INVESTMENT ADVISORY AGREEMENT
Agreement effective as of the 11th day of February , 1999, by and between
American Express Financial Corporation Inc. ("AEFC") and American Express Asset
Management International Inc. ("International").
Whereas each of the Funds and Portfolios listed in Exhibit A (individually a
"Fund" and collectively the "Funds" ), has been registered as an investment
company under the Investment Company Act of 1940; and
Whereas International has a staff of experienced investment personnel and
facilities for the kind of investment portfolio contemplated for the Funds;
NOW THEREFORE, it is mutually agreed with respect to each Fund:
1. Information Furnished to International. AEFC shall furnish such information
to International as to holdings, purchases, and sales of securities under its
management and investment portfolio requirements as will reasonably enable
International to furnish investment advice under this agreement. Any information
or notice provided to International under the terms of this agreement shall be
furnished to the President of International or to the person or persons
designated in writing by him or by a person to whom he has delegated the
authority to so designate.
2. Purchase and Sale of Securities. Subject to the supervision and approval of
AEFC and of the Fund's Board of Directors/Trustees (the "Board"), International
shall determine, consistent with the Fund's investment objectives and policies,
which securities (including both domestic and foreign securities) in
International's discretion shall be purchased, held or sold and to execute or
cause the execution of purchase and sell orders, provided that AEFC shall be
responsible for investing and reinvesting all of the Fund's cash and cash items
held by the Fund's U.S. custodian. All transactions will be executed in a manner
and in accordance with the procedures and standards as set forth in, or as
established in accordance with, the Investment Management Services Agreement
between the investment manager and the Fund. AEFC shall furnish International
with information concerning such procedures and standards, and any amendments
thereto, and International will maintain records to assure that such
transactions have been executed in accordance therewith.
3. Compensation to International. As compensation for its services, AEFC shall
pay International a fee as described in Exhibit A. AEFC shall pay this fee to
International on a monthly basis in cash within five (5) business days after the
last day of each month.
4. IMRO Provisions.
a. The IMRO required statements, disclosures and other provisions set forth in
Exhibit B shall be considered an integral part of this agreement.
b. The Securities Brokerage Policy set forth in Exhibit C shall be considered an
integral part of this agreement.
5. Miscellaneous.
a. AEFC recognizes that International now renders and may continue to render
investment advice and other services to other persons which may or may not have
investment policies and investments similar to those of the Fund, and that
International may manage its own investments. International shall be free to
render such investment advice and other services, and AEFC hereby consents
thereto.
b. It is understood and agreed that in furnishing investment advice and other
services as herein provided, neither International nor any officer, director,
employee, or agent thereof shall be held liable to AEFC or the Fund or creditors
for errors of judgment or for anything except willful misfeasance, bad faith, or
gross negligence in the performance of its duties, or reckless disregard of its
obligations and duties under the terms of this agreement. It is further
understood and agreed that International may rely upon information furnished to
it reasonably believed to be accurate and reliable and that, except as
hereinabove provided, International shall not be accountable for any loss
suffered by AEFC or the Fund by the reason of the latter's action or nonaction
on the basis of any advice or recommendation of International, its officers,
directors or agents.
6. Renewal and Termination.
This agreement, unless terminated pursuant to paragraph b, c, or d below, shall
continue in effect from year to year, provided its continued applicability is
specifically approved at least annually (i) by the Board of the Fund or by a
vote of the holders of a majority of the outstanding votes of the Fund and (ii)
by vote of a majority of the Board members who are not parties to this agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. As used in this paragraph, the term
"interested person" shall have the same meaning as set forth in the Investment
Company Act of 1940, as amended.
b. This agreement may be terminated at any time, without penalty, by the Board
of the Fund or by vote of the holders of a majority of the Fund's outstanding
shares, on sixty days' written notice to AEFC or to International.
c. AEFC or International may terminate this agreement by giving sixty days
written notice to the other party.
d. This agreement shall terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning set forth in the
Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing agreement as
of the day and year first above written.
AMERICAN EXPRESS FINANCIAL CORPORATION
Attest: /s/ Xxxxxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxxxxx
Secretary Senior Vice President - Investment
Operations
AMERICAN EXPRESS ASSET MANAGEMENT INTERNATIONAL INC.
Attest: /s/ Xxxxxxx X. Xxxxxx BY: /s/ Xxxxx X Xxxxxxxx
Secretary President and Chief Executive Officer
EXHIBIT A
American Express Financial Corporation shall pay American Express Asset
Management International Inc. a fee equal on an annual basis as follows:
Fund Fee
Emerging Markets Portfolio 0.50% of daily net assets
World Growth Portfolio 0.35% of daily net assets
Global Balanced Fund 0.35% of daily net assets
IDS International Fund, Inc. 0.35% of daily net assets
IDS Life International Equity Fund 0.35% of daily net assets
American Express Financial Corporation shall pay this compensation to American
Express International Inc. in arrears on a monthly basis.
Exhibit B
Attachment to
Investment Advisory Agreement
WHEREAS: American Express Asset Management International Inc. , (International)
of 11th Floor, Dashwood House, 00 Xxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxxx, ECZM
IQS, is a Member of the Investment Management Regulatory Organisation (IMRO), a
Self-Regulatory Organisation established by virtue of the United Kingdom's
Financial Services Xxx 0000 (FSA).
WHEREAS: IMRO requires International to incorporate certain statements,
disclosures and other provisions into its investment advisory agreements.
NOW THEREFORE: International and American Express Financial Corporation (AEFC)
hereby agree that the following IMRO required statements, disclosures and other
provisions form an Attachment to the Investment Advisory Agreement effective as
between International and AEFC as of the 9th day of April, 1998 with regard to
each Fund listed in Exhibit A.
I. Appointment of International
A. AEFC appoints International and International accepts such
appointment to determine in its discretion, but consistent with the
Fund's investment objectives and policies and subject to the
supervision and approval of AEFC and of the Fund's Board, which
securities (including both domestic and foreign securities) shall be
purchased, held or sold and to execute or cause the execution of
purchase and sell orders.
B. International represents and warrants that it is an Authorised
Person by virtue of it being a Member of IMRO, and in so being a Member
is regulated by that body in its conduct of investment business.
II. Incorporation of Prospectus and Statement of Additional Information
The Prospectus and Statement of Additional Information for the Fund are
hereby incorporated and shall be seen as forming part of this
Attachment.
III. Portfolio Transactions and Commissions/Relevant Arrangements
International is responsible for seeing that the Fund's securities
transactions are effected, for choosing the executing firms, and for
determining the brokerage commissions to be paid to such firms in a
manner and in accordance with the procedures and standards as set forth
in, or as established in accordance with, the Investment Management
Services Agreement between the investment manager and the Fund. With
regard to these executions, International will seek to secure best
execution, defined as the best net results for the Fund, taking into
consideration such factors as price, commission, dealer spread, size of
order, difficulty of execution, operational facilities of the executing
firm involved, that firm's risk in positioning a block of securities
and the overall benefits of supplemental investment research provided
by such firm.
To the extent that any such securities transactions may be effected for
the Fund with or through the agency of a person who provides such
services under any relevant arrangement, as defined in IMRO Chapter IV,
Rule 6.01, such transactions will be effected so as to seek to secure
for the Fund best execution of the transactions disregarding any
benefit which might enure directly or indirectly from the services or
benefits provided under that arrangement, since such arrangements will
relate solely to transactions in markets and on exchanges where
commission rates are fixed
IV. Investment
A. In currency transactions a movement of the exchange rate may have a
separate effect, unfavorable as well as favorable, on the gain or loss
otherwise experienced on the investment.
B. Services provided by International may relate to Investments Not
Readily Realisable. When such securities are not readily realisable;
there can be no certainty that market makers will be prepared to deal
in them, nor may they have proper information for determining their
current value.
C. The Fund may invest in units in Collective Investment Schemes which,
for the purposes of IMRO, are Unregulated Collective Investment
Schemes.
D. The Fund may not acquire or dispose of units in a Collective
Investment Scheme either operated or advised by International or by an
Associate, as defined by IMRO, of International.
E. The Fund may not contain securities of which an issue or offer for
sale was underwritten, managed or arranged by International during the
preceding twelve months. The Fund may, however, contain securities of
which an issue or offer for sale was underwritten, managed or arranged
by an Associate of International during the preceding twelve months
F. Subject to the extent permitted or not prohibited by any applicable
law and subject to procedures established by the Fund's Board and AEFC,
International may effect transactions on behalf of the Fund with an
Associate. In all Portfolio transactions so effected by International,
International could be deemed by IMRO either to be effecting a
transaction in which International has a direct or indirect material
interest, or a transaction which may involve a conflict with
International's duty to the Fund.
G. International may not commit the Fund to an obligation to underwrite
any issue or offer for the sale of securities, but under certain
securities laws the Fund may be deemed to be an underwriter where it
purchases securities directly from the issuer and later resells them.
H. International may not commit the Fund to supplement funds in the
Portfolio either by borrowing on its behalf or by committing it to a
contract of performance which may have required it to supplement the
funds.
I. Prior to effecting any transactions on behalf of the Fund in Options
or Futures, IMRO requires International to send AEFC the applicable
IMRO disclosures and agreements. International will therefore forward
the necessary disclosures and agreements to AEFC, and no such
transaction as mentioned in this paragraph I will be effected until
such agreements have been executed
J. In the event that Contracts for Differences are considered a
possible investment vehicle, the appropriate disclosures and agreements
between International and AEFC will be forwarded.
K. AEFC will inform International of any restrictions regarding the
markets in which transactions may be effected.
V. Administration
A. International shall not, under any circumstance, act as custodian or
trustee for the Fund, nor hold money, nor be the registered holder of
the Fund's registered investments nor be the custodian of documents or
other evidence of title.
B. American Express Trust Company, an Associate of International, acts
as Custodian with respect to the Fund. American Express Trust Company
has a subcustodial agreement with Xxxxxx Xxxxxxx Trust Company, an
entity not an Associate of International.
It is International's understanding that money will be deposited with
Xxxxxx Xxxxxxx Trust Company in the account name of American Express
Trust Company, that investments, documents of title, certificates
evidencing title to investments and other property belonging to the
Fund may be lent to a third party in accordance with a resolution of
the Fund's Board but that money may not be borrowed on the Fund's
behalf against the investments documents, certificates or property
hereinabove mentioned.
With respect to the Fund, International understands that Xxxxxx Xxxxxxx
Trust Company has procedures for accounting to the Fund regarding
income received and rights conferred in respect of the investments
held.
International accepts no responsibility for the default of any such
Custodian so appointed by the Fund.
The Board of the Fund will exercise all voting rights conferred on the
owners of the securities in the Fund.
C. International shall furnish to AEFC monthly written reports on the
valuation of the Fund, including both securities and cash and showing
all investments, receipts, disbursements and other transactions
involving the Fund during the accounting period and also showing the
assets of the Fund held at the end of the period and their market
values. Such reports do not include any measurement of performance
D. International has in operation a written procedure for the effective
consideration and proper handling of complaints. Any complaint by, or
on behalf of, the Fund should be sent in writing to:
Xxxxx X. Xxxxxxxx
American Express Asset Management International Inc.
11th Floor
Dashwood House
00 Xxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxx Xxxxxxx ECZM IQS
Direct complaint can also be made to IMRO. In the event of the
inability of International to meet its liabilities to the Fund
compensation may be available by virtue of the fund established under
the Financial Services (Compensation of Investors) Rules 1988
VI. Termination
Termination will be without prejudice to the completion of transactions
initiated prior to such termination, said transactions being completed
according to their terms. Termination shall occur in accordance with
procedures established in the Investment Advisory Agreement.
VII. Investment Management Fees
Pursuant to the IMRO provisions regarding the supplement and abatement
of fees, International hereby acknowledges that for the performance of
services contemplated by the Investment Advisory Agreement, it will
receive only the compensation set out in the Investment Advisory
Agreement. Such compensation shall be payable in accordance with the
agreed provisions regarding compensation to International.
In circumstances where International effects a transaction on behalf of
the Fund with an Associate, that Associate may receive commissions;
such commissions, however, would not supplement or xxxxx
International's above-mentioned agreed compensation.
VIII. Miscellaneous
A. Non-Private Investor: In accordance with IMRO International hereby deems
AEFC a Non-Private Investor (as such term is defined by IMRO) in relation
to all investment advisory services to be provided by International under
the Investment Advisory Agreement
B. Calls: Under the terms of the Investment Advisory Agreement
International has the right for itself, its representatives, or its
employees to make calls to AEFC at appropriate times, with the caller
identifying himself/herself at the start of the conversation
IN WITNESS WHEREOF, the parties have executed this Attachment as of the 11th day
of February, 1999.
American Express Financial Corporation
By: /s/Xxxxx X. Xxxxxxxx
Title: Director and Senior Vice President - Investment Operations
American Express Asset Management International Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
Exhibit C
AMERICAN EXPRESS ASSET MANAGEMENT INTERNATIONAL INC.
SECURITIES BROKERAGE POLICY
American Express Asset Management International Inc. ("AEAMI") provides its
Securities Brokerage Policy, together with any and all disclosure requirements
thereto, to all clients at least annually. In the event that any significant
policy changes occur before AEAMI sends the next annual policy statement, an
updated securities brokerage policy will be provided to all clients.
AEAMI seeks to comply with the guidelines established by each of its clients.
Such guidelines generally give AEAMI the discretionary authority to determine
the brokers and dealers through which transactions are to be effected. AEAMI
will seek to select brokers and dealers who will deal in terms which are the
best available for the client, taking into consideration such factors as price,
commission, dealer spread, size of order, difficulty of execution, reliability,
integrity, financial soundness, operational and execution capabilities of the
executing broker/dealer involved, the risk in positioning a block of securities
and the overall benefits of supplemental investment research. Purchases and
sales of over-the-counter securities are executed with primary market makers for
such securities, except where AEAMI believes that a better combination of price
and execution may otherwise be provided to the client. Clients also may direct
AEAMI to effect a portion of their transactions through specific broker/dealers.
In these cases, clients should be aware that such directed arrangements may
result in less favorable executions than those achieved for clients who do not
so direct.
Under certain circumstances, AEAMI may participate in soft commission
arrangements with broker/dealers whereby services are provided for the benefit
of AEAMI's clients in anticipation of receiving a certain amount of trading
business. The soft commission services provided include assessment of political,
economical, industrial, technical, market, industry and company factors and/or
conditions. All of the soft commission services received by AEAMI are used to
assist in the investment management decision making process and client
investment services. The broker/dealer services provided, enable AEAMI to obtain
special products and services essential to the management of client funds. In
the event AEAMI has entered into a soft commission arrangement, the affected
client's annual brokerage report will include the following: (i) the percentage
of the total commission paid under any soft commission arrangement; (ii) the
value (on a cost price basis) of disclosable softing services received by AEAMI
expressed as a percentage of the total commission paid (whether or not paid
under a soft commission agreement); (iii) a summary of disclosable softing
services received by AEAMI; (iv) a list of counterparties to the soft commission
arrangement; (v) the total commission paid from the portfolio of the affected
client; (vi) information on any Value Added Tax cash reclaims received which
relate to soft commission paid by the affected client; and (vii) confirmation
that AEAMI's soft commission agreement has not changed, or if a change has
occurred, a current copy of the soft commission agreement.
To: American Express Asset Management International Inc. (International)
On behalf of the Funds listed below, I hereby acknowledge receipt of the
Attachment (drafted to comply with the United Kingdom's Investment Management
Regulatory Organisation) to the Investment Advisory Agreement presently
effective between International and American Express Financial Corporation.
o Emerging Markets Portfolio
o World Growth Portfolio
o IDS Global Balanced Fund
o IDS International Fund, Inc.
o IDS Life International Equity Fund.
Signed: /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Title: Vice President and General Counsel
Date: Feb. 3, 1999
