TRANSFER AGENCY AGREEMENT
This Agreement, dated as of May 1, 2003, is between AXP High Yield Income
Series, Inc. (the "Corporation"), a Minnesota corporation, on behalf of its
underlying series AXP Extra Income Fund (the "Fund"), and American Express
Client Service Corporation (the "Transfer Agent"), a Minnesota corporation.
In consideration of the mutual promises set forth below, the Corporation and the
Transfer Agent agree as follows:
1. Appointment of the Transfer Agent. The Corporation hereby appoints the
Transfer Agent, as transfer agent for the shares of and as shareholder
servicing agent for the Fund, and the Transfer Agent accepts such
appointment and agrees to perform the duties set forth below.
2. Compensation.
(a) The Corporation will compensate the Transfer Agent for the
performance of its obligations as set forth in Schedule A.
Schedule A does not include out-of-pocket disbursements of the
Transfer Agent for which the Transfer Agent shall be entitled to
xxxx the Corporation separately.
(b) The Transfer Agent will xxxx the Corporation monthly. The fee
shall be paid in cash by the Corporation to the Transfer Agent
within five (5) business days after the last day of each month.
(c) Out-of-pocket disbursements shall include, but shall not be
limited to, the items specified in Schedule B. Reimbursement by
the Corporation for expenses incurred by the Transfer Agent in
any month shall be made as soon as practicable after the receipt
of an itemized xxxx from the Transfer Agent.
(d) Any compensation jointly agreed to hereunder may be adjusted from
time to time by attaching to this Agreement a revised Schedule A,
dated and signed by an officer of each party.
3. Documents. The Corporation will furnish from time to time such
certificates, documents or opinions as the Transfer Agent deems to be
appropriate or necessary for the proper performance of its duties.
4. Representations of the Corporation and the Transfer Agent.
(a) The Corporation represents to the Transfer Agent that all
outstanding shares are validly issued, fully paid and
non-assessable by the Corporation. When shares are hereafter
issued in accordance with the terms of the Corporation's Articles
of Incorporation and its By-laws, such
shares shall be validly issued, fully paid and non-assessable by
the Corporation.
(b) The Transfer Agent represents that it is registered under Section
17A(c) of the Securities Exchange Act of 1934. The Transfer Agent
agrees to maintain the necessary facilities, equipment and
personnel to perform its duties and obligations under this
Agreement and to comply with all applicable laws.
5. Duties of the Transfer Agent. The Transfer Agent shall be responsible,
separately and through its subsidiaries or affiliates, for the
following functions:
(a) Sale of Fund Shares.
(1) On receipt of an application and payment, wired
instructions and payment, or payment identified as
being for the account of a shareholder, the Transfer
Agent will deposit the payment, prepare and present
the necessary report to the Custodian and record the
purchase of shares in a timely fashion in accordance
with the terms of the Fund's prospectus. All shares
shall be held in book entry form, and no certificate
shall be issued unless the Fund is permitted to do so
by the prospectus and the purchaser so requests.
(2) On receipt of notice that payment was dishonored, the
Transfer Agent shall stop redemptions of all shares
owned by the purchaser related to that payment, place
a stop payment on any checks that have been issued to
redeem shares of the purchaser and take such other
action as it deems appropriate.
(b) Redemption of Fund Shares. On receipt of instructions to
redeem shares in accordance with the terms of the Fund's
prospectus, the Transfer Agent will record the redemption of
shares of the Fund, prepare and present the necessary report
to the Custodian and pay the proceeds of the redemption to the
shareholder, an authorized agent or legal representative upon
the receipt of the monies from the Custodian.
(c) Transfer or Other Change Pertaining to Fund Shares. On receipt
of instructions or forms acceptable to the Transfer Agent to
transfer the shares to the name of a new owner, change the
name or address of the present owner or take other legal
action, the Transfer Agent will take such action as is
requested.
(d) Exchange of Fund Shares. On receipt of instructions to
exchange the shares of the Fund for the shares of another
American Express(R) Fund or other American Express Financial
Corporation product in accordance with the terms of the
prospectus, the Transfer Agent will process the exchange
-2-
in the same manner as a redemption and sale of shares.
(e) Right to Seek Assurance. The Transfer Agent may refuse to
transfer, exchange or redeem shares of the Fund or take any
action requested by a shareholder until it is satisfied that the
requested transaction or action is legally authorized or until it
is satisfied there is no basis for any claims adverse to the
transaction or action. It may rely on the provisions of the
Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code. The Corporation shall
indemnify the Transfer Agent for any act done or omitted to be
done in reliance on such laws or for refusing to transfer,
exchange or redeem shares or taking any requested action if it
acts on a good faith belief that the transaction or action is
illegal or unauthorized.
(f) Shareholder Records, Reports and Services.
(1) The Transfer Agent shall maintain all shareholder
accounts, which shall contain all required tax,
legally imposed and regulatory information; shall
provide shareholders, and file with federal and state
agencies, all required tax and other reports
pertaining to shareholder accounts; shall prepare
shareholder mailing lists; shall cause to be printed
and mailed all required prospectuses, annual reports,
semiannual reports, statements of additional
information (upon request), proxies and other
mailings to shareholders; and shall cause proxies to
be tabulated.
(2) The Transfer Agent shall respond to all valid
inquiries related to its duties under this Agreement.
(3) The Transfer Agent shall create and maintain all
records in accordance with all applicable laws, rules
and regulations, including, but not limited to, the
records required by Section 31(a) of the Investment
Company Act of 1940.
(g) Dividends and Distributions. The Transfer Agent shall prepare
and present the necessary report to the Custodian and shall
cause to be prepared and transmitted the payment of income
dividends and capital gains distributions or cause to be
recorded the investment of such dividends and distributions in
additional shares of the Fund or as directed by instructions
or forms acceptable to the Transfer Agent.
(h) Confirmations and Statements. The Transfer Agent shall confirm
each transaction either at the time of the transaction or
through periodic reports as may be legally permitted.
(i) Lost or Stolen Checks. The Transfer Agent will replace lost or
stolen
-3-
checks issued to shareholders upon receipt of proper notification
and will maintain any stop payment orders against the lost or
stolen checks as it is economically desirable to do.
(j) Reports to Corporation. The Transfer Agent will provide
reports pertaining to the services provided under this
Agreement as the Corporation may request to ascertain the
quality and level of services being provided or as required by
law.
(k) Other Duties. The Transfer Agent may perform other duties for
additional compensation if agreed to in writing by the parties
to this Agreement.
6. Ownership and Confidentiality of Records.
(a) General. The Transfer Agent agrees that all records prepared
or maintained by it relating to the services to be performed
by it under the terms of this Agreement are the property of
the Corporation and may be inspected by the Corporation or any
person retained by the Corporation at reasonable times. The
Corporation and Transfer Agent agree to protect the
confidentiality of those records.
(b) Regulation S-P.
(1) In accordance with Regulation S-P of the Securities
and Exchange Commission, "Nonpublic Personal
Information" includes (1) all personally identifiable
financial information; (2) any list, description, or
other grouping of consumers (and publicly available
information pertaining to them) that is derived using
any personally identifiable financial information
that is not publicly available information; and (3)
any information derived therefrom.
(2) The Transfer Agent must not use or disclose Nonpublic
Personal Information for any purpose other than to
carry out the purpose for which Nonpublic Personal
Information was provided to the Transfer Agent as set
forth in this Agreement, and agrees to cause the
Transfer Agent, and its employees, agents,
representatives, or any other party to whom the
Transfer Agent may provide access to or disclose
Nonpublic Personal Information to limit the use and
disclosure of Nonpublic Personal Information to that
purpose.
(3) The Transfer Agent agrees to implement appropriate
measures designed to ensure the security and
confidentiality of Nonpublic Personal Information, to
protect such information against any anticipated
threats or hazards to the security or integrity of
such information, and to protect against unauthorized
access to, or use of, Nonpublic Personal Information
that could result in substantial
-4-
harm or inconvenience to any customer of the Fund; the
Transfer Agent further agrees to cause all its agents,
representatives, subcontractors, or any other party to whom
the Transfer Agent may provide access to, or disclose,
Nonpublic Personal Information to implement appropriate
measures designed to meet the objectives set forth in this
paragraph.
(4) With respect only to the provisions of this Section 6(b),
the Transfer Agent agrees to indemnify and hold harmless the
Corporation and/or the Fund, and any officer or director of
the Corporation, against losses, claims, damages, expenses,
or liabilities to which the Corporation and/or the Fund, or
any officer or director of the Corporation, may become
subject as the result of (1) a material breach of the
provisions of this section of the Agreement or (2) any acts
or omissions of the Transfer Agent, or of any of its
officers, directors, employees, or agents, that are not in
substantial accordance with this Agreement, including, but
not limited to, any violation of any federal statute or
regulation. Notwithstanding the foregoing, no party shall be
entitled to indemnification pursuant to this Section 6(b)(4)
if such loss, claim, damage, expense, or liability is due to
the willful misfeasance, bad faith, gross negligence, or
reckless disregard of duty by the party seeking
indemnification.
7. Action by Board and Opinion of Counsel. The Transfer Agent may rely on
resolutions of the Board of Directors (the "Board") or the Executive
Committee of the Board and on opinion of counsel for the Corporation.
8. Duty of Care. It is understood and agreed that, in furnishing the Fund
with the services as herein provided, neither the Transfer Agent, nor
any officer, director or agent thereof shall be held liable for any
loss arising out of or in connection with their actions under this
Agreement so long as they act in good faith and with due diligence,
and are not negligent or guilty of any willful misconduct. It is
further understood and agreed that the Transfer Agent may rely upon
information furnished to it reasonably believed to be accurate and
reliable. In the event the Transfer Agent is unable to perform its
obligations under the terms of this Agreement because of an act of
God, strike or equipment or transmission failure reasonably beyond its
control, the Transfer Agent shall not be liable for any damages
resulting from such failure.
9. Term and Termination. This Agreement shall become effective on the date
first set forth above 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. In the
event such notice is given by the Corporation, it shall be
-5-
accompanied by a vote of the Board, certified by the Secretary,
electing to terminate this Agreement and designating a successor
transfer agent or transfer agents. Upon such termination and at the
expense of the Corporation, the Transfer Agent will deliver to such
successor a certified list of shareholders of the Fund (with name,
address and taxpayer identification or Social Security number), a
historical record of the account of each shareholder and the status
thereof, and all other relevant books, records, correspondence, and
other data established or maintained by the Transfer Agent under this
Agreement in the form reasonably acceptable to the Corporation, and
will cooperate in the transfer of such duties and responsibilities,
including provisions for assistance from the Transfer Agent's
personnel in the establishment of books, records and other data by
such successor or successors.
10. Amendment. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
11. Subcontracting. The Corporation agrees that the Transfer Agent 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 the Transfer Agent remains fully
responsible for the services. Except for out-of-pocket expenses
identified in Schedule B, the Transfer Agent shall bear the cost of
subcontracting such services, unless otherwise agreed by the parties.
12. Miscellaneous.
(a) 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.
(b) This Agreement shall be governed by the laws of the State of
Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers as of the day and year written above.
AXP HIGH YIELD INCOME SERIES, INC.
AXP Extra Income Fund
By: /s/ Xxxxxx X. Xxx
-----------------------
Xxxxxx X. Xxx
Vice President
-6-
AMERICAN EXPRESS CLIENT SERVICE CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx
Senior Vice President
-7-
Schedule A
AXP HIGH YIELD INCOME SERIES, INC.
AXP Extra Income Fund
FEE
The annual per account fee for services under this Agreement, accrued daily and
payable monthly, is as follows:
Class A Class B Class C Class Y
------- ------- ------- -------
$20.50 $21.50 $21.00 $18.50
For purposes of this agreement, accounts that are part of a 529 college savings
plan offering American Express Funds will be charged at a rate that is 50% of
the rate shown above.
In addition, there is an annual closed-account fee of $5.00 per inactive
account, charged on a pro rata basis from the date the account becomes inactive
until the date the account is purged from the transfer agent system.
-8-
Schedule B
OUT-OF-POCKET EXPENSES
The Corporation shall reimburse the Transfer Agent monthly for the following
out-of-pocket expenses:
o typesetting, printing, paper, envelopes, postage and return postage for
proxy soliciting material, and proxy tabulation costs
o printing, paper, envelopes and postage for dividend notices, dividend
checks, records of account, purchase confirmations, exchange
confirmations and exchange prospectuses, redemption confirmations,
redemption checks, confirmations on changes of address and any other
communication required to be sent to shareholders
o typesetting, printing, paper, envelopes and postage for prospectuses,
annual and semiannual reports, statements of additional information,
supplements for prospectuses and statements of additional information
and other required mailings to shareholders
o stop orders
o outgoing wire charges
o National Securities Clearing Corporation charges related to fund
transactions
o other expenses incurred at the request or with the consent of the
Corporation
-9-
