ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, dated as of January 10, 2002, is by and between AXP(R)
Investment Series, Inc., a Minnesota corporation (the "Corporation"), on behalf
of its underlying series AXP(R) Mid Cap Value Fund (the "Fund"), and American
Express Financial Corporation, ("AEFC"), a Delaware corporation.
Part One: SERVICES
(1) The Corporation hereby retains AEFC, and AEFC 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 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. AEFC agrees to maintain an adequate
organization of competent persons to provide the services and to perform
the functions herein mentioned. AEFC agrees to meet with any persons at
such times as the Board of Directors deems appropriate for the purpose of
reviewing AEFC's performance under this Agreement.
(2) The Corporation agrees that it will furnish to AEFC any information that
the latter may reasonably request with respect to the services performed
or to be performed by AEFC under this Agreement.
(3) It is understood and agreed that in furnishing the Fund with the services
as herein provided, neither AEFC, nor any officer, director or agent
thereof shall be held liable to the Corporation and/or 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 AEFC 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 AEFC, on behalf of the Fund, and AEFC
covenants and agrees to accept from the Corporation in full payment for
the services furnished, based on the net assets of the Fund as set forth
in the following table:
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Assets Annual Rate At
(Billions) Each Asset Level
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First $ 1 0.050%
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Next 1 0.045
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Next 1 0.040
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Next 3 0.035
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Next 6 0.030
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Next 12 0.025
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Over 24 0.020
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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 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
Corporation to AEFC within five (5) business days after the last day of
each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Corporation, on behalf of the Fund, agrees to pay:
(a) Administrative fees payable to AEFC 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
and/or the Fund, its directors and officers, (ii) it employs in
conjunction with a claim asserted by the Board of Directors against
AEFC, except that AEFC shall reimburse the Corporation and/or the Fund
for such fees and expenses if it is ultimately determined by a court
of competent jurisdiction, or AEFC agrees, that it is liable in whole
or in part to the Corporation and/or 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 AEFC.
(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 AEFC 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 Fund.
(k) One-half of the Investment Company Institute membership dues charged
jointly to the AMERICAN EXPRESS(R) FUNDS and AEFC.
(l) Expenses properly payable by the Corporation, approved by the Board of
Directors.
(2) AEFC agrees to pay all expenses associated with the services it provides
under the terms of this Agreement. Further, AEFC 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 AEFC, 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 AEFC 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) AEFC 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 and/or the Fund.
(2) A "full business day" shall be as defined in the By-laws of the
Corporation.
(3) The Corporation recognizes that AEFC 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 AEFC manages its own investments
and/or those of its subsidiaries. AEFC 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 and/or the Fund are or may
be interested in AEFC or any successor or assignee thereof, as directors,
officers, stockholders or otherwise; that directors, officers,
stockholders or agents of AEFC are or may be interested in the Corporation
and/or the Fund as directors, officers, shareholders, or otherwise; or
that AEFC or any successor or assignee, is or may be interested in the
Corporation and/or the Fund as shareholder or otherwise, provided,
however, that neither AEFC, nor any officer, director or employee thereof
or of the Corporation and/or 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) AEFC agrees that no officer, director or employee of AEFC will deal for or
on behalf of the Corporation and/or 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 AEFC from having a financial interest in the
Fund or in AEFC.
(7) The Corporation agrees that AEFC 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
AEFC 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
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 INVESTMENT SERIES, INC.
AXP Mid Cap Value Fund
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President - Mutual Funds
