INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 10th day of May, 2001, by and between AXP Partners
International Series, Inc. (the "Corporation"), a Minnesota Corporation, on
behalf of its underlying series funds AXP Partners International Aggressive
Growth Fund and AXP Partners International Select Value Fund (individually a
"Fund" and collectively the "Funds"), and American Express Financial
Corporation, a Delaware corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Corporation hereby retains American Express Financial Corporation,
and American Express Financial Corporation hereby agrees, for the
period of this Agreement and under the terms and conditions hereinafter
set forth, to furnish the Corporation continuously with suggested
investment planning; to determine, consistent with the Funds'
investment objectives and policies, which securities in American
Express Financial Corporation's discretion shall be purchased, held or
sold and to execute or cause the execution of purchase or sell orders;
to prepare and make available to the Funds all necessary research and
statistical data in connection therewith; to furnish services of
whatever nature required in connection with the management of the Funds
as provided under this Agreement; and to pay such expenses as may be
provided for in Part Three; subject always to the direction and control
of the Board of Directors (the "Board"), the Executive Committee and
the authorized officers of the Corporation. American Express Financial
Corporation agrees to maintain an adequate organization of competent
persons to provide the services and to perform the functions herein
mentioned. American Express Financial Corporation agrees to meet with
any persons at such times as the Board deems appropriate for the
purpose of reviewing American Express Financial Corporation's
performance under this Agreement.
(2) American Express Financial Corporation agrees that the investment
planning and investment decisions will be in accordance with general
investment policies of the Funds as disclosed to American Express
Financial Corporation from time to time by the Funds and as set forth
in its prospectuses and registration statements filed with the United
States Securities and Exchange Commission (the "SEC").
(3) American Express Financial Corporation agrees that it will maintain all
required records, memoranda, instructions or authorizations relating to
the acquisition or disposition of securities for the Funds.
(4) The Corporation agrees that it will furnish to American Express
Financial Corporation any information that the latter may reasonably
request with respect to the services performed or to be performed by
American Express Financial Corporation under this Agreement.
(5) American Express Financial Corporation is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Funds and is directed to use its best
efforts to obtain the best available price and most favorable
execution, except as prescribed herein. Subject to prior authorization
by the Board of appropriate policies and procedures, and subject to
termination at any time by the Board, American Express Financial
Corporation may also be authorized to effect individual securities
transactions at commission rates in excess of the minimum commission
rates available, to the extent authorized by law, if American Express
Financial Corporation determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or American Express Financial
Corporation's overall responsibilities with respect to the Funds and
other funds for which it acts as investment adviser.
(6) It is understood and agreed that in furnishing the Funds with the
services as herein provided, neither American Express Financial
Corporation, nor any officer, director or agent thereof shall be held
liable to the Corporation (and/or the Fund) 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
American Express Financial Corporation may rely upon information
furnished to it reasonably believed to be accurate and reliable.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Corporation agrees to pay to American Express Financial
Corporation, and American Express Financial Corporation covenants and
agrees to accept from the Corporation in full payment for the services
furnished, a fee composed of an asset charge and a performance
incentive adjustment.
(a) The asset charge
(i) The asset charge for each calendar day of each year shall be
equal to the total of 1/365th (1/366th in each leap year) of
the amount computed in accordance with paragraph (ii) below.
The computation shall be made for each day on the basis of
net assets as of the close of business of the full business
day two (2) business days 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 asset charge 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. Net assets as of the close of a
full business day shall include all transactions in shares
of the Funds recorded on the books of the Funds for that
day.
(ii) The asset charge shall be based on the net assets of each
Fund as set forth in the following table.
International International
Aggressive Growth Fund Select Value Fund
Assets Annual Rate At Assets Annual Rate At
(Billions) Each Asset Level (Billions) Each Asset Level
--------------------------------- -----------------------------------
First $ .25 1.000% First $ .25 .900%
Next $ .25 .975 Next $ .25 .875
Next $ .25 .950 Next $ .25 .850
Next $ .25 .925 Next $ .25 .825
Next $1.00 .900 Next $1.00 .800
Over $2.00 .875 Over $2.00 .775
(b) The performance incentive adjustment
(i) The performance incentive adjustment, determined monthly,
shall be computed by measuring the percentage point
difference between the performance of one Class A share of a
Fund and the performance of an Index (the "Index"). The
Index for AXP Partners International Aggressive Growth Fund
and AXP Partners International Select Value Fund is Lipper
International Funds Index. The performance of one Class A
share of a Fund shall be measured by computing the
percentage difference, carried to two decimal places,
between the opening net asset value of one share of the Fund
and the closing net asset value of such share as of the last
business day of the period selected for comparison, adjusted
for dividends or capital gain distributions treated as
reinvested at the end of the month during which the
distribution was made but without adjustment for expenses
related to a particular class of shares. The performance of
the Index will then be established by measuring the
percentage difference, carried to two decimal places,
between the beginning and ending Index for the comparison
period, with dividends or capital gain distributions on the
securities which comprise the Index being treated as
reinvested at the end of the month during which the
distribution was made.
(ii) In computing the adjustment, one percentage point shall be
deducted from the difference, as determined in (b) (i)
above. The result shall be converted to a decimal value
(e.g., 2.38% to 0.0238), multiplied by .01 and then
multiplied by the Fund's average net assets for the
comparison period. This product next shall be divided by 12
to put the adjustment on a monthly basis. Where the
performance of the Fund exceeds the Index, the amount so
determined shall be an increase in fees as computed under
paragraph (a). Where Fund performance is exceeded by the
Index, the amount so determined shall be a decrease in such
fees. The percentage point difference between the
performance of the Fund and that of the Index, as determined
above, is limited to a maximum of .0012 per year for AXP
Partners International Aggressive Growth Fund and .0012 per
year for AXP Partners International Select Value Fund.
(iii)The 12 month comparison period will roll over with each
succeeding month, so that it always equals 12 months, ending
with the month for which the performance adjustment is being
computed.
(iv) If the Index ceases to be published for a period of more
than 90 days, changes in any material respect or otherwise
becomes impracticable to use for purposes of the adjustment,
no adjustment will be made under this paragraph (b) until
such time as the Board approves a substitute index.
(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, the 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 fee provided for hereunder shall be paid in cash by the Funds to
American Express Financial Corporation within five 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) Fees payable to American Express Financial Corporation for its
services under the terms of this Agreement.
(b) Taxes.
(c) Brokerage commissions and charges in connection with the purchase
and sale of assets.
(d) Custodian fees and charges.
(e) Fees and charges of its independent certified public accountants
for services the Corporation request.
(f) Premium on the bond required by Rule 17g-1 under the Investment
Company Act of 1940.
(g) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against the
Corporation, its directors and officers, (ii) it employs in
conjunction with a claim asserted by the Board against American
Express Financial Corporation, except that American Express
Financial Corporation shall reimburse the Corporation for such
fees and expenses if it is ultimately determined by a court of
competent jurisdiction, or American Express Financial Corporation
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.
(h) Fees paid for the qualification and registration for public sale
of the securities of the Funds under the laws of the United States
and of the several states in which such securities shall be
offered for sale.
(i) Fees of consultants employed by the Funds.
(j) 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 American Express Financial Corporation or its
affiliates.
(k) 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.
(l) Organizational expenses of the Corporation.
(m) Expenses incurred in connection with lending portfolio securities
of the Funds.
(n) Expenses properly payable by the Funds, approved by the Board.
(2) American Express Financial Corporation agrees to pay all expenses
associated with the services it provides under the terms of this
Agreement. Further, American Express Financial Corporation agrees that
if, at the end of any month, the expenses of a Fund under this
Agreement and any other agreement between the Fund and American Express
Financial Corporation, but excluding those expenses set forth in (1)(b)
and (1)(c) 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 (d) through (n) of this Part Three to the extent
necessary to keep the Fund's expenses from exceeding the limitation, it
being understood that American Express Financial Corporation 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) American Express Financial Corporation 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
Funds.
(2) A "full business day" shall be as defined in the By-laws.
(3) Each Fund recognizes that American Express Financial Corporation now
renders and may continue to render investment advice and other services
to other investment companies and persons which ay or may not have
investment policies and investments similar to those of the Funds and
that American Express Financial Corporation manages its own investments
and/or those of its subsidiaries. American Express Financial
Corporation shall be free to render such investment advice and other
services and each Fund hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Funds are or may be
interested in American Express Financial Corporation or any successor
or assignee thereof, as directors, officers, stockholders or otherwise;
that directors, officers, stockholders or agents of American Express
Financial Corporation are or may be interested in the Funds as
directors, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may
be interested in the Funds as shareholder or otherwise, provided,
however, that neither American Express Financial Corporation, nor any
officer, director or employee thereof or of the Funds, shall sell to or
buy from the Funds any property or security other than shares issued by
the Funds, except in accordance with applicable regulations or orders
of the SEC.
(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) American Express Financial Corporation agrees that no officer, director
or employee of American Express Financial Corporation will deal for or
on behalf of the Funds 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:
(a) Officers, directors or employees of American Express Financial
Corporation from having a financial interest in the Funds or in
American Express Financial Corporation.
(b) The purchase of securities for the Funds, or the sale of securities
owned by the Funds, through a security broker or dealer, one or
more of whose partners, officers, directors or employees is an
officer, director or employee of American Express Financial
Corporation, provided such transactions are handled in the capacity
of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
(c) Transactions with the Funds by a broker-dealer affiliate of
American Express Financial Corporation as may be allowed by rule or
order of the SEC and if made pursuant to procedures adopted by the
Board.
(7) American Express Financial Corporation agrees that, except as herein
otherwise expressly provided or as may be permitted consistent with the
use of a broker-dealer affiliate of American Express Financial
Corporation under applicable provisions of the federal securities laws,
neither it nor any of its officers, directors or employees shall at any
time during the period of this Agreement, make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any
character in connection with the purchase or sale of securities (except
shares issued by the Funds) or other assets by or for the Funds.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect until May 9, 2003, or until a
new agreement is approved by a vote of the majority of the outstanding
shares of each Fund and by vote of the Fund's Board, including the vote
required by (b) of this paragraph, and if no new agreement is so
approved, this Agreement shall continue from year to year thereafter
unless and until terminated by either party as hereinafter provided,
except that such continuance shall be specifically approved at least
annually (a) by the Board or by a vote of the majority of the
outstanding shares of the Funds and (b) by the vote of a majority of
the directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. As used in this paragraph, the term
"interested person" shall have the same meaning as set forth in the
Investment Company Act of 1940, as amended (the "1940 Act").
(2) This Agreement may be terminated by either the Corporation or American
Express Financial Corporation at any time by giving the other party 60
days' written notice of such intention to terminate, provided that any
termination shall be made without the payment of any penalty, and
provided further that termination may be effected either by the Board
or by a vote of the majority of the outstanding voting shares of the
Fund. The vote of the majority of the outstanding voting shares of a
Fund for the purpose of this Part Five shall be the vote at a
shareholders' regular meeting, or a special meeting duly called for the
purpose, of 67% or more of the Fund's shares present at such meeting if
the holders of more than 50% of the outstanding voting shares are
present or represented by proxy, or more than 50% of the outstanding
voting shares of the Fund, whichever is less.
(3) This Agreement shall terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning as set forth in
the 1940 Act.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement
asof the day and year first above written.
AXP PARTNERS INTERNATIONAL SERIES, INC.
AXP Partners International Aggressive Growth Fund
AXP Partners International Select 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
