Plan and Agreement of Distribution
This plan and agreement, effective as of _________, 2000, is between AXP
Strategy Series, Inc. on behalf of its underlying series AXP Small Cap Growth
Fund (the "Fund") and American Express Financial Advisors Inc. (AEFA), the
principal underwriter of the Fund, for distribution services to the Fund.
The plan and agreement has been approved by members of the Board of Directors
(the "Board") of the Fund who are not interested persons of the Fund 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 Fund will reimburse AEFA for expenses incurred in connection with the
distribution of the Fund's shares and providing personal service to
shareholders. These expenses include sales commissions; business, employee and
financial advisor expenses charged to distribution of Class A and Class B
shares; and overhead appropriately allocated to the sale of Class A and Class B
shares.
2. A portion of the fee under the agreement will be used to compensate AEFA,
financial advisors and other servicing agents for personal service to
shareholders. Fees paid will be used to help shareholders thoughtfully consider
their investment goals and objectively monitor how well the goals are being
achieved. AEFA represents that it will continue to provide the same level of
service as was provided under the previous shareholder service agreement.
3. AEFA agrees to monitor the services it provides, to measure the level and
quality of services and to provide training and support to financial advisors
and servicing agents. AEFA will use its best efforts to assure that other
distributors provide comparable services to shareholders.
4. For Class A shares, the fee under this agreement will be equal on an annual
basis to 0.25% of the average daily net assets of the Fund attributable to Class
A shares. The amount so determined shall be paid to AEFA in cash within five (5)
business days after the last day of each month.
5. For Class B shares, the fee under this agreement will be equal on an annual
basis to 1.00% of the average daily net assets of the Fund attributable to Class
B shares. Of that amount, 0.75% shall be reimbursed for distribution expenses.
The additional 0.25% shall be paid to AEFA to compensate AEFA, financial
advisors and servicing agents for personal service to shareholders and
maintenance of shareholder accounts. The amount so determined shall be paid to
AEFA in cash within five (5) business days after the last day of each month.
6. For each purchase of Class B shares, the Class B shares will be converted to
Class A shares in the ninth year of ownership.
7. The Fund understands that if a shareholder redeems Class B shares before they
are converted to Class A shares, AEFA will impose a sales charge directly on the
redemption proceeds to cover those expenses it has previously incurred on the
sale of those shares.
8. AEFA agrees to provide at least quarterly an analysis of expenses under this
agreement and to meet with representatives of the Fund as reasonably requested
to provide additional information.
9. 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.
10. The plan and agreement may not be amended to increase materially the amount
that may be paid by the Fund without the approval of a least a majority of the
outstanding shares of the relevant class. Any other amendment must be approved
in the manner in which the plan and agreement was initially approved.
11. This agreement may be terminated as to Class A or Class B 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 Fund and have no financial interest
in the operation of the plan and agreement, or by vote of a majority of the
outstanding shares of the relevant class, or by AEFA. 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.
AXP STRATEGY SERIES, INC.
AXP Small Cap Growth
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Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
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Xxxxxx X. Xxxxx
Senior Vice President
