PAGE 1
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS
Life Investment Series, Inc. (the "Corporation") on behalf of its
underlying series funds: IDS Life Aggressive Growth Fund, IDS Life
Capital Resource Fund and IDS Life International Equity Fund
(individually a "Fund" and collectively the "Funds"), a Minnesota
corporation, and IDS Life Insurance Company ("IDS Life") a
Minnesota corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Corporation hereby retains IDS Life, and IDS Life
hereby agrees, for the period of this Agreement and under the terms
and conditions hereinafter set forth, to furnish the Corporation
continuously with suggested investment planning; to determine,
consistent with the Funds' investment objectives and policies,
which securities in IDS Life's discretion shall be purchased, held
or sold and to execute or cause the execution of purchase or sell
orders; to prepare and make available to the Funds all necessary
research and statistical data in connection therewith; to furnish
all services of whatever nature required in connection with the
management of the Funds including transfer agent and dividend-
disbursing agent services; to furnish or pay for all supplies,
printed material, office equipment, furniture and office space as
the Funds may require; and to pay or reimburse such expenses of the
Funds as may be provided for in Part Three; subject always to the
direction and control of the Board of Directors (the "Board"), the
Executive Committee and the authorized officers of the corporation
and its underlying funds. IDS Life agrees to maintain (directly or
through the contract described in paragraph (7) of this Part One)
an adequate organization of competent persons to provide the
services and to perform the functions herein mentioned. IDS Life
agrees to meet with any persons at such times as the Board deems
appropriate for the purpose of reviewing IDS Life's performance
under this Agreement.
(2) IDS Life agrees that the investment planning and
investment decisions will be in accordance with general investment
policies of the Funds as disclosed to IDS Life from time to time by
the Funds and as set forth in its prospectuses and registration
statements filed with the United States Securities and Exchange
Commission (the "SEC").
(3) IDS Life agrees that it will maintain all required
records, memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Funds.
(4) Each Fund agrees that it will furnish to IDS Life any
information that the latter may reasonably request with respect to
the services performed or to be performed by IDS Life under this
Agreement.
(5) IDS Life is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities
for the Funds 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
PAGE 2
appropriate policies and procedures, and subject to termination at
any time by the Board, IDS Life 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 IDS Life determines in good faith that such amount of
commission was 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 American Express
Financial Corporation's ("AEFC") or IDS Life's overall
responsibilities with respect to the Funds and other funds for
which they act as investment adviser.
(6) It is understood and agreed that in furnishing the Funds
with the services as herein provided, neither IDS Life, nor any
officer, director or agent thereof shall be held liable to a 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 IDS Life may rely upon
information furnished to it reasonably believed to be accurate and
reliable.
(7) The existence of an investment advisory agreement between
IDS Life and AEFC is specifically ackknowledged and approved.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Corporation agrees to pay to IDS Life, and IDS Life
covenants and agrees to accept from the Corporation in full payment
for the services furnished, a fee for each calendar day of each
year equal to the total of 1/365th (1/366th in each leap year) of
each of the respective percentages set forth below of the net
assets of the Funds; to be computed for each 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 asset charge 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. Net
assets as of the close of a full business day shall include all
transactions in shares of the Funds recorded on the books of the
Funds for that day.
Asset Charge
Aggressive Growth International Equity Capital Resource
Assets Annual Rate at Annual Rate at Assets Annual Rate at
(Billions) Each Asset Level Each Asset Level (Billions) Each Asset Level
First $0.25 0.650% 0.870% First $1 0.630%
Next $0.25 0.635 0.855 Next $1 0.615
Next $0.25 0.620 0.840 Next $1 0.600
Next $0.25 0.605 0.825 Next $3 0.585
Next $1 0.590 0.810 Over $6 0.570
Over $2 0.575 0.795
PAGE 3
(2) The fee shall be paid on a monthly basis and, in the
event of the termination of this Agreement, the 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 fee provided for hereunder shall be paid in cash by
the Corporation to IDS Life within five business days after the
last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Corporation agrees to pay:
(a) Fees payable to IDS Life for the latter's services
under the terms of this Agreement.
(b) All fees, costs, expenses and allowances payable to
any person, firm or corporation for services under any agreement
entered into by the Funds covering the offering for sale, sale and
distribution of the Funds' shares.
(c) All taxes of any kind payable by the Funds other
than federal original issuance taxes on shares issued by the Funds.
(d) All brokerage commissions and charges in the
purchase and sale of assets.
(2) The Corporation agrees to reimburse IDS Life or its
affiliates for the aggregate cost of the services listed below
incurred by IDS Life in its operation of the Funds.
(a) All custodian or trustee fees, costs and expenses.
(b) Costs and expenses in connection with the auditing
and certification of the records and accounts of the Funds by
independent certified public accountants.
(c) Costs of obtaining and printing of dividend checks,
reports to shareholders, notices, proxies, proxy statements and tax
notices to shareholders, and also the cost of envelopes in which
such are to be mailed.
(d) Postage on all communications, notices and
statements to brokers, dealers, and the Funds' shareholders.
(e) All fees and expenses paid to directors of the
Funds; however, IDS Life will pay fees to directors who are
officers or employees of IDS Life or its affiliated companies.
(f) Costs of fidelity and surety bonds covering
officers, directors and employees of the Funds.
(g) All fees and expenses of attorneys who are not
officers or employees of IDS Life or any of its affiliates.
PAGE 4
(h) All fees paid for the qualification and registration
for public sales of the securities of the Funds under the laws of
the United States and of the several states of the United States in
which the securities of the Funds shall be offered for sale.
(i) Cost of printing prospectuses, statements of
additional information and application forms for existing
shareholders, and any supplements thereto.
(j) Any losses due to theft and defalcation of the
assets of the Funds, or due to judgments or adjustments not covered
by surety or fidelity bonds, and not covered by agreement or
obligation.
(k) Expenses incurred in connection with lending
portfolio securities of the Funds.
(l) Expenses properly payable by the Funds, approved by
the Board.
Part Four: MISCELLANEOUS
(1) IDS Life 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 Funds.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that AEFC and IDS Life now render 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 Funds
and that AEFC and IDS Life manage their own investments and/or
those of their subsidiaries. AEFC and IDS Life shall be free to
render such investment advice and other services and the Funds
hereby consent thereto.
(4) 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 Funds are or
may be interested in AEFC or IDS Life or any successor or assignee
thereof, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of AEFC or IDS Life are
or may be interested in the Funds as directors, officers,
shareholders, or otherwise; or that AEFC or IDS Life or any
successor or assignee, is or may be interested in the Funds as
shareholder or otherwise, provided, however, that neither AEFC or
IDS Life, nor any officer, director or employee thereof or of the
Funds, shall sell to or buy from the Funds any property or security
other than shares issued by the Funds, except in accordance with
applicable regulations or orders of the SEC.
PAGE 5
(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) IDS Life agrees that no officer, director or employee of
IDS Life will deal for or on behalf of the Funds 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 or employees of IDS Life from
having a financial interest in the Funds or in IDS Life.
(b) The purchase of securities for the Funds, or the
sale of securities owned by the Funds, through a security broker or
dealer, one or more of whose partners, officers, directors or
employees is an officer, director or employee of IDS Life, 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 Funds by a broker-dealer
affiliate of IDS Life as may be allowed by rule or order of the
SEC, and if made pursuant to procedures adopted by the Funds'
Board.
(7) IDS Life agrees that, except as herein otherwise
expressly provided or as may be permitted consistent with the use
of a broker-dealer affiliate of IDS Life 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 shares
issued by the Funds) or other assets by or for the Funds.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect until March 19,
1997, or until a new agreement is approved by a vote of the
majority of the outstanding shares of the Funds and by vote of the
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 Funds and
(b) by the vote of a majority of the 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. As used in this paragraph, the term "interested person"
shall have the same meaning as set forth in the Investment Company
Act of 1940, as amended (the "1940 Act").
PAGE 6
(2) This Agreement may be terminated by either a Fund or IDS
Life at any time by giving the other party 60 days' written notice
of such intention to terminate, provided that any termination shall
be made without the payment of any penalty, and provided further
that termination may be effected either by the Board or by a vote
of the majority of the outstanding voting shares of the Fund. The
vote of the majority of the outstanding voting shares of a Fund for
the purpose of this Part Five shall be the vote at a shareholders'
regular meeting, or a special meeting duly called for the purpose,
of 67% or more of the Fund's shares present at such meeting if the
holders of more than 50% of the outstanding voting shares are
present or represented by proxy, or more than 50% of the
outstanding voting shares of the Fund, whichever is less.
(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.
PAGE 7
IN WITNESS THEREOF, the parties hereto have executed the
foregoing Agreement as of the day and year first above written.
IDS LIFE INVESTMENT SERIES, INC.
IDS Life Aggressive Growth Fund
IDS Life Capital Resource Fund
IDS Life International Equity Fund
By /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
IDS LIFE INSURANCE COMPANY
By /s/ X. X. Xxxxx
Vice President
