ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 13th day of September, 1999, by and between AXP Variable
Portfolio Managed Series, Inc. (the "Corporation") a Minnesota corporation on
behalf of its underlying series fund AXP Variable Portfolio - Diversified Equity
Income Fund (the "Fund"), and American Express Financial Corporation, a Delaware
corporation.
Part One: 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 all administrative,
accounting, clerical, statistical, correspondence, corporate and all
other services of whatever nature required in connection with the
administration of the Fund as provided under this Agreement; and to pay
such expenses as may be provided for in Part Three hereof; subject
always to the direction and control of the Board of Directors, 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
of Directors deems appropriate for the purpose of reviewing American
Express Financial Corporation's performance under this Agreement.
(2) 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.
(3) 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 FOR SERVICES
(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, based on the
net assets of the Fund as set forth in the following table:
AXP Variable Portfolio - Diversified Equity Income Fund
Assets Annual rate at
(billions) each asset level
---------- ----------------
First $0.50 0.040%
Next 0.50 0.035
Next 1.00 0.030
Next 1.00 0.025
Next 3.00 0.020
Over 6.00 0.020
The administrative fee for each calendar day of each year shall be
equal to 1/365th (1/366th in each leap year) of the total amount
computed. The computation shall be made for each such 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 administrative fee 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. As used herein, "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.
(2) The administrative fee shall be paid on a monthly basis and, in the
event of the termination of this Agreement, the administrative 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 administrative fee provided for hereunder shall be paid in cash by
the Fund to American Express Financial Corporation within five (5)
business days after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Administrative fees payable to American Express Financial
Corporation for its services under the terms of this
Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public
accountants for services the Fund requests.
(d) 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 of Directors
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.
(e) 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.
(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books,
periodicals, published services, and office supplies used by
the Fund, equal to the cost of such incurred by American
Express Financial Corporation.
(g) Fees of consultants employed by the Fund.
(h) 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.
(i) 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.
(j) Organizational expenses of the Fund.
(k) One-half of the Investment Company Institute membership dues
charged jointly to the American Express(R) Funds and American
Express Financial Corporation.
(l) Expenses properly payable by the Fund, approved by the Board of
Directors.
(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)
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 (c) through (m) 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 anyway 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 United States Securities and Exchange Commission.
(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 officers, directors or employees of
American Express Financial Corporation from having a financial interest
in the Fund or in American Express Financial Corporation.
(7) The Fund agrees that American Express Financial Corporation may
subcontract for certain of the services described under this Agreement
with the understanding that there shall be no diminution in the quality
or level of the services and that American Express Financial
Corporation remains fully responsible for the services.
(8) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent
of the other party. This Agreement shall be governed by the laws of the
State of Minnesota.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect from year to year
thereafter as the parties may mutually agree; provided that either
party may terminate this Agreement by giving the other party notice in
writing specifying the date of such termination, which shall be not
less than 60 days after the date of receipt of such notice.
(2) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
AXP Variable Portfolio - Diversified Equity Income Fund
By: /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Vice President - Variable Assets
