Plan and Agreement of Distribution
This plan and agreement is between IDS Tax-Exempt Bond Fund, Inc. (the
"Corporation") on behalf of its underlying series fund: IDS Intermediate
Tax-Exempt Fund (the "Fund"); and American Express Financial Advisors Inc., the
principal underwriter of the Fund, for distribution services to the Fund.
The plan and agreement has been approved by members of the Board of Directors
(the "Board") of the Corporation who are not interested persons of the
Corporation and have no direct or indirect financial interest in the operation
of the plan or any related agreement, and all of the members of the Board, in
person, at a meeting called for the purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Corporation, on behalf of the Fund, will reimburse American Express
Financial Advisors Inc. for all sales and promotional expenses attributable to
the sale of the Fund's Class B Common Stock, $0.01 per share par value (the
"Class B Shares"), including sales commissions, business and employee expenses
charged to distribution of Class B Shares, and corporate overhead appropriately
allocated to the sale of Class B Shares.
2. The amount of the reimbursement shall be equal on an annual basis to 0.75% of
the average daily net assets of the Fund attributable to Class B Shares. The
amount so determined shall be paid to American Express Financial Advisors Inc.
in cash within five (5) business days after the last day of each month. American
Express Financial Advisors Inc. agrees that if, at the end of any month, the
expenses of the Fund, including fees under this agreement and any other
agreement between the Fund and American Express Financial Advisors Inc. or
American Express Financial Corporation, but excluding taxes, brokerage
commissions and charges in connection with the purchase and sale of assets
exceed the most restrictive applicable state expense limitation for the Fund's
current fiscal year, the Fund shall not pay fees and expenses under this
agreement to the extent necessary to keep the Fund's expenses from exceeding the
limitation, it being understood that American Express Financial Advisors Inc.
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.
3. For each purchase of Class B Shares, after eight years the Class B Shares
will be converted to shares of the Fund's then-existing Class A Common Stock,
$0.01 per share par value (the "Class A Shares") and those assets will no longer
be included in determining the reimbursement amount.
4. The Corporation understands that if a shareholder redeems Class B Shares
before they are converted to Class A Shares, American Express Financial Advisors
Inc. will impose a sales charge directly on the redemption proceeds to cover
those expenses it has previously incurred on the sale of those shares.
5. American Express Financial Advisors Inc. agrees to provide at least
quarterly an analysis of distribution expenses and to meet with
representatives of the Corporation as reasonably requested to provide
additional information.
6. The plan and agreement shall continue in effect for a period of more than one
year provided it is reapproved at least annually in the same manner in which it
was initially approved.
7. The plan and agreement may not be amended to increase materially the amount
that may be paid by the Fund without the approval of at least a majority of the
outstanding Class B Shares, as specified in the Investment Company Act of 1940.
Any other amendment must be approved in the manner in which the plan and
agreement was initially approved.
8. This agreement may be terminated at any time without payment of any penalty
by a vote of a majority of the members of the Board who are not interested
persons of the Corporation and have no financial interest in the operation of
the plan and agreement, or by vote of a majority of the outstanding Class B
shares, or by American Express Financial Advisors Inc. The plan and agreement
will terminate automatically in the event of its assignment as that term is
defined in the Investment Company Act of 1940.
Approved this 13th day of November, 1996.
IDS TAX-EXEMPT BOND FUND, INC.
IDS INTERMEDIATE TAX-EXEMPT FUND
/s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Vice President
