INDEX MANAGEMENT AGREEMENT
THE DREYFUS CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 13, 1995
Amended, November 6, 1996
Mellon Equity Associates
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Sirs:
As you are aware, Peoples Index Fund, Inc. (d/b/a Dreyfus S&P 500
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 Pros
pectus 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 .05 of 1% of the
value of the Fund's average daily net assets until Fund assets equal or
exceed $1 billion and .075 of 1% of the value of the Fund's average daily
net assets thereafter, irrespective of the level of the value of the Fund's
average daily net assets.
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:__________________________
