INDEX MANAGEMENT AGREEMENT
THE DREYFUS CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 13, 1995
Mellon Equity Associates
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Sirs:
As you are aware, Peoples S&P MidCap Index Fund, Inc.
(d/b/a Dreyfus MidCap Index Fund) (the "Fund") desires to employ
its capital by investing and reinvesting the same in investments
of the type and in accordance with the limitations specified in
its charter documents and in its Prospectus and Statement of
Additional Information as from time to time in effect, copies of
which have been or will be submitted to you, and in such manner
and to such extent as from time to time may be approved by the
Fund's Board. The Fund employs The Dreyfus Corporation
("Dreyfus") pursuant to a written agreement (the "Management
Agreement"), a copy of which has been furnished to you. Dreyfus
desires to employ you to act as the Fund's index manager.
In this connection, it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist you
in the performance of this Agreement. Such person or persons may
be officers or employees who are employed by both you and the
Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any
such respect.
Subject to the supervision and approval of Dreyfus, you
will provide investment management of the Fund's portfolio in
accordance with the Fund's investment objective and policies as
stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect. In connection
therewith, you will supervise the Fund's investments and, if
appropriate, the sale and reinvestment of the Fund's assets. You
are authorized to invest the Fund's assets in securities issued by
Mellon Bank Corporation, to the extent required or permitted by
the Fund's investment objective and policies, and to the extent
permitted by the U.S. Securities and Exchange Commission or other
applicable authority. You will furnish to Dreyfus or the Fund
such statistical information, with respect to the investments
which the Fund may hold or contemplate purchasing, as Dreyfus or
the Fund may reasonably request. The Fund and Dreyfus wish to be
informed of important developments materially affecting the Fund's
portfolio and shall expect you, on your own initiative, to furnish
to the Fund or Dreyfus from time to time such information as you
may believe appropriate for this purpose.
You shall exercise your best judgment in rendering the
services to be provided hereunder, and Dreyfus agrees as an
inducement to your undertaking the same that you shall not be
liable hereunder for any error of judgment or mistake of law or
for any loss suffered by the Fund or Dreyfus, provided that
nothing herein shall be deemed to protect or purport to protect
you against any liability to Dreyfus, the Fund or the Fund's
security holders to which you would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
In consideration of the services rendered pursuant to
this Agreement, Dreyfus will pay you, on the first business day of
each month, out of the management fee it receives and only to the
extent thereof, a fee calculated daily and paid monthly at the
annual rate of .095 of 1% of the value of the Fund's average daily
net assets, for the preceding month.
Net asset value shall be computed on such days and at
such time or times as described in the Fund's then-current
Prospectus and Statement of Additional Information. The fee for
the period from the date hereof to the end of the month hereof
shall be pro-rated according to the proportion which such period
bears to the full monthly period, and upon any termination of this
Agreement before the end of any month, the fee for such part of a
month shall be pro-rated according to the proportion which such
period bears to the full monthly period and shall be payable
within 10 business days of date of termination of this Agreement.
For the purpose of determining fees payable to you, the
value of the Fund's net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of the Fund's net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. You also will
pay, out of your fee to be received hereunder or from other
sources available to you, for the custody services to be provided
to the Fund by Boston Safe Deposit and Trust Company. All other
expenses to be incurred in the operation of the Fund (other than
those borne by Dreyfus) will be borne by the Fund, except to the
extent specifically assumed by you. The expenses to be borne by
the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who
are not officers, directors, employees or holders of 5% or more of
the outstanding voting securities of you or Dreyfus or any
affiliate of you or Dreyfus, Securities and Exchange Commission
fees and state Blue Sky qualification fees, advisory fees,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and
for distribution to existing stockholders, costs of stockholders'
reports and meetings, and any extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund
(including fees pursuant to the Fund's Management Agreement, but
excluding interest, taxes, brokerage and, with the prior written
consent of the necessary state securities commissions,
extraordinary expenses) exceed the expense limitation of any state
having jurisdiction over the Fund, Dreyfus may deduct from the
fees to be paid hereunder, or you will bear such excess expense on
a pro-rata basis with Dreyfus, in the proportion ("Your
Proportion") that the index management fee payable to you pursuant
to this Agreement bears to the fee payable to Dreyfus pursuant to
the Management Agreement, to the extent required by state law. If
Dreyfus fails to receive any portion of its fees under the
Management Agreement, for any reason other than Dreyfus' voluntary
waiver of such fees, your fee under this Agreement shall be
reduced by Your Proportion of the amount which Dreyfus shall not
have received. If Dreyfus waives receipt of any portion of its
fees under the Management Agreement, your fee under this Agreement
shall be reduced by Your Proportion of the amount which Dreyfus
shall have waived, provided that in no event will any such waiver
reduce the fee to be paid to you hereunder below the annual rate
of .055 of 1% of the value of the Fund's average daily net assets
during the period of such waiver. Dreyfus agrees to notify you in
advance of any such waiver. Your obligations pursuant to this
paragraph will be limited to the amount of your fees hereunder.
Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly
basis.
Dreyfus understands that you now act, and that from time
to time hereafter you may act, as investment adviser to one or
more other investment companies and fiduciary or other managed
accounts, and Dreyfus has no objection to your so acting, provided
that when purchase or sale of securities of the same issuer is
suitable for the investment objectives of two or more companies or
accounts managed by you which have available funds for investment,
the available securities will be allocated in a manner believed by
you to be equitable to each company or account. It is recognized
that in some cases this procedure may adversely affect the price
paid or received by the Fund or the size of the position
obtainable for or disposed of by the Fund.
In addition, it is understood that the persons employed
by you to assist in the performance of your duties hereunder will
not devote their full time to such services and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund or Dreyfus in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad faith or
gross negligence on your part in the performance of your duties or
from reckless disregard by you of your obligations and duties
under this Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee, or agent or one under your control or direction even
though paid by you.
This Agreement shall continue until May 14, 1997, and
thereafter shall continue automatically for successive annual
periods ending on May 14th of each year, provided such continuance
is specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940, as amended) of the Fund's outstanding voting
securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in said Act) of any party to this
Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable
without penalty (i) by Dreyfus upon 60 days' notice to you, (ii)
by the Fund's Board or by vote of the holders of a majority of the
Fund's shares upon 60 days' notice to you, or (iii) by you upon
not less than 90 days' notice to the Fund and Dreyfus. This
Agreement also will terminate automatically in the event of its
assignment (as defined in said Act). In addition, notwithstanding
anything herein to the contrary, if the Management Agreement
terminates for any reason, this Agreement shall terminate
effective upon the date the Management Agreement terminates.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
THE DREYFUS CORPORATION
By:_________________________
Accepted:
MELLON EQUITY ASSOCIATES
By:__________________________
