ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT dated September 9, 1999, is between AXP Market Advantage Series,
Inc., a Minnesota corporation (the "Corporation"), on behalf of its underlying
series funds, AXP International Equity Index Fund, AXP Mid Cap Index Fund, AXP
Nasdaq 100 Index Fund, AXP S&P 500 Index Fund and AXP Total Stock Market Index
Fund ( each individually a "Fund") and American Express Financial Corporation
(the "Administrator"), a Delaware corporation.
Part One: SERVICES
(1) The Fund hereby retains the Administrator, and the Administrator hereby
agrees, for the period of this Agreement and under the terms and
conditions hereinafter set forth, to furnish the Fund continuously with
all administrative, accounting, clerical, statistical, correspondence,
corporate and all other services of whatever nature required in
connection with the administration of the Fund 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 "Board"), the Executive Committee and the authorized
officers of the Fund. The Administrator agrees to maintain an adequate
organization of competent persons to provide the services and to
perform the functions herein mentioned. The Administrator agrees to
meet with any persons at such times as the Board deems appropriate for
the purpose of reviewing the Administrator's performance under this
Agreement.
(2) The Fund agrees that it will furnish to the Administrator any
information that the latter may reasonably request with respect to the
services performed or to be performed by the Administrator under this
Agreement.
(3) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither the Administrator, nor any
officer, director or agent thereof shall be held liable to 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 the Administrator may rely upon information furnished to it
reasonably believed to be accurate and reliable.
Part Two: COMPENSATION FOR SERVICES
(1) The Fund agrees to pay to the Administrator, and the Administrator
covenants and agrees to accept from the Fund in full payment for the
services furnished, based on the net assets of the Fund as set forth in
the following table:
AXP International Equity Index Fund AXP Mid Cap Index Fund
Assets Annual rate at Assets Annual rate at
(billions) each asset level (billions) each asset level
First $0.25 0.100% First $0.25 0.080%
Next 0.25 0.100 Next 0.25 0.080
Next 0.25 0.095 Next 0.25 0.080
Next 0.25 0.095 Next 0.25 0.080
Next 1.00 0.090 Next 1.00 0.075
Next 3.00 0.085 Next 3.00 0.070
Over 5.00 0.080 Over 5.00 0.065
AXP Nasdaq 100 Index Fund AXP S&P 500 Index Fund
------------------------- ----------------------
Assets Annual rate at Assets Annual rate at
(billions) each asset level (billions) each asset level
First $0.25 0.060% First $0.25 0.080%
Next 0.25 0.060 Next 0.25 0.080
Next 0.25 0.055 Next 0.25 0.080
Next 0.25 0.055 Next 0.25 0.080
Next 1.00 0.050 Next 1.00 0.075
Next 3.00 0.045 Next 3.00 0.070
Over 5.00 0.040 Over 5.00 0.065
AXP Total Stock Market Index Fund
Assets Annual rate at
(billions) each asset level
First $0.25 0.110%
Next 0.25 0.110
Next 0.25 0.105
Next 0.25 0.105
Next 1.00 0.100
Next 3.00 0.095
Over 5.00 0.090
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. 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 Fund recorded on the books of the Fund 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 Fund to the Administrator within five (5) business days after the
last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Administrative fees payable to the Administrator for its
services under the terms of this Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public
accountants for services the Fund 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 the Administrator, except that the Administrator shall
reimburse the Corporation for such fees and expenses if it is
ultimately determined by a court of competent jurisdiction, or
the Administrator agrees, that it is liable in whole or in
part to the Corporation, 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 Fund 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 Fund, equal to the cost of such incurred by the
Administrator.
(g) Fees of consultants employed by the Fund.
(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 Fund will not pay any fees or expenses of any person who
is an officer or employee of the Administrator 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 on behalf
of the Fund.
(j) Organizational expenses of the Fund.
(k) One-half of the Investment Company Institute membership dues
charged jointly to the American Express Funds and the
Administrator.
(l) Expenses properly payable by the Fund, approved by the Board.
(2) The Administrator agrees to pay all expenses associated with the
services it provides under the terms of this Agreement. Further, the
Administrator 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 the Administrator, 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 (l) of this Part Three to the extent necessary
to keep the Fund's expenses from exceeding the limitation, it being
understood that the Administrator 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) The Administrator 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 Fund.
(2) A "full business day" shall be as defined in the Corporation's By-laws.
(3) The Fund recognizes that the Administrator 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 the Administrator
manages its own investments and/or those of its subsidiaries. The
Administrator shall be free to render such investment advice and other
services and the Fund 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 Fund are or may be interested in the
Administrator or any successor or assignee thereof, as directors,
officers, stockholders or otherwise; that directors, officers,
stockholders or agents of the Administrator are or may be interested in
the Fund as directors, officers, shareholders, or otherwise; or that
the Administrator or any successor or assignee, is or may be interested
in the Fund as shareholder or otherwise, provided, however, that
neither the Administrator, nor any officer, director or employee
thereof or of the Fund, shall sell to or buy from the Fund any property
or security other than shares issued by the Fund, except in accordance
with applicable regulations or orders of the U.S. 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) The Administrator agrees that no officer, director or employee of the
Administrator will deal for or on behalf of the Fund 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 the Administrator from having a
financial interest in the Fund or in the Administrator.
(7) The Fund agrees that the Administrator 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 the Administrator 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 MARKET ADVANTAGE SERIES, INC.
AXP International Equity Index Fund
AXP Mid Cap Index Fund
AXP Nasdaq 100 Index Fund
AXP S&P 500 Index Fund
AXP Total Stock Market Index 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
