CLASS Y SHAREHOLDER SERVICE AGREEMENT
This agreement, dated as of April 9, 2003, is by and between AXP Discovery
Series, Inc., (the "Corporation"), a Minnesota corporation, on behalf of its
underlying series AXP Core Bond Fund, AXP Income Opportunities Fund and AXP
Limited Duration Bond Fund (individually a "Fund" and collectively the
"Funds"), and American Express Financial Advisors Inc. ("AEFA"), the principal
underwriter of the Funds, for services to be provided to shareholders of Class
Y of the Funds by AEFA and other servicing agents.
AEFA represents that shareholders consider personal service a significant
factor in their satisfaction with their investment. AEFA represents that fees
paid by the Funds will be used to help shareholders thoughtfully consider their
investment goals and objectively monitor how well the goals are being achieved.
Each Fund agrees to pay AEFA a fee equal to 0.10 percent of the net asset value
of Class Y shares. The Funds agree to pay the fee to AEFA in cash within five
(5) business days after the last day of each month.
AEFA agrees to provide the Funds annually with a budget covering its expected
costs and a quarterly report of its actual expenditures. AEFA agrees to meet
with representatives of the Funds at their request to provide information as
may be reasonably necessary to evaluate its performance under the terms of this
agreement.
This agreement shall continue in effect for a period of more than one year so
long as it is reapproved at least annually by a vote of the members of the
Board who are not interested persons of the Funds and have no financial
interest in the operation of the agreement, and of all the members of the
Board.
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 Funds and have no financial interest in the operation of the agreement,
or by AEFA. The agreement will terminate automatically in the event of its
assignment, as that term is defined in the Investment Company Act of 1940. This
agreement may be amended at any time provided the amendment is approved in the
same manner the agreement was initially approved and the amendment is agreed to
by AEFA.
This agreement shall be governed by the laws of the State of Minnesota.
AXP DISCOVERY SERIES, INC. AMERICAN EXPRESS
AXP Core Bond Fund FINANCIAL ADVISORS INC.
AXP Income Opportunities Fund
AXP Limited Duration Bond Fund
/s/ Xxxxxx X. Xxx /s/ Xxxx X. Xxxxxxxxx
----------------------- ------------------------
Xxxxxx X. Xxx Xxxx X. Xxxxxxxxx
Vice President Senior Vice President--
Retirement Services and
Asset
Management
