MASTER FEE WAIVER AGREEMENT
This Agreement, dated June 1, 2005, is between American Express Financial
Corporation ("AEFC"), in its capacity as investment advisor and administrator,
American Express Client Service Corporation ("AECSC"), in its capacity as
transfer agent, and American Express Financial Advisors Inc. ("AEFA"), in its
capacity as distributor (AEFC, AECSC and AEFA collectively referred to as the
"Service Providers"), and each of the American Express Funds and the Preferred
Master Trusts on behalf of its underlying series funds or portfolios, listed in
Schedule A (the term "Fund" is used to refer to either the registrant or the
underlying fund or portfolio as the context requires). Under this Agreement, the
Service Providers agree to waive fees and reimburse certain expenses, and the
Fund agrees to accept those waivers and reimbursements, as described below and
in Schedule B:
1. Applicable Agreements. To the extent that the Fund's total expenses
exceed the expense ratios set out in Schedule B, the Service Providers
agree to waive fees and reimburse certain expenses under one or more
of the following agreements, as applicable:
o Investment Management Services Agreement between the Fund and
AEFC.
o Administrative Services Agreement between the Fund and AEFC.
o Transfer Agency Agreement between the Fund and AECSC.
o Plan and Agreement of Distribution between the Fund and AEFA.
The above-mentioned agreements may be amended from time to time.
2. Fee Caps. AEFC also agrees to pay certain non-advisory expenses of the
Fund if necessary to meet the expense ratio limits set out in Schedule
B. AEFC will determine the allocation of fee waivers and expense
reimbursements among the applicable agreements.
3. Termination. With respect to any Fund, this Agreement will terminate
on the date listed in Schedule B unless modified by written agreement
of the Fund and the Service Providers or terminated earlier at the
sole discretion of the Fund.
Master Agreement - Fee Waivers 2
Schedule A
List of Funds:
AXP DISCOVERY SERIES, INC.
AXP Core Bond Fund
AXP Discovery Fund
AXP Income Opportunities Fund
AXP Inflation Protected Securities Fund
AXP Limited Duration Bond Fund
AXP FIXED INCOME SERIES, INC.
AXP Diversified Bond Fund
AXP GLOBAL SERIES, INC.
AXP Threadneedle Emerging Markets Fund
AXP Global Technology Fund
AXP GOVERNMENT INCOME SERIES, INC.
AXP Short Duration U.S. Government Fund
AXP U.S. Government Mortgage Fund
AXP GROWTH SERIES, INC.
AXP Large Cap Equity Fund
AXP Large Cap Value Fund
AXP Quantitative Large Cap Equity Fund
AXP INCOME SERIES, INC.
AXP Selective Fund
AXP INTERNATIONAL SERIES, INC.
AXP Threadneedle International Fund
AXP INVESTMENT SERIES, INC.
AXP Mid Cap Value Fund
AXP MARKET ADVANTAGE SERIES, INC.
AXP Portfolio Builder - Conservative Fund
AXP Portfolio Builder - Moderate Conservative Fund
AXP Portfolio Builder - Moderate Fund
AXP Portfolio Builder - Moderate Aggressive Fund
AXP Portfolio Builder - Aggressive Fund
AXP Portfolio Builder - Total Equity Fund
AXP Small Company Index Fund
AXP S&P 500 Index Fund
AXP PARTNERS SERIES, INC.
AXP Partners Aggressive Growth Fund
AXP Partners Growth Fund
AXP Partners Select Value Fund
AXP Partners Small Cap Core Fund
AXP Partners Small Cap Value Fund
AXP PARTNERS INTERNATIONAL SERIES, INC.
AXP Partners International Aggressive Growth Fund
AXP Partners International Core Fund
Master Agreement - Fee Waivers 3
AXP Partners International Small Cap Fund
AXP SECTOR SERIES, INC.
AXP Real Estate Fund
AXP SPECIAL TAX-EXEMPT SERIES TRUST
AXP Massachusetts Tax-Exempt Fund
AXP Michigan Tax-Exempt Fund
AXP New York Tax-Exempt Fund
AXP Ohio Tax-Exempt Fund
AXP STRATEGY SERIES, INC.
AXP Partners Small Cap Growth Fund
AXP TAX-EXEMT SERIES, INC.
AXP Intermediate Tax-Exempt Fund
AXP VARIABLE PORTFOLIO INCOME SERIES, INC.
AXP VP Core Bond Fund
AXP VP Income Opportunities Fund
AXP VP Inflation Protected Securities Fund
AXP VARIABLE PORTFOLIO INVESTMENT SERIES, INC.
AXP VP Equity Select Fund
AXP VP Mid Cap Value Fund
AXP VP Large Cap Value Fund
AXP VP S&P 500 Index Fund
AXP VP Threadneedle Emerging Markets Fund
AXP VARIABLE PORTFOLIO PARTNERS SERIES, INC.
AXP VP Partners Select Value Fund
AXP VP Partners Small Cap Value Fund
AXP VARIABLE PORTFOLIO SELECT SERIES, INC.
AXP VP Core Equity Fund
GROWTH TRUST
GROWTH AND INCOME TRUST
INCOME TRUST
TAX-FREE INCOME TRUST
WORLD TRUST
Master Agreement - Fee Waivers 4
Schedule B
Fee Caps. The Service Providers agree to waive fees and reimburse certain
expenses to the extent that total expenses exceed the following expense ratios:
Fund Class A Class B Class C Class D Class E Class I Class Y Effective Termination Date
Date
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Core Bond 0.945% 1.695% 1.695% N/A N/A 0.695% 0.785% 08/01/04 07/31/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Discovery* 1.49% 2.27% 2.29% N/A N/A N/A 1.32% 08/01/04 07/31/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Diversified Bond 0.945% 1.695% 1.695% N/A N/A 0.735% 0.775% 09/01/04 08/31/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Global 1.82% 2.59% 2.59% N/A N/A 1.13% 1.63% 11/01/04 10/31/05
Technology
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Income 1.19% 1.95% 1.95% N/A N/A 0.88% 1.03% 08/01/04 07/31/05
Opportunities
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Inflation 0.84% 1.62% 1.62% N/A N/A 0.59% 0.69% 08/01/04 07/31/05
Protected Securities
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Intermediate TE 0.88% 1.64% 1.63% N/A N/A N/A 0.70% 12/01/04 11/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Large Cap % % % N/A N/A % % 08/01/04 07/31/05
Equity**
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Large Cap Value 1.35% 2.11 % 2.11% N/A N/A 1.03% 1.17% 08/01/04 07/31/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Limited 0.945% 1.705% 1.705% N/A N/A 0.675% 0.775% 08/01/04 07/31/05
Duration Bond
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Massachusetts TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Michigan TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Mid Cap Value 1.40% 2.16% 2.16% N/A N/A 0.93% 1.22% 10/01/04 09/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP New York TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Ohio TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners 1.53% 2.32% 2.33% N/A N/A 1.21% 1.35% 06/01/05 05/31/06
Aggressive Growth
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
Master Agreement - Fee Waivers 5
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners Growth 1.50% 2.27% 2.27% N/A N/A 1.18% 1.31% 06/01/05 05/31/06
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners N/A N/A 11/01/04 10/31/05
International 1.75% 2.52% 2.52% 1.36% 1.58%
Aggressive Growth
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners N/A N/A 11/01/04 10/31/05
International Core 1.75% 2.52% 2.52% 1.35% 1.58%
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners 1.95% 2.72% 2.72% N/A N/A 1.56% 1.78% 11/01/04 10/31/05
International Small
Cap
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners Small 1.55% 2.31% 2.31% N/A N/A 1.30% 1.37% 06/01/05 05/31/06
Cap Core
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners Small 1.70% 2.46% 2.46% N/A N/A 1.20% 1.52% 04/01/05 03/31/06
Cap Growth
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Partners Small 1.59% 2.35% 2.35% N/A N/A 1.21% 1.42% 06/01/05 05/31/06
Cap Value
Fund
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Portfolio 0.59% 1.37% 1.37% N/A N/A N/A 0.42% 02/01/05 01/31/06
Builder Funds
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Quantitative 1.25% 2.04% 2.06% N/A N/A 0.93% 1.06% 08/01/04 07/31/05
Large Cap Equity
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Real Estate 1.49% 2.27% 2.27% N/A N/A 1.17% 1.34% 07/01/04 06/30/05
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Selective 0.89% 1.64% 1.64% N/A N/A 0.59% 0.72% 06/01/05 05/31/06
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Short Duration 0.89% 1.64% 1.64% N/A N/A 0.59% 0.72% 06/01/05 05/31/06
U.S. Government
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Small Company 0.94% 1.70% N/A N/A N/A N/A 0.78% 02/01/05 01/31/06
Index
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP S&P 500 Index N/A N/A N/A 0.64% 0.39% N/A N/A 02/01/05 01/31/06
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Threadneedle 1.99% 2.75% 2.75% N/A N/A 1.47% 1.82% 11/01/04 10/31/05
Emerging Markets
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
Master Agreement - Fee Waivers 6
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP Threadneedle 1.55% 2.31% 2.31% N/A N/A 1.07% 1.38% 11/01/04 10/31/05
International
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
AXP U.S. Government 0.89% 1.64% 1.64% N/A N/A 0.59% 0.71% 06/01/05 05/31/06
Mortgage
--------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
* AEFA waives its right to compensation under the 12b-1 Plan in the amount of
.0375%.
** AEFC waives compensation under the Investment Management Service Agreement
in the amount of .05% through July 31, 2005.
AXP VP Funds
----------------------------------------------------- ------------ ------------------- ------------------------
Fund Fee Cap Effective Date Termination Date
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Core Bond 0.95% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Core Equity 0.40% 01/01/05 12/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Equity Select 1.10% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Income Opportunities 0.99% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Inflation Protected Securities 0.75% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Large Cap Value 1.05% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Mid Cap Value 1.08% 05/01/05 08/31/06
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Partners Select Value 1.15% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Partners Small Cap Value 1.30% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP S&P 500 Index 0.495% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
AXP VP Threadneedle Emerging Markets 1.75% 09/01/04 08/31/05
----------------------------------------------------- ------------ ------------------- ------------------------
Master Agreement - Fee Waivers 7
AXP DISCOVERY SERIES, INC.
AXP FIXED INCOME SERIES, INC.
AXPGLOBAL SERIES, INC.
AXP GOVERNMENT INCOME SERIES, INC.
AXP GROWTH SERIES, INC.
AXP HIGH YIELD INCOME SERIES, INC.
AXP INCOME SERIES, INC.
AXP INTERNATIONAL SERIES, INC.
AXP INVESTMENT SERIES, INC.
AXP MARKET ADVANTAGE SERIES, INC.
AXP PARTNERS SERIES, INC.
AXP PARTNERS INTERNATIONAL SERIES, INC.
AXP SECTOR SERIES, INC.
AXP SPECIAL TAX-EXEMPT SERIES TRUST
AXP STRATEGY SERIES, INC.
AXP TAX-EXEMPT SERIES, INC.
AXP VP INCOME SERIES, INC.
AXP VP INVESTMENT SERIES, INC.
AXP VP PARTNERS SERIES, INC.
GROWTH TRUST
GROWTH AND INCOME TRUST
INCOME TRUST
TAX-FREE INCOME TRUST
WORLD TRUST
By: /s/ Xxxxxx X. Xxx
-------------------------------
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
Senior Vice President and General Manager- Mutual Funds
AMERICAN EXPRESS CLIENT SERVICE CORPORATION
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Xxxxxxx Xxxxx
Chairman of the Board, President and Chief Executive Officer
