INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 1st of July, 1999, by and between AXP Global Series,
Inc. (the "Corporation"), a Minnesota corporation, on behalf of its underlying
series fund, AXP Global Balanced Fund (the "Fund"), 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 Fund continuously with suggested
investment planning; to determine, consistent with the Fund's 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 Fund all necessary research and statistical data in
connection therewith; to furnish services of whatever nature required in
connection with the management of the Fund 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 Fund as disclosed to American Express
Financial Corporation from time to time by the Fund and as set forth in
the Fund's current Prospectus and Registration Statement 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 Fund.
(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 Fund 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 Fund and other funds for which it acts as investment
adviser.
(6) It is understood and agreed that in furnishing the Fund 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) 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
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, on behalf of the Fund, 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
Fund recorded on the books of the Fund for that day.
(ii) The asset charge shall be based on the net assets of the
Fund as set forth in the following table:
Assets Annual Rate at
(Billions) Each Asset Level
First $0.25 0.790%
Next 0.25 0.765
Next 0.25 0.740
Next 0.25 0.715
Next 1.00 0.690
Over 2.00 0.665
(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 the Fund and
the performance of the Lipper Global Fund Index (the "Index").
The performance of one Class A share of the 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 0.0012 per year.
(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 pro rated 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 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 requests;
(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 Fund 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 Corporation;
(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 Fund;
(m) Expenses incurred in connection with lending portfolio
securities of the Fund;
and
(n) Expenses properly payable by the Corporation, 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 the 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
Corporation.
(2) A "full business day" shall be as defined in the By-laws of the
Corporation.
(3) The Corporation 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 may or
may not have investment policies and investments similar to those of the
Fund 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 the Corporation 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 Corporation 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 Corporation as
directors, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may be
interested in the Corporation as shareholder or otherwise, provided,
however, that neither American Express Financial Corporation, nor any
officer, director or employee thereof or of the Corporation, shall sell
to or buy from the Corporation any property or security other than
shares issued by the Corporation, 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 Fund with himself or herself as principal or
agent, or with any corporation or partnership in which he or she 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
Fund or in American Express Financial Corporation;
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, 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; or
(c) Transactions with the Fund 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 Corporation) or other assets by or for the Fund.
Part Five: RENEWAL AND TERMINATION
(1) This agreement shall continue in effect until June 30, 2001, or
until a new agreement is approved by a vote of the majority of the
outstanding shares of the Fund and by vote of the 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 Fund 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
the 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 as of the day and year first above written.
AXP GLOBAL SERIES, INC.
AXP Global Balanced Fund
By /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Vice President
