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Plan and Agreement of Distribution
This plan and agreement is between IDS Special Tax-Exempt Series Trust (the
"Trust"), on behalf of its underlying series funds and American Express
Financial Advisors Inc., the principal underwriter of the Trust, for
distribution services to the Trust. It is effective on the first day the Trust
offers multiple classes of
shares.
The plan and agreement has been approved by members of the Board of Trustees
(the "Board") of the Trust who are not interested persons of the Trust and have
no direct or indirect financial interest in the operation of the plan or any
related agreement, and all of the members of the Board, in person, at a meeting
called for the purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Trust will reimburse American Express Financial Advisors for all sales
and promotional expenses attributable to the sale of Class B shares, including
sales commissions, business and employee expenses charged to distribution of
Class B shares, and corporate overhead appropriately allocated to the sale of
Class B shares.
2. The amount of the reimbursement shall be equal on an annual basis to 0.75% of
the average daily net assets of the Trust attributable to Class B shares. The
amount so determined shall be paid to American Express Financial Advisors in
cash within five (5) business days after the last day of each month. American
Express Financial Advisors agrees that if, at the end of any month, the expenses
of the Trust, including fees under this agreement and any other agreement
between the Trust and American Express Financial Advisors or American Express
Financial Corporation, but excluding taxes, brokerage commissions and charges in
connection with the purchase and sale of assets exceed the most restrictive
applicable state expense limitation for the Trust's current fiscal year, the
Trust shall not pay fees and expenses under this agreement to the extent
necessary to keep the Trust's expenses from exceeding the limitation, it being
understood that American Express Financial Advisors will assume all unpaid
expenses and xxxx the Trust for them in subsequent months, but in no event can
the accumulation of unpaid expenses or billing be carried past the end of the
Trust's fiscal year.
3. For each purchase of Class B shares, after eight years the Class B shares
will be converted to Class A shares and those assets will no longer be included
in determining the reimbursement amount.
4. The Trust understands that if a shareholder redeems Class B shares before
they are converted to Class A shares, American Express Financial Advisors will
impose a sales charge directly on the redemption proceeds to cover those
expenses it has previously incurred on the sale of those shares.
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5. American Express Financial Advisors agrees to provide at least quarterly an
analysis of distribution expenses and to meet with representatives of the Trust
as reasonably requested to provide additional information.
6. The plan and agreement shall continue in effect for a period of more than one
year provided it is reapproved at least annually in the same manner in which it
was initially approved.
7. The plan and agreement may not be amended to increase materially the amount
that may be paid by the Trust without the approval of a least a majority of the
outstanding shares of Class B. Any other amendment must be approved in the
manner in which the plan and agreement was initially approved.
8. This agreement may be terminated at any time without payment of any penalty
by a vote of a majority of the members of the Board who are not interested
persons of the Trust and have no financial interest in the operation of the plan
and agreement, or by vote of a majority of the outstanding Class B shares, or by
American Express Financial Advisors. The plan and agreement will terminate
automatically in the event of its assignment as that term is defined in the
Investment Company Act of 1940.
Approved this 20th day of March, 1995.
IDS SPECIAL TAX-EXEMPT SERIES TRUST IDS Insured Tax-Exempt Fund IDS
Massachusetts Tax-Exempt Fund IDS Michigan Tax-Exempt Fund IDS Minnesota
Tax-Exempt Fund IDS New York Tax-Exempt Fund IDS Ohio Tax-Exempt Fund
/s/Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President
