PLAN AND AGREEMENT OF DISTRIBUTION
This plan and agreement, dated as of January 1, 2003, is between AXP(R) Tax-Free
Money Series, Inc., on behalf of its underlying series AXP(R) Tax-Free Money
Fund (the "Fund"), and American Express Financial Advisors Inc. ("AEFA"), the
principal underwriter of the Fund, for distribution services to the Fund.
The plan and agreement has been approved by members of the Board of Directors
(the "Board") of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the plan or any
related agreement, and all of the members of the Board, in person, at a meeting
called for the purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Fund will reimburse AEFA for expenses incurred in connection with
distributing the Fund's shares and providing personal service to
shareholders. These expenses include sales commissions; business,
employee and financial advisor expenses charged to distribution of Fund
shares; and overhead appropriately allocated to the sale of Fund
shares.
2. A portion of the fee under the agreement will be used to compensate
AEFA, financial advisors and other servicing agents for personal
service to shareholders. Fees paid will be used to help shareholders
thoughtfully consider their investment goals and objectively monitor
how well the goals are being achieved.
3. AEFA agrees to monitor the services it provides, to measure the level
and quality of services and to provide training and support to
financial advisors and servicing agents. AEFA will use its best efforts
to assure that other distributors provide comparable services to
shareholders.
4. The fee under this agreement will be equal on an annual basis to 0.10%
of the average daily net assets of the Fund. The amount so determined
shall be paid to AEFA in cash within five (5) business days after the
last day of each month.
5. AEFA agrees to provide at least quarterly an analysis of expenses under
this agreement and to meet with representatives of the Fund as
reasonably requested to provide additional information.
6. The plan and agreement shall continue in effect for a period of more
than one year provided it is reapproved at least annually in the same
manner in which it was initially approved.
7. The plan and agreement may not be amended to increase materially the
amount that may be paid by the Fund without the approval of a least a
majority of the outstanding shares. Any other amendment must be
approved in the manner in which the plan and agreement was initially
approved.
8. This agreement may be terminated at any time without payment of any
penalty by a vote of a majority of the members of the Board who are not
interested persons of the Fund and have no financial interest in the
operation of the plan and agreement, or by vote of a majority of the
outstanding shares, or by AEFA. The plan and agreement will terminate
automatically in the event of its assignment as that term is defined in
the Investment Company Act of 1940.
9. This plan and agreement shall be governed by the laws of the State of
Minnesota.
AXP TAX-FREE MONEY SERIES, INC.
AXP Tax-Free Money Fund
/s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Senior Vice President and General Manager- Mutual Funds
