AMENDED AND RESTATED MANAGEMENT AGREEMENT
AGREEMENT made as of August 2, 1999, by and between INDEX MASTER SERIES
TRUST, a Delaware business trust (hereinafter referred to as the "Trust") on
behalf of each of its series named in the one or more Addenda hereto, as it may
be amended from time to time (each, a "Series") and FUND ASSET MANAGEMENT, L.P.,
a Delaware limited partnership (hereinafter referred to as the "Manager"). This
Agreement and the Addendum or Addenda pertaining to a Series shall constitute
the "investment advisory contract" for such Series for purposes of Section 15(a)
of the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are authorized to
establish separate series relating to separate portfolios of securities, each of
which may offer separate classes of shares; and
WHEREAS, the Trustees have established and designated the Series as
series of the Trust; and
WHEREAS, the Manager is engaged principally in rendering management and
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Manager to provide management
and investment advisory services to each Series in the manner and on the terms
hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and investment
advisory services to each Series on the terms and conditions hereafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Manager hereby agree as follows:
ARTICLE I
Duties of the Manager
The Trust hereby employs the Manager to act as a manager and investment
adviser of each Series and to furnish, or arrange for affiliates to furnish, the
management and investment advisory services described below, subject to the
policies of, review by and overall control of the Trustees, for the period and
on the terms and conditions set forth in this Agreement. The Manager hereby
accepts such employment and agrees during such period, at its own expense, to
render, or arrange for the rendering of, such services and to assume the
obligations herein set forth for the compensation provided for herein. The
Manager and its affiliates shall for all purposes herein be deemed to be
independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or any Series in
any way or otherwise be deemed agents of the Trust or any Series.
(a) Management Services. The Manager shall perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Trust and each Series including administering
shareholder accounts and handling shareholder relations. The Manager shall
provide the Trust and each Series with office space, facilities, equipment and
necessary personnel and such other services as the Manager, subject to review by
the Trustees, shall from time to time determine to be necessary or useful to
perform its obligations under this Agreement. The Manager shall also, on behalf
of the Trust and each Series, conduct relations with custodians, depositories,
transfer agents, dividend disbursing agents, other shareholder servicing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Manager shall generally monitor the
Trust's and each Series= compliance with investment policies and restrictions as
set forth in the Registration Statement of the Trust filed with the Securities
and Exchange Commission under the Investment Company Act, as amended from time
to time (the "Registration Statement"). The Manager shall make reports to the
Trustees of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of each Series as it shall determine to be desirable.
(b) Investment Advisory Services. The Manager shall provide (or arrange
for affiliates to provide) the Trust with such investment research, advice and
supervision as the latter may from time to time consider necessary for the
proper supervision of the assets of each Series, shall furnish continuously an
investment program for each Series and shall determine from time to time which
securities shall be purchased, sold or exchanged and what portion of the assets
of each Series shall be held in the various securities and other financial
instruments in which such Series invests or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Trust, as amended
from time to time, the provisions of the Investment Company Act and the
statements relating to the applicable Series= investment objectives, investment
policies and investment restrictions as the same are set forth in the Trust's
current Registration Statement. The Manager shall make decisions for the Trust
as to the manner in which voting rights, rights to
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consent to corporate action and any other rights pertaining to a Series=
portfolio securities shall be exercised. Should the Trustees at any time,
however, make any definite determination as to investment policy and notify the
Manager thereof in writing, the Manager shall be bound by such determination for
the period, if any, specified in such notice or until similarly notified that
such determination has been revoked. The Manager shall take, on behalf of each
Series, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders for
the purchase or sale of portfolio securities for each Series= account with
brokers or dealers selected by it, and to that end, the Manager is authorized as
the agent of the Trust to give instructions to the custodian of the Series as to
deliveries of securities and payments of cash for the account of the applicable
Series. In connection with the selection of such brokers or dealers and the
placing of such orders with respect to assets of a Series, the Manager is
directed at all times to seek to obtain execution and price within the policy
guidelines determined by the Trustees and set forth in the then current
Registration Statement. Subject to this requirement and the provisions of the
Investment Company Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Manager may select brokers or dealers
with which it or the Trust is affiliated.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes and shall pay for maintaining the
staff and personnel necessary to perform its obligations under this Agreement,
and shall, at its own expense, provide the office space, facilities and
necessary personnel which it is obligated to provide under Article I hereof, and
shall pay compensation of all Officers of the Trust and all Trustees of the
Trust who are affiliated persons of the Manager.
(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust and each Series (except for the expenses paid by
Mercury Funds Distributor, a division of Princeton Funds Distributor, Inc. (the
"Distributor")), including, without limitation: taxes, expenses for legal and
auditing services, costs of printing proxies, stock certificates (if any),
shareholder reports, copies of the Registration Statement, charges of the
custodian, any sub-custodian and transfer agent, expenses of portfolio
transactions, expenses of redemption of shares, Securities and Exchange
Commission fees, expenses of registering the shares under Federal, state and
foreign laws, fees and actual out-of-pocket expenses of Trustees who are not
affiliated persons of the Manager, accounting and pricing costs (including the
daily calculation of the net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Trust or a Series. It is also understood that the Trust
shall reimburse the Manager for its costs in providing accounting services to
the Trust and each Series. The Distributor will pay certain of the expenses of
the Series incurred in connection with the continuous offering of shares of
beneficial interest of each Series.
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ARTICLE III
Compensation of the Manager
(a) Management and Investment Advisory Fee. For the services rendered,
the facilities furnished and expenses assumed by the Manager, each Series shall
pay to the Manager at the end of each calendar month a fee based upon the
average daily value of the net assets of such Series, as determined and computed
in accordance with the description of the determination of net asset value
contained in the Registration Statement, at the annual rate set forth on the
Addendum or Addenda pertaining to such Series, commencing on the day following
effectiveness hereof. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fee as set forth
above. Payment of the Manager's compensation for the preceding month shall be
made as promptly as possible after completion of the computations contemplated
above. During any period when the determination of net asset value is suspended
by the Trustees, the net asset value of a share as of the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again determined.
ARTICLE IV
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the management of the Trust and any Series, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Manager" shall include any affiliates of the Manager
performing services for the Trust or a Series contemplated hereby and partners,
shareholders, directors, officers and employees of the Manager and such
affiliates.
ARTICLE V
Activities of the Manager
The services of the Manager to the Trust and the Series are not to be
deemed to be exclusive, and the Manager and each affiliate is free to render
services to others. It is understood that Trustees, officers, employees and
shareholders of the Trust and any Series are or may become interested in the
Manager and its affiliates, as directors, officers, employees, partners,
shareholders or otherwise, and that the Manager and directors, officers,
employees, partners and shareholders of the Manager and its affiliates are or
may become similarly interested in the Trust or a Series as shareholders or
otherwise.
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ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective with respect to a Series as of
the date such Series commences investment operations, and shall remain in force
with respect to such Series for two years thereafter or, if sooner, until such
date as may be set forth in the Addendum pertaining to such Series, and
thereafter continue from year to year, but only so long as such continuance is
specifically approved at least annually by (i) the Trustees, or with respect to
any Series by the vote of a majority of the outstanding voting securities of
such Series, and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees or with respect to a Series by the vote of a
majority of the outstanding voting securities of such Series, or by the Manager,
on sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) (a) with respect to all Series, by the vote of a
majority of outstanding voting securities of each Series, and (b) with respect
to any one Series, by the vote of a majority of outstanding voting securities of
such Series; and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws
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of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the Investment Company Act, the latter shall control.
ARTICLE X
Limitation of Obligations of the Series
The obligations of each Series hereunder shall be limited to the assets
of that Series, shall be separate from the obligations of each other series of
the Trust, and no Series shall be liable for the obligations of any other series
of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written. This Agreement may be executed by
the parties hereto on any number of counterparts, all of which shall constitute
one and the same instrument.
INDEX MASTER SERIES TRUST,
on behalf of each Series
By: /s/ XXXXX X. XXXXX
--------------------------
Name: Xxxxx X. Xxxxx
Title: President and Trustee
FUND ASSET MANAGEMENT, L.P.
By: PRINCETON SERVICES, INC.,
ITS GENERAL PARTNER
By: /s/ XXXXXX X. XXXXX
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
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ADDENDUM A TO MANAGEMENT AGREEMENT
Name of Series Management Fee
Master S&P 500 Index Series............................................ 0.05%
Master Small Cap Index Series.......................................... 0.08%
Master Aggregate Bond Index Series..................................... 0.06%
Master International (GDP Weighted) Index Series....................... 0.11%
Master International (Capitalization Weighted) Index Series............ 0.01%
Master Enhanced S&P 500 Series ........................................ 0.01%
Master Enhanced International Series ..................................0.015%
