Preliminary Copy
PEOPLES S&P MIDCAP INDEX FUND, INC.
NOTICE OF MEETING OF STOCKHOLDERS
To the Shareholders
<PAGE>
PEOPLES S&P MIDCAP INDEX FUND, INC.:
A meeting of stockholders of the Peoples S&P MidCap
Index Fund, Inc. (the "Fund") will be held at the offices of The
Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York, New
York, on [DAY], ____________, 1995 at __:__ _.m. for the
following purposes:
1. To approve a new Index Management Agreement between
the Fund and the successor to the business of World Asset
Management, Inc. ("World Asset"), the Fund's existing index
fund manager, resulting from the formation of a joint
venture among Comerica Bank, Woodbridge Capital Management,
Inc., World Asset and Munder Capital Management Inc., such
agreement containing substantially the same terms and
conditions, including the fee charged the Fund, as the
Fund's existing Index Management Agreement with World
Asset; and
2. To transact such other business as may properly
come before the meeting, or any adjournment or adjournments
thereof.
Stockholders of record at the close of business on
____________, 1995, will be entitled to receive notice of and to
vote at the meeting.
By Order of the Board of Directors
John E. Pelletier
Secretary
New York, New York
___________, 1995
WE NEED YOUR PROXY VOTE IMMEDIATELY
A STOCKHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT
IT IS VITAL. BY LAW, THE MEETING OF STOCKHOLDERS OF
THE FUND WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING
ANY BUSINESS IF LESS THAN A MAJORITY OF ITS SHARES
ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, THE
FUND, AT STOCKHOLDERS' EXPENSE, WOULD CONTINUE TO
SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM.
CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND
TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR
PROXY CARD IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS
WILL BENEFIT FROM YOUR COOPERATION.
<PAGE>
Preliminary Copy
PEOPLES S&P MIDCAP INDEX FUND, INC.
PROXY STATEMENT
Meeting of Stockholders
to be held on _________, 1995
This Proxy Statement is furnished in
connection with a solicitation of proxies by the Board of
Directors of Peoples S&P MidCap Index Fund, Inc. (the "Fund") to
be used at the meeting of stockholders (the "Meeting") of the
Fund, to be held on [DAY], ___________, 1995 at __:__ _.m., at
the offices of The Dreyfus Corporation, 200 Park Avenue, 7th
Floor, New York, New York, for the purposes set forth in the
accompanying Notice of Meeting of Stockholders. Stockholders of
record at the close of business on ____________, 1995 are
entitled to receive notice of and to vote at the Meeting. Each
share of common stock of the Fund is entitled to one vote.
Shares represented by executed and unrevoked proxies will be
voted in accordance with the specifications made thereon. If the
enclosed form of proxy is executed and returned, it nevertheless
may be revoked by giving another proxy or by letter or telegram
directed to the Fund, which must indicate the stockholder's name
and account number. To be effective, such revocation must be
received before the Meeting. Also, any stockholder who attends
the Meeting in person may vote by ballot at such Meeting, thereby
canceling any proxy previously given. As of ______________,
1995, __________ shares of common stock were issued and
outstanding.
<PAGE>
PROPOSAL 1. APPROVAL OF A NEW INDEX MANAGEMENT
AGREEMENT BETWEEN THE FUND AND THE NEW
INDEX FUND MANAGER
INTRODUCTION
At the Meeting, stockholders will be asked to
approve a new Index Management Agreement (the "New Index
Management Agreement"), which is being submitted in connection
with a change in control of the Fund's index fund manager, and
the payment of index management fees to the Fund's index fund
manager during the interim period from the date of such change in
control through the date of the Meeting and any adjournment
thereof. The New Index Management Agreement is summarized below,
and is substantially identical to the Fund's former Index
Management Agreement (the "Former Index Management Agreement"),
except for the change in the Fund's index fund manager, the
commencement and termination dates and other technical changes.
A copy of the New Index Management Agreement is attached to this
Proxy Statement as Exhibit A, and the description of the New
Index Management Agreement which follows is qualified in its
entirety by reference to Exhibit A.
BACKGROUND
Before __________, 1994, World Asset
Management, Inc. ("World Asset"), a wholly-owned subsidiary of
Comerica Bank ("Comerica"), served as index fund manager pursuant
to an Index Management Agreement with the Fund dated February 24,
1994. On November __, 1994, Comerica, World Asset and Woodbridge
Capital Management, Inc. ("Woodbridge"), a subsidiary of
Comerica, entered into a joint venture agreement with Munder
Capital Management, Inc. ("Munder"), providing for the transfer
of the investment management businesses of World Asset,
Woodbridge and Munder to a new general partnership named Munder
Capital Management (the "Munder Partnership") and the subsequent
formation of a separate partnership of the Munder Partnership
named World Asset Management (the "New Index Fund Manager") to
hold the assets and conduct the business formerly conducted by
World Asset. The parties to the joint venture agreement believe
that the transfer of these businesses to the Munder Partnership
and subsequent formation of the New Index Fund Manager should
result in an organization with greater investment management
resources, experience, capabilities and prospects. Closing on
the joint venture transaction occurred on ___________ __, 1994,
which, in turn, caused the automatic termination of the Former
Index Management Agreement pursuant to its terms and the
provisions of the Investment Company Act of 1940, as amended (the
"Act"). Since that date, the New Index Fund Manager has provided
index fund management services to the Fund under the New Index
Management Agreement dated __________ __, 1994, which provides
for the same services at the same index fund management fee rate
as the Former Index Management Agreement.
In connection with the foregoing
transactions, Section 15(a) of the Act requires that investment
advisory agreements such as the New Index Management Agreement be
approved by the stockholders of an investment company. On
November [22], 1994, the Fund and World Asset filed an
application (the "Application") for exemption from the provisions
of Section 15(a) of the Act with the Securities and Exchange
Commission (the "Commission"). The Application requests an order
of the Commission permitting implementation, without stockholder
approval, of the New Index Management Agreement during the
interim period commencing on the date of the closing on the joint
venture agreement until such time as the Fund's stockholders meet
to consider and vote on the approval of the New Index Management
Agreement (the "Interim Period").
As a condition to the requested exemptive
relief, the Fund has undertaken in the Application that index
fund management compensation payable by the Fund during the
Interim Period will be maintained in an interest-bearing escrow
account and amounts in the account will be paid to the New Index
Fund Manager only upon approval by the stockholders of the Fund
of the New Index Management Agreement and the compensation
payable thereunder. In addition, the Application contains
representations that the New Index Fund Manager will take all
appropriate steps so that the scope and quality of the index
management and other services provided to the Fund during the
Interim Period will be at least equivalent to the scope and
quality of the services previously provided; and that, in the
event of any material change in the personnel providing services
pursuant to the New Index Management Agreement during the Interim
Period, the Fund's Board of Directors will be apprised and
consulted to assure that they are satisfied that the services
provided will not be diminished in scope or quality.
Although the Fund believes that the
Commission will grant the exemptive relief requested on the
conditions stated above, there is no assurance that the
Commission will do so, even if Proposal 1 is approved by
stockholders at the Meeting. In such an event, the Fund would
consider what action would be appropriate to take in light of the
Commission's response to the Application.
DESCRIPTION OF THE NEW INDEX MANAGEMENT AGREEMENT
The New Index Fund Manager currently serves
as index fund manager to the Fund pursuant to the New Index
Management Agreement. In the New Index Management Agreement, the
New Index Fund Manager agrees, subject to the general supervision
of the Fund's Board of Directors, to manage the Fund's portfolio
in accordance with its investment objective and policies, place
purchase and sale orders for the Fund's transactions, and provide
continuous supervision of the Fund's investment portfolio. In
addition, the New Index Fund Manager will supply office
facilities (which may be in the New Index Fund Manager's own
offices), data processing services, clerical, internal auditing
services, internal executive and administrative services, and
stationery and office supplies; make available to The Dreyfus
Corporation, the Fund's administrator (the "Administrator"),
information necessary to prepare reports to the Fund's
stockholders, tax returns, reports to and filings with the
Commission and state Blue Sky authorities; and generally assist
in all aspects of the Fund's operations.
As compensation for the New Index Fund
Manager's services to the Fund, the Fund has agreed to pay the
New Index Fund Manager a monthly fee at the annual rate of .10 of
1% of the value of the Fund's average daily net assets. The fee
payable to the New Index Fund Manager is not subject to reduction
as the value of the Fund's net assets increases, but may be
reduced pursuant to expense limitations in effect. Pursuant to
the Former Index Management Agreement, which provides for an
index management fee identical to that contained in the New Index
Management Agreement, the Fund paid $ __________ in index fund
management fees for the fiscal year ended October 31, 1994. The
New Index Fund Manager has agreed to temporarily waive during the
Interim Period, a portion of its fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing
yield to investors at the time such amounts are waived or
assumed, as the case may be.
The New Index Fund Manager will bear all
expenses in connection with the performance of its services under
the New Index Management Agreement. All other expenses incurred
in the operation of the Fund will continue to be borne by the
Fund, except to the extent specifically assumed by the New Index
Fund Manager or the Administrator.
The only differences between the Former Index
Management Agreement and the New Index Management Agreement are
the change in the index fund manager, termination dates and a
provision in the New Index Management Agreement that the New
Index Fund Manager notify the Fund of any change in the
membership of the New Index Fund Manager within a reasonable time
after such change. The Former Management Index Agreement
provided that it would terminate on May 14th of each year unless
continuance was specifically approved in accordance with the Act.
Under its terms, if approved by stockholders, the New Index
Management Agreement will continue until May 14, 1996, and
thereafter will continue automatically for successive annual
periods ending on May 14th of each year, provided such
continuance is approved in accordance with the Act. The New
Index Management Agreement may be terminated without penalty, on
60 days' notice, by the Fund's Board of Directors or by vote of
the holders of a majority of the Fund's shares, or, upon not less
than 90 days' notice, by the New Index Fund Manager. The New
Index Management Agreement will terminate automatically in the
event of it assignment (as defined in the Act).
BOARD CONSIDERATION AND RECOMMENDATION
In considering whether to approve the New
Index Management Agreement and to submit it to the stockholders
for their approval, the Board of Directors considered the
following factors: (1) the representation that there would be no
diminution in the scope and quality of advisory and other
services provided by the New Index Fund Manager under the New
Index Management Agreement; (2) the substantially identical
nature of the terms and conditions contained in the New Index
Management Agreement as compared to the Former Index Management
Agreement; (3) the assurances provided to the Board that the Fund
would receive during the Interim Period the same investment
management services, provided in the same manner by essentially
the same personnel, as it received under the Former Index
Management Agreement; and (4) the representation that in the
event of any material change in personnel providing services
pursuant to the New Index Management Agreement during the Interim
Period, the Board of Directors would be informed and consulted
for the purpose of assuring themselves that the services provided
would not be diminished in scope or quality. Additionally, the
Directors considered the benefits that would be obtained by the
Fund in maintaining continuity in the index fund management
services provided to it, and determined that continuity was
advantageous to the Fund as it would serve to minimize
uncertainty and confusion, provide for the continued utilization
of the demonstrated skills and capability of the staff of World
Asset and its familiarity with the operations of the Fund, and
avoid the possibility of disruptive effects on the Fund that
might otherwise result from a change in the management and
operations of the Fund. In evaluating the effect of the change
in control of World Asset on the New Index Fund Manager's ability
to continue to provide services to the Fund, the Directors
received and considered information concerning the New Index Fund
Manager's business organization, financial resources, personnel
and other matters.
The Board of Directors also concluded that
payment of the index fund management fee under the New Index
Management Agreement during the Interim Period would be
appropriate and fair considering that (1) the fee would be paid
at the same rate as was previously in effect under the Former
Index Management Agreement and services would be provided in the
same manner, (2) because of the relatively short time frame
necessary to complete the change in control of World Asset, there
was insufficient time to seek stockholder approval of the New
Index Management Agreement prior to the change in control, and
(3) the non-payment of index fund management fees during the
Interim Period would be an unduly harsh result in view of the
services provided to the Fund under the New Index Management
Agreement.
REQUIRED VOTE AND DIRECTORS' RECOMMENDATION
Approval of this proposal requires the
affirmative vote of (a) 67% of the voting securities present at
this meeting, if the holders of more than 50% of the outstanding
voting securities are present or represented by proxy, or (b)
more than 50% of the Fund's outstanding voting securities,
whichever is less.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" APPROVAL OF THE NEW
INDEX MANAGEMENT AGREEMENT BETWEEN THE FUND AND THE NEW INDEX
FUND MANAGER
ADDITIONAL INFORMATION ABOUT THE NEW INDEX FUND MANAGER
The New Index Fund Manager is a [Delaware
general] partnership with principal offices at
_____________________. The general partner of the New Index Fund
Manager is the Munder Partnership, a Delaware general partnership
the general partners of which are World Asset and Woodbridge
(together, the "Comerica Partners") and Munder. The Comerica
Partners have offices at 100 Renaissance Center, Detroit,
Michigan 48243 and are wholly-owned subsidiaries of Comerica
Investment Services, Inc., which, in turn, is a wholly-owned
subsidiary of Comerica. Comerica is a wholly-owned subsidiary of
Comerica Incorporated, a publicly-held bank holding company. Mr.
Lee P. Munder, the Munder Partnership's chief executive officer,
owns a controlling stock interest in Munder, which has offices at
480 Pierce Street, Birmingham, Michigan 48009. Currently, the
Comerica Partners own 45%, and Munder owns 55%, of the
partnership interests in the Munder Partnership. In addition,
employees of the Munder Partnership may acquire partnership
interests in the Munder Partnership from time to time through a
separate company organized for that purpose. Currently, the
Comerica Partners and Munder do not conduct any business except
for their investments in the New Index Fund Manager.
Banking laws and regulations, including the
Glass-Steagall Act as presently interpreted by the Board of
Governors of the Federal Reserve System, prohibit a bank holding
company registered under the Federal Bank Holding Company Act of
1956 or any bank or non-bank affiliate thereof from sponsoring,
organizing, controlling or distributing the shares of a
registered open-end investment company continuously engaged in
the issuance of its shares, and prohibit banks generally from
underwriting securities. The New Index Fund Manager is subject
to such laws and regulations. However, a holding company or
affiliate, and banks generally, can act as adviser to an
investment company and can purchase shares of an investment
company as agent for and upon the order of customers. The New
Index Fund Manager believes that it may perform the services
contemplated by the New Index Management Agreement without
violating these banking laws or regulations. However, future
changes in legal requirements relating to the permissible
activities of banks and their affiliates, as well as future
interpretations of current requirements, could prevent the New
Index Fund Manager from continuing to perform investment
management services for the Fund. If the New Index Fund Manager
were prohibited from performing investment management services
for the Fund, it is expected that the Board of Directors would
select another qualified firm. Any new index management
agreement would be subject to stockholder approval. The Fund
does not anticipate that stockholders would suffer any adverse
financial consequences should this occur.
ADDITIONAL INFORMATION
PORTFOLIO TRANSACTIONS
The New Index Fund Manager assumes general
supervision over placing orders on behalf of the Fund for the
purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the
best judgment of the New Index Fund Manager and in a manner
deemed fair and reasonable to stockholders. The primary
consideration is prompt execution of orders at the most favorable
net price. Brokers also are selected because of their ability to
handle special executions such as are involved in large block
trades or broad distributions, provided the primary consideration
is met. The overall reasonableness of brokerage commissions paid
is evaluated by the New Index Fund Manager based upon its
knowledge of available information as to the general level of
commissions paid by other institutional investors for comparable
services. For its portfolio securities transactions for the
fiscal year ended October 31, 1994, the Fund paid total brokerage
commissions of $______, none of which was paid to the Fund's
distributor.
FORMER INDEX MANAGEMENT AGREEMENT
Pursuant to the requirements of the Act, the
Former Index Management Agreement was submitted to the Fund's
Administrator as sole stockholder prior to the public offering of
the Fund's shares, and was last submitted for approval by the
Fund's public stockholders on August 12, 1992 when such agreement
was between the Fund and the predecessor to World Asset. The
continuance of the Former Index Management Agreement for an
additional annual term was most recently approved by the Board of
Directors, including the Directors who are not "interested
persons" of any party to such Agreement, on May 4, 1994.
ADMINISTRATOR
The Dreyfus Corporation. The Administrator,
located at 200 Park Avenue, New York, New York 10166, serves as
administrator to the Fund under the terms of the Administration
Agreement entered into on August 24, 1994. The Board of
Directors, including a majority of the Directors who are not
"interested persons" (as defined in the Act) of any party to the
Administration Agreement, last approved the Administration
Agreement at a meeting held on ________, 1994.
The Administrator was formed in 1947, has
advised The Dreyfus Fund Incorporated since that time and serves
as investment adviser, sub-investment adviser or administrator
for other investment companies. The Administrator is a wholly-
owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation. In addition to serving as
administrator to the Fund, Dreyfus serves as administrator to the
following investment companies: Dreyfus Edison Electric Index
Fund, Inc., Dreyfus-Wilshire Target Funds, Inc., Dreyfus Stock
Index Fund, First Prairie Cash Management, First Prairie
Diversified Asset Fund, First Prairie Money Market Fund, First
Prairie Tax Exempt Bond Fund, Inc., First Prairie Tax Exempt
Money Market Fund, First Prairie U.S. Treasury Securities Cash
Management, Pacific American Fund and Peoples Index Fund, Inc.
Terms of the Administration Agreement.
Pursuant to the Administration Agreement, the Administrator
furnishes the Fund clerical help and accounting, data processing,
bookkeeping, internal auditing and legal services and certain
other services required by the Fund, prepares reports to the
Fund's stockholders, tax returns, reports to and filings with the
Commission and state Blue Sky authorities, and generally assists
in all aspects of the Fund's operations, other than providing
index management or investment advice. The Administrator bears
all expenses in connection with the performance of its services.
As compensation for its services, the Fund
has agreed to pay the Administrator a monthly administration fee
at the annual rate of .30 of 1% of the value of the Fund's
average daily net assets. For the fiscal year ended October 31,
1994, the administration fee paid to the Administrator was
$_______.
DISTRIBUTOR
The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor is a wholly-
owned subsidiary of Institutional Administration Services, Inc.,
a provider of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc. The
Distributor serves as the Fund's exclusive distributor pursuant
to an agreement which was last approved by the Fund's Board of
Directors, including the "non-interested" Directors (as defined
in the Act), on August 24, 1994, and is renewable annually. The
Distributor also serves as distributor of the shares of the other
funds in the Dreyfus Family of Funds.
OTHER MATTERS
The Fund's Board members are not aware of any
other matters which may come before the Meeting. However, should
any such matters properly come before the Meeting, it is the
intention of the persons named in the accompanying form of proxy
to vote the proxy in accordance with their judgment on such
matters.
VOTING INFORMATION
The Fund will bear the cost of soliciting
proxies. In addition to the use of the mails, proxies may be
solicited personally, by telephone or by telegraph, and the Fund
may pay persons holding Fund shares in their names or those of
their nominees for their expenses in sending soliciting materials
to their principals.
If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote,
represents a broker "non-vote" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions
from the beneficial owner or other person entitled to vote Fund
shares on a particular matter with respect to which the broker or
nominee does not have discretionary power) or is marked with an
abstention (collectively, "abstentions"), the shares represented
thereby will be considered to be present at the Meeting for
purposes of determining the existence of a quorum for the
transaction of business. Abstentions, however, will have the
effect of a "no" vote for the purpose of obtaining requisite
approval for Proposal No. 1.
In the event that a quorum is not present at
the Meeting, or in the event that a quorum is present at the
Meeting but sufficient votes to approve Proposal 1 are not
received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of the
proxies. Any such adjournment will require the affirmative vote
of a majority of those shares affected by the adjournment that
are represented at the Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" Proposal 1 in favor
of such adjournments, and will vote those proxies required to be
voted "AGAINST" Proposal 1 against any adjournment. A quorum is
constituted with respect to the Fund by the presence in person or
by proxy of the holders of more than one-third of the outstanding
shares of the Fund entitled to vote at the Meeting. If a proxy
is properly executed and returned and is marked with an
abstention, the shares represented thereby will be considered to
be present at the Meeting for the purpose of determining the
existence of a quorum for the transaction of business, but will
not be voted on any matter as to which the abstention applies.
[Any 5% holders of the Fund's shares to be inserted]
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Fund, in care of The Shareholder
Services Group, Inc., a subsidiary of First Data Corporation,
Attention: Peoples S&P MidCap Index Fund, Inc., P.O. Box 9119,
Quincy, Massachusetts 02269-9947, whether other persons are the
beneficial owners of Fund shares for which proxies are being
solicited from you, and, if so, the number of copies of the proxy
statement and other soliciting material you wish to receive in
order to supply copies to the beneficial owners of Fund shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED
STAMPED ENVELOPE.
Dated: ________________, 1995
<PAGE>
EXHIBIT A
INDEX MANAGEMENT AGREEMENT
PEOPLES S&P MIDCAP INDEX FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
, 1994
World Asset Management
100 Renaissance Center
5th Floor
Detroit, Michigan 48243
Dear Sirs:
Peoples S&P MidCap Index Fund, Inc., a
Maryland corporation (the "Fund"), herewith confirms its
agreement with you (the "Adviser") as follows:
The Fund desires to employ its capital by in-
vesting and reinvesting the same in investments of the type and
in accordance with the limitations specified in its Articles of
Incorporation 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 the Adviser, and in such manner and
to such extent as from time to time may be approved by the Fund's
Board of Directors. The Fund employs The Dreyfus Corporation
("Dreyfus") to act as its administrator and desires to employ the
Adviser to act as its index fund manager.
In this connection it is understood that from
time to time the Adviser will employ or associate with itself
such person or persons as the Adviser may believe to be
particularly fitted to assist it in the performance of this
Agreement. Such person or persons may be officers or employees
who are employed by both the Adviser and the Fund. The
compensation of such person or persons shall be paid by the
Adviser and no obligation may be incurred on the Fund's behalf in
any such respect.
Subject to the supervision and approval of
the Fund's Board of Directors, the Adviser will provide
investment management of the Fund's portfolio in accordance with
the Fund's investment objective and policies as stated in its
Prospectus and Statement of Additional Information as from time
to time in effect. In connection therewith, the Adviser will
supervise the Fund's investments and, if appropriate, the sale
and reinvestment of the Fund's assets. The Adviser will furnish
to the Fund such statistical information, with respect to the
investments which the Fund may hold or contemplate purchasing, as
the Fund may reasonably request. The Fund wishes to be informed
of important developments materially affecting its portfolio and
shall expect the Adviser, on its own initiative, to furnish to
the Fund from time to time such information as the Adviser may
believe appropriate for this purpose. The Adviser agrees to
notify the Fund of any change in the membership of the Adviser
within a reasonable time after such change.
In addition, the Adviser will supply office
facilities (which may be in the Adviser's own offices), data
processing services, clerical, internal auditing services,
internal executive and administrative services, and stationery
and office supplies; make available to Dreyfus information
necessary to prepare reports to the Fund's stockholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities; and generally assist
in all aspects of the Fund's operations.
The Adviser shall exercise its best judgment
in rendering the services to be provided to the Fund hereunder
and the Fund agrees as an inducement to the Adviser's undertaking
the same that the Adviser shall not be liable hereunder for any
error of judgment or mistake of law or for any loss suffered by
the Fund, provided that nothing herein shall be deemed to protect
or purport to protect the Adviser against any liability to the
Fund or to its security holders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties hereunder,
or by reason of the Adviser's reckless disregard of its
obligations and duties hereunder.
In consideration of the services rendered
pursuant to this Agreement, the Fund will pay the Adviser a fee
calculated daily and paid monthly at the annual rate of .10 of 1%
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 upon the date of
termination of this Agreement.
For the purpose of determining fees payable
to the Adviser, the value of the Fund's net assets shall be
computed in the manner specified in the Fund's Articles of
Incorporation for the computation of the value of the Fund's net
assets.
The Adviser will bear all expenses in
connection with the performance of its services under this Agree-
ment. All other expenses to be incurred in the operation of the
Fund will be borne by the Fund, except to the extent specifically
assumed by the Adviser or Dreyfus. The expenses to be borne by
the Fund include, without limitation, the following:
organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of the Adviser or Dreyfus or any of their
affiliates, Securities and Exchange Commission fees and state
Blue Sky qualification fees, index management and administration
fees, charges of custodians, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining corporate
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
corporate meetings, and any extraordinary expenses.
If in any fiscal year the aggregate expenses
of the Fund (including fees pursuant to this Agreement and the
Fund's Administration Agreement, but excluding interest, taxes,
brokerage and, with the prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed the
expense limitations of any state having jurisdiction over the
Fund, the Fund may deduct from the fees to be paid hereunder, to
the extent required by state law, that portion of such excess
expense which bears the same relation to the total of such excess
as the Adviser's fee hereunder bears to the total fee otherwise
payable for the fiscal year by the Fund pursuant to this
Agreement and the Administration Agreement between the Fund and
Dreyfus. The Adviser's obligation pursuant hereto is limited to
the amount of its fees hereunder. Such deduction, if any, will
be estimated daily, and reconciled and effected on a monthly
basis.
The Fund understands that the Adviser now
acts and will continue to act as index manager to various
investment companies and fiduciary or other managed accounts, and
the Fund has no objection to the Adviser's so acting, provided
that when the purchase or sale of securities of the same issuer
is suitable for the investment objectives of two or more
companies or accounts managed by the Adviser which have available
funds for investment, the available securities will be allocated
in a manner believed by the Adviser to be in keeping with its
fiduciary or contractual duties 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 the Adviser to assist in the performance of
its duties hereunder will not devote their full time to such
service and nothing contained herein shall be deemed to limit or
restrict the right of the Adviser or the right of any of its
affiliates to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
Any person, even though also an officer,
director, partner, employee or agent of the Adviser, who may be
or become an officer, director, 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 an officer, director,
partner, employee or agent or one under the control or direction
of the Adviser even though paid by the Adviser.
This Agreement shall continue in effect
automatically for successive annual periods ending on May 14 of
each year, provided such continuance is specifically approved at
least annually by (i) the Fund's Board of Directors or (ii) vote
of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting securities, provided that in
either event its continuance also is approved by a majority of
the Fund's Directors 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, on
60 days' notice, by the Fund's Board of Directors or by vote of
holders of a majority of the Fund's shares or, on not less than
90 days' notice, by the Adviser. This Agreement also will
terminate automatically in the event of its assignment (as
defined in said Act).
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,
PEOPLES S&P MIDCAP INDEX
FUND, INC.
By:___________________________
Marie E. Connolly,
President
Accepted:
WORLD ASSET MANAGEMENT
By:_______________________________
[NAME][TITLE]
<PAGE>
PRELIMINARY COPY
PEOPLES S&P MIDCAP INDEX FUND, INC.
The undersigned stockholder of Peoples S&P MidCap Index Fund,
Inc. (the "Fund") hereby appoints __________________ and
___________________, and each of them, the attorneys and proxies
of the undersigned, with full power of substitution, to vote, as
indicated herein, all of the shares of common stock of the Fund
standing in the name of the undersigned at the close of business
on _________, 1995, at a Meeting of Stockholders to be held at
the offices of The Dreyfus Corporation, 200 Park Avenue, New
York, New York at __:__ _.m. on [DAY], _________, 1995, and at
any and all adjournments thereof, with all of the powers the
undersigned would possess if then and there personally present
and especially (but without limiting the general authorization
and power hereby given) to vote as indicated on the proposal, as
more fully described in the Proxy Statement for the meeting.
Please mark boxes in blue or black ink.
1. To approve a new Index Management Agreement between the Fund
and the successor to the business of World Asset Management, Inc.
("World Asset"), the Fund's existing index fund manager,
resulting from the formation of a joint venture among Comerica
Bank, Woodbridge Capital Management, Inc., World Asset and Munder
Capital Management Inc., such agreement containing substantially
the same terms and conditions, including the fee charged the
Fund, as the Fund's existing Index Management Agreement with
World Asset.
|__| FOR |__| AGAINST |__| ABSTAIN
2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting, or
any adjournment(s) or postponement(s) thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
<PAGE>
Signature(s) should be exactly
as name or names appearing on
this proxy. If shares are
held jointly, each holder
should sign. If signing is by
attorney, executor, administrator,
trustee or guardian, please give
full title.
Dated: ______________, 1995
_________________________________
Signature(s)
_________________________________
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
