INVESTMENT SUBADVISORY AGREEMENT
This Agreement is effective as of the 9th day of July, 1999, by and between
American Express Financial Corporation ("AEFC"), a Delaware corporation and
American Express Asset Management Group Inc. ("AEAMG"), a Minnesota corporation.
Each of the Funds and Portfolios listed in Exhibit A (individually a "Fund" and
collectively the "Funds" ), is registered as an investment company under the
Investment Company Act of 1940 (the "1940 Act"); and
Each Fund has entered into an Investment Management Services Agreement with
AEFC, an investment adviser registered under the Investment Advisers Act of 1940
(the "Advisers Act"), under which AEFC provides investment advisory services to
the Fund; and
AEAMG is a registered investment adviser under the Advisers Act and has a staff
of experienced investment personnel and facilities for the kind of investment
portfolio contemplated for the Funds.
Therefore, it is mutually agreed with respect to each Fund:
Part One: Investment Management Services
(1) AEFC retains AEAMG, and AEAMG agrees, with respect to the Fund's assets
allocated to AEAMG by AEFC, to furnish the Fund continuously with suggested
investment planning; to determine, consistent with the Fund's investment
objectives and policies, which securities in AEAMG'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; subject always to the direction and control of the Board
of Directors (the "Board"), the officers of the Fund and AEFC. AEFC will be
responsible for investing and reinvesting all of the Fund's cash and cash items
held by the Fund's U.S. custodian. AEAMG agrees to maintain an adequate
organization of competent persons to provide the services and to perform the
functions described in this Agreement.
(2) All transactions will be executed in accordance with the procedures and
standards set forth in, or established in accordance with, the Investment
Management Services Agreement between AEFC and the Fund. AEFC will provide AEAMG
with information concerning those procedures and standards and AEAMG will
maintain records to assure that transactions have been executed in accordance
those procedures and standards.
(3) AEAMG agrees that the investment planning and investment decisions will be
in accordance with investment policies and strategies of the Fund as disclosed
to AEAMG from time to time by the Fund and as set forth in its prospectus and
statement of additional information filed with the Securities and Exchange
Commission (the "SEC").
(4) AEFC agrees that it will furnish to AEAMG any information that the latter
may reasonably request with respect to the services performed or to be performed
by AEAMG under this Agreement.
(5) AEAMG agrees to provide the Board and AEFC with information and reports
regarding its activities as deemed appropriate by AEFC or as requested by the
Board and to meet with any persons at the request of the Board or AEFC for the
purpose of reviewing AEAMG's performance under this Agreement.
(6) It is understood and agreed that in furnishing the Fund with advisory
services, neither AEAMG, nor any of its officers, directors or agents will be
held liable to AEFC, 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 AEAMG may rely upon information furnished to it
reasonably believed to be accurate and reliable and that, except as provided
above, AEAMG will not be accountable for any loss suffered by AEFC or the Fund
by reason of the latter's action or nonaction on the basis of any advice or
recommendation of AEAMG, its officers, directors or agents.
Part Two: Compensation To AEAMG.
As compensation for its services, AEFC will pay AEAMG a fee as described in
Exhibit A. AEFC will pay this fee to AEAMG on a monthly basis in cash within 5
business days after the last day of each month. In the event of the termination
of this Agreement, the fee accrued will be prorated on the basis of the number
of days that this Agreement is in effect during the month.
Part Three: Miscellaneous
(1) AEAMG will be deemed to be an independent contractor and, unless expressly
authorized, will have no authority to act for or represent the Fund.
(2) AEFC agrees that AEAMG may render investment advice and other services to
other persons that may or may not have investment policies and investments
similar to those of the Fund, and that AEAMG may manage its own investments,
provided that these activities do not impair AEAMG's ability to render services
under this Agreement.
(3) Neither this Agreement nor any transaction under this Agreement will be
invalidated or in any way affected by the fact that directors, officers, agents
and/or shareholders of the Fund are or may be interested in AEAMG or any
successor or assignee, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of AEAMG are or may be interested in
the Fund as directors, officers, shareholders, or otherwise; or that AEAMG or
any successor or assignee, is or may be interested in the Fund as shareholder or
otherwise, provided, however, that neither AEAMG, 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 SEC.
(4) Any notice under this Agreement must be given in writing delivered to the
party's principal place of business in Minneapolis, Minnesota, or to another
address as either party may designate in writing to the other.
(5) AEAMG agrees that no officer, director or employee of AEAMG 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 AEAMG from having a financial
interest in the Fund or in AEAMG.
(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 AEAMG, 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 Fund by a broker-dealer affiliate of AEAMG as
may be allowed by rule or order of the SEC, and if made pursuant to procedures
adopted by the Fund's Board.
(6) AEAMG agrees that, except as herein otherwise expressly provided or as may
be permitted consistent with the use of a broker-dealer affiliate of AEAMG 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 Fund) or other assets by or for the
Fund.
(7) AEAMG agrees to protect the confidentiality of any non-public information
provided to it by AEFC or the Fund.
Part Four: Renewal And Termination
(1) This Agreement, unless terminated under paragraph 2,3, or 4 below, will
continue in effect from year to year, provided its continued applicability is
specifically approved at least annually (i) by the Board of the Fund or by a
vote of the holders of a majority of the outstanding votes of the Fund and (ii)
by vote of a majority of the Board members 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" has the same meaning as set forth in the 1940 Act, as
amended.
(2) This Agreement may be terminated at any time, without penalty, by the Board
of the Fund or by vote of the holders of a majority of the Fund's outstanding
shares, on 60 days' written notice to AEFC or to AEAMG.
(3) AEFC or AEAMG may terminate this Agreement by giving sixty days written
notice to the other party.
(4) This Agreement will terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning set forth in the 1940 Act,
as amended.
In Witness Thereof, the parties hereto have executed this Agreement as of the
day and year first above written.
AMERICAN EXPRESS FINANCIAL CORPORATION
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President -
Investment Operations
AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
EXHIBIT A
With respect to the Fund's assets allocated to AEAMG, AEFC will pay AEAMG a fee
equal on an annual basis as follows:
Fund Fee
AXP Variable Portfolio -
Strategy Aggressive Fund 0.35% of average daily net assets
