SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or
(S)240.14a-12
PEOPLES S&P MIDCAP INDEX FUND, INC.
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PEOPLES S&P MIDCAP INDEX FUND, INC.
-------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
141-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[_] 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:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:*
(4) Proposed maximum aggregate value of transaction:
__________________________
* Set forth the amount on which the filing fee is calculated
and state how it was determined.
[_] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the 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:
Notes:
February 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: 1934 Act Filings
Gentlemen:
Pursuant to Rule 14a-6(b) under the Securities Exchange Act of
1934, as amended, transmitted herewith for filing is a copy of
definitive proxy materials for a meeting of stockholders of
Peoples S&P MidCap Index Fund, Inc. The filing fee of $125 for
the Fund was forwarded prior to filing the
preliminary proxy materials on December 23, 1994. It is
estimated that proxy materials will be mailed to stockholders of
record on or about February 6, 1995.
PEOPLES S&P MIDCAP INDEX FUND, INC.
Notice of Special Meeting of Stockholders
To the Shareholders
PEOPLES S&P MIDCAP INDEX FUND, INC.:
A special 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 West, New York,
New York, on Friday, March 31, 1995 at 10:00 a.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 pursuant to an
agreement among Comerica Incorporated, Woodbridge Capital
Management, Inc., World Asset and Munder Capital Management,
Inc., such Index Management 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 February
1, 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
February 1, 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, 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.
PEOPLES S&P MIDCAP INDEX FUND, INC.
PROXY STATEMENT
Special Meeting of Stockholders
to be held on March 31, 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 special
meeting of stockholders (the "Meeting") of the Fund, to be held
on Friday, March 31, 1995 at 10:00 a.m., at
the offices of The Dreyfus Corporation, 200 Park Avenue, 7th
Floor West, 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 February 1, 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 January 26, 1995, there were
5,251,568.557 shares of common stock issued and outstanding.
It is estimated that proxy materials will be mailed to
stockholders of record on or about February 6, 1995. The
principal executive offices of the Fund are located at 200 Park
Avenue, New York, New York 10166.
Copies of the Fund's most recent Annual and Semi-Annual Reports
are available upon request, without charge, by writing to the
Fund at its principal executive offices or by calling toll-free
1-800-645-6561.
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 December 31, 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 2, 1994, Comerica
Incorporated (Comerica's parent), World Asset and Woodbridge
Capital Management, Inc.
("Woodbridge"), a subsidiary of Comerica, entered into a joint
venture agreement with Munder Capital Management, Inc. ("Old MCM,
Inc."), providing
for the transfer of the investment management businesses of World
Asset, Woodbridge and Old MCM, Inc. to a new general partnership
named Munder Capital
Management (the "Munder Partnership") and the subsequent
formation of a separate partnership subsidiary 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 December 31, 1994,
pursuant to which the New Index
Fund Manager became 99% owned by the Munder Partnership and 1%
owned by The Munder Capital Management
Trust I, a trust whose settlor and beneficiary is the Munder
Partnership, and whose sole trustee is Mr. Lee P. Munder, the
President and Chief Executive Officer of Old MCM, Inc. The
transfer of World Asset's business and assets to the New Index
Fund Manager
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 the closing, the New Index
Fund Manager has provided index fund management services to the
Fund under the New Index
Management Agreement dated January 1, 1995, 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 of 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, to the
extent otherwise payable by the Fund during the Interim Period,
would 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 index fund management fee payable for the fiscal
year ended October 31, 1994 was $72,970,
which amount was waived by World Asset resulting in no index
management fee being paid by the Fund. The New Index Fund
Manager may, from time to time, including during the Interim
Period, voluntarily waive all or a portion of its
fee and/or 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, the
Fund's address 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
Index Management 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 payable 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 480 Pierce Street, Birmingham, Michigan
48009. The majority general partner (with a 99% interest) of the
New Index Fund Manager is the Munder Partnership, a Delaware
general partnership the general partners
of which are WAM Holdings, Inc. and Woodbridge (together, the
"Comerica Partners"), Old MCM, Inc. and Munder Group,
L.L.C. (together, the "MCM Partners"). The
Comerica Partners have offices at 100 Renaissance Center,
Detroit, Michigan 48243 and are wholly-owned subsidiaries of
Comerica Bank-Ann Arbor, N.A., which, in turn, 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 interest in each of the MCM Partners, which
also have offices at 480 Pierce Street, Birmingham, Michigan
48009. The MCM Partners currently hold
more than 50% of the partnership interests in the Munder
Partnership, as represented by the partners' capital accounts.
Accordingly, through the MCM Partners, Mr. Munder has a majority
stake in, and operational control of, the
Munder Partnership. However, certain activities of the Munder
Partnership, including acquisitions, divestitures, succession
planning, and significant changes from initial compensation
formulas, would require the approval of the
Comerica Partners.
The New Index Fund Manager is a newly-formed registered
investment adviser providing investment management services to
individuals, corporations
and foundations, and currently is responsible for managing or
providing investment advice for assets aggregating approximately
$6.2 billion. It also serves as index fund manager to two other
investment companies that seek to
replicate a benchmark index--SEI S&P Index Portfolio and SEI Bond
Index Portfolio with net assets as of September 30, 1994 of $413
million and $49 million, respectively--and charges a monthly fee
at the annual rate of .03% of the value of each such fund's
average daily net assets.
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
Beneficial Owners
The following table sets forth certain information
concerning persons that were beneficial owners of 5% or more of
the outstanding shares of Common Stock of the Fund as of January
26, 1995:
Percent of
Name and Address Amount of Total Shares
Shares Held Outstanding
Charles Schwab & Co., Inc. 449,238.753 8.60%
Reinvest Account
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
MAC & Co. 437,422.553 8.30%
c/o Mellon Bank, N.A.
Mutual Funds
P.O. Box 320
Pittsburgh, PA 15230
Cornell College 276,357.707 5.30%
600 1st St. W.
Mount Vernon, IA 52314
Mercy Medical Center 267,034.111 5.10%
701 10th Street SE
Cedar Rapids, IA 52403
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 $24,979, 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 May
13, 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 dated
August 24, 1994, as revised January 1, 1995. 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 November 9,
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, Pacific American Money
Market Portfolio, Pacific American U.S. Treasury Portfolio 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 payable to the
Administrator was $218,911.
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 June 1, 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 New Index Fund Manager 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 New
Index Fund Manager 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 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
adjournment(s), 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.
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
IMMEDIATELY COMPLETE, DATE,
SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: February 1, 1995
EXHIBIT A
INDEX MANAGEMENT AGREEMENT
PEOPLES S&P MIDCAP INDEX FUND, INC.
200 Park Avenue
New York, New York 10166
January 1, 1995
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 investing 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 Agreement. 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, transfer and dividend disbursing agents,
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:_______________________________
<PAGE>
PEOPLES S&P MIDCAP INDEX FUND, INC.
The undersigned stockholder of Peoples S&P MidCap Index Fund,
Inc. (the "Fund") hereby appoints Steven F. Newman and
J. Stephen King, Jr., 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 February 1, 1995, at a
Meeting of Stockholders to be held at the offices of The Dreyfus
Corporation, 200 Park Avenue, New York, New York at 10:00 a.m. on
Friday, March 31, 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 pursuant to an agreement among Comerica Incorporated,
Woodbridge Capital Management, Inc., World Asset and Munder
Capital Management Inc., such Index Management 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.
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
