INVESTMENT MANAGEMENT SERVICES AGREEMENT
This Agreement dated as of December 1, 2002, is by and between IDS Life
Variable Annuity Fund B (the "Fund") and American Express Financial Corporation
("AEFC").
The Fund desires to avail itself of the investment management
facilities available from AEFC and AEFC is willing to furnish such services as
set forth in this Agreement.
Therefore, it is mutually agreed:
ARTICLE I: INVESTMENT MANAGEMENT SERVICES
Section 1.1: AEFC shall manage the assets of the Fund by furnishing continuously
an investment program, by determining what securities shall be purchased or
sold, by directing the execution of the purchase and sell orders, and by
determining what portion of the Fund's assets shall be held in cash. So long as
this Agreement remains in effect, determinations so made by AEFC shall be
binding on the Fund, if in compliance with the restrictions set forth in Section
1.3. AEFC will report to the Board of Managers (the "Board") at such times and
in such detail as members of the Board may from time to time determine to be
appropriate in order to permit the Board to determine the adherence of AEFC to
the investment policies of the Fund.
Section 1.2: AEFC 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 Board of appropriate policies and procedures, and subject to termination
at any time by the Board, AEFC 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 AEFC determines in good
faith that such amount of commission is 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 AEFC's overall responsibilities
with respect to the Fund and other accounts as to which AEFC exercises
investment discretion. The Fund shall pay all brokerage commissions and charges
in the purchase and sale of assets. It is specifically understood and agreed
that broker-dealers affiliated with AEFC may participate in brokerage
commissions generated by security transactions for the Fund, to the extent
consistent with requirements of the Investment Company Act of 1940, as amended
(the "1940 Act") and other applicable provisions of federal securities laws.
Section 1.3: The investment management furnished by AEFC will be in accordance
with the general investment policies of the Fund as disclosed to AEFC from time
to time by the Fund and as set forth in its prospectus and registration
statement filed with the Securities and Exchange Commission, and the provisions
of applicable federal and state laws.
ARTICLE II: COMPENSATION TO INVESTMENT MANAGER
Section 2.1: The fee for the investment management services shall be 0.4% on an
annual basis of the net asset value of the Fund. The computation shall be made
for each calendar day on the basis of net assets as of the close of the
preceding business day. In the case of the suspension of the computation of net
asset value, the fee for each calendar 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.
Section 2.2: The fee shall be paid on a monthly basis in cash within five
business days after the last day of each month.
ARTICLE III: MISCELLANEOUS
Section 3.1: The Fund recognizes that AEFC 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 AEFC manages its own investments and/or those of its
subsidiaries. AEFC shall be free to render such investment advice and other
services and the Fund hereby consents thereto.
Section 3.2: This Agreement shall not be invalidated or in any way affected by
the fact that Board members, and/or shareholders of the Fund are or may be
interested in AEFC or any successor or assignee thereof, as board members,
officers, employees, agents, stockholders or otherwise; or that AEFC or any
successor or assignee, is or may be interested in the Fund as shareholder or
otherwise.
Section 3.3: It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither AEFC, nor any officer, board member or
agent thereof shall be held liable to the Board, 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 AEFC may rely upon information furnished to
it reasonably believed to be accurate and reliable.
ARTICLE IV: RENEWAL AND TERMINATION
Section 4.1: This Agreement shall continue in effect until November 30, 2004 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 or by a vote of the
majority of the outstanding shares of the Fund and (b) by the 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 1940 Act.
Section 4.2: This Agreement may be terminated by the Fund at any time without
penalty by giving AEFC 60 days' written notice of the intention to terminate.
Such termination may be effected either by the Board or by a vote of the
majority of the outstanding voting shares of the Fund.
Section 4.3: 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.
Section 4.4: This Agreement shall terminate in the event of its assignment by
AEFC, the term "assignment" for this purpose having the same meaning as set
forth in the 1940 Act.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year written above.
IDS LIFE VARIABLE ANNUITY FUND B
By /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
AMERICAN EXPRESS FINANCIAL CORPORATION
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Senior Vice President and General Manager- Mutual Funds
