TRANSFER AGENCY AGREEMENT
This Agreement, dated as of May 1, 2003, is between AXP Investment Series, Inc.
(the "Corporation"), a Minnesota corporation, on behalf of its underlying series
AXP Diversified Equity Income Fund, AXP Mid Cap Value Fund and AXP Mutual
(individually a "Fund" and collectively the "Funds"), 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 Funds, 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 a Fund's prospectus. All shares shall be held in book
entry form, and no certificate shall be issued unless the Funds
are 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 a 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 a 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 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 Funds 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 Funds 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
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 harm or inconvenience to any customer of the Funds;
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 Funds, and any officer or director of the
Corporation, against losses, claims, damages, expenses, or
liabilities to which the Corporation and/or the Funds, 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 Funds
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
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 Funds (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 INVESTMENT SERIES, INC.
AXP Diversified Equity Income Fund
AXP Mid Cap Value Fund
AXP Mutual
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS CLIENT SERVICE CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
Senior Vice President
Schedule A
AXP INVESTMENT SERIES, INC.
AXP Diversified Equity Income Fund
AXP Mid Cap Value Fund
AXP Mutual
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
------- ------- ------- -------
$19.50 $20.50 $20.00 $17.50
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.
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
