DISTRIBUTION AGREEMENT
Agreement made as of the ____ day of _____, 2000, by and between AXP Strategy
Series, Inc. (the "Corporation"), a Minnesota corporation, for and on behalf of
each class of its underlying fund: AXP Focus Fund and American Express Financial
Advisors Inc. ("AEFA"), a Delaware corporation.
Part One: DISTRIBUTION OF SECURITIES
(1) The Corporation covenants and agrees that, during the term of this agreement
and any renewal or extension, AEFA shall have the exclusive right to act as
principal underwriter for the Fund and to offer for sale and to distribute, as
agent for the Fund, any and all shares of each class of capital stock issued or
to be issued by the Fund to the public, broker-dealers and other institutions.
(2) AEFA hereby covenants and agrees to act as the principal underwriter of each
class of capital shares issued and to be issued by the Fund during the period of
this agreement and agrees during such period to offer for sale such shares as
long as such shares remain available for sale, unless AEFA is unable or
unwilling to make such offer for sale or sales or solicitations therefor legally
because of any federal, state, provincial or governmental law, rule or agency or
for any financial reason.
(3) With respect to the offering for sale and sale of shares of each class to be
issued by the Fund, it is mutually understood and agreed that such shares are to
be sold on the following terms:
(a) All sales shall be made by means of an application, and every
application shall be subject to acceptance or rejection by the Fund at its
principal place of business. Shares are to be sold for cash, payable at the time
the application and payment for such shares are received by the Fund or its
agent.
(b) No shares shall be sold at less than the asset value (computed in
the manner provided by the Fund's currently effective prospectus or Statement of
Additional Information and the Investment Company Act of 1940, as amended, and
rules thereunder (the "1940 Act")). The number of shares or fractional shares to
be acquired by each applicant shall be determined by dividing the amount of each
accepted application by the public offering price of one share of the capital
stock of the appropriate class as of the close of business on the day when the
application, together with payment, is received by the Fund or its agent. The
computation as to the number of shares and fractional shares shall be carried to
three decimal points of one share with the computation being carried to the
nearest 1/l000th of a share. If the day of receipt of the application and
payment is not a full business day, then the asset value of the share for use in
such computation shall be determined as of the close of business on the next
succeeding full business day. In the event of a period of emergency, the
computation of the asset value for the purpose of determining the number of
shares or fractional shares to be acquired by the applicant may be deferred
until the close of business on the first full business day following the
termination of the period of emergency. A period of emergency shall have the
definition given thereto in the 1940 Act.
(c) AEFA is authorized to enter into agreements with broker-dealers
that are lawfully registered under federal law and any applicable state law or
with other institutions lawfully able to distribute securities ("Selling
Brokers") providing for Selling Brokers to obtain unconditional orders for
shares from investors, provided however, that AEFA may in its discretion refuse
to accept orders for such shares from any particular applicant and may provide
similar discretion to the Selling Brokers. All agreements between AEFA and
Selling Brokers shall include provisions similar to paragraphs (a) and (b).
(4) The Corporation agrees to make prompt and reasonable effort to do any and
all things necessary, in the opinion of AEFA, to have and to keep the Fund and
the shares properly registered or qualified in all appropriate jurisdictions
and, as to shares, in such amounts as AEFA may from time to time designate in
order that the Funds' shares may be offered or sold in such jurisdictions.
(5) The Corporation agrees that it will furnish AEFA with information with
respect to the affairs and accounts of the Fund, and in such form, as AEFA may
from time to time reasonably require and further agrees that AEFA, at all
reasonable times, shall be permitted to inspect the books and records of the
Fund.
(6) AEFA may prepare or cause to be prepared from time to time circulars, sales
literature, broadcast material, publicity data and other advertising material to
be used in the sales of shares issued by the Fund, including material which may
be deemed to be a prospectus under rules promulgated by the Securities and
Exchange Commission (the "SEC") (each separate promotional piece is referred to
as an "Item of Soliciting Material"). At its option, AEFA may submit any Item of
Soliciting Material to the Corporation for its prior approval. Unless a
particular Item of Soliciting Material is approved in writing by the Corporation
prior to its use, AEFA agrees to indemnify the Corporation and its directors and
officers against any and all claims, demands, liabilities and expenses which the
Corporation or such persons may incur arising out of or based upon the use of
any Item of Soliciting Material prepared or approved by AEFA. The term
"expenses" includes amounts paid in satisfaction of judgments or in settlements.
The foregoing right of indemnification shall be in addition to any other rights
to which the Corporation or any director or officer may be entitled as a matter
of law. Notwithstanding the foregoing, such indemnification shall not be deemed
to abrogate or diminish in any way any right or claim AEFA may have against the
Corporation or its officers or directors in connection with the Funds'
registration statement, prospectus, Statement of Additional Information or other
information furnished by or caused to be furnished by the Corporation. All
agreements between AEFA and Selling Brokers shall include a similar
indemnification provision.
(7) AEFA agrees to submit to the Corporation each application for shares
immediately after the receipt of such application and payment therefor by AEFA
or its agent.
(8) AEFA agrees to cause to be delivered to each person submitting an
application a current prospectus or circular to be furnished in the form
required by the applicable federal laws or by the acts or statutes of any
applicable state, province or country. All agreements between AEFA and Selling
Brokers shall include a similar provision.
(9) The Fund shall have the right to extend to shareholders of each class the
right to use the proceeds of any cash dividend paid by the Fund to that
shareholder to purchase shares of the same class at the net asset value at the
close of business upon the day of purchase, to the extent set forth in the
Fund's currently effective prospectus or Statement of Additional Information.
(10) Shares of each class issued by the Fund may be offered and sold at their
asset value to the shareholders of the same class of other Corporations of the
American Express(R) Funds who wish to exchange their investments in shares of
the other American Express(R) Funds to investments in shares of the Funds, to
the extent set forth in the currently effective prospectus or Statement of
Additional Information, such asset value to be computed as of the close of
business on the day of sale of such shares of the Fund.
(11) AEFA and the Corporation agree to use their best efforts to conform with
all applicable state and federal laws and regulations relating to any rights or
obligations under the terms of this agreement. All agreements between AEFA and
Selling Brokers shall include a similar provision.
Part Two: ALLOCATION OF EXPENSES
Except as provided by any other agreements between the parties, AEFA covenants
and agrees that during the period of this agreement it will pay or cause to be
paid all expenses incurred by AEFA, in the offering for sale or sale of each
class of the Funds' shares that is subject to the terms of this agreement.
Part Three: COMPENSATION
(1) It is covenanted and agreed that AEFA shall be paid:
(i) for a class of shares imposing a front-end sales charge, by the
purchasers of shares in an amount equal to the difference between the total
amount received upon each sale of shares issued by the Fund and the asset value
of such shares at the time of such sale; and
(ii) for a class of shares imposing a deferred sales charge, by owners
of Corporation shares at the time the sales charge is imposed in an amount equal
to any deferred sales charge, as described in the Fund's prospectus.
Such sums as are received by the Corporation shall be received as agent for AEFA
and shall be remitted to AEFA daily as soon as practicable after receipt.
(2) The asset value of any share of each class of the Fund shall be determined
in the manner provided by the currently effective prospectus and Statement of
Additional Information and the 0000 Xxx.
Part Four: MISCELLANEOUS
(1) AEFA 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 Corporation.
(2) AEFA shall be free to render to others services similar to those rendered
under this agreement.
(3) 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 AEFA as directors,
officers, shareholders or otherwise; that directors, officers, shareholders or
agents of AEFA are or may be interested in the Fund as directors, officers,
shareholders or otherwise; or that AEFA is or may be interested in the Fund as
shareholder or otherwise, provided, however, that neither AEFA nor any officer
or director of AEFA or any officers or directors of the Fund shall sell to or
buy from the Fund any property or security other than a security issued by the
Fund, except in accordance with a rule, regulation or order of the SEC.
(4) For the purposes of this agreement, a "business day" shall have the same
meaning as is given to the term in the By-laws of the Corporation.
(5) Any notice under this agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the parties to this agreement at each
company'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) AEFA agrees that no officer, director or employee of AEFA 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 and employees of AEFA from having a financial
interest in the Fund or in AEFA.
(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 AEFA, 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 AEFA if
allowed by rule or order of the SEC and if made pursuant to procedures adopted
by the Board of Directors.
(7) AEFA agrees that, except as otherwise provided in this agreement, or as may
be permitted consistent with the use of a broker-dealer affiliate of AEFA 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 securities issued by the Fund) or other assets by or for the
Fund.
Part Five: TERMINATION
(1) This agreement shall continue from year to year unless and until terminated
by AEFA or the Fund, except that such continuance shall be specifically approved
at least annually by a vote of a majority of the Board of 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, and by a
majority of the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund. As used in this paragraph, the term "interested
person" shall have the meaning as set forth in the 1940 Act.
(2) This agreement may be terminated by AEFA or the Fund at any time by giving
the other party sixty (60) days written notice of such intention to terminate.
(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 WHEREOF, The parties hereto have executed the foregoing agreement on
the date and year first above written.
AXP STRATEGY SERIES, INC.
AXP Focus Fund
By______________________
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By______________________
Xxxxxx X. Xxxxx
Vice President
