BOARD SERVICES AGREEMENT
AGREEMENT made the 11th day of January, 2006 by and between each Corporation and
Trust, a Minnesota corporation or Massachusetts business trust, listed on
Schedule A, each on behalf of its underlying series and Board Services
Corporation, a Minnesota corporation. The terms "Fund" or "Funds" are used to
refer to the Corporation or Trust and the underlying series as context requires.
Part One: Retention of Services
(1) The Fund hereby retains Board Services Corporation (Board Services) and
Board Services hereby agrees, for the term of this Agreement, subject to the
terms and conditions hereinafter set forth, to assist the Fund's Board of
Directors (the "Board") as the Board may reasonably request to carry out the
legal and fiduciary responsibilities of the Board and its members. Such services
shall include, but not be limited to:
o providing guidance in identifying issues they need to address
o recommending structures and processes that will enable them to address
issues efficiently and effectively
o assisting in selection of the investment manager, sub-advisors,
distributors, custodians, accountants, legal counsel and other service
providers determined to be appropriate to carry out the business of
the Fund; supporting contracts negotiations; and handling ongoing
relationships
o preparing meeting agendas, analyzing data presented by others,
presenting matters for consideration, drafting reports, preparing
minutes
o working with each service provider to evaluate whether operations of
the Fund are being conducted in accordance with the Fund's basic
objectives, in the best interest of shareholders, in compliance with
applicable rules and regulations, and by effective and efficient
practices
o reviewing methods used to allocate costs to the Fund's operations to
ascertain whether such allocations are reasonable and equitable
o assisting, where appropriate, in the preparation of prospectuses,
statements of additional information, registration statements, proxy
soliciting material, and reviewing all regulatory filings
o providing internal legal services
o obtaining and keeping in effect fidelity bonds and director liability
insurance
o performing all administrative services to the extent not provided by
others.
(2) Board Services agrees to maintain an adequate organization of competent
persons to provide the services and perform the functions contemplated by this
Agreement.
(3) The Fund hereby retains Board Services and Board Services agrees to
serve as the Fund's paying agent for the purpose of paying compensation and
expenses of members of the Board, leasehold costs, equipment rental and other
expenses properly incurred for the operations of the Fund and to administer the
Fund's Deferred Compensation Plan for members of the Board.
(4) Board Services agrees to employ such persons as are designated by the
Fund to serve as the Fund's Chair of the Board and the Fund's Vice President and
General Counsel.
Part Two: Compensation
(1) The Fund agrees to pay Board Services for services rendered pursuant to
this Agreement, and Board Services agrees to accept from the Fund for the
provisions of such services, a fee that reflects the actual costs incurred by
Board Services in providing the services contemplated by this Agreement,
including, without limitations, reasonable compensation for special projects,
reasonable bonuses for superior performance, and reasonable employee health and
retirement benefits. Board Services intends to determine its fee based on the
total assets of all clients for which it serves and to charge each client a
proportionate share of its costs not specifically incurred for the benefit or on
behalf of a specific client. It shall include in the computation of the fee it
charges the Fund, all costs it incurs for the benefit or on behalf of the Fund.
(2) The fee shall be computed using Board Services best evaluation of the
costs it will incur for the Fund. The fee shall be paid on a monthly basis. The
fee shall be paid in cash by the Fund to Board Services within five business
days after the last day of each month. Board Services shall adjust the fee once
each quarter and shall use its good faith efforts to insure that adjustments to
the fee reflect the approximately monies expended by Board Services in providing
all services under this Agreement. The monthly fee for each succeeding quarter
shall be communicated to the Fund sufficiently in advance of the end of each
quarter so that the Fund can make appropriate accruals on its records.
Part Three: Payment of Costs
(1) Board Services agrees to make on behalf of the Fund payments under its
lease for office space; equipment purchase and rental; premiums on directors and
officers liability insurance policies; and compensation and expenses properly
incurred by or on behalf of the members of the Board. Board Services agrees to
furnish all services hereunder at reasonable costs, which costs shall include,
but not be limited to, compensation, parking, office supplies, travel,
professional and club dues, library acquisitions, ordinary business activities,
and professional and personal insurance.
(2) The Fund will provide Board Services office space and equipment
appropriate for providing the services required under the terms of this
Agreement.
(3) The Fund agrees that the actual costs incurred by Board Services may
include monies needed to establish reserves relating to initial cash
requirements or any legitimate purpose under this Agreement, including the
payment of amounts required to enable Board Services to honor provisions for
termination benefits under Board Services' employment agreements Any such
reserves relating to termination benefits shall not exceed actual base pay and
health benefits for periods not to exceed two years for executives and one month
for each year of employment up to a maximum of six months for paraprofessional
and administrative personnel or the terms of any deferred compensation plan of
or administered on behalf of the Fund by Board Services. The Fund shall have the
opportunity to review the terms of all of Board Services' employment agreements.
The Fund agrees that Board Services may at its option invest reserves, as
necessary or appropriate consistent with its obligations. If the Fund terminates
this Agreement, and such termination results, directly or indirectly, in the
termination of one or more of Board Services' employees, the Fund agrees to
honor the severance provisions of any employment agreements of terminated
employees to the extent that Board Services is financially unable to do so. It
is intended that Board Services' employees shall be third-party beneficiaries of
this paragraph (3). Any assets remaining in reserves related to the operations
of Fund shall be returned to Fund.
(4) Amounts expended by Board Services on behalf of the Fund shall be (i)
reimbursed directly to Board Services or (ii) paid to Board Services under Part
Two above, as appropriate.
Part Four: Liability
(1) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither Board Services nor any officer, director,
employee or agent thereof shall be liable to the Fund, its officers, directors,
creditors or shareholders for errors in judgment, acts or omissions made in good
faith and believed to be in the best interests of the Fund except by reason of
willful misfeasance, bad faith, gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under the terms of
this Agreement.
(2) The Fund agrees that to the fullest extent permitted by law, it shall
indemnify , hold harmless and defend Board Services and each of its officers,
directors, employees or agents (individually, an "Indemnitee") from and against
any and all losses, claims, damages, liabilities, whether joint or several,
expenses (including legal fees and expenses), judgments, fines and other amounts
paid in settlement, incurred or suffered by such Indemnitee, as a party or
otherwise, in connection with any threatened, pending or completed claim,
demand, action, suit or proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal, arising out of or in connection
with the provision of services pursuant to this Agreement regardless of whether
the Indemnitee continues to be an officer, director, employee or agent of the
Board Services at the time any such loss, claim, damage, liability or other
expense is paid or incurred if (i) the Indemnitee acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the Fund
and, with respect to any criminal proceeding, had no reasonable cause to believe
that his or her conduct was unlawful, (ii) the Indemnitee's conduct did not
constitute intentional misconduct or a material breach of the terms of this
Agreement and (iii) the Indemnitee's conduct did not involve a transaction from
which the Indemnitee derived an improper personal benefit. The termination of
any action, suit or proceeding by judgment, order, settlement or upon a, plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Indemnitee acted in a manner contrary to the standards specified in
clauses (i), (ii) or (iii) of this paragraph.
(3) The Indemnitee shall notify the Fund in writing within 30 days after
receipt of notice of the commencement of any action that may result in a claim
for indemnification pursuant to this Part Four; provided, however, that any
omission so to notify the Fund will not relieve it of any liability for
indemnification hereunder as to the particular item for which indemnification
may then be sought (except to the extent that the failure to give notice shall
have been materially prejudicial to the Fund) nor from any other liability that
it may have to any Indemnitee.
(4) An Indemnitee shall have the right to employ separate counsel in any
action as to which indemnification may be sought under any provision of this
Agreement and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee unless (i) the Fund
has agreed in writing to pay such fees and expenses, (ii) the Fund has failed to
assume the defense thereof and employ counsel within a reasonable period of time
after being given the notice required above or (iii) the Indemnitee shall have
been advised by its counsel that representation of such Indemnitee and other
parties by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them. It
is understood, however, that the Fund shall, in connection with anyone such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys at any time for all such Indemnitees having actual or potential
differing interests with the Fund, but only to the extent the Indemnitees have
actual or potential differing interests with each other.
(5) The Fund shall not be liable for any settlement of any such action
effected without its written consent, but if settled with such written consent,
or if there is a final judgment against the Indemnitee in any such action, the
Fund agrees to indemnify and hold harmless the Indemnitee to the extent provided
above from and against any loss claim, damage, liability or expense by reason of
such settlement or judgment.
(6) The indemnification obligations set forth in this Part Four shall
survive the termination of this Agreement.
Part Five: Term; Termination
(1) The term of this Agreement shall commence on the date hereof and shall
end on the first anniversary of the date hereof and shall renew automatically
for successive six (6) month periods thereafter until terminated pursuant to the
following paragraph (2).
(2) Either party may terminate this Agreement at any time by delivering
written notice of termination (the "Termination Notice") to the other party not
less than 180 days before the effective date of such termination.
(i) In the event that the Fund terminates this Agreement, Board
Services shall relinquish office space and return all equipment it has been
provided by the Fund under this Agreement on the effective date of
termination.
(ii) In the event that Board Services terminates this Agreement, Board
Services shall provide such services as the Fund may reasonably request
pursuant hereto through and including the effective date of termination,
and the Fund shall pay Board Services for such services pursuant to the
terms of Part Four above.
Part Six: Miscellaneous
(1) This Agreement does not make either party the employee, agent or legal
representative of the other for any purpose whatsoever. Neither party is granted
any right or authority to assume or to create any obligation or responsibility,
express or implied, on behalf of or in the name of the other party. In
fulfilling its obligations pursuant to this Agreement each party shall be acting
as an independent contractor.
(2) Board Services agrees that no officer, director or employee will deal
for, on behalf of, or with the Fund as principal or agent for personal financial
benefit, except that the foregoing will not prohibit any such officer, director
or employee from having a financial interest in the Fund.
(3) Board Services will maintain a Code of Ethics that conforms to the
requirements of Rule 17j-1 under the Investment Company Act of 1940.
(4) Board Services agrees that it will advise Fund of its intent to provide
the same or similar services prior to providing such services to others.
(5) This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, assigns, merges or affiliates; it being
understood that, neither party hereto may assign part or all of this Agreement
without the prior written consent of the other.
(6) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except pursuant to
a written document executed by each of the parties hereto.
(7) In the event that any of the terms of this Agreement are in conflict
with any rule of law or statutory provision or are otherwise unenforceable under
the laws or regulations of any government or subdivision thereof, such terms
shall be deemed stricken from this Agreement, but such invalidity or
unenforceability shall not invalidate any of the other terms of this Agreement
and this Agreement shall continue in force, unless the invalidity or
unenforceability of any such provisions hereof does substantial violence to, or
where the invalid or unenforceable provisions comprise an integral part of, or
are otherwise inseparable from, the remainder of this Agreement.
(8) Notices permitted or required to be given hereunder shall be deemed
sufficient if given by registered or certified air mail, postage prepaid, return
receipt requested, addressed to the respective addresses of the parties as first
above written or at such other addresses as the respective parties may designate
by like notice from time to time. Notices so given shall be effective upon (a)
receipt by the party to which notice is given, or (b) on the third day (3rd) day
following the date such notice was posted, whichever occurs first.
(9) This Agreement may be executed in one or more counterparts which
together constitute one and the entire agreement among the parties with respect
to the transactions contemplated hereby.
(10) This Agreement shall be governed by the laws of the state of
Minnesota.
(11) This Agreement evidences the complete agreement and understanding
of Board Services and the Fund relative to the matters discussed herein and
supersedes any prior written or oral agreements between them relative to such
matters.
(12) The headings and captions of this Agreement are for convenience of
reference only and shall in no way define or limit the terms and provisions
hereof.
IN WITNESS WHEREOF, the Fund and Board Services have executed this
Agreement as of the date set forth in the first paragraph hereof.
For each entity listed on Schedule A Board Services Corporation
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxx X. Xxx
-------------------- ----------------------
Xxxx X. Xxxxxxx, Chair of the Board Xxxxxx X. Xxx, President
Schedule A
RIVERSOURCE FUNDS
as of January 11, 2006
AXP California Tax-Exempt Trust
AXP Dimensions Series, Inc.
AXP Discovery Series, Inc.
AXP Equity Series, Inc.
AXP Fixed Income Series, Inc.
AXP Global Series, Inc.
AXP Government Income Series, Inc.
AXP Growth Series, Inc.
AXP High Yield Income Series, Inc.
AXP High Yield Tax-Exempt Series, Inc.
AXP Income Series, Inc.
AXP International Series, Inc.
AXP Investment Series, Inc.
AXP Managed Series, Inc.
AXP Market Advantage Series, Inc.
AXP Money Market Series, Inc.
AXP Partners International Series, Inc.
AXP Partners Series, Inc.
AXP Progressive Series, Inc.
AXP Sector Series, Inc.
AXP Selected Series, Inc.
AXP Special Tax-Exempt Series Trust
AXP Stock Series, Inc.
AXP Strategy Series, Inc.
AXP Tax-Exempt Series, Inc.
AXP Tax-Free Money Market Series, Inc.
AXP Variable Portfolio - Income Series, Inc.
AXP Variable Portfolio - Investment Series, Inc.
AXP Variable Portfolio - Managed Series, Inc.
AXP Variable Portfolio - Money Market Series, Inc.
AXP Variable Portfolio - Partners Series, Inc.
AXP Variable Portfolio - Select Series, Inc.
RiverSource Retirement Series Trust
