INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 1st day of July, 1999, by and between AXP Tax-Free
Money Fund, Inc. (the "Fund"), a Minnesota corporation, and American Express
Financial Corporation, a Delaware corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund hereby retains American Express Financial Corporation, and
American Express Financial Corporation hereby agrees, for the period
of this Agreement and under the terms and conditions hereinafter set
forth, to furnish the Fund continuously with suggested investment
planning; to determine, consistent with the Fund's investment
objectives and policies, which securities in American Express
Financial Corporation's discretion shall be purchased, held or sold
and to execute or cause the execution of purchase or sell orders; to
prepare and make available to the Fund all necessary research and
statistical data in connection therewith; to furnish services of
whatever nature required in connection with the management of the Fund
as provided under this Agreement; and to pay such expenses as may be
provided for in Part Three; subject always to the direction and
control of the Board of Directors (the "Board"), the Executive
Committee and the authorized officers of the Fund. American Express
Financial Corporation agrees to maintain an adequate organization of
competent persons to provide the services and to perform the functions
herein mentioned. American Express Financial Corporation agrees to
meet with any persons at such times as the Board deems appropriate for
the purpose of reviewing American Express Financial Corporation's
performance under this Agreement.
(2) American Express Financial Corporation agrees that the investment
planning and investment decisions will be in accordance with general
investment policies of the Fund as disclosed to American Express
Financial Corporation from time to time by the Fund and as set forth
in its prospectuses and registration statements filed with the United
States Securities and Exchange Commission (the "SEC").
(3) American Express Financial Corporation agrees that it will maintain
all required records, memoranda, instructions or authorizations
relating to the acquisition or disposition of securities for the Fund.
(4) The Fund agrees that it will furnish to American Express Financial
Corporation any information that the latter may reasonably request
with respect to the services performed or to be performed by American
Express Financial Corporation under this Agreement.
(5) American Express Financial Corporation is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Fund and is directed to use its best
efforts to obtain the best available price and most favorable
execution, except as prescribed herein. Subject to prior authorization
by the Fund's Board of appropriate policies and procedures, and
subject to termination at any time by the Board, American Express
Financial Corporation may also be authorized to effect individual
securities transactions at commission rates in excess of the minimum
commission rates available, to the extent authorized by law, if
American Express Financial Corporation determines in good faith that
such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or American
Express Financial Corporation's overall responsibilities with respect
to the Fund and other funds for which it acts as investment adviser.
(6) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither American Express Financial
Corporation, nor any officer, director or agent thereof shall be held
liable to the Fund or its creditors or shareholders 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 American Express
Financial Corporation may rely upon information furnished to it
reasonably believed to be accurate and reliable.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Fund agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept
from the Fund in full payment for the services furnished, a fee for
each calendar day of each year equal to the total of 1/365th (1/366th
in each leap year) of each of the respective percentages set forth
below of the net assets of the Fund; to be computed for each day on
the basis of net assets as of the close of business of the full
business day two (2) business days prior to the day for which the
computation is being made. In the case of the suspension of the
computation of net asset value, the asset charge for each day during
such suspension shall be computed as of the close of business on the
last full business day on which the net assets were computed. Net
assets as of the close of a full business day shall include all
transactions in shares of the Fund recorded on the books of the Fund
for that day.
Assets Annual Rate at
(Billions) Each Asset Leve
First $1.0 0.360%
Next 0.5 0.343
Next 0.5 0.325
Next 0.5 0.308
Next 1.0 0.290
Next 3.0 0.270
Over 6.5 0.250
(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, the fee accrued shall be prorated on
the basis of the number of days that this Agreement is in effect
during the month with respect to which such payment is made.
(3) The fee provided for hereunder shall be paid in cash by the Fund to
American Express Financial Corporation within five business days after
the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Fees payable to American Express Financial Corporation for
its services under the terms of this Agreement.
(b) Taxes.
(c) Brokerage commissions and charges in connection with the
purchase and sale of assets.
(d) Custodian fees and charges.
(e) Fees and charges of its independent certified public
accountants for services the Fund requests.
(f) Premium on the bond required by Rule 17g-1 under the
Investment Company Act of 1940.
(g) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against
the Fund, its directors and officers, (ii) it employs in
conjunction with a claim asserted by the Board against
American Express Financial Corporation, except that American
Express Financial Corporation shall reimburse the Fund for
such fees and expenses if it is ultimately determined by a
court of competent jurisdiction, or American Express
Financial Corporation agrees, that it is liable in whole or
in part to the Fund, and (iii) it employs to assert a claim
against a third party.
(h) Fees paid for the qualification and registration for public
sale of the securities of the Fund under the laws of the
United States and of the several states in which such
securities shall be offered for sale.
(i) Fees of consultants employed by the Fund.
(j) Directors, officers and employees expenses which shall
include fees, salaries, memberships, dues, travel, seminars,
pension, profit sharing, and all other benefits paid to or
provided for directors, officers and employees, directors
and officers liability insurance, errors and omissions
liability insurance, worker's compensation insurance and
other expenses applicable to the directors, officers and
employees, except the Fund will not pay any fees or expenses
of any person who is an officer or employee of American
Express Financial Corporation or its affiliates.
(k) Filing fees and charges incurred by the Fund in connection
with filing any amendment to its articles of incorporation,
or incurred in filing any other document with the State of
Minnesota or its political subdivisions.
(l) Organizational expenses of the Fund.
(m) Expenses incurred in connection with lending portfolio
securities of the Fund.
(n) Expenses properly payable by the Fund, approved by the
Board.
(2) American Express Financial Corporation agrees to pay all expenses
associated with the services it provides under the terms of this
Agreement. Further, American Express Financial Corporation agrees that
if, at the end of any month, the expenses of the Fund under this
Agreement and any other agreement between the Fund and American
Express Financial Corporation, but excluding those expenses set forth
in (1)(b) and (1)(c) of this Part Three, exceed the most restrictive
applicable state expenses limitation, the Fund shall not pay those
expenses set forth in (1)(a) and (d) through (n) of this Part Three to
the extent necessary to keep the Fund's expenses from exceeding the
limitation, it being understood that American Express Financial
Corporation will assume all unpaid expenses and xxxx the Fund for them
in subsequent months but in no event can the accumulation of unpaid
expenses or billing be carried past the end of the Fund's fiscal year.
Part Four: MISCELLANEOUS
(1) American Express Financial Corporation shall be deemed to be an
independent contractor and, except as expressly provided or authorized
in this Agreement, shall have no authority to act for or represent the
Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that American Express Financial Corporation now
renders and may continue to render investment advice and other
services to other investment companies and persons which may or may
not have investment policies and investments similar to those of the
Fund and that American Express Financial Corporation manages its own
investments and/or those of its subsidiaries. American Express
Financial Corporation shall be free to render such investment advice
and other services and the Fund hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall
be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in American Express Financial Corporation or any successor
or assignee thereof, as directors, officers, stockholders or
otherwise; that directors, officers, stockholders or agents of
American Express Financial Corporation are or may be interested in the
Fund as directors, officers, shareholders, or otherwise; or that
American Express Financial Corporation or any successor or assignee,
is or may be interested in the Fund as shareholder or otherwise,
provided, however, that neither American Express Financial
Corporation, nor any officer, director or employee thereof or of the
Fund, shall sell to or buy from the Fund any property or security
other than shares issued by the Fund, except in accordance with
applicable regulations or orders of the SEC.
(5) Any notice under this Agreement shall be given in writing, addressed,
and delivered, or mailed postpaid, to the party to this Agreement
entitled to receive such, at such party's principal place of business
in Minneapolis, Minnesota, or to such other address as either party
may designate in writing mailed to the other.
(6) American Express Financial Corporation agrees that no officer,
director or employee of American Express Financial Corporation will
deal for or on behalf of the Fund with himself as principal or agent,
or with any corporation or partnership in which he may have a
financial interest, except that this shall not prohibit:
(a) Officers, directors or employees of American Express
Financial Corporation from having a financial interest in
the Fund or in American Express Financial Corporation.
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or
dealer, one or more of whose partners, officers, directors
or employees is an officer, director or employee of American
Express Financial Corporation, provided such transactions
are handled in the capacity of broker only and provided
commissions charged do not exceed customary brokerage
charges for such services.
(c) Transactions with the Fund by a broker-dealer affiliate of
American Express Financial Corporation as may be allowed by
rule or order of the SEC, and if made pursuant to procedures
adopted by the Fund's Board.
(7) American Express Financial Corporation agrees that, except as herein
otherwise expressly provided or as may be permitted consistent with
the use of a broker-dealer affiliate of American Express Financial
Corporation under applicable provisions of the federal securities
laws, neither it nor any of its officers, directors or employees shall
at any time during the period of this Agreement, make, accept or
receive, directly or indirectly, any fees, profits or emoluments of
any character in connection with the purchase or sale of securities
(except shares issued by the Fund) or other assets by or for the Fund.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect until June 30, 2001, or until
a new agreement is approved by a vote of the majority of the
outstanding shares of the Fund and by vote of the Fund's Board,
including the vote required by (b) of this paragraph, and if no new
agreement is so approved, this Agreement shall continue from year to
year thereafter unless and until terminated by either party as
hereinafter provided, except that such continuance shall be
specifically approved at least annually (a) by the Board of the Fund
or by a vote of the majority of the outstanding shares of the Fund and
(b) by the vote of a majority of the directors 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 (the "1940 Act").
(2) This Agreement may be terminated by either the Fund or American
Express Financial Corporation at any time by giving the other party 60
days' written notice of such intention to terminate, provided that any
termination shall be made without the payment of any penalty, and
provided further that termination may be effected either by the Board
of the Fund or by a vote of the majority of the outstanding voting
shares of the Fund. The vote of the majority of the outstanding voting
shares of the Fund for the purpose of this Part Five shall be the vote
at a shareholders' regular meeting, or a special meeting duly called
for the purpose, of 67% or more of the Fund's shares present at such
meeting if the holders of more than 50% of the outstanding voting
shares are present or represented by proxy, or more than 50% of the
outstanding voting shares of the Fund, whichever is less.
(3) This Agreement shall terminate in the event of its assignment, the
term "assignment" for this purpose having the same meaning as set
forth in the 1940 Act.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
AXP TAX-FREE MONEY FUND, INC.
By /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Vice President
