (d) The Purchaser shall have been incorporated and assumed its obligations
under this Agreement pursuant to Section 5.14.                                  

     6.3  Conditions to Obligation of the Parent and the Purchaser to Effect the
Merger.  The obligation of the Parent and the Purchaser to effect the Merger is 
further subject to the fulfillment (or waiver by the Parent and the Purchaser)  
of the following conditions:                                                    

    (a) (i) The representations and warranties of the Company contained herein
(other than in Section 3.25) shall be true and correct in all respects (without 
giving effect to any references to Company                                      

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Material Adverse Effect contained in any specific representation or warranty)   
and (ii) the representations and warranties of the Company contained in Section 
3.25 shall be true and correct in all material respects, in the cases of the    
clauses (i) and (ii), as of the Effective Time with the same effect as though   
made as of the Effective Time, except (X) for changes specifically permitted by 
the terms of this Agreement, (Y) that the accuracy of representations and       
warranties that by their terms speak as of the date of this Agreement or some   
other date will be determined as of such date and (Z) only in the case of clause
(i), where any such failure of such representations and warranties to be true   
and correct in all respects would not, individually or in the aggregate,        
reasonably be expected to have a Company Material Adverse Effect; provided,     
however, that this clause (Z) shall not be applicable if the Parent shall prove,
by clear and convincing evidence, that the failure of such representations and  
warranties to be true and correct in all material respects resulted directly    
from the intentional fraudulent conduct of the persons to whom the knowledge of 
the Company is imputed under this Agreement;                                    

(b) The Company shall have performed in all material respects all     
obligations and complied in all material respects with all covenants required by
this Agreement to be performed or complied with by it prior to the Effective    
Time;                                                                           

     (c) The Company shall have delivered to the Parent a certificate, dated the
Effective Time and signed by its Chief Executive Officer to the effect that each
of the conditions specified in clauses (a) and (b) of this Section 6.3 is       
satisfied in all material respects.                                             

  (d) The number of Dissenting Shares shall not equal more than 15% of the
total of the outstanding Shares;                                                

    (e) The proposals to be acted upon at the special meetings of shareholders
of the Funds in connection with the approvals described in Section 4.3 shall    
have received affirmative votes sufficient for their adoption by Funds          
representing at least 92.5% of the assets of all Funds at the Effective Time;   
and                                                                             

  (f) The Company shall have obtained in writing all consents, waivers, or
approvals, necessary to provide that the consummation of the Merger does not    
constitute a default under, or effect of give rise to a right of termination of 
each of the Material Contracts identified in Section 6.3(f) of the Disclosure   
Schedule.                                                                       

ARTICLE 7 

TERMINATION, AMENDMENT AND WAIVER 

  7.1  Termination.  This Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the Stockholders, as  
follows:                                                                        

     (a) by mutual written consent duly authorized by the Boards of Directors of
each of the Purchaser and the Company; or                                       

     (b) by either the Parent or the Company if (i) the Effective Time shall not
have occurred on or before February 15, 2001; provided, however, that the right 
to terminate this Agreement under this Section 7.1(b) shall not be available to 
any party whose failure to fulfill any obligation under this Agreement has been 
the cause of, or resulted in, the failure of the Effective Time to occur on or  
before such date or (ii) if there shall be any order which is final and         
nonappealable preventing the consummation of the Merger;                        

   (c) by the Parent if (i) the Board of Directors of the Company withdraws,
modifies or changes its recommendation of this Agreement or the transactions    
contemplated hereby in a manner adverse to the Parent or shall have resolved to 
do so, (ii) the Board of Directors of the Company shall have recommended to the 
Stockholders an Acquisition Proposal or shall have resolved to do so or (iii) a 
tender offer or exchange offer for 20% or more of the outstanding shares of     
capital stock of the Company is                                                 

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commenced, and the Board of Directors of the Company fails to recommend against 
acceptance of such tender offer or exchange offer by its Stockholders (including
by taking no position with respect to the acceptance of such tender offer or    
exchange offer by its Stockholders);                                            

 (d) by either the Parent or the Company if this Agreement shall fail to
receive the requisite vote for approval at of the Stockholders at a Company     
Stockholders' Meeting (or an adjournment thereof);                              

(e) by the Parent upon a breach of any representation or warranty or  
material covenant or agreement on the part of the Company set forth in this     
Agreement, or if any representation or warranty of the Company shall have become
untrue, in either case such that the conditions set forth in Section 6.3(a) and 
Section 6.3(b) would not be satisfied ("Terminating Company Breach"); provided, 
however, that, if such Terminating Company Breach is curable by the Company     
through the exercise of its commercially reasonable efforts and for so long as  
the Company continues to exercise such commercially reasonable efforts, the     
Parent may not terminate this Agreement under this Section 7.1(e); or           

(f) by the Company upon a breach of any representation or warranty or 
material covenant or agreement on the part of the Parent and the Purchaser set  
forth in this Agreement, or if any representation or warranty of the Parent and 
the Purchaser shall have become untrue, in either case such that the conditions 
set forth in Section 6.2(a) and Section 6.2(b) would not be satisfied           
("Terminating Parent Breach"); provided, however, that, if such Terminating     
Parent Breach is curable by the Parent and the Purchaser through the exercise of
their respective commercially reasonable efforts and for so long as the Parent  
or the Purchaser continue to exercise such commercially reasonable efforts, the 
Company may not terminate this Agreement under this Section 7.1(f).             

7.2  Effect of Termination.  In the event of the termination of this  
Agreement as provided in Section 7.1, all obligations and agreements of the     
parties set forth in this Agreement (except as otherwise specifically provided) 
shall forthwith terminate and be of no further force or effect, and there shall 
be no liability on the part of the Parent, the Purchaser or the Company         
hereunder; provided that the foregoing shall not relieve any party for liability
for damages actually incurred as a result of any breach of this Agreement.      
Notwithstanding any other provision contained in this Agreement to the contrary,
the Confidentiality Agreement shall survive the termination of this Agreement   
for any reason.                                                                 

     7.3  Amendment.  This Agreement may not be amended except by action of each
of the parties hereto set forth in an instrument in writing signed on behalf of 
each of the parties hereto; provided, however, that if this Agreement and the   
Merger are subject to Stockholder approval then, after approval of the Merger by
the Stockholders, no amendment may be made without the further approval of the  
Stockholders which would do any of the following: (i) reduce the Cash           
Consideration or change the form thereof; or (ii) change any other terms and    
conditions of this Agreement if any of the changes, alone or in the aggregate,  
would materially adversely affect the Stockholders (other than the Parent and   
its affiliates).                                                                

  7.4  Waiver.  At any time prior to the Effective Time, whether before or
after any special meeting of the Stockholders to vote on the Merger, any party  
hereto, by action taken by its Board of Directors, may (i) extend the time for  
the performance of any of the obligations or other acts of any other party      
hereto or (ii) subject to the proviso contained in Section 7.3, waive compliance
with any of the agreements of any other party or with any conditions to its own 
obligations. Any agreement on the part of a party hereto to any such extension  
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party by a duly authorized officer.                              

7.5  Expenses; Termination Fee.                                       

(a) If this Agreement is terminated by the Parent pursuant to Section 
7.1(e) or by the Company pursuant to Section 7.1(f), then the party terminating 
this Agreement shall be entitled to reimbursement by the other party of all     
reasonable costs and expenses (including, without limitation, fees and          
disbursements of counsel, financial advisors and accountants) incurred by it in 
connection with this Agreement and the transactions contemplated hereby.        

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   (b) If this Agreement is terminated by (i) the Parent pursuant to Section
7.1(c) or (ii) either the Company or the Purchaser pursuant to Section 7.1(d)   
and the Company enters into, prior to the first anniversary of such date of     
termination, a definitive agreement with respect to the sale of the Company and 
such sale is consummated prior to the 18-month anniversary of such date of      
termination (a "Subsequent Sale"), then, in the case of clause (i) or (ii), the 
Company shall pay the Parent promptly (but in no event later than three business
days after the termination of this Agreement in the case of clause (i) the      
Subsequent Sale in the case of clause (ii)) a fee of $37.5 million (the "Fee"), 
which amount shall be payable in immediately available funds. In addition, upon 
the termination of this Agreement pursuant to Section 7.1(c) or upon the closing
of a Subsequent Sale, the Company shall reimburse the Parent for all reasonable 
costs and expenses (including, without limitation, fees and disbursements of    
counsel, financial advisors and accountants) incurred by the Parent in          
connection with this Agreement and the transactions contemplated hereby in an   
amount not to exceed $7.5 million.                                              

   (c) In the event that the Company shall fail to pay the Fee when due, the
Company shall reimburse the Parent and the Purchaser for the costs and expenses 
actually incurred or accrued by each of them (including, without limitation,    
fees and reasonable expenses of counsel) in connection with the collection under
and enforcement of this Section 7.5, together with interest on such unpaid Fee, 
commencing on the date that the Fee became due, at a rate equal to the rate of  
interest publicly announced by Citibank, N.A., from time to time, in the City of
New York, as such bank's base rate.                                             

(d) This Section 7.5 shall survive any termination of this Agreement. 

ARTICLE 8 

HARBOR GLOBAL 

     8.1  Formation of Harbor Global.  As promptly as practicable after the date
of this Agreement, the Company shall form Harbor Global Company Ltd. as a       
Bermuda limited duration company ("Harbor Global"). Prior to the Effective Time,
the Company and Harbor Global shall have entered into the Distribution Agreement
substantially in the form of agreement attached hereto as Exhibit A (the        
"Distribution Agreement") and the Tax Separation Agreement substantially in the 
form of agreement attached hereto as Exhibit B (the "Tax Separation Agreement"),
or with such other changes thereto as to which the Parent shall consent (such   
consent not to be unreasonably withheld, conditioned or delayed).               

8.2  Certain Agreements With Respect to Harbor Global.                

    (a) Prior to the Effective Time, the Company shall take all actions as are
reasonably necessary under the Securities Act, the Exchange Act and the laws of 
the jurisdiction of Harbor Global's organization to permit the distribution by  
the Company of the beneficial interests (the "Harbor Global Interests") in      
Harbor Global to the Stockholders (the "Distribution").                         

     (b) Prior to the Effective Time, the Company shall cause Pioneer Goldfields
II Limited to use its commercially reasonable efforts to obtain the release of  
the Company from liabilities of any kind (including, without limitation,        
contingent liabilities under any indemnification arrangements) of Pioneer       
Goldfields II Limited under the Purchase Agreement dated May 11, 2000 among the 
Company, Pioneer Goldfields II Limited, Ashanti Goldfields Company Limited and  
Ashanti Goldfields Teberebie Limited.                                           

   (c) The Company shall consult with the Parent in structuring and carrying
out the Distribution and provide the Parent with reasonable opportunity to      
review and comment on any filings made under the Securities Act, the Exchange   
Act or any applicable law, and the Company and the Parent will use commercially 
reasonable efforts to agree on such matters. The Company will, at such times as 
the Parent shall reasonably request, advise the Parent of the cost incurred or  
expected to be incurred by the Company in connection with the formation of      
Harbor Global and the Distribution and will consult with the Parent regarding   
the amount and nature of such expenses.                                         

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   8.3  Distribution of the Harbor Global Interests.  Prior to the Effective
Time, the Board of Directors of the Company shall declare a distribution to the 
Stockholders of all of the Company's interest in Harbor Global, such            
distribution to be payable to the Stockholders pro rata on the basis of the     
number of Shares held by such Stockholder to the total number of Shares issued  
and outstanding at the time of such distribution. The record date for such      
distribution shall be the time immediately prior to the Effective Time. The     
Parent and the Purchaser acknowledge that this distribution (the "Distribution")
will be made to the Stockholders immediately prior to the Effective Time and    
shall not reduce or otherwise affect the Cash Consideration.                    

ARTICLE 9 

GENERAL PROVISIONS

 9.1  Closing.  Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to the      
provisions of Article 7, and subject to the provisions of Article 6 hereof, the 
closing of the Merger pursuant to this Agreement (the "Closing") shall take     
place at the offices of Hale and Dorr LLP, 60 State Street, Boston,             
Massachusetts, as soon as practicable following the meeting of the Stockholders 
or other Stockholder action referred to in Section 5.1 hereof, or at such other 
place, time and date as the parties may mutually agree. The date and time of    
such Closing are hereinafter referred to as the "Closing Date."                 

 9.2  Publicity.  So long as this Agreement is in effect, except as such
party required by applicable law or applicable national stock exchange,         
Commission or NASD requirements, neither the Company nor the Parent shall, nor  
shall either permit any of its subsidiaries to, issue or cause the publication  
of any press release or other public announcement with respect to the           
transactions contemplated by this Agreement without the consent of the other    
party, which consent shall not be unreasonably withheld.                        

   9.3  Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if (i) delivered           
personally, (ii) sent by certified or registered mail, return receipt requested,
(iii) sent by overnight courier for delivery on the next business day or (iv)   
sent by confirmed telecopy, provided that a hard copy of all such telecopied    
materials is thereafter sent within 24 hours in the manner described in clauses 
(i), (ii) or (iii), to the parties at the following addresses or at such other  
addresses as shall be specified by the parties by like notice:                  

(a) If to the Parent or the Purchaser:                                

                                                                [Download Table]
                                                            
                   UniCredito Italianio S.p.A.              
                   Piazza Cordusio                          
                   Milan, Italy                             

Attention:         Pietro Modiano, Head of Finance          

Telecopy No.:      (011)(3902) 876-309                      

and                EuroPlus SGR S.p.A.                      
                   Via Turati                               
                   Milan, Italy                             

Attention:         Fabio Innocenzi, Chief Executive Officer,
                   EuroPlus SGR S.p.A.                      
Telecopy No.:      (011)(3902) 623-8309                     

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                                                                [Download Table]
                                                                           
with copies to:    Shearman & Sterling                                     
                   801 Pennsylvania Avenue, N.W.                           
                   Washington, D.C. 20004                                  

Attention:         Barry P. Barbash, Esq.                                  

Telecopy No.:      (202) 508-8100                                          

and                NCTM-Negri-Clementi, Toffoletto, Montironi & Soci Studio
                   Legale Associato                                        
                   Via Monte Napoleone, 12                                 
                   20121 Milan, Italy                                      

Attention:         Avv. Pietro Caliceti                                    

Telecopy No.:      (011)(3902) 783-091                                     

(b) If to the Company:                                                

                                                                [Download Table]
                                              
                   The Pioneer Group, Inc.    
                   60 State Street            
                   Boston, Massachusetts 02109

Attention:         Robert P. Nault, Esq.      

Telecopy No.:      (617) 422-4293             

with a copy to:    Hale and Dorr LLP          
                   60 State Street            
                   Boston, MA 02109           

Attention:         Joseph P. Barri, Esq.      

Telecopy No.:      (617) 526-5000             

Notices provided in accordance with this Section 9.3 shall be deemed  
delivered (i) on the date of personal delivery, (ii) four business days after   
deposit in the mail, (iii) one business day after delivery to an overnight      
courier, or (iv) on the date of confirmation of the telecopy transmission, as   
the case may be.                                                                

9.4  Interpretation.  When a reference is made in this Agreement to   
subsidiaries of the Parent, the Purchaser or the Company, the word "subsidiary" 
or "subsidiaries" means any corporation more than 50% of whose outstanding      
voting securities, or partnership, joint venture or other entity more than 50%  
of whose total equity interests are, directly or indirectly, owned by the Parent
or the Company, as the case may be; and the word "affiliates" shall have the    
meaning assigned to such term under Rule 405 of the Securities Act. For purposes
of this Agreement, the Company shall not be deemed to be an affiliate or        
subsidiary of the Purchaser or the Parent. The headings contained in this       
Agreement are for reference purposes only and shall not affect in any way the   
meaning or interpretation of this Agreement. Inclusion of information in the    
Disclosure Schedule does not constitute an admission or acknowledgment of the   
materiality of such information.                                                

9.5  Representations and Warranties; etc.  The representations and    
warranties of the Company contained herein (other than the representations or   
warranties contained in Section 3.25 which shall survive the consummation of the
Merger) shall expire with, and be terminated and extinguished upon, consummation
of the Merger. This Section 9.5 shall have no effect upon any other obligation  
of the parties hereto, whether to be performed before or after the consummation 
of the Merger.                                                                  

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9.6  Miscellaneous.                                                   

    (a) This Agreement together with the Confidentiality Agreement between the
Parent and the Company dated March 23, 2000 constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,  
among the parties, or any of them, with respect to the subject matter hereof.   
This Agreement (i) is not intended to confer upon any other person any rights or
remedies hereunder, create any agreement of employment with any person or       
otherwise (except for Section 5.8 and 5.13) create any third-party beneficiary  
hereto; (ii) shall not be assigned, except that the Purchaser may assign its    
rights and obligations to one or more direct or indirect wholly-owned           
subsidiaries of the Parent which in a written instrument shall make all the     
representations and warranties of the Purchaser set forth herein and shall agree
to assume all of the Purchaser's obligations hereunder and be bound by all of   
the terms and conditions of this Agreement; provided, however, that no such     
assignment shall relieve the Parent or the Purchaser of its obligations         
hereunder; and (iii) shall be governed in all respects, including validity,     
interpretation and effect, by the laws of State of Delaware, without giving     
effect to the principles of conflict of laws thereof. This Agreement may be     
executed in one or more counterparts which together shall constitute a single   
agreement.                                                                      

 (b) The Parent and the Purchaser hereby irrevocably and unconditionally
consent to submit to the jurisdiction of the courts of the State of Delaware and
the United States of America located in the State of Delaware for any actions,  
suits or proceedings arising out of or relating to this Agreement and the       
transactions contemplated hereby (and the Parent and the Purchaser agree not to 
commence any action, suit or proceeding relating thereto except in such courts),
and further agree that service of any process, summons, notice or document by   
United States registered mail to the respective addresses set forth in Section  
9.3 shall be effective service of process for any action, suit or proceeding    
brought against the Parent or the Purchaser in any such court. The Parent and   
the Purchaser hereby irrevocably and unconditionally waive any objection to the 
laying of venue of any action, suit or proceeding arising out of this agreement 
or the transactions contemplated hereby, in the courts of the State of Delaware 
or the United States of America located in the State of Delaware, and hereby    
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding brought in any such     
court has been brought in an inconvenient forum.                                

     9.7  Validity.  The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other          
provisions of this Agreement, which shall remain in full force and effect.      

[Remainder of page intentionally left blank.] 

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   IN WITNESS WHEREOF, the Parent, the Purchaser and the Company have caused
this Agreement to be executed as of the date first written above by their       
respective officers thereunto duly authorized.                                  

                              UNICREDITO ITALIANO S.P.A.

                          By: /s/ PIETRO MODIANO
                                            ------------------------------------
                                Name: Pietro Modiano
                                    Title:   Head of Finance

                           THE PIONEER GROUP, INC.

                              By: /s/ JOHN F. COGAN, JR.
                                            ------------------------------------
                                    Name: John F. Cogan, Jr.
                                            Title:   Chairman, President and
                                   Chief
                                               Executive Officer

[Schedule and Exhibits Intentionally Omitted] 

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                                                                         ANNEX B

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Information in this information statement is not complete and may be changed. 

Subject to completion, dated June 26, 2000
INFORMATION STATEMENT 

HARBOR GLOBAL COMPANY LTD.
COMMON SHARES 

This information statement is being furnished to stockholders of The  
Pioneer Group, Inc. in connection with the contemplated distribution by Pioneer 
Group of common shares of its wholly owned subsidiary, Harbor Global Company    
Ltd., to its stockholders. At the time of the distribution, you will be entitled
to receive one Harbor Global common share for every five shares of Pioneer Group
common stock held by you at that time. Following the distribution, all of the   
outstanding Harbor Global common shares will be held pro rata by the            
stockholders of Pioneer Group.                                                  

 Pioneer Group will distribute the shares of Harbor Global in connection
with the acquisition of Pioneer Group by UniCredito Italiano S.p.A., a          
corporation organized under the laws of the Republic of Italy. The acquisition  
of Pioneer Group will be effected by a merger of a wholly owned subsidiary of   
UniCredito Italiano with and into Pioneer Group. Pioneer Group will survive the 
merger as a wholly owned subsidiary of UniCredito Italiano.                     

   As a condition to closing the merger, Pioneer Group will transfer some of
its businesses and assets to Harbor Global and, before closing the merger,      
distribute Harbor Global common shares to Pioneer Group stockholders of record. 
At the time of the distribution, the Harbor Global assets will consist primarily
of the following businesses and assets currently owned or operated by Pioneer   
Group:                                                                          

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

   - the proceeds from the sale of Pioneer Group's gold mining operations in
Ghana; and                                                        

- $25 million in cash.                                                

Harbor Global will seek to liquidate its assets in a timely fashion on          
economically advantageous terms.                                                

  You will not pay for the Harbor Global common shares you will receive in
the distribution, but the distribution will be taxable to you. The Harbor Global
common shares are registered with the Securities and Exchange Commission on a   
registration statement on Form 10 under the Securities Exchange Act of 1934,    
effective as of [            ], 2000, and are transferable. However, there is no
current public trading market for Harbor Global common shares, and Harbor Global
common shares will not be listed on a securities exchange or on The Nasdaq Stock
Market(R). Furthermore, Harbor Global does not intend to take any action to     
facilitate the development of an active trading market.                         

     The distribution record date will be the closing date of the merger. Harbor
Global expects the distribution to occur immediately prior to the closing of the
merger. The distribution is conditioned on the satisfaction or waiver of all    
conditions to the obligations of Pioneer Group to consummate the merger provided
for in the merger agreement dated as of May 14, 2000 between Pioneer Group and  
UniCredito Italiano, including approval of the merger by Pioneer Group          
stockholders. The merger agreement is attached as Annex A to the merger proxy   
statement to which this information statement is attached as Annex B.           

    In reviewing this information statement, you should carefully consider the
matters described under the caption "Risk Factors."                             

NO SEPARATE VOTE OF SHAREHOLDERS IS REQUIRED IN CONNECTION WITH THIS  
DISTRIBUTION.                                                                   

  WE ARE NOT ASKING YOU FOR A PROXY WITH RESPECT TO THIS DISTRIBUTION, AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.                                       

  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE         
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED    
UPON THE ACCURACY OR ADEQUACY OF THIS INFORMATION STATEMENT. ANY REPRESENTATION 
TO THE CONTRARY IS A CRIMINAL OFFENSE.                                          

The date of this information statement is [     ], 2000.

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY     
REPRESENTATION NOT CONTAINED IN THIS INFORMATION STATEMENT, AND IF GIVEN OR     
MADE, YOU MUST NOT RELY UPON SUCH INFORMATION OR REPRESENTATION AS HAVING BEEN  
AUTHORIZED BY THE PIONEER GROUP, INC. OR HARBOR GLOBAL COMPANY LTD. THIS        
INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE HARBOR GLOBAL       
COMPANY LTD. COMMON SHARES OR ANY OTHER SECURITIES.                             

TABLE OF CONTENTS 

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
Summary.....................................................    1 
Risk Factors................................................    7 
Forward-looking Statements..................................   11 
The Distribution............................................   12 
Pro Forma Capitalization....................................   21 
Pro Forma Condensed Consolidated Financial Statements.......   22 
Pro Forma Condensed Consolidated Statement of Financial           
  Condition.................................................   23 
Pro Forma Condensed Consolidated Statement of Operations....   25 
Selected Consolidated Historical Financial Data.............   26 
Management's Discussion and Analysis of Financial Condition       
  and Results of Operations.................................   27 
Business....................................................   31 
Management..................................................   41 
Beneficial Ownership of Principal Stockholders and                
  Management................................................   44 
Certain Relationships and Related Transactions..............   46 
Description of Harbor Global Share Capital..................   47 
Where You Can Find Additional Information...................   53 

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SUMMARY 

    This summary does not contain all of the information that may be important
to you. You should read this information statement in its entirety, including   
"Risk Factors" and the financial statements of Harbor Global and the            
accompanying notes which appear elsewhere in this information statement.        
References in this information statement to "Harbor Global" refer to Harbor     
Global Company Ltd., and references to "Pioneer Group" refer to The Pioneer     
Group, Inc.                                                                     

HARBOR GLOBAL COMPANY LTD.

Harbor Global Company Ltd. is a newly formed Bermuda limited duration 
company created to:                                                             

- receive various businesses and assets currently owned or operated by
Pioneer Group;                                                    

 - liquidate its assets in a timely fashion on economically advantageous
terms;                                                            

     - operate its assets as going concern businesses until they are liquidated;
and                                                               

  - after satisfying its liabilities, distribute any remaining proceeds to
its shareholders.                                                 

    Harbor Global's memorandum of association provides that the liquidation of
its assets must be completed no later than the earlier of the fifth anniversary 
of the distribution by Pioneer Group of Harbor Global common shares to its      
shareholders or the distribution by Harbor Global of its assets to its          
shareholders. If Harbor Global has not liquidated all of its assets before the  
fifth anniversary of the distribution date, the Harbor Global board of directors
may authorize the company to continue to operate its assets for up to three     
additional one year periods.                                                    

At the time of the distribution, Harbor Global's assets will consist  
primarily of the following businesses and assets, each of which is currently    
owned or operated by Pioneer Group:                                             

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

   - the proceeds from the sale of Pioneer Group's gold mining operations in
Ghana; and                                                        

- $25 million in cash.                                                

   After the distribution, Stephen G. Kasnet will be the President and Chief
Executive Officer, and Donald H. Hunter will be the Chief Operating Officer and 
Chief Financial Officer of Harbor Global. Mr. Kasnet is currently the President 
and Mr. Hunter is currently the Chief Operating Officer and Senior Vice         
President of Pioneer Global Investments, a division of Pioneer Group. As        
officers of Pioneer Global Investments, Mr. Kasnet and Mr. Hunter currently     
operate substantially all of the businesses that Harbor Global will own         
following the distribution. Harbor Global is expected to enter into an          
administration and liquidation agreement with Calypso Management LLC under which
Calypso Management will manage the liquidation of Harbor Global and operate its 
assets as going concern businesses pending their liquidation. Mr. Kasnet is the 
President and Chief Executive Officer, and Mr. Hunter is the Chief Operating    
Officer and Chief Financial Officer of Calypso Management. Harbor Global will   
pay the operating expenses of Calypso Management and, in general, as            
compensation for Calypso Management's services, Harbor Global will pay Calypso  
Management up to 10% of the net proceeds distributed from the liquidation of    
Harbor Global's assets. See "Certain Relationships and Related Transactions" in 
this information statement for more information about the administration and    
liquidation agreement.                                                          

  The principal executive offices of Harbor Global are located at 60 State
Street, 16th Floor, Boston, Massachusetts 02109-1820, and its telephone number  
is (617) 422-4804.                                                              
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THE TRANSACTIONS

The Merger.  Harbor Global is currently a wholly owned subsidiary of  
Pioneer Group. On May 14, 2000, Pioneer Group entered into a merger agreement   
with UniCredito Italiano under which a wholly owned subsidiary of UniCredito    
Italiano will merge with and into Pioneer Group. Pioneer Group will survive the 
merger as a wholly owned subsidiary of UniCredito Italiano. As a condition to   
closing the merger, Pioneer Group has agreed to transfer some of its business   
and assets to Harbor Global and distribute Harbor Global common shares to       
Pioneer Group stockholders immediately prior to closing the merger.             

 For more information about the merger, the merger agreement and related
matters, you should refer to the merger proxy statement to which this           
information statement is attached as Annex B. The merger agreement is attached  
as Annex A to the merger proxy statement.                                       

   The Distribution.  Immediately prior to closing the merger, Pioneer Group
will distribute Harbor Global common shares pro rata to its stockholders.       
Following the distribution, all of the outstanding Harbor Global common shares  
will be held by the stockholders of Pioneer Group. You will not pay for the     
Harbor Global common shares you will receive in the distribution, but the       
distribution will be taxable to you. The distribution is summarized below.      

Distributing Corporation......   The Pioneer Group, Inc.                        

Distributed Corporation.......   Harbor Global Company Ltd., a Bermuda limited  
                               duration company and currently a wholly owned
             subsidiary of Pioneer Group

Securities to be                                                                
Distributed...................   Approximately 5,371,428 million Harbor Global  
                                 common shares, based on the number of shares of
                                Pioneer Group common stock outstanding on June
                             22, 2000. The shares to be distributed will
                               constitute all of the common shares of Harbor
                              Global outstanding on the distribution date.

Distribution Ratio............   You will receive one Harbor Global common share
                               for every five shares of Pioneer Group common
                         stock you own on the distribution date.

Fractional Shares Interests...   Fractional Harbor Global common shares will not
                             be distributed. The distribution agent will
                           aggregate and seek to sell the fractional
                                 shares, and the aggregate net cash proceeds, if
                              any, will be distributed pro rata to you, if
                            you are entitled to a fractional interest.

Trading Market................   There is no current public trading market for  
                                Harbor Global common shares. The Harbor Global
                       common shares are registered with the
                            Securities and Exchange Commission and are
                             transferable. However, Harbor Global common
                           shares will not be listed on a securities
                            exchange or on The Nasdaq Stock Market(R).
                               Furthermore, Harbor Global does not intend to
                               take any action to facilitate the development
                            of an active trading market. Harbor Global
                                 cannot assure you that you will be able to sell
                            your Harbor Global common shares, and if a
                            trading market does develop, Harbor Global
                             cannot assure you as to the prices at which
                         Harbor Global common shares will trade.

Distribution Record Date......   The distribution record date will be the       
             closing date of the merger.

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Distribution Date.............   The distribution is expected to occur          
                                 immediately prior to the closing of the merger.
                              The merger is expected to close in September
2000.         

Conditions to the                                                               
Distribution..................   The distribution will only occur if:           

                               - the stockholders of Pioneer Group
                                      approve and adopt the merger agreement
                                    between Pioneer Group and UniCredito
                               Italiano S.p.A. and the merger;

                                    - Pioneer Group transfers the businesses
                                        and assets specified in the distribution
                           agreement to Harbor Global;

                                     - all of the conditions to the obligation
                                     of Pioneer Group to close the merger,
                                 other than the condition that the
                                        distribution be completed, are satisfied
                               or waived by Pioneer Group; and

                                 - no order, injunction or other legal
                                       restraint preventing or prohibiting the
                          distribution is in effect.

Distribution Agent............   EquiServe Limited Partnership                  

Dividend Policy...............   Harbor Global will distribute the proceeds it  
                              receives from the liquidation of its assets,
                                net of its expenses, including amounts payable
                                to Calypso Management under the administration
                             and liquidation agreement, and net of other
                           liabilities. The timing and amount of any
                                distribution will also depend on the financial
                             position and capital requirements of Harbor
                                 Global and other factors that the Harbor Global
                    board of directors deems relevant.

Tax Consequences..............   Your receipt of cash and Harbor Global common  
                              shares in connection with the merger and the
                               distribution will be a taxable transaction or
                               transactions for United States federal income
                             tax purposes and may also be subject to tax
                               under applicable state, local and foreign tax
laws.         

                                For federal income tax purposes, Pioneer Group
                              currently estimates that it will report that
                                 the Harbor Global common shares received in the
                            distribution have a value of approximately
                                $[          ] to $[          ] with respect to
                               each share of Pioneer Group common stock held
                                at the time of the merger (equating to a value
                       of the Harbor Global common shares of
                              approximately $[          ] to $[          ]
                                per share). However, the actual value ascribed
                                to the Harbor Global common shares for federal
                          income tax purposes may differ from this
                                 estimate due to, among other things, changes in
                                the value of Harbor Global's assets before the
                            date of the distribution and the number of
                      shares of Pioneer Group common stock
                                outstanding at the closing date of the merger.
                              Pioneer Group and Harbor Global will provide
                              you with their determination of the value of
                          the Harbor Global common shares you will
                            receive in the distribution. However, this
                          determination will not be binding on the
                              Internal Revenue Service, which may assert a
                             different and possibly higher value for the
                          Harbor Global common shares you receive.
                                 Accordingly, Harbor Global cannot assure you as
to the        

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                             exact amount of gain you may recognize as a
                            result of the merger and the distribution.

                               In addition, because Harbor Global intends to
                               be treated as a partnership for United States
                              federal income tax purposes, in general, you
                                will recognize a proportionate share of Harbor
                          Global's income, gain, loss and credits,
                                including gain or loss from the sale of Harbor
                              Global assets, determined in accordance with
                                 your interest in Harbor Global. You may also be
                                required to recognize a proportionate share of
                        the income earned by any Harbor Global
                            subsidiary that is classified as a foreign
                               personal holding company or a passive foreign
                               investment company. You are urged to consider
                          whether making a qualified electing fund
                               election with respect to each passive foreign
                                investment company would be beneficial to you.

                                 THE TAX CONSEQUENCES TO YOU OF THE DISTRIBUTION
                               AND THE MERGER ARE COMPLEX AND WILL DEPEND ON
                              YOUR PARTICULAR FACTS AND CIRCUMSTANCES. YOU
                           ARE URGED TO CONSULT YOUR OWN TAX ADVISOR
                                REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE
                            MERGER AND THE DISTRIBUTION, INCLUDING TAX
                    RETURN REPORTING REQUIREMENTS, THE
                            APPLICABILITY OF FEDERAL, STATE, LOCAL AND
                                 FOREIGN TAX LAWS AND THE EFFECT OF ANY PROPOSED
                             CHANGE IN THE TAX LAWS. For a discussion of
                               United States federal income tax consequences
                               of the merger and the distribution, including
                               the qualified electing fund election, see the
                               discussion under "The Distribution -- Certain
                                United States Federal Income Tax Consequences"
                in this information statement.

Relationship with Pioneer                                                       
Group After the                                                                 
Distribution................   Following the distribution and the merger,   
                              Pioneer Group will not own any Harbor Global
                                 common shares. Harbor Global will operate as an
                               independent public company, and Pioneer Group
                              will operate as a wholly owned subsidiary of
                             UniCredito Italiano. However, in connection
                                 with the distribution, Pioneer Group and Harbor
                               Global entered into the following agreements:

                            - Distribution agreement, under which:

                                    -- Pioneer Group will transfer some of its
                                       businesses and assets to Harbor Global;

                                 -- Pioneer Group will distribute Harbor
                                        Global common shares to its stockholders
                    on a pro rata basis;

                                 -- Harbor Global will indemnify Pioneer
                                     Group for liabilities, other than tax
                                      liabilities, incurred by Pioneer Group
                                        relating to the businesses or operations
                                of the Harbor Global assets; and

                                -- Pioneer Group will indemnify Harbor
                                      Global for liabilities, other than tax
                                      liabilities, incurred by Harbor Global
                                        relating to the businesses or operations
                                      of the Pioneer Group assets, excluding
                         the Harbor Global assets.

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                             - Tax separation agreement, under which
                              Pioneer Group and Harbor Global will
                                 allocate tax liabilities that relate to
                                   periods before and after the distribution
date. 

                              In addition, Pioneer Group and Harbor Global
                                 may enter into an agreement under which Pioneer
                      Group may agree to provide corporate
                            administrative, information and technology
                                systems and other support to Harbor Global for
              a limited transition period.

Risk Factors..................   You should carefully read the section entitled 
                              "Risk Factors" in this information statement
                         which describes risks and uncertainties
                                 associated with the Harbor Global common shares
           to be distributed to you.

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SUMMARY PRO FORMA FINANCIAL DATA(1) 

The following table presents summary unaudited pro forma financial    
information for Harbor Global. The summary pro forma condensed financial data   
has been derived from Harbor Global's consolidated historical financial         
statements for the three months ended March 31, 2000 and the year ended December
31, 1999, which are included elsewhere in this information statement. The       
unaudited pro forma condensed consolidated statement of operations data sets    
forth Harbor Global's results of operations for the year ended December 31,     
1999, and the three months ended March 31, 2000, and assumes the distribution   
was completed on January 1, 1999 or January 1, 2000, as applicable. The pro     
forma condensed combined balance sheet data sets forth Harbor Global's financial
position at March 31, 2000, and assumes the distribution was completed on March 
31, 2000.                                                                       

 The pro forma adjustments are based upon available information and upon
certain assumptions that Harbor Global and Pioneer Group believe are reasonable 
and which are described in the notes to the Pro Forma Condensed Consolidated    
Financial Statements included in this information statement. The pro forma      
condensed consolidated financial data is presented for informational purposes   
only and may not be indicative of the results of operations or financial        
position that would have occurred had the distribution occurred on the dates    
indicated, or which may be obtained in the future, particularly in light of     
Harbor Global's intent to liquidate its assets within a limited period of time. 
You should read the pro forma condensed consolidated financial data presented   
below in connection with the Pro Forma Condensed Consolidated Financial         
Statements and the Consolidated Historical Financial Statements of Harbor Global
and the related notes included in this information statement.                   

                                                        [Enlarge/Download Table]

                                                         AS OF AND FOR THE                          
                                                           THREE MONTHS                             
                                                               ENDED                 YEAR ENDED     
                                                          MARCH 31, 2000        DECEMBER 31, 1999(2)
                                                         -----------------      --------------------
                                                          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)  
                                                                                                    
Income Statement Data                                                                               
  Revenues..............................................     $  2,601                 $ 28,107      
  Operating Expenses....................................       (5,824)                 (58,951)     
  Other Income..........................................        2,180                    4,897      
  Loss from Continuing Operations.......................       (1,520)                 (28,823)     
  Loss from Continuing Operations Per Share.............         (.29)                   (5.44)     
  Weighted Average Shares Outstanding...................        5,296                    5,296      
Balance Sheet Data                                                                                  
  Working Capital.......................................     $ 26,297                               
  Total Assets..........................................      157,686                               
  Shareholders' (Deficit) Equity........................       76,450                               

---------------                                                                 
(1) See Note 1 to the Consolidated Financial Statements of Harbor Global        
included elsewhere in this information statement.                       

(2) The 1999 amounts exclude a loss associated with the cumulative effect of a  
change in accounting principle related to start up costs of $11,547.    

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RISK FACTORS

HARBOR GLOBAL DOES NOT HAVE AN OPERATING HISTORY AS AN INDEPENDENT COMPANY.     

     After the distribution, Pioneer Group will not own any Harbor Global common
shares, and Harbor Global will be an independent public company. Although Harbor
Global will be operated by the same senior management who operated its assets   
prior to the distribution date, Harbor Global does not have an operating history
as an independent company. The financial statements included in this information
statement may not necessarily reflect the results of operations, financial      
condition and cash flows that would have been achieved had Harbor Global and its
subsidiaries operated as an independent company during the periods presented,   
particularly in light of Harbor Global's intent to liquidate its assets within a
limited period of time. In addition, as an independent company, Harbor Global   
will not be able to rely on Pioneer Group for financial support or corporate    
administrative support. After the distribution date, Harbor Global's operating  
businesses will be responsible for obtaining their own financing, and Harbor    
Global will be responsible for providing corporate administrative services,     
including legal, human resources, information and technology systems and tax and
accounting services.                                                            

THE LOSS OF KEY OFFICERS AND MANAGERS COULD IMPAIR THE ABILITY OF HARBOR GLOBAL 
TO SUCCESSFULLY OPERATE AND MANAGE ITS ASSETS PRIOR TO THEIR LIQUIDATION.       

After the distribution, Mr. Kasnet will be the President and Chief    
Executive Officer, and Mr. Hunter will be the Chief Operating Officer and Chief 
Financial Officer of Harbor Global. Mr. Kasnet is currently the President, and  
Mr. Hunter is currently the Chief Operating Officer and Senior Vice President of
Pioneer Global Investments, a division of Pioneer Group. As executive officers  
of Pioneer Global Investments, Mr. Kasnet and Mr. Hunter currently operate      
substantially all the businesses that Harbor Global will own following the      
distribution. In addition, Harbor Global is expected to enter into an           
administration and liquidation agreement with Calypso Management under which    
Calypso Management will manage the liquidation of Harbor Global and operate its 
assets as going concern businesses until they are liquidated. Mr. Kasnet is the 
President and Chief Executive Officer, and Mr. Hunter is the Chief Operating    
Officer and Chief Financial Officer of Calypso Management.                      

    Harbor Global's assets are a diverse range of businesses and are generally
located in countries in which successfully conducting and selling businesses    
requires significant experience. Harbor Global believes that its success in     
liquidating its assets and operating its assets pending their liquidation will  
depend to a significant extent upon the continued efforts of Mr. Kasnet and Mr. 
Hunter. The loss of the services of either Mr. Kasnet or Mr. Hunter could have a
material adverse effect upon Harbor Global's results of operations and financial
condition. The services of Mr. Kasnet and Mr. Hunter may also be critical to    
Harbor Global's ability to liquidate its assets at prices which will enable     
Harbor Global to make meaningful distributions to its shareholders.             

HARBOR GLOBAL'S BUSINESSES, PARTICULARLY THOSE CONDUCTED IN EMERGING MARKETS,   
ARE SUSCEPTIBLE TO NUMEROUS RISKS AND UNCERTAINTIES ASSOCIATED WITH ITS         
INTERNATIONAL OPERATIONS.                                                       

    Harbor Global conducts business in countries outside of the United States,
primarily in Russia and Poland. In the year ended December 31, 1999, nearly all 
of Harbor Global's revenues were derived from operations outside of the United  
States. Harbor Global will continue to operate its international businesses     
until those businesses are liquidated and will continue to be subject to the    
risks of doing business internationally, including:                             

  - unexpected changes in regulatory requirements and underdeveloped legal
systems in some countries;                                        

- export controls relating to timber;                                 

- tariffs and other trade barriers;                                   

- difficulties in staffing and managing foreign operations;           

- political and economic instability;                                 

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- fluctuations in currency exchange rates;                            

- restrictions on currency exchange and repatriation;                 

- restrictions on foreign investment in its businesses;               

     - seasonal reductions in timber harvesting and gold exploration operations;
and                                                               

- potentially adverse tax consequences.                               

For example, in recent years Russia has undergone substantial political,        
economic and social change. The economic conditions in Russia, together with    
actions of the Russian government, led to a severe devaluation of the ruble, a  
sharp increase in the rate of inflation, the near collapse of the banking       
system, significant defaults on foreign currency obligations and a dramatic     
decline in the prices of Russian debt and equity securities. In addition, as an 
emerging market, Russia does not possess a well-developed business, legal and   
regulatory infrastructure that would generally exist in the United States or in 
a more mature free market economy. Accordingly, Harbor Global's Russian timber  
harvesting and sales operations, gold exploration operations and real estate    
management and investment management businesses involve significant risks, such 
as those listed above, that are not typically associated with developed markets.
The liquidation of these businesses, and the businesses Harbor Global operates  
in other emerging markets, as well as the successful operation of these         
businesses pending their liquidation, will depend on the stability of, and      
economic conditions in, these emerging markets.                                 

HARBOR GLOBAL WILL INDEMNIFY PIONEER GROUP FOR SOME LIABILITIES ACCRUING AFTER  
THE DISTRIBUTION DATE.                                                          

    Harbor Global and Pioneer Group have entered into a distribution agreement
under which Harbor Global agrees to indemnify Pioneer Group for liabilities,    
other than tax liabilities, incurred by Pioneer Group relating to the businesses
or operations of the Harbor Global assets. For example, in connection with the  
sale of its gold mining operations in Ghana to Ashanti Goldfields Teberebie     
Limited, Pioneer Group has agreed to indemnify Ashanti for claims arising under 
the purchase agreement before June 19, 2005 relating to its Ghanaian gold mining
operations. Under the distribution agreement, Pioneer Group has agreed to       
transfer Pioneer Goldfields II Limited, the Pioneer Group subsidiary through    
which Pioneer Group's gold mining operations in Ghana were conducted, to Harbor 
Global. As a result of the transfer of Pioneer Goldfields II to Harbor Global,  
Harbor Global is obligated to reimburse Pioneer Group in the event that Ashanti 
seeks indemnification for any claim. Harbor Global's indemnification obligations
to Pioneer Group under the Ashanti purchase agreement are capped at the amount  
of the total purchase price paid by Ashanti to Pioneer Goldfields II under the  
purchase agreement.                                                             

  Additionally, under a tax separation agreement between Harbor Global and
Pioneer Group, generally, Harbor Global has agreed to indemnify Pioneer Group   
for tax liabilities relating to the Harbor Global businesses. Currently, there  
are no suits pending which would require payment by Harbor Global to Pioneer    
Group under the indemnification provisions of the distribution agreement or tax 
separation agreement. However, Harbor Global cannot assure you that no legal    
proceeding or other claim will occur that would require Harbor Global to        
indemnify Pioneer Group. Furthermore, Harbor Global and its subsidiaries may be 
subject to legal proceedings or other claims arising in the ordinary course of  
business, including employment related claims, environmental claims and         
regulatory fees or fines associated with its international operations.          

THE VALUES OF MOST OF HARBOR GLOBAL'S ASSETS ARE SPECULATIVE.                   

The values of Harbor Global's gold exploration operations, Polish and 
Eastern European real estate management operations and Russian real estate      
management and investment management operations are speculative. Although Harbor
Global and its majority owned subsidiary Tas-Yurjah have conducted gold         
exploration activities on its concession land, Harbor Global does not have      
sufficient information to estimate the value of any proven or probable gold     
reserves pursuant to United States reserves standards, and therefore Harbor     
Global has not been able to evaluate the economic feasibility of, or begin,     
extraction operations. Accordingly, the gold exploration business is not        
producing a revenue stream. See "Business -- Russian Gold Exploration" for more 
information about Harbor Global's gold exploration operations.                  
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     Harbor Global's real estate management business consists principally of the
management of two pooled investment funds, the PBO Property Fund, LLC and the   
Polish Real Estate Fund, S.A. Although Harbor Global believes that the PBO      
Property Fund and the Polish Real Estate Fund could enhance the future value of 
its real estate management business, the PBO Property Fund has received only a  
small amount of funding from investors, and the Polish Real Estate Fund         
committed capital is not yet invested. In addition, changes in real estate      
values in Russia, Poland and Eastern Europe may also significantly affect the   
value of these assets. See "Business -- Polish and Eastern European Real Estate"
for more information about Harbor Global's real estate management business.     

     A significant portion of Harbor Global's Russian real estate management and
investment management operations consists of its approximately 52% interest in  
Pioneer First Investment Fund, a company that invests in Russian real estate    
and, to a lesser extent, securities of Russian companies. Generally, the Russian
real estate and securities markets are significantly smaller and less liquid    
than the markets in the United States, and as a result, a portion of the assets 
held by Pioneer First Investment Fund are illiquid. There is also limited       
liquidity in the publicly traded securities of Pioneer First Investment Fund.   
Consequently, Harbor Global may have difficulty selling its investment in       
Pioneer First Investment Fund or causing Pioneer First Investment Fund to       
liquidate its underlying assets, and may only be able to do so at prices which  
may not reflect the long-term value of these investments. See                   
"Business -- Russian Real Estate and Investment Management" for more information
about Harbor Global's Russian real estate management and investment management  
operations.                                                                     

Harbor Global sells the timber it harvests primarily to markets in the
Asian-Pacific region. During 1998, timber prices were significantly depressed   
and, although prices increased in the last quarter of 1998 and in 1999, Harbor  
Global cannot assure you that this trend will continue. The value of Harbor     
Global's timber harvesting and sales operations is and will continue to be      
affected by changes in market demand and prices for timber and upon the         
stability of the economies in the Asian-Pacific region.                         

PIONEER FIRST INVESTMENT FUND IS CONSTRAINED IN DISTRIBUTING DIVIDENDS TO HARBOR
GLOBAL BECAUSE OF COST AND ADMINISTRATIVE BURDEN.                               

Harbor Global holds approximately a 52% interest in Pioneer First     
Investment Fund. Under Russian law, before paying a dividend to its             
shareholders, Pioneer First Investment Fund must notify each shareholder by     
mail. Currently, Pioneer First Investment Fund has over two million             
shareholders. The administrative and postage expenses associated with notifying 
its shareholders would consume a significant portion of any dividend. Pioneer   
First Investment Fund established a share repurchase program to reduce the      
number of its shareholders, but the program has had little success. Until its   
efforts to lessen these burdens are successful, the large number of shareholders
constrains Pioneer First Investment Fund from paying dividends to its           
shareholders, including Harbor Global.                                          

THE AMOUNT OF INCOME, GAIN OR LOSS YOU MAY RECOGNIZE AS A RESULT OF THE MERGER  
AND DISTRIBUTION CANNOT BE PRECISELY DETERMINED.                                

     Your receipt of cash and Harbor Global common shares in connection with the
merger and the distribution will be a taxable transaction or transactions. The  
amount of income, gain or loss, if any, that you will recognize will depend, in 
part, on the fair market value of the Harbor Global common shares you receive in
the distribution. Harbor Global will undertake to provide you with its          
determination regarding the fair market value of the Harbor Global common shares
you receive in the distribution. However, any determination will not be binding 
on the Internal Revenue Service, which may assert a different and possibly      
higher value for the Harbor Global common shares you receive. Accordingly, there
can be no assurance as to the exact amount of income, gain or loss you may      
recognize as a result of the merger and the distribution.                       

AS A RESULT OF HOLDING HARBOR GLOBAL COMMON SHARES, YOU MAY RECOGNIZE TAXABLE   
INCOME AND BE REQUIRED TO PAY TAX WITHOUT A CORRESPONDING DISTRIBUTION OF CASH  
FROM HARBOR GLOBAL TO YOU.                                                      

   For United States federal income tax purposes, Harbor Global will file an
election to be classified as a partnership. For United States federal income tax
purposes, it is anticipated that you will be treated as a                       
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partner in a Bermuda partnership and your Harbor Global common shares will      
represent partnership interests. Because of its classification as a partnership 
for United States federal income tax purposes, Harbor Global will not itself be 
subject to United States federal income tax. Instead, items of income, gain,    
loss, deduction and expense will flow through to you, and you will include your 
allocable share of these items in computing your own United States federal      
income tax for each taxable year of Harbor Global. Cash distributions made by   
Harbor Global to you generally will not be taxable, except to the extent that   
those distributions exceed your adjusted tax basis in the Harbor Global common  
shares. For a general discussion of the rules regarding certain tax consequences
of holding Harbor Global common shares, see the discussion under the heading    
"The Distribution -- Certain United States Federal Income Tax                   
Consequences -- United States Federal Income Tax Consequences of Holding Harbor 
Global Common Shares" in this information statement.                            

   Harbor Global believes that one or more of the majority or minority owned
foreign subsidiaries of Harbor Global may be classified as a foreign personal   
holding company or passive foreign investment company for United States federal 
income tax purposes. If any such subsidiary is classified as a foreign personal 
holding company or passive foreign investment company, you may be required to   
recognize taxable income and pay tax with respect to a portion of the           
subsidiary's income, even in the absence of the receipt of any payment of cash  
or other property from the subsidiary. The tax rules regarding foreign          
partnerships, foreign personal holding companies and passive foreign investment 
companies are complicated. You should consult your tax advisor to determine the 
tax consequences to you of holding Harbor Global common shares. For a general   
discussion of the rules regarding foreign personal holding companies and passive
foreign investment companies, see "The Distribution -- Certain United States    
Federal Income Tax Consequences -- Investments in Foreign Corporations."        

THERE IS NOT, NOR CAN YOU EXPECT THERE TO BE, AN ACTIVE PUBLIC TRADING MARKET   
FOR HARBOR GLOBAL COMMON SHARES.                                                

Prior to the distribution, there has been no public trading market for
Harbor Global common shares. In addition, Harbor Global cannot assure you that  
an active public trading market will develop after the distribution because     
Harbor Global common shares will not be listed on any securities exchange or on 
The Nasdaq Stock Market(R).                                                     

Furthermore, Harbor Global does not intend to:                        

- engage the services of any market maker;                            

   - facilitate the development of an active public trading market in Harbor
Global common shares, or encourage others to do so;               

   - place any advertisements in the media promoting an investment in Harbor
Global; or                                                        

 - except as required by the Securities Exchange Act of 1934, collect or
       publish information about prices at which Harbor Global common shares may
be traded.                                                        

  Harbor Global cannot assure you that you will be able to sell the Harbor
Global common shares you will receive in the distribution. If a trading market  
does develop, Harbor Global cannot assure you as to the prices at which Harbor  
Global common shares will trade.                                                

HARBOR GLOBAL AND THE BUSINESSES IT OPERATES MAY NOT BE ABLE TO RAISE ADDITIONAL
CAPITAL OR OBTAIN DEBT FINANCING.                                               

Based on budget projections, Harbor Global Company Ltd. currently has 
sufficient capital, without liquidating any of its assets, to continue to       
operate its assets for approximately three years. As such, it may be necessary  
for Harbor Global to liquidate some of its assets within three years of the     
distribution date to continue to operate its remaining assets pending their     
liquidation. If Harbor Global is unable to liquidate some of its assets, it will
require additional funding. Harbor Global may not be able to obtain additional  
funding, either in the form of additional capital or debt financing, because of 
the nature of its operations, namely its intent to hold its assets for          
liquidation and its limited duration. In addition, after the                    

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distribution and the merger, Pioneer Group will not own any Harbor Global common
shares, and Pioneer Group and Harbor Global will operate as two wholly          
independent companies. As an independent company, Harbor Global will not be able
to obtain additional funding from Pioneer Group. If adequate funding is not     
available, Harbor Global may be forced to liquidate its assets prematurely for a
discounted sale price or on other less favorable terms than those that may      
otherwise be available if Harbor Global could obtain additional funding.        

HARBOR GLOBAL WILL BE SUBJECT TO SIGNIFICANT RESTRICTIONS IF IT BECOMES AN      
INVESTMENT COMPANY.                                                             

    Harbor Global is currently not an investment company. Because a portion of
Harbor Global's assets consists of investment securities, Harbor Global could,  
in some circumstances in the future, be deemed to be an investment company under
the Investment Company Act of 1940. The determination of whether Harbor Global  
is an investment company is based on facts and circumstances that exist at      
various times.                                                                  

Harbor Global intends to conduct itself in the future so as to avoid  
becoming an investment company. If, nevertheless, Harbor Global were in the     
future to become an investment company, because Harbor Global is a foreign      
company, the Investment Company Act would prohibit Harbor Global and any person 
deemed to be an underwriter of Harbor Global's securities from offering for     
sale, selling or delivering after sale, in connection with a public offering,   
any security issued by Harbor Global in the United States.                      

FORWARD-LOOKING STATEMENTS

   This information statement contains forward-looking statements within the
"safe harbor" provisions of the Private Securities Litigation Reform Act of 1995
that involve substantial risks and uncertainties and are based upon the beliefs 
and assumptions of Harbor Global's management. Forward looking statements       
include those about Harbor Global's plans or strategies to liquidate its assets 
and operate its assets until they are liquidated, Harbor Global's anticipated   
expenses, liquidity and capital resources and general economic and market       
conditions, particularly those in the emerging markets in which Harbor Global   
conducts its businesses. You can identify these statements by forward-looking   
words such as "anticipate," "believe," "could," "estimate," "expect," "intend," 
"may," "should," "will" and "would" or similar words. You should read statements
that contain these words carefully because they discuss future expectations,    
contain projections of future results of operations or of financial position or 
state other "forward-looking" information with respect to Harbor Global. The    
factors listed above in the section captioned "Risk Factors," as well as any    
cautionary language in this information statement, provide examples of risks,   
uncertainties and events that may cause actual results to differ materially from
the expectations described in forward-looking statements.                       

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THE DISTRIBUTION

REASONS FOR THE DISTRIBUTION                                                    

On May 14, 2000, Pioneer Group and UniCredito Italiano entered into a 
merger agreement under which a wholly owned subsidiary of UniCredito Italiano   
will merge with and into Pioneer Group. Pioneer Group will survive the merger as
a wholly owned subsidiary of UniCredito Italiano. Prior to closing the merger,  
Pioneer Group will transfer some of its businesses and assets to Harbor Global, 
a wholly owned subsidiary of Pioneer Group, and distribute Harbor Global common 
shares to its stockholders. The Pioneer Group board of directors believes the   
distribution will enable Pioneer Group stockholders to participate in the value 
of all of Pioneer Group's assets through the acquisition of Pioneer Group by    
UniCredito Italiano and the realization of any potential value of the businesses
and assets transferred to Harbor Global through the liquidation of those assets 
within a limited period of time. Pioneer Group's board of directors believes the
distribution and the merger are in the best interests of Pioneer Group's        
stockholders.                                                                   

DISTRIBUTION AGREEMENT                                                          

    Pioneer Group and Harbor Global have entered into a distribution agreement
which, in general, provides that:                                               

   - Pioneer Group will transfer some of its businesses and assets to Harbor
Global;                                                           

- Pioneer Group will distribute Harbor Global common shares to its    
stockholders on a pro rata basis;                                 

  - Harbor Global will indemnify Pioneer Group for liabilities, other than
    tax liabilities, incurred by Pioneer Group relating to the business or
operations of Harbor Global or its subsidiaries; and              

  - Pioneer Group will indemnify Harbor Global for liabilities, other than
    tax liabilities, incurred by Harbor Global relating to the business or
      operations of Pioneer Group or its subsidiaries, excluding Harbor Global
and its subsidiaries.                                             

The form of distribution agreement is attached as Exhibit A to this information 
statement.                                                                      

  Transfer of Assets.  Under the distribution agreement, Pioneer Group has
agreed to transfer the capital stock of several of its subsidiaries and an      
amount in cash of $25 million to Harbor Global before the distribution date. As 
a result of these transfers, at the time of the distribution Harbor Global's    
assets will consist primarily of the following businesses and assets currently  
owned or operated by Pioneer Group:                                             

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

   - the proceeds from the sale of Pioneer Group's gold mining operations in
Ghana; and                                                        

- $25 million in cash.                                                

Harbor Global will own and operate all of its assets through a direct majority  
owned subsidiary, Harbor Global II Ltd. See "Business -- Holding Company        
Structure" in this information statement for more information about Harbor      
Global's structure.                                                             

Indemnification.  In connection with the transfer of the Pioneer Group
businesses and assets described above to Harbor Global, Harbor Global has agreed
to indemnify Pioneer Group and its subsidiaries and their officers, directors,  
agents and employees for liabilities, other than tax liabilities, incurred by   
Pioneer Group relating to the businesses or operations of Harbor Global or its  
subsidiaries. For example, in connection with the sale of its gold mining       
operations in Ghana to Ashanti Goldfields                                       

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Teberebie Limited, Pioneer Group has agreed to indemnify Ashanti for claims     
arising under the purchase agreement before June 19, 2005 relating to its       
Ghanaian gold mining operations. Under the distribution agreement, Pioneer Group
has agreed to transfer Pioneer Goldfields II Limited, the Pioneer Group         
subsidiary through which Pioneer Group's gold mining operations in Ghana were   
conducted, to Harbor Global. As a result of the transfer of Pioneer Goldfields  
II to Harbor Global, Harbor Global is obligated to reimburse Pioneer Group in   
the event that Pioneer Group indemnifies Ashanti for any claim under the        
purchase agreement.                                                             

  Similarly, under the distribution agreement, Pioneer Group has agreed to
indemnify Harbor Global and its subsidiaries and their directors, officers,     
agents and employees for liabilities, other than tax liabilities, incurred by   
Harbor Global relating to the businesses or operations of Pioneer Group or its  
subsidiaries, other than Harbor Global and its subsidiaries.                    

The liability of each of Harbor Global and Pioneer Group for taxes are
exclusively governed by the tax separation agreement which is described below.  

  Additional Liabilities.  Under the purchase agreement in connection with
the sale by Pioneer Group of its gold mining operations in Ghana to Ashanti,    
Pioneer Goldfields II is entitled to receive an $18.8 million base purchase     
price plus additional payments up to $5 million contingent upon the market price
of gold and productivity of the Ghana gold mine. On June 19, 2000, $5 million of
the base purchase price was paid to Pioneer Goldfields II in cash and $13.8     
million of the base purchase price was paid in the form of a five year          
non-interest bearing promissory note. Under the distribution agreement, Harbor  
Global has agreed that promptly after June 19, 2005, the fifth anniversary of   
the closing of the sale, it will pay to Pioneer Group the lesser of $5 million  
or the proceeds received by Pioneer Goldfields II from Ashanti under the        
purchase agreement less any indemnification claims paid under the purchase      
agreement for breach of any representation or warranty of Pioneer Goldfields II,
which shall not exceed the total purchase price paid by Ashanti. If any         
indemnification claim under the purchase agreement is pending on June 19, 2005, 
Harbor Global will pay the appropriate amount described above promptly upon     
resolution of the pending claim or claims. For more information about the       
transaction with Ashanti, see "Business -- Other Assets -- Ashanti Proceeds" in 
this information statement.                                                     

Harbor Global will make certain payments to Mr. Hunter, Catherine V.  
Mannick and other employees of Calypso Management or subsidiaries of Harbor     
Global who are currently officers or employees of Pioneer Group or its          
subsidiaries and who, as a result of the merger, will be entitled to receive    
payments from Pioneer Group upon termination of their employment with Pioneer   
Group. In addition, Harbor Global will pay Mr. Kasnet a signing and retention   
bonus of $1.8 million if he remains employed by Calypso Management and Calypso  
Management continues to provide services to Harbor Global on the second         
anniversary of the distribution date, or if Harbor Global terminates his        
employment without cause prior to the second anniversary of the distribution    
date. Harbor Global expects that these payments will be approximately $3.6      
million in the aggregate. See "Management -- Compensation of Executive Officers"
in this information statement for more information regarding these payments.    

In addition, Harbor Global has commitments to invest an additional    
approximately $5.4 million in the Polish Real Estate Fund and approximately $2.3
million in the PBO Property Fund. See "Business -- Polish and Eastern European  
Real Estate" in this information statement for more information regarding the   
Polish Real Estate Fund and the PBO Property Fund.                              

 Intercompany Indebtedness.  Prior to the distribution, any intercompany
indebtedness, receivable or other intercompany obligation between Harbor Global 
or its subsidiaries on one hand, and Pioneer Group or its subsidiaries on the   
other hand, other than Pioneer Group's right to receive up to $5 million under  
the distribution agreement in connection with the Ashanti purchase agreement,   
will be contributed by Pioneer Group to the capital of either Harbor Global or  
one of its subsidiaries. Following the distribution, except as described above  
and except for any amounts payable by Harbor Global to Pioneer Group in         
connection with any transitional services provided to Harbor Global, there will 
be no outstanding indebtedness or accounts payable or receivable between Harbor 
Global and its subsidiaries and Pioneer Group and its subsidiaries.             
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     Mutual Release.  Under the distribution agreement each of Harbor Global and
Pioneer Group releases and forever discharges the other and its subsidiaries for
all obligations, liabilities and claims which the releasing party has against   
the other relating to events or circumstances existing before the distribution  
date. This mutual release does not affect either party's ability to enforce the 
distribution agreement or any other agreement contemplated by the distribution  
agreement, including the tax separation agreement.                              

Names.  Following the distribution, the name "Pioneer" and all similar
related names, marks and logos will be the property of UniCredito Italiano,     
Pioneer Group or a subsidiary of Pioneer Group. Harbor Global intends to change 
the names of its subsidiaries that currently contain the "Pioneer" name before  
the distribution. Accordingly, the names of some of the Harbor Global           
subsidiaries used in this information statement will be changed. In the event   
that these name changes cannot be completed before the distribution date,       
Pioneer Group and Harbor Global have agreed to use their good faith efforts to  
enter into a licence agreement to permit Harbor Global and its subsidiaries to  
use the "Pioneer" name for a reasonable period of time after the closing of the 
merger in connection with the continued operation of Harbor Global's assets and 
businesses.                                                                     

  Distribution of Harbor Global Common Shares.  The distribution agreement
provides that the distribution record date and the distribution date will be the
closing date of the merger and that the distribution will occur immediately     
prior to the closing of the merger.                                             

     The distribution will occur only if the following conditions are satisfied:

    - the stockholders of Pioneer Group approve and adopt the merger agreement
between Pioneer Group and UniCredito Italiano;                    

- Pioneer Group transfers some of its businesses and assets to Harbor 
Global;                                                           

 - all of the conditions to the obligation of Pioneer Group to close the
      merger, other than the condition that the distribution be completed, are
satisfied or waived by Pioneer Group; and                         

   - no order, injunction or other legal restraint preventing or prohibiting
the distribution is in effect.                                    

Pioneer Group will deliver to EquiServe Limited Partnership, the      
distribution agent, certificates representing all of the outstanding Harbor     
Global common shares. At the time of distribution, Pioneer Group will notify the
distribution agent that the distribution is effective, and you will be entitled 
to receive one Harbor Global common share for every five shares of Pioneer Group
common stock held by you on the distribution date. No certificates or scrip     
representing fractional Harbor Global common shares will be issued to you as    
part of the distribution. The distribution agent will aggregate fractional      
shares into whole shares and seek to sell them at then prevailing prices on     
behalf of you and other holders who would be entitled to receive fractional     
share interests. Instead of a fractional share, you will receive a cash payment 
in the amount of your pro rata share of the total sale proceeds, net of any     
commissions incurred in connection with the sale of fractional shares. The      
aggregated fractional shares will be sold on, or as soon as practicable after,  
the distribution date.                                                          

The total number of Harbor Global common shares to be distributed will
depend on the number of shares of common stock of Pioneer Group outstanding on  
the distribution date. Based upon the number of shares of Pioneer Group         
outstanding on June 22, 2000, approximately 5,371,428 Harbor Global common      
shares will be distributed to Pioneer Group stockholders. This amount may       
increase prior to the distribution date due to the issuance of shares of Pioneer
Group common stock upon the exercise of outstanding options. The certificate    
representing your Harbor Global common shares will be mailed to you             
approximately one to two weeks after the distribution date.                     

 You will not be required to pay any cash or other consideration for the
Harbor Global common shares you receive in the distribution.                    

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TAX SEPARATION AGREEMENT                                                        

Pioneer Group and Harbor Global have entered into a tax separation    
agreement, which will govern each party's rights and obligations with respect to
payments, deficiencies and refunds, if any, of federal, state, local or foreign 
taxes for periods before and after the distribution. Under the tax separation   
agreement, Harbor Global has agreed to pay any tax arising in connection with   
the transfer of businesses and assets from Pioneer Group to Harbor Global and   
the subsequent distribution. The tax separation agreement also governs each     
party's obligations with respect to the filing of tax returns and conduct of tax
audits. The form of the tax separation agreement is attached as Exhibit B to    
this information statement.                                                     

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES                           

 The following is a general description of certain United States federal
income tax consequences that are expected to be material and are applicable to  
you by virtue of your receipt of cash and Harbor Global common shares in the    
merger and distribution. This description is not a comprehensive description of 
all of the tax consequences that may be relevant to you. This description does  
not discuss the tax consequences that may be applicable to you in light of your 
individual circumstances or if you are subject to special treatment under some  
United States federal income tax laws, such as laws pertaining to:              

- banks;                                                              

- tax-exempt organizations;                                           

- insurance companies;                                                

- mutual funds;                                                       

- traders in securities who elect to apply a mark-to-market method of 
accounting;                                                       

- dealers in securities or foreign currencies;                        

  - stockholders who received their Pioneer Group common stock through the
exercise of employee stock options or otherwise as compensation;  

- stockholders who are not United States persons, as defined in the   
Internal Revenue Code;                                            

- stockholders who hold Pioneer Group common stock as part of a hedge,
straddle or conversion transaction;                               

   - stockholders who hold Pioneer Group common stock through a partnership,
       trust or other entity that is treated as a pass-through entity for United
States federal income tax purposes; or                            

- stockholders subject to the alternative minimum tax.                

This description is based upon the Internal Revenue Code of 1986, the 
regulations of the United States Treasury Department, and court and             
administrative rulings and decisions in effect on the date of this information  
statement, all of which are subject to change, possibly retroactively, which may
change the tax consequences described below.                                    

  Neither Harbor Global nor Pioneer Group has sought or will seek a ruling
from the Internal Revenue Service or a legal opinion regarding any tax matter   
discussed in this information statement, including any tax consequences relating
to the formation of Harbor Global, or the tax consequences of the merger and    
distribution or holding Harbor Global common shares. Neither Pioneer Group nor  
Harbor Global can assure you that the Internal Revenue Service would not assert,
or that a court would not sustain, a position contrary to any of the tax        
consequences described below.                                                   

 Tax matters are complicated. The tax consequences of the merger and the
distribution to you are complex and will depend on your particular facts and    
circumstances. Harbor Global urges you to consult your own tax advisor regarding
your specific tax consequences of the merger and distribution, including tax    
return reporting requirements, the applicability of federal, state, local and   
foreign tax laws and the effect of any proposed change in the tax laws.         
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   U.S. Federal Income Tax Consequences to Pioneer Group Stockholders of the
Receipt of Cash and Harbor Global Common Shares.  The United States federal     
income tax consequences to you of receiving Harbor Global common shares in the  
distribution may differ significantly depending on whether the distribution and 
merger are treated as a single integrated transaction or as two separate        
transactions for United States federal income tax purposes. Although there is no
specific authority directly on point, UniCredito Italiano, Pioneer Group and    
Harbor Global intend to characterize the merger and the distribution as a single
integrated transaction for United States federal income tax purposes. However,  
because the issue is not free from doubt, you should consult your tax advisor   
with respect to the proper treatment of the distribution of Harbor Global common
shares.                                                                         

In general, your receipt of cash and Harbor Global common shares in   
connection with the merger and the distribution will be a taxable event. If the 
merger and the distribution are treated as a single, integrated transaction,    
your receipt of cash and Harbor Global common shares will be treated as an      
exchange of shares of Pioneer Group common stock for both cash and Harbor Global
common shares. Under this treatment, you will generally recognize capital gain  
or loss for United States federal income tax purposes equal to the difference   
between (1) the amount of cash you receive plus the fair market value at the    
time of the distribution of the Harbor Global common shares you receive and (2) 
the adjusted tax basis in the shares of Pioneer Group common stock you surrender
in exchange for the cash and Harbor Global common shares.                       

 The gain or loss will be long-term capital gain or loss if your holding
period for the Pioneer Group common stock you exchange is more than 12 months at
the closing of the merger. If you own more than one block of shares of Pioneer  
Group common stock, the cash and Harbor Global common shares you receive must be
allocated ratably among the blocks you own. Your holding period for the Harbor  
Global common shares you receive in the distribution will begin on the day      
following the date of the distribution, and you will have an initial tax basis  
in the Harbor Global common shares equal to their fair market value on the      
distribution date.                                                              

If the merger and distribution are not treated as a single integrated 
transaction for United States federal income tax purposes, the receipt of cash  
in exchange for shares of Pioneer Group common stock would result in the        
recognition of gain or loss as described above, while your receipt of Harbor    
Global common shares may instead be a taxable distribution from Pioneer Group.  

     If the receipt of the Harbor Global common shares were treated as a taxable
distribution, the fair market value of your Harbor Global common shares at the  
time of the distribution would be taxable to you as a dividend to the extent of 
Pioneer Group's current or accumulated earnings and profits, including earnings 
and profits arising from the deemed sale by Pioneer Group of the Harbor Global  
common shares as a result of the distribution. That portion of the value of     
Harbor Global common shares that exceeds the earnings and profits of Pioneer    
Group would first be treated as a non-taxable return of capital to the extent of
your basis in your shares of Pioneer Group common stock, and your adjusted tax  
basis in this stock would be reduced accordingly (but not below zero). To the   
extent that the remaining portion of the value of Harbor Global common shares   
you receive were to exceed your adjusted tax basis in your shares of Pioneer    
Group common stock, the excess would be treated as long-term or short-term      
capital gain from the sale or exchange of Pioneer Group common stock, depending 
on the period of time you held the Pioneer Group stock.                         

  As discussed above, the amount of income, gain or loss, if any, that you
will recognize will depend, in part, on the fair market value of the Harbor     
Global common shares you receive in the distribution. Harbor Global will        
undertake to provide you with its determination regarding the fair market value 
of the Harbor Global common shares you receive in the distribution. However, any
determination will not be binding on the Internal Revenue Service, which may    
assert a different, and possibly higher, value for the Harbor Global common     
shares you receive. Accordingly, there can be no assurance as to the exact      
amount of income, gain or loss you may recognize as a result of the merger and  
the distribution.                                                               

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Bermuda and United States Tax Status of Harbor Global.  Harbor Global 
believes that it will not be subject to taxation in Bermuda and that interest,  
dividends and gains distributed by Harbor Global to you will not be subject to  
taxation in Bermuda.                                                            

    For United States federal income tax purposes, Harbor Global will elect to
be classified as a partnership. Harbor Global believes that it will not be      
classified as a "publicly traded partnership" or otherwise classified as a      
corporation for United States federal income tax purposes. It is anticipated    
that, for United States federal income tax purposes, you will be treated as a   
partner in the Bermuda partnership and your Harbor Global common shares will    
represent partnership interests.                                                

United States Federal Income Tax Consequences of Holding Harbor Global
Common Shares.  By reason of its classification as a partnership for United     
States federal income tax purposes, Harbor Global itself will not be subject to 
United States federal income tax. Instead, items of income, gain, loss,         
deduction and expense will pass through to you, and you will be treated as a    
partner in Harbor Global for United States federal income tax purposes.         

  As a partner in Harbor Global, you will be required to take into account
your allocable share of Harbor Global's items of income, gain, loss, deduction  
and credit. The amount of your allocable share of Harbor Global's items of      
income, gain, loss, deduction and credit will be determined in accordance with  
your interest in Harbor Global. Your adjusted tax basis in the Harbor Global    
shares generally will be equal to the fair market value of the Harbor Global    
shares you receive at the time of the distribution and will be (1) increased by 
your allocable share of Harbor Global's items of income and gain that you are   
required to take into account as described above and (2) decreased, but not     
below zero, by the allocable share of Harbor Global's items of deduction and    
loss and the amount of any cash or other distribution made by Harbor Global to  
you. Cash distributions that Harbor Global makes to you generally will not be   
taxable to you, except to the extent that these distributions exceed your       
adjusted tax basis in your Harbor Global common shares.                         

     Because Harbor Global will not be required to make current distributions of
its earnings, it is possible that your United States federal income tax         
liability directly (as described below under the heading "Investments in Foreign
Corporations"), or with respect to your allocable share of Harbor Global's items
of income, gain, loss, deduction and credit, in a particular taxable year could 
exceed the cash distributions, if any, to you for that year. In this case, you  
may have a liability for tax which must be paid by you out of other funds.      

     Harbor Global's disposition of businesses or assets may generally give rise
to income, gain or loss, which will pass through to you, as described above.    
Except as described below under the heading "Passive Foreign Investment         
Company," this gain will be treated as long-term capital gain if Harbor Global's
holding period in the stock is more than 12 months at the time of the sale. For 
this purpose, Harbor Global's holding period will include any period during     
which the stock was held as a capital asset by Pioneer Group. Harbor Global     
expects to distribute proceeds from the liquidation of its assets, net of its   
expenses and other liabilities, pro rata to its shareholders.                   

Investments in Foreign Corporations.  As a result of the structure of 
Harbor Global, you may be required to recognize a proportionate share of the    
income earned by any majority or minority owned Harbor Global subsidiary that is
classified as a Foreign Personal Holding Company or a Passive Foreign Investment
Company. You are urged to consult your tax advisor as to whether making a       
qualified electing fund election, as described below, with respect to each      
Passive Foreign Investment Company would be beneficial to you.                  

    Foreign Personal Holding Company.  Harbor Global believes that one or more
of its foreign subsidiaries may be classified as a "foreign personal holding    
company" (an "FPHC"). In general, a foreign corporation will be classified as an
FPHC if in any taxable year (1) five or fewer individuals who are United States 
citizens or residents own or are deemed to own more than 50% (measured by the   
total voting power of all classes entitled to vote or the total value) of the   
foreign corporation's shares (the "ownership test") and (2) at least 60% (50% in
some cases) of the foreign corporation's gross income                           

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consists of "foreign personal holding company income," which generally includes 
passive income such as dividends, interests, gains from the sale or exchange of 
shares or securities, rent and royalties (the "income test").                   

For purposes of determining whether a foreign corporation meets the   
ownership test described above, you will be treated as owning your proportionate
share of stock in any foreign corporation held by Harbor Global, and the shares 
that are treated as owned by you will be attributed to all other shareholders of
Harbor Global. Therefore, any foreign corporation owned by Harbor Global will   
generally be treated as owned, through attribution, by each Harbor Global       
shareholder in the same proportion that the company is owned by Harbor Global,  
so that the ownership test will be satisfied with respect to any company that is
owned more than 50 percent by Harbor Global. As a result, any foreign           
corporation that is more than 50% owned by Harbor Global will be treated as an  
FPHC based solely on whether the income test is satisfied. In addition, Harbor  
Global believes that one or more of the subsidiaries of Harbor Global will have 
substantial passive income, and as a result may be classified as an FPHC under  
the income test.                                                                

    In the event that any foreign subsidiary of Harbor Global is classified as
an FPHC, you will be required to include your proportionate share of the        
subsidiary's undistributed foreign personal holding company income, regardless  
of whether you receive corresponding distributions of cash.                     

    Harbor Global will undertake to provide you with information regarding the
classification of any Harbor Global subsidiary as an FPHC and your allocable    
share of the subsidiary's income, as described above. However, Harbor Global    
cannot assure you that it will be able to provide you with this information.    

Passive Foreign Investment Company.  One or more of Harbor Global's   
subsidiaries could also be classified as a passive foreign investment company (a
"PFIC"). In general, a foreign corporation will be a PFIC if, for any taxable   
year, either (1) 75% or more of its gross income is "passive income," which     
includes interest, dividends, and some types of rents and royalties, or (2) the 
average percentage of the corporation's assets that produce or are held for the 
production of "passive income" is 50% or more. If any of the foreign            
corporations owned directly or indirectly by Harbor Global is a PFIC during any 
year in which you own an interest in Harbor Global, you will be treated as      
directly owning your proportionate share of such PFIC. Unless you make a        
qualified electing fund election, as described below, you will be subject to tax
on gains on dispositions of PFIC shares by Harbor Global or a subsidiary of     
Harbor Global and on certain "excess distributions" by a PFIC to Harbor Global  
as if the gain or distribution were ordinary income earned ratably over each of 
the years during the period in which the subsidiary was classified as a PFIC,   
and you will be treated as owning an indirect interest in the PFIC. You         
generally will be liable to pay tax at the ordinary income rates prevailing     
during each of the years to which the gain or distribution is allocated, except 
that in the case of gains and distributions allocated to prior years in which   
the foreign corporation was a PFIC, (1) the tax rate will be the highest in     
effect for that taxable year and (2) the tax will be payable generally without  
regard to offsets from deductions, losses and expenses. You will also be subject
to an interest charge with respect to any tax described above that is allocated 
to a prior year.                                                                

    Alternatively, you may make an election with respect to each PFIC in which
you are treated as owning shares to have the PFIC treated as a "qualified       
electing fund" ("QEF"). In general, a QEF election would require you to include 
in gross income each year your share of the PFIC's ordinary income and net      
capital gain for the year, even if the PFIC does not distribute cash or other   
property in respect of such income. You may only make a QEF election if the PFIC
satisfies certain reporting requirements with respect to its ordinary income and
net capital gains.                                                              

In addition, subject to specific limitations, shareholders treated as 
owning marketable shares in a PFIC may make an election to mark those shares to 
market annually, rather than being subject to the above-described rules. Amounts
included in or deducted from income under this mark-to-market election and      
actual gains and losses realized upon disposition, subject to specific          
limitations, would be treated as ordinary gains or losses.                      

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As mentioned above, Harbor Global expects that one or more of its     
subsidiaries will have substantial passive income. Accordingly, Harbor Global   
expects that one or more of its subsidiaries will be classified as a PFIC, in   
which case the subsidiary will likely be classified as both a PFIC and an FPHC. 
In that event, unless you make a QEF election, you will include in your income  
the portion of the foreign corporation's income that is required to be included 
under the FPHC rules, described above, and also be subject to tax under the PFIC
rules with respect to gains on dispositions and excess distributions, including 
the interest charge, as described above. However, if you have made a QEF        
election with respect to a company that is treated as both a PFIC and an FPHC,  
you will include in your income your proportionate share of the foreign         
corporation's income as provided in the FPHC rules, as described above, and any 
remaining income under the QEF rules, as described above. Accordingly, you will 
include your proportionate share of the subsidiary's income, but only once, and 
you will not be subject to the PFIC rules regarding gains on dispositions and   
excess distributions, including the interest charge described above in the PFIC 
rules.                                                                          

   Harbor Global will undertake to obtain from any PFIC, and provide to you,
the information necessary to allow you to make, and maintain, a QEF election    
with respect to any PFIC. However, Harbor Global cannot assure you that it will 
be able to provide all the necessary information to satisfy the PFIC            
requirements and that you will be permitted to make and maintain a QEF election.

    YOU ARE STRONGLY URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO HOW THE
PASSIVE FOREIGN INVESTMENT COMPANY RULES AFFECT YOUR TAX SITUATION AND WHETHER  
MAKING A QUALIFIED ELECTING FUND ELECTION WITH RESPECT TO EACH PASSIVE FOREIGN  
INVESTMENT COMPANY OWNED BY HARBOR GLOBAL WOULD BE BENEFICIAL TO YOU.           

Controlled Foreign Corporation.  Any foreign corporation that is held 
directly or indirectly by Harbor Global could be treated as a "controlled       
foreign corporation" if more than 50% of the total voting power or value of the 
shares is owned, directly or indirectly, by shareholders that are citizens or   
residents of the United States, United States domestic partnerships or          
corporations or estates or trusts other than foreign estates or trusts,         
indirectly owning 10% or more of the total combined voting power of all classes 
of shares in the foreign corporation. This classification would have many       
complex results, including requiring the shareholders to include in income their
pro rata shares of the controlled foreign corporation's "Subpart F Income," as  
defined by the Internal Revenue Code. In addition, with respect to any such     
shareholder who is or was a 10% or greater shareholder at any time during the   
five year period ending with the sale or exchange of shares in a controlled     
foreign corporation by Harbor Global or any of its subsidiaries, gain from such 
sale or exchange will be treated as a dividend taxable at ordinary income tax   
rates to the extent of the controlled foreign corporation's earnings and profits
attributable to the shares sold or exchanged.                                   

  Pioneer Group does not believe that any foreign corporation that will be
held directly or indirectly by Harbor Global immediately following the          
distribution will be a controlled foreign corporation. However, we cannot assure
you that a foreign corporation owned by Harbor Global will not qualify as a     
controlled foreign corporation in the future.                                   

TRADING OF HARBOR GLOBAL COMMON SHARES                                          

Harbor Global has registered its common shares with the Securities and
Exchange Commission on a registration statement on Form 10 under the Securities 
Exchange Act of 1934, effective as of [            ], 2000. The Harbor Global   
common shares you receive in the distribution will be freely transferable,      
unless you are an "affiliate" of Harbor Global under the Securities Act of 1933.
However, there is no current public trading market for Harbor Global common     
shares, and Harbor Global common shares will not be listed on an exchange or on 
The Nasdaq Stock Market(R). Furthermore, Harbor Global does not intend to take  
any action to facilitate the development of an active trading market. Harbor    
Global cannot assure you that you will be able to sell your Harbor Global common
shares, and if a trading market does develop, Harbor Global cannot assure you as
to the prices at which Harbor Global common shares will trade.                  

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Persons who may be deemed to be affiliates of Harbor Global generally 
include individuals or entities that control, are controlled by or are under    
common control with Harbor Global and may include the directors and officers of 
Harbor Global or any principal shareholder of Harbor Global. Persons who are    
affiliates of Harbor Global will be permitted to sell their Harbor Global common
shares only pursuant to an effective registration statement under the Securities
Act or an exemption from the registration requirements of the Securities Act,   
such as the exemption afforded under Rule 144 under the Securities Act.         

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PRO FORMA CAPITALIZATION

    The following table presents the consolidated historical capitalization of
Harbor Global as of March 31, 2000, adjusted to reflect capital contributions to
be made by Pioneer Group to Harbor Global prior to the distribution, as well as 
the distribution. This information should be read in conjunction with the       
Condensed Consolidated Financial Statements and the related notes thereto of    
Harbor Global included elsewhere in this information statement.                 

                                                        [Enlarge/Download Table]

                                                                        MARCH 31, 2000             
                                                           ----------------------------------------
                                                                        (IN THOUSANDS)             
                                                                                 PRO FORMA         
                                                                         --------------------------
                                                           HISTORICAL    ADJUSTMENTS    AS ADJUSTED
                                                           ----------    -----------    -----------
                                                                                                   
Cash(1)...................................................    6,114         21,400        27,514   
Restricted Cash(1)(2).....................................      880          7,720         8,600   
Current Notes Payable(2)..................................    1,240         (1,240)           --   
Amounts Due to Affiliates(3)..............................  100,455       (100,455)           --   
Notes Payable(2)..........................................    3,720         (3,720)           --   
Minority Interest.........................................   62,328             --        62,328   
Preferred Shares (1,000,000 shares authorized and none                                             
  outstanding on a pro forma basis).......................       --             --            --   
Common Shares (48,000,000 shares authorized and 5,296,236                                          
  shares outstanding on a pro forma basis, par value                                               
  $.0025)(3)..............................................       --             13            13   
Additional Paid In Capital(3).............................       --         76,437        76,437   
Parent Company Investment(3)..............................  (59,164)        59,164            --   
Total Shareholders' Equity................................  (59,164)       135,614        76,450   

---------------                                                                 
(1) Reflects the contribution of cash by the Pioneer Group of approximately     
$29,080,000 which includes: (1) $25,000,000 to fund the expenses to be  
incurred by Harbor Global for the administration and liquidation of its 
   assets, to fund capital commitments to the PBO Property Fund and the Polish
Real Estate Fund and to fund certain compensation liabilities payable to
current employees of Pioneer Group who will become employees of Harbor  
    Global or its subsidiaries or Calypso Management; and (2) $4,080,000 to fund
   the repayment of a note payable of Forest-Starma prior to the distribution.
 Also reflects $5,000,000 of cash received by Pioneer Goldfields II, which
  will become a wholly owned subsidiary of Harbor Global, in connection with
    the sale of its Ghanaian gold mining operations. Approximately $8,600,000 of
the cash is reflected in short and long term restricted cash.           

(2) Reflects the repayment of $4,960,000 of notes payable to occur prior to the 
    distribution. Pioneer Group will contribute $4,080,000 to the repayment, and
Harbor Global will fund the balance of $880,000.                        

(3) Reflects the capitalization of Harbor Global at the time of the             
 distribution, including the issuance to Pioneer Group stockholders of one
   common share of Harbor Global for every five shares of Pioneer Group common
stock held on the distribution date, based on the number of shares of   
Pioneer Group common stock outstanding on March 31, 2000, and the       
   forgiveness of indebtedness of Harbor Global subsidiaries to Pioneer Group.
In addition, the number of common shares authorized assumes that Harbor 
 Global effects a four-for-one stock split prior to the distribution date.

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

   Set forth on the following pages are a historical and pro forma condensed
consolidated statement of financial position of Harbor Global at March 31, 2000 
and historical and pro forma condensed consolidated statements of operations of 
Harbor Global for the three month period ended March 31, 2000 and the year ended
December 31, 1999.                                                              

The pro forma condensed consolidated statement of financial position  
includes condensed consolidated historical amounts for Harbor Global at March   
31, 2000, as adjusted to reflect the effect of capital contributions to be made 
by Pioneer Group to Harbor Global prior to the distribution date, as well as the
distribution, as if the distribution was completed on March 31, 2000. The pro   
forma condensed consolidated statements of operations sets forth Harbor Global's
results of operations for the three months ended March 31, 2000, and for the    
year ended December 31, 1999, and assumes the distribution was completed on     
January 1, 2000 or January 1, 1999, respectively.                               

  The pro forma condensed consolidated financial statements should be read
together with the other financial information presented elsewhere in this       
information statement. The pro forma condensed consolidated information is      
presented for illustrative purposes only and is not necessarily indicative of   
either (1) the operating or financial results that would have occurred had the  
distribution occurred on January 1, 2000 or January 1, 1999, in the case of the 
pro forma condensed consolidated statements of operations, or on March 31, 2000,
in the case of the pro forma condensed consolidated statement of financial      
position, or (2) Harbor Global's future operating or financial results,         
particularly in light of Harbor Global's intent to liquidate its assets within a
limited period of time.                                                         

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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION 

                                                        [Enlarge/Download Table]

                                                                       MARCH 31, 2000            
                                                           --------------------------------------
                                                                       (IN THOUSANDS)            
                                                           HISTORICAL    ADJUSTMENTS    PRO FORMA
                                                           ----------    -----------    ---------
                                                                                                 
ASSETS                                                                                           
Cash(1)(4)................................................     6,114        21,400        27,514 
Restricted Cash(1)(2).....................................       880         2,720         3,600 
Timber Inventory..........................................     7,061            --         7,061 
Other Current Assets......................................     1,953            --         1,953 
Net Current Assets of Discontinued Operations.............        77            --            77 
                                                            --------      --------      -------- 
          Total Current Assets............................    16,085        24,120        40,205 
Long Term Restricted Cash(1)..............................        --         5,000         5,000 
Goodwill..................................................     1,454            --         1,454 
Venture Capital Investments(3)............................    50,765            --        50,765 
Long Term Investments(4)..................................     8,177            --         8,177 
Building(4)...............................................    24,689            --        24,689 
Timber Equipment..........................................    12,677            --        12,677 
Other Long Term Assets....................................     3,843            --         3,843 
Notes Receivable(5).......................................        --         9,679         9,679 
Net Noncurrent Assets of Discontinued Operations..........     1,197            --         1,197 
                                                            --------      --------      -------- 
          Total Assets....................................   118,887        38,799       157,686 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                             
Accounts Payable..........................................     3,772            --         3,772 
Accrued Expenses(6).......................................     6,536         3,600        10,136 
Current Portion of Notes Payable(2).......................     1,240        (1,240)           -- 
                                                            --------      --------      -------- 
          Total Current Liabilities.......................    11,548         2,360        13,908 
Other Liabilities(6)......................................        --         5,000         5,000 
Notes Payable(2)..........................................     3,720        (3,720)           -- 
Amounts Due Affiliates(7).................................   100,455      (100,455)           -- 
                                                            --------      --------      -------- 
Total Debt................................................   104,175      (104,175)           -- 
                                                            --------      --------      -------- 
          Total Liabilities...............................   115,723       (96,815)       18,908 
Minority Interest(3)(4)...................................    62,328            --        62,328 
Preferred Shares (1,000,000 shares authorized and none                                           
  outstanding on a pro forma basis).......................        --            --            -- 
Common Shares (48,000,000 shares authorized and 5,296,236                                        
  shares outstanding on a pro forma basis, par value                                             
  $.0025)(7)..............................................        --            13            13 
Additional Paid In Capital(7).............................        --        76,437        76,437 
Parent Company Investment(7)..............................   (59,164)       59,164            -- 
                                                            --------      --------      -------- 
          Total Equity....................................   (59,164)      135,614        76,450 
                                                            --------      --------      -------- 
Total Liabilities and Equity..............................   118,887        38,799       157,686 

---------------                                                                 
(1) Reflects the contribution of cash by the Pioneer Group of approximately     
$29,080,000 which includes: (1) $25,000,000 to fund the expenses to be  
incurred by Harbor Global for the administration and management of its  
   assets, to fund capital commitments to the PBO Property Fund and the Polish
 Real Estate Fund, and to fund certain compensation liabilities payable to
current employees of Pioneer Group who will become employees of Harbor  
Global or its subsidiaries or Calypso                                   

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 Management; and (2) $4,080,000 to fund the repayment of a note payable of
 Forest-Starma prior to the distribution. Also reflects $5,000,000 of cash
received by Pioneer Goldfields II, which will become a wholly owned     
subsidiary of Harbor Global, in connection with the sale of its Ghanaian
    gold mining operations. Approximately $8,600,000 of the cash contribution is
reflected in short and long term restricted cash.                       

(2) Reflects the repayment of $4,960,000 of notes payable to occur prior to the 
distribution. Pioneer Group will contribute $4,080,000 and Harbor Global
will fund the balance of $880,000.                                      

(3) Harbor Global has consolidated 100% of the net assets of Pioneer Poland     
  U.S., L.P. and Pioneer Poland UK, L.P., although Harbor Global's ownership
  interests are 7.2% and 9.2%, respectively. The Polish and Eastern European
    venture capital investments are made through these consolidated partnerships
which comprise the Pioneer Poland Fund. Harbor Global's interest in the 
Pioneer Poland Fund totals $4,279,000. The difference between the assets
  listed under "Venture Capital Investments" and Harbor Global's interest is
included under "Minority Interest" and represents the interest of other 
shareholders in the fund.                                               

(4) Harbor Global owns approximately 52% of the equity in the Pioneer First     
   Investment Fund. The Pioneer First Investment Fund invests directly in real
estate, and to a lesser extent, securities of Russian companies. The    
building represents the Meridian Commercial Tower, which comprises a    
significant portion of the assets of Pioneer First investment Fund. The 
 long-term investments and approximately $3.4 million in cash comprise the
    balance of the Pioneer First Investment Fund's assets. The 48% interest held
  by the other shareholders of the Pioneer First Investment Fund is recorded
under Minority Interest and totals $14,010,000.                         

(5) Reflects a note receivable of Pioneer Goldfields II. Pioneer Goldfields II  
  received the note from Ashanti Goldfields Teberebie Limited, in connection
 with the sale of its Ghanaian gold mining operations. The note receivable
  has the following repayment schedule: $2,500,000 in March 2001, $2,500,000
in March 2002, $3,000,000 in March 2003, $3,750,000 in March 2004 and   
 $2,050,000 in March 2005. The note has a net present value of $9,679,000,
when discounted at a rate of 13%.                                       

(6) Reflects the obligation of Harbor Global under the distribution agreement to
pay Pioneer Group up to $5 million of the proceeds received by Pioneer  
   Goldfields II from Ashanti Goldfields, Teberebie Limited in connection with
the sale of Pioneer Group's Ghanaian gold mining operations to Ashanti. 
Harbor Global has also assumed approximately $3,600,000 of compensation 
obligations payable to current employees of Pioneer Group or its        
   subsidiaries who will become employees of Harbor Global or its subsidiaries
or Calypso Management.                                                  

(7) Reflects the capitalization of Harbor Global at the time of the             
 distribution, including the issuance to Pioneer Group stockholders of one
   common share of Harbor Global for every five shares of Pioneer Group common
stock held on the distribution date, based on the number of shares of   
Pioneer Group common stock outstanding on March 31, 2000, and the       
forgiveness of the indebtedness of Harbor Global subsidiaries to Pioneer
Group. In addition, the number of common shares authorized assumes that 
  Harbor Global effects a four-for-one stock split prior to the distribution
date.                                                                   

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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                                        [Enlarge/Download Table]

                                                    THREE MONTHS ENDED             YEAR ENDED       
                                                      MARCH 31, 2000            DECEMBER 31, 1999   
                                                  -----------------------    -----------------------
                                                                    (IN THOUSANDS)                  
                                                  HISTORICAL    PRO FORMA    HISTORICAL    PRO FORMA
                                                  ----------    ---------    ----------    ---------
                                                                                                    
Revenues                                                                                            
  Timber Sales...................................        0            0        14,383        14,383 
  Real Estate Rental Revenue.....................    1,955        1,955         9,495         9,495 
  Other..........................................      646          646         4,229         4,229 
                                                    ------       ------       -------       ------- 
Total Revenues...................................    2,601        2,601        28,107        28,107 

Operating Expenses                                                                                  
  Timber Cost of Goods Sold......................        0            0       (15,252)      (15,252)
  Salary and Benefit Expenses....................     (658)        (658)       (6,052)       (6,052)
  Facility Expenses..............................     (350)        (350)       (1,489)       (1,489)
  Building and Property Management Expenses......     (440)        (440)       (2,350)       (2,350)
  Other Expenses.................................   (2,236)      (2,236)       (6,392)       (6,392)
  Write-down of Natural Resource Projects........        0            0          (685)         (685)
  Reduction in Carrying Value of Timber Assets...        0            0       (15,300)      (15,300)
  Allocation of Corporate Costs..................   (2,140)      (2,140)      (11,431)      (11,431)
                                                    ------       ------       -------       ------- 
Total Operating Expenses.........................   (5,824)      (5,824)      (58,951)      (58,951)

Operating Income (Loss)..........................   (3,223)      (3,223)      (30,844)      (30,844)

Other Income (Expense)                                                                              
  Unrealized and Realized Gains/Losses on                                                           
     Securities..................................    1,478        1,478         2,095         2,095 
  Interest (Expense)/Income(1)...................     (100)         702          (593)        2,802 
                                                    ------       ------       -------       ------- 
Total Other Income...............................    1,378        2,180         1,502         4,897 

Income (Loss) from Continuing Operations before                                                     
  Provision for Income Taxes and Minority                                                           
  Interest.......................................   (1,845)      (1,043)      (29,342)      (25,947)
Provision for Income Taxes.......................     (321)        (321)       (1,438)       (1,438)

Income (Loss) from Continuing Operations before                                                     
  Minority Interest..............................   (2,166)      (1,364)      (30,780)      (27,385)

Minority Interest................................     (156)        (156)       (1,438)       (1,438)

Net Income (Loss) from Continuing Operations                                                        
  before Change in Accounting Principle..........   (2,322)      (1,520)      (32,218)      (28,823)

---------------                                                                 
(1) Reflects assumed interest income earnings on a $26,400,000 contribution of  
cash (net of the payments owed to some employees of Harbor Global and   
    Calypso Management) at a weighted average commercial paper rate of 5.5%, and
   reflects the accretion of interest income on the Ashanti note at a discount
  rate of 13%. No local tax provision will be required as the income will be
  earned in jurisdictions with no income taxes. Also reflects a reduction in
interest expense associated with the repayment of $4,960,000 of notes   
payable.                                                                

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA 

     The following table presents summary consolidated historical financial data
for Harbor Global for each of the periods indicated. The summary consolidated   
historical financial data for the five fiscal years ended December 31 have been 
derived from the audited consolidated financial statements of Harbor Global for 
these periods. The summary combined historical financial data for the three     
months ended March 31, 2000 and March 31, 1999 have been derived from unaudited 
consolidated historical financial statements of Harbor Global, which in the     
opinion of management include all normal recurring adjustments necessary to     
present fairly the information required to be contained in the consolidated     
historical financial statements for the periods indicated.                      

You should read the summary consolidated historical financial data    
presented below in conjunction with the audited Consolidated Historical         
Financial Statements of Harbor Global and the related notes and "Management's   
Discussion and Analysis of Financial Condition and Results of Operations"       
included in this information statement. The summary consolidated historical     
financial data presented below and the consolidated historical financial        
statements of Harbor Global contained in this information statement are         
presented as if Harbor Global were a stand-alone independent company for the    
periods presented. However, the historical financial information presented below
may not be indicative of (1) the results of operations or financial position    
that would have been attained if Harbor Global had been a stand-alone           
independent company during the periods shown or (2) Harbor Global's future      
performance as an independent company, particularly in light of its intent to   
liquidate its assets within a limited period of time. Historical per share data 
for earnings and dividends are not presented because Harbor Global was not a    
publicly held company during the periods presented below.                       

                                                        [Enlarge/Download Table]

                                        THREE MONTHS                                                     
                                            ENDED                                                        
                                          MARCH 31,                  YEAR ENDED DECEMBER 31,             
                                      -----------------   ---------------------------------------------- 
                                                             AMOUNTS IN THOUSANDS                        
                                      ------------------------------------------------------------------ 
                                       2000      1999      1999      1998      1997      1996      1995  
                                      -------   -------   -------   -------   -------   -------   ------ 
                                                                                                         
Income Statement Data                                                                                    
  Revenue............................   2,601     3,498    28,107    21,460    20,916     6,073    4,196 
  Operating Expenses.................  (5,824)   (5,075)  (58,951)  (68,131)  (41,299)  (10,162)  (3,755)
  Other Income (Expense).............   1,378        25     1,502   (12,399)    8,698      (709)  (3,489)
  Income (Loss) from Continuing                                                                          
    Operations(1)....................  (2,322)  (13,612)  (43,765)  (45,797)  (13,634)   (2,784)   1,484 
Balance Sheet Data                                                                                       
  Total Assets....................... 118,887   140,657   118,972   149,506   152,239   111,095   76,839 
  Total Amounts Due to Affiliates.... 100,455    94,946   103,557    95,282    38,496    47,081   36,148 
  Total Long-term Obligations........   3,720     4,960     3,720     4,960    11,337    12,680    6,000 
  Total Equity (Deficit)............. (59,164)  (41,180)  (59,707)  (29,162)    7,088     9,128   15,812 

---------------                                                                 
(1) Includes the cumulative effect of change in accounting principle totalling  
$11,547 in 1999.                                                        

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

OVERVIEW                                                                        

 The consolidated financial statements of Harbor Global include its real
estate management and investment management operations in Russia, Polish and    
Eastern European venture capital investment and management operations, Polish   
and Eastern European real estate management operations, timber harvesting and   
sales operations in Russia and gold exploration operations in Russia.           

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997      

  Consolidated Operations.  For fiscal year 1999, Harbor Global reported a
net loss from continuing operations of $32.2 million as compared to $45.8       
million for fiscal year 1998, reflecting a decrease in net losses of $13.6      
million. The decrease was attributable, in large part, to increased             
profitability of the Meridian Commercial Towers in 1999 and the adverse         
consequences of the Russian financial crisis in 1998. For fiscal year 1999,     
losses from discontinued brokerage operations were $1.4 million, and as a result
of a required change in accounting principle, Harbor Global reported the impact 
of the write-off of unamortized capitalized start-up costs of $11.5 million.    

 For fiscal year 1998, Harbor Global reported a net loss from continuing
operations of $45.8 million as compared to $13.6 million for fiscal year 1997,  
reflecting an increase of $32.2 million. The increase was attributable          
principally to losses incurred as a result of the Russian financial crisis and a
fire disruption at the timber operation. For fiscal year 1998, Harbor Global    
reported losses from discontinued Russian brokerage and banking operations of   
$10.7 million as compared to income of $6.0 million in fiscal year 1997,        
reflecting a decrease in income of $16.7 million.                               

Real Estate Management and Investment Management Operations in        
Russia.  Revenues from the Russian real estate management and investment        
management operations increased by $1.8 million in 1999 to $10.4 million. This  
was principally a result of increased rental revenues at the Meridian Commercial
Tower. The net loss from continuing operations declined by $13.9 million to $1.6
million as certain costs and write-downs incurred in 1998 as a result of the    
Russian financial crisis were non-recurring in 1999. The increased profitability
of the Meridian Commercial Tower operations also contributed to the reduction in
the net loss. In 1998, Harbor Global had losses of $6.3 million associated with 
cost basis adjustments of certain securities in the Pioneer First Investment    
Fund. Additionally, Harbor Global incurred increased bad debt expense and       
foreign currency losses in connection with the Russian financial crisis in 1998.
In 1997, the net loss from continuing operations was approximately $3.8 million,
which was related to losses at the management and stockholder services companies
that were partially offset by security gains in the Pioneer First Investment    
Fund.                                                                           

Losses from the discontinued Russian banking and brokerage operations 
totaled approximately $1.4 million and $10.1 million in 1999 and 1998,          
respectively. In 1997, the discontinued Russian banking and brokerage operations
reported income of approximately $6.0 million.                                  

     Polish and Eastern European Venture Capital.  Harbor Global had losses from
its Central and Eastern European venture capital operations of $0.8 million in  
1999, $0.9 million in 1998 and $0.1 million in 1997. Losses in 1999 reflect a   
$0.4 million write off of start up costs associated with the cumulative effect  
of a change in accounting principle as well as costs associated with the        
development of the venture capital funds. The 1998 losses relate to write downs 
to certain portfolio investments.                                               

     Polish and Eastern European Real Estate Management.  Harbor Global's Polish
and Eastern European real estate management operations reported losses of $5.0  
million in 1999, $4.9 million in 1998 and $3.4 million in 1997. Most of the     
losses were attributable to costs associated with the development of Harbor     
Global's Polish and Eastern European real estate investments and related        
management operations. The losses increased in 1999 and 1998, over those        
incurred in 1997, due to losses recorded in connection with Harbor Global's     
investment in the PBO Property Fund in 1998.                                    

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Timber Business.  The results of the timber business are substantially
attributable to the operations of Forest-Starma, which commenced in January     
1997. Forest-Starma has developed a modern logging camp, including a harbor,    
from which it exports timber to markets in the Pacific Rim. In 1995, Closed     
Joint-Stock Company "Amgun-Forest" and Closed Joint-Stock Company "Udinskoye,"  
Harbor Global's other Russian timber ventures, each executed a 49 year lease    
relating to timber harvesting.                                                  

While Forest-Starma harvests timber and incurs the resulting operating
expenses throughout the year, it ships timber from mid-April through December.  
As a result, Forest-Starma has incurred, and expects to continue to incur,      
seasonal operating losses from fixed costs in the first quarter of Harbor       
Global's fiscal year.                                                           

   In 1999, the timber business reported a net loss, prior to the cumulative
effect of a change in accounting principle, of $24.7 million, compared to a net 
loss of $21.8 million in 1998. The 1999 net loss includes a reduction in the    
carrying value of timber equipment and deferred development costs of            
approximately $15.3 million. The $15.3 million adjustment to the cost basis of  
the project was recorded in connection with Pioneer Group's realization of      
certain US tax benefits. Prior to the cost basis adjustment, the timber         
business' net loss was $9.4 million. The reduction in net loss from 1998 to 1999
was principally associated with increased production and prices in 1999. Also,  
in 1998 Harbor Global wrote off certain costs incurred in connection with the   
Amgun and Udinskoye projects. In 1997, the timber business reported a net loss  
of $4.4 million.                                                                

     Timber Production and Sales.  Harbor Global had timber shipments of 336,000
cubic meters in 1999, compared to 280,000 cubic meters in 1998 and 194,000 cubic
meters in 1997. Production amounted to 313,000 cubic meters in 1999, compared to
248,000 cubic meters in 1998 and 257,000 cubic meters in 1997. Revenue increased
to $14.4 million in 1999, up from $10.5 million in 1998 and $11.9 million in    
1997. The average realized price of timber was $43 per cubic meter in 1999,     
compared to $37 in 1998 and $61 in 1997. Forest-Starma expects to produce over  
325,000 cubic meters in 2000.                                                   

  Production in 1998 was hindered by a fire disruption, which required the
redeployment of logging crews and equipment to contain the fire. There was      
damage to approximately 7.8 million cubic meters of standing timber on 76,000   
hectares, as well as 5,500 cubic meters of decked logs. Harbor Global does not  
believe the fire damage will have a material impact on production over the next 
several years. Harbor Global is continuing negotiations with the territorial    
government for both replacement and additional cutting rights.                  

 Cost of Goods Sold.  Forest-Starma values its inventory at the lower of
cost or market under the full absorption accounting method and accordingly,     
includes operating costs such as payroll, fuel, spare parts, site related       
general and administrative expenses, depreciation and amortization and other    
taxes in the cost of goods sold.                                                

Third-Party Debt.  Forest-Starma had $5.0 million of external debt    
outstanding at December 31, 1999. Scheduled principal and interest payments for 
2000 are expected to aggregate $1.7 million. Pioneer Group elected to prepay    
this third-party financing obligation in the second quarter of 2000 and expects 
that it will be repaid in full prior to the distribution.                       

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999        

     Consolidated Operations.  For the three months ended March 31, 2000, Harbor
Global reported a net loss from continuing operations of $2.3 million, as       
compared to a loss from continuing operations before the change in accounting   
principle of $2.1 million for the first quarter of 1999. In the first quarter of
1999, Harbor Global wrote-off $11.5 million of capitalized start-up costs, which
represented the cumulative effect of a change in accounting principle.          

Real Estate Management and Investment Management Operations.  Revenues from     
Russian real estate management and investment management operations for the     
three months ended March 31, 2000, were $1.9 million, as compared to $2.7       
million in the first quarter of 1999. The decrease is attributable to a         

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decrease in rental revenues at the Meridian Commercial Tower. During the first  
quarter of 2000, the operations reported a net loss from continuing operations  
of $0.3 million, a decrease of $1.1 million compared to the corresponding period
in 1999. The decrease was attributable to lower rental revenue at the Meridian  
Commercial Towers in 2000 coupled with a non-recurring tax credit recorded in   
1999. The decrease in rental revenue was attributable to the restructuring of   
certain leases, which increased the term of these leases in exchange for lower  
current lease rates. The lease restructuring was designed to maintain the       
present value of these leases in view of lower market rates.                    

Polish and Eastern European Venture Capital.  The Polish and Eastern European   
venture capital operations reported income of approximately $0.1 million for the
three months ended March 31, 2000, as compared to a loss of $0.2 million in the 
comparable period in 1999. The decrease was largely attributable to operating   
cost reductions.                                                                

Polish and Eastern European Real Estate Management.  The Company's Polish and   
Eastern European real estate management operations reported losses of $0.8      
million in the first three months of 2000, compared to losses of $1.3 million in
the same period in 1999. The improvement principally represents management fees 
and cost reductions associated with the closing of the Polish Real Estate Fund  
in late 1999. Most of the first quarter 2000 losses were attributable to costs  
associated with the development of the PBO Property Fund.                       

Timber Business.  The results of the timber business are substantially          
attributable to the operations of Forest-Starma. While Forest-Starma harvests   
timber and incurs the resulting operating expenses throughout the year, it      
typically ships timber from mid-April through December. As a result, Forest     
Starma has incurred, and expects to continue to incur, operating losses from    
fixed costs in the first three months of each year. Harbor Global's timber      
business reported losses of $1.3 million in the first quarter of 2000 compared  
to $1.0 million in the first quarter of 1999. There were no timber shipments in 
the three months ended March 31, 2000 nor in the same period of 1999.           
Forest-Starma produced approximately 65,200 cubic meters of timber in the first 
three months of 2000, as compared to 85,600 cubic meters of timber during the   
comparable period in 1999. The reduction in production is attributable to       
concerted efforts to realize greater overall value through improvements in grade
quality.                                                                        

LIQUIDITY AND CAPITAL RESOURCES                                                 

     Harbor Global's liquidity needs have historically been met through advances
and capital contributions made by Pioneer Group. Other than the $25 million to  
be contributed by Pioneer Group to Harbor Global prior to the distribution,     
Harbor Global's cash is generally held by its wholly or majority owned          
subsidiaries, and accordingly, it is not available for general corporate        
purposes. The $25 million that Pioneer Group will contribute prior to the       
distribution will be used to manage the liquidation of Harbor Global's assets   
and to discharge certain other obligations. Based upon budget projections,      
Harbor Global currently has sufficient cash, without liquidating any of its     
assets, to continue to operate its assets for approximately three years. As     
such, it may be necessary for Harbor Global to liquidate some of its assets     
within three years of the distribution date to continue to operate its remaining
assets pending their liquidation. If Harbor Global is unable to liquidate some  
of its assets, it will require additional funding. Harbor Global may not be able
to obtain additional funding, either in the form of additional capital or debt  
financing, because of the nature of its operations, namely its intent to hold   
its assets for liquidation and its limited duration. In addition, after the     
distribution and the merger, Pioneer Group will not own any Harbor Global common
shares, and Pioneer Group and Harbor Global will operate as two wholly          
independent companies. As an independent company, Harbor Global will not be able
to obtain additional funding from Pioneer Group.                                

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

   Harbor Global monitors its exposure to adverse changes in interest rates,
foreign currency exchange rates and the market price paid for timber.           
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  Harbor Global is exposed to certain changes in foreign currency exchange
rates, primarily as a result of its operations in Russia and Poland. The        
functional currency of its Russian operations is the U.S. dollar, while the     
functional currency of its Polish operations is the local currency. All of these
operations have some costs denominated in the local currency, which acts as a   
natural hedge to the revenues denominated in local currencies.                  

     In addition, Harbor Global conducts timber operations in Russia. The prices
it receives for its timber products are denominated in U.S. dollars. However, as
most of the timber produced is sold to the Asian markets, the U.S. dollar prices
have been influenced by changes in the foreign currency exchange rates. The     
revenues of this business are also subject to changes in the market price paid  
for timber.                                                                     

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BUSINESS

   Harbor Global is a Bermuda limited duration company organized in May 2000
to receive various businesses and assets currently owned or operated by Pioneer 
Group. Currently, Harbor Global is a wholly owned subsidiary of Pioneer Group.  
Following the distribution, all of the outstanding Harbor Global common shares  
will be held pro rata by the stockholders of Pioneer Group.                     

   The assets of Harbor Global consist primarily of the following businesses
and assets, each of which is currently owned or operated by Pioneer Group:      

  - real estate management and investment management operations in Russia;

 - Polish and Eastern European venture capital investment and management
operations;                                                       

- Polish and Eastern European real estate management operations;      

- timber harvesting and sales in Russia;                              

- gold exploration operations in Russia;                              

   - the proceeds from the sale of Pioneer Group's gold mining operations in
Ghana; and                                                        

- $25 million in cash.                                                

Harbor Global will seek to liquidate its assets in a timely fashion on
economically advantageous terms. Harbor Global will operate its assets as going 
concern businesses until they are liquidated. Harbor Global's memorandum of     
association provides that the liquidation of its assets will be completed upon  
the earlier of the fifth anniversary of the date of the distribution of Harbor  
Global common shares to its shareholders or the distribution by Harbor Global of
all its assets to its shareholders. If Harbor Global has not liquidated all its 
assets before the fifth anniversary of the distribution date, the Harbor Global 
board of directors, in its discretion, may authorize Harbor Global to continue  
to operate its assets for up to three additional one year periods.              

  Stephen G. Kasnet will be the President and Chief Executive Officer, and
Donald H. Hunter will be the Chief Operating Officer of Harbor Global. Mr.      
Kasnet is currently the President, and Mr. Hunter is currently the Chief        
Operating Officer and Senior Vice President of Pioneer Global Investments, a    
division of Pioneer Group. As officers of Pioneer Global Investments, Mr. Kasnet
and Mr. Hunter operate substantially all of the businesses that will be         
conducted by Harbor Global following the distribution. Prior to the             
distribution, Harbor Global will enter into an administration and liquidation   
agreement with Calypso Management LLC under which Calypso Management will manage
the liquidation of Harbor Global and operate Harbor Global's assets as going    
concern businesses pending their liquidation. Mr. Kasnet is the President and   
Chief Executive Officer, and Mr. Hunter is the Chief Operating Officer and Chief
Financial Officer of Calypso Management. See "Certain Relationships and Related 
Transactions" in this information statement for more information about the      
administration and liquidation agreement.                                       

Harbor Global does business in countries outside of the United States,
primarily in Russia and Poland. In the year ended December 31, 1999, nearly all 
of Harbor Global's revenues were derived from operations outside of the United  
States. Harbor Global's businesses and assets are described below, together with
the principal strategies that Harbor Global currently intends to employ to sell 
or liquidate the assets.                                                        

Harbor Global intends to change the names of its subsidiaries that    
currently contain the "Pioneer" name before the distribution. Accordingly, the  
names of some of the Harbor Global subsidiaries used in this information        
statement will be changed. For more information see "The Distribution -- The    
Distribution Agreement -- Names" in this information statement.                 

RUSSIAN REAL ESTATE AND INVESTMENT MANAGEMENT                                   

  Ownership Structure.  Harbor Global's Russian real estate management and
investment management operations are consolidated under its wholly owned        
Delaware subsidiary, Pioneer Omega, Inc. Pioneer                                
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Omega owns an approximately 82% interest in Pioneer First Russia, Inc., a       
Delaware corporation, and the International Finance Corporation, a member of the
World Bank Group, owns an approximately 18% interest in Pioneer First Russia.   
Pioneer First Russia in turn operates through two wholly owned subsidiaries,    
Closed Joint-Stock Company "Pioneer First," an investment management company    
(JSC Pioneer First), and Closed Joint-Stock Company "Pioneer Services," a       
stockholder services company (JSC Pioneer Services). Both JSC Pioneer First and 
JSC Pioneer Services are Russian joint stock companies.                         

In addition, Pioneer Omega, through its two wholly owned Delaware     
subsidiaries, Lucinia, Inc. and Theta Enterprises, Inc., holds an approximately 
52% interest in Pioneer First Investment Fund, a Russian joint stock company    
managed by JSC Pioneer First.                                                   

Currently, approximately two million Russian stockholders hold the    
remaining approximately 48% interest in Pioneer First Investment Fund.          

Pioneer First Investment Fund.  Pioneer First Investment Fund invests 
directly in real estate and, to a lesser extent, securities of Russian          
companies. A significant portion of the assets of Pioneer First Investment Fund 
consists of its ownership of the Meridian Commercial Tower, an 18-story, 22,600 
square meter office building in Moscow, Russia. The Meridian Commercial Tower is
primarily occupied by American and European corporate tenants and is managed by 
PREA, LLC (formerly Pioneer Real Estate Advisors, Inc.), Harbor Global's real   
estate management subsidiary. Pioneer First Investment Fund has agreed to pay   
PREA a property management fee of 5% of gross revenues less any value added     
taxes or similar taxes. In 1999, Pioneer First Investment Fund paid PREA        
approximately $433,000 in property management fees.                             

 PREA leases the Meridian Commercial Tower from Pioneer First Investment
Fund under a master lease agreement and, in turn, subleases the premises to     
tenants. The initial term of the master lease agreement between Pioneer First   
Investment Fund and PREA will expire in July 2001, but may be extended at the   
option of PREA for two additional five-year periods. Under the master lease     
agreement PREA pays Pioneer First Investment Fund an amount equal to gross      
revenues less building operating expenses, the PREA property management fee     
described above and any value added taxes or similar taxes. In 1999, Meridian   
Commercial Tower net lease revenues were approximately $8.6 million and         
accounted for approximately 90% of the revenues of Pioneer First Investment     
Fund.                                                                           

    The remaining assets of Pioneer First Investment Fund primarily consist of
real estate related securities, including a 25% interest in the Cosmos Hotel,   
located in Moscow, Russia, and securities in Russian companies, some of which   
are illiquid.                                                                   

    JSC Pioneer First.  Under a management agreement between JSC Pioneer First
and Pioneer First Investment Fund, JSC Pioneer First has agreed to provide      
management services to Pioneer First Investment Fund for an annual fee of 5% of 
gross assets less any value added taxes or similar taxes. In 1999, Pioneer First
Investment Fund paid JSC Pioneer First an aggregate management fee of           
approximately $3.1 million.                                                     

JSC Pioneer First also serves as an investment manager to two Russian 
open-end unit investment funds having an aggregate market value of $1.8 million 
at March 31, 2000. Pioneer First Unit Investment Fund was organized by Pioneer  
Group in 1996 and is one of Russia's first open-end unit investment funds.      
Pioneer First Unit Investment Fund invests primarily in Russian government      
bonds. Pioneer First Liquid Shares was organized by Pioneer Group in 1997 and   
invests primarily in Russian securities and government bonds.                   

 As compensation for its investment management services to Pioneer First
Unit Investment Fund and Pioneer First Liquid Shares, JSC Pioneer First receives
annual management fees equal to three percent of the annual net asset value of  
the Pioneer First Unit Investment Fund and three and one-half percent of the    
annual net asset value of Pioneer First Liquid Shares. In 1999, Pioneer First   
Unit Investment Fund and Pioneer First Liquid Shares paid JSC Pioneer First     
aggregate management fees of approximately $30,000.                             
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    JSC Pioneer Services.  Through December 1999, JSC Pioneer Services was the
transfer agent to Pioneer First Investment Fund and Pioneer First Unit          
Investment Fund. JSC Pioneer Services maintained the funds' shareholder         
registers and provided customer service and technical support to the funds. As a
result of new legislation enacted by the Russian Federal Securities Commission, 
Russian funds are currently prohibited from using a registrar which is directly 
related to the fund's management company and requires a Russian registrar to    
have at least five stockholders and maintain at least 50 registers. Because JSC 
Pioneer Services does not meet these three Russian registrar requirements, as of
December 23, 1999, JSC Pioneer Services was no longer licensed to act as a      
registrar within the Russian Federation.                                        

    As a result, JSC Pioneer Services entered into a service contract with the
National Registry Company (NRC) whereby JSC Pioneer Services agreed to pay NRC  
an annual fee of $50,200 for the use of its registrar license, and five         
employees of JSC Pioneer Services became employed by NRC to service Pioneer     
First Investment Fund and Pioneer First Unit Investment Fund. The five JSC      
Pioneer Services employees are compensated by JSC Pioneer Services.             

   JSC Pioneer Services' operations are supported solely by a transfer agent
fee from Pioneer First Investment Fund. In 1999, Pioneer First Investment Fund  
paid JSC Pioneer Services a transfer agent fee of approximately $950,000.       

    In 1999, 1998 and 1997, Harbor Global's Russian real estate management and
investment management operations had revenues and net income (loss) from        
continuing operations as shown in the table below:                              

                                                        [Enlarge/Download Table]

                                                            1999      1998     1997  
                                                            -----    ------    ----- 
                                                                 (IN MILLIONS)       
                                                                                     
Revenues................................................... $10.4    $  8.6    $ 8.0 
Net Income (Loss).......................................... $(1.6)   $(15.5)   $(3.8)

Minority Interest in Pioneer First Russia.  In connection with the    
investment by the International Finance Corporation in Pioneer First Russia,    
International Finance Corporation, Pioneer Omega, Inc. and Pioneer First Russia 
entered into a stockholders agreement and a put and call agreement. Under the   
stockholders agreement, Pioneer Omega may not transfer or pledge its shares of  
Pioneer First Russia common stock without the consent of the International      
Finance Corporation if, as a result of the transfer or pledge, Pioneer Omega    
would cease to own at least 51% of the outstanding shares of Pioneer First      
Russia. In addition, under the stockholders agreement, as long as the           
International Finance Corporation is a stockholder of Pioneer First Russia, the 
International Finance Corporation is entitled to nominate one person to the     
Pioneer First Russia board of directors. The approval of the International      
Finance Corporation nominated director is required to take the actions that may 
materially affect the business of Pioneer First Russia.                         

   Under the put and call agreement, from October 2000 to October 2004, upon
written notice to Pioneer Omega, the International Finance Corporation will have
the right to cause Pioneer Omega to purchase all of its shares of Pioneer First 
Russia common stock. From October 2004 to October 2006, upon written notice to  
the International Finance Corporation, Pioneer Omega will have the right to buy 
all of the International Finance Corporation's shares of Pioneer First Russia   
common stock. In each case, the purchase price to be paid by Pioneer Omega is   
equal to the greater of the International Finance Corporation's pro rata share, 
calculated on a fully diluted basis, of Pioneer First Russia's net asset value  
on a specified date not more than 30 or less than 60 days from the date of the  
notice or 12 times the three year average of the product of net income divided  
by the weighted average of the number of shares outstanding during such period  
times the weighted average of shares held by the International Finance          
Corporation during such period.                                                 

    Under the put and call agreement, if the International Finance Corporation
proposes to transfer any of its shares to any party, Pioneer Omega has a right  
of first refusal to purchase the shares proposed to be transferred. In addition,
if Pioneer First Russia proposes to issue any of its common stock, or a security

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convertible into shares of its common stock, the International Finance          
Corporation has a preemptive right to purchase its pro rata portion of the      
securities to be issued.                                                        

    Insurance.  Harbor Global maintains Overseas Private Insurance Corporation
(OPIC) political risk insurance in an amount that would protect up to 90% of its
equity investment in the Pioneer First Investment Fund and loans as reduced by  
cumulative losses.                                                              

   Asset Realization Strategy.  JSC Pioneer First is seeking to increase the
value of the Pioneer First Investment Fund through a process of restructuring   
the Pioneer First Investment Fund portfolio by:                                 

- selling securities which are considered illiquid;                   

- increasing the value of its real estate holdings through the        
redevelopment of the Cosmos Hotel;                                

- investing in real estate and in more liquid securities;             

 - improving the value of its investments in portfolio companies through
active board representation; and                                  

   - exploring alternatives to reduce the number of Pioneer First Investment
Fund stockholders.                                                

PREA is managing, on behalf of Pioneer First Investment Fund, the     
redevelopment of the Cosmos Hotel, a moderately priced hotel with approximately 
1,770 rooms. PREA currently plans to convert a portion of the hotel into        
commercial office space and corporate apartments and upgrade the remaining hotel
facilities. Harbor Global believes that restructuring the Pioneer First         
Investment Fund portfolio as described above will maximize the value of Pioneer 
First Investment Fund in a sale.                                                

  In addition, JSC Pioneer First is seeking to increase the asset level of
the two Russian unit investment funds it manages. Harbor Global believes that by
increasing JSC Pioneer First's assets under management, it will be more likely  
to realize economies of scale and to attract additional institutional investors,
which Harbor Global believes will, in turn, maximize the value of Pioneer First 
Russia in a sale.                                                               

 Competition.  JSC Pioneer First is seeking to increase its assets under
management by competing for institutional investors for the two Russian unit    
investment funds it manages. However, many of its competitors have substantially
greater resources to attract institutional investors.                           

Employees.  At May 31, 2000, Pioneer First Russia and its subsidiaries
together with Pioneer First Investment Fund employed 44 persons.                

POLISH AND EASTERN EUROPEAN REAL ESTATE                                         

Ownership Structure.  Harbor Global's Polish and Eastern European real
estate investment and management operations are conducted by PREA, a wholly     
owned Delaware subsidiary of Harbor Global, and its subsidiaries. PREA provides 
real estate investment opportunities in Poland and Eastern Europe to            
institutional investors through two pooled investment funds, the Polish Real    
Estate Fund and the PBO Property Fund, LLC. PREA is based in Boston and conducts
its operations in Russia through a representative office in Moscow, and in      
Poland through a wholly owned subsidiary, Pioneer Real Estate Advisors Poland   
Sp. z o.o., a Polish limited liability company.                                 

     Polish Real Estate Fund.  In October 1999, PREA established the Polish Real
Estate Fund, a Polish real property fund with committed capital of $33.5 million
created to invest in a diversified portfolio of commercial real estate in       
Poland, including office space, warehouse/distribution centers and retail       
centers. PREA has committed to invest $5.7 million and other Polish and         
non-United States institutional investors have committed to invest $27.8        
million. As of May 31, 2000, PREA had invested approximately $285,000 in the    
Polish Real Estate Fund and the other investors had invested a total of $1.57   
million. Currently, none of the Polish Real Estate Fund's committed capital has 
been invested. After October 20, 2001, the Polish Real Estate Fund may be       
liquidated by a vote of stockholders representing three-fourths of the fund's   
capital if less than one-third of the fund's capital is invested or committed to
be invested as of                                                               

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October 20, 2001, or if less than two-thirds of the fund's capital is invested  
or committed to be invested as of October 21, 2002.                             

 Pioneer Real Estate Advisors Poland has agreed to act as the investment
advisor of the Polish Real Estate Fund for an annual base advisory fee equal to 
2% of the Polish Real Estate Fund's net capital and after October 2002, equal to
1 1/2% of net capital, as defined in the investment advisory services agreement.
In addition, after the Polish Real Estate Fund stockholders have received a     
return of their original capital contributions plus a 10% cumulative annual     
return, Pioneer Real Estate Advisors Poland is entitled to an additional annual 
incentive advisory fee. In 1999, the Polish Real Estate Fund paid Pioneer Real  
Estate Advisors Poland approximately $110,000 in advisory fees.                 

   Under its investment advisory services agreement with Pioneer Real Estate
Advisors Poland, the Polish Real Estate Fund may terminate the agreement upon   
the written resolution of its stockholders holding two-thirds of its voting     
shares if Pioneer Real Estate Advisors Poland ceases to be directly or          
indirectly controlled by Pioneer Group. As a result of the distribution by      
Pioneer Group of Harbor Global shares of common shares to Pioneer Group         
stockholders, the Polish Real Estate Fund stockholders will have the right to   
terminate the advisory services agreement because Pioneer Group will cease to   
directly or indirectly control Pioneer Real Estate Advisors Poland. PREA is     
currently seeking a waiver of the right to terminate the advisory services      
agreement from the Polish Real Estate Fund stockholders and expects to obtain   
the waiver prior to the distribution date. If this waiver is not obtained, the  
value of Harbor Global's carried interest in the Polish Real Estate Fund and any
potential benefit derived from this carried interest to Harbor Global may be    
materially adversely affected, which in turn may adversely affect the results of
operations and financial condition of Harbor Global's Polish and Eastern        
European real estate management business.                                       

 PREA also provides advisory services to third parties. The scope of its
advisory services includes property management, facilities management,          
development management, feasibility and valuation analysis, fund management and 
corporate advisory services.                                                    

PBO Property Fund.  In May 1998, PREA and Banc One Capital Holdings   
Corporation, established the PBO Property Fund, LLC, a pooled investment fund   
sponsored by the Overseas Private Investment Corporation (OPIC). PBO Property   
Capital, LLC, a 99% owned Delaware subsidiary of PREA, manages the PBO Property 
Fund. The PBO Property Fund will consider investing in a broad array of         
commercial property projects in Central and Eastern Europe and the independent  
states of the former Soviet Union, including:                                   

- warehousing/distribution centers;                                   

- office buildings;                                                   

- light assembly/manufacturing facilities;                            

- big-box, single tenant retail space; and                            

- business hotels with master lease support.                          

  The PBO Property Fund is designed to be funded with up to $80 million of
equity from institutional investors and up to $160 million of debt guaranteed by
OPIC. PREA is actively seeking, directly and through third parties, capital     
commitments for the PBO Property Fund. As of June 16, 2000, PREA, through PBO   
Property Capital, had invested approximately $167,300 in the PBO Property Fund. 
Additionally, Pioneer Group has invested approximately $1.5 million in the PBO  
Property Fund.                                                                  

   Currently, each of PREA, together with PBO Property Capital, and Banc One
Capital Holdings holds approximately 50% of the membership interests in the PBO 
Property Fund. Under the PBO Property Fund limited liability company agreement, 
members of the PBO Property Fund are entitled to receive cash distributions     
first equal to their initial capital contributions and then in preferential     
amounts as specified in the PBO Property Fund limited liability company         
agreement. Before paying cash distributions to its members, the PBO Property    
Fund must pay its expenses, including the payment of an asset management        

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fee to PBO Property Capital and the payment of amounts due to OPIC in connection
with the financing agreement between OPIC and the PBO Property Fund.            

    PBO Property Capital, as the manager of the PBO Property Fund, is entitled
to receive an annual asset management fee equal to 2% of the aggregate amount of
committed capital. In 1999, the PBO Property Fund paid PBO Property Capital an  
aggregate management fee of $825,000.                                           

Asset Realization Strategy.  PREA is currently negotiating with new   
American and Polish investors in an effort to increase the capital commitments  
in the Polish Real Estate Fund to approximately $55 million. PREA will continue 
to seek institutional investors for its Polish Real Estate Fund and PBO Property
Fund to increase their committed capital and, in turn, maximize their value in a
sale.                                                                           

  Competition.  PREA is actively competing for institutional investors for
its Polish Real Estate Fund and PBO Property Fund. However, PREA must compete   
with a large number of real estate firms, many of which have substantially more 
resources than those available to PREA.                                         

  Employees.  At May 31, 2000, PREA and its subsidiaries had 36 employees,
including two expatriate employees provided by PIOGlobal Corporation, a Delaware
corporation and wholly owned subsidiary of Harbor Global, and 12 employees of   
the Meridian Commercial Tower.                                                  

POLISH VENTURE CAPITAL                                                          

     Ownership Structure.  Harbor Global holds minority interests in two venture
capital funds partnerships, Pioneer Poland U.S., L.P. and Pioneer Poland UK,    
L.P. Together, Pioneer Poland U.S., L.P. and Pioneer Poland UK, L.P. constitute 
the Pioneer Poland Fund. Pioneer Poland U.S. (Jersey) Limited, a wholly owned   
subsidiary of Harbor Global, holds approximately a 7% interest in Pioneer Poland
U.S., L.P. and approximately a 9% interest in Pioneer Poland UK, L.P. In        
addition, Pioneer Poland U.S. Limited holds a 59.5% interest in the general     
partner of the Pioneer Poland Fund.                                             

Pioneer Poland Fund.  At March 31, 2000, the Pioneer Poland Fund had  
approximately $60 million in committed capital of which approximately $45.8     
million has been invested in 11 privately held Polish companies engaged in:     

- computer distribution;                                              

- computer systems integration;                                       

- stainless steel distribution;                                       

- the restaurant business;                                            

- food distribution;                                                  

- wood products manufacturing;                                        

- automotive parts distribution;                                      

- the video rental business; and                                      

- disposable diaper manufacturing.                                    

Pioneering Management Limited, an indirect wholly owned subsidiary of 
Harbor Global, manages the Pioneer Poland Fund. Pioneering Management Limited   
entered into a sub-advisory contract with Pioneer Investments Poland Sp. z o.o. 
by which Pioneer Investments Poland manages the investments and makes investment
decisions on behalf of the Pioneer Poland Fund. Under its joint management      
agreement with the Pioneer Poland Fund, Pioneering Management is entitled to a  
management fee equal to 2% of the carried capital of the fund. In 1999, the     
Pioneer Poland Fund paid Pioneering Management Limited a management fee of $1.2 
million.                                                                        

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   Asset Realization Strategy.  The Pioneer Poland Fund currently intends to
maximize stockholder value by selling its investments in its portfolio          
companies. Harbor Global expects the Pioneer Poland Fund to be sold or fully    
liquidated by the end of 2003.                                                  

     Competition.  The Pioneer Poland Fund currently does not intend to seek new
investments.                                                                    

 Employees.  At May 31, 2000, the Polish venture capital business had 13
employees.                                                                      

RUSSIAN TIMBER                                                                  

Ownership Structure.  Harbor Global's Russian timber operations are   
conducted through its indirect subsidiaries Closed Joint-Stock Company          
"Forest-Starma," Closed Joint-Stock Company "Udinskoye" and Closed Joint-Stock  
Company "Amgun-Forest". These three companies will be consolidated under Pioneer
Forest, LLC, a wholly owned Delaware subsidiary of Harbor Global. Udinskoye is a
wholly owned subsidiary, and Amgun-Forest is an approximately 99.5% owned       
subsidiary of Forest-Starma. Of the three companies, Forest-Starma is the only  
company currently engaged in timber operations. Forest-Starma, which is located 
on Siziman Bay in the Vanino district of the Khabarovsk Territory of the Russian
Far East, owns and operates a modern logging camp, including a harbor facility, 
from which it exports timber to markets in the Pacific Rim, primarily Japan and 
South Korea.                                                                    

  Leasehold and Cutting Rights.  Forest-Starma, Amgun-Forest and Udinskoye
have each been granted long-term leases that provide significant leasehold      
acreage and annual cutting rights. In the aggregate, the three subsidiaries have
been granted long-term leasehold rights comprising 1,076,500 hectares           
(approximately 2.7 million acres), with annual cutting rights of approximately  
1.2 million cubic meters. Each of the leases has a 49-year term with expiration 
dates ranging from 2046 to 2047. The current leasehold rights of each of the    
subsidiaries appear in the table below:                                         

                                                        [Enlarge/Download Table]

                                                FOREST-STARMA  AMGUN-FOREST  UDINSKOYE
                                                -------------  ------------  ---------
                                                                                      
Hectares (Acres)...............................    390,100         485,400    201,000 
                                                  (964,000)     (1,200,000)  (497,000)
Annual Cutting Rights (m(3))...................    555,000         350,000    300,000 

  Currently, the local timber authorities are reviewing the cutting rights
for Forest-Starma and Udinskoye. Because of losses due to natural drying and    
other causes, Harbor Global expects that its annual cutting rights in those     
areas where it currently has leasehold rights will be reduced. However, Harbor  
Global is currently negotiating with the territorial government to obtain       
replacement cutting rights in the surrounding area.                             

In addition, Harbor Global has commenced the process of unifying the  
Udinskoye and Forest-Starma leaseholds. This process requires that Udinskoye    
tender its leasehold rights back to the Russian state in order for the Russian  
state to tender these rights to Forest-Starma.                                  

Timber Operations.  Forest-Starma seeks to harvest timber according to
international sustainable development standards using advanced planning and     
implementation of the management practices as defined in the United States      
Forest Service stewardship guidelines and the United Nations Conference on      
Environment and Development principles. Production crews consisting, in the     
aggregate, of four harvesters, eight skidders, and five processors form the     
nucleus of the logging operation. The harvesters cut the trees, which are then  
skidded to processors that delimb the timber. The logs are hauled on company    
constructed roads by log trucks approximately 50 kilometers to a lower landing  
log yard for sorting and scaling prior to shipment. The lower landing is        
equipped with log loaders and other equipment necessary for maintaining the log 
yard and delivering sorted logs to the self-constructed harbor for shipment.    
Sorted logs are delivered to the Siziman Bay harbor based upon a manifest       
received from Forest-Starma's marketing and sales agent, Rayonier, Inc. The logs
are then delivered to the dock and placed on ships by crane. Forest-Starma has  
constructed and maintains a self-contained camp with living quarters for between
250 and 300 workers, a modern maintenance and parts facility, on-site offices   
and sophisticated communications equipment.                                     

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 During the period between January and mid-April, the Siziman Bay harbor
typically is frozen, which prevents the delivery of harvested timber. In January
2000, Forest-Starma entered into an agreement with Rayonier, Inc. to receive    
prepayment for timber production during this period. This arrangement allows    
Forest-Starma to cover ongoing expenditures prior to commencement of the        
shipping season. Forest-Starma has already shipped sufficient amounts of logs to
Rayonier to repay all advances made to Forest-Starma under this agreement.      

    In 1999, Forest-Starma shipped 56% of its timber to ten customers in South
Korea, 35% of its timber to six customers in Japan and 9% of its timber to three
customers in China. The following chart shows Forest-Starma's total production  
and shipments of timber during the last three years.                            

                                                                [Download Table]

                                                        1999     1998     1997  
                                                       -------  -------  -------
                                                                                
Timber Produced (m(3))................................ 313,000  248,000  257,000
Timber Shipped (m(3))................................. 336,000  280,000  194,000

A three-year financial summary for the timber business is shown below:

                                                        [Enlarge/Download Table]

                                                            1999      1998     1997  
                                                           ------    ------    ----- 
                                                                 (IN MILLIONS)       
                                                                                     
Revenues.................................................. $ 14.4    $ 10.5    $11.9 
Net Income (Loss)......................................... $(35.3)   $(21.8)   $(4.4)
Total Assets.............................................. $ 19.8    $ 48.3    $55.2 

     Insurance.  In connection with Harbor Global's investment in Forest-Starma,
it maintains OPIC political risk insurance in an amount that would protect up to
90% of its equity investment in Forest-Starma and loans as reduced by cumulative
losses. In addition, Harbor Global has OPIC business income loss insurance of up
to $5 million for Forest-Starma.                                                

    Asset Realization Strategy.  Harbor Global is actively exploring strategic
alternatives with respect to its timber operations, including joint venture     
opportunities and the sale of Pioneer Forest or its subsidiaries. Harbor Global 
is also currently pursuing the potential sale of Amgun-Forest.                  

    Employees.  At May 31, 2000, Forest-Starma had 480 employees, including 11
expatriate employees provided by PIOGlobal Corporation, a Delaware corporation  
and wholly owned subsidiary of Harbor Global.                                   

RUSSIAN GOLD EXPLORATION                                                        

   Ownership Structure.  Harbor Global's Russian gold exploration operations
are conducted through its indirect majority owned Russian subsidiary, Closed    
Joint-Stock Company "Tas-Yurjah" Mining Company. Harbor Far East Exploration,   
LLC, a wholly owned subsidiary of Harbor Global, will own a 94.5% direct        
interest and a 0.6% indirect interest in Tas-Yurjah.                            

  Gold Exploration.  Tas-Yurjah conducts the exploration of potential gold
mining properties over concession areas in the Ayano-Maysky district of the     
Khabarovsk Territory. Tas-Yurjah has secured four licenses which permit it to   
conduct geological exploration activities over aggregate concession areas       
totaling 909.7 square kilometers. Two of these licenses also allow for mining in
their respective concession areas and require that production commence at       
specified levels in 2001 to maintain their validity. In addition, Tas-Yurjah    
will forfeit its exploration and mining licenses if it fails to comply with     
other covenants, which include:                                                 

- meeting Russian environmental standards;                            

- meeting Russian health and safety standards for its employees;      

  - taking part in the social and economic development of the Ayano-Maysky
district of the Khabarovsk Territory; and                         

- preferential hiring of the Ayano-Maysky population.                 

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Tas-Yurjah has completed a number of feasibility studies on the Red Zone and has
conducted preliminary studies of the mineral deposits in the Malyutka Zone but  
has not developed any part of the concession area for extraction operations. In 
addition, Tas-Yurjah is presently exploring other zones in the concession area. 

   As of December 31, 1999, Pioneer Group had spent a total of approximately
$6.4 million for exploration work related to Tas-Yurjah, $1.0 million of which  
was spent in 1999.                                                              

    Asset Realization Strategy.  Harbor Global is actively exploring strategic
alternatives with respect to Tas-Yurjah, including the sale of its interest in  
Tas-Yurjah.                                                                     

Employees.  At May 31, 2000, Tas-Yurjah had 38 employees, including 26
seasonal employees.                                                             

OTHER ASSETS                                                                    

  Cash.  Under the contribution agreement, prior to the distribution date,
Pioneer Group will contribute $25 million to Harbor Global. Harbor Global       
believes that this cash contribution will be sufficient to pay the expenses,    
capital commitments and liabilities, if any, associated with the operation of   
its assets for a period of approximately three years.                           

 Ashanti Proceeds.  In May 2000, Pioneer Goldfields II Limited, a wholly
owned subsidiary of Harbor Global, sold its gold mining operations in Ghana to  
Ashanti Goldfields Teberebie Limited for an $18.8 million base purchase price   
plus additional payments of up to $5 million contingent upon the market price of
gold and productivity of the Ghanaian goldmine. On June 19, 2000, $5 million of 
the base purchase price was paid to Pioneer Goldfields II in cash and $13.8     
million of the base purchase price was paid in the form of a promissory note.   
Under the promissory note, Ashanti is obligated to pay the purchase price over  
five years, with principal amounts of between $2.0 million and $3.75 million due
annually, as specified in the purchase agreement.                               

   In connection with the sale to Ashanti, each of Pioneer Goldfields II and
Pioneer Group agreed to indemnify Ashanti for the breach of any representation  
or warranty of Pioneer Goldfields II contained in the purchase agreement for an 
amount not to exceed the total purchase price paid by Ashanti to Pioneer        
Goldfields II under the purchase agreement. The representations and warranties  
contained in the purchase agreement, other than those relating to tax and       
environmental issues, survive until June 19, 2002. The tax and environmental    
representations and warranties survive the closing of the purchase agreement    
until June 19, 2005. Under the distribution agreement, Harbor Global has agreed 
to reimburse Pioneer Group for any liability it incurs in connection with any   
claim brought by Ashanti for indemnification under the purchase agreement. See  
"The Distribution -- The Distribution Agreement" in this information statement  
for more information about Harbor Global's obligation to indemnify Pioneer      
Group.                                                                          

 In addition, under the distribution agreement, Harbor Global has agreed
that promptly after the fifth anniversary of the closing of the purchase        
agreement it will pay to Pioneer Group the lesser of $5 million or the proceeds 
received by Pioneer Goldfields II from Ashanti under the purchase agreement less
any indemnification claims paid under the purchase agreement. If any            
indemnification claim under the purchase agreement is pending on June 19, 2005, 
Harbor Global will pay the appropriate amount described above promptly upon     
resolution of the pending claim or claims.                                      

Metals.  Harbor Global will own a 25% interest in Pioneer Metals and  
Technology. Pioneer Metals and Technology is engaged in the production and sale 
of powdered metals, in particular neodymium-iron-boron permanent magnet powders,
as well as the production of permanent magnets and permanent magnet assemblies. 
Pioneer Metals and Technology is also engaged in the production and distribution
of titanium powders, titanium-vanadium-aluminum powders and nickel powders and  
powdered alloys for aerospace and industrial applications.                      

   These activities are largely carried out in Russia through Pioneer Metals
International, Pioneer Metals and Technology's wholly owned Russian subsidiary, 
and through Gradient, a joint venture located in the                            

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Moscow region, 50% of which is owned by Pioneer Metals International and 50% of 
which is owned by Kompozit, a leading Russian materials company.                

    Pioneer Metals and Technology is involved in the commercial development of
the "lean neo" line of neodymium-iron-boron magnetic powders and magnets.       

EMPLOYEES                                                                       

     At May 31, 2000, Harbor Global and its subsidiaries employed a total of 611
employees worldwide, including employees of its businesses described in this    
information statement. Harbor Global employs three of these employees at its    
principal executive offices in Boston, Massachusetts. None of the employees of  
Harbor Global or its subsidiaries are unionized or parties to any collective    
bargaining agreement.                                                           

PROPERTIES                                                                      

    Harbor Global's principal properties, other than its timber production and
gold exploration properties, consist of its leased principal executive offices  
in Boston, Massachusetts, and its leased offices in Warsaw, Poland and Moscow,  
Russia.                                                                         

Harbor Global and some of its subsidiaries currently conduct their    
operations from a portion of the space leased by Pioneer Group at 60 State      
Street, Boston, Massachusetts. Harbor Global expects to enter into a lease      
agreement to lease space independent of Pioneer Group at 60 State Street,       
Boston, Massachusetts prior to the distribution.                                

PREA and its subsidiaries conduct some of their Polish real estate    
management and advisory services operations in Warsaw, Poland and Moscow,       
Russia. Pioneer Real Estate Advisors Poland Sp. z o.o. leases 1,930 square feet 
of office space in Warsaw Poland for an annual rent of approximately $62,900.   
PREA also leases 1,840 square feet of office space in Moscow, Russia, for an    
annual rent of approximately $42,400. The Warsaw lease will expire in July 2000 
and the Moscow lease will expire in 2011. PREA is currently in negotiations to  
renew its Warsaw lease.                                                         

HOLDING COMPANY STRUCTURE                                                       

Harbor Global will own and operate all of its assets through a direct 
majority owned subsidiary, Harbor Global II Ltd. Harbor Global owns 99% of the  
share capital of Harbor Global II, and HGC Ltd., a wholly owned subsidiary of   
Harbor Global, owns the remaining 1% of the share capital of Harbor Global II.  
Both Harbor Global II and HGC are Bermuda limited duration companies. Under     
their memorandums of association, each of Harbor Global II and HGC will         
liquidate concurrently with the liquidation of Harbor Global.                   

LEGAL PROCEEDINGS                                                               

Neither Harbor Global nor its subsidiaries are a party to, and their  
property is not the subject of, any material legal proceedings.                 

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MANAGEMENT

DIRECTORS                                                                       

As of the distribution date, Harbor Global's board of directors will  
consist of three persons, each of whom is currently a director of Pioneer Group.
Each of the following individuals has been elected for a five year term expiring
at Harbor Global's annual general meeting in 2005:                              

                                                                [Download Table]

NAME                                                          AGE
----                                                          ---
                                                                 
John D. Curtin Jr...........................................  67 
W. Reid Sanders.............................................  50 
John H. Valentine...........................................  75 

JOHN D. CURTIN JR. has been a Director of Pioneer Group since February
2000. From 1995 to 1998, Mr. Curtin was the Chairman, President and Chief       
Executive Officer of Aearo Corporation, a provider of personal safety equipment.
Prior to 1995, Mr. Curtin was the Executive Vice President and Chief Financial  
Officer of Cabot Corporation, a global specialty chemicals and materials        
company. Mr. Curtin serves as a Director of Aearo Corporation, Eastern          
Enterprises, the parent company of Boston Gas Company, and Imperial Sugar       
Company, a refined sugar supplier.                                              

   W. REID SANDERS has been a Director of Pioneer Group since February 2000.
Prior to retiring in 1999, Mr. Sanders was a Director and Executive Vice        
President of Southeastern Asset Management, Inc., an investment management firm 
that he co-founded in 1975. In addition, Mr. Sanders serves as a Trustee of The 
Hugo Dixon Foundation and Rhodes College, Trustee and member of the Executive   
Committee of the Dixon Gallery and Gardens and Vice Chairman and member of the  
Board of Trustees of the Hutchinson School.                                     

JOHN H. VALENTINE has been a Director of Pioneer Group since 1985. Mr.
Valentine is the Vice Chairman of the Board of Directors and Treasurer of Boston
Medical Center and serves as the Chairman of the Board of Directors of Cypress  
Hill Associates, an outpatient addiction treatment facility. He is also Director
of Entrepreneurial Management at Boston University Health Policy Institute. From
1980 to 1990, Mr. Valentine was a consultant to T.A. Associates, a manager of   
venture capital. From 1972 to 1975, Mr. Valentine was a partner of Tucker       
Anthony & R.L. Day, a member of the New York Stock Exchange. Mr. Valentine also 
serves as a Director of Visualization Technology, Inc., and is a member of the  
Advisory Committees of the Hurricane Island Outward Bound School and the        
Thompson Island Outward Bound Education Center, and he was a Trustee of both    
institutions.                                                                   

COMMITTEES OF THE BOARD OF DIRECTORS                                            

The Harbor Global board of directors intends to establish an audit    
committee, which will oversee Harbor Global's financial reporting process,      
including the scope and approach of the annual audit and recommendations of the 
audit performed by the independent accountants, and consider procedures for     
internal controls.                                                              

COMPENSATION OF DIRECTORS                                                       

     Each Harbor Global director will be entitled to receive $20,000 annually as
compensation for serving on the Harbor Global board of directors. In addition,  
directors of Harbor Global will be entitled to be reimbursed for out of pocket  
expenses incurred in connection with attendance at any meeting of the board of  
directors or any committee meeting of the board of directors.                   

EXECUTIVE OFFICERS AND KEY EMPLOYEES                                            

The following table sets forth certain information concerning the     
individuals who will serve as executive officers or key employees of Harbor     
Global following the distribution. Each individual has been                     

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elected to the office indicated on or before the distribution date and serves at
the discretion of the Harbor Global board of directors.                         

                                                        [Enlarge/Download Table]

NAME                                        AGE                POSITION               
----                                        ---  -------------------------------------
                                                                                      
Stephen G. Kasnet.......................... 54   President and Chief Executive Officer
Donald H. Hunter........................... 43   Chief Operating Officer and Chief    
                                                   Financial Officer                  
Catherine Mannick.......................... 45   Senior Vice President                

  STEPHEN G. KASNET has been the Executive Vice President of Pioneer Group
and the President of Pioneer Global Investments, a division of Pioneer Group,   
since 1998. From 1995 to 1998, Mr. Kasnet was a Vice President of Pioneer Group 
and has been the President of PREA, LLC since 1996. From 1991 to 1995, Mr.      
Kasnet served as a Managing Director of First Winthrop Corporation and Winthrop 
Financial Associates. Mr. Kasnet serves as a Director of PREA, Pioneer Forest,  
Inc. and JSC Forest-Starma. In addition, Mr. Kasnet serves as Chairman of the   
Board of Directors of Warren Bancorp and Warren Five Cents Savings Bank and     
Director of Bradley Real Estate, Inc.                                           

 DONALD H. HUNTER has been the Senior Vice President and Chief Operating
Officer of Pioneer Global Investments, a division of Pioneer Group, since 1998. 
From 1992 to 1998, Mr. Hunter was the Manager of International Finance. Prior to
1992, Mr. Hunter served in various high-profile finance roles at Pioneer Group  
and General Electric Company. In addition, Mr. Hunter has served as Chairman of 
the Audit Committee of Pioneer First Polish Trust Fund Company, Treasurer of    
Pioneer Forest, Inc. and a director of several international foreign            
subsidiaries of Pioneer Group.                                                  

     CATHERINE MANNICK has been Assistant General Counsel of Pioneer Group since
1996 and a Vice President of Pioneer Group since 1998, during which time she has
overseen Pioneer Group's Russian legal matters. From 1991 to 1996, Ms. Mannick  
was Of Counsel at Hale and Dorr LLP in the firm's corporate department. Ms.     
Mannick is currently a member of the Board of Directors of the U.S.-Russia      
Chamber of Commerce of Boston.                                                  

COMPENSATION OF EXECUTIVE OFFICERS                                              

Currently, Harbor Global has not paid any compensation to, and no     
compensation has been earned by, the executive officers of Harbor Global.       
Although Mr. Kasnet, Mr. Hunter and Ms. Mannick will be executive officers of   
Harbor Global, Harbor Global will not directly pay compensation to these        
individuals. Instead, the administration and liquidation agreement between      
Harbor Global and Calypso Management LLC is expected to provide that, after the 
distribution date, Harbor Global will pay the operating expenses of Calypso     
Management, including compensation payable to Mr. Kasnet in the amount of       
$325,000 as an annual base salary for his services as President and Chief       
Executive Officer of Harbor Global, and Mr. Hunter in the amount of $250,000 as 
an annual base salary for his services as Chief Operating Officer and Chief     
Financial Officer of Harbor Global. In addition, each of Mr. Kasnet and Mr.     
Hunter are expected to be eligible to receive annual bonus payments of up to    
100% of their respective salaries. The annual bonus payments will be based upon 
the achievement of performance goals which will be established by the Harbor    
Global board of directors. Harbor Global will also pay a signing and retention  
bonus of 1.8 million to Mr. Kasnet if he remains employed by Calypso Management 
and Calypso Management continues to provide services to Harbor Global on the    
second anniversary of the distribution date, or if Harbor Global terminates his 
employment without cause before the second anniversary of the distribution date.
For more information about the administration and liquidation agreement with    
Calypso Management, see "Certain Relationships and Related                      
Transactions -- Administration and Liquidation Agreement" in this information   
statement. Ms. Mannick will be compensated by Calypso Management for her        
services as Senior Vice President to Harbor Global. The funds Calypso Management
will use to compensate Ms. Mannick, as well as other employees of Calypso       
Management, will be included in the operating expenses of Calypso Management    
payable by Harbor Global under the administration and liquidation agreement.    

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   In addition, Mr. Hunter and Ms. Mannick have entered into agreements with
Pioneer Group which provide for payments of approximately $751,250 and $164,400,
respectively, upon termination of their employment with Pioneer Group. Harbor   
Global has agreed to make these payments to Mr. Hunter and Ms. Mannick          
immediately following the distribution. Harbor Global will also make severance  
and retention payments to other employees of Calypso Management or subsidiaries 
of Harbor Global who are currently officers or employees of Pioneer Group or its
subsidiaries and who, as a result of the merger, will be entitled to receive    
severance and retention payments. Harbor Global expects these payments will be  
approximately $1.8 million in the aggregate, including the payments to Mr.      
Hunter and Ms. Mannick described above.                                         

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BENEFICIAL OWNERSHIP
OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

All of the outstanding Harbor Global common shares are currently      
beneficially owned by Pioneer Group. The following table presents the number of 
shares of Pioneer Group common stock beneficially owned as of May 31, 2000,     
unless otherwise indicated, by:                                                 

- each person or entity known by Harbor Global to own more than five  
percent of Pioneer Group common stock;                            

- each director of Pioneer Group and Harbor Global;                   

    - each of the named executive officers of Pioneer Group and Harbor Global;
and                                                               

    - all directors and officers of Pioneer Group as a group and all directors
and officers of Harbor Global as a group.                         

The table below also presents the number of shares of Harbor Global that each   
listed person or entity will own immediately after the distribution, on a pro   
forma basis, assuming no changes in the ownership of Pioneer Group common stock.
Unless otherwise indicated, each person or entity has sole voting and investment
power with respect to the shares listed opposite the person's or entity's name. 

                                                        [Enlarge/Download Table]

                                                                          HARBOR GLOBAL                   
                                       PIONEER GROUP                      PRO FORMA(4)                    
                         ------------------------------------------  -----------------------              
                                         NUMBER OF      PERCENT OF               PERCENT OF               
                         NUMBER OF     SHARES SUBJECT   OUTSTANDING  NUMBER OF   OUTSTANDING   NATURE OF  
BENEFICIAL OWNER         SHARES(1)     TO OPTIONS(2)     SHARES(3)   SHARES(1)    SHARES(3)   OWNERSHIP(1)
----------------         ---------     --------------   -----------  ---------   -----------  ------------
                                                                                                          
John F. Cogan, Jr....... 2,548,294        510,000           9.31%     407,658        7.59%        Direct  
  The Pioneer Group,                                                                                      
    Inc.                 1,277,708(5)                       4.76%     255,541        4.76%      Indirect  
  60 State Street                                                                                         
  Boston, MA 02109                                                                                        
Southeastern Asset                                                                                        
  Management, Inc. ..... 3,194,100(6)                      11.89%     638,820       11.90%      Indirect  
  6410 Poplar Avenue                                                                                      
  Suite 900                                                                                               
  Memphis, TN 38119                                                                                       
Gabelli Funds, Inc...... 1,857,300(7)                       6.92%     371,460        6.92%      Indirect  
  One Corporate Center                                                                                    
  Rye, NY 10580                                                                                           
David D. Tripple........   461,485        292,500           1.70%      33,797           *         Direct  
John D. Curtin Jr.+.....        --             --             --           --          --             --  
Alyce J. Lee............        --             --             --           --          --             --  
W. Reid Sanders+........        --             --             --           --          --             --  
Alan J. Strassman.......   120,000        120,000              *           --           *         Direct  
Jaskaran S. Teja........    53,636         48,500              *        1,027           *         Direct  
John H. Valentine+......     4,000             --              *          800           *         Direct  
Stephen G. Kasnet+......   159,265        142,500              *        3,353           *         Direct  
Alicja K. Malecka.......   214,655        182,000              *        6,531           *         Direct  
William H. Smith, Jr....   411,448        240,000           1.52%      34,289           *         Direct  

All directors and                                                                                         
  executive officers of                                                                                   
  Pioneer Group as a                                                                                      
  group (14 persons).... 4,211,171(8)   1,740,500          15.39%     494,134        9.20%        Direct  
                         1,277,708(5)(8)                    4.76%     255,541        4.76%      Indirect  
Donald H. Hunter+.......     3,661             --              *          732           *         Direct  
Catherine V. Mannick+...     1,473             --              *          294           *         Direct  

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                                                        [Enlarge/Download Table]

                                                                          HARBOR GLOBAL                   
                                       PIONEER GROUP                      PRO FORMA(4)                    
                         ------------------------------------------  -----------------------              
                                         NUMBER OF      PERCENT OF               PERCENT OF               
                         NUMBER OF     SHARES SUBJECT   OUTSTANDING  NUMBER OF   OUTSTANDING   NATURE OF  
BENEFICIAL OWNER         SHARES(1)     TO OPTIONS(2)     SHARES(3)   SHARES(1)    SHARES(3)   OWNERSHIP(1)
----------------         ---------     --------------   -----------  ---------   -----------  ------------
                                                                                                          
All directors and                                                                                         
  officers of Harbor                                                                                      
  Global as a group (6                                                                                    
  persons)..............   168,399        142,500              *        5,179           *         Direct  

---------------                                                                 
*  Denotes ownership of less than 1% of outstanding shares of either Pioneer  
Group common stock or Harbor Global common shares, as applicable.       

+  Denotes a director or executive officer of Harbor Global.                  

(1) The inclusion of shares of common stock listed as beneficially owned does   
not constitute an admission of beneficial ownership of those shares.    

(2) Includes options that will be exercisable on the distribution date due to   
the full acceleration of vesting of these options in connection with the
merger.                                                                 

(3) For purposes of this table, the percentage of outstanding shares of common  
stock is adjusted for each director and executive officer to include the
    number of shares of Pioneer Group common stock into which the listed options
held by such director or executive officer will be exercisable.         

(4) The Harbor Global pro forma ownership calculations assume that directors or 
   officers will not exercise any of their currently exercisable options prior
 to closing the merger, and therefore, that these persons will not receive
Harbor Global common shares for the shares of Pioneer Group common stock
underlying their options.                                               

(5) Includes 1,167,410 shares of Pioneer Group common stock held by family      
  trusts of which Mr. Cogan is the sole trustee and with respect to which he
has sole voting and investment power; an aggregate of 74,340 shares of  
 Pioneer Group common stock held in trusts with respect to which Mr. Cogan
may be deemed to be a beneficial owner by reason of his position as a   
trustee and/or his interests as beneficiary, over which shares Mr. Cogan
  exercises shared voting and investment power; and 35,958 shares of Pioneer
Group common stock held for the benefit of Mr. Cogan in Pioneer Group's 
   deferred compensation plan, over which shares Mr. Cogan exercises no voting
power and sole investment power.                                        

(6) Consists of shares of Pioneer Group common stock held by a variety of       
investment advisory clients, over which shares Southeastern Asset       
    Management, Inc. exercises sole, shared or no voting authority and exercises
sole or shared investment power. This information is based solely on    
    information provided by Southeastern Asset Management, Inc. in Amendment No.
    1 to Schedule 13G dated June 7, 2000, with respect to shares held on May 31,
2000.                                                                   

(7) Consists of shares of Pioneer Group common stock held by a variety of       
investment advisory and investment company clients, over which shares   
Gabelli Funds, Inc., Gabelli Asset Management, Inc. or one of their     
  affiliates exercises sole voting authority and sole investment power. This
  information is based solely on information provided by Gabelli Funds, Inc.
in Amendment No. 13 to Schedule 13D dated June 16, 2000, with respect to
shares held on June 14, 2000.                                           

(8) Of the shares beneficially owned by the directors and executive officers of 
   Pioneer Group as a group, an aggregate of 4,495,875 shares are subject to a
   voting agreement that Mr. Cogan, Mr. Tripple, Robert Nault and Eric Reckard
  entered into in connection with the merger agreement and pursuant to which
each agreed to vote his shares in favor of the merger agreement and the 
merger.                                                                 

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The businesses that Harbor Global will conduct have engaged in transactions
with Pioneer Group in the past, some of which included various types of         
financial support by Pioneer Group. These transactions were often on terms more 
favorable to the businesses conducted by Harbor Global than would otherwise have
been attainable in similar transactions with unaffiliated third parties.        
Following the distribution, Harbor Global will continue to have a relationship  
with Pioneer Group only as a result of the distribution agreement and the tax   
separation agreement entered into in connection with the distribution. The      
transactions contemplated between Harbor Global and Pioneer Group by the        
distribution agreement and the tax separation agreement are described in "The   
Distribution" in this information statement. In addition, Harbor Global and     
Pioneer Group may enter into an agreement under which Pioneer Group may agree to
provide corporate administrative, information and technology and other support  
to Harbor Global for a limited transition period.                               

     Other than as contemplated by the distribution agreement and tax separation
agreement, following the distribution, Harbor Global and Pioneer Group will not 
have any material contractual or other material relationships with each other,  
and transactions between Harbor Global and Pioneer Group will be conducted on an
arms-length basis.                                                              

   Harbor Global is expected to enter into an administration and liquidation
agreement with Calypso Management LLC pursuant to which Calypso Management will,
at the direction of the Harbor Global board of directors, manage the liquidation
of Harbor Global and operate Harbor Global's assets pending their liquidation.  
The administration and liquidation agreement is expected to have a term ending  
upon the liquidation of Harbor Global. The agreement is expected to provide that
Harbor Global will pay the operating expenses of Calypso Management incurred in 
connection with the provision of services to Harbor Global. These operating     
expenses are expected to include annual salaries for Mr. Kasnet and Mr. Hunter  
of $325,000 and $250,000, respectively, plus annual bonuses of up to 100% of    
such base salary, depending upon the achievement of performance goals to be     
established by the Harbor Global board of directors. Calypso Management will    
provide the services of Mr. Kasnet and Mr. Hunter and other employees to act as 
officers and employees of Harbor Global. As compensation for its provision of   
services to Harbor Global, Calypso Management is expected to receive a portion  
of the net proceeds distributed from the liquidation of Harbor Global's assets, 
generally according to the following schedule:                                  

- with respect to the first $36 million in net proceeds available for 
      distribution, Calypso Management shall receive a payment equal to 10% of
such net proceeds;                                                

- with respect to the next $72 million in net proceeds available for  
       distribution, Calypso Management shall receive a payment equal to 7.5% of
such net proceeds; and                                            

 - with respect to any additional net proceeds, Calypso Management shall
receive a payment equal to 10% of such net proceeds.              

Net proceeds will not include any unexpended portion of the $25 million         
contributed by Pioneer Group to Harbor Global. The proceeds received by Pioneer 
Goldfields II in connection with the sale of its Ghanaian gold mine to Ashanti  
will not be subject to the preceding schedule. Instead, Calypso Management will 
receive only 5% of the Ashanti proceeds that are distributed, if any.           

In addition, Harbor Global will pay Mr. Kasnet a signing and retention
bonus of $1.8 million if he remains employed by Calypso Management and Calypso  
Management continues to provide services to Harbor Global on the second         
anniversary of the distribution date, or if Harbor Global terminates his        
employment without cause prior to the second anniversary of the distribution    
date.                                                                           

Following the first two years of the term of the administration and   
liquidation agreement, Calypso Management may terminate the agreement upon 120  
days notice to Harbor Global. Harbor Global may terminate the agreement in the  
event of Mr. Kasnet's death or disability, or upon an uncured failure by Calypso
Management to follow a reasonable direction of the Harbor Global board of       
directors. Generally, Calypso Management will not be entitled to the payments   
described above following a termination of the agreement. As part of the        
administration and liquidation agreement, Calypso Management will agree to      
customary confidentiality and noncompetition covenants with respect to Harbor   
Global.                                                                         
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DESCRIPTION OF HARBOR GLOBAL SHARE CAPITAL

    Your rights as a holder of Harbor Global common shares will be governed by
Bermuda law and Harbor Global's memorandum of association and bye-laws. The     
following is a summary of certain provisions of Bermuda law and Harbor Global's 
memorandum of association and bye-laws. This summary may not contain all of the 
information that may be important to you. You should carefully read the         
memorandum of association and bye-laws of Harbor Global, copies of which have   
been filed with the Securities and Exchange Commission as exhibits to Harbor    
Global's registration statement on Form 10, of which this information statement 
is a part. For information on how you may obtain a copy of Harbor Global's      
memorandum of association and bye-laws, see "Where You Can Find Additional      
Information" in this information statement.                                     

     Under Harbor Global's memorandum of association, Harbor Global's authorized
share capital consists of 12,000,000 common shares, par value $.01 per share,   
and 1,000,000 preferred shares, par value $.01 per share. Pioneer Group         
currently owns 1,200,000 Harbor Global common shares. No Harbor Global preferred
shares have been issued. Prior to the distribution, Harbor Global will effect a 
four-for-one stock split of its common shares and Pioneer Group will purchase   
enough additional Harbor Global common shares so that it may distribute one     
Harbor Global common share for every five shares of Pioneer Group common stock  
held by you immediately before closing the merger. After giving effect to the   
four-for-one stock split, Harbor Global's authorized common share capital will  
consist of 48,000,000 common shares, par value $.0025, of which Pioneer Group   
will own 4,800,000 shares. Based on the number of shares of Pioneer Group common
stock outstanding on June 22, 2000, immediately following the distribution      
approximately 5,371,428 million Harbor Global common shares will be outstanding.
This amount may increase prior to the distribution date due to the issuance of  
shares of Pioneer Group common stock upon the exercise of outstanding options.  
All of the Harbor Global common shares to be distributed to you in the          
distribution will be fully paid and nonassessable.                              

COMMON SHARES                                                                   

    Each outstanding Harbor Global common share is entitled to one vote on all
matters submitted to a vote of Harbor Global shareholders, including the        
election of directors. There are no cumulative voting rights. As a holder of    
Harbor Global common shares you are entitled to receive dividends if, when and  
as declared by the board of directors out of assets legally available for the   
payment of dividends. In the event of a liquidation, dissolution, or winding up 
of Harbor Global, Harbor Global's assets will be distributed pro rata among the 
holders of Harbor Global common shares after satisfaction in full of its debts  
and liabilities. The holders of Harbor Global common shares have no preemptive, 
redemption, conversion or subscription rights and there are no sinking fund     
provisions. The rights, powers, preferences and privileges of holders of Harbor 
Global common shares are subject to, and may be impaired by, the rights of any  
preferred shares that Harbor Global may designate and issue in the future.      

PREFERRED SHARES                                                                

 Under Harbor Global's bye-laws, the Harbor Global board of directors is
authorized, without further shareholder approval, to issue an aggregate of      
1,000,000 preferred shares in one or more classes or series and to fix the      
voting powers, if any, and the preferences, privileges and restrictions of the  
preferred shares, including dividend rights, dividend rates, conversion rights, 
terms of redemption, redemption prices and liquidation preferences of any class 
or series of preferred shares. Although the board of directors does not         
presently intend to do so, it could issue preferred shares with rights that     
could adversely affect the voting power and other rights of holders of Harbor   
Global common shares without obtaining the approval of its shareholders. In     
addition, the issuance of preferred shares could delay or prevent a change in   
control of Harbor Global without further action by its shareholders.            

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BERMUDA LAW AND ADDITIONAL PROVISIONS OF HARBOR GLOBAL'S MEMORANDUM OF          
ASSOCIATION AND BYE-LAWS                                                        

Meetings of Shareholders.  Under Bermuda law, a company is required to
convene at least one general shareholders' meeting per calendar year. Bermuda   
law provides that a special general meeting must be convened by the board of    
directors upon the request of shareholders holding not less than 10% of the     
paid-up capital of the company having the right to vote. Bermuda law also       
requires that shareholders be given at least five days' advance notice of a     
general meeting. Harbor Global's bye-laws provide that the accidental omission  
of notice to any person does not invalidate the proceedings at the meeting.     
Harbor Global's bye-laws require that at least five days' advance notice of an  
annual general meeting or a special general meeting be given to each            
shareholder.                                                                    

Shareholder Action.  Under Bermuda law, the number of shareholders    
constituting a quorum at any general meeting of shareholders is determined by   
the bye-laws of the company. Harbor Global's bye-laws provide that a minimum of 
two persons present in person and representing in person or by proxy in excess  
of 50% of the total issued voting shares of Harbor Global constitutes a quorum. 
Any action to be taken by Harbor Global shareholders at a general meeting or    
special general meeting may be taken by unanimous written consent of the        
shareholders without a meeting and without previous notice being given.         

Election or Removal of Directors.  Under Harbor Global's bye-laws, the
initial directors are elected for a term expiring at the annual general meeting 
immediately following the fifth anniversary of the date of the distribution of  
Harbor Global common shares to Pioneer Group stockholders or until their        
successors are elected or appointed, unless they resign or are earlier removed. 
Subsequent directors are elected at the annual general meeting for a term of    
three years or until their successors are elected or appointed, unless they     
resign or are earlier removed.                                                  

  Harbor Global's bye-laws provide that a director may only be removed for
cause at a special general meeting of shareholders specifically called for that 
purpose. The director whose removal is sought must be served with at least 14   
days' notice of the meeting, and the director has a right to be heard at the    
meeting. Any vacancy created by the removal of a director at a special general  
meeting may be filled by the shareholders or by the board.                      

Advance Notice Requirements for Shareholder Nominations and           
Proposals.  Under Harbor Global's bye-laws, a shareholder seeking (1) to bring  
business before an annual general meeting or special general meeting or (2) to  
nominate candidates for election as directors must provide Harbor Global with   
timely written notice of the nomination or proposal. To be timely, notice in    
connection with a special meeting must be received by Harbor Global not less    
than 60 nor more than 90 days before the meeting, and notice before an annual   
general meeting must be received by Harbor Global not less than 60 nor more than
90 days before the anniversary date of the prior year's annual general meeting, 
excluding, in each case, the meeting date and the date the notice is received by
Harbor Global. The notice must contain the name and business background of the  
person to be nominated as director and all material information on any proposal 
and any additional information the board of directors may specify from time to  
time.                                                                           

 Shareholder Proposals.  Under The Companies Act 1981 of Bermuda, Harbor
Global must circulate notice of a properly supported shareholder requisition    
proposing a resolution to be passed on at the next annual general meeting of the
company, together with a statement of up to 1,000 words in response to the      
proposed resolution. The resolution must be supported by the lesser of 100      
shareholders or shareholders representing 5% of the total voting power eligible 
to vote at the meeting at which the resolution is proposed to be passed. Unless 
Harbor Global determines otherwise, the resolution and notice will be circulated
at the expense of the shareholders making the requisition. The requisition      
proposing a resolution must be deposited at the registered office of the company
not less than six weeks before the annual general meeting.                      

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   Access to Books and Records and Dissemination of Information.  Members of
the general public have the right to inspect the public documents of a Bermuda  
company which are available at the office of the Registrar of Companies in      
Bermuda. These documents include:                                               

- Harbor Global's memorandum of association; and                      

- any amendment of Harbor Global's memorandum of association.         

    In addition, under Bermuda law Harbor Global's shareholders have the right
to inspect:                                                                     

- Harbor Global's bye-laws;                                           

- minutes of Harbor Global's general meetings; and                    

     - audited financial statements of Harbor Global, which must be presented to
shareholders at the annual general meeting.                       

Additionally, Harbor Global's register of shareholders is open to     
inspection by its shareholders free of charge and to members of the general     
public upon the payment of a fee. Harbor Global is required to maintain its     
share register in Bermuda. Harbor Global is required to keep at its registered  
office a register of its directors and officers which is open for inspection for
not less than two hours each day by members of the public without charge. Other 
than as described above, Bermuda law does not provide a general right for       
shareholders to inspect or obtain copies of any other corporate records.        

    Amendment of Memorandum of Association and Bye-laws.  Bermuda law provides
that the memorandum of association of a company may be amended by a resolution  
passed at a general meeting of shareholders after due notice has been given. An 
amendment to the objects set out in Harbor Global's memorandum of association   
may require the approval of the Bermuda Minister of Finance, who may grant or   
withhold approval at his or her discretion. Under Bermuda law, the directors may
amend the bye-laws with the approval of the shareholders representing a majority
of Harbor Global's outstanding voting shares at a general meeting.              

    Under Bermuda law, the holders of at least 20% of any class of a company's
issued share capital have the right to apply to the Bermuda courts for an       
annulment of any amendment to the company's memorandum of association adopted by
shareholders at any general meeting, other than an amendment which alters or    
reduces a company's share capital as provided in the Companies Act. Where such  
an application is made, the amendment becomes effective only to the extent that 
it is confirmed by the Bermuda courts. An application for annulment of any      
amendment of the memorandum of association must be made within 21 days after the
date on which the resolution altering the company's memorandum is passed and may
be made on behalf of the persons entitled to make the application by one or more
of shareholders as they may appoint in writing for that purpose. Persons voting 
in favor of an amendment may not make an application for its annulment.         

     Duties of Directors and Officers.  The Companies Act 1981 imposes a duty to
act honestly and in good faith with a view to the best interests of the company 
and exercise the care, diligence and skill that a reasonably prudent person     
would exercise in comparable circumstances upon each director and officer of a  
Bermuda company. A Bermuda court is unlikely to interfere with decision of      
directors unless one of these two duties is breached. The court must find that  
the director acted in bad faith or that no reasonable board of directors could  
have come to the decision that was reached.                                     

    Interested Directors.  Harbor Global's bye-laws provide that any director,
or a firm, partner or company associated with a director, may act in a          
professional capacity for Harbor Global, and will be entitled to remuneration   
for those services. However, a director or a firm, partner or company associated
with a director, may not act as auditor of Harbor Global's accounts.            

The bye-laws also provide that a director who has a direct or indirect
material interest, in a contract or other arrangement with Harbor Global must   
disclose the nature of his or her interest as required by the Companies Act.    
Following this disclosure, unless the chairman of the board of directors        
disqualifies the interested director, the interested director may be counted in 
the quorum and vote in respect of any                                           
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contract or other arrangement in which he or she is interested and will not be  
liable for any profit realized in connection with the contract or other         
arrangement.                                                                    

     Appraisal Rights and Shareholder Suits.  Under Bermuda law, in the event of
a consolidation, amalgamation or merger with one or more companies, if a        
shareholder is not satisfied that fair value has been offered for his or her    
shares, he or she may apply to the Bermuda courts to appraise the fair value of 
the shares.                                                                     

   Except as described below, class actions and derivative actions against a
Bermuda company are not available to shareholders under Bermuda law. Bermuda    
courts ordinarily would be expected to follow English case law precedent, which 
would permit a shareholder to commence an action in the name of a company to    
remedy a wrong done to the company where the act complained of is alleged to be 
an act that cannot be confirmed by a majority of shareholders because the act:  

- is beyond the corporate power of the company;                       

- is illegal;                                                         

     - is a fraud on the minority shareholders and the wrongdoers are in control
of the company; or                                                

- infringes personal rights of an individual shareholder.             

     When the affairs of a company are being conducted in a manner oppressive or
prejudicial to the interests of one or more of the shareholders, a shareholder  
may apply to the Bermuda courts for an order to regulate the company's conduct  
of affairs in the future or order the purchase of the shares held by the        
shareholder by other shareholders or by the company.                            

   Mergers and Similar Arrangements.  Harbor Global may acquire the business
of another Bermuda company similarly exempt from Bermuda taxes or a company     
incorporated outside Bermuda and carry on the acquired company's business when  
it is within the corporate powers specified in its memorandum of association.   
Harbor Global may also consolidate, amalgamate or merge with another Bermuda    
company or with a body incorporated outside Bermuda upon the approval of the    
board of directors and the holders of a majority of the outstanding shares of   
the company, including any shares that would otherwise be non-voting shares.    

    Takeovers.  Bermuda law provides that where an offer is made for shares of
another company and within four months of the offer, the holders of not less    
than 90% of the shares which are the subject of the offer accept the offer, the 
offeror may give notice to the non-tendering shareholders requiring them to     
transfer their shares to the offeror on the same terms as the initial offer.    
Dissenting shareholders may object to the transfer by applying to the Bermuda   
courts for relief within one month of the offeror's notice. The burden is on the
dissenting shareholders to show that the court should exercise its discretion to
enjoin the required transfer, which a Bermuda court will be unlikely to do      
unless there is evidence of fraud, bad faith or collusion between the offeror   
and the holders of the shares who have accepted the offer as a means of unfairly
forcing minority shareholders out of the company.                               

LIMITATION OF LIABILITY AND INDEMNIFICATION                                     

Harbor Global's bye-laws provide that it will indemnify its directors,
officers and any liquidator or trustee acting in relation to any of Harbor      
Global's affairs, including the heirs, executors or administrators of these     
indemnified persons, from all expenses incurred as a result of any act done,    
concurred in or omitted in execution of their duty, so long as the action or    
inaction does not involve fraud or dishonesty. In addition, Harbor Global's     
bye-laws also provide that each shareholder agrees to waive any claim or right  
of action, whether individually or by right of Harbor Global, against any       
director or officer as a result of any action taken or omitted in execution of  
his or her duty, so long as the action or inaction does not involve fraud or    
dishonesty or the recovery of any gain, personal profit or advantage to which   
the director or officer is not legally entitled.                                

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Currently, there is no pending litigation or proceeding involving any 
director, officer, liquidator or trustee of Harbor Global in which              
indemnification will be required or permitted. Harbor Global is not aware of any
threatened or pending litigation or proceeding which may result in a claim for  
indemnification.                                                                

TRANSFER AGENT AND REGISTRAR                                                    

The transfer agent and registrar for Harbor Global's common shares is 
EquiServe Limited Partnership.                                                  

MATERIAL FOREIGN ISSUER CONSIDERATIONS                                          

Foreign Exchange Control Regulations.  Harbor Global has obtained the 
permission of the Bermuda Monetary Authority for the distribution of its common 
shares to you and has been designated by the Bermuda Monetary Authority as a    
non-resident exempted company for exchange control purposes. As such, Harbor    
Global is exempted from the provisions of Bermuda law that require at least 60% 
of a Bermuda company's equity to be owned by Bermudians. This designation allows
Harbor Global to engage in transactions, or to pay dividends to non-residents of
Bermuda who are holders of Harbor Global common shares in currencies other than 
the Bermuda Dollar.                                                             

     The transfer of shares between persons regarded as resident outside Bermuda
for exchange control purposes and the issue of shares after the completion of   
distribution to or by non-resident persons may take place without specific      
consent under the Exchange Control Act 1972. The issuance or transfer of shares 
involving any person regarded as resident in Bermuda for exchange control       
purposes requires specific prior approval of the Bermuda Monetary Authority     
under the Exchange Control Act 1972.                                            

     Harbor Global shareholders who are not Bermuda residents are not restricted
in the exercise of the rights to hold or vote their shares. Because Harbor      
Global has been designated as a non-resident for Bermuda exchange control       
purposes, there are no restrictions on its ability to transfer funds in and out 
of Bermuda or to pay dividends to United States residents who are holders of    
Harbor Global common shares, as long as the transactions are not effected in the
Bermuda Dollar.                                                                 

   Under Bermuda law, registration of share ownership is only required to be
in the names of corporations or individuals. In the case of an applicant acting 
in a special capacity (for example as a trustee), the register may, at the      
request of the applicant, record the capacity in which the applicant is acting, 
but Harbor Global is not bound to investigate or incur any responsibility in    
respect of the proper administration of the trust. Harbor Global will take no   
notice of any trust applicable to any of its shares whether or not it has notice
of the trust.                                                                   

As an exempted company, Harbor Global may not participate in certain  
business transactions, including:                                               

- acquiring or leasing land in Bermuda, except as required for Harbor 
      Global's business and then for a term of not more than 50 years, without
the express authorization of the Bermuda legislature;             

- taking mortgages on land in Bermuda to secure an amount in excess of
$50,000 without the consent of the Bermuda Minister of Finance;   

- the acquisition of any bonds or debentures secured by any land in   
    Bermuda, other than certain types of Bermuda government securities; or

 - carrying on business of any kind in Bermuda, except in furtherance of
    Harbor Global's business carried on outside Bermuda or under a license
granted by the Bermuda Minister of Finance.                       

   The Bermuda government actively encourages foreign investment in exempted
entities which, like Harbor Global, are based in Bermuda but do not operate in  
competition with local business.                                                

    Reciprocal Recognition and Enforcement of Civil Judgements.  Harbor Global
has been advised by its legal counsel in Bermuda that the United States and     
Bermuda currently do not have a treaty providing for                            
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the reciprocal recognition and enforcement of judgments in civil and commercial 
matters. A final judgment for the payment of money rendered by any federal or   
state court in the United States based on civil liability, whether or not based 
solely on United States federal securities laws, would therefore not be         
automatically enforceable in Bermuda.                                           

    Nevertheless, a final and conclusive judgment obtained in a state court or
federal court of the United States based upon a contractual obligation under    
which a sum of money is payable could be enforced by an action in the Supreme   
Court of Bermuda, without reexamination of the merits, under the common law     
doctrine of obligation. A final opinion as to the availability of this remedy   
could only be given when the facts surrounding the judgment were known but,     
generally, based on advise from its legal counsel in Bermuda, Harbor Global     
would expect an application to be successful if the judgment:                   

- was final and conclusive;                                           

- was not obtained by fraud;                                          

    - was not, and its enforcement would not be, contrary to the public policy
of Bermuda;                                                       

    - was not obtained in circumstances where the proceedings were contrary to
the rules of natural justice;                                     

- complied with procedures under Bermuda law for its enforcement; and 

- no new evidence is submitted to the Bermuda courts.                 

A Bermuda court may impose civil liability on Harbor Global or its    
directors or officers in a suit brought in the Supreme Court of Bermuda against 
Harbor Global or those persons with respect to a violation of United States     
securities if the facts surrounding the violation would constitute or give rise 
to a cause of action under Bermuda law.                                         

  Bermuda Taxation.  Under current Bermuda law, there is no Bermuda income
tax, withholding tax, capital gains tax or capital transfer tax levied on Harbor
Global or its shareholders. The United States and Bermuda do not currently have 
a reciprocal treaty regarding withholding taxes that is applicable to Harbor    
Global.                                                                         

    Harbor Global and its Bermuda subsidiaries have each applied for a written
undertaking from the Bermuda Minister of Finance under the Exempted Undertakings
Tax Protection Act, 1966, as amended, that, in the event any legislation        
imposing tax computed on profits or income, or on any capital asset, gain or    
appreciation, or any tax in the nature of estate duty or inheritance tax is     
enacted in Bermuda, the tax will not be applicable to Harbor Global or any of   
its operations, or to the shares, debentures or other obligations of Harbor     
Global until 2016, except insofar as the tax applied to Bermuda residents       
holding shares, debentures or other obligations of Harbor Global or to any      
Bermuda land leased by Harbor Global.                                           

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WHERE YOU CAN FIND ADDITIONAL INFORMATION 

Harbor Global has filed with the Securities and Exchange Commission a 
registration statement on Form 10 under the Securities Exchange Act of 1934 with
respect to the Harbor Global common shares to be distributed to you. This       
information statement, which is a part of the registration statement on Form 10,
does not contain all of the information in the registration statement or the    
exhibits and schedules which are part of the registration statement.            

  For further information about Harbor Global and the Harbor Global common
shares to be distributed to you, please refer to the registration statement and 
the exhibits and schedules which are part of the registration statement.        
Statements in this information statement regarding the contents of any contract 
or any other document to which Harbor Global refers are not necessarily         
complete, and in each instance where a copy of the contract or other document   
has been filed as an exhibit to the registration statement, Harbor Global refers
to the filed copy. Each statement in this information statement regarding the   
contents of the referenced contract or other document is qualified in all       
respects by the filed copy.                                                     

You may read a copy of the registration statement on Form 10, or any  
contract or other document filed as an exhibit to the registration statement or 
any other information from our Securities and Exchange Commission filings at the
following public reference rooms maintained by the Securities and Exchange      
Commission:                                                                     

                                                                [Download Table]
                                                                         
Public Reference Room 1024  Citicorp Center          7 World Trade Center
Judiciary Plaza             500 West Madison Street  Suite 1300          
450 Fifth Street, N.W.      Suite 1400               New York, NY 10048  
Washington, D.C. 20549      Chicago, IL 60661                            

   In addition, you can request copies of these documents, upon payment of a
duplicating fee, by writing to the Securities and Exchange Commission at the    
address listed above. Please call the Securities and Exchange Commission at     
1-800-SEC-0330 for further information about the public reference rooms. Harbor 
Global's Securities and Exchange Commission filings are also available to you on
the Securities and Exchange Commission Web site (http://www.sec.gov).           

As a result of registering Harbor Global's common shares with the     
Securities and Exchange Commission, Harbor Global will become subject to the    
information and reporting requirements of the Securities Exchange Act of 1934   
and will file periodic reports, including annual reports containing audited     
financial statements and quarterly reports for the first three quarters of each 
fiscal year containing unaudited interim financial information, proxy statements
and other information with the Securities and Exchange Commission. You may      
request copies of or view Harbor Global's future periodic reports filed with the
Securities and Exchange Commission as described above.                          

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HARBOR GLOBAL COMPANY LIMITED 
INDEX TO FINANCIAL STATEMENTS 

                                                                [Download Table]
                                                                  
Report of Independent Public Accountants....................   F-2
Consolidated Statements of Operations.......................   F-3
Consolidated Balance Sheets.................................   F-4
Consolidated Statements of Changes in Net Parent Company          
  Investment (Deficit)......................................   F-5
Consolidated Statements of Cash Flows.......................   F-6
Notes to Consolidated Financial Statements..................   F-7
Unaudited Consolidated Interim Statements of Operations.....  F-22
Unaudited Consolidated Interim Balance Sheets...............  F-23
Unaudited Notes to Consolidated Interim Financial                 
  Statements................................................  F-24

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Harbor Global Company Ltd.:                                                  

   After the reorganization transaction discussed in Note 1 to Harbor Global
Company Ltd.'s consolidated financial statements is effected, we expect to be in
a position to render the following audit report.                                

                           /s/ ARTHUR ANDERSEN LLP

Boston, Massachusetts                                                           
June 9, 2000                                                                    

We have audited the accompanying consolidated balance sheets of Harbor
Global Company Ltd. (a Bermuda limited duration company) as of December 31, 1999
and 1998 and the related consolidated statements of operations, changes in net  
parent company investment (deficit) and cash flows for each of the three years  
in the period ended December 31, 1999. These financial statements are the       
responsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.                      

 We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

 In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Harbor      
Global Company Ltd. as of December 31, 1999 and 1998 and the results of its     
operations and its cash flows for each of the three years in the period ended   
December 31, 1999 in conformity with accounting principles generally accepted in
the United States.                                                              

    As explained in Note 2 to the consolidated financial statements, effective
January 1, 1999, the Company changed its method of accounting for start-up      
costs.                                                                          

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HARBOR GLOBAL COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS 
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997 

                                                        [Enlarge/Download Table]

                                                               1999        1998       1997   
                                                             --------    --------    ------- 
                                                                     (IN THOUSANDS)          
                                                                                             
Revenues:                                                                                    
  Timber Sales.............................................. $ 14,383    $ 10,450    $11,879 
  Real Estate Rental Revenue................................    9,495       8,589      7,013 
  Other.....................................................    4,229       2,421      2,024 
                                                             --------    --------    ------- 
          Total Revenues....................................   28,107      21,460     20,916 
Operating Expenses:                                                                          
  Timber Cost of Goods Sold.................................  (15,252)    (18,918)   (13,469)
  Salary and Benefit Expenses...............................   (6,052)     (6,882)    (6,048)
  Facility Expenses.........................................   (1,489)     (2,620)    (1,775)
  Building and Property Management Expenses.................   (2,350)     (4,965)    (3,958)
  Other Expenses............................................   (6,392)    (18,686)    (8,585)
  Write-down of Natural Resource Projects...................     (685)     (6,103)        -- 
  Reduction in the Carrying Value of Timber Assets..........  (15,300)         --         -- 
  Allocation of Corporate Costs.............................  (11,431)     (9,957)    (7,464)
                                                             --------    --------    ------- 
          Total Operating Expenses..........................  (58,951)    (68,131)   (41,299)
                                                             --------    --------    ------- 
          Operating Loss....................................  (30,844)    (46,671)   (20,383)
Other Income (Expense):                                                                      
  Unrealized and Realized Gains (Losses) on Securities......    2,095     (11,665)     9,551 
                                                             --------    --------    ------- 
  Interest Expense..........................................     (593)       (734)      (853)
                                                             --------    --------    ------- 
          Total Other Income (Expense)......................    1,502     (12,399)     8,698 
          Loss from Continuing Operations before Provision                                   
            for Income Taxes and Minority Interest..........  (29,342)    (59,070)   (11,685)
Provision for Income Taxes..................................   (1,438)       (183)    (1,517)
                                                             --------    --------    ------- 
          Loss from Continuing Operations before Minority                                    
            Interest........................................  (30,780)    (59,253)   (13,202)
Minority Interest (Expense) Income..........................   (1,438)     13,456       (432)
                                                             --------    --------    ------- 
          Net Loss from Continuing Operations before                                         
            Cumulative Effect of a Change in Accounting                                      
            Principle.......................................  (32,218)    (45,797)   (13,634)
Net (Loss) Income from Discontinued Operations..............   (1,413)    (10,142)     6,015 
Cumulative Effect of Change in Accounting Principle.........  (11,547)         --         -- 
                                                             --------    --------    ------- 
          Net Loss.......................................... $(45,178)   $(55,939)   $(7,619)
                                                             ========    ========    ======= 
Basic and Diluted Loss Per Share............................ $  (8.53)   $ (10.56)   $ (1.44)
                                                             ========    ========    ======= 
Weighted Average Shares Outstanding.........................    5,296       5,296      5,296 
                                                             ========    ========    ======= 

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD.

CONSOLIDATED BALANCE SHEETS 
DECEMBER 31, 1999 AND 1998

                                                                [Download Table]

                                                               1999        1998   
                                                             --------    -------- 
                                                                (IN THOUSANDS)    
                                                                                  
ASSETS                                                                            
Cash and Cash Equivalents................................... $  5,177    $  5,473 
Restricted Cash.............................................      880       1,513 
Timber Inventory............................................    2,482       3,585 
Other Current Assets........................................    3,938       5,592 
Net Current Assets of Discontinued Operations...............    6,004       4,793 
                                                             --------    -------- 
          Total Current Assets..............................   18,481      20,956 
Deferred Development Costs..................................       --      19,561 
Goodwill....................................................    1,524       1,810 
Venture Capital Investments.................................   51,093      50,085 
Long-term Investments.......................................    6,712       7,006 
Building....................................................   24,559      24,700 
Timber Equipment............................................   12,566      18,800 
Other Long-term Assets......................................    2,708       5,754 
Net Noncurrent Assets of Discontinued Operations............    1,329         834 
                                                             --------    -------- 
          Total Assets...................................... $118,972    $149,506 
                                                             ========    ======== 
LIABILITIES AND PARENT COMPANY DEFICIT                                            
Accounts Payable............................................ $  2,628    $  3,194 
Accrued Expenses............................................    5,902      13,816 
Current Portion of Notes Payable............................    1,240       1,696 
                                                             --------    -------- 
          Total Current Liabilities.........................    9,770      18,706 
Amounts Due to Affiliates...................................  103,557      95,282 
Notes Payable, Net of Current Portion.......................    3,720       4,960 
                                                             --------    -------- 
          Total Liabilities.................................  117,047     118,948 
Minority Interest...........................................   61,632      59,720 
Parent Company Deficit......................................  (59,707)    (29,162)
                                                             --------    -------- 
          Total Liabilities and Parent Company Deficit...... $118,972    $149,506 
                                                             ========    ======== 

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN NET PARENT COMPANY INVESTMENT (DEFICIT) 
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997 

                                                                [Download Table]

                                                              (IN THOUSANDS)
                                                                            
Balance, December 31, 1996..................................     $  9,128   
(Deduct) Add:                                                               
  Net Loss..................................................       (7,619)  
  Net Parent Company Investment.............................        5,579   
                                                                 --------   
Balance, December 31, 1997..................................        7,088   
(Deduct) Add:                                                               
  Net Loss..................................................      (55,939)  
  Net Parent Company Investment.............................       19,689   
                                                                 --------   
Balance, December 31, 1998..................................      (29,162)  
(Deduct) Add:                                                               
  Net Loss..................................................      (45,178)  
  Net Parent Company Investment.............................       14,633   
                                                                 --------   
Balance, December 31, 1999..................................     $(59,707)  
                                                                 ========   

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997 

                                                        [Enlarge/Download Table]

                                                                1999        1998        1997   
                                                              --------    --------    -------- 
                                                                       (IN THOUSANDS)          
                                                                                               
Cash Flows from Operating Activities:                                                          
  Net Loss..................................................  $(45,178)   $(55,939)   $ (7,619)
  Net Loss of Discontinued Operations.......................    (1,413)    (10,142)      6,015 
  Cumulative Effect of Change in Accounting Principle.......   (11,547)         --          -- 
                                                              --------    --------    -------- 
        Net Loss from Continuing Operations.................   (32,218)    (45,797)    (13,634)
  Adjustments to Reconcile Net Loss to Net Cash Used in                                        
    Operating Activities --                                                                    
    Bad Debt Expense........................................        --       2,559         651 
    Depreciation and Amortization...........................     4,272       7,543       4,508 
    Write-down of Natural Resource Projects.................       685       6,103          -- 
    Reduction in the Carrying Value of Timber Assets........    15,300          --          -- 
    Unrealized and Realized (Gains) Losses on Venture                                          
      Capital, Marketable Securities, and Long-term                                            
      Investments, Net......................................    (2,095)     11,665      (9,551)
    Provision on Other Investments..........................        81         420         962 
    Minority Interest.......................................     1,438     (13,456)        432 
  Changes in Operating Assets and Liabilities --                                               
    Timber Inventory........................................     1,103       2,312      (4,491)
    Other Current Assets....................................     1,655       2,937       5,734 
    Other Long-term Assets..................................     1,778      (2,212)     (8,589)
    Accrued Expenses and Accounts Payable...................    (8,513)      5,677       4,631 
                                                              --------    --------    -------- 
        Total Adjustments and Changes in Operating Assets                                      
          and Liabilities...................................    15,704      23,548      (5,713)
                                                              --------    --------    -------- 
        Net Cash Used in Operating Activities...............   (16,514)    (22,249)    (19,347)
                                                              --------    --------    -------- 
        Net Cash (Used in) Provided by Discontinued                                            
          Operations........................................    (3,119)     (6,976)      1,277 
                                                              --------    --------    -------- 
Cash Flows from Investing Activities:                                                          
  Building..................................................      (556)       (832)     (2,865)
  Purchase of Long-term Venture Capital Investments.........      (201)    (29,652)    (14,889)
  Proceeds from Sale of Long-term Venture Capital                                              
    Investments.............................................     1,003         492          -- 
  Deferred Timber Development Costs.........................      (695)         --        (354)
  Purchase of Timber Equipment..............................    (3,127)     (4,988)     (5,206)
  Purchase of Long-term Investments.........................      (189)     (2,245)     (4,026)
  Proceeds from Sale of Long-term Investments...............       768       5,007      13,884 
                                                              --------    --------    -------- 
        Net Cash Used in Investing Activities...............    (2,997)    (32,218)    (13,456)
                                                              --------    --------    -------- 
Cash Flows from Financing Activities:                                                          
  Capital Contributions.....................................    14,633      19,689       5,579 
  Due to Affiliates, Net....................................     8,277      19,865       4,667 
  Amounts Invested by Limited Partners of Venture Capital                                      
    Subsidiary..............................................       475      27,169      24,004 
  Repayment of Short-term Borrowings........................        --        (738)        741 
  Repayments of Notes Payable...............................    (1,696)     (4,680)     (3,968)
  Borrowing of Notes Payable................................        --          --       2,625 
  Reclassification of Restricted Cash.......................       633          39      (1,552)
                                                              --------    --------    -------- 
        Net Cash Provided by Financing Activities...........    22,322      61,344      32,096 
                                                              --------    --------    -------- 
Effect of Foreign Currency Exchange Rate Changes on Cash and                                   
  Cash Equivalents..........................................        12        (104)        (11)
Net (Decrease) Increase in Cash and Cash Equivalents........      (296)       (203)        559 
                                                              --------    --------    -------- 
Cash and Cash Equivalents, Beginning of Period..............     5,473       5,676       5,117 
                                                              --------    --------    -------- 
Cash and Cash Equivalents, End of Period....................  $  5,177    $  5,473    $  5,676 
                                                              ========    ========    ======== 

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 

(1) BACKGROUND AND BASIS OF PRESENTATION                                        

BACKGROUND                                                                      

  On May 14, 2000, The Pioneer Group, Inc. (Pioneer) entered into a merger
agreement with UniCredito Italiano S.p.A., an Italian Corporation (UniCredito)  
under which a wholly owned subsidiary of UniCredito will merge with and into    
Pioneer, with Pioneer surviving the merger as a wholly owned subsidiary of      
UniCredito. As a condition to closing the merger, Pioneer has agreed to transfer
some of its assets to Harbor Global Company Ltd. (the Separation), a newly      
formed wholly owned Bermuda limited duration company (the Company), and, before 
closing the merger, to distribute all the outstanding common shares of the      
Company to stockholders of Pioneer (the Distribution).                          

At the time of the Distribution, the Company's assets will primarily  
consist of: real estate management and investment management operations in      
Russia; Polish and Eastern European venture capital investment and management   
operations; Polish and Eastern European real estate management operations;      
timber harvesting and sales in Russia; gold exploration operations in Russia;   
approximately $30 million in cash, of which $5 million is restricted to satisfy 
liabilities associated with Pioneer's former gold mining operations;            
approximately $3.6 million of liabilities related to certain compensation       
liabilities payable to current employees of Pioneer who will become employees of
Harbor Global or Calypso Management; and a non-interest-bearing promissory note 
with a face value of $13.8 million, payable to Pioneer Goldfields II, a wholly  
owned subsidiary of the Company.                                                

    The Russian real estate and investment management operations consist of an
81% owned Russian investment management company (JSC Pioneer First), an 81%     
owned Russian stockholder services company (JSC Pioneer Services), and on       
approximately 52% interest held in the Pioneer First Investment Fund, a Russian 
joint stock company managed by JSC Pioneer First. Pioneer First Investment Fund 
invests directly in real estate and securities of Russian companies. A          
significant portion of the assets of Pioneer First Investment Fund consists of  
its ownership of the Meridian Commercial Tower, an 18-story, 22,600 square-meter
office building in Moscow, Russia. Under a management agreement between JSC     
Pioneer First and Pioneer First Investment Fund, JSC Pioneer First has agreed to
provide management services to Pioneer First Investment Fund for an annual fee  
of five percent of gross assets less any value-added taxes or similar taxes.    
Through December 31, 1999, JSC Pioneer Services provided shareholder services to
Pioneer First Investment Fund and two Russian open-end unit investment funds    
managed by JSC Pioneer First.                                                   

   The Polish and Eastern European venture capital investment and management
operations consist primarily of the Pioneer Poland Fund. At December 31, 1999,  
the Pioneer Poland Fund had approximately $60 million in commitments from U.S.  
and European investors, of which approximately $40 million had been invested in 
privately held Polish companies.                                                

The Polish and Eastern European real estate management operations are 
conducted by PREA, LLC (formerly, Pioneer Real Estate Advisors, Inc.) (PREA).   
PREA provides real estate investment opportunities in Poland and Eastern Europe 
to institutional investors through two pooled investment funds, the Polish Real 
Estate Fund and the PBO Property Fund, LLC. PREA also provides management       
services for the Meridian Commercial Tower.                                     

The Russian timber harvesting and sales operations consist of         
Forest-Starma's operations. Forest-Starma, which is located on the Siziman Bay  
in the Vanino district of the Khabarovsk Territory of the Russian Far East, owns
and operates a modern logging camp, including a harbor facility, from which it  
exports timber to markets in the Pacific Rim, primarily Japan and South Korea.  
Two other entities in this segment, JSC Udinskoye and JSC Amgun-Forest, are both
in the development stage. All of these entities have signed long-term leases    
relating to timber harvesting in the Russian Far East.                          

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

     The Russian gold exploration operations consist of Tas-Yurjah's operations.
Tas-Yurjah conducts the exploration of potential gold mining properties over    
concession areas in the Ayano-Maysky district of the Khabarovsk Territory.      
Tas-Yurjah is included in the Company's "Other" segment (see Note 14).          

    Pioneer is in the final stages of closing its Russian brokerage operations
and, as such, has reported the results of those operations as discontinued      
operations. Additionally, Pioneer sold its Russian banking operations in 1999   
and the historical results are reflected as a discontinued operation. These     
companies will not be included as part of the legal separation due to a prior   
liquidation or sale. However, as they were subsidiaries of Pioneer First Russia,
the 81% owned subsidiary of the Company, the results of these operations have   
been included in these consolidated financial statements.                       

BASIS OF PRESENTATION                                                           

  The consolidated financial statements reflect the results of operations,
financial position, changes in net parent company investment (deficit), and cash
flows of the businesses that will be transferred to the Company from Pioneer in 
the Separation (the Company Businesses) as if the Company were a separate entity
for all periods presented. The consolidated financial statements have been      
prepared using the historical basis in the assets and liabilities and historical
results of operations related to the Company Businesses. Changes in net parent  
company investment (deficit) represent the net losses of the Company plus net   
cash transfers to or from Pioneer and noncash transfers to or from Pioneer.     
Additionally, the consolidated financial statements include allocations of      
certain Pioneer expenses relating to the Company Businesses that will be        
transferred to the Company from Pioneer. All material intercompany transactions 
and balances between the Company Businesses have been eliminated.               

  Certain costs historically have been incurred on the Company's behalf by
Pioneer. These costs relate to shared activities, such as executive, legal,     
finance, human resources, and information technology support. The shared        
activities costs are allocated to all Pioneer business units and the Company    
based upon estimated time spent and the actual compensation costs of the        
departments performing shared activities. Additionally, certain other costs that
are directly attributable to the operations of the Company, such as salary and  
benefits costs of Pioneer employees who have worked exclusively for the Company,
and other direct costs, including travel, entertainment, gold exploration costs 
and political risk insurance, are allocated to the Company. The costs of the    
shared services charged to the Company are not necessarily indicative of the    
costs that would have been incurred if the Company had performed these functions
as a stand-alone entity. Subsequent to the Distribution, the Company will       
perform these shared functions using its own resources or purchased services and
will be responsible for the costs and expenses associated with the management of
an independent public corporation. Additionally, income taxes are calculated    
using the separate-tax-return method.                                           

 The Company is expected to enter into an administration and liquidation
agreement with Calypso Management LLC (the Manager) under which the Manager will
manage the liquidation of the Company and operate the Company's assets pending  
liquidation in exchange for a fee (see Note 10).                                

    The consolidated financial information included herein may not necessarily
reflect the consolidated results of operations, financial position, changes in  
net parent company investment (deficit), and cash flows of the Company in the   
future or what they would have been had it been a separate, stand-alone entity  
during the periods presented.                                                   

RUSSIAN ENVIRONMENT                                                             

    In recent years, Russia has undergone substantial political, economic, and
social change. As an emerging market, Russia does not possess a well developed  
business, legal, and regulatory infrastructure                                  

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

that would generally exist in a more mature free-market economy. As a result,   
operations carried out in Russia involve significant risks that are not         
typically associated with those in developed markets. Such risks have been      
evidenced by the government's inability to meet its obligations under its       
short-term ruble denominated treasury bills (GKOs) and certain other ruble and  
foreign currency denominated securities. The government also announced a        
widening of the ruble-trading corridor, which was soon abandoned, and a         
moratorium on certain foreign currency payments.                                

 The economic conditions in Russia, together with actions of the Russian
government, led to a severe devaluation of the ruble, a sharp increase in the   
rate of inflation, the near collapse of the banking system, significant defaults
on foreign currency obligations, a dramatic decline in the prices of Russian    
debt and equity securities, and an inability to raise funds in the international
capital markets during 1998 and 1999. Although recent performance has improved, 
the Russian economy since August 1998 generally has been characterized by rising
unemployment and underemployment, high government debt relative to gross        
domestic product, high levels of trade credit, high levels of corporate         
insolvency, highly volatile foreign currency exchange and interest rates, and an
unstable stock market.                                                          

ASIAN CRISIS                                                                    

 The Company has been and for the foreseeable future will continue to be
affected by the unstable economies in the Asian-Pacific region. The Company's   
timber sales are primarily made to this region. During 1998, timber sales prices
were significantly depressed and, although prices increased in the last quarter 
of 1998 and in 1999, there is uncertainty as to whether this trend will         
continue. This will be dependent upon the recovery in the economies of countries
in this region.                                                                 

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, PRINCIPLES OF CONSOLIDATION     

CONSOLIDATION                                                                   

  The accompanying consolidated financial statements include the Company's
wholly owned and majority-owned subsidiaries and certain partnerships that it   
controls. Intercompany transactions and balances have been eliminated. The      
Company has consolidated the Pioneer Poland U.S., L.P. and Pioneer Poland UK,   
L.P. in which the Company's ownership interests are 7.2% and 9.2%, respectively.
Control is defined by several factors, including, but not limited to, the fact  
that the Company is the general partner of both Pioneer Poland U.S., L.P. and   
Pioneer Poland UK, L.P., the general partner has absolute and unilateral        
authority to make investment decisions, the limited partners may not remove the 
general partner, and the general partner has absolute and unilateral authority  
to declare, or not to declare, distributions of partnership income to the       
partners. Investments in which the Company exercises significant influence but  
which it does not control (generally a 20% to 50% ownership interest) are       
accounted for under the equity method of accounting. Investments in which the   
Company has less than a 20% ownership interest are generally accounted for under
the cost method of accounting.                                                  

The preparation of financial statements in conformity with generally  
accepted accounting principles requires management to make estimates and        
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenues and expenses during the         
reporting period. Actual results could differ from those estimates. The most    
significant estimates with regard to these consolidated financial statements    
relate to the valuation of investments of the Pioneer First Investment Fund and 
venture capital investments and the estimated future cash flows of the Company's
timber operations, as discussed herein.                                         

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

CONSOLIDATED STATEMENT OF CASH FLOWS                                            

  Cash and cash equivalents consist primarily of cash on deposit in banks.
The Company had approximately $880,000 and $1,513,000 of restricted cash as of  
December 31, 1999 and 1998, respectively. The cash is restricted due to certain 
provisions of the loan agreement between Forest Starma and the Overseas Private 
Investment Corporation (OPIC) (see Note 4). Pioneer, as required under the      
agreement with UniCredito, intends to repay the OPIC debt prior to the          
Distribution.                                                                   

INVENTORIES                                                                     

Inventories are stated at the lower of average cost or net realizable 
value.                                                                          

DEFERRED TIMBER DEVELOPMENT COSTS                                               

   Deferred timber development costs consist of construction and engineering
expenditures and infrastructure costs incurred in developing the site and the   
roads, as well as capitalized interest. These costs are amortized on a          
units-of-production basis, which anticipates recovery principally over 10 years.
Certain other deferred timber development costs, including legal,               
organizational, and other preoperating costs, were expensed in connection with  
the adoption of an American Institute of Certified Public Accountants Statement 
of Position (SOP) 98-5, Reporting on the Costs of Start-up Activities,effective 
January 1, 1999.                                                                

GOODWILL                                                                        

Pioneer acquired its Russian real estate management and investment    
management operations in 1995 for approximately $20,000,000. At inception, the  
excess of the purchase price over the estimated fair value of the assets        
approximated $2,858,000. As of December 31, 1999 and 1998, goodwill totaled     
approximately $1,524,000 and $1,810,000, respectively, and is being amortized   
over 10 years. Amortization expense was approximately $286,000 for both 1999 and
1998. At December 31, 1999 and 1998, the accumulated amortization of goodwill   
was approximately $1,334,000 and $1,048,000, respectively.                      

TIMBER EQUIPMENT                                                                

    Timber equipment and facilities consist of a jetty, logging machinery, and
building and housing units. These costs are principally depreciated on a        
units-of-production basis, which anticipates recovery over 5 to 20 years. Major 
renewals and improvements are capitalized, while maintenance and repairs are    
expensed when incurred. In the event of retirement or other disposition of a    
fixed asset, the cost of the asset and the related accumulated depreciation or  
amortization amount is removed from the accounts and any resulting gain or loss 
is reflected in earnings.                                                       

BUILDING                                                                        

The building represents the Meridian Commercial Tower in Russia. The  
Meridian Commercial Tower is an office building that is wholly owned by the     
Pioneer First Investment Fund. The building is being                            

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

depreciated on a straight-line basis over 40 years. The cost and the accumulated
depreciation for the building is as follows:                                    

                                                                [Download Table]

                                                               1999         1998   
                                                             ---------    ---------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
Building Cost...............................................  $26,550      $25,994 
Accumulated Depreciation....................................   (1,991)      (1,294)
                                                              -------      ------- 
                                                              $24,559      $24,700 
                                                              =======      ======= 

LONG-TERM VENTURE CAPITAL INVESTMENTS                                           

The Company's long-term venture capital investments consist of the    
following:                                                                      

                                                                [Download Table]

                                                                  DECEMBER 31,     
                                                             ----------------------
                                                               1999         1998   
                                                             ---------    ---------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
Cash Restricted for Future Investment Purposes..............  $11,232      $22,586 
Venture Capital Investments.................................   39,861       27,499 
                                                              -------      ------- 
                                                              $51,093      $50,085 
                                                              =======      ======= 

   The Company's venture capital investments are made through certain of its
consolidated partnerships. The venture capital investments are in companies that
are domiciled in Poland and are primarily engaged in bringing new technology to 
market, as well as more mature companies in need of capital for expansion,      
acquisitions, management buyouts, or recapitalizations. At the time the         
investments are made, the investments are primarily in the form of unregistered 
common and preferred stock, warrants, and promissory notes. No market quotes are
available for the venture capital investments.                                  

     Most of the Company's venture capital investments are valued at fair value,
as determined in good faith by management. In determining fair value,           
investments are initially stated at cost until significant subsequent events    
require a change in valuation. The Company considers the financial condition and
operating results of the investee, prices paid in subsequent private offerings  
of the same or similar securities, the amount that the Company can reasonably   
expect to realize upon the sale of these securities, and other factors deemed   
relevant.                                                                       

LONG-TERM INVESTMENTS                                                           

   Long-term investments consist of Russian investments of the Pioneer First
Investment Fund. These securities are carried at cost with adjustments made for 
any other-than-temporary impairment in value until such time as the breadth and 
scope of the Russian securities markets develop to certain quantifiable levels. 
The carrying value of these securities was approximately $6,712,000 and         
$7,006,000 at December 31, 1999 and 1998, respectively. Management estimated the
approximate fair value of these securities was $20,600,000 and $13,400,000 at   
December 31, 1999 and 1998, respectively, (based upon available market          
quotations and appraisals).                                                     

VALUATION OF FINANCIAL INSTRUMENTS                                              

    The Company considers the available market quotations when estimating fair
value of financial instruments. As stated in the accompanying consolidated      
balance sheets, the carrying values of the Company's financial instruments      
approximate fair value, except for the long-term investments of Pioneer First   
Investment Fund, as discussed above.                                            

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

LOSS PER SHARE                                                                  

     On the date of Distribution, shareholders of Pioneer will receive one share
of the Company for every five Pioneer shares they own. The loss per share has   
been computed assuming that the shares expected to be issued on the distribution
date were outstanding for all periods presented.                                

The following table provides a reconciliation of the numerators and   
denominators of the basic and diluted loss per share calculation:               

                                                        [Enlarge/Download Table]

                                                        1999           1998           1997   
                                                     -----------    -----------    ----------
                                                     (SHARE AND DOLLAR AMOUNTS IN THOUSANDS, 
                                                            EXCEPT PER SHARE AMOUNTS)        
                                                                                             
Net Loss............................................  $(45,178)      $(55,939)      $(7,619) 
Weighted Average Shares.............................     5,296          5,296         5,296  
Basic and Diluted Loss Per Share....................     (8.53)        (10.56)        (1.44) 

The Company had no stock options or other common stock equivalents    
outstanding during the periods presented.                                       

COMPREHENSIVE LOSS                                                              

    The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for the 
reporting of comprehensive income and its components. Comprehensive income, as  
defined, includes all changes in equity during a period from nonowner sources.  

FOREIGN CURRENCY TRANSLATION                                                    

In accordance with SFAS No. 52, Foreign Currency Translation, the     
functional currency of the Company's timber operation is the U.S. dollar, as the
revenues, costs of capital equipment, and financing costs are principally       
denominated in U.S. dollars. The functional currency of the Company's financial 
services operations is generally the currency of the country in which those     
operations are conducted. However, some of those operations are conducted in    
countries having highly inflationary economies and, as a result, the functional 
currency is currently the U.S. dollar. For those entities, the gains and losses 
that result from remeasuring into the U.S. dollar for reporting purposes are    
included in the accompanying consolidated statements of operations. The net     
foreign currency losses were approximately $135,000 in 1999, $1,705,000 in 1998,
and $515,000 in 1997.                                                           

LONG-LIVED ASSETS                                                               

     The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying value of the asset may not  
be recoverable. In accordance with SFAS No. 121, Accounting for the Impairment  
of Long-Lived Assets and for the Long-Lived Assets to Be Disposed Of, the       
Company uses an estimate of the future undiscounted cash flows of the related   
asset or asset grouping in measuring whether the assets are impaired. If any    
impairment is identified, an impairment charge is recorded to write down the    
assets by the excess of the carrying value over fair value. The Company         
periodically reviews its long-lived assets and assesses the future useful life  
of these assets whenever events or changes in circumstances indicate that the   
current useful life has diminished.                                             

CONCENTRATION OF RISK                                                           

 The Company's operations are concentrated in Russia and Eastern Europe.
Additionally, the Company's timber project sells its timber primarily in the    
Asian markets. The Company performs ongoing                                     
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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

evaluations of its subsidiaries and investments and obtains political risk      
insurance, which mitigates its exposure in foreign countries (see Note 14).     

CHANGE OF ACCOUNTING PRINCIPLE                                                  

  On January 1, 1999, the Company adopted SOP 98-5. This standard requires
that entities expense costs of start-up activities as those costs are incurred. 
The Company previously capitalized certain preoperating costs in connection with
its natural resource operations and certain organizational costs associated with
its financial services operations. In the first quarter of 1999, the Company    
recorded the cumulative effect of a change in accounting principle and wrote off
unamortized capitalized start-up costs, net of tax, of approximately            
$11,547,000. The amount of pro forma net income in 1998 giving effect to the    
change in accounting principle did not differ materially from the amount        
reported in 1998.                                                               

(3) TIMBER INVENTORY AND EQUIPMENT                                              

Timber inventory comprises the following:                             

                                                                [Download Table]

                                                                  DECEMBER 31,     
                                                             ----------------------
                                                               1999          1998  
                                                             --------      --------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
Log Inventory...............................................  $  842        $1,887 
Spare Parts, Supplies, and Other............................   1,045         1,553 
Fuel........................................................     595           145 
                                                              ------        ------ 
                                                              $2,482        $3,585 
                                                              ======        ====== 

Timber equipment comprises the following:                             

                                                                [Download Table]

                                                                  DECEMBER 31,      
                                                             -----------------------
                                                                1999         1998   
                                                             ----------    ---------
                                                             (DOLLARS IN THOUSANDS) 
                                                                                    
Production Equipment........................................  $ 12,618      $11,747 
Buildings and Construction..................................     7,260        7,225 
Roads.......................................................     2,513        2,177 
Vehicles....................................................     1,463        1,409 
Other.......................................................     1,083           42 
                                                              --------      ------- 
          Total Cost........................................    24,937       22,600 
Less -- Accumulated Depreciation............................   (12,371)      (3,800)
                                                              --------      ------- 
                                                              $ 12,566      $18,800 
                                                              ========      ======= 

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

(4)  NOTES PAYABLE                                                              

Notes payable of the Company consist of the following:                

                                                                [Download Table]

                                                                  DECEMBER 31,     
                                                             ----------------------
                                                               1999         1998   
                                                             ---------    ---------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
Forest Starma financing, guaranteed by OPIC, payable in                            
  semiannual installments of $620,000 through December 15,                         
  2003, interest payable at 9.95%...........................  $ 4,960      $ 6,200 
Note payable to a bank, interest payable quarterly at the                          
  three month LIBOR plus 6%, principal due in eight                                
  quarterly installments through January 1999, secured by                          
  lease rental payments and proceeds from insurance                                
  policies..................................................       --          456 
Less -- Current Portion.....................................   (1,240)      (1,696)
                                                              -------      ------- 
                                                              $ 3,720      $ 4,960 
                                                              =======      ======= 

Pioneer has guaranteed the repayment of the loan to OPIC.             

(5)  AMOUNTS DUE TO AFFILIATES                                                  

  The consolidated financial statements include approximately $103,557,000
and $95,282,000 of amounts due to affiliates at December 31, 1999 and 1998,     
respectively. These amounts primarily consist of costs paid for services and    
costs that arose when Pioneer made payments on behalf of the Company. In        
connection with the Distribution, the outstanding balance at the date of        
distribution will be contributed to capital of the Company.                     

(6)  OTHER EXPENSES                                                             

Other expenses consist of the following:                              

                                                                [Download Table]

                                                                DECEMBER 31,        
                                                         ---------------------------
                                                          1999      1998       1997 
                                                         ------    -------    ------
                                                           (DOLLARS IN THOUSANDS)   
                                                                                    
Insurance and Other Tax................................. $1,772    $ 3,396    $  784
Professional Services...................................  1,137      2,589     1,113
Bad-debt Expense........................................     --      2,559       651
Foreign Currency Transaction Losses.....................    135      1,705       515
Travel, Subscriptions, and Dues.........................    471        889       759
Amortization Expense....................................    451        718       421
Telephone and Data Processing...........................    242        481       404
Selling Expense.........................................    136        253       204
Other...................................................  2,048      6,096     3,734
                                                         ------    -------    ------
          Total Other Expenses.......................... $6,392    $18,686    $8,585
                                                         ======    =======    ======

(7)  INCOME TAXES                                                               

The results of operations of certain subsidiaries of the Company were 
previously included in the U.S. federal consolidated tax returns of Pioneer. In 
the Company's consolidated financial statements, the provision for income taxes 
includes a provision calculated on the separate-return basis in accordance with 

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

the requirements of SFAS No. 109, Accounting for Income Taxes. The separate     
return method allocates current and deferred taxes to members of a group by     
applying the provisions of SFAS No. 109 to each member as if it were a separate 
tax payer.                                                                      

The following is a summary of the components of loss from continuing  
operations before provision for income taxes and minority interest for financial
reporting purposes:                                                             

                                                        [Enlarge/Download Table]

                                                      1999        1998        1997   
                                                    --------    --------    -------- 
                                                         (DOLLARS IN THOUSANDS)      
                                                                                     
Domestic........................................... $(21,653)   $(12,856)   $ (7,223)
Foreign............................................   (7,689)    (46,214)     (4,462)
                                                    --------    --------    -------- 
                                                    $(29,342)   $(59,070)   $(11,685)
                                                    ========    ========    ======== 

   The Company is a Bermuda limited duration company and will not be subject
to taxation in Bermuda. The Company currently has subsidiaries located in the   
United States. Prior to the Separation, the results of these subsidiaries have  
been included in the U.S. federal consolidated tax returns of Pioneer. Under the
separate-return method, the losses incurred in the United States have not been  
benefited. However, Pioneer has made capital contributions to the Company in    
exchange for the tax benefits that Pioneer realized. In connection with the     
Separation, the U.S. subsidiaries will be recharacterized as partnerships for   
U.S. tax purposes. The income tax provisions and the deferred taxes included in 
the accompanying consolidated financial statements relate to the Company's      
corporate subsidiaries that are located primarily in Russia and Poland.         

The components of the provision for foreign income taxes on continuing
operations consist of:                                                          

                                                                [Download Table]

                                                             1999     1998     1997 
                                                            ------    ----    ------
                                                             (DOLLARS IN THOUSANDS) 
                                                                                    
Current Foreign............................................ $1,438    $183    $1,517
Deferred Foreign...........................................     --      --        --
                                                            ------    ----    ------
                                                            $1,438    $183    $1,517
                                                            ======    ====    ======

    Income taxes, as stated as a percentage of loss from continuing operations
before provision for income taxes, are comprised of the following:              

                                                        [Enlarge/Download Table]

                                                             1999     1998     1997   
                                                             -----    -----    -----  
                                                                                      
Federal Statutory Rate:..................................... (35.0)%  (35.0)%  (35.0)%
Losses Not Benefited........................................  39.5     35.0     50.6  
Foreign Taxes...............................................   1.7      0.3     (0.8) 
Other.......................................................  (1.1)     0.0      0.2  
                                                             -----    -----    -----  
     Effective Tax Rate.....................................   5.1%     0.3%    15.0% 
                                                             =====    =====    =====  

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

The total income tax provision (benefit) included in the accompanying 
consolidated statements of operations is as follows:                            

                                                                [Download Table]

                                                          1999      1998       1997 
                                                         ------    -------    ------
                                                           (DOLLARS IN THOUSANDS)   
                                                                                    
Continuing Operations................................... $1,438    $   183    $1,517
Discontinued Operations.................................   (365)    (1,615)    5,128
Change in Accounting Principle..........................   (249)        --        --
                                                         ------    -------    ------
                                                         $  824    $(1,432)   $6,645
                                                         ======    =======    ======

The tax effects of significant temporary differences are as follows:  

                                                                [Download Table]

                                                               1998          1999   
                                                             ---------    ----------
                                                             (DOLLARS IN THOUSANDS) 
                                                                                    
Net Operating Loss Carryforwards of Foreign Subsidiaries....  $9,733       $12,726  
Valuation Allowance.........................................   9,733        12,726  
                                                              ------       -------  
                                                              $    0       $     0  
                                                              ======       =======  

    The net operating loss carryforward is primarily related to Forest-Starma.
There are a number of restrictions on the utilization of loss carryforwards in  
Russia. The net operating loss carryforward approximated 876,000,000 Russian    
Rubles at both December 31, 1999 and 1998.                                      

   Pioneer, the Company and Harbor Global II Ltd., a wholly owned subsidiary
of the Company, will enter into a tax separation agreement before consummation  
of the Distribution. Under the tax separation agreement, the Company will agree 
to indemnify Pioneer for any income tax obligations arising from the Separation 
and Distribution.                                                               

(8)  MINORITY INTEREST                                                          

 The Company's minority interest liability includes the interests of the
other equity holders of the Company's consolidated entities. The liability for  
each entity is recorded based upon the net book value of that entity at the     
balance sheet date, except for those instances in which agreements could result 
in the Company redeeming those interests at amounts greater than their share of 
the net book value. In those instances, adjustments are made to the liability to
reflect the minority equity holders' economic interests under those agreements. 
As of December 31, 1999 and 1998, the Company's minority interest liability     
consisted of the following:                                                     

                                                                [Download Table]

                                                               1999         1998   
                                                             ---------    ---------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
Pioneer First Investment Fund...............................  $13,816      $13,433 
Pioneer First Russia........................................    1,330          638 
The Poland Fund -- Venture Capital..........................   46,486       45,649 
                                                              -------      ------- 
                                                              $61,632      $59,720 
                                                              =======      ======= 

(9)  BENEFIT PLANS                                                              

Prior to the Distribution, the Company's employees participated in a  
retirement benefit plan and a savings and investment plan (the Benefit Plans)   
qualified under Section 401(k) of the Internal Revenue Code. Pioneer makes      
contributions to a trustee, on behalf of eligible employees to fund both Benefit
Plans. The contributions allocable to the Company's employees have been included
in the costs and expenses in                                                    

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

the accompanying consolidated financial statements. In 1999, 1998, and 1997,    
these costs were approximately $164,000, $157,000 and $125,000 respectively.    

(10)  RELATED PARTY TRANSACTIONS                                                

 The Company is expected to enter into an administration and liquidation
agreement with the Manager, under which the Manager will manage the liquidation 
of the Company and operate the Company's assets as going concern businesses     
until they are liquidated. The principal executive officers of the Company will 
also serve as the principal executive officers of the Manager. These officers   
are currently officers of Pioneer. Under the management agreement, the Company  
has agreed to pay certain expenses of the Manager incurred in connection with   
its provision of services and a percentage of the net proceeds realized from the
liquidation of its assets.                                                      

(11) COMMITMENTS                                                                

     The Company has committed to contribute up to $5,700,000 for Class B shares
of the Pioneer Poland Real Estate Fund, of which approximately $300,000 has been
contributed as of December 31, 1999. Additionally, the Company has also         
committed to contribute $4,000,000 for shares of the PBO Property Fund, of which
$1,384,000 has been contributed as of December 31, 1999. The Company also       
provides management and advisory services to these funds.                       

 Pioneer First Russia (PFR), a subsidiary of the Company, is part of the
Russian real estate and investment management operations and is the parent of   
JSC Pioneer First and JSC Pioneer Services. In 1996, PFR issued approximately   
18% of its common stock in exchange for $4,000,000. At the same time, PFR       
entered into a put and call agreement with respect to the common stock. The put 
allows the holder to put the shares to PFR for the greater of a defined book    
value or 12 times the holder's share of PFR's average earnings, as further      
defined in the agreement. This put is effective from October of 2000 through    
October of 2004. The liability recorded in connection with the put was          
approximately $1,900,000 and $2,000,000 at December 31, 1999 and 1998,          
respectively, and is included in both the minority interest liability and the   
net noncurrent assets of discontinued operations in the accompanying            
consolidated balance sheet.                                                     

(12) DISCONTINUED OPERATIONS                                                    

 Pioneer Securities and UKS Securities Ltd. previously traded in various
Russian securities on behalf of customers and, to a lesser extent, on their own 
account. In 1999, the decision was made by management of the Company to close   
the operations of these two companies after all transfers of customers'         
positions were complete. No loss was realized in connection with the closure.   

    In the third quarter of 1998, the Company decided to liquidate its Russian
banking operations. The 1998 loss included a provision of approximately         
$3,600,000 for costs and certain losses associated with liquidating the bank. In
December 1998, the Company sold its stock in the bank to an unrelated third     
party.                                                                          

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

  Accordingly, the operating results for the Russian brokerage and banking
have been segregated from the results from continuing operations and reported   
separately on the consolidated statements of operations for all periods         
presented. The following is a summary of the results of discontinued operations 
for the years ended December 31, 1999, 1998, and 1997, respectively.            

                                                        [Enlarge/Download Table]

                                                                 YEAR ENDED DECEMBER 31,     
                                                              ------------------------------ 
                                                               1999        1998       1997   
                                                              -------    --------    ------- 
                                                                  (DOLLARS IN THOUSANDS)     
                                                                                             
Revenues from Brokerage and Banking.........................  $   728    $  6,581    $46,629 
                                                              -------    --------    ------- 
  Income (Loss) before Income Taxes and Minority Interest...   (2,096)    (15,265)    11,410 
Income Tax Benefit (Expense)................................      365       1,615     (5,128)
                                                              -------    --------    ------- 
  (Loss) Income from Discontinued Operations before Minority                                 
     Interest...............................................   (1,731)    (13,650)     6,282 
Minority Interest Income (Expense)..........................      318       3,508       (267)
                                                              -------    --------    ------- 
  Net (Loss) Income from Discontinued Operations............  $(1,413)   $(10,142)   $ 6,015 
                                                              =======    ========    ======= 

(13) TIMBER OPERATIONS                                                          

In connection with the filing of its 1999 income tax return, Pioneer  
realized approximately $15,300,000 of income tax benefits associated with the   
timber operations. In connection with the realization of the income tax         
benefits, Pioneer recorded an equal offsetting reduction in the carrying value  
of its timber project. The reduction in the carrying value of the timber project
has been reflected in the accompanying consolidated statement of operations. As 
the Company utilizes the separate return method for providing income taxes (see 
Note 7), the income tax benefits have not been reflected in the accompanying    
consolidated statement of operations.                                           

(14) FINANCIAL INFORMATION BY BUSINESS SEGMENT                                  

The Company presents its segment information for continuing operations
using the management approach. The management approach is based on the way that 
management organizes the segments within a Company for making operating         
decisions and assessing performance. The Company's operating segments are       
organized around services and products provided, as well as geographic regions. 

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

  The following details selected financial information by business segment
and geographic region (dollars in thousands):                                   

SEGMENT DISCLOSURES 

                                                        [Enlarge/Download Table]

                                                            INTER-                                           
                                                 RUSSIAN   NATIONAL                                          
                                                FINANCIAL  VENTURE    REAL                                   
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1999  SERVICES   CAPITAL   ESTATE     TIMBER     OTHER     TOTAL   
----------------------------------------------  ---------  --------  -------   --------   -------   -------- 
                                                                                                             
Net Revenues and Sales....................       $10,386   $ 1,221   $ 1,737   $ 14,383   $   380   $ 28,107 
                                                 -------   -------   -------   --------   -------   -------- 
  Income (Loss) before Income Taxes, Minority                                                                
     Interest, and Cumulative Effect of                                                                      
     Accounting Change....................           839       481    (4,868)   (24,681)   (1,113)   (29,342)
Income Taxes..............................        (1,352)      (17)      (68)        (1)       --     (1,438)
Minority Interest Expense.................          (600)     (838)       --         --        --     (1,438)
                                                 -------   -------   -------   --------   -------   -------- 
  Net Loss from Continuing Operations before                                                                 
     Change in Accounting Principle.......        (1,113)     (374)   (4,936)   (24,682)   (1,113)   (32,218)
Cumulative Effect of Change in Accounting                                                                    
  Principle...............................          (450)     (382)      (88)   (10,627)       --    (11,547)
                                                 -------   -------   -------   --------   -------   -------- 
  Net Loss from Continuing Operations.....       $(1,563)  $  (756)  $(5,024)  $(35,309)  $(1,113)  $(43,765)
                                                 =======   =======   =======   ========   =======   ======== 
Depreciation and Amortization.............       $(1,073)  $   (12)  $  (119)  $ (3,064)  $    (4)  $ (4,272)
                                                 =======   =======   =======   ========   =======   ======== 
Interest Expense..........................       $    --   $    --   $    (7)  $   (586)  $    --   $   (593)
                                                 =======   =======   =======   ========   =======   ======== 
Capital Expenditures......................       $   652   $     4   $    --   $  3,127   $    --   $  3,783 
                                                 =======   =======   =======   ========   =======   ======== 
Total Assets..............................       $37,795   $51,794   $ 1,338   $ 19,761   $   951   $111,639 
                                                 =======   =======   =======   ========   =======   ======== 

ENTERPRISE-WIDE DISCLOSURES 

                                                                [Download Table]

1999                                                                 
----                                                                 
                                                                     
Revenues from External Customers --                                  
  Russia....................................................  $24,769
  Poland....................................................    2,958
  Other.....................................................      380
                                                              -------
          Total.............................................  $28,107
                                                              =======
Long-lived Assets                                                    
  Russia....................................................  $38,301
  Poland....................................................      263
  Other.....................................................    2,445
                                                              -------
          Total.............................................  $41,009
                                                              =======

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Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

SEGMENT DISCLOSURES 

                                                        [Enlarge/Download Table]

                                                            INTER-                                           
                                                 RUSSIAN   NATIONAL                                          
                                                FINANCIAL  VENTURE    REAL                                   
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1998  SERVICES   CAPITAL   ESTATE     TIMBER     OTHER     TOTAL   
----------------------------------------------  ---------  --------  -------   --------   -------   -------- 
                                                                                                             
Net Revenues and Sales....................      $  8,599   $   949   $ 1,208   $ 10,450   $   254   $ 21,460 
                                                --------   -------   -------   --------   -------   -------- 
  Loss before Income Taxes and Minority                                                                      
     Interest.............................       (22,515)   (7,193)   (4,862)   (21,821)   (2,679)   (59,070)
Income Taxes..............................          (176)       21       (28)        --        --       (183)
Minority Interest Income..................         7,219     6,237        --         --        --     13,456 
                                                --------   -------   -------   --------   -------   -------- 
  Net Loss from Continuing Operations.....      $(15,472)  $  (935)  $(4,890)  $(21,821)  $(2,679)  $(45,797)
                                                ========   =======   =======   ========   =======   ======== 
Depreciation and Amortization.............      $ (1,920)  $   (18)  $  (108)  $ (5,481)  $   (16)  $ (7,543)
                                                ========   =======   =======   ========   =======   ======== 
Interest Expense..........................      $     --   $    --   $   (24)  $   (710)  $    --   $   (734)
                                                ========   =======   =======   ========   =======   ======== 
Capital Expenditures......................      $  1,076   $    23   $    --   $  4,988   $    --   $  6,087 
                                                ========   =======   =======   ========   =======   ======== 
Total Assets..............................      $ 37,591   $50,774   $ 5,360   $ 48,308   $ 1,846   $143,879 
                                                ========   =======   =======   ========   =======   ======== 

ENTERPRISE-WIDE DISCLOSURES 

                                                                [Download Table]

1998                                                                 
----                                                                 
                                                                     
Revenues from External Customers --                                  
  Russia....................................................  $19,049
  Poland....................................................    2,157
  Other.....................................................      254
                                                              -------
          Total.............................................  $21,460
                                                              =======
Long-lived Assets                                                    
  Russia....................................................  $44,107
  Poland....................................................      502
  Other.....................................................    2,184
                                                              -------
          Total.............................................  $46,793
                                                              =======

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HARBOR GLOBAL COMPANY LTD.

Notes to Consolidated Financial Statements -- (Continued) 
December 31, 1999 

SEGMENT DISCLOSURES 

                                                        [Enlarge/Download Table]

                                                            INTER-                                          
                                                 RUSSIAN   NATIONAL                                         
                                                FINANCIAL  VENTURE    REAL                                  
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997  SERVICES   CAPITAL   ESTATE    TIMBER     OTHER     TOTAL   
----------------------------------------------  ---------  --------  -------   -------   -------   -------- 
                                                                                                            
Net Revenues and Sales.....................      $ 7,972   $   522   $   543   $11,879   $    --   $ 20,916 
                                                 -------   -------   -------   -------   -------   -------- 
  Loss before Income Taxes and Minority                                                                     
     Interest..............................       (1,311)     (669)   (3,397)   (4,367)   (1,941)   (11,685)
Income Taxes...............................       (1,508)       (8)       (1)       --        --     (1,517)
Minority (Expense) Interest Income.........         (998)      566        --        --        --       (432)
                                                 -------   -------   -------   -------   -------   -------- 
  Net Loss from Continuing Operations......      $(3,817)  $  (111)  $(3,398)  $(4,367)  $(1,941)  $(13,634)
                                                 =======   =======   =======   =======   =======   ======== 
Depreciation and Amortization..............      $(1,571)  $    (9)  $   (54)  $(2,871)  $    (3)  $ (4,508)
                                                 =======   =======   =======   =======   =======   ======== 
Interest Expense...........................      $    --   $    --   $   (20)  $  (833)  $    --   $   (853)
                                                 =======   =======   =======   =======   =======   ======== 
Capital Expenditures.......................      $ 3,561   $    29   $   344   $ 5,206   $    48   $  9,188 
                                                 =======   =======   =======   =======   =======   ======== 
Total Assets...............................      $53,226   $27,105   $ 5,327   $55,241   $   504   $141,403 
                                                 =======   =======   =======   =======   =======   ======== 

ENTERPRISE-WIDE DISCLOSURES 

                                                                [Download Table]

1997                                                                 
----                                                                 
                                                                     
Revenues from External Customers --                                  
  Russia....................................................  $19,851
  Poland....................................................    1,065
  Other.....................................................       --
                                                              -------
          Total.............................................  $20,916
                                                              =======
Long-lived Assets                                                    
  Russia....................................................  $41,829
  Poland....................................................    1,878
  Other.....................................................    1,399
                                                              -------
          Total.............................................  $45,106
                                                              =======

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HARBOR GLOBAL COMPANY LTD.

UNAUDITED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS 
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

                                                                [Download Table]

                                                              2000        1999   
                                                             -------    -------- 
                                                                 (UNAUDITED)     
                                                               (IN THOUSANDS)    
                                                                                 
Revenues:                                                                        
  Real Estate Rental Revenue................................ $ 1,955    $  2,710 
  Other.....................................................     646         788 
                                                             -------    -------- 
          Total Revenues....................................   2,601       3,498 
Operating Expenses:                                                              
  Salary and Benefit Expenses...............................    (658)       (710)
  Facility Expenses.........................................    (350)       (365)
  Building and Property Management Expenses.................    (440)       (459)
  Other Expenses............................................  (2,236)     (1,557)
  Allocation of Corporate Costs.............................  (2,140)     (1,984)
                                                             -------    -------- 
          Total Operating Expenses..........................  (5,824)     (5,075)
                                                             -------    -------- 
          Operating Loss....................................  (3,223)     (1,577)
Other Income:                                                                    
  Unrealized and Realized Gains on Securities...............   1,478         135 
  Interest Expense..........................................    (100)       (110)
                                                             -------    -------- 
          Total Other Income................................   1,378          25 
          Loss from Continuing Operations before Provision                       
           for Income Taxes and Minority Interest...........  (1,845)     (1,552)
Provision for Income Taxes..................................    (321)       (633)
                                                             -------    -------- 
          Loss from Continuing Operations before Minority                        
           Interest.........................................  (2,166)     (2,185)
Minority Interest (Expense) Income..........................    (156)        120 
                                                             -------    -------- 
          Net Loss from Continuing Operations before                             
           Cumulative Effect of a Change in Accounting                           
           Principle........................................  (2,322)     (2,065)
Net Income (Loss) from Discontinued Operations..............     192      (1,654)
Cumulative Effect of Change in Accounting Principle.........      --     (11,547)
                                                             -------    -------- 
          Net Loss.......................................... $(2,130)   $(15,266)
                                                             =======    ======== 
Basic and Diluted Loss Per Share............................ $ (0.40)   $  (2.88)
                                                             =======    ======== 
Weighted Average Shares Outstanding.........................   5,296       5,296 
                                                             =======    ======== 

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD.

UNAUDITED CONSOLIDATED INTERIM BALANCE SHEET
MARCH 31, 2000

                                                                [Download Table]

                                                                  UNAUDITED   
                                                                --------------
                                                                (IN THOUSANDS)
                                                                              
ASSETS                                                                        
Cash and Cash Equivalents...................................       $  6,114   
Restricted Cash.............................................            880   
Timber Inventory............................................          7,061   
Other Current Assets........................................          1,953   
Net Current Assets of Discontinued Operations...............             77   
                                                                   --------   
          Total Current Assets..............................         16,085   
Deferred Development Costs..................................             --   
Goodwill....................................................          1,454   
Venture Capital Investments.................................         50,765   
Long-term Investments.......................................          8,177   
Building....................................................         24,689   
Timber Equipment............................................         12,677   
Other Long-term Assets......................................          3,843   
Net Noncurrent Assets of Discontinued Operations............          1,197   
                                                                   --------   
          Total Assets......................................       $118,887   
                                                                   ========   
LIABILITIES AND PARENT COMPANY INVESTMENT                                     
Accounts Payable............................................       $  3,772   
Accrued Expenses............................................          6,536   
Current Portion of Notes Payable............................          1,240   
                                                                   --------   
          Total Current Liabilities.........................         11,548   
Amounts Due to Affiliates...................................        100,455   
Notes Payable, Less Current Portion.........................          3,720   
                                                                   --------   
          Total Liabilities.................................        115,723   
Minority Interest...........................................         62,328   
Parent Company Deficit......................................        (59,164)  
                                                                   --------   
          Total Liabilities and Parent Company Investment...       $118,887   
                                                                   ========   

The accompanying notes are an integral part of these consolidated financial 
statements. 
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HARBOR GLOBAL COMPANY LTD 

UNAUDITED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
as of and for the Three Months Ended March 31, 2000 

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                  

   The accounting and reporting policies of the Company conform to generally
accepted accounting principles. The Company has not changed any of its principal
accounting policies from those stated in the consolidated financial statements  
for the year ended December 31, 1999, included elsewhere in this information    
statement.                                                                      

     During the first quarter of 1999, the Company adopted the provisions of the
American Institute of Certified Public Accountants (the AICPA) SOP 98-5,        
Reporting on the Costs of Start-Up Activities. SOP 98-5 requires that costs of  
start-up activities be expensed as incurred. The Company had capitalized certain
pre-operating costs in connection with capitalized organizational costs         
associated with its financial services operations and its natural resource      
operations. Adoption of SOP 98-5 resulted in write-offs of $11.5 million, which 
is reflected in the accompanying consolidated financial statements as a change  
in accounting principle.                                                        

(2) FINANCIAL INFORMATION BY BUSINESS SEGMENT                                   

In accordance with SFAS No. 131, Disclosures about Segments of an     
Enterprise and Related Information, the Company presents segment information    
using the management approach. The management approach is based on the way that 
management organizes the segments within a Company for making operating         
decisions and assessing performance. The Company's operating segments are       
organized around services and products provided, as well as geographic regions. 

  The following details selected financial information by business segment
(dollars in thousands):                                                         

As of and for the three months ended March 31, 2000 (unaudited)             

                                                        [Enlarge/Download Table]

                                 RUSSIAN   INTERNATIONAL                                     
                                FINANCIAL     VENTURE      REAL                              
                                SERVICES      CAPITAL     ESTATE   TIMBER    OTHER   TOTAL   
                                ---------  -------------  ------   -------   -----  -------- 
                                                                                             
Net Revenues and Sales.........  $ 1,945      $   240     $  416   $    --   $ --   $  2,601 
                                 -------      -------     ------   -------   ----   -------- 
  Income (Loss) before Income                                                                
     Taxes and Minority                                                                      
     Interest..................      464         (215)      (794)   (1,300)    --     (1,845)
Income Taxes...................     (321)          --         --        --     --       (321)
Minority Interest..............     (441)         285         --        --     --       (156)
                                 -------      -------     ------   -------   ----   -------- 
  Net (Loss) Income from                                                                     
     Continuing Operations.....  $  (298)     $    70     $ (794)  $(1,300)  $ --   $ (2,322)
                                 =======      =======     ======   =======   ====   ======== 
Depreciation and                                                                             
  Amortization.................  $   272      $     4     $   31   $   757   $ --   $  1,064 
                                 =======      =======     ======   =======   ====   ======== 
Interest Expense...............  $    --      $    --     $   --   $  (100)  $ --   $   (100)
                                 =======      =======     ======   =======   ====   ======== 
Capital Expenditures...........  $   166      $    --     $   --   $   429   $ --   $    595 
                                 =======      =======     ======   =======   ====   ======== 
Total Assets...................  $40,772      $51,613     $1,442   $22,834   $952   $117,613 
                                 =======      =======     ======   =======   ====   ======== 

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HARBOR GLOBAL COMPANY LTD 

UNAUDITED NOTES TO CONSOLIDATED 
INTERIM FINANCIAL STATEMENTS -- (Continued) 
as of and for the Three Months Ended March 31, 2000 

As of and for the three months ended March 31, 1999 (unaudited)             

                                                        [Enlarge/Download Table]

                                                     INTER-                                          
                                          RUSSIAN   NATIONAL                                         
                                         FINANCIAL  VENTURE    REAL                                  
                                         SERVICES   CAPITAL   ESTATE     TIMBER    OTHER     TOTAL   
                                         ---------  --------  -------   --------   ------   -------- 
                                                                                                     
Net Revenues and Sales..................  $ 2,710   $   208   $   354   $     --   $  226   $  3,498 
                                          -------   -------   -------   --------   ------   -------- 
  Income (Loss) before Income Taxes,                                                                 
  Minority Interest and Change in                                                                    
  Accounting Principle..................    1,477      (316)   (1,346)    (1,005)    (362)    (1,552)
Income Taxes............................     (624)       (9)       --         --       --       (633)
Minority Interest.......................      (26)      146        --         --       --        120 
                                          -------   -------   -------   --------   ------   -------- 
Net Income (Loss) from Continuing                                                                    
  Operations before the Change in                                                                    
  Accounting Principle..................      827      (179)   (1,346)    (1,005)    (362)    (2,065)
Change in Accounting Principle..........     (450)     (382)      (88)   (10,627)      --    (11,547)
  Net Income (Loss) from Continuing                                                                  
  Operations............................  $   377   $  (561)  $(1,434)  $(11,632)  $ (362)  $(13,612)
                                          =======   =======   =======   ========   ======   ======== 
Depreciation and Amortization...........  $   547   $    75   $    37   $    545   $   --   $  1,204 
                                          =======   =======   =======   ========   ======   ======== 
Interest Expense........................  $    --   $    --   $    --   $   (110)  $   --   $   (110)
                                          =======   =======   =======   ========   ======   ======== 
Capital Expenditures....................  $   111   $    70   $    --   $    720   $   --   $    901 
                                          =======   =======   =======   ========   ======   ======== 
Total Assets............................  $38,225   $50,357   $ 4,456   $ 39,863   $1,773   $134,674 
                                          =======   =======   =======   ========   ======   ======== 

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                                                                       EXHIBIT A

DISTRIBUTION AGREEMENT

BY AND AMONG

THE PIONEER GROUP, INC.,

HARBOR GLOBAL COMPANY LTD.

AND 

HARBOR GLOBAL II LTD. 

[            ], 2000

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
DISTRIBUTION AGREEMENT......................................    1 
  ARTICLE I  Definitions....................................    1 
     Section 1.1   "Assumed Liabilities"....................    1 
     Section 1.2   "DGCL"...................................    1 
     Section 1.3   "Distribution"...........................    1 
     Section 1.4   "Distribution Agreement".................    1 
     Section 1.5   "Effective Time".........................    1 
     Section 1.6   "Exchange Act"...........................    1 
     Section 1.7   "Harbor Far East Exploration"............    1 
     Section 1.8   "Harbor Far East Ventures"...............    1 
     Section 1.9   "Harbor Global"..........................    1 
     Section 1.10  "Harbor Global II".......................    2 
     Section 1.11  "Harbor Global Common Stock".............    2 
     Section 1.12  "Harbor Global Group"....................    2 
     Section 1.13  "Harbor Global Indemnitees"..............    2 
     Section 1.14  "Harbor Global Preferred Stock"..........    2 
     Section 1.15  "Indemnified Claim"......................    2 
     Section 1.16  "Indemnitee".............................    2 
     Section 1.17  "Indemnifying Party".....................    2 
     Section 1.18  "Information"............................    2 
     Section 1.19  "Liabilities"............................    2 
     Section 1.20  "Losses".................................    2 
     Section 1.21  "Merger".................................    2 
     Section 1.22  "Merger Agreement".......................    3 
     Section 1.23  "OPIC Loan"..............................    3 
     Section 1.24  "Parent".................................    3 
     Section 1.25  "Parent Common Stock"....................    3 
     Section 1.26  "Parent Group"...........................    3 
     Section 1.27  "Parent Indemnitees".....................    3 
     Section 1.28  "PBO Property Fund Capital                     
      Contribution".........................................    3 
     Section 1.29  "Pioneer Forest".........................    3 
     Section 1.30  "PIOGlobal"..............................    3 
     Section 1.31  "Pioneer Goldfields II"..................    3 
     Section 1.32  "Pioneer International"..................    3 
     Section 1.33  "Pioneer Investments Poland".............    3 
     Section 1.34  "Pioneer Omega"..........................    3 
     Section 1.35  "Pioneer Poland Fund Holding Company"....    3 
     Section 1.36  "Pioneer Real Estate Advisors"...........    3 
     Section 1.37  "Pioneering Management"..................    3 
     Section 1.38  "Polish Real Estate Fund Capital               
      Contribution".........................................    3 
     Section 1.39  "Record Date"............................    3 
     Section 1.40  "Representatives"........................    3 
     Section 1.41  "Restructuring"..........................    3 
     Section 1.42  "Retained Liabilities"...................    3 
     Section 1.43  "SEC"....................................    4 
     Section 1.44  "Taxes"..................................    4 

 i

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                                                                [Download Table]

                                                            PAGE
                                                            ----
                                                                
   Section 1.45  "Tax Separation Agreement"...............    4 
   Section 1.46  "Time of Distribution"...................    4 
   Section 1.47  "Transfer Agent".........................    4 
ARTICLE II  Capitalization of Harbor Global; Mechanics of       
   the Distribution.......................................    4 
   Section 2.1   Capitalization of Harbor Global..........    4 
   Section 2.2   Mechanics of the Distribution............    4 
   Section 2.3   Timing of Distribution...................    4 
ARTICLE III  Representations and Warranties of Harbor           
   Global.................................................    4 
   Section 3.1   Organization and Qualification...........    4 
   Section 3.2   Authorization............................    5 
   Section 3.3   Compliance...............................    5 
ARTICLE IV  Tax Matters...................................    5 
   Section 4.1   Tax Separation Agreement.................    5 
   Section 4.2   Tax Matters..............................    5 
ARTICLE V  Restructuring and Assumed Liabilities..........    5 
   Section 5.1   Restructuring............................    5 
   Section 5.2   Assumed Liabilities......................    7 
   Section 5.3   Further Assurances.......................    8 
   Section 5.4   Intercompany Balances....................    8 
ARTICLE VI  Covenants.....................................    8 
   Section 6.1   Books and Records........................    8 
   Section 6.2   Access...................................    8 
   Section 6.3   Retention of Records.....................    8 
   Section 6.4   Confidentiality..........................    9 
   Section 6.5   Cooperation..............................    9 
   Section 6.6   Mutual Release, Etc......................    9 
   Section 6.7   Transaction Expenses.....................   10 
   Section 6.8   Ashanti..................................   10 
   Section 6.9   Names....................................   10 
ARTICLE VII  Indemnification..............................   10 
   Section 7.1   Indemnification by Harbor Global.........   10 
   Section 7.2   Indemnification by Parent................   11 
   Section 7.3   Indemnification Procedures...............   11 
   Section 7.4   Certain Limitations......................   12 
ARTICLE VIII  Conditions..................................   12 
   Section 8.1   Tax Separation Agreement.................   12 
   Section 8.2   Certain Transactions.....................   12 
   Section 8.3   Registration of Harbor Global Common           
    Stock.................................................   12 
   Section 8.4   Conditions to Merger Satisfied...........   12 
   Section 8.5   No Injunctions or Restraints.............   12 

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                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
  ARTICLE IX  Miscellaneous and General.....................   12 
     Section 9.1   Modification or Amendment................   12 
     Section 9.2   Counterparts.............................   13 
     Section 9.3   Governing Law............................   13 
     Section 9.4   Notices..................................   13 
     Section 9.5   Captions.................................   13 
     Section 9.6   Assignment...............................   13 
     Section 9.7   Certain Obligations......................   13 
     Section 9.8   Specific Performance.....................   13 
     Section 9.9   Severability.............................   13 
     Section 9.10  Entire Agreement.........................   14 
     Section 9.11  Jurisdiction.............................   14 
SCHEDULE 5.2A...............................................   16 
SCHEDULE 5.2B...............................................   18 
SCHEDULE 5.2C...............................................   18 
EXHIBIT A...................................................      

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DISTRIBUTION AGREEMENT

    DISTRIBUTION AGREEMENT dated as of [            ], 2000 (the "Distribution
Agreement") by and among The Pioneer Group, Inc., a Delaware corporation        
("Parent"), Harbor Global Company Ltd., a Bermuda limited duration company and  
direct wholly owned subsidiary of Parent ("Harbor Global"), and Harbor Global II
Ltd., a Bermuda limited duration company and indirect majority owned subsidiary 
of Harbor Global ("Harbor Global II").                                          

 WHEREAS, Parent and UniCredito Italiano S.p.A., an Italian corporation,
have entered into an Agreement and Plan of Merger dated as of May 14, 2000 (the 
"Merger Agreement"), providing for the merger of a wholly owned subsidiary of   
UniCredito Italiano S.p.A. with and into Parent (the "Merger") as described     
therein; and                                                                    

     WHEREAS, immediately prior to the Effective Time (as defined in Section 1.3
of the Merger Agreement), subject to the satisfaction or waiver of the          
conditions set forth in Article VIII of this Distribution Agreement, the Board  
of Directors of Parent expects to distribute to holders of Parent common stock, 
par value $.10 per share ("Parent Common Stock"), all of the outstanding shares 
of Harbor Global common stock, par value $.01 (the "Harbor Global Common        
Stock"), on a pro rata basis as described in Section 2.2 of this Distribution   
Agreement (the "Distribution"); and                                             

    WHEREAS, it is intended by the parties to this Distribution Agreement that
the Distribution will be preceded by a transfer by Parent of certain of its     
assets to Harbor Global and that such transfers, as described in Section 4.1    
hereof shall qualify as tax-free contributions under Section 721 of the Internal
Revenue Code of 1986, as amended; and                                           

  WHEREAS, the Board of Directors of Parent has approved this Distribution
Agreement, and the Board of Directors of Parent believes this Distribution      
Agreement is in the best interests of the Parent stockholders. This Distribution
Agreement sets forth and provides for certain agreements among Parent, Harbor   
Global and Harbor Global II in consideration of the separation of their         
ownership.                                                                      

   NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:           

ARTICLE I 

DEFINITIONS 

Section 1.1  "Assumed Liabilities" shall have the meaning set forth in
Section 4.2 hereof.                                                             

 Section 1.2  "DGCL" shall mean the Delaware General Corporation Law, as
amended.                                                                        

Section 1.3  "Distribution" shall have the meaning set forth in the   
preamble to this Distribution Agreement.                                        

   Section 1.4  "Distribution Agreement" shall have the meaning set forth in
the preamble to this Distribution Agreement.                                    

   Section 1.5  "Effective Time" shall have the meaning set forth in Section
1.3 of the Merger Agreement.                                                    

     Section 1.6  "Exchange Act" shall have the meaning set forth in Section 8.3
hereof.                                                                         

     Section 1.7  "Harbor Far East Exploration" shall have the meaning set forth
in Section 5.1 hereof.                                                          

     Section 1.8  "Harbor Far East Ventures" shall have the meaning set forth in
Section 5.1 hereof.                                                             

Section 1.9  "Harbor Global" shall have the meaning set forth in the  
preamble to this Distribution Agreement.                                        

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  Section 1.10  "Harbor Global II" shall have the meaning set forth in the
preamble to this Distribution Agreement.                                        

     Section 1.11  "Harbor Global Common Stock" shall have the meaning set forth
in the preamble to this Distribution Agreement.                                 

     Section 1.12  "Harbor Global Group" shall mean Harbor Global and its direct
and indirect subsidiaries (determined after giving effect to the transfers and  
transactions contemplated by Sections 5.1 and 5.2 of this Distribution          
Agreement), including any predecessor or successor entities.                    

    Section 1.13  "Harbor Global Indemnitees" shall have the meaning set forth
in Section 7.2 hereof.                                                          

Section 1.14  "Harbor Global Preferred Stock" shall mean the preferred
stock, $.01 par value per share, of Harbor Global.                              

   Section 1.15  "Indemnified Claim" shall mean any demand, claim, action or
proceeding subject to indemnification by either Parent or Harbor Global under   
Section 7.1 or Section 7.2 of this Distribution Agreement, as applicable.       

   Section 1.16  "Indemnitee" shall mean either any Parent Indemnitee or any
Harbor Global Indemnitee, as applicable.                                        

Section 1.17  "Indemnifying Party" shall have the meaning set forth in
Section 7.3 of this Distribution Agreement.                                     

   Section 1.18  "Information" of a party shall mean any and all information
that such party or any of its Representatives furnish or have furnished to the  
receiving party or any of its Representatives and any information in the        
possession of a party or its Representatives which relates to the business or   
operations of the other party, whether furnished orally or in writing or by any 
other means or gathered by inspection or otherwise in one's possession and      
regardless of whether the same is specifically marked or designated as          
"confidential" or "proprietary," together with any and all notes, memoranda,    
analyses, compilations, studies or other documents (whether in hard copy or     
electronic media) prepared by the receiving party or any of its Representatives 
which contain or otherwise reflect such Information, together with any and all  
copies, extracts or other reproductions of any of the same; provided, however,  
that "Information" does not include information that:                           

  (a) is or becomes generally available to the public through no
wrongful act of the receiving party or its Representatives;           

(b) is or becomes available to the receiving party on a     
    non-confidential basis from a source other than the providing party or its
    Representatives, provided, that, such source is not known by the receiving
     party to be subject to a confidentiality obligation to the providing party;
or                                                                    

     (c) has been independently acquired or developed by the receiving
     party without violation of any of the obligations of the receiving party or
its Representatives under this Distribution Agreement or otherwise.   

Section 1.19  "Liabilities" shall mean any and all debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute, mature or   
unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown,
whenever or however arising and whether or not the same would be required by    
generally accepted accounting principles to be reflected in financial statements
or disclosed in the notes thereto.                                              

    Section 1.20  "Losses" shall mean any and all costs or expenses, including
interest, penalties, costs of preparation and investigation and reasonable      
attorney's fees and disbursements imposed on or incurred, directly or           
indirectly, by any Indemnitee resulting from or arising out of any Indemnified  
Claim, net of any tax benefit actually realized by such Indemnitee in connection
with any such Loss.                                                             

    Section 1.21  "Merger" shall have the meaning set forth in the preamble to
this Distribution Agreement.                                                    

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  Section 1.22  "Merger Agreement" shall have the meaning set forth in the
preamble to this Distribution Agreement.                                        

Section 1.23  "OPIC Loan" shall mean the loan made by Overseas Private
Investment Corporation to Closed Joint-Stock Company "Forest-Starma" under the  
Finance Agreement dated as of December 21, 1995 by and between Closed           
Joint-Stock Company "Forest-Starma", a Russian joint stock company and indirect 
wholly owned subsidiary of Parent, and Overseas Private Investment Corporation, 
and guaranteed by Parent pursuant to the Project Completion Agreement dated as  
of December 21, 1995 by and among Overseas Private Investment Corporation,      
Parent, Closed Joint-Stock Company "Forest-Starma" and International Joint-Stock
Company "Starma-Holding."                                                       

    Section 1.24  "Parent" shall have the meaning set forth in the preamble to
this Distribution Agreement.                                                    

     Section 1.25  "Parent Common Stock" shall have the meaning set forth in the
preamble to this Distribution Agreement.                                        

    Section 1.26  "Parent Group" shall mean Parent and its direct and indirect
subsidiaries, other than Harbor Global and its direct and indirect subsidiaries 
(determined after giving effect to the transfers and transactions contemplated  
by Sections 5.1 and 5.2 of this Distribution Agreement), including any          
predecessor or successor entities.                                              

Section 1.27  "Parent Indemnitees" shall have the meaning set forth in
Section 7.1 hereof.                                                             

Section 1.28  "PBO Property Fund Capital Contribution" shall mean the 
approximately $2.3 million that Parent has agreed to contribute to Pioneer Real 
Estate Advisors, LLC to fund the remaining capital commitments of Pioneer Real  
Estate Advisors, LLC under the Limited Liability Company Agreement of PBO       
Property Fund, LLC dated as of May 20, 1998.                                    

    Section 1.29  "Pioneer Forest" shall have the meaning set forth in Section
5.1 hereof.                                                                     

   Section 1.30  "PIOGlobal" shall have the meaning set forth in Section 5.1
hereof.                                                                         

   Section 1.31  "Pioneer Goldfields II" shall have the meaning set forth in
Section 5.1 hereof.                                                             

   Section 1.32  "Pioneer International" shall have the meaning set forth in
Section 5.1 hereof.                                                             

     Section 1.33  "Pioneer Investments Poland" shall have the meaning set forth
in Section 5.1 hereof.                                                          

   Section 1.34  "Pioneer Omega" shall have the meaning set forth in Section
5.1 hereof.                                                                     

    Section 1.35  "Pioneer Poland Fund Holding Company" shall have the meaning
set forth in Section 5.1 hereof.                                                

 Section 1.36  "Pioneer Real Estate Advisors" shall have the meaning set
forth in Section 5.1 hereof.                                                    

   Section 1.37  "Pioneering Management" shall have the meaning set forth in
Section 5.1 hereof.                                                             

     Section 1.38  "Polish Real Estate Fund Capital Contribution" shall mean the
approximately $5.4 million that Parent has agreed to contribute to Pioneer Real 
Estate Advisors, LLC to fund the remaining capital commitments of Pioneer Real  
Estate Advisors, LLC under the Subscription and Shareholders' Agreement dated as
of October 27, 1999 by and among Polish Real Estate Fund, s.a. and several      
investors.                                                                      

   Section 1.39  "Record Date" shall mean the date designated by or pursuant
to the authorization of the Board of Directors of Parent for the purpose of     
determining the stockholders of Parent entitled to participate in the           
Distribution.                                                                   

Section 1.40  "Representatives" of a party shall mean such party's    
affiliates, directors, officers, employees, agents or other representatives,    
including attorneys, accountants and financial advisors.                        

   Section 1.41  "Restructuring" shall have the meaning set forth in Section
5.1 hereof.                                                                     

  Section 1.42  "Retained Liabilities" shall have the meaning set forth in
Section 5.2 hereof.                                                             

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     Section 1.43  "SEC" shall have the meaning set forth in Section 8.3 hereof.

   Section 1.44  "Taxes" shall have the meaning set forth in Section 1.19 of
the Tax Separation Agreement.                                                   

   Section 1.45  "Tax Separation Agreement" shall have the meaning set forth
in Section 4.1 hereof.                                                          

  Section 1.46  "Time of Distribution" shall mean the time as of which the
Distribution is effective pursuant to Section 2.3 hereof.                       

    Section 1.47  "Transfer Agent" shall mean Equiserve Limited Partnership as
transfer agent for Harbor Global Common Stock.                                  

ARTICLE II

CAPITALIZATION OF HARBOR GLOBAL; MECHANICS OF THE DISTRIBUTION

     Section 2.1  Capitalization of Harbor Global.  The authorized capital stock
of Harbor Global consists of 12 million shares of Harbor Global Common Stock of 
which a number of shares equal to one-fifth of the shares of Parent Common Stock
issued and outstanding at the Time of Distribution are issued and outstanding   
and owned beneficially and of record by Parent and one million shares of Harbor 
Global Preferred Stock, none of which are issued and outstanding.               

Section 2.2  Mechanics of the Distribution.  The Distribution will be 
effected by the declaration of the Distribution by the Board of Directors of    
Parent and the distribution to each holder of record of shares of Parent Common 
Stock as of the Record Date of certificates representing one share of Harbor    
Global Common Stock for every five shares of Parent Common Stock held by such   
holder on the Record Date multiplied by the number of shares of Parent Common   
Stock held by such holder. Fractional shares of Harbor Global Common Stock will 
be distributed to holders entitled thereto.                                     

  Section 2.3  Timing of Distribution.  Immediately prior to the Effective
Time, subject to the satisfaction or waiver of the conditions set forth in      
Article VII of this Distribution Agreement, the Board of Directors of Parent    
shall declare the Distribution and shall authorize Parent to effect the         
Distribution by delivering certificates representing all of the issued and      
outstanding Harbor Global Common Stock to the Transfer Agent for delivery to the
holders entitled thereto as described in Section 2.2 above. The Distribution    
will be deemed to be effective upon notification by Parent to the Transfer Agent
that the Distribution has been declared and that the Transfer Agent is          
authorized to proceed with the Distribution.                                    

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF HARBOR GLOBAL 

   Harbor Global represents and warrants to Parent as follows, each of which
representations and warranties are true and correct as of the date hereof. The  
representations and warranties set forth herein constitute the sole             
representations and warranties made by or on behalf of Harbor Global in         
connection with the transactions contemplated in this Distribution Agreement,   
notwithstanding delivery or disclosure of other information prior to the date   
hereof.                                                                         

  Section 3.1  Organization and Qualification.  Harbor Global is a company
limited by shares, duly organized and validly existing under the laws of Bermuda
and has all requisite corporate power to own properties and to carry on its     
business as now conducted and as presently contemplated. Harbor Global is in    
good standing or licensed as a foreign corporation and is duly authorized to do 
business in each jurisdiction in which its property or business, as presently   
conducted or contemplated, makes such qualification necessary, except where a   
failure to be so qualified, licensed or in good standing would not, individually
or in the aggregate, materially impair the ability of Harbor Global to perform  
its obligations hereunder.                                                      

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Section 3.2  Authorization.  Harbor Global has all necessary corporate
power and has taken all necessary corporate action required for the due         
authorization, execution and delivery of this Distribution Agreement and for the
performance by Harbor Global of its obligations under this Distribution         
Agreement. This Distribution Agreement has been duly executed and delivered by  
Harbor Global and constitutes a valid and binding obligation of Harbor Global,  
enforceable against Harbor Global in accordance with its terms, except as such  
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or  
similar laws of general application relating to or affecting creditors rights   
and general principles of equity.                                               

   Section 3.3  Compliance.  The execution and delivery of this Distribution
Agreement and the consummation of the transactions contemplated hereby will not 
result in a violation of Harbor Global's memorandum of association, by-laws or  
any of its material agreements, except where such violation, individually or in 
the aggregate, would not materially impair the ability of Harbor Global to      
perform its obligations hereunder.                                              

ARTICLE IV

TAX MATTERS 

    Section 4.1  Tax Separation Agreement.  Prior to the Time of Distribution,
Harbor Global, Harbor Global II and Parent shall enter into an agreement        
relating to past and future tax sharing and certain issues associated therewith 
in the form attached hereto as Exhibit A (the "Tax Separation Agreement").      

     Section 4.2  Tax Matters.  Notwithstanding anything to the contrary in this
Distribution Agreement, Liabilities of the parties for Taxes are governed by the
terms of the Tax Separation Agreement.                                          

ARTICLE V 

RESTRUCTURING AND ASSUMED LIABILITIES 

 Section 5.1  Restructuring.  Prior to the Time of Distribution, Parent,
Harbor Global and Harbor Global II shall cause the following transactions to    
occur as set forth below (the "Restructuring"):                                 

(a) Parent shall effect the following transactions:         

          (i) organize Harbor Global and cause it to make any elections or
take any other actions necessary to cause it to be treated as a 
 disregarded entity for United States federal income tax purposes;

            (ii) transfer, assign and convey all of the issued and outstanding
       capital stock of Closed Joint-Stock Company "Tas-Yurjah Mining Company"
      and JSL Co. Dalplaz, each a Russian joint stock company, to Harbor Far
      East Exploration, LLC, a Delaware limited liability company and wholly
owned subsidiary of Parent ("Harbor Far East Exploration");     

             (iii) transfer, assign and convey all of the issued and outstanding
capital stock of International Closed Joint-Stock Company       
    "Starma-Holding" Closed Joint-Stock Company "Starma-Port" and Closed
   Joint-Stock Company "Pioneer-Starma-Equipment" each a Russian joint
   stock company, to Harbor Far East Ventures, LLC, a Delaware limited
    liability company and wholly owned subsidiary of Parent ("Harbor Far
East Ventures");                                                

       (iv) transfer, assign and convey all of the assets of Pioneer
   Forest, Inc., a Delaware corporation and wholly owned subsidiary of
        Parent, to Pioneer Forest, LLC, a Delaware limited liability company and
wholly owned subsidiary of Parent ("Pioneer Forest");           

           (v) transfer, assign and convey all of the issued and outstanding
  membership interests of Pioneer Forest to [ForeignCo I], a Bermuda
company and wholly owned subsidiary of Parent ("[ForeignCo I]");

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   (vi) cause Pioneer Real Estate Advisors, Inc., a Delaware
  corporation and wholly owned subsidiary of Parent, to convert to a
     Delaware limited liability company, Pioneer Real Estate Advisors, LLC
   ("Pioneer Real Estate Advisors"), pursuant to Section 266(b) of the
DGCL;                                                           

             (vii) transfer, assign and convey all of the issued and outstanding
       membership interests of Pioneer Real Estate Advisors to [ForeignCo II],
       a Bermuda company and a wholly owned subsidiary of Parent ( "[ForeignCo
II]");                                                          

           (viii) cause Pioneer First Polish Investment Fund, S.A., a Polish
      joint stock company and indirect wholly owned subsidiary of Parent, to
    sell, transfer, assign and convey its interest in Polish Real Estate
Fund, S.A., a Polish joint stock company, to Pioneer Real Estate
Advisors;                                                       

          (ix) transfer, assign and convey its membership interests in PBO
    Property Fund, LLC, a Delaware limited liability company, to Pioneer
Real Estate Advisors;                                           

       (x) cause Pioneer Goldfields II Limited, a corporation dually
       incorporated in Delaware and Guernsey, Channel Islands and wholly owned
       subsidiary of Parent, to be converted into a Delaware limited liability
       company, Pioneer Goldfields II, LLC ("Pioneer Goldfields II"), pursuant
to Section 266(b) of the DGCL;                                  

           (xi) cause Pioneer Omega, Inc., a Delaware corporation and wholly
        owned subsidiary of Parent, to convert into a Delaware limited liability
  company, Pioneer Omega, LLC ("Pioneer Omega"), pursuant to Section
266(b) of the DGCL;                                             

          (xii) cause Luscinia, Inc., a wholly owned subsidiary of Pioneer
    Omega, Theta Enterprises, Inc., a wholly owned subsidiary of Pioneer
     Omega, and Pioneer First Russia, Inc., a majority owned subsidiary of
Pioneer Omega, each a Delaware corporation, to be converted into
      Delaware limited liability companies pursuant to Section 266(b) of the
DGCL;                                                           

    (xiii) cause Pioneer International Corporation, a Delaware
    corporation and wholly owned subsidiary of Parent, to convert into a
        Delaware limited liability company, Pioneer International, LLC ("Pioneer
International"), pursuant to Section 266(b) of the DGCL;        

         (xiv) cause Pioneer Poland U.S. (Jersey) Limited, a corporation
      dually incorporated in Delaware and Jersey, Channel Islands and direct
      wholly owned subsidiary of Pioneer International ("Pioneer Poland Fund
     Holding Company"), to revoke its Delaware charter pursuant to Section
390 of the DGCL;                                                

         (xv) cause Pioneer International to transfer, assign and convey
100% of the issued and outstanding share capital of Pioneering  
    Management Limited, a Jersey, Channel Islands corporation and direct
wholly owned subsidiary of Pioneer International ("Pioneering   
Management") to Parent;                                         

          (xvi) cause Pioneer International to transfer, assign and convey
     100% of the issued and outstanding shares of capital stock of Pioneer
        Investments Poland, Ltd., a Polish joint stock company and direct wholly
        owned subsidiary of Pioneer International ("Pioneer Investments Poland")
to Parent;                                                      

           (xvii) cause Pioneer International to transfer, assign and convey
       100% of the issued and outstanding share capital of Pioneer Poland Fund
Holding Company to Parent;                                      

    (b) Parent shall contribute, as a capital contribution to Harbor
Global:                                                               

(i) $25 million in cash;                              

         (ii) 100% of the issued and outstanding membership interests of
Harbor Far East Exploration;                                    

          (iii) 100% of the issued and outstanding membership interests of
Harbor Far East Ventures;                                       

             (iv) 100% of the issued and outstanding capital stock of [ForeignCo
I];                                                             

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            (v) 100% of the issued and outstanding capital stock of [ForeignCo
II];                                                            

         (vi) 100% of the issued and outstanding membership interests of
Pioneer Goldfields II;                                          

             (vii) 250 of the issued and outstanding shares of common stock, par
        value $.10 per share, of Pioneer Metals and Technology, Inc., a Delaware
       corporation, such shares representing 25% of the issued and outstanding
capital stock of Pioneer Metals and Technology, Inc.;           

            (viii) 100% of the issued and outstanding capital stock of Pioneer
Omega;                                                          

            (ix) 100% of the issued and outstanding capital stock of PIOGlobal
  Corporation, a Delaware corporation and wholly owned subsidiary of
Parent;                                                         

            (x) 100% of the issued and outstanding share capital of Pioneering
Management;                                                     

          (xi) 100% of the issued and outstanding capital stock of Pioneer
Investments Poland;                                             

           (xii) 100% of the issued and outstanding share capital of Pioneer
Polish Fund Holding Company;                                    

             (xiii) all of the issued and outstanding shares of capital stock of
  Anabasis Enterprises Ltd., a Cypriot company, held by Parent, such
      shares representing 99% of the issued and outstanding capital stock of
Anabasis Enterprises Ltd.; and                                  

            (xiv) 100% of Parent's interest in PT Pioneer Ongko, an Indonesian
corporation.                                                    

  (c) Parent shall pay the outstanding balance of the OPIC Loan,
including any and all interest and other amounts payable in respect   
thereof;                                                              

          (d) Parent shall contribute the PBO Property Fund Capital Contribution
to Pioneer Real Estate Advisors;                                      

   (e) Parent shall contribute the Polish Real Estate Fund Capital
Contribution to Pioneer Real Estate Advisors;                         

    (f) Harbor Global shall (i) organize HGC Ltd., a Bermuda limited
     duration company and wholly owned subsidiary of Harbor Global ("HGC"), (ii)
    contribute an amount of cash to HGC as a contribution to capital necessary
to permit HGC to purchase a 1% equity interest in Harbor Global II and
   (iii) cause HGC to make any elections or take any other actions necessary
     to cause it to be treated as a corporation for United States federal income
tax purposes; and                                                     

         (g) Harbor Global shall (i) organize Harbor Global II, (ii) cause HGC
to purchase a 1% equity interest in Harbor Global II, (iii) transfer, 
   assign and convey all of its assets to Harbor Global II as a contribution
   to capital and (iii) cause Harbor Global II to make any elections or take
    any other actions necessary to cause it to be treated as a partnership for
United States federal income tax purposes.                            

 Section 5.2  Assumed Liabilities.  Except as otherwise specifically set
forth in the Merger Agreement or the Tax Separation Agreement, at or prior to   
the Time of Distribution, Harbor Global shall, or shall cause the appropriate   
member of the Harbor Global Group to, unconditionally assume and undertake to   
pay, satisfy and discharge when due and in accordance with their terms all      
Liabilities (whether arising before or after the Time of Distribution) to the   
extent arising out of, based upon or resulting from the operation of the        
business of, or to the extent relating to, any member of the Harbor Global      
Group, other than the Retained Liabilities and the Liabilities listed on        
Schedules 5.2A, 5.2B and 5.2C hereof (collectively, the "Assumed Liabilities"), 
and Parent shall retain, or shall cause the appropriate member of the Parent    
Group to retain, and undertake to pay, satisfy and discharge when due in        
accordance with their terms all Liabilities (whether arising before or after the
Time of Distribution) of Parent to the extent arising out of, based upon or     
resulting from the operation of the business of, or to the extent relating to   
(i) any member of the Parent Group (the "Retained Liabilities") or (ii) the     
Liabilities set forth on Schedules 5.2A, 5.2B and 5.2C hereof; provided,        
however, that the parties hereto will use their                                 

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reasonable efforts to cause the Liabilities described in Items 1 and 2 of       
Schedule 5.2A to this Distribution Agreement to be assigned to and assumed by   
Pioneer Forest with a mutual release of liability.                              

     Section 5.3  Further Assurances.  If after the Time of Distribution, either
party holds assets which by the terms hereof or of the Merger Agreement were    
intended to be assigned and transferred to, or retained by, the other party,    
such party shall promptly assign and transfer or cause to be assigned or        
transferred such assets to the other party, and the parties agree that the      
transferring party will hold such assets as trustee of the transferee party and 
all income and risk of loss of the transferred assets after the Time of         
Distribution shall be for the account of the intended owner. Each of the parties
hereto, at its own cost and expense, shall promptly execute such documents and  
other instruments and take such further actions as may be reasonably required or
desirable to carry out the provisions of this Distribution Agreement and to     
consummate the transactions contemplated hereby.                                

    Section 5.4  Intercompany Balances.  Any indebtedness, accounts receivable
or other intercompany obligations of another nature accrued prior to the Time of
Distribution between Parent and any member of the Harbor Global Group shall     
either be contributed as a capital contribution or otherwise contributed by     
Parent to a member of the Harbor Global Group. At the Time of the Distribution, 
there shall not be outstanding any indebtedness or accounts payable or          
receivable between the Parent Group and the Harbor Global Group.                

ARTICLE VI

COVENANTS 

 Section 6.1  Books and Records.  Prior to or as promptly as practicable
after completion of the Restructuring, Parent shall deliver to Harbor Global all
corporate books and records of the members of the Harbor Global Group in the    
possession of the Parent Group and the relevant portions (or copies thereof) of 
all corporate books and records of the Parent Group relating directly and       
primarily to the members of the Harbor Global Group, the Assumed Liabilities or 
the Liabilities listed on Schedule 5.2A and 5.2C hereof, including, in each     
case, all active agreements, active litigation files and government filings.    
From and after the completion of the Restructuring, all such books, records and 
copies shall be the property of Harbor Global. Parent may retain copies of all  
such corporate books and records. Prior to or as promptly as practicable after  
the completion of the Restructuring, Harbor Global shall deliver to Parent all  
corporate books and records of the members of the Parent Group in the possession
of any member of the Harbor Global Group and relevant portions (or copies       
thereof) of all corporate books and records of the Harbor Global Group relating 
directly and primarily to the members of the Parent Group, the Retained         
Liabilities or the Liabilities listed on Schedule 5.2B hereof, including, in    
each case, all active agreements, active litigation files and government        
filings. From and after the completion of the Restructuring, all such books,    
records and copies shall be the property of Parent. Harbor Global may retain    
copies of all such corporate books and records.                                 

Section 6.2  Access.  From and after the Time of Distribution, each of
Parent and Harbor Global shall afford the other and the other's Representatives 
reasonable access and duplicating rights without cost or expense to the         
requesting party during normal business hours and upon reasonable advance       
notice, to all information within the possession or control of the Parent Group 
or the Harbor Global Group, as the case may be, to the extent relating to the   
business, assets or Liabilities of the other as they existed prior to the       
completion of the Restructuring or to the extent relating to or arising in      
connection with the relationship between the Parent Group or the Harbor Global  
Group, as the case may be, prior to the Restructuring. Without limiting the     
foregoing, information may be requested under this Section 6.2 for audit,       
accounting, claims, litigation and tax purposes, as well as for purposes of     
fulfilling disclosure and reporting obligations.                                

Section 6.3  Retention of Records.  If any information relating to the
businesses, assets or Liabilities of the Parent Group or the Harbor Global Group
is retained by the Harbor Global Group or the Parent Group, respectively, each  
of Parent and Harbor Global shall, and shall cause each member of the Parent    
Group and the Harbor Global Group, respectively, to retain all such information 
in the Parent Group's or                                                        

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the Harbor Global Group's possession or under its control until such information
is at least ten years old except that if prior to the expiration of such period 
Parent or Harbor Global wishes to destroy or dispose of any such information    
that is at least three years old, prior to destroying or disposing of any of    
such information (a) Parent or Harbor Global shall provide no less than 45 days'
prior written notice to the other party, specifying the information proposed to 
be destroyed or disposed of, and (b) if prior to the scheduled date of such     
destruction or disposal, the other party requests in writing that any of the    
information proposed to be destroyed or disposed of be delivered to such other  
party, Parent or Harbor Global, as applicable, promptly shall arrange for the   
delivery of the requested information to a location specified by, and at the    
expense of, the requesting party.                                               

Section 6.4  Confidentiality.                                         

  (a) Each party hereto shall keep, and shall cause its Representatives to
keep, the other party's Information strictly confidential and will disclose such
Information only to such of its Representatives who need to know such           
Information and who agree to be bound by this Section 6.4 and not to disclose   
such Information to any other person or entity. Without the prior written       
consent of the other party, each party and its Representatives shall not        
disclose the other party's Information to any person or entity except as may be 
required by (i) federal securities laws or (ii) a judicial process; provided,   
that disclosure required by a judicial process shall be made in accordance with 
Section 6.4(b).                                                                 

     (b) In the event that either party or any of its Representatives receives a
request or is required by law or judicial process to disclose to a court or     
other tribunal all or any part of the other party's Information, the receiving  
party or its Representatives shall promptly notify the other party of the       
request in writing, and consult with and assist the other party in seeking a    
protective order or request for other appropriate remedy. In the event that such
protective order or other remedy is not obtained or the other party waives      
compliance with the terms hereof, such receiving party or its Representatives,  
as the case may be, shall disclose only that portion of the Information or facts
which, in the written opinion of the receiving party's outside counsel, is      
legally required to be disclosed, and will exercise its respective reasonable   
best efforts to assure that confidential treatment will be accorded such        
Information or facts by the persons or entities receiving the same. The         
providing party will be given an opportunity to review the Information or facts 
prior to disclosure.                                                            

   Section 6.5  Cooperation.  The parties shall cooperate with each other in
all reasonable respects to ensure (a) that the Restructuring and the assumption 
of the Retained Liabilities and the Assumed Liabilities are consummated in      
accordance with the terms hereof, (b) the retention by Parent of the Parent     
Group, including allocating rights and obligations under any contract,          
agreement, undertaking or other commitment, if any, of the Parent Group or of   
the Harbor Global Group that relate to the business or operations of any member 
of the Parent Group and the Liabilities listed on Schedules 5.2A, 5.2B and 5.2C 
hereof, and (c) the retention by Harbor Global of the Harbor Global Group,      
including allocating rights and obligations under any contract, agreement,      
undertaking or other commitment, if any, of the Harbor Global Group or of the   
Parent Group that relate to the business or operations of any member of the     
Harbor Global Group, other than the Liabilities listed on Schedules 5.2A, 5.2B  
and 5.2C hereof. In addition, Harbor Global shall use reasonable efforts to take
all steps necessary to release Parent from its Liabilities relating to Items 12 
through 16 listed on Schedule 5.2A hereof.                                      

    Section 6.6  Mutual Release, Etc.  Effective upon the Time of Distribution
and except as otherwise specifically set forth in this Distribution Agreement,  
each member of the Parent Group on one hand and each member of the Harbor Global
Group on the other hand releases and forever discharges each member of the other
of and from all debts, demands, actions, causes of action, suits, accounts,     
covenants, contracts, agreements, undertakings, commitments, damages and any and
all claims, demands and liabilities whatsoever of every name and nature, both in
law and in equity, against such other party or any of its assigns, which the    
releasing party has or ever had, which arise out of or relate to events,        
circumstances or actions taken by such other party prior to the Time of         
Distribution; provided, however, that the foregoing general release shall not   
apply to any demands, actions, causes of action, suits, accounts, covenants,    
agreements, undertakings, commitments, damages and any and all claims, demands  
and liabilities arising                                                         

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out of or relating to this Distribution Agreement, the Merger Agreement or the  
Tax Separation Agreement or the transactions contemplated hereby or thereby and 
shall not affect either party's right to enforce this Distribution Agreement or 
any other agreement contemplated hereby or thereby in accordance with its terms.
Each party understands and agrees that, except as otherwise specifically        
provided herein, neither the other party nor any of its subsidiaries is, in this
Distribution Agreement or any other agreement (other than the Merger Agreement),
or document, representing or warranting to such party in any way as to the      
assets, business or liabilities transferred or assumed as contemplated hereby or
thereby or as to any consents or approvals required in connection with the      
consummation of the transactions contemplated by this Distribution Agreement, it
being agreed and understood that each party shall take each of the assets       
transferred, retained or assumed by it pursuant to this Distribution Agreement  
"as is" and that such party shall bear the economic and legal risk that the     
title to any such asset shall be other than good and marketable and free from   
encumbrances.                                                                   

Section 6.7  Transaction Expenses.  For purposes of this Distribution 
Agreement, all reasonable expenses in connection with this Distribution         
Agreement and the Tax Separation Agreement and the transactions contemplated    
hereby and thereby, including all fees and expenses of Parent's investment      
bankers and counsel, shall be paid by Parent; it being understood that all      
expenses under $5 million shall be considered reasonable and that the           
reasonableness of expenses of $5 million and over are to be determined in light 
of the facts and circumstances.                                                 

  Section 6.8  Ashanti.  Harbor Global agrees that promptly upon the fifth
anniversary of the closing of the Purchase Agreement dated May 11, 2000 by and  
among Pioneer Goldfield II Limited ("Goldfield II"), Goldfields Teberebie       
Limited, and Ashanti Goldfields Company Limited (the "Purchase Agreement") or,  
if there is any indemnification claim pending under the Purchase Agreement as of
the fifth anniversary, promptly after resolution of all such claims, it will pay
to Parent the lesser of (i) $5 million or (ii) the proceeds received by         
Goldfield II under the Purchase Agreement less any indemnification claims paid  
under the Purchase Agreement.                                                   

     Section 6.9  Names.  Harbor Global and Harbor Global II agree that from and
after the Effective Time, the name "Pioneer" and all similar related names,     
marks and logos (all such names, marks and logos being the "Parent Names") shall
be owned by Parent or a Continuing Subsidiary (as defined in the Merger         
Agreement), that no member of the Harbor Global Group shall have any rights in, 
and shall not use, any Parent Name, and that no member of the Harbor Global     
Group shall contest the ownership or validity of any rights of Parent or any of 
its Continuing Subsidiaries in or to the Parent Names; provided, however,       
Parent, Harbor Global and Harbor Global II shall use good faith efforts to enter
into a mutually agreeable right and license to use the Parent Names effective   
for a reasonable period of time after the Effective Time in connection with the 
conduct by the members of the Harbor Global Group of their respective businesses
as such businesses were conducted prior to the Effective Time.                  

ARTICLE VII 

INDEMNIFICATION 

   Section 7.1  Indemnification by Harbor Global.  Subject to the provisions
of this Article VII, Harbor Global shall indemnify, defend and hold harmless the
members of the Parent Group and the respective officers, directors, employees,  
agents, successors and assigns of the members of the Parent Group (collectively,
the "Parent Indemnitees") from and against, and pay or reimburse members of the 
Parent Group for all Losses, as incurred:                                       

     (a) relating to or arising from the business or operations of any
   member of the Harbor Global Group, the assets of any member of the Harbor
   Global Group, the Assumed Liabilities or, notwithstanding anything to the
   contrary contained herein, the Liabilities listed on Schedule 5.2A hereof
   and the Liabilities, if any, listed on Schedule 5.2C hereto, whether such
 Losses relate to or arise from events, occurrences, actions, omissions,
    facts or circumstances occurring, existing or asserted before, at or after
the Time of Distribution;                                             

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          (b) relating to or arising from the breach by any member of the Harbor
  Global Group of any agreement or covenant contained in this Distribution
Agreement; or                                                         

      (c) relating to or arising from the breach by Harbor Global of any
representation or warranty contained in Article III herein.           

    Section 7.2  Indemnification by Parent.  Subject to the provisions of this
Article VII, Parent shall indemnify, defend and hold harmless the members of the
Harbor Global Group and the respective officers, directors, employees, agents,  
successors and assigns of the members of the Harbor Global Group (collectively, 
the "Harbor Global Indemnitees") from and against, and pay or reimburse members 
of the Harbor Global Group for all Losses, as incurred:                         

     (a) relating to or arising from the business or operations of any
   member of the Parent Group, the assets of any member of the Parent Group,
the Retained Liabilities or, notwithstanding anything to the contrary 
   contained herein, the Liabilities listed on Schedule 5.2B hereof, whether
such Losses relate to or arise from events, occurrences, actions,     
   omissions, facts or circumstances occurring, existing or asserted before,
at or after the Time of Distribution; or                              

          (b) relating to or arising from the breach by any member of the Parent
     Group of any agreement or covenant contained in this Distribution Agreement
  which by its express terms is to be performed or complied with after the
Time of Distribution.                                                 

Section 7.3  Indemnification Procedures.                              

  (a) Any Indemnitee shall give written notice to the party who may become
obligated to provide indemnification hereunder (the "Indemnifying Party") in    
reasonable detail and promptly, and in any event within 30 days after receipt by
such Indemnitee of written notice of the Indemnified Claim; provided, that,     
failure to give such notice shall not affect the indemnification provided       
hereunder except to the extent the Indemnifying Party shall have been actually  
prejudiced as a result of such failure. After any required notification pursuant
to this Section 7.3, the Indemnitee shall promptly deliver to the Indemnifying  
Party copies of all notices, court documents or other documents received by the 
Indemnitee relating to the Indemnified Claim.                                   

     (b) If an Indemnified Claim is made against an Indemnitee, the Indemnifying
Party will be entitled to participate in the defense thereof and, if it so      
chooses, to assume the defense thereof with counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnitee. If the Indemnifying Party  
elects to assume the defense of an Indemnified Claim, the Indemnifying Party    
will not be liable to the Indemnitee for any legal expenses incurred by the     
Indemnitee in connection with the defense thereof. The Indemnitee shall have the
right to employ, at its own expense, one separate counsel in any suit , action  
or proceeding and to participate in the defense thereof; provided, that, the    
Indemnifying Party shall control such defense. The Indemnifying Party shall pay 
the fees and expenses of counsel employed by the Indemnitee during any period   
which the Indemnifying Party has not assumed the defense thereof, other than any
period in which the Indemnitee shall have failed to give notice of the          
Indemnified Claim as provided above. The Indemnifying Party shall not, without  
the Indemnitee's prior written consent, which consent shall not be unreasonably 
withheld, conditioned or delayed, settle or compromise any Indemnified Claim or 
consent to the entry of any judgement with respect to any Indemnified Claim if  
such settlement, compromise or judgment provides for injunctive or other        
nonmonetary relief affecting the Indemnitee or does not include as an           
unconditional term thereof the giving by each claimant or plaintiff to such     
Indemnitee of a release from all liability with respect to such Indemnified     
Claim. If the Indemnifying Party shall have assumed the defense of an           
Indemnified Claim, the Indemnitee shall not admit any liability with respect to,
or settle, compromise or discharge, such Indemnified Claim without the          
Indemnifying Party's prior written consent, which consent shall not be          
unreasonably withheld, conditioned or delayed.                                  

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Section 7.4  Certain Limitations.                                     

    (a) The amount of any Loss or other liability for which indemnification is
provided under this Distribution Agreement or any other amounts payable or      
reimbursable by one party to another under this Distribution Agreement shall be 
net of any amounts actually recovered by the Indemnitee from third parties,     
including amounts actually recovered under insurance policies, with respect to  
such Losses.                                                                    

(b) Neither Harbor Global nor Parent shall have any liability for any 
Losses, whether pursuant to this Article VII or otherwise pursuant to this      
Distribution Agreement, unless the aggregate amount of all Losses for which     
Harbor Global or Parent, respectively, would be liable, but for this Section    
7.4(b), exceeds on a cumulative basis an amount equal to $250,000. If aggregate 
Losses for which Harbor Global or Parent, respectively, would be liable exceeds 
$250,000, Harbor Global or Parent, respectively, shall be liable under Section  
7.1 or Section 7.2, respectively, only for the aggregate amount of Losses that  
exceeds $250,000.                                                               

Section 7.5  Exclusivity of Tax Separation Agreement.  Notwithstanding
anything in this Distribution Agreement to the contrary, the Tax Separation     
Agreement shall be the exclusive agreement among the parties with respect to all
tax matters, including indemnification with respect to tax matters.             

ARTICLE VIII

CONDITIONS

    The obligations of Parent and Harbor Global to consummate the Distribution
shall be subject to the fulfillment of each of the following conditions:        

         Section 8.1  Tax Separation Agreement.  The Tax Separation Agreement,
in the form attached as Exhibit A hereto, shall have been executed and
delivered by each of Parent, Harbor Global and Harbor Global II.      

         Section 8.2  Certain Transactions.  The Restructuring shall have been
consummated in accordance with Article V in all material respects.    

 Section 8.3  Registration of Harbor Global Common Stock.  Any
registration statement filed by Harbor Global with the Securities and 
    Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of
 1934, as amended (the "Exchange Act"), relating to Harbor Global Common
Stock shall be effective under the Exchange Act.                      

          Section 8.4  Conditions to Merger Satisfied.  The obligation of Parent
 to consummate the Distribution shall be subject to the satisfaction (or
waiver by Parent) of the conditions to the obligations of Parent to   
consummate the Merger set forth in Sections 6.1 and 6.2 of the Merger 
Agreement, other than the condition as to the consummation of the     
transactions contemplated by this Distribution Agreement.             

        Section 8.5  No Injunctions or Restraints.  No temporary restraining
 order, preliminary or permanent injunction or other order issued by any
 court of competent jurisdiction or other legal restraint or prohibition
    preventing the consummation of the Distribution shall be in effect, and if
such order or injunction exists, each party agrees to use reasonable  
efforts to have any such order reversed or injunction lifted.         

ARTICLE IX

MISCELLANEOUS AND GENERAL 

   Section 9.1  Modification or Amendment.  The parties hereto may modify or
amend this Distribution Agreement by written agreement executed and delivered by
authorized officers of the respective parties.                                  

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     Section 9.2  Counterparts.  For the convenience of the parties hereto, this
Distribution Agreement may be executed in separate counterparts, each such      
counterpart being deemed to be an original instrument, and which counterparts   
shall together constitute the same agreement.                                   

    Section 9.3  Governing Law.  This Distribution Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without  
reference to its conflicts of law principles.                                   

   Section 9.4  Notices.  Any notice, request, instruction or other document
to be given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered by      
facsimile (upon confirmation of receipt) or personally or (ii) on the date as of
which delivery to the receiving party is confirmed if delivered by Federal      
Express or other next-day courier service or by registered or certified mail,   
return receipt requested, postage prepaid. All notices hereunder shall be       
delivered as set forth below, or pursuant to such other instructions as may be  
designated in writing by the party receiving such notice:                       

If to Parent:                                                 

The Pioneer Group, Inc.                                       
60 State Street                                               
18th Floor                                                    
Boston, MA 02109-1820                                         
Attn: Robert P. Nault, General Counsel                        

If to Harbor Global or Harbor Global II:                      

Harbor Global Company Ltd.                                    
60 State Street                                               
18th Floor                                                    
Boston, MA 02109-1820                                         
Attn: Stephen G. Kasnet, Chief Executive Officer              

    Section 9.5  Captions.  All Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this           
Distribution Agreement and shall not be deemed to limit or otherwise affect any 
of the provisions hereof.                                                       

 Section 9.6  Assignment.  No party to this Distribution Agreement shall
convey, assign or otherwise transfer any of its rights or obligations under this
Distribution Agreement without the express written consent of the other party   
hereto in its sole and absolute discretion, except that either party hereto may 
assign any of its rights hereunder to a successor to all or any part of its     
business or to any of its wholly owned subsidiaries. Except as aforesaid, any   
such conveyance, assignment or transfer without the express written consent of  
the other party shall be void ab initio. No assignment of this Distribution     
Agreement or any rights hereunder shall relieve the assigning party of its      
obligations hereunder.                                                          

 Section 9.7  Certain Obligations.  Whenever this Distribution Agreement
requires any of the subsidiaries of any party to take any action, this          
Distribution Agreement will be deemed to include an undertaking on the part of  
such party to cause such subsidiary to take such action.                        

Section 9.8  Specific Performance.  In the event of any actual or     
threatened default in, or breach of, any of the terms, conditions and provisions
of this Distribution Agreement, the party or parties who are or are to be       
thereby aggrieved shall have the right of specific performance and injunctive   
relief giving effect to its or their rights under this Distribution Agreement,  
in addition to any and all other rights and remedies at law or in equity, and   
all such rights and remedies shall be cumulative. The parties agree that the    
remedies at law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for 
specific performance that a remedy at law would be adequate is waived.          

     Section 9.9  Severability.  If any provision of this Distribution Agreement
or the application thereof to any person or circumstance is determined by a     
court of competent jurisdiction to be invalid, illegal or                       

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unenforceable, such invalidity, illegality or unenforceability shall not affect 
any other provision hereof or the application of such provision to any other    
persons or circumstances. In the event that the terms and conditions of this    
Distribution Agreement are materially altered as a result of this Section, the  
parties shall negotiate in good faith to agree upon a suitable and equitable    
substitute provision to effect the original intent of the parties.              

Section 9.10  Entire Agreement.  This Distribution Agreement, the Tax 
Separation Agreement and the Merger Agreement constitute the entire agreement   
and supersede all prior agreements and understandings, both written and oral,   
among the parties with respect to the subject matter hereof and thereof.        

  Section 9.11  Jurisdiction.  Each of Parent and Harbor Global hereby (i)
consents to be subject to the jurisdiction of the United States District Court  
for the District of Delaware and the jurisdiction of the courts of the State of 
Delaware in any suit, action or proceeding seeking to enforce any provision of, 
or based on any matter arising out of or in connection with, this Distribution  
Agreement or the transactions contemplated hereby, (ii) agrees that it will not 
attempt to deny or defeat such personal jurisdiction by motion or other request 
for leave from any such court, (iii) agrees that it will not bring any action   
relating to this Distribution Agreement or the transactions contemplated hereby 
in any court other than the Untied States District Court for the District of    
Delaware or the courts of the State of Delaware, (iv) irrevocably waives (x) any
objection that it may have or hereafter have to the changing of venue of any    
such suit, action or proceeding in such court and (y) any claim that any such   
suit, action or proceeding in any such court has been brought in an inconvenient
forum and (v) irrevocably consents to the service of any and all process in any 
such suit, action or proceeding by the delivery of such process to such party at
the address and in the manner provided in Section 9.4 hereof.                   

[SIGNATURE PAGE FOLLOWS]

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    IN WITNESS WHEREOF, this Distribution Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date  
first written above.                                                            

                           THE PIONEER GROUP, INC.

       By:
                                            ------------------------------------
                 Name:
                  Title:

                              HARBOR GLOBAL COMPANY LTD.

       By:
                                            ------------------------------------
                 Name:
                  Title:

                         HARBOR GLOBAL II LTD.

       By:
                                            ------------------------------------
                 Name:
                  Title:

Signature Page to Distribution Agreement

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SCHEDULE 5.2A 

     The following Liabilities shall remain Liabilities of Parent after the Time
of the Distribution; provided, however, that Harbor Global will indemnify,      
defend and hold harmless the Parent Indemnitees for all Losses incurred in      
connection with the Liabilities listed on this Schedule 5.2A pursuant to Article
VII hereof; and provided, further, that Items 1 and 2 shall remain Liabilities  
of Parent only until such Items are assigned to and assumed by Pioneer Forest:  

     1. All Liabilities of Parent under the Loan Agreement dated as of
   January 30, 1996, as amended by the First Amendment to the Loan Agreement
 dated as of January 1, 1999, by and between State Street Bank and Trust
Company and Closed Joint-Stock Company "Forest-Starma," the Master    
     Short-Term Credit Agreement dated as of March 19, 1996 by and between State
Street Bank and Trust Company and Closed Joint-Stock Company          
  "Forest-Starma" and the Loan Agreement dated as of September 18, 1997 by
and between State Street Bank and Trust Company and Closed Joint-Stock
 Company "Forest-Starma" each as assigned by State Street Bank and Trust
    Company to Parent pursuant to the Assignment Agreement dated as of January
20, 1999 by and among Parent, State Street Bank and Trust Company and 
Closed Joint-Stock Company "Forest-Starma."                           

     2. All Liabilities of Parent under the Agreement on Assignment of
     Rights Under Promissory Note dated as of January 25, 2000, as amended as of
April 25, 2000, by and between Parent and Closed Joint-Stock Company  
"Forest-Starma."                                                      

        3. All Liabilities of Parent under the Assignment Agreement dated as
   of May 10, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which State Street Bank and Trust Company
 assigned to Parent all of its rights, title and interest in, and Parent
   assigned to Pioneer Forest, LLC all of its rights, title and interest in,
   the Participation Agreement dated as of March 18, 1996, as amended by the
First Amendment to the Participation Agreement dated as of December 6,
     1996, by and between Parent and State Street Bank and Trust Company and the
Participation Agreement dated as of September 17, 1997 by and between 
   Parent and State Street Bank and Trust Company (relating to certain loans
to Closed Joint-Stock Company "Forest-Starma.").                      

        4. All Liabilities of Parent under the Assignment Agreement dated as
   of May 10, 2000 by and among Pioneer Forest, LLC, Parent and State Street
   Bank and Trust Company under which Parent assigned to Pioneer Forest, LLC
    all of its rights, title and interest in the Participation Agreement dated
as of January 30, 1996 by and between Parent and State Street Bank and
Trust Company (relating to a loan to Closed Joint-Stock Company       
"Forest-Starma.").                                                    

        5. All Liabilities of Parent under the Assignment Agreement dated as
   of May 12, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which State Street Bank and Trust Company
assigned to Parent all of its rights, title and interest in the       
    Participation Agreement dated as of January 30, 1996 by and between Parent
and State Street Bank and Trust Company (relating to a loan to Closed 
Joint-Stock Company "Forest-Starma.").                                

        6. All Liabilities of Parent under the Assignment Agreement dated as
     of May 2, 2000 by and among Harbor Far East Ventures, LLC, Parent and State
 Street Bank and Trust Company under which Parent assigned to Harbor Far
East Ventures, LLC all of its rights, title and interest in the       
   Participation Agreement dated as of September 17, 1997, as amended by the
    First Amendment to the Participation Agreement dated as of March 19, 1998,
    by and between Parent and State Street Bank and Trust Company (relating to
a loan to Closed Joint-Stock Company "Pioneer-Starma-Equipment").     

        7. All Liabilities of Parent under the Assignment Agreement dated as
  of May 2, 2000 by and among Harbor Far East Exploration, LLC, Parent and
   State Street Bank and Trust Company under which Parent assigned to Harbor
Far East Exploration, LLC all of its rights, title and interest in the
  Participation Agreement dated as of February 14, 1997, as amended by the
First Amendment to the                                                

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     Participation Agreement dated as of March 19, 1998 and the Second Amendment
  to the Participation Agreement dated as of June 30, 1999, by and between
Parent and State Street Bank and Trust Company (relating to a loan to 
Closed Joint-Stock Company "Tas-Yurjah Mining Company").              

        8. All Liabilities of Parent under the Assignment Agreement dated as
  of May 2, 2000 by and among Pioneer Forest, LLC, Parent and State Street
   Bank and Trust Company under which Parent assigned to Pioneer Forest, LLC
    all of its rights, title and interest in the Participation Agreement dated
as of September 17, 1997, as amended by the First Amendment to the    
   Participation Agreement dated as of March 19, 1998, by and between Parent
and State Street Bank and Trust Company (relating to a loan to Closed 
Joint-Stock Company "Udinskoye").                                     

        9. All Liabilities of Parent under the Assignment Agreement dated as
  of May 2, 2000 by and among Pioneer Forest, LLC, Parent and State Street
   Bank and Trust Company under which Parent assigned to Pioneer Forest, LLC
    all of its rights, title and interest in the Participation Agreement dated
as of September 17, 1997, as amended by a First Amendment to the      
     Participation Agreement dated as of January 22, 1998 and a Second Amendment
  to the Participation Agreement dated as of July 17, 1998, by and between
Parent and State Street Bank and Trust Company (relating to a loan to 
Closed Joint-Stock Company "Amgun-Forest").                           

         10. All Liabilities of Parent under the Assignment Agreement dated as
     of May 2, 2000 by and among Harbor Far East Ventures, LLC, Parent and State
 Street Bank and Trust Company under which Parent assigned to Harbor Far
East Ventures, LLC all of its rights, title and interest in the       
Participation Agreement dated as of November 25, 1997 and the Second  
Participation Agreement dated as of May 20, 1998, each by and between 
Parent and State Street Bank and Trust Company (relating to a loan to 
International Closed Joint-Stock Company "Starma-Holding").           

         11. All Liabilities of Parent under the Assignment Agreement dated as
of November 29, 1999 by and among Pioneer Metals and Technology, Inc.,
    Parent and State Street Bank and Trust Company under which Parent assigned
to Pioneer Metals and Technology, Inc. all of its rights, title and   
     interest in the Second Participation Agreement dated as of May 20, 1998, as
    amended by the First Amendment to the Second Participation Agreement dated
    as of October 9, 1998 and the Second Amendment to the Second Participation
  Agreement dated as of February 26, 1999, by and between Parent and State
Street Bank and Trust Company.                                        

   12. All Liabilities of Parent under the Letter of Agreement and
 Indemnity dated as of January 12, 1995 by and between Pioneer Poland UK
Limited, Parent and Richard Phillips.                                 

   13. All Liabilities of Parent under the Letter of Agreement and
 Indemnity dated as of January 12, 1995 by and between Pioneer Poland UK
Limited, Parent and Godfrey Whitehead.                                

        14. All Liabilities of Parent under the Letter Agreement dated as of
January 10, 1995 by and between Parent and the European Bank for      
Reconstruction and Development.                                       

          15. All Liabilities of Parent under the Side Letter Agreement dated as
 of October 27, 1999 by and between Pioneer Real Estate Advisors Poland,
S.A., Parent and the European Bank for Reconstruction and Development.

          16. All Liabilities of Parent under the Side Letter Agreement dated as
 of October 27, 1999 by and between Pioneer Real Estate Advisors Poland,
   S.A., Pioneer Real Estate Advisors, Inc., Parent and Cadim Servotech B.V.

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SCHEDULE 5.2B 

1. All rights and obligations of Parent under the Settlement Agreement
dated as of March 29, 2000 by and between Caterpillar Financial Services        
Corporation, Teberebie Goldfields Limited and Parent.                           

Note: If the Distribution Agreement is executed before Closed Joint-Stock       
Company "Forest-Starma." fully performs its log delivery obligations to         
Rayonier, Inc., also include all rights and obligations of Parent under the     
Guaranty dated as of January 7, 2000 by and between Parent and Rayonier, Inc.   
with respect to certain obligations of Closed Joint-Stock Company               
"Forest-Starma." under the Log Sales Contract No. 00-01-07 by and between       
Rayonier, Inc. and Closed Joint-Stock Company "Forest-Starma."                  

SCHEDULE 5.2C 

Note: If the consent of Ashanti Goldfields Company Limited to release Parent of 
its obligations under the Purchase Agreement dated as of May 11, 2000 by and    
among Pioneer Goldfields II Limited, Ashanti Goldfields Company Limited and     
Goldfields Teberebie Limited cannot be obtained, this agreement and the related 
guaranty will be included on this Schedule 5.2C.                                

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                                                                       EXHIBIT B

TAX SEPARATION AGREEMENT dated as of [            ], 2000 (the "Tax   
Separation Agreement") by and among The Pioneer Group, Inc., a Delaware         
corporation ("Parent"), Harbor Global Company Ltd., a Bermuda limited duration  
company and direct wholly owned subsidiary of Parent ("Harbor Global"), and     
Harbor Global II Ltd., a Bermuda limited duration company and indirect wholly   
owned subsidiary of Harbor Global ("Harbor Global II").                         

RECITALS

WHEREAS:                                                              

A. As of the date hereof, Parent is the common parent of an affiliated
group of corporations within the meaning of Section 1504(a) of the Internal     
Revenue Code of 1986, as amended (the "Code"), which together with the members  
of the affiliated group files a consolidated United States federal income tax   
return.                                                                         

     B. As of the date hereof, Parent and UniCredito Italiano S.p.A., an Italian
corporation, have entered into an Agreement and Plan of Merger dated as of May  
14, 2000 (the "Merger Agreement"), providing for the merger of a subsidiary of  
UniCredito Italiano S.p.A. with and into Parent (the "Merger"), as described    
therein.                                                                        

  C. Immediately prior to the Effective Time (as defined in Section 1.3 of
the Merger Agreement), subject to the satisfaction or waiver of the conditions  
set forth in Article VII of the Distribution Agreement dated as of              
[            ], 2000 (the "Distribution Agreement") by and among Parent, Harbor 
Global and Harbor Global II, the Board of Directors of Parent expects to        
distribute to holders of Parent common stock, par value $.10 per share (the     
"Parent Common Stock"), all of the outstanding shares of Harbor Global common   
stock, par value $.01 per share (the "Harbor Global Common Stock"), on a pro    
rata basis as described in Article II of the Distribution Agreement (the        
"Distribution"). In connection with the Distribution, Parent will effect the    
Restructuring (as defined in Section 4.1 of the Distribution Agreement) and     
assume certain liabilities as described in Article IV of the Distribution       
Agreement.                                                                      

 D. The parties hereto have determined to enter into this Tax Separation
Agreement, setting forth their agreement with respect to certain Tax matters.   

 NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:                          

ARTICLE I 

DEFINITIONS 

For the purposes of this Agreement,                                   

  1.1  "Code" shall have the meaning set forth in the preamble to this Tax
Separation Agreement.                                                           

 1.2  "Distribution" shall have the meaning set forth in the preamble to
this Tax Separation Agreement.                                                  

1.3  "Distribution Agreement" shall have the meaning set forth in the 
preamble to this Tax Separation Agreement.                                      

  1.4  "Distribution Date" shall mean the day on which the Distribution is
deemed effective in accordance with Section 2.3 of the Distribution Agreement.  

  1.5  "Effective Time" shall have the meaning set forth in Section 1.3 of
the Merger Agreement.                                                           

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1.6  "Final Determination" shall mean with respect to any issue (i) a 
decision, judgment, decree or other order by any court of competent             
jurisdiction, which decision, judgment, decree or other order has become final  
and is not subject to further appeal, (ii) a closing agreement entered into     
under Section 7121 of the Code or any other binding settlement agreement        
(whether or not with the Internal Revenue Service) entered into in connection   
with or in contemplation of an administrative or judicial proceeding or (iii)   
the completion of the highest level of administrative proceedings if a judicial 
contest is not or is no longer available.                                       

  1.7  "Harbor Global" shall have the meaning set forth in the preamble to
this Tax Separation Agreement.                                                  

   1.8  "Harbor Global Common Stock" shall have the meaning set forth in the
preamble to this Tax Separation Agreement.                                      

     1.9  "Harbor Global II" shall have the meaning set forth in the preamble to
this Tax Separation Agreement.                                                  

   1.10  "Harbor Global Group" shall mean, for any period, Harbor Global and
its direct and indirect subsidiaries (determined after giving effect to the     
transfers and transactions contemplated by Sections 4.1 and 4.2 of the          
Distribution Agreement), including any predecessor or successor entities. For   
purposes of this Tax Separation Agreement, Pioneer Forest, LLC is a successor of
Pioneer Forest, Inc., Pioneer Real Estate Advisors, LLC is a successor of       
Pioneer Real Estate Advisors, Inc., Pioneer Goldfields II, LLC is a successor of
Pioneer Goldfields II Limited, Pioneer Omega, LLC is a successor of Pioneer     
Omega, Inc., Luscinia, LLC is a successor of Luscinia, Inc., Theta Enterprises, 
LLC is a successor of Theta Enterprises, Inc. and Pioneer First Russia, LLC is a
successor of Pioneer First Russia, Inc.                                         

  1.11  "Liable Party" shall have the meaning set forth in Section 2.4(e).

     1.12  "Merger" shall have the meaning set forth in the preamble to this Tax
Separation Agreement.                                                           

   1.13  "Merger Agreement" shall have the meaning set forth in the preamble
to this Tax Separation Agreement.                                               

 1.14  "Other Party" shall have the meaning set forth in Section 2.4(e).

     1.15  "Parent" shall have the meaning set forth in the preamble to this Tax
Separation Agreement.                                                           

1.16  "Parent Common Stock" shall have the meaning set forth in the   
preamble to this Tax Separation Agreement.                                      

    1.17  "Parent Group" shall mean, for any period, Parent and its direct and
indirect subsidiaries (determined after giving effect to the transfers and      
transactions contemplated by Sections 4.1 and 4.2 of the Distribution           
Agreement), including any predecessor or successor entities. For the purposes of
this Tax Separation Agreement, Pioneer International LLC is a successor of      
Pioneer International Corporation.                                              

     1.18  "Period" shall mean any Period Before the Distribution and any Period
After the Distribution.                                                         

    1.19  "Period After the Distribution" shall mean any taxable year or other
taxable period beginning on or after the Distribution Date and, in the case of  
any taxable year or other taxable period that begins before and ends after the  
Distribution Date, that part of the taxable year or other taxable period that   
begins after the close of the Distribution Date.                                

     1.20  "Period Before the Distribution" shall mean any taxable year or other
taxable period that ends on or before the Distribution Date and, in the case of 
any taxable year or other taxable period that begins before and ends after the  
Distribution Date, that part of the taxable year or other taxable period through
the close of the Distribution Date.                                             

   1.21  "Restructuring" shall have the meaning set forth in the preamble to
this Tax Separation Agreement.                                                  

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    1.22  "Restructuring Tax" shall mean any Tax that is imposed on any member
of the Parent Group or the Harbor Global Group resulting from, or arising in    
connection with, any transaction that occurs as part of the Restructuring.      

  1.23  "Separate Tax Liability" shall mean, with respect to any member or
members of the Harbor Global Group, an amount equal to the Tax liability that   
such member or members would have incurred if it had filed a consolidated       
return, combined return or a separate return, as the case may be, separate from 
the Parent Group for all Periods Before the Distribution, and such amount shall 
be computed by Parent using the highest marginal corporate Tax rate (or rates,  
in the case of an item that affects more than one Tax) for the relevant taxable 
period (or portion thereof), without giving effect to any carryforward or       
carryover of any Tax Item and in a manner consistent with (i) general Tax       
accounting principles, (ii) the Code and the Treasury regulations promulgated   
thereunder, (iii) any similar provisions of the laws of other jurisdictions, if 
applicable, and (iv) past practice, including payments between members for the  
use of tax losses or credits and with respect to audit adjustments thereto.     

     1.24  "Tax" whether used in the form of a noun or adjective, shall mean any
tax on or measured by or with respect to income, franchise, gross receipts,     
sales, use, excise, payroll, personal property, real property, ad-valorem,      
value-added, leasing, leasing use or other taxes, levies, imposts, duties,      
charges or withholdings of any nature imposed by any Taxing Authority. Whenever 
the term "Tax" is used (including with respect to any duty to reimburse another 
party for indemnified Taxes or refunds or credit of Taxes) it shall include     
penalties, fines, additions to Tax and interest thereon.                        

  1.25  "Taxing Authority" shall mean the Internal Revenue Service and any
other state, local or foreign governmental authority responsible for the        
administration of any Tax.                                                      

  1.26  "Tax Item" shall mean any item of income, gain, loss, deduction or
credit or other attribute that may have the effect of increasing or decreasing  
any Tax.                                                                        

 1.27  "Tax Return" shall mean any return, report, schedule, estimate or
document, including related or supporting information, to be filed or that may  
be filed for any period with any Taxing Authority in connection with any Tax.   

     1.28  "Disregarded Operations" shall mean, collectively, the operations of:
(i) Pioneer Forest, LLC, a Delaware limited liability company; (ii) Closed      
Joint-Stock Company "Forest-Starma," a Russian joint stock company; (iii) Closed
Joint-Stock Company "Udinskoye," a Russian joint stock company; (iv) Closed     
Joint-Stock Company "Amgun-Forest," a Russian joint stock company; (v) Pioneer  
Goldfields Limited; and (vi) Teberebie Goldfields Limited.                      

  1.29  "U.S. Tax Return" shall mean any Tax Return that is required to be
filed with respect to any Tax imposed by the United States or any state or local
government that is part of the United States.                                   

ARTICLE II

TAX RETURNS AND TAX PAYMENTS

2.1  Obligation to File Tax Returns.                                  

     (a) Parent shall have sole and exclusive responsibility for the preparation
and filing of all Tax Returns with respect to any member of the Parent Group and
the Harbor Global Group that (i) are filed on a consolidated, combined or       
unitary basis, (ii) include any member of the Harbor Global Group and any member
of the Parent Group and (iii) are required to be filed with respect to any      
Period.                                                                         

     (b) Parent shall have sole and exclusive responsibility for the preparation
and filing of all Tax Returns (in addition to any Tax Return described in       
Section 2.1(a)) with respect to any member of the Parent Group for any Period.  

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(c) Harbor Global shall have sole and exclusive responsibility for the
preparation and filing of any Tax Return (other than a Tax Return described in  
Section 2.1(a)) with respect to any member of the Harbor Global Group.          

2.2  Agent.  Subject to the other applicable provisions of this Tax   
Separation Agreement, Harbor Global hereby irrevocably designates, and agrees to
cause each member of the Harbor Global Group to so designate, Parent as its sole
and exclusive agent and attorney-in-fact to take any action, including execution
of documents, as Parent, in its sole discretion, may deem appropriate in any and
all matters (including Tax audits) relating to any Tax Return described in      
Section 2.1(a).                                                                 

2.3  Manner of Tax Return Preparation and Information Reporting.      

(a) Unless otherwise required by a Taxing Authority, the parties shall
prepare and file all Tax Returns, and take all other action, in a manner        
consistent with (i) this Tax Separation Agreement, (ii) the Merger Agreement and
(iii) the Distribution Agreement, including any action necessary to maintain    
applicable elections set forth in Sections 4.1(a)(i), 4.1(f) and 4.1(g) of the  
Distribution Agreement with respect to such party's United States federal income
tax classification. All Tax Returns shall be filed on a timely basis (taking    
into account applicable extensions) by the party responsible for filing such Tax
Returns under this Tax Separation Agreement.                                    

 (b) Parent shall have the exclusive right, in its sole discretion, with
respect to any Tax Return described in Sections 2.1(a) and 2.1(b) to make all   
decisions, including (i) the manner in which such Tax Return shall be prepared  
and filed, including the elections, method of accounting, positions, conventions
and principles of taxation to be used and the manner in which any Tax Item shall
be reported, (ii) whether any extensions may be requested, (iii) the elections  
that will be made by any member of the Parent Group or Harbor Global Group on   
such Tax Return, (iv) whether any amended Tax Returns shall be filed, (v)       
whether any claims for refund shall be made, (vi) whether any refund shall be   
paid by way of refund or credited against any liability for the related Tax and 
(vii) whether to retain outside firms to prepare or review such Tax Returns.    

   (c) Parent shall undertake to timely provide an information statement and
other necessary reports to stockholders of Parent to assist such stockholders in
accurately reporting Tax consequences of the Distribution and any related       
transactions.                                                                   

2.4  Liability for Taxes.                                             

  (a) Harbor Global's Liability for Section 2.1(a) Taxes.  With respect to
all Tax Returns described in Section 2.1(a), Harbor Global shall be liable for  
the Separate Tax Liability of each member of the Harbor Global Group, and shall 
be entitled to receive and retain all refunds or credits of Taxes previously    
paid by Harbor Global with respect to any such Separate Tax Liability; provided,
however, that Parent shall have the sole and exclusive liability with respect to
any Tax resulting from any worthless security loss or other deduction taken     
directly or indirectly by Parent with respect to any of the Disregarded         
Operations, including any Tax deficiency of Pioneer Forest, Inc. and its        
successor Pioneer Forest, LLC, and shall be entitled to receive and retain all  
refunds or credits of Taxes previously paid by Parent with respect to such      
Taxes.                                                                          

(b) Parent's Liability for Section 2.1 Taxes.  With respect to all Tax
Returns described in Section 2.1(a), Parent shall be liable for the difference  
between the Separate Tax Liability of each member of the Harbor Global Group    
described in Section 2.4(a) and all Taxes shown as due on such Tax Returns, and 
shall be entitled to receive and retain all refunds or credits of Taxes         
attributable to such difference. With respect to all Tax Returns described in   
Section 2.1(b), Parent shall be liable for all Taxes due with respect thereto   
and shall be entitled to receive and retain all refunds or credits of Taxes     
previously paid by Parent with respect to such Taxes.                           

   (c) Harbor Global's Liability for Section 2.1(c) Taxes.  With respect all
Tax Returns described in Section 2.1(c), Harbor Global shall be liable for all  
Taxes due with respect thereto and shall be entitled to                         

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receive and retain all refunds or credits of Taxes previously paid by Harbor    
Global with respect to such Taxes.                                              

 (d) Harbor Global's Liability for Restructuring Taxes.  Notwithstanding
anything contained in this Tax Separation Agreement to the contrary, Harbor     
Global shall be liable for any and all Restructuring Taxes.                     

(e) Payment of Tax Liability.  If one party is liable for Taxes under 
Section 2.4(a) through 2.4(d) (the "Liable Party") with respect to Tax Returns  
for which another party (the "Other Party") is responsible for preparing and    
filing, then the Liable Party shall pay the Taxes to the Other Party (or to the 
appropriate Tax Authority, as directed in writing by the Other Party) pursuant  
to Article IV.                                                                  

2.5  Tax Benefits.  Notwithstanding any other provision in this Tax   
Separation Agreement, to the extent that one party actually recognizes a Tax    
benefit from the use of a loss or credit generated by another party to this Tax 
Separation Agreement, the party receiving such benefit shall pay the amount of  
such benefit to the party which generated the loss or credit.                   

2.6  Indemnification.                                                 

    (a) Obligations of Harbor Global.  Harbor Global shall indemnify and shall
hold each member of the Parent Group harmless against any Tax liability         
described in Sections 2.4(a), 2.4(c) and 2.4(d), including any Tax liability    
asserted against any member of the Parent Group under the provisions of Treasury
Regulation 1.1502-6(a) that impose several liability on members of any          
affiliated group of corporations that files consolidated returns, or similar    
provisions of any state, local or foreign law, in respect of any Separate Tax   
Liability of any member of the Harbor Global Group.                             

    (b) Obligations of Parent.  Parent shall indemnify and hold each member of
the Harbor Global Group harmless against any Tax liability described in Sections
2.4(b) and 2.4(d), including any Tax liability asserted against any member of   
the Parent Group under the provisions of Treasury Regulation 1.1502-6(a) that   
impose several liability on members of any affiliated group of corporations that
files consolidated returns, or similar provisions of any foreign, state or local
law, in respect of Taxes of any member of the Parent Group.                     

   2.7  Period that Includes the Distribution Date.  To the extent permitted
by law or administrative practice, the taxable year of each member of the Harbor
Global Group that is a United States person (within the meaning of Section      
7701(a)(30) of the Code) shall be treated as closing on the Distribution Date,  
and the parties agree to file all U.S. Tax Returns on such basis.               

ARTICLE III 

CARRYBACKS

   Without the prior consent of Parent, no member of the Harbor Global Group
shall carry back any net operating loss or other Tax attribute from a Period    
After the Distribution to a Period Before the Distribution.                     

ARTICLE IV

PAYMENTS

4.1  Payments.  Payments arising under Section 2.4(e) shall be due not
later than 20 business days after the receipt or crediting of a refund or the   
receipt of notice of a Final Determination that the indemnified party is liable 
for an indemnified cost.                                                        

 4.2  Notice.  Parent and Harbor Global shall give each other reasonable
notice of payment that may be due under this Tax Separation Agreement; provided,
that, together with such notice to Harbor Global, Parent shall provide Harbor   
Global with a written calculation in reasonable detail setting forth the amount 
of any Separate Tax Liability or estimated Separate Tax Liability.              

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4.3  Treatment of Payments.  Unless otherwise required by any Final   
Determination, the parties agree that any payments made by a Liable Party to the
Other Party pursuant to this Tax Separation Agreement shall be treated for all  
Tax and financial accounting purposes as payments made immediately prior to the 
Distribution.                                                                   

ARTICLE V 

TAX AUDITS

 Each of Harbor Global and Parent shall have sole responsibility for all
audits or other proceedings with respect to Tax Returns that it is required to  
file under Section 2.1. Harbor Global shall be entitled to participate in the   
conduct of any audit or controversy proceedings relating to any Taxes for which 
Harbor Global may be liable, and Parent shall not settle any such audit or      
controversy with respect to such Tax without the approval and consent of Harbor 
Global, which approval and consent shall not unreasonably be withheld.          

ARTICLE VI

COOPERATION 

     6.1  Parent and Harbor Global shall cooperate with each other in the filing
of any Tax Returns and the conduct of any audit or other proceeding, and each   
shall execute and deliver such powers of attorney and make available such other 
documents as are necessary to carry out the intent of this Tax Separation       
Agreement. Each party shall notify the other party of any audit adjustments     
which do not result in Tax liability but can be reasonably expected to affect   
Tax Returns of any member of the other party for a Period After the             
Distribution. Each party agrees that the Distribution is not a non-recognition  
transaction satisfying the requirements of Section 355 of the Code.             

     6.2  Harbor Global shall be entitled to review any Tax Return pertaining to
any Taxes for which Harbor Global may either be liable directly to the relevant 
Taxing Authority or for which it may be required to indemnify any member of the 
Parent Group under Section 2.6(a). Parent shall have due regard for any comments
made by Harbor Global Group in respect of any such Tax Return before it is      
filed.                                                                          

ARTICLE VII 

TAX RECORDS, TAX RECORDS RETENTION AND ACCESS 

  7.1  On or before the Distribution Date, Parent shall use its reasonable
best efforts to provide Harbor Global with copies of all Tax records, documents,
accounting data and other information (including computer data) in its          
possession that relates to any member of the Harbor Global Group. If after the  
Distribution Date Parent obtains further Tax records, documents, accounting data
and other information (including computer data), it shall use its reasonable    
best efforts to provide Harbor Global with copies of such additional information
no later than 15 days after receipt of such information.                        

   7.2  The Parent Group and the Harbor Global Group shall (a) in accordance
with the record retention policy described in Section 5.3 of the Distribution   
Agreement, retain Tax records, documents, accounting data and other information 
(including computer data) necessary for the preparation and filing of all Tax   
Returns in respect of Taxes of the Parent Group or the Harbor Global Group or   
for the audit of such Tax Returns and (b) give the other reasonable access to   
such records, documents, accounting data and other information (including       
computer data) and to its personnel (ensuring their cooperation) and premises,  
for the purpose of the review or audit of such returns to the extent relevant to
an obligation or liability of a party under this Tax Separation Agreement.      

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ARTICLE VIII

DISPUTES

If Parent and Harbor Global cannot agree on any calculation of any    
liabilities under this Tax Separation Agreement, such calculation shall be made 
by any nationally recognized accounting firm acceptable to both Parent and      
Harbor Global. The decision of such firm shall be final and binding. The fees   
and expenses incurred in connection with such calculations shall be borne       
equally by Parent and Harbor Global.                                            

ARTICLE IX

TERMINATION OF LIABILITIES

   Notwithstanding any other provision in this Tax Separation Agreement, any
liabilities determined under this Tax Separation Agreement shall not terminate  
upon the expiration of the applicable statute of limitation for such liability. 
All other covenants under this Tax Separation Agreement shall survive           
indefinitely.                                                                   

ARTICLE X 

MISCELLANEOUS PROVISIONS

   10.1  Notices and Governing Law.  All notices required or permitted to be
given pursuant to this Tax Separation Agreement shall be given as described in  
Section 8.4 of the Distribution Agreement. This Tax Separation Agreement shall  
be governed by and construed in accordance with the laws of the State of        
Delaware, without reference to its conflicts of laws principles.                

   10.2  Binding Effect; No Assignment; Third Party Beneficiaries.  This Tax
Separation Agreement shall be binding on, and shall inure to the benefit of, the
parties and their respective successors and assigns, including Acquiror. Parent 
and Harbor Global hereby guarantee the performance of all actions, agreements   
and obligations provided for under this Tax Separation Agreement of each member 
of the Parent Group and the Harbor Global Group, respectively. Parent and Harbor
Global shall, upon the written request of the other, cause any of their         
respective subsidiaries to execute this Tax Separation Agreement. Parent or     
Harbor Global shall not assign any of its rights or delegate any of its duties  
under this Tax Separation Agreement without the prior written consent of the    
other party. No person (including, without limitation, any employee of a party  
or any stockholder of a party) shall be, or shall be deemed to be, a third party
beneficiary of this Tax Separation Agreement.                                   

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Tax    
Separation Agreement as of the day and year first above written.                

                           THE PIONEER GROUP, INC.

       By:
                                            ------------------------------------
                 Name:
                  Title:

                              HARBOR GLOBAL COMPANY LTD.

       By:
                                            ------------------------------------
                 Name:
                  Title:

                         HARBOR GLOBAL II LTD.

       By:
                                            ------------------------------------
                 Name:
                  Title:

Signature Page to Tax Separation Agreement

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                                                                         ANNEX C

                                            (Date)

Board of Directors                                                              
The Pioneer Group, Inc.                                                         
60 State Street                                                                 
Boston, Massachusetts 02109                                                     

Ladies and Gentlemen:                                                           

  The Pioneer Group, Inc. (the "Company"), UniCredito Italiano S.p.A. (the
"Acquiror") and a wholly owned subsidiary of the Acquiror (the "Acquisition     
Sub"), have entered into an Agreement and Plan of Merger, dated as of May 14,   
2000 (the "Agreement"), pursuant to which the Company will be merged with the   
Acquisition Sub in a transaction (the "Merger") in which each outstanding share 
of the Company's common stock par value $.10 per share (the "Shares"), will be  
converted into the right to receive $43.50 in cash (the "Merger Consideration").
Prior to the Merger, the Company will distribute (the "Distribution") to holders
of Company Common Stock all of the capital stock of Harbor Global Company Ltd. a
Bermuda limited duration company ("Harbor Global") which at such time will hold 
substantially all of the Company's assets and liabilities not related to the    
Company's global investment management business (the "GIM Business").           

   You have asked us whether, in our opinion, the aggregate consideration to
be received by the holders of the Shares other than the Acquiror and its        
affiliates in the Merger and the Distribution is fair to such shareholders from 
a financial point of view.                                                      

  In arriving at the opinion set forth below, we have, among other things:

     (1) Reviewed the Company's Annual Reports, Forms 10-K and related financial
       information for the five fiscal years ended December 31, 1999 and the
         Company's Form 10-Q and the related unaudited financial information for
the quarterly period ending March 31, 2000;                   

   (2) Reviewed certain information, including financial forecasts, relating
   to the business, earnings, cash flow, assets and prospects of the
Company, furnished to us by the Company;                      

    (3) Conducted discussions with members of senior management of the Company
concerning the businesses and prospects of the Company;       

(4) Reviewed the historical market prices and trading activity for the
         Shares and compared them with that of certain publicly traded companies
which we deemed to be reasonably similar to the GIM Business; 

 (5) Compared the results of operations of the GIM Business with that of
       certain companies which we deemed to be reasonably similar to the GIM
Business;                                                     

    (6) Compared the proposed financial terms of the transactions contemplated
        by the Agreement with the financial terms of certain other mergers and
acquisitions which we deemed to be relevant;                  

     (7) Reviewed the Agreement and certain drafts of the agreements relating to
the Distribution;                                             

  (8) Reviewed a letter (the "Solvency Letter") regarding the solvency and
     financial viability of Harbor Global following the Distribution and
    discussed its contents with the Company's management and the third
party which proposed such letter; and                         

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   (9) Reviewed such other financial studies and analyses and performed such
     other investigations and took into account such other matters as we
        deemed necessary, including our assessment of general economic, market
and monetary conditions                                       

   In preparing our opinion, we have relied on the accuracy and completeness
of all information supplied or otherwise made available to us by the Company,   
and we have not independently verified such information or undertaken an        
independent appraisal of the assets of the Company. With respect to the         
financial forecasts furnished by the Company, we have assumed that they have    
been reasonably prepared and reflect the best currently available estimates and 
judgment of the Company's management as to the expected future financial        
performance of the GIM Business. In addition, we have relied upon the Solvency  
Letter and have assumed that as set forth in the Solvency Letter, Harbor Global 
will be solvent and financially viable at the time of the Distribution.         

   On the basis of, and subject to the foregoing, we are of the opinion that
the aggregate consideration to be received by the holders of the Shares other   
than the Acquiror and its affiliates pursuant to the Merger and the Distribution
is fair to such shareholders from a financial point of view.                    

                     Very truly yours,

                                   MERRILL LYNCH, PIERCE, FENNER &
                          SMITH INCORPORATED

       By:
                                            ------------------------------------
                   (Title)
                                    Investment Banking Group

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                                                                         ANNEX D

[Date]                                                                          

Board of Directors                                                              
The Pioneer Group, Inc.                                                         
60 State Street                                                                 
Boston, Massachusetts 02109                                                     

Ladies and Gentlemen:                                                           

   You have requested our opinion as to the fairness, from a financial point
of view, to the holders of shares of the common stock, par value $0.10 per share
(the "Company Common Stock"), of The Pioneer Group, Inc. (the "Company") of the 
aggregate consideration to be received by holders of the Company Common Stock in
the Merger and the Distribution (each as defined below) contemplated by the     
Agreement and Plan of Merger (the "Agreement"), dated as of May 14, 2000, by and
between the Company, UniCredito Italiano S.p.A. ("Parent") and a direct wholly  
owned subsidiary to be organized by Parent ("Merger Sub").                      

   As more specifically set forth in the Agreement, and subject to the terms
and conditions thereof, Merger Sub will merge with and into the Company (the    
"Merger"), and each issued and outstanding share of Company Common Stock, other 
than certain shares to be cancelled pursuant to the Agreement, will be converted
into the right to receive $43.50 in cash, without any interest thereon (the     
"Merger Consideration"). Prior to the Merger, the Company will distribute (the  
"Distribution") to holders of Company Common Stock all of the capital stock of  
Harbor Global Company Ltd., a Bermuda limited duration company ("Harbor         
Global"), which at such time will hold substantially all of the Company's assets
and liabilities not related to the Company's global investment management       
business (the "GIM Business").                                                  

    In arriving at our opinion, we reviewed the Agreement and held discussions
with certain senior officers, directors and other representatives and advisors  
of the Company concerning the businesses, operations and prospects of the GIM   
Business. We examined certain publicly available business and financial         
information relating to the Company as well as certain financial forecasts and  
other information and data for the Company which were provided to or otherwise  
discussed with us by the Company's management. We reviewed the financial terms  
of the Merger as set forth in the Agreement in relation to, among other things: 
current and historical market prices and trading volumes of the Company Common  
Stock; the historical and projected earnings and other operating data of the GIM
Business; and the historical and projected capitalization and financial         
condition of the Company and the GIM Business. We analyzed certain financial,   
stock market and other publicly available information relating to the businesses
of other companies whose operations we considered relevant in evaluating those  
of the GIM Business. We also reviewed the terms of the Distribution and a letter
(the "Solvency Letter") with respect to the solvency and financial viability of 
Harbor Global following the Distribution following the Distribution and         
discussed its contents with the Company's management and the third party which  
proposed such letter. In addition to the foregoing, we conducted such other     
analyses and examinations and considered such other information and financial,  
economic and market criteria as we deemed appropriate in arriving at our        
opinion.                                                                        

   In rendering our opinion, we have assumed and relied, without independent
verification, upon the accuracy and completeness of all financial and other     
information and data publicly available or furnished to or otherwise reviewed by
or discussed with us and have further relied upon the assurances of the         
Company's management that it is not aware of any facts that would make any of   
such information inaccurate or misleading. With respect to financial forecasts  
and other information and data provided to or otherwise reviewed by or discussed
with us, we have been advised by the Company's management that such forecasts   
and other information and data were reasonably prepared on bases reflecting the 
best currently available estimates and judgments of the Company's management as 
to the future financial performance of the GIM Business. We express no view with
respect to such forecasts and other                                             

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information and data or the assumptions on which they were based. We have not   
made or been provided with an independent evaluation or appraisal of the assets 
or liabilities (contingent or otherwise) of the GIM Business nor have we made   
any physical inspection of the properties or assets of the GIM Business. We have
assumed that the Merger and the Distribution will be consummated in a timely    
fashion in accordance with the terms of the Agreement without waiver of any of  
the conditions precedent contained in the Agreement. In addition, we have relied
upon the Solvency Letter, and have assumed that as set forth in the Solvency    
Letter, Harbor Global will be solvent and financially viable at the time of the 
Distribution.                                                                   

  We were not requested to consider, and our opinion does not address, the
relative merits of the Merger and the Distribution as compared to any           
alternative business strategies that might exist for the Company or the effect  
of any other transaction in which the Company might engage. Our opinion         
necessarily is based upon information available to us and financial, stock      
market and other conditions and circumstances existing and disclosed to us as of
the date hereof.                                                                

    Salomon Smith Barney Inc. is acting as financial advisor to the Company in
connection with the Merger and the Distribution and will receive a fee for our  
services, a portion of which is payable only upon the consummation of the       
transactions. We have in the past provided investment banking services to the   
Company unrelated to the Merger and the Distribution, for which we have received
and will receive compensation. In the ordinary course of our business, we and   
our affiliates may actively trade or hold the securities of the Company and     
Parent for our own account or for the account of our customers and, accordingly,
may at any time hold a long or short position in such securities. Salomon Smith 
Barney Inc. and its affiliates (including Citigroup Inc. and its affiliates) may
maintain relationships with the Company and Parent and their respective         
affiliates.                                                                     

     Our advisory services and the opinion expressed herein are provided for the
information of the Board of Directors of the Company in its evaluation of the   
Merger and the Distribution and our opinion is not intended to be and does not  
constitute a recommendation of the Merger or the Distribution to the Company or 
a recommendation to any stockholder as to how such stockholder should vote on   
any matters relating to the Merger or the Distribution.                         

Based upon and subject to the foregoing, our experience as investment 
bankers, our work as described above and other factors we deemed relevant, we   
are of the opinion that, as of the date hereof, the aggregate consideration to  
be received by the holders of shares of Company Common Stock in the Merger and  
the Distribution is fair, from a financial point of view, to such holders.      

                     Very truly yours,

                               [SALOMON SMITH BARNEY INC.]

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                                                                         ANNEX E

DELAWARE GENERAL CORPORATION LAW
SECTION 262 -- APPRAISAL RIGHTS 

    262  APPRAISAL RIGHTS.  (a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to     
subsection (d) of this section with respect to such shares, who continuously    
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither  
voted in favor of the merger or consolidation nor consented thereto in writing  
pursuant to sec.228 of this title shall be entitled to an appraisal by the Court
of Chancery of the fair value of the stockholder's shares of stock under the    
circumstances described in subsections (b) and (c) of this section. As used in  
this section, the word "stockholder" means a holder of record of stock in a     
stock corporation and also a member of record of a nonstock corporation; the    
words "stock" and "share" mean and include what is ordinarily meant by those    
words and also membership or membership interest of a member of a nonstock      
corporation; and the words "depository receipt" mean a receipt or other         
instrument issued by a depository representing an interest in one or more       
shares, or fractions thereof, solely of stock of a corporation, which stock is  
deposited with the depository.                                                  

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be 
effected pursuant to sec.251 (other than a merger effected pursuant to sec.251  
(g) of this title), sec.252, sec.254, sec.257, sec.258, sec.263 or sec.264 of   
this title:                                                                     

      (1) Provided, however, that no appraisal rights under this section
  shall be available for the shares of any class or series of stock, which
    stock, or depository receipts in respect thereof, at the record date fixed
    to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or    
    consolidation, were either (i) listed on a national securities exchange or
     designated as a national market system security on an interdealer quotation
     system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no    
appraisal rights shall be available for any shares of stock of the    
  constituent corporation surviving a merger if the merger did not require
    for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec.251 of this title.               

          (2) Notwithstanding paragraph (1) of this subsection, appraisal rights
     under this section shall be available for the shares of any class or series
   of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to   
  Sections251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:                                           

           a. Shares of stock of the corporation surviving or resulting from
        such merger or consolidation, or depository receipts in respect thereof;

             b. Shares of stock of any other corporation, or depository receipts
    in respect thereof, which shares of stock (or depository receipts in
    respect thereof) or depository receipts at the effective date of the
      merger or consolidation will be either listed on a national securities
 exchange or designated as a national market system security on an
      interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;     

       c. Cash in lieu of fractional shares or fractional depository
   receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or                                                   

            d. Any combination of the shares of stock, depository receipts and
   cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this  
paragraph.                                                      

          (3) In the event all of the stock of a subsidiary Delaware corporation
    party to a merger effected under sec.253 of this title is not owned by the
    parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.   

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  (c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any    
class or series of its stock as a result of an amendment to its certificate of  
incorporation, any merger or consolidation in which the corporation is a        
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision, 
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.                   

(d) Appraisal rights shall be perfected as follows:                   

        (1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a  
  meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
 record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that   
appraisal rights are available for any or all of the shares of the    
   constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such    
     stockholder's shares shall deliver to the corporation, before the taking of
    the vote on the merger or consolidation, a written demand for appraisal of
    such stockholder's shares. Such demand will be sufficient if it reasonably
 informs the corporation of the identity of the stockholder and that the
   stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not 
   constitute such a demand. A stockholder electing to take such action must
     do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or  
 resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
   favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or                      

          (2) If the merger or consolidation was approved pursuant to sec.228 or
sec.253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days      
thereafter, shall notify each of the holders of any class or series of
    stock of such constituent corporation who are entitled to appraisal rights
  of the approval of the merger or consolidation and that appraisal rights
 are available for any or all shares of such class or series of stock of
  such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the   
   effective date of the merger or consolidation, such notice shall be given
    by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to  
    appraisal rights. Such notice may, and, if given on or after the effective
   date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder 
    entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting     
corporation the appraisal of such holder's shares. Such demand will be
    sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the    
appraisal of such holder's shares. If such notice did not notify      
   stockholders of the effective date of the merger or consolidation, either
     (i) each such constituent corporation shall send a second notice before the
     effective date of the merger or consolidation notifying each of the holders
  of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or   
 consolidation or (ii) the surviving or resulting corporation shall send
  such a second notice to all such holders on or within 10 days after such
    effective date; provided, however, that if such second notice is sent more
    than 20 days following the sending of the first notice, such second notice
   need only be sent to each stockholder who is entitled to appraisal rights
   and who has demanded appraisal of such holder's shares in accordance with
     this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either 
   notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of     
determining the stockholders entitled to receive either notice, each  
  constituent corporation may fix, in advance, a record date that shall be
     not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the          

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   merger or consolidation, the record date shall be such effective date. If
no record date is fixed and the notice is given prior to the effective
date, the record date shall be the close of business on the day next  
preceding the day on which the notice is given.                       

(e) Within 120 days after the effective date of the merger or         
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to   
appraisal rights, may file a petition in the Court of Chancery demanding a      
determination of the value of the stock of all such stockholders.               
Notwithstanding the foregoing, at any time within 60 days after the effective   
date of the merger or consolidation, any stockholder shall have the right to    
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of   
the merger or consolidation, any stockholder who has complied with the          
requirements of subsections (a) and (d) hereof, upon written request, shall be  
entitled to receive from the corporation surviving the merger or resulting from 
the consolidation a statement setting forth the aggregate number of shares not  
voted in favor of the merger or consolidation and with respect to which demands 
for appraisal have been received and the aggregate number of holders of such    
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the    
period for delivery of demands for appraisal under subsection (d) hereof,       
whichever is later.                                                             

 (f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which   
shall within 20 days after such service file in the office of the Register in   
Chancery in which the petition was filed a duly verified list containing the    
names and addresses of all stockholders who have demanded payment for their     
shares and with whom agreements as to the value of their shares have not been   
reached by the surviving or resulting corporation. If the petition shall be     
filed by the surviving or resulting corporation, the petition shall be          
accompanied by such a duly verified list. The Register in Chancery, if so       
ordered by the Court, shall give notice of the time and place fixed for the     
hearing of such petition by registered or certified mail to the surviving or    
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by one or more publications at  
least one week before the day of the hearing, in a newspaper of general         
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication  
shall be approved by the Court, and the costs thereof shall be borne by the     
surviving or resulting corporation.                                             

(g) At the hearing on such petition, the Court shall determine the    
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an   
appraisal for their shares and who hold stock represented by certificates to    
submit their certificates of stock to the Register in Chancery for notation     
thereon of the pendency of the appraisal proceedings; and if any stockholder    
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.                                                               

    (h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or        
consolidation, together with a fair rate of interest, if any, to be paid upon   
the amount determined to be the fair value. In determining such fair value, the 
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of 
interest which the surviving or resulting corporation would have had to pay to  
borrow money during the pendency of the proceeding. Upon application by the     
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery 
or other pretrial proceedings and may proceed to trial upon the appraisal prior 
to the final determination of the stockholder entitled to an appraisal. Any     
stockholder whose name appears on the list filed by the surviving or resulting  
corporation pursuant to subsection (f) of this section and who has submitted    
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally          
determined that such stockholder is not entitled to appraisal rights under this 
section.                                                                        
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 (i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court 
may direct. Payment shall be so made to each such stockholder, in the case of   
holders of uncertificated stock forthwith, and the case of holders of shares    
represented by certificates upon the surrender to the corporation of the        
certificates representing such stock. The Court's decree may be enforced as     
other decrees in the Court of Chancery may be enforced, whether such surviving  
or resulting corporation be a corporation of this State or of any state.        

  (j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon        
application of a stockholder, the Court may order all or a portion of the       
expenses incurred by any stockholder in connection with the appraisal           
proceeding, including, without limitation, reasonable attorney's fees and the   
fees and expenses of experts, to be charged pro rata against the value of all   
the shares entitled to an appraisal.                                            

  (k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of  
this section shall be entitled to vote such stock for any purpose or to receive 
payment of dividends or other distributions on the stock (except dividends or   
other distributions payable to stockholders of record at a date which is prior  
to the effective date of the merger or consolidation); provided, however, that  
if no petition for an appraisal shall be filed within the time provided in      
subsection (e) of this section, or if such stockholder shall deliver to the     
surviving or resulting corporation a written withdrawal of such stockholder's   
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as       
provided in subsection (e) of this section or thereafter with the written       
approval of the corporation, then the right of such stockholder to an appraisal 
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems  
just.                                                                           

(l) The shares of the surviving or resulting corporation to which the 
shares of such objecting stockholders would have been converted had they        
assented to the merger or consolidation shall have the status of authorized and 
unissued shares of the surviving or resulting corporation.                      

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                                                                         ANNEX F

VOTING AGREEMENT

VOTING AGREEMENT, dated as of May 14, 2000 (this "Agreement"), by the 
executive officers identified on Schedule A hereto (each, a "Stockholder" and   
collectively, the "Stockholders") of The Pioneer Group, Inc., a company         
organized under the laws of the state of Delaware (the "Company"), to and for   
the benefit of UniCredito Italiano S.p.A, a company organized under the laws of 
the Republic of Italy ("Parent").                                               

     WHEREAS, as of the date hereof, each of the Stockholders owns of record and
beneficially or has the power to vote the number of shares of the Company's     
common stock, par value $.10 per share (the "Company Common Stock"), set forth  
opposite such Stockholder's name on Schedule A hereto (such shares, together    
with any shares of Company Common Stock acquired by the Stockholders prior to   
the termination of this Agreement being referred to herein as the "Shares");    

    WHEREAS, concurrently with the execution of this Agreement, Parent and the
Company are entering into an Agreement and Plan of Merger, dated as of the date 
hereof (the "Merger Agreement"; capitalized terms used and not otherwise defined
herein shall have the respective meanings assigned to them in the Merger        
Agreement), pursuant to which, upon the terms and subject to the conditions     
thereof, a wholly owned subsidiary of Parent (the "Purchaser") will be merged   
with and into the Company (the "Merger"); and                                   

 WHEREAS, as a condition to the willingness of Parent and the Company to
enter into the Merger Agreement, Parent has requested the Stockholders to agree,
and in order to induce Parent to enter into the Merger Agreement, the           
Stockholders are willing to agree to vote in favor of adopting the Merger       
Agreement and approving the Merger, upon the terms and subject to the conditions
set forth herein.                                                               

    NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the  
parties hereby agree, severally and not jointly, as follows:                    

   Section 1.  Voting of Shares.  Until the termination of this Agreement in
accordance with the terms hereof, each Stockholder hereby agrees that, at the   
Company Stockholders' Meeting or any other meeting of the stockholders of the   
Company, however called, and in any action by written consent of the            
stockholders of the Company, each Stockholder will vote all of his Shares that  
such Stockholder is entitled to vote at such meeting or action (a) in favor of  
adoption of the Merger Agreement and approval of the Merger and the other       
transactions contemplated by the Merger Agreement, (b) against any action or    
agreement that Parent has advised the Stockholder would result in a breach of   
any covenant, representation or warranty or and other obligation or agreement of
the Company under the Merger Agreement (subject to the Company's rights under   
Section 5.5 of the Merger Agreement) and (c) in favor of any other matter       
necessary to consummate the transactions contemplated by the Merger Agreement   
that is subject to approval of the Stockholders. Except as set forth in clauses 
(a), (b) and (c) of the immediately preceding sentence, the Stockholder shall   
not be restricted from voting in favor of, against or abstaining with respect to
any other matter presented to the Stockholders of the Company. In addition, each
Stockholder agrees that he/she will, upon request by Parent, furnish written    
confirmation, in form and substance reasonably acceptable to Parent, of such    
Stockholder's vote in favor of the Merger Agreement and the Merger. Each        
Stockholder acknowledges receipt and review of a copy of the Merger Agreement.  

Section 2.  Proxy.  Each Stockholder, by this Agreement, does hereby  
constitute and appoint Messrs. Pietro Modiano and Fabio Innocenzi, and each of  
them acting individually, or any nominee of either of such individuals, with    
full power of substitution, as such Stockholder's irrevocable proxy and         
attorney-in-fact to vote the Shares as indicated in Section 1 in the event such 
Stockholder fails to comply with his obligations under such section. Each       
Stockholder intends this proxy to be irrevocable and coupled                    

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with an interest and will take such further action and execute such other       
instruments as may be necessary to effectuate the intent of this proxy and      
hereby revokes any proxy previously granted by him with respect his Shares.     

     Section 3.  Transfer of Shares.  Each Stockholder severally and not jointly
represents and warrants that he/she has no present intention of taking action   
to, prior to the termination of this Agreement in accordance with the terms     
hereof, directly or indirectly, (a) to sell, assign, transfer, pledge, encumber 
or otherwise dispose of any of the Shares, (b) deposit any of the Shares into a 
voting trust or enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect thereto which is    
inconsistent with this Agreement or (c) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect sale,         
assignment, transfer (including by operation of law) or other disposition of any
Shares.                                                                         

Section 4.  Representations and Warranties of Stockholder.  Each      
Stockholder severally and not jointly hereby represents and warrants to Parent  
with respect to himself and the ownership of his Shares as follows:             

      (a) Such Stockholder has all legal capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.

         (b) Such Stockholder is the record or beneficial owner of, or has the
    power to vote, his Shares and, if such Stockholder is the beneficial owner
  of such Shares, he owns such Shares free and clear of any liens, claims,
   charges, encumbrances or voting agreements and commitments of every kind,
   other than this Agreement, except as set forth in the Merger Agreement or
the Disclosure Schedules.                                             

   (c) This Agreement has been duly executed and delivered by such
Stockholder.                                                          

          (d) This Agreement constitutes the valid and binding agreement of such
  Stockholder, enforceable against such Stockholder in accordance with its
terms, except as such enforceability may be limited by bankruptcy,    
   insolvency or other similar requirements of law affecting the enforcement
of creditor's rights generally and by general principles of equity.   

Section 5.  No Solicitation.  No Stockholder shall take, directly or  
indirectly, (nor shall a Stockholder authorize or permit his representatives, or
to the extent within the Stockholder's control, his affiliates to take) any     
action to (i) encourage (including by way of furnishing nonpublic information), 
solicit, initiate or facilitate any Acquisition Proposal, (ii) enter into any   
letter of intent, term sheet or other agreement with respect to any Acquisition 
Proposal or (iii) participate in any way in discussions or negotiations with, or
furnish any information to, any person in connection with, or take any other    
action to facilitate any inquiries or the making of any proposal that           
constitutes, or could reasonably be expected to lead to, any Acquisition        
Proposal; provided, however, that nothing in this Section 5 shall prevent the   
Stockholder, in his capacity as a director or executive officer of the Company, 
from engaging in any activity permitted pursuant to Section 5.5 of the Merger   
Agreement. The Stockholder shall immediately cease and cause to be terminated   
all discussions or negotiations commenced prior to the date hereof with respect 
to any Acquisition Proposal. From and after the date of the execution of this   
Agreement, the Stockholder will as promptly as practicable communicate to Parent
orally and in writing any inquiry received by him relating to any Acquisition   
Proposal and the material terms of any proposal or inquiry, including the       
identity of the person and its affiliates making the same, that he may receive  
in respect of any such negotiations or discussions being sought to be initiated 
with the Company. The Stockholder shall (i) keep Parent fully informed on a     
prompt basis with respect to any developments with respect to the foregoing and 
(ii) provide to Parent as soon as practicable after receipt or delivery thereof 
with copies of all correspondence and other written material sent or provided to
the Company from any Third Party in connection with any Acquisition Proposal. In
addition, each of the Stockholders of the Company agrees that he will not enter 
into any employment, consulting or similar arrangement (or participate in any   
negotiations or discussions concerning such arrangements) with any person that  
has made an Acquisition Proposal (other than Parent or its affiliates) prior to 
termination of this Agreement in accordance with its terms.                     

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   Section 6.  Termination.  This Agreement shall terminate upon the earlier
to occur of (i) the Effective Time or (ii) the termination of the Merger        
Agreement in accordance with the terms thereof; provided that the provisions of 
Section 7 of this Agreement shall survive any termination of this Agreement; and
provided further that no such termination shall relieve any party of liability  
for a breach hereof prior to termination.                                       

     Section 7.  Specific Performance.  The Stockholders acknowledge that Parent
believes that irreparable damage would occur in the event any provision of this 
Agreement was not performed in accordance with the terms hereof and that the    
parties may be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or in equity.                                        

Section 8.  Miscellaneous.                                            

(a) All notices, requests, claims, demands and other communications   
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly made or given upon receipt) by delivery in person, by facsimile, 
by courier service or by registered or certified mail (postage prepaid, return  
receipt requested) to the respective parties at the following addresses (or at  
such other address for a party as shall be specified in a notice given in       
accordance herewith):                                                           

IF TO PARENT:                                                                   

                                                                [Download Table]
                                                                           
                   UniCredito Italiano S.p.A.                              
                   Piazza Cordusio                                         
                   Milano, Italy                                           

Attention:         Pietro Modiano, Head of Finance                         
Telecopy No.:      (011)(3902) 876-309                                     

and                EuroPlus SGR S.p.A.                                     
                   Via Turati                                              
                   Milano, Italy                                           

Attention:         Fabio Innocenzi, Chief Executive Officer,               
                   EuroPlus SGR S.p.A.                                     
Telecopy No.:      (011)(3902) 623-8309                                    

with copies to:    Shearman & Sterling                                     
                   801 Pennsylvania Avenue, N.W.                           
                   Washington, D.C. 20004                                  

Attention:         Barry P. Barbash, Esq.                                  
Telecopy No.:      (202) 508-8100                                          

and                NCTM-Negri-Clementi, Toffoletto, Montironi & Soci Studio
                   Legale Associato                                        
                   Via Monte Napoleone, 12                                 
                   20121 Milan, Italy                                      

Attention:         Avv. Pietro Caliceti                                    
Telecopy No.:      (011)(3902) 783-091                                     

IF TO THE STOCKHOLDERS:                                                    
                   c/o The Pioneer Group, Inc.                             
                   60 State Street                                         
                   Boston, Massachusetts 02109                             

Attention:         Robert P. Nault, Esq.                                   
Telecopy No.:      (617) 422-4293                                          

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                                                                [Download Table]
                                        

with a copy to:    Hale and Dorr LLP    
                   60 State Street      
                   Boston, MA 02109     

Attention:         Joseph P. Barri, Esq.
Telecopy No.:      (617) 526-5000       

 (b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior       
agreements and understandings, both written and oral, between the parties with  
respect thereto. This Agreement may not be amended, modified or rescinded except
by an instrument in writing signed by each of the parties hereto.               

     (c) If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other     
conditions and provisions of this Agreement shall nevertheless remain in full   
force and effect. Upon such determination that any term or other provision is   
invalid, illegal or incapable of being enforced, the parties hereto shall       
negotiate in good faith to modify this Agreement so as to effect the original   
intent of the parties as closely as possible to the fullest extent permitted by 
applicable law in a mutually acceptable manner in order that the terms of this  
Agreement remain as originally contemplated to the fullest extent possible.     

  (d) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, provided  
that no party may assign, delegate or otherwise transfer any of its rights,     
interests or obligations under this Agreement (except as set forth herein)      
without the prior written consent of the other parties hereto.                  

   (e) This Agreement shall be governed by, and construed in accordance with
the laws of the State of Delaware. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined exclusively in the     
courts of the State of Delaware and the United States District Court for the    
State of Delaware.                                                              

    (f) This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same  
instrument.                                                                     

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     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above.                                 

                 STOCKHOLDERS:

                          /s/ JOHN F. COGAN, JR.
                                          --------------------------------------
                      John F. Cogan, Jr.

                        /s/ DAVID D. TRIPPLE
                                          --------------------------------------
                    David D. Tripple

                       /s/ ERIC W. RECKARD
                                          --------------------------------------
                   Eric W. Reckard

                       /s/ ROBERT P. NAULT
                                          --------------------------------------
                   Robert P. Nault

AGREED AND ACKNOWLEDGED:                                                        
UNICREDITO ITALIANO S.P.A                                                       

BY: /s/ PIETRO MODIANO                                                          
--------------------------------------------------------                
NAME: PIETRO MODIANO                                                    
TITLE: HEAD OF FINANCE                                                  

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SCHEDULE A

STOCKHOLDERS

                                                        [Enlarge/Download Table]

                                                                    NUMBER OF SHARES OF      
                                                                 COMPANY COMMON STOCK OWNED  
NAME OF STOCKHOLDER                       ADDRESS               OF RECORD AND BENEFICIALLY*  
-------------------            ------------------------------  ------------------------------
                                                                                             
1. John F. Cogan, Jr.......... c/o The Pioneer Group, Inc.     3,790,044 shares, including   
                               60 State Street                 510,000 shares issuable upon  
                               Boston, MA                      exercise of options, but      
                                                               excluding 35,958 shares held  
                                                               in treasury pursuant to a     
                                                               deferred compensation         
                                                               arrangement for the benefit of
                                                               Mr. Cogan                     

2. David D. Tripple........... c/o The Pioneer Group, Inc.     461,485 shares, including     
                               60 State Street                 292,500 shares issuable upon  
                               Boston, MA                      exercise of options           

3. Eric W. Reckard............ c/o The Pioneer Group, Inc.     108,419 shares, including     
                               60 State Street                 100,000 shares issuable upon  
                               Boston, MA                      exercise of options           

4. Robert P. Nault............ c/o The Pioneer Group, Inc.     99,969 shares, including      
                               60 State Street                 90,000 shares issuable upon   
                               Boston, MA                      exercise of options           

-------------------------                                                       

* Shares issuable upon exercise of options may only be voted after the option is
exercised and the shares are issued.                                        

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THE PIONEER GROUP, INC. PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD
AUGUST --, 2000 
CONCERNING THE MERGER AND ADOPTION OF THE MERGER AGREEMENT. 

The undersigned, having received notice of the Special Meeting of       
Stockholders and the Board of Directors' proxy statement therefor, and revoking 
all prior proxies, hereby appoint(s) John F. Cogan, Jr., David D. Tripple,      
Robert P. Nault, and Joseph P. Barri, attorneys of the undersigned (with full   
power of substitution) for and in the name(s) of the undersigned to attend the  
Special Meeting of Stockholders of THE PIONEER GROUP, INC. (the "Company") to be
held on August --, 2000 at --, local time, at the offices of Hale and Dorr LLP, 
60 State Street, Boston, Massachusetts, and any adjournments thereof, and there 
to vote and act upon the following matters in respect of all shares of common   
stock of the Company which the undersigned may be entitled to vote or act upon, 
with all the powers the undersigned would possess if personally present.        

Whether or not you plan to attend the Special Meeting, you are urged to 
complete, date, sign and return this Proxy in the accompanying envelope. Please 
detach and mail in the envelopes provided.                                      

A [X]  PLEASE MARK YOUR VOTES AS INDICATED IN THIS SAMPLE 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY AND  
SHOULD BE RETURNED AS SOON AS POSSIBLE.                                         

A VOTE "FOR" APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE MERGER IS    
RECOMMENDED BY THE BOARD OF DIRECTORS.                                          

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE 
UNDERSIGNED STOCKHOLDER(S). IF NO OTHER INDICATION IS MADE, THE PROXIES SHALL   
VOTE "FOR" APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE MERGER, AS     
RECOMMENDED BY THE BOARD OF DIRECTORS. ATTENDANCE OF THE UNDERSIGNED AT THE     
MEETING OR AT ANY ADJOURNMENT THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY   
UNLESS THE UNDERSIGNED GIVES AFFIRMATIVE NOTICE OF REVOCATION.                  

                                                        [Enlarge/Download Table]
                                                                                     
1. To approve the merger of a wholly owned subsidiary of        FOR  ABSTAIN  AGAINST
   UniCredito Italiano S.p.A. ("UniCredito") with and into The  [ ]    [ ]      [ ]  
   Pioneer Group, Inc, and to adopt and approve the Agreement                        
   and Plan of Merger, dated as of May 14, 2000, between the                         
   Company and UniCredito.                                                           

CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE

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SPECIAL MEETING OF STOCKHOLDERS 
CONCERNING THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE
MERGER -- (CONTINUED) 

THE PIONEER GROUP, INC. 

AUGUST --, 2000 

2. Other Business: In their discretion, the proxy holders are authorized to vote
upon such other matters as may properly come before the meeting or any    
adjournments thereof.                                                     

                                                                [Download Table]
                                                          
MARK HERE FOR ADDRESS                                     
CHANGE AND NOTE AT                                        
LEFT                                                      
                          [ ]      MARK HERE IF YOU    [ ]
                                   PLAN TO ATTEND         
                                   THE MEETING            

                Signature:
                                           -------------------------------------

                               Signature if held jointly
  ------------------------------------------------------------------------------

            Dated:
                                          -------------------------------------,
          2000

NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT 
OWNERS, BOTH SHOULD SIGN. WHEN SIGNED AS ATTORNEY, EXECUTOR, ADMINISTRATOR,     
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE   
SIGN IN FULL CORPORATE NAME BY AUTHORIZED OFFICER, GIVING FULL TITLE. IF A      
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON, GIVING FULL  
TITLE.