ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 1st day of May, 2000, by and between AXP Variable Portfolio -
Investment Series, Inc. (the "Corporation"), a Minnesota corporation, on behalf
of its underlying series funds: AXP Variable Portfolio - Emerging Markets Fund
and AXP Variable Portfolio - S&P 500 Index Fund (individually a "Fund" and
collectively the "Funds"), and American Express Financial Corporation, a
Delaware corporation.
Part One: SERVICES
(1) The Corporation 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 Corporation continuously with all
administrative, accounting, clerical, statistical, correspondence,
corporate and all other services of whatever nature required in
connection with the administration of the Corporation 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 Corporation. 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 Corporation 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 Corporation with the
services as herein provided, neither American Express Financial
Corporation, nor any officer, director or agent thereof shall be held
liable to the Corporation 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 Corporation agrees to pay to American Express Financial
Corporation, and American Express Financial Corporation covenants and
agrees to accept from the Corporation in full payment for the services
furnished, based on the net assets of the Corporation as set forth in
the following table:
-------------------------------------
AXP Variable Portfolio -
Emerging Markets Fund
Assets Annual rate at
(billions) each asset level
---------- ----------------
First $0.25 0.10%
Next 0.25 0.09
Next 0.25 0.08
Next 0.25 0.07
Next 1.00 0.06
Over 2.00 0.05
------------------- -----------------
-------------------------------------
AXP Variable Portfolio -
S&P 500 Index Fund
Assets Annual rate at
(billions) each asset level
---------- ----------------
First $1.00 0.080%
Next 1.00 0.075
Next 3.00 0.070
Over 5.00 0.065
------------------- -----------------
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 Corporation recorded on the books of the Corporation 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 Corporation to American Express Financial Corporation within five
(5) business days after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Corporation 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 Corporation 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
Corporation, 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
Corporation 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 Corporation, 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 Corporation 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 Corporation,
equal to the cost of such incurred by American Express Financial
Corporation.
(g) Fees of consultants employed by the Corporation.
(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 Corporation
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 Corporation 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 Corporation.
(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 Corporation, 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 Corporation under this
Agreement and any other agreement between the Corporation 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 Corporation 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 Corporation's expenses from exceeding the
limitation, it being understood that American Express Financial
Corporation will assume all unpaid expenses and xxxx the Corporation
for them in subsequent months but in no event can the accumulation of
unpaid expenses or billing be carried past the end of the Corporation'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
Corporation.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Corporation 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
Corporation 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 Corporation 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 Corporation 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 Corporation as
directors, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may
be interested in the Corporation as shareholder or otherwise, provided,
however, that neither American Express Financial Corporation, nor any
officer, director or employee thereof or of the Corporation, shall sell
to or buy from the Corporation any property or security other than
shares issued by the Corporation, 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 Corporation 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 Corporation or in American Express Financial
Corporation.
(7) The Corporation 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 - INVESTMENT SERIES, INC.
AXP Variable Portfolio - Emerging Markets Fund
AXP Variable Portfolio - S&P 500 Index Fund
By:/s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Senior Vice President - Investment Products
