ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 10th day of May 2001, by and between AXP Partners Series,
Inc. (the "Corporation"), a Minnesota corporation on behalf of its underlying
series funds: AXP Partners Fundamental Value Fund, AXP Partners Value Fund and
AXP Partners Small Cap Value Fund (individually a "Fund" and collectively the
"Funds"); and American Express Financial Corporation, a Delaware corporation.
Part One: 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 all administrative,
accounting, clerical, statistical, correspondence, corporate and all
other services of whatever nature required in connection with the
administration of the Funds as provided under this Agreement; and to pay
such expenses as may be provided for in Part Three hereof; subject always
to the direction and control of the Board of Directors, the Executive
Committee and the authorized officers of the Funds. 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 of Directors deems
appropriate for the purpose of reviewing American Express Financial
Corporation's performance under this Agreement.
(2) 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.
(3) 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 Funds) 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 FOR SERVICES
(1) The Corporation agrees to pay to American Express Financial Corporation,
on behalf of the funds, and American Express Financial Corporation
covenants and agrees to accept from the Corporation in full payment for
the services furnished, based on the net assets of each Fund as set forth
in the following table:
Fundamental Value Value Small Cap Value
----------------- ----- ---------------
Assets Annual Rate At Assets Annual Rate At Assets Annual Rate At
(Billions) Each Asset Level (Billions) Each Asset Level (Billions) Each Asset Level
--------- ---------------- ---------- ---------------- ---------- ----------------
First $0.50 0.060% First $0.50 0.060% First $0.25 0.080%
Next 0.50 0.055 Next 0.50 0.055 Next 0.25 0.075
Next 1.00 0.050 Next 1.00 0.050 Next 0.25 0.070
Next 1.00 0.045 Next 1.00 0.045 Next 0.25 0.065
Next 3.00 0.040 Next 3.00 0.040 Over 1.00 0.060
Over 6.00 0.035 Over 6.00 0.035
The administrative fee for each calendar day of each year shall be equal
to 1/365th (1/366th in each leap year) of the total amount computed. The
computation shall be made for each such 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 administrative fee 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. As used
herein, "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.
(2) The administrative fee shall be paid on a monthly basis and, in the event
of the termination of this Agreement, the administrative 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 administrative fee provided for hereunder shall be paid in cash by
the Corporation to American Express Financial Corporation within five (5)
business days after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Corporation, on behalf of the Funds, agrees to pay:
(a) Administrative fees payable to American Express Financial Corporation
for its services under the terms of this Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public accountants for
services the Corporation requests.
(d) 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 of Directors 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
Funds), and (iii) it employs to assert a claim against a third party.
(e) 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.
(f) Office expenses which shall include a charge for occupancy, insurance
on the premises, furniture and equipment, telephone, telegraph,
electronic information services, books, periodicals, published
services, and office supplies used by the Funds, equal to the cost of
such incurred by American Express Financial Corporation.
(g) Fees of consultants employed by the Corporation.
(h) 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.
(i) 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.
(j) Organizational expenses of the Funds.
(k) One-half of the Investment Company Institute membership dues charged
jointly to the AMERICAN EXPRESS(R) FUNDS and American Express
Financial Corporation.
(l) Expenses properly payable by the Corporation, approved by the Board
of Directors.
(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 any Fund under this
Agreement and any other agreement between the Funds and American Express
Financial Corporation, but excluding those expenses set forth in (1)(b)
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
(c) through (m) 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 Fund 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.
Until May 31, 2002, American Express Financial Corporation has
agreed to waive certain fees and to absorb certain fund expenses under
the agreement. If, at the end of any month, the fees and expenses of
the Funds' respective Class A Common Stock, $0.01 par value per share
collectively referred to as the "Class A Shares" under this agreement
and any other agreement between the Fund and American Express
Financial Corporation exceed 1.35% for AXP Partners Fundamental Value
Fund, 1.35% for AXP Partners Value Fund and 1.60% for AXP Partners Small
Cap Value Fund, that Fund shall not pay fees or expenses under this
agreement to the extent necessary to keep the expense ratio from
exceeding the limitation. In any month that fees and expenses of Class
A shares exceed the limitation all fees and expenses in excess of that
limit will be returned to the respective Fund. Any fee waiver or
elimination of expenses will apply to each class on a pro rata basis.
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.
(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 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 the Corporation hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in anyway 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 United States Securities and Exchange Commission.
(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 Corporation 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 officers, directors or employees of
American Express Financial Corporation from having a financial interest
in the Corporation or in American Express Financial Corporation.
(7) The Corporation agrees that American Express Financial Corporation 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 American Express Financial Corporation
remains fully responsible for the services.
(8) 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. This Agreement shall be governed by the laws of the
State of Minnesota.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall become effective on the date first set forth above
(the "Effective Date") 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.
(2) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
AXP PARTNERS SERIES, INC.
AXP Partners Fundamental Value Fund
AXP Partners Value Fund
AXP Partners Small Cap Value Fund
By:/s/ Xxxxxx X. Xxx
-----------------
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By:/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Senior Vice President
