<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 34 (File No. 2-66868) [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 35 (No. 811-3003)
AXP TAX-FREE MONEY FUND, INC.
IDS Tower 10
Minneapolis, MN 55440-0010
Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810,
Minneapolis, MN 55402-3268
(612) 330-9283
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on February 29, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
AXPSM Tax-Free Money Fund
PROSPECTUS
Feb. 29, 2000
American Express(R) Funds
AXP Tax-Free Money Fund seeks to provide shareholders with as high a level of
current income exempt from federal income tax as is consistent with liquidity
and stability of principal.
Please note that this Fund:
o is not a bank deposit
o is not federally insured
o is not endorsed by any bank or government agency
o is not guaranteed to achieve its goal
Like all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
<PAGE>
Table of Contents
TAKE A CLOSER LOOK AT:
The Fund 3p
Goal 3p
Investment Strategy 3p
Risks 4p
Past Performance 5p
Fees and Expenses 6p
Management 7p
Buying and Selling Shares 7p
Valuing Fund Shares 7p
Purchasing Shares 7p
Transactions through Third Parties 10p
Exchanging/Selling Shares 10p
Distributions and Taxes 14p
Other Information 16p
Financial Highlights 17p
Appendix 18p
FUND INFORMATION KEY
Goal and Investment Strategy
The Fund's particular investment goal and the strategies it intends to use in
pursuing its goal.
Risks
The major risk factors associated with the Fund.
Fees and Expenses
The overall costs incurred by an investor in the Fund, including sales charges
and annual expenses.
Management
The individual or group designated by the investment manager to handle the
Fund's day-to-day management.
Financial Highlights
Tables showing the Fund's financial performance.
The Fund
GOAL
AXP Tax-Free Money Fund (the Fund) seeks to provide shareholders with as high a
level of current income exempt from federal income tax as is consistent with
liquidity and stability of principal. Because any investment involves risk, the
Fund cannot guarantee this goal.
INVESTMENT STRATEGY
The Fund's assets primarily are invested in debt obligations. Under normal
market conditions, at least 80% of the Fund's net assets are invested in
short-term debt obligations whose interest is exempt from federal income taxes.
This 80% threshold is a fundamental policy of the Fund. These securities must be
rated in one of the two highest categories by national rating services. The Fund
may invest up to 25% of its net assets in securities of issuers located in the
same state or region or in industrial revenue bonds.
Because the Fund seeks to maintain a constant net asset value of $1.00 per
share, capital appreciation is not expected to play a role in the Fund's return.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
The selection of short-term debt obligations is the primary decision in building
the investment portfolio.
In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses debt obligations by:
o Considering opportunities and risks in short-term municipal obligations (such
as municipal bonds and notes) given current interest rates.
o Identifying bonds and notes that:
-- have interest not subject to the alternative minimum tax, and
-- have short-term maturities,
o Identifying obligations that contribute to portfolio diversification.
The Fund restricts its investments to instruments that meet certain maturity and
quality standards required for tax-exempt money market funds. For example, the
Fund:
o limits its average portfolio maturity to 90 days or less; and
o buys obligations with remaining maturities of 397 days or less.
AEFC chooses investments by:
o Considering opportunities and risks given current interest rates and expected
interest rates.
o Identifying obligations that:
-- have characteristics better than that of comparable obligations, and
-- identifying obligations that contribute to the portfolio
diversification of the Fund, including both the number of shares and
the types of securities held in the portfolio.
In evaluating whether to sell a security, AEFC considers, among other factors,
if:
-- the issuer's credit rating declines or AEFC expects a decline (the
Fund may continue to own securities that are down-graded until the
board of directors believes it is advantageous to sell),
-- political, economic, or other events could affect the issuer's
performance, and
-- the issuer or the security continues to meet the other standards
described above.
If suitable tax-exempt securities are not available, the Fund may invest up to
20% of its net assets in taxable investments, including government securities,
bank obligations, commercial paper, and repurchase agreements. The Fund also may
invest, from time to time, in securities that are illiquid.
For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.
RISKS
Please remember that with any mutual fund investment you may lose money.
Although the Fund seeks to maintain the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund. The Fund's yield
will vary from day-to-day. Principal risks associated with an investment in the
Fund include:
Market Risk
Interest Rate Risk
Market Risk
The market may drop and you may lose money. Market risk may affect a single
issuer, sector of the economy, industry, or the market as a whole. The market
value of all securities may move up and down, sometimes rapidly and
unpredictably.
<PAGE>
Interest Rate Risk
The risk of losses attributable to changes in interest rates. This term is
generally associated with bond prices (when interest rates rise, bond prices
fall). In general, the longer the maturity of a bond, the higher its yield and
the greater its sensitivity to changes in interest rates.
PAST PERFORMANCE
The following bar chart and table indicate the risks and variability of
investing in the Fund by showing how the Fund's performance has varied for each
full calendar year shown.
How the Fund has performed in the past does not indicate how the Fund will
perform in the future.
Performance (based on calendar years)
+5.20% +3.79% +2.24% +1.59% +2.09% +3.24% +2.95 +3.18% +2.94 +2.68%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
During the period shown in the bar chart, the highest return for a calendar
quarter was +1.34% (quarter ending December 1990) and the lowest return for a
calendar quarter was +0.36% (quarter ending March 1994).
The Fund's year to date return as of Dec. 31, 1999 was +2.68%.
<PAGE>
Average Annual Total Returns (as of Dec. 31, 1999)
1 year 5 years 10 years
Tax-Free Money +2.68% +3.02% +2.99%
This table shows total returns from hypothetical investments in shares of the
Fund.
For purposes of this calculation we assumed no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
Yield Information
For current 7-day yield information, call 1-800-862-7919, select option #2.
FEES AND EXPENSES
Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge (load)
imposed on purchases (as a
percentage of offering price) none
Maximum deferred sales charge
(load) imposed on sales (as
a percentage of offering price
at time of purchase) none
Annual Fund operating expenses(a) (expenses that are deducted from Fund assets)
As a percentage of average daily net assets:
Management fees 0.36%
Distribution (12b-1) fees 0.00%
Other expenses(b) 0.25%
Total 0.61%
(a) Expenses for the Fund are based on actual expenses for the last fiscal year,
restated to reflect current fees.
(b) Other expenses include an administrative services fee, a transfer agency fee
and other nonadvisory expenses.
<PAGE>
Example
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:
1 year 3 years 5 years 10 years
$62 $196 $341 $766
This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.
MANAGEMENT
Terry Fettig, senior portfolio manager, joined AEFC in 1986. He has managed this
Fund since April 1993. He also serves as portfolio manager of AXP Cash
Management Fund, AXP Intermediate Tax-Exempt Fund, AXP Variable Portfolio - Cash
Management Fund and IDS Life Series Fund, Money Market Portfolio.
Buying and Selling Shares
VALUING FUND SHARES
The NAV is the value of a single Fund share. The NAV usually changes daily, and
is calculated at the close of business of the New York Stock Exchange, normally
3 p.m. Central Time (CT), each business day (any day the New York Stock Exchange
is open).
Fund shares may be purchased through various third-party organizations,
including 401(k) plans, banks, brokers and investment advisers. Where authorized
by the Fund, orders will be priced at the NAV next computed after receipt by the
organization or their selected agent.
The Fund's investments are valued at amortized cost, which approximates market
value, as explained in the SAI. Although the Fund cannot guarantee it will
always be able to maintain a constant net asset value of $1 per share, it will
use its best efforts to do so.
PURCHASING SHARES
To purchase shares through a brokerage account or from entities other than
American Express Financial Advisors Inc., please consult your selling agent. The
following section explains how you can purchase shares from American Express
Financial Advisors (the Distributor).
If you do not have a mutual fund account, you need to establish one. Your
financial advisor will help you fill out and submit an application. Your
application will be accepted only when federal funds (funds of the Federal
Reserve System) are available to the Fund, normally within three days of receipt
of your application. Once your account is set up, you can choose among several
convenient ways to invest. When you purchase shares for a new or existing
account, your order will be priced at the next NAV calculated after your order
is accepted by the Fund.
Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.
If you do not provide the correct TIN, you could be subject to backup
withholding of 31% of taxable distributions and proceeds from certain sales and
exchanges. You also could be subject to further penalties, such as:
o a $50 penalty for each failure to supply your correct TIN,
o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and
o criminal penalties for falsifying information.
You also could be subject to backup withholding, if the IRS notifies us to do
so, because you failed to report required interest or dividends on your tax
return.
<TABLE>
<CAPTION>
How to determine the correct TIN
<S> <C>
For this type of account: Use the Social Security or Employer Identification number of:
Individual or joint account The individual or one of the owners listed on the joint account
Custodian account of a minor
(Uniform Gifts/Transfers to
Minors Act) The minor
A revocable living trust The grantor-trustee (the person who puts the money into the trust)
An irrevocable trust, The legal entity (not the personal representative or trustee,
pension trust or estate unless no legal entity is designated in the account title)
Sole proprietorship The owner
Partnership The partnership
Corporate The corporation
Association, club or
tax-exempt organization The organization
</TABLE>
For details on TIN requirements, contact your financial advisor to obtain a copy
of federal Form W-9, "Request for Taxpayer Identification Number and
Certification." You also may obtain the form on the Internet at
(http://www.irs.gov/prod/forms_pubs/).
<PAGE>
Three ways to invest
1 By mail:
Once your account has been established, send your check with the account number
on it to:
American Express Funds
P.O. Box 74
Minneapolis, MN 55440-0074
Minimum amounts
Initial investment: $2,000
Additional investments: $ 100
Account balances: $1,000
If your account balance falls below $1,000, you will be asked to increase it to
$1,000 or establish a scheduled investment plan. If you do not do so within 30
days, your shares can be sold and the proceeds mailed to you.
2 By scheduled investment plan:
Contact your financial advisor for assistance in setting up one of the following
scheduled plans:
o automatic payroll deduction,
o bank authorization,
o direct deposit of Social Security check, or
o other plan approved by the Fund.
Minimum amounts
Initial investment: $2,000
Additional investments: $ 100/mo.
Account balances: $1,000 (on active plans with monthly payments)
If your account balance is below $2,000, you must make payments at least
monthly.
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3 By wire or electronic funds transfer:
If you have an established account, you may wire money to:
Norwest Bank Minnesota
Routing Transit No. 091000019
Give these instructions:
Credit American Express Financial Advisors Account #0000030015 for personal
account # (your account number) for (your name). Please remember that you need
to provide all 10 digits.
If this information is not included, the order may be rejected, and all money
received by the Fund, less any costs the Fund or American Express Client Service
Corporation (AECSC) incurs, will be returned promptly.
Minimum amounts
Each wire investment: $1,000
TRANSACTIONS THROUGH THIRD PARTIES
You may buy or sell shares through certain 401(k) plans, banks, broker-dealers,
financial advisors or other investment professionals. These organizations may
charge you a fee for this service and may have different policies. Some policy
differences may include different minimum investment amounts, exchange
privileges, fund choices and cutoff times for investments. The Fund and the
Distributor are not responsible for the failure of one of these organizations to
carry out its obligations to its customers. Some organizations may receive
compensation from the Distributor or its affiliates for shareholder
recordkeeping and similar services. Where authorized by the Fund, some
organizations may designate selected agents to accept purchase or sale orders on
the Fund's behalf. To buy or sell shares through third parties or determine if
there are policy differences, please consult your selling agent. For other
pertinent information related to buying or selling shares, please refer to the
appropriate section in the prospectus.
EXCHANGING/SELLING SHARES
Exchanges
You can exchange your Fund shares for Class A shares of any other publicly
offered American Express mutual fund. If your initial investment was in this
Fund, you may exchange Fund shares for Class B shares of another fund. For
complete information on the other funds, including fees and expenses, read that
fund's prospectus carefully. Your exchange will be priced at the next NAV
calculated after it is accepted by that fund.
If your initial investment was in this Fund, and you exchange into a non-money
market fund, you will pay an initial sales charge if you exchange into Class A
and be subject to a contingent deferred sales charge if you exchange into Class
B. If your initial investment was in Class A shares of a non-money market fund
and you exchange shares into this Fund, you may exchange that amount, including
dividends earned on that amount, without paying a sales charge.
Other exchange policies:
o Exchanges of Class A shares of other American Express mutual funds to this
Fund will be accepted. Exchanges of Class B shares to this Fund will not be
accepted.
o If your exchange creates a new account, it must satisfy the minimum
investment amount for new purchases.
o Once we receive your exchange request, you cannot cancel it.
o Shares of the new fund may not be used on the same day for another
exchange.
o If your shares are pledged as collateral, the exchange will be delayed
until AECSC receives written approval from the secured party.
Selling Shares
You can sell your shares at any time. The payment will be mailed within seven
days after accepting your request.
When you sell shares, the amount you receive may be more or less than the amount
you invested. Your sale price will be the next NAV calculated after your request
is accepted by the Fund.
The Fund reserves the right to redeem in kind.
For more details and a description of other sales policies, please see the SAI.
<PAGE>
To sell or exchange shares held through a brokerage account or with entities
other than American Express Financial Advisors, please consult your selling
agent. The following section explains how you can exchange or sell shares held
with American Express Financial Advisors.
Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.
Important: If you request a sale of shares you recently purchased by a check or
money order that is not guaranteed, the Fund will wait for your check to clear.
It may take up to 10 days from the date of purchase before payment is made.
(Payment may be made earlier if your bank provides evidence satisfactory to the
Fund and AECSC that your check has cleared.)
Three ways to request an exchange or sale of shares
1 By letter:
Include in your letter:
o the name of the fund(s),
o your mutual fund account number(s) (for exchanges, both funds must be
registered in the same ownership),
o your Social Security number or Employer Identification number,
o the dollar amount or number of shares you want to exchange or sell,
o signature(s) of all registered account owners,
o for sales, indicate how you want your money delivered to you, and
o any paper certificates of shares you hold.
Regular mail:
American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402
2 By telephone:
American Express Client Service Corporation
Telephone Transaction Service
800-437-3133
o The Fund and AECSC will use reasonable procedures to confirm authenticity
of telephone exchange or sale requests.
o Telephone exchange and sale privileges automatically apply to all accounts
except custodial, corporate or qualified retirement accounts. You may
request that these privileges NOT apply by writing AECSC. Each registered
owner must sign the request.
o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.
o Telephone privileges may be modified or discontinued at any time.
Minimum sale amount: $100 Maximum sale amount: $50,000
3 By draft:
Free drafts are available and can be used just like a check to withdraw $100 or
more from your account. The shares in your account earn dividends until they are
redeemed by the Fund to cover your drafts. Most accounts will automatically
receive free drafts. However, to receive drafts on qualified or custodial
business accounts, you must contact AECSC. A request form will be supplied and
must be signed by each registered owner. Your draft writing privilege may be
modified or discontinued at any time. Drafts are not available for accounts set
up in a brokerage account.
Minimum amount Redemption: $100
<PAGE>
Three ways to receive payment when you sell shares
1 By regular or express mail:
o Mailed to the address on record.
o Payable to names listed on the account.
NOTE: The express mail delivery charges you pay will vary depending on the
courier you select.
2 By wire or electronic funds transfer:
o Minimum wire: $1,000.
o Request that money be wired to your bank.
o Bank account must be in the same ownership as the American Express mutual
fund account.
NOTE: Pre-authorization required. For instructions, contact your financial
advisor or AECSC.
3 By scheduled payout plan:
o Minimum payment: $50.
o Contact your financial advisor or AECSC to set up regular payments on a
monthly, bimonthly, quarterly, semiannual or annual basis.
o Purchasing new shares while under a payout plan may be disadvantageous
because of the sales charges.
Distributions and Taxes
As a shareholder you are entitled to your share of the Fund's net income and any
short-term capital gains. The Fund distributes dividends and capital gains to
qualify as a regulated investment company and to avoid paying corporate income
and excise taxes.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Fund's net investment income is distributed to you as dividends. Capital
gains are realized when a security is sold for a higher price than was paid for
it. Each realized capital gain or loss is long-term or short-term depending on
the length of time the Fund held the security. Realized capital gains and losses
offset each other. The Fund offsets any net realized capital gains by any
available capital loss carryovers. Net short-term capital gains are included in
net investment income. Net realized long-term capital gains, if any, are
distributed by the end of the calendar year as capital gain distributions.
REINVESTMENTS
Dividends are automatically reinvested in additional shares of the Fund, unless:
o you request distributions be paid monthly in cash, or
o you direct the Fund to invest your distributions monthly in any publicly
offered American Express mutual fund for which you have previously opened
an account. Your purchases may be subject to a sales charge.
We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.
If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.
TAXES
Dividends distributed from interest earned on tax-exempt securities
(exempt-interest dividends) are exempt from federal income taxes but may be
subject to state and local taxes. Dividends distributed from capital gain
distributions and other income earned are not exempt from federal income taxes.
Distributions are taxable in the year the Fund declares them regardless of
whether you take them in cash or reinvest them.
Interest on certain private activity bonds is a preference item for purposes of
the individual and corporate alternative minimum taxes. To the extent the Fund
earns such income, it will flow through to its shareholders and may be taxable
to those shareholders who are subject to the alternative minimum tax.
Because interest on municipal bonds and notes is tax-exempt for federal income
tax purposes, any interest on money you borrow that is used directly or
indirectly to purchase Fund shares is not deductible on your federal income tax
return. You should consult a tax advisor regarding its deductibility for state
and local income tax purposes.
If you buy shares shortly before the record date of a distribution you may pay
taxes on money earned by the Fund before you were a shareholder. You will pay
the full pre-distribution price for the shares, then receive a portion of your
investment back as a distribution, which may be taxable.
<PAGE>
For tax purposes, an exchange is considered a sale and purchase and may result
in a gain or loss. A sale is a taxable transaction. If you sell shares for less
than their cost, the difference is a capital loss. If you sell shares for more
than their cost, the difference is a capital gain. Your gain may be short term
(for shares held for one year or less) or long term (for shares held for more
than one year).
Important: This information is a brief and selective summary of some of the tax
rules that apply to this Fund. Because tax matters are highly individual and
complex, you should consult a qualified tax advisor.
Other Information
YEAR 2000
The Fund could be adversely affected if the computer systems used by AEFC and
the Fund's other service providers do not properly process and calculate
date-related information from and after Jan. 1, 2000. While Year 2000-related
computer problems could have a negative effect on the Fund, AEFC is working to
avoid such problems and to obtain assurances from service providers that they
are taking similar steps.
The companies, governments or international markets in which the Fund invests
also may be adversely affected by Year 2000 issues. To the extent a portfolio
holding is adversely affected by a Year 2000 processing issue, the Fund's return
could be adversely affected.
INVESTMENT MANAGER
The investment manager of the Fund is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Fund pays AEFC a fee for managing its assets.
Under the Investment Management Services Agreement, the fee for the most recent
fiscal year was 0.34% of its average daily net assets. Under the agreement, the
Fund also pays taxes, brokerage commissions and nonadvisory expenses. AEFC is a
wholly-owned subsidiary of American Express Company, a financial services
company with headquarters at American Express Tower, World Financial Center, New
York, NY 10285.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Fiscal period ended Dec. 31,
Per share income and capital changes(a)
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) .03 .03 .03 .03 .03
Less distributions:
Dividends from net investment income (.03) (.03) (.03) (.03) (.03)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $206 $173 $152 $157 $146
Ratio of expenses to average daily net assets(b) .59% .54% .55% .55% .58%
Ratio of net investment income (loss)
to average daily net assets 2.64% 2.93% 3.13% 2.94% 3.19%
Total return 2.68% 2.94% 3.18% 2.95% 3.24%
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
</TABLE>
The information in this table has been audited by KPMG LLP, independent
auditors. The independent auditors' report and additional information about the
performance of the Fund are contained in the Fund's annual report which, if not
included with this prospectus, may be obtained without charge.
<PAGE>
APPENDIX
1999 federal tax-exempt and taxable equivalent yield calculation
These tables will help you determine your federal taxable yield equivalents for
given rates of tax-exempt income.
STEP 1: Calculating your marginal tax rate.
Using your Taxable Income and Adjusted Gross Income figures as guides, you can
locate your Marginal Tax Rate in the table below.
First, locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your federal
Marginal Tax Rate. For example: Let's assume you are married filing jointly,
your taxable income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$105,950-$161,450 range. Under Adjusted Gross Income, $175,000 is in the
$128,950 to $193,400 column. The Taxable Income line and Adjusted Gross Income
column meet at 31.93%. This is the rate you'll use in Step 2.
<PAGE>
<TABLE>
<CAPTION>
Adjusted gross income*
<S> <C> <C> <C> <C>
Taxable income** $0 $128,950 $193,400
to to to Over
$128,950(1) $193,400(2) $315,900(3) $315,900(2)
Married Filing Jointly
$ 0 - $ 43,850 15.00%
43,850 - 105,950 28.00 28.84%
105,950 - 161,450 31.00 31.93 33.32%
161,450 - 288,350 36.00 37.08 38.69 37.08%
288,350 + 39.60 42.56*** 40.79
Adjusted gross income*
Taxable income** $0 $128.950
to to Over
$128,950(1) $251,450(3) $251,450(2)
Single
$ 0 - $ 26,250 15.00%
26,250 - 63,550 28.00
63,550 - 132,600 31.00 32.62%
132,600 - 288,350 36.00 37.89 37.08%
288,350 + 39.60 40.79
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deductions (or standard
deduction) and personal exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $315,900 and your taxable income exceeds $288,350.
</TABLE>
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out -- Assumes a phase-out of itemized deductions
and no current phase-out of personal exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions, personal exemptions phase-out and itemized deductions continue
to phase-out. If these assumptions do not apply to you, it will be
necessary to construct your own personalized tax equivalency table.
<PAGE>
STEP 2: Determining your federal taxable yield equivalents. Using 31.93%, you
may determine that a tax-exempt yield of 4% is equivalent to earning a taxable
5.88% yield.
<TABLE>
<CAPTION>
For these Tax-Exempt Rates:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%
Marginal Tax Rates Equal the Taxable Rates shown below:
15.00% 4.12 4.71 5.29 5.88 6.47 7.06 7.65 8.24
28.00% 4.86 5.56 6.25 6.94 7.64 8.33 9.03 9.72
28.84% 4.92 5.62 6.32 7.03 7.73 8.43 9.13 9.84
31.00% 5.07 5.80 6.52 7.25 7.97 8.70 9.42 10.14
31.93% 5.14 5.88 6.61 7.35 8.08 8.81 9.55 10.28
32.62% 5.19 5.94 6.68 7.42 8.16 8.90 9.65 10.39
33.32% 5.25 6.00 6.75 7.50 8.25 9.00 9.75 10.50
36.00% 5.47 6.25 7.03 7.81 8.59 9.38 10.16 10.94
37.08% 5.56 6.36 7.15 7.95 8.74 9.54 10.33 11.13
37.89% 5.64 6.44 7.25 8.05 8.86 9.66 10.47 11.27
38.69% 5.71 6.52 7.34 8.16 8.97 9.79 10.60 11.42
39.60% 5.79 6.62 7.45 8.28 9.11 9.93 10.76 11.59
40.79% 5.91 6.76 7.60 8.44 9.29 10.13 10.98 11.82
42.56% 6.09 6.96 7.83 8.70 9.58 10.45 11.32 12.19
</TABLE>
This Fund, along with the other American Express mutual funds, is distributed by
American Express Financial Advisors Inc. and can be purchased from an American
Express financial advisor or from other authorized broker-dealers or third
parties. The Funds can be found under the "Amer Express" banner in most mutual
fund quotations.
Additional information about the Fund and its investments is available in the
Fund's Statement of Additional Information (SAI), annual and semiannual reports
to shareholders. In the Fund's annual report, you will find a discussion of
market conditions and investment strategies that significantly affected the Fund
during its last fiscal year. The SAI is incorporated by reference in this
prospectus. For a free copy of the SAI, the annual report or the semiannual
report contact your selling agent or American Express Client Service
Corporation.
American Express Client Service Corporation
P.O. Box 534,
Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852
Web site address:
http://www.americanexpress.com/advisors
You may review and copy information about the Fund, including the SAI, at the
Securities and Exchange Commission's (Commission) Public Reference Room in
Washington, D.C. (for information about the public reference room call
1-202-942-8090). Reports and other information about the Fund are available on
the EDGARDatabase on the Commission's Internet site at (http://www.sec.gov).
Copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following E-mail address:[email protected], or by
writing to the Public Reference Section of the Commission, Washington, D.C.
20549-6009.
Investment Company Act File #811-3003
TICKER SYMBOL
Class A: ITFXXS-6433-99 P(2/00)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR
AXPSM TAX-FREE MONEY FUND (the Fund)
Feb. 29, 2000
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus and the financial statements contained in the
most recent Annual Report to shareholders (Annual Report) that may be obtained
from your financial advisor or by writing to American Express Client Service
Corporation, P.O. Box 534, Minneapolis, MN 55440-0534 or by calling
800-862-7919.
The Independent Auditors' Report and the Financial Statements, including Notes
to the Financial Statements and the Schedule of Investments in Securities,
contained in the Annual Report are incorporated in this SAI by reference. No
other portion of the Annual Report, however, is incorporated by reference. The
prospectus for the Fund, dated the same date as this SAI, also is incorporated
in this SAI by reference.
<PAGE>
AXP Tax-Free Money Fund
TABLE OF CONTENTS
Mutual Fund Checklist..............................................p. 3
Fundamental Investment Policies....................................p. 5
Investment Strategies and Types of Investments.....................p. 7
Information Regarding Risks and Investment Strategies..............p. 8
Security Transactions...............................................p.16
Brokerage Commissions Paid to Brokers Affiliated with
American Express Financial Corporation..............................p.17
Performance Information.............................................p.18
Valuing Fund Shares.................................................p.19
Investing in the Fund...............................................p.19
Selling Shares......................................................p.20
Pay-out Plans.......................................................p.21
Taxes...............................................................p.22
Agreements..........................................................p.22
Organizational Information..........................................p.24
Board Members and Officers..........................................p.26
Compensation for Board Members......................................p.28
Independent Auditors................................................p.29
Appendix: Description of Ratings...................................p.30
<PAGE>
MUTUAL FUND CHECKLIST
- --------------------------------------------------------------------------------
|X| Mutual funds are NOT guaranteed or insured by any bank or government
agency. You can lose money.
|X| Mutual funds ALWAYS carry investment risks. Some types carry more risk than
others.
|X| A higher rate of return typically involves a higher risk of loss.
|X| Past performance is not a reliable indicator of future performance.
|X| ALL mutual funds have costs that lower investment return.
|X| You can buy some mutual funds by contacting them directly. Others, like
this one, are sold mainly through brokers, banks, financial planners, or
insurance agents. If you buy through these financial professionals, you
generally will pay a sales charge.
|X| Shop around. Compare a mutual fund with others of the same type before you
buy.
OTHER IDEAS FOR SUCCESSFUL MUTUAL FUND INVESTING:
Develop a Financial Plan
Have a plan - even a simple plan can help you take control of your financial
future. Review your plan with your advisor at least once a year or more
frequently if your circumstances change.
Dollar-Cost Averaging
An investment technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is dollar-cost
averaging. Dollar-cost averaging involves building a portfolio through the
investment of fixed amounts of money on a regular basis regardless of the price
or market condition. This may enable an investor to smooth out the effects of
the volatility of the financial markets. By using this strategy, more shares
will be purchased when the price is low and less when the price is high. As the
accompanying chart illustrates, dollar-cost averaging tends to keep the average
price paid for the shares lower than the average market price of shares
purchased, although there is no guarantee.
While this does not ensure a profit and does not protect against a loss if the
market declines, it is an effective way for many shareholders who can continue
investing through changing market conditions to accumulate shares to meet
long-term goals.
<PAGE>
Dollar-cost averaging:
- -------------------------------------------------------------
Regular Market Price Shares
Investment of a Share Acquired
- -------------------------------------------------------------
$100 $6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
----- -------- ------
$500 $25.00 103.4
Average market price of a share over 5 periods: $5.00 ($25.00 divided by 5)
The average price you paid for each share: $4.84 ($500 divided by 103.4)
Diversify
Diversify your portfolio. By investing in different asset classes and different
economic environments you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.
Understand Your Investment
Know what you are buying. Make sure you understand the potential risks, rewards,
costs, and expenses associated with each of your investments.
<PAGE>
FUNDAMENTAL INVESTMENT POLICIES
- --------------------------------------------------------------------------------
Fundamental investment policies adopted by the Fund cannot be changed without
the approval of a majority of the outstanding voting securities of the Fund as
defined in the Investment Company Act of 1940, as amended (the 1940 Act).
Notwithstanding any of the Fund's other investment policies, the Fund may invest
its assets in an open-end management investment company having substantially the
same investment objectives, policies, and restrictions as the Fund for the
purpose of having those assets managed as part of a combined pool.
The policies below are fundamental policies that apply to the Fund and may be
changed only with shareholder approval. Unless holders of a majority of the
outstanding voting securities agree to make the change, the Fund will not:
o Act as an underwriter (sell securities for others). However, under the
securities laws, the Fund may be deemed to be an underwriter when it
purchases securities directly from the issuer and later resells them.
o Borrow money or property, except as a temporary measure for extraordinary
or emergency purposes, in an amount not exceeding one-third of the market
value of its total assets (including borrowings) less liabilities (other
than borrowings) immediately after the borrowing.
o Make cash loans. The Fund, however, does make investments in debt
securities where the sellers agree to repurchase the securities at cost
plus an agreed-upon interest rate within a specified time.
o Invest more than 5% of its total assets in securities of any one company,
government, or political subdivision thereof, except the limitation will
not apply to investments in securities issued by the U.S. government, its
agencies, or instrumentalities. For purposes of this policy, the terms of a
municipal security determine the issuer. In order to comply with revisions
to Rule 2a-7, the Fund will observe the limitation on investment in a
single issuer as to 100% of its portfolio.
o Buy on margin or sell short.
o Invest in real estate, but the Fund can invest in municipal bonds and notes
secured by real estate or interests therein. For purposes of this policy,
real estate includes real estate limited partnerships.
o Invest in commodities or commodity contracts.
o Lend Fund securities in excess of 30% of its net assets.
o Invest more than 10% of the Fund's net assets in securities and derivative
instruments that are illiquid. In determining the liquidity of municipal
lease obligations, the investment manager, under guidelines established by
the board, will consider the essential nature of the leased property, the
likelihood that the municipality will continue appropriating funding for
the leased property, and other relevant factors related to the general
credit quality of the municipality and the marketability of the municipal
lease obligations.
In addition to considering ratings assigned by the ratings services in the
selection of portfolio securities for the Fund, the Fund may consider, among
other things, information concerning the financial history and condition of the
issuer and its revenue and expense prospect and, in the case of revenue bonds,
the financial history and condition of the source of revenue to service the
bonds.
<PAGE>
After a municipal bond or note has been purchased by the Fund, it may be
assigned a lower rating or cease to be rated. Such an event would not require
the elimination of the issue from the portfolio, but the Fund will consider such
an event in determining whether the Fund should continue to hold the security in
its portfolio.
Yields on municipal bonds and notes depend on a variety of factors, including
money market conditions, municipal bond market conditions, the size of a
particular offering, the maturity of the obligation, and the rating of the
issue. The market in municipal bonds and notes is note comparable to the market
in taxable money market instruments in terms of liquidity and stability of
principal. This is because the market in municipal bonds and notes is not as
broad, does not offer as much choice in maturities, and has fewer issuers.
Notwithstanding any of the Fund's other investment policies, the Fund may invest
its assets in an open-end management investment company having substantially the
same investment objectives, policies and restrictions as the Fund for the
purpose of having those assets managed as part of a combined pool.
Except for the fundamental investment policies listed above, the other
investment policies described in the prospectus and in this SAI are not
fundamental and may be changed by the board at any time.
<PAGE>
INVESTMENT STRATEGIES AND TYPES OF INVESTMENTS
- -------------------------------------------------------------------------------
This table shows various investment strategies and investments that many funds
are allowed to engage in and purchase. It also lists certain percentage
guidelines that are generally followed by the Fund's investment manager. This
table is intended to show the breadth of investments that the investment manager
may make on behalf of the Fund. For a description of principal risks, please see
the prospectus.
- -------------------------------------------------------------------------------
Investment strategies & types of investments: AXP Tax-Free Money
Allowable for the Fund?
Agency and Government Securities yes
Cash/Money Market Instruments yes
Commercial Paper yes
Debt Obligations yes
Illiquid and Restricted Securities yes
Lending of Portfolio Securities yes
Mortgage- and Asset-Backed Securities yes
Municipal Obligations yes
Repurchase Agreements yes
Variable- or Floating-Rate Securities yes
- -------------------------------------------------------------------------------
Unless changed by the board, the Fund will not:
Invest more than 10% of the Fund's net assets in securities and derivative
instruments that are illiquid. In determining the liquidity of municipal lease
obligations, the investment manager, under guidelines established by the board,
will consider the essential nature of the leased property, the likelihood that
the municipality will continue appropriating funding for the leased property,
and other relevant factors related to the general credit quality of the
municipality and the marketability of the municipal lease obligations.
In addition to considering ratings assigned by the ratings services in the
selection of portfolio securities for the Fund, the Fund may consider, among
other things, information concerning the financial history and condition of the
issuer and its revenue and expense prospect and, in the case of revenue bonds,
the financial history and condition of the source of revenue to service the
bonds.
After a municipal bond or note has been purchased by the Fund, it may be
assigned a lower rating or cease to be rated. Such an event would not require
the elimination of the issue from the portfolio, but the Fund will consider such
an event in determining whether the Fund should continue to hold the security in
its portfolio.
<PAGE>
INFORMATION REGARDING RISKS AND INVESTMENT STRATEGIES
- -------------------------------------------------------------------------------
RISKS
The following is a summary of common risk characteristics. Following this
summary is a description of certain investments and investment strategies and
the risks most commonly associated with them (including certain risks not
described below and, in some cases, a more comprehensive discussion of how the
risks apply to a particular investment or investment strategy). Please remember
that a mutual fund's risk profile is largely defined by the fund's primary
securities and investment strategies. However, most mutual funds are allowed to
use certain other strategies and investments that may have different risk
characteristics. Accordingly, one or more of the following types of risk will be
associated with the Fund at any time (for a description of principal risks,
please see the prospectus):
Call/Prepayment Risk
The risk that a bond or other security might be called (or otherwise converted,
prepaid, or redeemed) before maturity. This type of risk is closely related to
"reinvestment risk."
Correlation Risk
The risk that a given transaction may fail to achieve its objectives due to an
imperfect relationship between markets. Certain investments may react more
negatively than others in response to changing market conditions.
Credit Risk
The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise become unable to honor a financial obligation (such as
payments due on a bond or a note). The price of junk bonds may react more to the
ability of the issuing company to pay interest and principal when due than to
changes in interest rates. Junk bonds have greater price fluctuations and are
more likely to experience a default than investment grade bonds.
Event Risk
Occasionally, the value of a security may be seriously and unexpectedly changed
by a natural or industrial accident or occurrence.
Foreign/Emerging Markets Risk
The following are all components of foreign/emerging markets risk:
Country risk includes the political, economic, and other conditions of a
country. These conditions include lack of publicly available information, less
government oversight (including lack of accounting, auditing, and financial
reporting standards), the possibility of government-imposed restrictions, and
even the nationalization of assets.
Currency risk results from the constantly changing exchange rate between local
currency and the U.S. dollar. Whenever the Fund holds securities valued in a
foreign currency or holds the currency, changes in the exchange rate add or
subtract from the value of the investment.
<PAGE>
Custody risk refers to the process of clearing and settling trades. It also
covers holding securities with local agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local market. Governments or trade groups may compel local agents to hold
securities in designated depositories that are not subject to independent
evaluation. The less developed a country's securities market is, the greater the
likelihood of problems occurring.
Emerging markets risk includes the dramatic pace of change (economic, social,
and political) in emerging market countries as well as the other considerations
listed above. These markets are in early stages of development and are extremely
volatile. They can be marked by extreme inflation, devaluation of currencies,
dependence on trade partners, and hostile relations with neighboring countries.
Inflation Risk
Also known as purchasing power risk, inflation risk measures the effects of
continually rising prices on investments. If an investment's yield is lower than
the rate of inflation, your money will have less purchasing power as time goes
on.
Interest Rate Risk
The risk of losses attributable to changes in interest rates. This term is
generally associated with bond prices (when interest rates rise, bond prices
fall). In general, the longer the maturity of a bond, the higher its yield and
the greater its sensitivity to changes in interest rates.
Issuer Risk
The risk that an issuer, or the value of its stocks or bonds, will perform
poorly. Poor performance may be caused by poor management decisions, competitive
pressures, breakthroughs in technology, reliance on suppliers, labor problems or
shortages, corporate restructurings, fraudulent disclosures, or other factors.
Legal/Legislative Risk
Congress and other governmental units have the power to change existing laws
affecting securities. A change in law might affect an investment adversely.
Leverage Risk
Some derivative investments (such as options, futures, or options on futures)
require little or no initial payment and base their price on a security, a
currency, or an index. A small change in the value of the underlying security,
currency, or index may cause a sizable gain or loss in the price of the
instrument.
Liquidity Risk
Securities may be difficult or impossible to sell at the time that the Fund
would like. The Fund may have to lower the selling price, sell other
investments, or forego an investment opportunity.
Management Risk
The risk that a strategy or selection method utilized by the investment manager
may fail to produce the intended result. When all other factors have been
accounted for and the investment manager chooses an investment, there is always
the possibility that the choice will be a poor one.
<PAGE>
Market Risk
The market may drop and you may lose money. Market risk may affect a single
issuer, sector of the economy, industry, or the market as a whole. The market
value of all securities may move up and down, sometimes rapidly and
unpredictably.
Reinvestment Risk
The risk that an investor will not be able to reinvest income or principal at
the same rate it currently is earning.
Sector/Concentration Risk
Investments that are concentrated in a particular issuer, geographic region, or
industry will be more susceptible to changes in price (the more you diversify,
the more you spread risk).
Small Company Risk
Investments in small and medium companies often involve greater risks than
investments in larger, more established companies because small and medium
companies may lack the management experience, financial resources, product
diversification, and competitive strengths of larger companies. In addition, in
many instances the securities of small and medium companies are traded only
over-the-counter or on regional securities exchanges and the frequency and
volume of their trading is substantially less than is typical of larger
companies.
<PAGE>
INVESTMENT STRATEGIES
The following information supplements the discussion of the Fund's investment
objectives, policies, and strategies that are described in the prospectus and in
this SAI. The following describes many strategies that many mutual funds use and
types of securities that they purchase. Please refer to the section entitled
Investment Strategies and Types of Investments to see which are applicable to
the Fund.
Agency and Government Securities
The U.S. government and its agencies issue many different types of securities.
U.S. Treasury bonds, notes, and bills and securities including mortgage pass
through certificates of the Government National Mortgage Association (GNMA) are
guaranteed by the U.S. government. Other U.S. government securities are issued
or guaranteed by federal agencies or government-sponsored enterprises but are
not guaranteed by the U.S. government. This may increase the credit risk
associated with these investments.
Government-sponsored entities issuing securities include privately owned,
publicly chartered entities created to reduce borrowing costs for certain
sectors of the economy, such as farmers, homeowners, and students. They include
the Federal Farm Credit Bank System, Farm Credit Financial Assistance
Corporation, Federal Home Loan Bank, FHLMC, FNMA, Student Loan Marketing
Association (SLMA), and Resolution Trust Corporation (RTC). Government-sponsored
entities may issue discount notes (with maturities ranging from overnight to 360
days) and bonds. Agency and government securities are subject to the same
concerns as other debt obligations. (See also Debt Obligations and Mortgage- and
Asset-Backed Securities.)
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with agency and government securities include:
Call/Prepayment Risk, Inflation Risk, Interest Rate Risk, Management Risk, and
Reinvestment Risk.
Cash/Money Market Instruments
The Fund may maintain a portion of its assets in cash and cash-equivalent
investments. Cash-equivalent investments include short-term U.S. and Canadian
government securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances, and letters of credit of banks or
savings and loan associations having capital, surplus, and undivided profits (as
of the date of its most recently published annual financial statements) in
excess of $100 million (or the equivalent in the instance of a foreign branch of
a U.S. bank) at the date of investment. The Fund also may purchase short-term
notes and obligations of U.S. and foreign banks and corporations and may use
repurchase agreements with broker-dealers registered under the Securities
Exchange Act of 1934 and with commercial banks. (See also Commercial Paper, Debt
Obligations, Repurchase Agreements, and Variable- or Floating-Rate Securities.)
These types of instruments generally offer low rates of return and subject the
Fund to certain costs and expenses.
See the appendix for a discussion of securities ratings.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with cash/money market instruments include: Credit
Risk, Inflation Risk, and Management Risk.
Commercial Paper
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations, and other borrowers. It is sold to
investors with temporary idle cash as a way to increase returns on a short-term
basis. These instruments are generally unsecured, which increases the credit
risk associated with this type of investment. (See also Debt Obligations and
Illiquid and Restricted Securities.)
<PAGE>
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with commercial paper include: Credit Risk, Liquidity
Risk, and Management Risk.
Debt Obligations
Many different types of debt obligations exist (for example, bills, bonds, or
notes). Issuers of debt obligations have a contractual obligation to pay
interest at a specified rate on specified dates and to repay principal on a
specified maturity date. Certain debt obligations (usually intermediate- and
long-term bonds) have provisions that allow the issuer to redeem or "call" a
bond before its maturity. Issuers are most likely to call these securities
during periods of falling interest rates. When this happens, an investor may
have to replace these securities with lower yielding securities, which could
result in a lower return.
The market value of debt obligations is affected primarily by changes in
prevailing interest rates and the issuers perceived ability to repay the debt.
The market value of a debt obligation generally reacts inversely to interest
rate changes. When prevailing interest rates decline, the price usually rises,
and when prevailing interest rates rise, the price usually declines.
In general, the longer the maturity of a debt obligation, the higher its yield
and the greater the sensitivity to changes in interest rates. Conversely, the
shorter the maturity, the lower the yield but the greater the price stability.
As noted, the values of debt obligations also may be affected by changes in the
credit rating or financial condition of their issuers. Generally, the lower the
quality rating of a security, the higher the degree of risk as to the payment of
interest and return of principal. To compensate investors for taking on such
increased risk, those issuers deemed to be less creditworthy generally must
offer their investors higher interest rates than do issuers with better credit
ratings. (See also Agency and Government Securities, Corporate Bonds, and
High-Yield (High-Risk) Securities.)
See the appendix for a discussion of securities ratings.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with debt obligations include: Call/Prepayment Risk,
Credit Risk, Interest Rate Risk, Issuer Risk, Management Risk, and Reinvestment
Risk.
Illiquid and Restricted Securities
The Fund may invest in illiquid securities (i.e., securities that are not
readily marketable). These securities may include, but are not limited to,
certain securities that are subject to legal or contractual restrictions on
resale, certain repurchase agreements, and derivative instruments.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with illiquid and restricted securities include:
Liquidity Risk and Management Risk.
Lending of Portfolio Securities
The Fund may lend certain of its portfolio securities to broker-dealers. The
current policy of the Fund's board is to make these loans, either long- or
short-term, to broker-dealers. In making loans, the Fund receives the market
price in cash, U.S. government securities, letters of credit, or such other
collateral as may be permitted by regulatory agencies and approved by the board.
If the market price of the loaned securities goes up, an investor will get
additional collateral on a daily basis. The risks are that the borrower may not
provide additional collateral when required or return the securities when due.
During the existence of the loan, the Fund receives cash payments equivalent to
all interest or other distributions paid on the loaned securities. The Fund may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Fund will
receive reasonable interest on the loan or a flat fee from the borrower and
amounts
<PAGE>
equivalent to any dividends, interest, or other distributions on the securities
loaned.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with the lending of portfolio securities include:
Credit Risk and Management Risk.
Mortgage- and Asset-Backed Securities
Mortgage-backed securities represent direct or indirect participations in, or
are secured by and payable from, mortgage loans secured by real property, and
include single- and multi-class pass-through securities and Collateralized
Mortgage Obligations (CMOs). These securities may be issued or guaranteed by
U.S. government agencies or instrumentalities (see also Agency and Government
Securities), or by private issuers, generally originators and investors in
mortgage loans, including savings associations, mortgage bankers, commercial
banks, investment bankers, and special purpose entities. Mortgage-backed
securities issued by private lenders may be supported by pools of mortgage loans
or other mortgage-backed securities that are guaranteed, directly or indirectly,
by the U.S. government or one of its agencies or instrumentalities, or they may
be issued without any governmental guarantee of the underlying mortgage assets
but with some form of non-governmental credit enhancement.
Stripped mortgage-backed securities are a type of mortgage-backed security that
receive differing proportions of the interest and principal payments from the
underlying assets. Generally, there are two classes of stripped mortgage-backed
securities: Interest Only (IO) and Principal Only (PO). IOs entitle the holder
to receive distributions consisting of all or a portion of the interest on the
underlying pool of mortgage loans or mortgage-backed securities. POs entitle the
holder to receive distributions consisting of all or a portion of the principal
of the underlying pool of mortgage loans or mortgage-backed securities. The cash
flows and yields on IOs and POs are extremely sensitive to the rate of principal
payments (including prepayments) on the underlying mortgage loans or
mortgage-backed securities. A rapid rate of principal payments may adversely
affect the yield to maturity of IOs. A slow rate of principal payments may
adversely affect the yield to maturity of POs. If prepayments of principal are
greater than anticipated, an investor in IOs may incur substantial losses. If
prepayments of principal are slower than anticipated, the yield on a PO will be
affected more severely than would be the case with a traditional mortgage-backed
security.
CMOs are hybrid mortgage-related instruments secured by pools of mortgage loans
or other mortgage-related securities, such as mortgage pass through securities
or stripped mortgage-backed securities. CMOs may be structured into multiple
classes, often referred to as "tranches," with each class bearing a different
stated maturity and entitled to a different schedule for payments of principal
and interest, including prepayments. Principal prepayments on collateral
underlying a CMO may cause it to be retired substantially earlier than its
stated maturity.
The yield characteristics of mortgage-backed securities differ from those of
other debt securities. Among the differences are that interest and principal
payments are made more frequently on mortgage-backed securities, usually
monthly, and principal may be repaid at any time. These factors may reduce the
expected yield.
Asset-backed securities have structural characteristics similar to
mortgage-backed securities. Asset-backed debt obligations represent direct or
indirect participation in, or secured by and payable from, assets such as motor
vehicle installment sales contracts, other installment loan contracts, home
equity loans, leases of various types of property, and receivables from credit
card or other revolving credit arrangements. The credit quality of most
asset-backed securities depends primarily on the credit quality of the assets
underlying such securities, how well the entity issuing the security is
insulated from the credit risk of the originator or any other affiliated
entities, and the amount and quality of any credit enhancement of the
securities. Payments or distributions of principal and interest on asset-backed
debt obligations may be supported by non-governmental credit enhancements
including letters of credit, reserve funds, overcollateralization, and
guarantees by third parties. The market for privately issued asset-backed debt
<PAGE>
obligations is smaller and less liquid than the market for government sponsored
mortgage-backed securities. (See also Derivative Instruments.)
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with mortgage- and asset-backed securities include:
Call/Prepayment Risk, Credit Risk, Interest Rate Risk, Liquidity Risk, and
Management Risk.
Municipal Obligations
Municipal obligations include debt obligations issued by or on behalf of states,
territories, or possessions of the United States (including the District of
Columbia). The interest on these obligations is generally exempt from federal
income tax. Municipal obligations are generally classified as either "general
obligations" or "revenue obligations."
General obligation bonds are secured by the issuer's pledge of its full faith,
credit, and taxing power for the payment of interest and principal. Revenue
bonds are payable only from the revenues derived from a project or facility or
from the proceeds of a specified revenue source. Industrial development bonds
are generally revenue bonds secured by payments from and the credit of private
users. Municipal notes are issued to meet the short-term funding requirements of
state, regional, and local governments. Municipal notes include tax anticipation
notes, bond anticipation notes, revenue anticipation notes, tax and revenue
anticipation notes, construction loan notes, short-term discount notes,
tax-exempt commercial paper, demand notes, and similar instruments.
Municipal lease obligations may take the form of a lease, an installment
purchase, or a conditional sales contract. They are issued by state and local
governments and authorities to acquire land, equipment, and facilities. An
investor may purchase these obligations directly, or it may purchase
participation interests in such obligations. Municipal leases may be subject to
greater risks than general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must meet in order
to issue municipal obligations. Municipal leases may contain a covenant by the
state or municipality to budget for and make payments due under the obligation.
Certain municipal leases may, however, provide that the issuer is not obligated
to make payments on the obligation in future years unless funds have been
appropriated for this purpose each year.
Yields on municipal bonds and notes depend on a variety of factors, including
money market conditions, municipal bond market conditions, the size of a
particular offering, the maturity of the obligation, and the rating of the
issue. The municipal bond market has a large number of different issuers, many
having smaller sized bond issues, and a wide choice of different maturities
within each issue. For these reasons, most municipal bonds do not trade on a
daily basis and many trade only rarely. Because many of these bonds trade
infrequently, the spread between the bid and the offer may be wider and the time
needed to develop a bid or an offer may be longer than other security markets.
See the appendix for a discussion of securities ratings. (See also Debt
Obligations.)
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with municipal obligations include: Credit Risk, Event
Risk, Inflation Risk, Interest Rate Risk, Legal/Legislative Risk, and Market
Risk.
Repurchase Agreements
The Fund may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys a security at one price, and
at the time of sale, the seller agrees to repurchase the obligation at a
mutually agreed upon time and price (usually within seven days). The repurchase
agreement, thereby, determines the yield during the purchaser's holding period,
while the seller's obligation to repurchase is secured by the value of the
underlying security. Repurchase agreements could involve certain risks in the
event of a default or insolvency of the other party to the agreement, including
possible delays or restrictions upon the Fund's ability to dispose of the
underlying securities. A specific risk of a repurchase
<PAGE>
agreement is that if the seller seeks the protection of bankruptcy laws, the
Fund's ability to liquidate the security involved could be impaired.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with repurchase agreements include: Credit Risk and
Management Risk.
Variable- or Floating-Rate Securities
The Fund may invest in securities that offer a variable- or floating-rate of
interest. Variable-rate securities provide for automatic establishment of a new
interest rate at fixed intervals (e.g., daily, monthly, semi-annually, etc.).
Floating-rate securities generally provide for automatic adjustment of the
interest rate whenever some specified interest rate index changes.
Variable- or floating-rate securities frequently include a demand feature
enabling the holder to sell the securities to the issuer at par. In many cases,
the demand feature can be exercised at any time. Some securities that do not
have variable or floating interest rates may be accompanied by puts producing
similar results and price characteristics.
Variable-rate demand notes include master demand notes that are obligations that
permit the Fund to invest fluctuating amounts, which may change daily without
penalty, pursuant to direct arrangements between the Fund as lender, and the
borrower. The interest rates on these notes fluctuate from time to time. The
issuer of such obligations normally has a corresponding right, after a given
period, to prepay in its discretion the outstanding principal amount of the
obligations plus accrued interest upon a specified number of days' notice to the
holders of such obligations. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that such
instruments generally will be traded. There generally is not an established
secondary market for these obligations. Accordingly, where these obligations are
not secured by letters of credit or other credit support arrangements, the
Fund's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies and may involve heightened risk of default by the issuer.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with variable- or floating-rate securities include:
Credit Risk and Management Risk.
<PAGE>
SECURITY TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies set by the board, AEFC is authorized to determine,
consistent with the Fund's investment goal and policies, which securities will
be purchased, held, or sold. In determining where the buy and sell orders are to
be placed, AEFC has been directed to use its best efforts to obtain the best
available price and the most favorable execution except where otherwise
authorized by the board. In selecting broker-dealers to execute transactions,
AEFC may consider the price of the security, including commission or mark-up,
the size and difficulty of the order, the reliability, integrity, financial
soundness, and general operation and execution capabilities of the broker, the
broker's expertise in particular markets, and research services provided by the
broker.
The Fund, AEFC and the Distributor each have a strict Code of Ethics that
prohibits its affiliated personnel from engaging in personal investment
activities that compete with or attempt to take advantage of planned portfolio
transactions for the Fund.
The Fund's securities may be traded on a principal rather than an agency basis.
In other words, AEFC will trade directly with the issuer or with a dealer who
buys or sells for its own account, rather than acting on behalf of another
client. AEFC does not pay the dealer commissions. Instead, the dealer's profit,
if any, is the difference, or spread, between the dealer's purchase and sale
price for the security.
On occasion, it may be desirable to compensate a broker for research services or
for brokerage services by paying a commission that might not otherwise be
charged or a commission in excess of the amount another broker might charge. The
board has adopted a policy authorizing AEFC to do so to the extent authorized by
law, if AEFC determines, in good faith, that such commission is reasonable in
relation to the value of the brokerage or research services provided by a broker
or dealer, viewed either in the light of that transaction or AEFC's overall
responsibilities with respect to the Fund and the other American Express mutual
funds for which it acts as investment manager.
Research provided by brokers supplements AEFC's own research activities. Such
services include economic data on, and analysis of, U.S. and foreign economies;
information on specific industries; information about specific companies,
including earnings estimates; purchase recommendations for stocks and bonds;
portfolio strategy services; political, economic, business, and industry trend
assessments; historical statistical information; market data services providing
information on specific issues and prices; and technical analysis of various
aspects of the securities markets, including technical charts. Research services
may take the form of written reports, computer software, or personal contact by
telephone or at seminars or other meetings. AEFC has obtained, and in the future
may obtain, computer hardware from brokers, including but not limited to
personal computers that will be used exclusively for investment decision-making
purposes, which include the research, portfolio management, and trading
functions and other services to the extent permitted under an interpretation by
the SEC.
When paying a commission that might not otherwise be charged or a commission in
excess of the amount another broker might charge, AEFC must follow procedures
authorized by the board. To date, three procedures have been authorized. One
procedure permits AEFC to direct an order to buy or sell a security traded on a
national securities exchange to a specific broker for research services it has
provided. The second procedure permits AEFC, in order to obtain research, to
direct an order on an agency basis to buy or sell a security traded in the
over-the-counter market to a firm that does not make a market in that security.
The commission paid generally includes compensation for research services. The
third procedure permits AEFC, in order to obtain research and brokerage
services, to cause the Fund to pay a commission in excess of the amount another
broker might have charged. AEFC has advised the Fund that it is necessary to do
business with a number of brokerage firms on a continuing basis to obtain such
services as the handling of large orders, the willingness of a broker to risk
its own money by taking a position in a security, and the specialized handling
of a particular group of securities that only certain brokers may be able to
offer. As a result of this arrangement, some portfolio transactions may not be
effected at the lowest commission, but AEFC believes it may obtain better
overall execution. AEFC has represented that under all three
<PAGE>
procedures the amount of commission paid will be reasonable and competitive in
relation to the value of the brokerage services performed or research provided.
All other transactions will be placed on the basis of obtaining the best
available price and the most favorable execution. In so doing, if in the
professional opinion of the person responsible for selecting the broker or
dealer, several firms can execute the transaction on the same basis,
consideration will be given by such person to those firms offering research
services. Such services may be used by AEFC in providing advice to all American
Express mutual funds even though it is not possible to relate the benefits to
any particular fund.
Each investment decision made for the Fund is made independently from any
decision made for another portfolio, fund, or other account advised by AEFC or
any of its subsidiaries. When the Fund buys or sells the same security as
another portfolio, fund, or account, AEFC carries out the purchase or sale in a
way the Fund agrees in advance is fair. Although sharing in large transactions
may adversely affect the price or volume purchased or sold by the Fund, the Fund
hopes to gain an overall advantage in execution.
On a periodic basis, AEFC makes a comprehensive review of the broker-dealers and
the overall reasonableness of their commissions. The review evaluates execution,
operational efficiency, and research services.
The Fund paid total brokerage commissions of $0 for fiscal year ended Dec. 31,
1999, $0 for fiscal year 1998, and $0 for fiscal year 1997. Substantially all
firms through whom transactions were executed provide research services.
No transactions were directed to brokers because of research services they
provided to the Fund.
As of the end of the most recent fiscal year, the Fund held no securities of its
regular brokers or dealers or of the parent of those brokers or dealers that
derived more than 15% of gross revenue from securities-related activities.
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AMERICAN EXPRESS FINANCIAL
CORPORATION
- --------------------------------------------------------------------------------
Affiliates of American Express Company (of which AEFC is a wholly-owned
subsidiary) may engage in brokerage and other securities transactions on behalf
of the Fund according to procedures adopted by the board and to the extent
consistent with applicable provisions of the federal securities laws. AEFC will
use an American Express affiliate only if (i) AEFC determines that the Fund will
receive prices and executions at least as favorable as those offered by
qualified independent brokers performing similar brokerage and other services
for the Fund and (ii) the affiliate charges the Fund commission rates consistent
with those the affiliate charges comparable unaffiliated customers in similar
transactions and if such use is consistent with terms of the Investment
Management Services Agreement.
No brokerage commissions were paid to brokers affiliated with AEFC for the three
most recent fiscal years.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
The Fund may quote various performance figures to illustrate past performance.
Average annual total return and current yield quotations, if applicable, used by
the Fund are based on standardized methods of computing performance as required
by the SEC. An explanation of the methods used by the Fund to compute
performance follows below.
<PAGE>
AVERAGE ANNUAL TOTAL RETURN
The Fund may calculate average annual total return for a class for certain
periods by finding the average annual compounded rates of return over the period
that would equate the initial amount invested to the ending redeemable value,
according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of a period, at the end of the period
(or fractional portion thereof)
AGGREGATE TOTAL RETURN
The Fund may calculate aggregate total return for a class for certain periods
representing the cumulative change in the value of an investment in the Fund
over a specified period of time according to the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of a period, at the end of the period
(or fractional portion thereof)
Annualized yield
The Fund calculates annualized simple and compound yields based on a seven-day
period.
The simple yield is calculated by determining the net change in the value of a
hypothetical account having a balance of one share at the beginning of the
seven-day period, dividing the net change in account value by the value of the
account at the beginning of the period to obtain the return for the period, and
multiplying that return by 365/7 to obtain an annualized figure. The value of
the hypothetical account includes the amount of any declared dividends, the
value of any shares purchased with any dividend paid during the period and any
dividends declared for such shares. The Fund's yield does not include any
realized or unrealized gains or losses.
The Fund calculates its compound yield according to the following formula:
Compound Yield = (return for seven-day period + 1) x (365/7) - 1
The Fund's simple annualized yield was 3.67% and its compound yield was 3.74% on
Dec. 31, 1999.
Yield, or rate of return, on Fund shares may fluctuate daily and does not
provide a basis for determining future yields. However, it may be used as one
element in assessing how the Fund is meeting its goal. When comparing an
investment in the Fund with savings accounts and similar investment
alternatives, you must consider that such alternatives often provide an agreed
to or guaranteed fixed yield for a stated period of time, whereas the Fund's
yield fluctuates. In comparing the yield of one money market fund to another,
you should consider the Fund's investment policies, including the types of
investments permitted.
In its sales material and other communications, the Fund may quote, compare or
refer to rankings, yields, or returns as published by independent statistical
services or publishers and publications such as The Bank Rate Monitor National
Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market
<PAGE>
Fund Report, Financial Services Week, Financial Times, Financial World, Forbes,
Fortune, Global Investor, Institutional Investor, Investor's Business Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal Investor,
Shearson Lehman Aggregate Bond Index, Stanger Report, Sylvia Porter's Personal
Finance, USA Today, U.S. News and World Report, The Wall Street Journal, and
Wiesenberger Investment Companies Service. The Fund also may compare its
performance to a wide variety of indexes or averages. There are similarities and
differences between the investments that the Fund may purchase and the
investments measured by the indexes or averages and the composition of the
indexes or averages will differ from that of the Fund.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
All of the securities in the Fund's portfolio are valued at amortized cost. The
amortized cost method of valuation is an approximation of market value
determined by systematically increasing the carrying value of a security if
acquired at a discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the maturity date. It
does not take into consideration unrealized capital gains or losses.
The board has established procedures designed to stabilize the fund's price per
share for purposes of sales and redemptions at $1, to the extent that it is
reasonably possible to do so. These procedures include review of the Fund's
securities by the board, at intervals deemed appropriate by it, to determine
whether the Fund's net asset value per share computed by using available market
quotations deviates from a share value of $1 as computed using the amortized
cost method. The board must consider any deviation that appears and if it
exceeds 0.5% it must determine what action, if any, needs to be taken. If the
board determines a deviation exists that may result in a material dilution of
the holdings of current shareholders or investors, or in other unfair
consequences for such persons, it must undertake remedial action that it deems
necessary and appropriate. Such action may include withholding dividends,
calculating net asset value per share for purposes of sales and redemptions
using available market quotations, making redemptions in kind, and selling
securities before maturity in order to realize capital gains or losses or to
shorten average portfolio maturity.
While the amortized cost method provides certainty and consistency in portfolio
valuation, it may result in valuations of securities that are either somewhat
higher or lower than the prices at which the securities could be sold. This
means that during times of declining interest rates the yield on the Fund's
shares may be higher than if valuations of securities were made based on actual
market prices and estimates of market prices. Accordingly, if using the
amortized cost method were to result in a lower portfolio value, a prospective
investor in the Fund would be able to obtain a somewhat higher yield than he
would get if portfolio valuation were based on actual market values. Existing
shareholders, on the other hand, would receive a somewhat lower yield than they
would otherwise receive. The opposite would happen during a period of rising
interest rates.
INVESTING IN THE FUND
- -------------------------------------------------------------------------------
The minimum purchase for directors, officers and employees of the Fund or AEFC
and AEFC financial advisors is $1,000 for the Fund (except payroll deduction
plans), with a minimum additional purchase of $25.
SYSTEMATIC INVESTMENT PROGRAMS
After you make your initial investment of $100 or more, you must make additional
payments of $100 or more on at least a monthly basis until your balance reaches
$2,000. These minimums do not apply to all systematic investment programs. You
decide how often to make payments - monthly, quarterly, or semiannually. You are
not obligated to make any payments. You can omit payments or discontinue the
investment program altogether. The Fund also can change the program or end it at
any time.
<PAGE>
AUTOMATIC DIRECTED DIVIDENDS
Dividends, including capital gain distributions, paid by another American
Express mutual fund, may be used to automatically purchase shares of the Fund.
Dividends may be directed to existing accounts only. Dividends declared by a
fund are exchanged to this Fund the following day. Dividends can be exchanged
into the same class of another American Express mutual fund but cannot be split
to make purchases in two or more funds. Automatic directed dividends are
available between accounts of any ownership except:
o Between a non-custodial account and an IRA, or 401(k) plan account or other
qualified retirement account of which American Express Trust Company acts
as custodian;
o Between two American Express Trust Company custodial accounts with
different owners (for example, you may not exchange dividends from your IRA
to the IRA of your spouse); and
o Between different kinds of custodial accounts with the same ownership (for
example, you may not exchange dividends from your IRA to your 401(k) plan
account, although you may exchange dividends from one IRA to another IRA).
Dividends may be directed from accounts established under the Uniform Gifts to
Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) only into other UGMA
or UTMA accounts with identical ownership.
The Fund's investment goal is described in its prospectus along with other
information, including fees and expense ratios. Before exchanging dividends into
another fund, you should read that fund's prospectus. You will receive a
confirmation that the automatic directed dividend service has been set up for
your account.
REJECTION OF BUSINESS
The Fund reserves the right to reject any business, in its sole discretion.
SELLING SHARES
- --------------------------------------------------------------------------------
You have a right to sell your shares at any time. For an explanation of sales
procedures, please see the prospectus. During an emergency, the board can
suspend the computation of NAV, stop accepting payments for purchase of shares,
or suspend the duty of the Fund to redeem shares for more than seven days. Such
emergency situations would occur if:
o The Exchange closes for reasons other than the usual weekend and holiday
closings or trading on the Exchange is restricted, or
o Disposal of the Fund's securities is not reasonably practicable or it is
not reasonably practicable for the Fund to determine the fair value of its
net assets, or
o The SEC, under the provisions of the 1940 Act, declares a period of
emergency to exist.
Should the Fund stop selling shares, the board may make a deduction from the
value of the assets held by the Fund to cover the cost of future liquidations of
the assets so as to distribute fairly these costs among all shareholders.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act, which
obligates the Fund to redeem shares in cash, with respect to any one shareholder
during any 90-day period, up to the lesser of $250,000 or 1% of the net assets
of the Fund at the beginning of the period. Although redemptions in
<PAGE>
excess of this limitation would normally be paid in cash, the Fund reserves the
right to make these payments in whole or in part in securities or other assets
in case of an emergency, or if the payment of a redemption in cash would be
detrimental to the existing shareholders of the Fund as determined by the board.
In these circumstances, the securities distributed would be valued as set forth
in this SAI. Should the Fund distribute securities, a shareholder may incur
brokerage fees or other transaction costs in converting the securities to cash.
PAY-OUT PLANS
- --------------------------------------------------------------------------------
You can use any of several pay-out plans to redeem your investment in regular
installments. If you redeem Class B shares you may be subject to a contingent
deferred sales charge as discussed in the prospectus. While the plans differ on
how the pay-out is figured, they all are based on the redemption of your
investment. Net investment income dividends and any capital gain distributions
will automatically be reinvested, unless you elect to receive them in cash. If
you are redeeming a tax-qualified plan account for which American Express Trust
Company acts as custodian, you can elect to receive your dividends and other
distributions in cash when permitted by law. If you redeem an IRA or a qualified
retirement account, certain restrictions, federal tax penalties, and special
federal income tax reporting requirements may apply. You should consult your tax
advisor about this complex area of the tax law.
Applications for a systematic investment in a class of the Fund subject to a
sales charge normally will not be accepted while a pay-out plan for any of those
funds is in effect. Occasional investments, however, may be accepted.
To start any of these plans, please consult your selling agent or write American
Express Client Service Corporation, P.O. Box 534, Minneapolis, MN 55440-0534, or
call 800-437-3133. Your authorization must be received at least five days before
the date you want your payments to begin. The initial payment must be at least
$50. Payments will be made on a monthly, bimonthly, quarterly, semiannual, or
annual basis.
Your choice is effective until you change or cancel it.
The following pay-out plans are designed to take care of the needs of most
shareholders in a way AEFC can handle efficiently and at a reasonable cost. If
you need a more irregular schedule of payments, it may be necessary for you to
make a series of individual redemptions, in which case you will have to send in
a separate redemption request for each pay-out. The Fund reserves the right to
change or stop any pay-out plan and to stop making such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be redeemed at regular
intervals during the time period you choose. This plan is designed to end in
complete redemption of all shares in your account by the end of the fixed
period.
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed for each
payment and that amount will be sent to you. The length of time these payments
continue is based on the number of shares in your account.
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares is necessary
to make the payment will be redeemed in regular installments until the account
is closed.
<PAGE>
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset value of the
shares in the account computed on the day of each payment. Percentages range
from 0.25% to 0.75%. For example, if you are on this plan and arrange to take
0.5% each month, you will get $50 if the value of your account is $10,000 on the
payment date.
TAXES
- -------------------------------------------------------------------------------
For tax purposes, an exchange is considered a sale and purchase, and may results
in a gain or loss. A sale is a taxable transaction. If you sell shares for more
than their cost, the difference is a capital gain. Your gain may be short term
(for shares held for one year or less) or long term (for shares held more than
one year). If you sell shares for less than their cost, the difference is a
capital loss. If you buy Class A shares of this or another American Express
mutual fund and within 91 days exchange into this Fund, you may not include the
sales charge in your calculation of tax gain or loss on the sale of the first
fund you purchased. The sales charge may be included in the calculation of your
tax gain or loss on a subsequent sale of this Fund.
If you have a nonqualified investment in the Fund and you wish to move part or
all of those shares to an IRA or qualified retirement account in the Fund, you
can do so without paying a sales charge. However, this type of exchange is
considered a redemption of shares and may result in a gain or loss for tax
purposes. In addition, this type of exchange may result in an excess
contribution under IRA or qualified plan regulations if the amount exchanged
plus the amount of the initial sales charge applied to the amount exchanged
exceeds annual contribution limitations. For example: If you were to exchange
$2,000 in Class A shares from a nonqualified account to an IRA without
considering the 5% ($100) initial sales charge applicable to that $2,000, you
may be deemed to have exceeded current IRA annual contribution limitations. You
should consult your tax advisor for further details about this complex subject.
Capital gain distributions, if any, received by shareholders should be treated
as long-term capital gains regardless of how long they owned their shares.
Short-term capital gains earned by the Fund are paid to shareholders as part of
their ordinary income dividend and are taxable. A special 28% rate on capital
gains may apply to sales of precious metals, if any, owned directly by the Fund.
A special 25% rate on capital gains may apply to investments in REITs.
Under federal tax law, by the end of a calendar year the Fund must declare and
pay dividends representing 98% of ordinary income for that calendar year and 98%
of net capital gains (both long-term and short-term) for the 12-month period
ending Dec. 31 of that calendar year. The Fund is subject to an excise tax equal
to 4% of the excess, if any, of the amount required to be distributed over the
amount actually distributed. The Fund intends to comply with federal tax law and
avoid any excise tax.
This is a brief summary that relates to federal income taxation only.
Shareholders should consult their tax advisor as to the application of federal,
state, and local income tax laws to Fund distributions.
AGREEMENTS
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AEFC, a wholly-owned subsidiary of American Express Company, is the investment
manager for the Fund. Under the Investment Management Services Agreement, AEFC,
subject to the policies set by the board, provides investment management
services.
<PAGE>
For its services, AEFC is paid a fee based on the following schedule. Each class
of the Fund pays its proportionate share of the fee.
Assets Annual rate at
(billions) each asset level
- --------- ----------------
First $1.00 0.360%
Next 0.50 0.343
Next 0.50 0.325
Next 0.50 0.308
Next 1.00 0.290
Next 3.00 0.270
Over 6.50 0.250
On the last day of the most recent fiscal year, the daily rate applied to the
Fund's net assets was equal to 0.360% on an annual basis. The fee is calculated
for each calendar day on the basis of net assets as of the close of business two
business days prior to the day for which the calculation is made.
The management fee is paid monthly. Under the agreement, the total amount paid
was $603,060 for fiscal year 1999, $496,593 for fiscal year 1998, and $488,015
for fiscal year 1997.
Under the agreement, the Fund also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees; audit and certain legal
fees; fidelity bond premiums; registration fees for shares; office expenses;
postage of confirmations except purchase confirmations; consultants' fees;
compensation of board members, officers and employees; corporate filing fees;
organizational expenses; expenses incurred in connection with lending
securities; and expenses properly payable by the Fund, approved by the board.
Under the agreement, nonadvisory expenses, net of earnings credits, paid by the
Fund were $179,185 for fiscal year 1999, $91,073 for fiscal year 1998, and
$69,516 for fiscal year 1997.
Administrative Services Agreement
The Fund has an Administrative Services Agreement with AEFC. Under this
agreement, the Fund pays AEFC for providing administration and accounting
services. The fee is calculated as follows:
Assets Annual rate at
(billions) each asset level
- --------- ----------------
First $1.0 0.030%
Next 0.5 0.027
Next 0.5 0.025
Next 0.5 0.022
Over 2.5 0.020
On the last day of the most recent fiscal year, the daily rate applied to the
Fund's net assets was equal to 0.030% on an annual basis. The fee is calculated
for each calendar day on the basis of net assets as of the close of business two
business days prior to the day for which the calculation is made. Under the
agreement, the Fund paid fees of $55,748 for fiscal year 1999, $50,968 for
fiscal year 1998, and $48,992
for fiscal year 1997.
Transfer Agency Agreement
The Fund has a Transfer Agency Agreement with American Express Client Service
Corporation (AECSC). This agreement governs AECSC's responsibility for
administering and/or performing transfer agent functions, for acting as service
agent in connection with dividend and distribution functions and for performing
shareholder account administration agent functions in connection with the
issuance, exchange and redemption or repurchase of the Fund's shares. Under the
agreement, AECSC earns a fee from the
<PAGE>
Fund determined by multiplying the number of shareholder accounts at the end of
the day by a rate of $24 per year and dividing by the number of days in the
year. The fees paid to AECSC may be changed by the board without shareholder
approval.
DISTRIBUTION AGREEMENT
American Express Financial Advisors Inc. (the Distributor) is the Fund's
principal underwriter. The Fund's shares are offered on a continuous basis.
Custodian Agreement
The Fund's securities and cash are held by U.S. Bank National Association, 180
E. Fifth St., St. Paul, MN 55101-1631, through a custodian agreement. The
custodian is permitted to deposit some or all of its securities in central
depository systems as allowed by federal law. For its services, the Fund pays
the custodian a maintenance charge and a charge per transaction in addition to
reimbursing the custodian's out-of-pocket expenses.
ORGANIZATIONAL INFORMATION
- -------------------------------------------------------------------------------
The Fund is an open-end management investment company. The Fund headquarters are
at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-3268.
SHARES
The shares of the Fund represent an interest in that fund's assets only (and
profits or losses), and, in the event of liquidation, each share of the Fund
would have the same rights to dividends and assets as every other share of that
Fund.
VOTING RIGHTS
As a shareholder in the Fund, you have voting rights over the Fund's management
and fundamental policies. You are entitled to one vote for each share you own.
Each class, if applicable, has exclusive voting rights with respect to matters
for which separate class voting is appropriate under applicable law. All shares
have cumulative voting rights with respect to the election of board members.
This means that you have as many votes as the number of shares you own,
including fractional shares, multiplied by the number of members to be elected.
Dividend Rights
Dividends paid by the Fund, if any, with respect to each class of shares, if
applicable, will be calculated in the same manner, at the same time, on the same
day, and will be in the same amount, except for differences resulting from
differences in fee structures.
AMERICAN EXPRESS FINANCIAL CORPORATION
AEFC has been a provider of financial services since 1894. Its family of
companies offers not only mutual funds but also insurance, annuities, investment
certificates and a broad range of financial management services.
In addition to managing assets of more than $101 billion for the American
Express Funds, AEFC manages investments for itself and its subsidiaries, IDS
Certificate Company and IDS Life Insurance Company. Total assets under
management as of the end of the most recent fiscal year were more than $262
billion.
AEFA serves individuals and businesses through its nationwide network of more
than 180 offices and more than 9,500 advisors.
<PAGE>
<TABLE>
<CAPTION>
FUND HISTORY TABLE FOR ALL PUBLICLY OFFERED AMERICAN EXPRESS FUNDS*
<S> <C> <C> <C> <C> <C>
Date of Form of State of Fiscal
Fund Organization Organization Organization Year End Diversified
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Bond Fund, Inc. 6/27/74, 6/31/86*** Corporation NV/MN 8/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Discovery Fund, Inc. 4/29/81, 6/13/86*** Corporation NV/MN 7/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Equity Select Fund, Inc.** 3/18/57, 6/13/86*** Corporation NV/MN 11/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Extra Income Fund, Inc. 8/17/83 Corporation MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Federal Income Fund, Inc. 3/12/85 Corporation MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Series, Inc. 10/28/88 Corporation MN 10/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Emerging Markets Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Balanced Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Bond Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Growth Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Innovations Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Growth Series, Inc. 5/21/70, 6/13/86*** Corporation NV/MN 7/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Growth Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Research Opportunities Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP High Yield Tax-Exempt Fund, Inc. 12/21/78, Corporation NV/MN 11/30 Yes
6/13/86***
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP International Fund, Inc. 7/18/84 Corporation MN 10/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Investment Series, Inc. 1/18/40, 6/13/86*** Corporation NV/MN 9/30
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Diversified Equity Income Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Mutual Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Managed Series, Inc. 10/9/84 Corporation MN 9/30
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Managed Allocation Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Market Advantage Series, Inc. 8/25/89 Corporation MN 1/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Blue Chip Advantage Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP International Equity Index No
Fund
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Mid Cap Index Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Nasdaq 100 Index Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP S&P 500 Index Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Small Company Index Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Total Stock Market Index Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Money Market Series, Inc. 8/22/75, 6/13/86*** Corporation NV/MN 7/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Cash Management Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP New Dimensions Fund, Inc. 2/20/68, 6/13/86*** Corporation NV/MN 7/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Precious Metals Fund, Inc. 10/5/84 Corporation MN 3/31 No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Progressive Fund, Inc. 4/23/68, 6/13/86*** Corporation NV/MN 9/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Selective Fund, Inc. 2/10/45, 6/13/86*** Corporation NV/MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Stock Fund, Inc. 2/10/45, 6/13/86*** Corporation NV/MN 9/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Strategy Series, Inc. 1/24/84 Corporation MN 3/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Equity Value Fund** Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Small Cap Advantage Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Strategy Aggressive Fund** Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Exempt Series, Inc. 9/30/76, 6/13/86*** Corporation NV/MN 11/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Intermediate Tax-Exempt Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Exempt Bond Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Free Money Fund, Inc. 2/29/80, 6/13/86*** Corporation NV/MN 12/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Utilities Income Fund, Inc. 3/25/88 Corporation MN 6/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP California Tax-Exempt Trust 4/7/86 Business MA 6/30
Trust****
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP California Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Special Tax-Exempt Series Trust 4/7/86 Business MA 6/30
Trust****
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Insured Tax-Exempt Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Massachusetts Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Michigan Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Minnesota Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP New York Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Ohio Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
</TABLE>
* At the shareholders meeting held on June 16, 1999, shareholders of the
existing funds (except for AXP Small Cap Advantage Fund) approved the name
change from IDS to AXP. In addition to substituting AXP for IDS, the
following series changed their names: IDS Growth Fund, Inc. to AXP Growth
Series, Inc., IDS Managed Retirement Fund, Inc. to AXP Managed Series,
Inc., IDS Strategy Fund, Inc. to AXP Strategy Series, Inc., and IDS
Tax-Exempt Bond Fund, Inc. to AXP Tax-Exempt Series, Inc.
<PAGE>
** At the shareholders meeting held on Nov. 9, 1994, IDS Equity Plus Fund,
Inc. changed its name to IDS Equity Select Fund, Inc. At that same time IDS
Strategy Aggressive Equity Fund changed its name to IDS Strategy Aggressive
Fund, and IDS Strategy Equity Fund changed its name to IDS Equity Value
Fund.
*** Date merged into a Minnesota corporation incorporated on 4/7/86.
**** Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the
trust itself is unable to meet its obligations.
BOARD MEMBERS AND OFFICERS
- --------------------------------------------------------------------------------
Shareholders elect a board that oversees the Fund's operations. The board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the board.
The following is a list of the Fund's board members. They serve 15 Master Trust
portfolios and 58 American Express mutual funds.
H. Brewster Atwater, Jr.'
Born in 1931
4900 IDS Tower
Minneapolis, MN
Retired chairman and chief executive officer, General Mills, Inc. Director,
Merck & Co., Inc.
Arne H. Carlson+'*
Born in 1934
901 S. Marquette Ave.
Minneapolis, MN
Chairman and chief executive officer of the Fund. Chairman, Board Services
Corporation (provides administrative services to boards). Former Governor of
Minnesota.
Lynne V. Cheney
Born in 1941
American Enterprise Institute
for Public Policy Research (AEI)
1150 17th St., N.W. Washington, D.C.
Distinguished Fellow AEI. Former Chair of National Endowment of the Humanities.
Director, The Reader's Digest Association Inc., Lockheed-Martin, and Union
Pacific Resources.
William H. Dudley'**
Born in 1932
2900 IDS Tower
Minneapolis, MN
Senior adviser to the chief executive officer of AEFC.
David R. Hubers**
Born in 1943
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of AEFC.
<PAGE>
Heinz F. Hutter'
Born in 1929
P.O. Box 2187
Minneapolis, MN
Retired president and chief operating officer, Cargill, Incorporated (commodity
merchants and processors).
Anne P. Jones
Born in 1935
5716 Bent Branch Rd.
Bethesda, MD
Attorney and telecommunications consultant. Former partner, law firm of
Sutherland, Asbill & Brennan. Director, Motorola, Inc. (electronics), C-Cor
Electronics, Inc., and Amnex, Inc. (communications).
William R. Pearce'+
Born in 1927
2050 One Financial Plaza
Minneapolis, MN
RII Weyerhaeuser World Timberfund, L.P. (develops timber resources) - management
committee. Retired vice chairman of the board, Cargill, Incorporated (commodity
merchants and processors). Former chairman, American Express Funds.
Alan K. Simpson
Born in 1931
1201 Sunshine Ave.
Cody, WY
Visiting lecturer and Director of The Institute of Politics, Harvard University.
Former three-term United States Senator for Wyoming. Former Assistant Republican
Leader, U.S. Senate. Director, Biogen (bio-pharmaceuticals).
John R. Thomas+'**
Born in 1937
2900 IDS Tower
Minneapolis, MN
Senior vice president of AEFC.
C. Angus Wurtele'
Born in 1934
Valspar Corporation
Suite 1700
Foshay Tower
Minneapolis, MN
Retired chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Valspar, Bemis Corporation (packaging) and
General Mills, Inc. (consumer foods).
+ Member of executive committee.
' Member of investment review committee.
* Interested person by reason of being an officer and employee of the Fund.
**Interested person by reason of being an officer, board member, employee and/or
shareholder of AEFC or American Express.
<PAGE>
The board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. In addition to Mr. Carlson, who
is chairman of the board, and Mr. Thomas, who is president, the Fund's other
officers are:
Leslie L. Ogg
Born in 1938
901 S. Marquette Ave.
Minneapolis, MN
President of Board Services Corporation. Vice president, general counsel and
secretary for the Fund.
Officers who also are officers and employees of AEFC:
Peter J. Anderson
Born in 1942
IDS Tower 10
Minneapolis, MN
Director and senior vice president-investments of AEFC. Vice
president-investments for the Fund.
Frederick C. Quirsfeld
Born in 1947
IDS Tower 10
Minneapolis, MN
Vice president - taxable mutual fund investments of AEFC. Vice president - fixed
income investments for the Fund.
John M. Knight
Born in 1952
IDS Tower 10
Minneapolis, MN
Vice president - investment accounting of AEFC. Treasurer for the Fund.
COMPENSATION FOR BOARD MEMBERS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
During the most recent fiscal year, the independent members of the Fund board,
for attending up to 25 meetings, received the following compensation:
<S> <C> <C>
Compensation Table Total cash compensation from
--------------------------------- ---------------------------------
Board member Aggregate American Express Funds and
compensation from the Fund Preferred Master Trust Group
H. Brewster Atwater, Jr. $1,175 $115,325
Lynne V. Cheney 907 102,225
Heinz F. Hutter 950 101,750
Anne P. Jones 982 106,675
William R. Pearce 775 80,200
Alan K. Simpson 907 102,225
C. Angus Wurtele 1,208 117,300
</TABLE>
As of 30 days prior to the date of this SAI, the Fund's board members and
officers as a group owned less than 1% of the outstanding shares of any class.
<PAGE>
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The financial statements contained in the Annual Report were audited by
independent auditors, KPMG LLP, 4200 Norwest Center, 90 S. Seventh St.,
Minneapolis, MN 55402-3900. The independent auditors also provide other
accounting and tax-related services as requested by the Fund.
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS
Standard & Poor's Debt Ratings
A Standard & Poor's corporate or municipal debt rating is a current assessment
of the creditworthiness of an obligor with respect to a specific obligation.
This assessment may take into consideration obligors such as guarantors,
insurers, or lessees.
The debt rating is not a recommendation to purchase, sell, or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or obtained
by S&P from other sources it considers reliable. S&P does not perform an audit
in connection with any rating and may, on occasion, rely on unaudited financial
information. The ratings may be changed, suspended, or withdrawn as a result of
changes in, or unavailability of such information or based on other
circumstances.
The ratings are based, in varying degrees, on the following considerations:
o Likelihood of default capacity and willingness of the obligor as
to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation.
o Nature of and provisions of the obligation.
o Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors'
rights.
Investment Grade
Debt rated AAA has the highest rating assigned by Standard & Poor's. Capacity to
pay interest and repay principal is extremely strong.
Debt rated AA has a very strong capacity to pay interest and repay principal and
differs from the highest rated issues only in a small degree.
Debt rated A has a strong capacity to pay interest and repay principal, although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher-rated categories.
Speculative grade
Debt rated BB, B, CCC, CC, and C is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest. While such debt
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major exposures to adverse conditions.
<PAGE>
Debt rated BB has less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainies or exposure to adverse
business, financial, or economic conditions that could lead to inadequate
capacity to meet timely interest and principal payments. The BB rating category
also is used for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category also is used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Debt rated CCC has a currently identifiable vulnerability to default and is
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category also is
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
Debt rated CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
Debt rated C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating CI is reserved for income bonds on which no interest is being paid.
Debt rated D is in payment default. The D rating category is used when interest
payments or principal payments are not made on the date due, even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
Moody's Long-Term Debt Ratings
Aaa - Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds that are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risk appear somewhat larger than in Aaa securities.
A - Bonds that are rated A possess many favorable investment attributes and are
to be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment some time in the future.
Baa - Bonds that are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
<PAGE>
Ba - Bonds that are rated Ba are judged to have speculative elements--their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or maintenance of other
terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations that are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
SHORT-TERM RATINGS
Standard & Poor's Commercial Paper Ratings
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market.
Ratings are graded into several categories, ranging from A-1 for the highest
quality obligations to D for the lowest. These categories are as follows:
A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics are denoted
with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as
high as for issues designated A-1.
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
B Issues are regarded as having only speculative capacity for timely
payment.
C This rating is assigned to short-term debt obligations with
doubtful capacity for payment.
D Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not made
on the date due, even if the applicable grace period has not
expired, unless S&P believes that such payments will be made
during such grace period.
<PAGE>
Standard & Poor's Note Ratings
An S&P note rating reflects the liquidity factors and market-access risks unique
to notes. Notes maturing in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating.
Note rating symbols and definitions are as follows:
SP-1 Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over
the term of the notes.
SP-3 Speculative capacity to pay principal and interest.
Moody's Short-Term Ratings
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Issuers rated Prime-l (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-l
repayment ability will often be evidenced by many of the following
characteristics: (i) leading market positions in well-established
industries, (ii) high rates of return on funds employed, (iii)
conservative capitalization structure with moderate reliance on debt
and ample asset protection, (iv) broad margins in earnings coverage of
fixed financial charges and high internal cash generation, and (v) well
established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above, but
to a lesser degree. Earnings trends and coverage ratios, while sound,
may be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require
relatively high financial leverage.
Adequate alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the Prime rating
categories.
<PAGE>
Moody's & S&P's
Short-Term Muni Bonds and Notes
Short-term municipal bonds and notes are rated by Moody's and by S&P. The
ratings reflect the liquidity concerns and market access risks unique to notes.
Moody's MIG 1/VMIG 1 indicates the best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
Moody's MIG 2/VMIG 2 indicates high quality. Margins of protection are ample
although not so large as in the preceding group.
Moody's MIG 3/VMIG 3 indicates favorable quality. All security elements are
accounted for but there is lacking the undeniable strength of the preceding
grades. Liquidity and cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
Moody' s MIG 4/VMIG 4 indicates adequate quality. Protection commonly regarded
as required of an investment security is present and although not distinctly or
predominantly speculative, there is specific risk.
Standard & Poor's rating SP-1 indicates very strong or strong capacity to pay
principal and interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
Standard & Poor's rating SP-2 indicates satisfactory capacity to pay principal
and interest.
Standard & Poor's rating SP-3 indicates speculative capacity to pay principal
and interest.
<PAGE>
Independent Auditors' Report
THE BOARD AND SHAREHOLDERS
AXP TAX-FREE MONEY FUND, INC.
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of AXP Tax-Free Money Fund, Inc. as
of December 31, 1999, and the related statement of operations for the year then
ended and the statements of changes in net assets for each of the years in the
two-year period ended December 31, 1999 and the financial highlights for each of
the years in the five-year period ended December 31, 1999. These financial
statements and the financial highlights are the responsibility of fund
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP Tax-Free Money Fund, Inc.
as of December 31, 1999, and the results of its operations, changes in its net
assets, and the financial highlights for the periods stated in the first
paragraph above, in conformity with generally accepted accounting principles.
/s/KPMG LLP
KPMG LLP
Minneapolis, Minnesota
February 4, 2000
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Tax-Free Money Fund, Inc.
Dec. 31, 1999
Assets
Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $205,627,368) $205,627,368
Cash in bank on demand deposit 1,387,646
Accrued interest receivable 1,410,196
---------
Total assets 208,425,210
-----------
Liabilities
Dividends payable to shareholders 175,670
Payable for investment securities purchased 1,780,260
Accrued investment management services fee 1,994
Accrued transfer agency fee 528
Accrued administrative services fee 166
Other accrued expenses 38,579
------
Total liabilities 1,997,197
---------
Net assets applicable to outstanding capital stock $206,428,013
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 2,064,331
Additional paid-in capital 204,367,560
Accumulated net realized gain (loss) (3,878)
------
Total-- representing net assets applicable to outstanding capital stock $206,428,013
============
Shares outstanding 206,433,080
-----------
Net asset value per share of outstanding capital stock $ 1.00
------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
AXP Tax-Free Money Fund, Inc.
Year ended Dec. 31, 1999
Investment income
Income:
<S> <C>
Interest $5,762,955
----------
Expenses (Note 2):
Investment management services fee 603,060
Transfer agency fee 188,488
Administrative services fees and expenses 55,748
Compensation of board members 7,629
Custodian fees 27,933
Printing and postage 61,907
Registration fees 87,130
Audit fees 21,000
Other 10,227
------
Total expenses 1,063,122
Earnings credits on cash balances (Note 2) (36,641)
-------
Total net expenses 1,026,481
---------
Investment income (loss)-- net 4,736,474
---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on security transactions (Note 3) 2,841
-----
Net increase (decrease) in net assets resulting from operations $4,739,315
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP Tax-Free Money Fund, Inc.
Year ended Dec. 31, 1999 1998
Operations and distributions
<S> <C> <C>
Investment income (loss) -- net $ 4,736,474 $ 4,692,082
Net realized gain (loss) on security transactions (Note 3) 2,841 0
----- -
Net increase (decrease) in net assets resulting from operations 4,739,315 4,692,082
--------- ---------
Distributions to shareholders from:
Net investment income (4,736,474) (4,692,121)
---------- ----------
Capital share transactions at constant $1 net asset value
Proceeds from sales of shares 404,531,201 343,999,939
Net asset value of shares issued in reinvestment of distributions 4,522,093 4,513,497
Payments for redemptions of shares (375,868,340) (327,618,650)
------------ ------------
Increase (decrease) in net assets from capital share transactions 33,184,954 20,894,786
---------- ----------
Total increase(decrease) in net assets 33,187,795 20,894,747
Net assets at beginning of year 173,240,218 152,345,471
----------- -----------
Net assets at end of year $ 206,428,013 $ 173,240,218
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP Tax-Free Money Fund, Inc.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 (as amended), as
a diversified, open-end management investment company. The Fund has 10 billion
authorized shares of capital stock. The Fund invests primarily in short-term
bonds and notes issued by or on behalf of state or local governmental units.
The Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
Valuation of securities
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value, in order to maintain a constant
net asset value of $1 per share.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to shareholders. No provision for income or excise taxes
is thus required.
Dividends to shareholders
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including level-yield amortization of premium and
discount, is accrued daily.
2. EXPENSES
The Fund has agreements with American Express Financial Corporation (AEFC) to
manage its portfolio and provide administrative services. Under an Investment
Management Services Agreement, AEFC determines which securities will be
purchased, held or sold. The management fee is a percentage of the Fund's
average daily net assets in reducing percentages from 0.36% to 0.25% annually.
Under terms of a prior agreement that ended June 30, 1999, the management fee
was a percentage of the Fund's average daily net assets in reducing percentages
from 0.31% to 0.24% annually.
Under an Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.03% to 0.02% annually. A minor
portion of additional administrative service expenses paid by the Fund are
consultants' fees and fund office expenses. Under this agreement, the Fund also
pays taxes, audit and certain legal fees, registration fees for shares,
compensation of board members, corporate filing fees and any other expenses
properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee of $24 per shareholder account for this service. Under terms
of a prior agreement that ended Jan. 31, 1999, the Fund paid a transfer agency
fee at an annual rate per shareholder account of $20.
During the year ended Dec. 31, 1999, the Fund's custodian and transfer agency
fees were reduced by $36,641 as a result of earnings credits from overnight cash
balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities aggregated $654,890,325
and $620,405,330, respectively, for the year ended Dec. 31, 1999. Realized gains
and losses, if any, are determined on an identified cost basis.
4. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express funds, permits borrowings up
to $200 million, collectively. Interest is charged to each fund based on its
borrowings at a rate equal to the Federal Funds Rate plus 0.30% or the
Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to 90
days after such loan is executed. The Fund also pays a commitment fee equal to
its pro rata share of the amount of the credit facility at a rate of 0.05% per
annum. The Fund had no borrowings outstanding during the year ended Dec. 31,
1999.
5. FINANCIAL HIGHLIGHTS
"Financial highlights" showing per share data and selected financial information
is presented on page 17 of the prospectus.
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP Tax-Free Money Fund, Inc.
Dec. 31, 1999
(Percentages represent value of investments compared to net assets)
Municipal notes
Issuer(b) Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Alabama (4.2%)
Columbia County Industrial Development Pollution Control
Revenue Bonds (Alabama Power) V.R. Series 1995C
<S> <C> <C> <C> <C> <C>
10-01-22 4.75% $8,350,000(c) $8,350,000
Columbia County Industrial Development Pollution Control
Revenue Bonds (Alabama Power) V.R. Series 1995D
10-01-22 4.50 400,000(c) 400,000
Total 8,750,000
Alaska (2.3%)
Valdez Marine Terminal Refunding Revenue Bonds
(Mobil Alaskan Pipeline) V.R. Series 1993A
11-01-03 5.55 1,000,000(c) 1,000,000
Valdez Marine Terminal Revenue Bonds
(Exxon Pipeline) V.R. Series 1993A
12-01-33 4.75 3,700,000(c) 3,700,000
Total 4,700,000
Arizona (8.4%)
Maricopa County (Arizona Public Service)
(Bank of America) V.R.
05-01-29 4.90 2,700,000(c) 2,700,000
Maricopa County Pollution Control Revenue Bonds
(Arizona Public Service) V.R. Series 1994A
05-01-29 4.75 4,900,000(c) 4,900,000
Maricopa County Pollution Control Revenue Bonds
(Southern California Edison) C.P. Series 1999E
01-14-00 3.75 2,500,000 2,500,000
01-24-00 3.85 1,000,000 1,000,000
Maricopa County Pollution Control Revenue Bonds
V.R. Series 1994C
05-01-29 4.80 1,150,000(c) 1,150,000
Salt River Agricultural Improvement & Power District C.P.
01-11-00 3.85 2,000,000 2,000,000
01-12-00 3.75 1,000,000 1,000,000
01-12-00 3.85 1,000,000 1,000,000
02-09-00 3.50 1,000,000 1,000,000
Total 17,250,000
California (0.7%)
Los Angeles County T.R.A.N.
06-30-00 3.99 1,500,000 1,504,880
Florida (1.5%)
Jacksonville Electric Authority Tax Exempt C.P. Series 1999C
01-10-00 3.75 2,000,000 2,000,000
Municipal Power Agency C.P.
02-01-00 3.30 1,155,000 1,155,000
Total 3,155,000
Georgia (2.1%)
Burke County Development Authority Revenue
Bonds (Georgia Power) C.P.
01-12-00 3.65 1,200,000 1,200,000
Putnam County Development Authority Revenue Bonds
(Georgia Power)
01-13-00 3.65 3,100,000 3,100,000
Total 4,300,000
Idaho (1.5%)
State T.R.A.N. Series 1999
06-30-00 4.23 3,000,000 3,012,184
Illinois (5.1%)
Chicago General Obligation Tender Notes
Series 1999
01-27-00 2.95 2,000,000 2,000,000
Chicago General Obligation Tender Notes
V.R.
01-01-12 5.55 2,600,000(c) 2,600,000
Development Finance Authority Pollution Control
Revenue Bonds (Amoco Oil) V.R. Series 1994
11-01-12 4.85 200,000(c) 200,000
Health Facilities (University of Chicago Hospitals)
V.R. (MBIA Insured)
08-01-26 4.80 3,800,000(c,d) 3,800,000
Health Facilities Authority Revenue Bonds
(University of Chicago Hospitals) V.R.
11-15-23 5.60 1,900,000(c) 1,900,000
Total 10,500,000
Indiana (3.9%)
Bond Bank Advanced Funding Notes
2nd Series 1999A
01-19-00 3.50 2,000,000 2,000,509
Mount Vernon Pollution Control & Solid Waste Disposal
Refunding Revenue Bonds (General Electric) C.P.
01-10-00 3.70 5,000,000 5,000,000
State Education Facility (University of Notre Dame) V.R.
03-01-25 5.35 1,000,000(c) 1,000,000
Total 8,000,509
Iowa (1.9%)
School Cash Anticipation Program
Iowa School Corporation Warrant Certificate Series 1999A
06-23-00 3.99 2,000,000 2,007,084
School Cash Anticipation Program
Iowa School Corporation Warrant Certificate Series 1999B
01-28-00 3.50 2,000,000 2,000,760
Total 4,007,844
Kentucky (2.1%)
Jefferson County Pollution Control Revenue Bonds
(Louisville Gas & Electric) C.P. V.R.D.N. Series 1993
01-11-00 3.75 3,000,000 3,000,000
02-02-00 3.75 1,300,000 1,300,000
Total 4,300,000
Louisiana (0.2%)
Easton Baton Rouge Parish Pollution Control
Revenue Bonds (Exxon) V.R.
03-01-22 4.80 500,000(c) 500,000
Maryland (1.0%)
Montgomery County C.P. B.A.N.
02-01-00 3.85 2,000,000 2,000,000
Massachusetts (2.4%)
State Variable Refunding Bonds
V.R. Series 1998B
09-01-16 5.50 5,000,000(c) 5,000,000
Michigan (5.0%)
Detroit City District School Notes
Series 1999
06-01-00 3.99 2,000,000 2,006,435
Regents of the University Hospital Refunding Revenue Bonds
V.R. Series 1992A
12-01-19 4.80 1,400,000(c) 1,400,000
Regents of the University Hospital Revenue Bonds
V.R. Series 1992A
12-01-19 4.80 400,000(c) 400,000
Regents of the University Hospital Revenue Bonds
V.R. Series 1992B
12-01-19 4.80 800,000(c) 800,000
Regents of the University Hospital Revenue Bonds
V.R. Series 1995A
12-01-27 4.80 4,300,000(c) 4,300,000
Regents of the University of Michigan
C.P. Series 1999B
01-25-00 3.75 1,000,000 1,000,000
University Hospital Refunding Revenue Bonds
V.R. Series 1992A
12-01-19 4.80 400,000(c) 400,000
Total 10,306,435
Minnesota (7.4%)
Becker Pollution Control Revenue Bonds
(Northern States Power) C.P. Series 1999A
01-10-00 3.75 3,000,000 3,000,000
01-18-00 3.70 2,000,000 2,000,000
02-01-00 3.75 1,000,000 1,000,000
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997A
06-01-20 4.70 2,300,000(c) 2,300,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) Series 1999A
02-02-00 3.60 1,000,000 1,000,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) Series 1999B
02-23-00 3.70 1,000,000 1,000,000
School District Tax & Aid Anticipation Borrowing Program
Certificates
02-03-00 3.00 3,000,000 3,000,000
Southern Minnesota Municipal Power C.P. Series 1999B
02-07-00 3.75 2,000,000 2,000,000
Total 15,300,000
Missouri (4.4%)
State Health & Educational Facilities Authority
Revenue Bonds (St. Louis University) V.R.
10-01-09 4.75 1,000,000(c) 1,000,000
10-01-24 4.75 8,000,000(c) 8,000,000
Total 9,000,000
Nevada (1.0%)
Las Vegas Valley Water District
General Obligation Bonds (Lt Water) C.P. Series 1999A
01-18-00 3.80 2,000,000 2,000,000
New Mexico (1.7%)
Farmington Pollution Control Revenue Bonds
(Arizona Public Service) V.R. Series 1994B
09-01-24 4.70 500,000(c) 500,000
State T.R.A.N. Series 1999
06-30-00 3.99 3,000,000 3,011,053
Total 3,511,053
New York (10.0%)
City of Buffalo R.A.N. Series 1999A
07-25-00 4.63 1,000,000 1,004,683
Long Island Power Authority Electric Revenue Bonds
Variable Sub Series 6
05-01-33 4.75 500,000(c) 500,000
Long Island Power Authority Electric Revenue Bonds
Variable Sub Series 7-7B
04-01-25 5.50 3,000,000(c) 3,000,000
Metropolitan Transit Authority Special Obligation
B.A.N. C.P. Series 1999B
01-21-00 3.75 2,000,000 2,000,000
Nassau County T.A.N. Series 1999A
04-28-00 4.84 2,000,000 2,006,048
New York City Municipal Water Finance Authority
V.R. Series 1994C
06-15-23 5.00 1,600,000(c) 1,600,000
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds V.R.
06-15-22 5.00 2,200,000(c) 2,200,000
06-15-23 5.00 5,300,000(c) 5,300,000
New York City Transitional Finance Authority
Future Secured Tax Revenue Bonds V.R. Series 1998A2
11-15-22 5.45 1,000,000(c) 1,000,000
Suffolk County T.A.N. Series 1999I
08-10-00 4.49 2,000,000 2,006,492
Total 20,617,223
North Carolina (1.9%)
Medical Care Community Hospital Revenue Bonds
(Duke University Hospital) V.R. Series 1985B
06-01-15 4.95 2,000,000(c) 2,000,000
Medical Care Community Hospital Revenue Bonds
(Duke University Hospital) V.R. Series 1985C
06-01-15 4.95 2,000,000(c) 2,000,000
Total 4,000,000
Ohio (0.5%)
State Air Quality Development Revenue Bonds
(Cincinnati Gas & Electric) V.R. Series 1995A
09-01-30 4.75 1,100,000(c) 1,100,000
Pennsylvania (5.9%)
Allegheny County Higher Education Building Authority
Revenue Bonds (Carnegie Mellon University) V.R.
12-01-33 4.80 6,800,000(c) 6,800,000
Commonwealth System of Higher Education
(University of Pittsburgh) Asset Notes
06-30-00 3.99 1,000,000 1,003,108
Delaware County Industrial Development Authority
Airport Facility Revenue Bonds (UPS) V.R.
12-01-15 4.70 700,000(c) 700,000
Philadelphia School District T.R.A.N. Series 1999A
06-30-00 3.99 1,000,000 1,002,636
Philadelphia School District T.R.A.N. Series 1999B
06-30-00 3.99 1,000,000 1,002,636
State Higher Education Facilities Authority Refunding
Revenue Bonds (Carnegie Mellon) V.R. Series 1995B
11-01-27 4.80 700,000(c) 700,000
State Higher Education Facilities Authority Revenue Bonds
(Carnegie Mellon University) V.R. Series 1995A
11-01-25 4.80 200,000(c) 200,000
State Higher Education Facilities Authority Revenue Bonds
(Carnegie Mellon University) V.R. Series 1995C
11-01-29 4.80 700,000(c) 700,000
Total 12,108,380
Tennessee (1.2%)
Shelby County B.A.N. C.P. Series 1998A
01-24-00 3.85 2,500,000 2,500,000
Texas (6.3%)
City of San Antonio (Electric & Gas System) C.P. Series 1999A
01-20-00 3.70 3,500,000 3,500,000
Gulf Coast Waste Disposal Authority
Pollution Control Refunding Revenue Bonds
(Amoco) V.R.
10-01-17 4.75 800,000(c) 800,000
Houston T.R.A.N. Series 1999
06-30-00 4.23 1,000,000 1,004,552
Port Arthur Naval District of Jefferson
Pollution Control Revenue Bonds (Texaco) V.R.
10-01-24 4.95 5,600,000(c) 5,600,000
State T.R.A.N. Series 1999A
08-31-00 4.48 2,000,000 2,010,133
Total 12,914,685
Utah (1.9%)
Intermountain Power Agency
(Power Supply Service) C.P. Series 1999F
(AMBAC Insured)
01-19-00 3.85 1,000,000(d) 1,000,000
State General Obligation Highway
Series 1999C V.R.
07-01-16 5.35 3,000,000(c) 3,000,000
Total 4,000,000
Virginia (3.3%)
Roanoke Hospital Revenue Bonds
(Carilion Health System) V.R. Series 1997A
07-01-27 4.80 6,800,000(c) 6,800,000
Washington (6.6%)
Port of Seattle C.P. Series 1999A
01-14-00 3.65 1,000,000 1,000,000
State Adjustable V.R. Series 1996B
06-15-20 5.40 3,000,000(c) 3,000,000
State General Obligation Bonds V.R. Series 1996B
06-15-20 5.40 1,000,000(c) 1,000,000
State Public (Power Supply System) V.R.
07-01-17 5.50 6,900,000(c) 6,900,000
State Public (Power Supply System) V.R.
Series 1993 1A-3
07-01-17 5.35 1,780,000(c) 1,780,000
Total 13,680,000
Wyoming (5.2%)
Kemmerer Pollution Control Revenue Bonds
(Exxon) V.R.
11-01-14 4.75 2,000,000(c) 2,000,000
Lincoln County Pollution Control Revenue Bonds
(Exxon) V.R. Series 1984D
11-01-14 4.70 200,000(c) 200,000
State General Fund T.R.A.N.
06-27-00 3.99 3,000,000 3,009,175
Uinta County Pollution Control Revenue Bonds
(Amoco) V.R.
07-01-26 4.75 5,600,000(c) 5,600,000
Total 10,809,175
Total investments in securities
(Cost: $205,627,368)(e) $205,627,368
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in the portfolio descriptions:
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(c) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. However, for purposes of
Rule 2a-7, maturity is the later of the next put or interest rate reset date.
Interest rate varies to reflect current market conditions; rate shown is the
effective rate on Dec. 31, 1999.
(d) The following abbreviation is used in portfolio descriptions to identify the
insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
MBIA -- Municipal Bond Investors Assurance
(e) Also represents the cost of securities for federal income tax purposes at
Dec. 31, 1999.
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits.
(a)(1) Articles of Incorporation as amended October 17, 1988, filed
electronically as Exhibit 1 to Post-Effective Amendment No. 14 to
Registration Statement No. 2-66868, are incorporated by reference.
(a)(2) Articles of Amendment dated June 16, 1999, is filed electronically
herewith.
(b) By-laws as amended January 12, 1989, filed electronically as Exhibit 2
to Post-Effective Amendment No. 16 to Registration Statement No.
2-66868, are incorporated by reference.
(c) Stock certificate, filed as Exhibit 4 to Registrant's Registration
Statement No. 2-66868, is incorporated by reference.
(d) Investment Management Services Agreement between Registrant and
American Express Financial Corporation dated July 1, 1999, is filed
electronically herewith.
(e) Distribution Agreement between Registrant and American Express
Financial Advisors Inc. dated July 8, 1999, is filed electronically
herewith.
(f) All employees are eligible to participate in a profit sharing plan.
Entry into the plan is Jan. 1 or July 1. The Registrant contributes
each year an amount up to 15 percent of their annual salaries, the
maximum deductible amount permitted under Section 404(a) of the
Internal Revenue Code.
(g) Custodian Agreement between Registrant and First National Bank of
Minneapolis, dated November 1, 1988, filed electronically as Exhibit 8
to Post-Effective Amendment No. 29, is incorporated by reference.
(h)(1) Administrative Services Agreement between Registrant and American
Express Financial Corporation dated March 20, 1995, filed
electronically as Exhibit 9(d) to Post-Effective Amendment No. 29, is
incorporated by reference.
(h)(2) License Agreement, dated January 25, 1988, between the Registrant
and IDS Financial Corporation, filed electronically as Exhibit 9(c) to
Post-Effective Amendment No. 16 to Registration Statement No. 2-66868,
is incorporated herein by reference.
(h)(3) Plan and Agreement of Merger, dated April 10, 1986, filed
electronically as Exhibit 9(a) to Post-Effective Amendment No. 14 to
Registration Statement No. 2-66868, is incorporated by reference.
(h)(4) Transfer Agency Agreement between Registrant and American Express
Client Service Corporation dated Feb. 1, 1999, filed electronically as
Exhibit (h)(4) to Post-Effective Amendment No. 33 to Registration
Statement No. 2-66868, is incorporated by reference.
(h)(5) License Agreement, dated June 17, 1999, between American Express
Funds and American Express Company, filed electronically on or about
September 23, 1999 as Exhibit (h)(4) to AXP Stock Fund, Inc.'s
Post-Effective Amendment No. 98 to Registration Statement No. 2-11358,
is incorporated by reference.
(i) Opinion and consent of counsel as to the legality of the securities
being registered is filed electronically herewith.
<PAGE>
(j) Independent Auditors' Consent is filed electronically herewith.
(k) Omitted Financial Statements: None.
(l) Initial Capital Agreements: Not applicable.
(m) Plan and Supplemental Agreement of Distribution between Registrant and
IDS Financial Corporation dated Jan. 1, 1987, filed electronically as
Exhibit 15 to Post-Effective Amendment No. 13 to Registration
Statement No. 2-66868, is incorporated by reference.
(n) Financial Data Schedule. Not applicable.
(o)(1) Directors' Power of Attorney to sign amendments to this Registration
Statement dated Jan. 13, 2000, is filed electronically herewith.
(o)(2) Officers' Power of Attorney to sign amendments to this Registration
Statement dated Jan. 13, 2000, is filed electronically herewith.
(o)(3) Form of Directors/Trustees Power of Attorney to sign amendments to
this Registration Statement filed electronically as Exhibit (o)(3) to
Registrant's Post-Effective Amendment No. 33, is incorporated by
reference.
(o)(4) Form of Officers Power of Attorney to sign amendments to this
Registration Statement filed electronically as Exhibit (o)(4) to
Registrant's Post-Effective Amendment No. 33, is incorporated by
reference.
Item 24. Persons Controlled by or Under Common Control with Registrant
None
Item 25. Indemnification
The Articles of Incorporation of the registrant provide that the Fund shall
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that she or he is or was a director, officer, employee or
agent of the Fund, or is or was serving at the request of the Fund as a
director, officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may purchase
liability insurance and advance legal expenses, all to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or hereafter
amended. The By-laws of the registrant provide that present or former directors
or officers of the Fund made or threatened to be made a party to or involved
(including as a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by the Minnesota
Business Corporation Act, all as more fully set forth in the By-laws filed as an
exhibit to this registration statement.
<PAGE>
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Any indemnification hereunder shall not be exclusive of any other rights of
indemnification to which the directors, officers, employees or agents might
otherwise be entitled. No indemnification shall be made in violation of the
Investment Company Act of 1940.
<TABLE>
<CAPTION>
Item 26. Business and Other Connections of Investment Adviser (American Express Financial Corporation)
Directors and officers of American Express Financial Corporation who are
directors and/or officers of one or more other companies:
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Name and Title Other company(s) Address Title within other
company(s)
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Ronald G. Abrahamson, American Express Client IDS Tower 10 Director and Vice President
Vice President Service Corporation Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
Public Employee Payment Director and Vice President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Douglas A. Alger, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Peter J. Anderson, Advisory Capital IDS Tower 10 Director
Director and Senior Vice Strategies Group Inc. Minneapolis, MN 55440
President
American Express Asset Director and Chairman of
Management Group Inc. the Board
American Express Asset Director, Chairman of the
Management International, Board and Executive Vice
Inc. President
American Express Financial Senior Vice President
Advisors Inc.
IDS Capital Holdings Inc. Director and President
IDS Futures Corporation Director
NCM Capital Management 2 Mutual Plaza Director
Group, Inc. 501 Willard Street
Durham, NC 27701
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Ward D. Armstrong, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Service Vice President
Corporation
American Express Trust Director and Chairman of
Company the Board
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
John M. Baker, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Trust Senior Vice President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Joseph M. Barsky III, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Timothy V. Bechtold, American Centurion Life IDS Tower 10 Director and President
Vice President Assurance Company Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
IDS Life Insurance Company Executive Vice President
IDS Life Insurance Company P.O. Box 5144 Director and President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
John C. Boeder, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Life Insurance Company P.O. Box 5144 Director
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Douglas W. Brewers, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Karl J. Breyer, American Express Financial IDS Tower 10 Senior Vice President
Director, Corporate Senior Advisors Inc. Minneapolis, MN 55440
Vice President
American Express Financial Director
Advisors Japan Inc.
American Express Minnesota Director
Foundation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Cynthia M. Carlson, American Enterprise IDS Tower 10 Director, President and
Vice President Investment Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Vice President
Advisors Inc.
American Express Service Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Mark W. Carter, American Express Financial IDS Tower 10 Senior Vice President and
Director, Senior Vice Advisors Inc. Minneapolis, MN 55440 Chief Marketing Officer
President and Chief Marketing
Officer
IDS Life Insurance Company Executive Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James E. Choat, American Centurion Life IDS Tower 10 Executive Vice President
Director and Senior Vice Assurance Company Minneapolis, MN 55440
President
American Enterprise Life Director, President and
Insurance Company Chief Executive Officer
American Express Financial Senior Vice President
Advisors Inc.
American Express Insurance Vice President
Agency of Idaho Inc.
American Express Insurance Vice President
Agency of Nevada Inc.
American Express Insurance Vice President
Agency of Oregon Inc.
American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.
IDS Insurance Agency of Vice President
Alabama Inc.
IDS Insurance Agency of Vice President
Arkansas Inc.
IDS Insurance Agency of Vice President
Massachusetts Inc.
IDS Insurance Agency of Vice President
New Mexico Inc.
IDS Insurance Agency of Vice President
North Carolina Inc.
IDS Insurance Agency of Vice President
Ohio Inc.
IDS Insurance Agency of Vice President
Wyoming Inc.
IDS Life Insurance Company P.O. Box 5144 Executive Vice President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Kenneth J. Ciak, AMEX Assurance Company IDS Tower 10 Director and President
Vice President and General Minneapolis, MN 55440
Manager
American Express Financial Vice President and General
Advisors Inc. Manager
IDS Property Casualty 1 WEG Blvd. Director and President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Paul A. Connolly, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
Colleen Curran, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel
American Express Service Vice President and Chief
Corporation Legal Counsel
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Luz Maria Davis American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Douglas K. Dunning, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Gordon L. Eid, American Express Financial IDS Tower 10 Senior Vice President,
Director, Senior Vice Advisors Inc. Minneapolis, MN 55440 General Counsel and Chief
President, General Counsel Compliance Officer
and Chief Compliance Officer
American Express Financial Vice President and Chief
Advisors Japan Inc. Compliance Officer
American Express Insurance Director and Vice President
Agency of Arizona Inc.
American Express Insurance Director and Vice President
Agency of Idaho Inc.
American Express Insurance Director and Vice President
Agency of Nevada Inc.
American Express Insurance Director and Vice President
Agency of Oregon Inc.
American Express Property Director and Vice President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Director and Vice President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Director and Vice President
Casualty Insurance Agency
of Pennsylvania Inc.
IDS Insurance Agency of Director and Vice President
Alabama Inc.
IDS Insurance Agency of Director and Vice President
Arkansas Inc.
IDS Insurance Agency of Director and Vice President
Massachusetts Inc.
IDS Insurance Agency of Director and Vice President
New Mexico Inc.
IDS Insurance Agency of Director and Vice President
North Carolina Inc.
IDS Insurance Agency of Director and Vice President
Ohio Inc.
IDS Insurance Agency of Director and Vice President
Wyoming Inc.
IDS Real Estate Services, Vice President
Inc.
Investors Syndicate Director
Development Corp.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Robert M. Elconin, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Life Insurance Company Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Gordon M. Fines, American Express Asset IDS Tower 10 Senior Vice President and
Vice President Management Group Inc. Minneapolis, MN 55440 Chief Investment Officer
American Express Financial Vice President
Advisors Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Douglas L. Forsberg, American Centurion Life IDS Tower 10 Director
Vice President Assurance Company Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
American Express Financial Director, President and
Advisors Japan Inc. Chief Executive Officer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Jeffrey P. Fox, American Enterprise Life IDS Tower 10 Vice President and
Vice President and Corporate Insurance Company Minneapolis, MN 55440 Controller
Controller
American Express Financial Vice President and
Advisors Inc. Corporate Controller
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Harvey Golub, American Express Company American Express Tower Chairman and Chief
Director World Financial Center Executive Officer
New York, NY 10285
American Express Travel Chairman and Chief
Related Services Company, Executive Officer
Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
David A. Hammer, American Express Financial IDS Tower 10 Vice President and
Vice President and Marketing Advisors Inc. Minneapolis, MN 55440 Marketing Controller
Controller
IDS Plan Services of Director and Vice President
California, Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Lorraine R. Hart, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440
American Centurion Life Vice President
Assurance Company
American Enterprise Life Vice President
Insurance Company
American Express Financial Vice President
Advisors Inc.
American Partners Life Director and Vice
Insurance Company President
IDS Certificate Company Vice President
IDS Life Insurance Company Vice President
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Vice President
Funds A and B
Investors Syndicate Director and Vice
Development Corp. President
IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205
IDS Property Casualty 1 WEG Blvd. Vice President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Scott A. Hawkinson, American Express Financial IDS Tower 10 Vice President and
Vice President and Controller Advisors Inc. Minneapolis, MN 55440 Controller
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Janis K. Heaney, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Darryl G. Horsman, American Express Trust IDS Tower 10 Director and President
Vice President Company Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Jeffrey S. Horton, AMEX Assurance Company IDS Tower 10 Vice President, Treasurer
Vice President and Corporate Minneapolis, MN 55440 and Assistant Secretary
Treasurer
American Centurion Life Vice President and
Assurance Company Treasurer
American Enterprise Vice President and
Investment Services Inc. Treasurer
American Enterprise Life Vice President and
Insurance Company Treasurer
American Express Asset Vice President and
Management Group Inc. Treasurer
American Express Asset Vice President and
Management International Treasurer
Inc.
American Express Client Vice President and
Service Corporation Treasurer
American Express Vice President and
Corporation Treasurer
American Express Financial Vice President and
Advisors Inc. Treasurer
American Express Financial Vice President and
Advisors Japan Inc. Treasurer
American Express Insurance Vice President and
Agency of Arizona Inc. Treasurer
American Express Insurance Vice President and
Agency of Idaho Inc. Treasurer
American Express Insurance Vice President and
Agency of Nevada Inc. Treasurer
American Express Insurance Vice President and
Agency of Oregon Inc. Treasurer
American Express Minnesota Vice President and
Foundation Treasurer
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Kentucky Inc.
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Maryland Inc.
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Pennsylvania Inc.
American Partners Life Vice President and
Insurance Company Treasurer
IDS Cable Corporation Director, Vice President
and Treasurer
IDS Cable II Corporation Director, Vice President
and Treasurer
IDS Capital Holdings Inc. Vice President, Treasurer
and Assistant Secretary
IDS Certificate Company Vice President and
Treasurer
IDS Insurance Agency of Vice President and
Alabama Inc. Treasurer
IDS Insurance Agency of Vice President and
Arkansas Inc. Treasurer
IDS Insurance Agency of Vice President and
Massachusetts Inc. Treasurer
IDS Insurance Agency of Vice President and
New Mexico Inc. Treasurer
IDS Insurance Agency of Vice President and
North Carolina Inc. Treasurer
IDS Insurance Agency of Vice President and
Ohio Inc. Treasurer
IDS Insurance Agency of Vice President and
Wyoming Inc. Treasurer
IDS Life Insurance Company Vice President, Treasurer
and Assistant Secretary
IDS Life Insurance Company P.O. Box 5144 Vice President and
of New York Albany, NY 12205 Treasurer
IDS Life Series Fund Inc. Vice President and
Treasurer
IDS Life Variable Annuity Vice President and
Funds A & B Treasurer
IDS Management Corporation Director, Vice President
and Treasurer
IDS Partnership Services Vice President and
Corporation Treasurer
IDS Plan Services of Vice President and
California, Inc. Treasurer
IDS Real Estate Services, Vice President and
Inc. Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Sales Support Inc. Vice President and
Treasurer
Investors Syndicate Vice President and
Development Corp. Treasurer
IDS Property Casualty 1 WEG Blvd. Vice President, Treasurer
Insurance Company DePere, WI 54115 and Assistant Secretary
Public Employee Payment Vice President and
Company Treasurer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
David R. Hubers, AMEX Assurance Company IDS Tower 10 Director
Director, President and Chief Minneapolis, MN 55440
Executive Officer
American Express Financial Chairman, President and
Advisors Inc. Chief Executive Officer
American Express Service Director and President
Corporation
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of Director and President
California, Inc.
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Martin G. Hurwitz, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Debra A. Hutchinson American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James M. Jensen, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Life Insurance Company Vice President
IDS Life Series Fund, Inc. Director
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Marietta L. Johns, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Nancy E. Jones, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Service Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Ora J. Kaine, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Linda B. Keene, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
G. Michael Kennedy, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Susan D. Kinder, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Richard W. Kling, AMEX Assurance Company IDS Tower 10 Director
Director and Senior Vice Minneapolis, MN 55440
President
American Centurion Life Director and Chairman of
Assurance Company the Board
American Enterprise Life Director and Chairman of
Insurance Company the Board
American Express Director and President
Corporation
American Express Financial Senior Vice President
Advisors Inc.
American Express Insurance Director and President
Agency of Arizona Inc.
American Express Insurance Director and President
Agency of Idaho Inc.
American Express Insurance Director and President
Agency of Nevada Inc.
American Express Insurance Director and President
Agency of Oregon Inc.
American Express Property Director and President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Director and President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Director and President
Casualty Insurance Agency
of Pennsylvania Inc.
American Express Service Vice President
Corporation
American Partners Life Director and Chairman of
Insurance Company the Board
IDS Certificate Company Director and Chairman of
the Board
IDS Insurance Agency of Director and President
Alabama Inc.
IDS Insurance Agency of Director and President
Arkansas Inc.
IDS Insurance Agency of Director and President
Massachusetts Inc.
IDS Insurance Agency of Director and President
New Mexico Inc.
IDS Insurance Agency of Director and President
North Carolina Inc.
IDS Insurance Agency of Director and President
Ohio Inc.
IDS Insurance Agency of Director and President
Wyoming Inc.
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Manager, Chairman of the
Funds A and B Board and President
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
IDS Life Insurance Company P.O. Box 5144 Director and Chairman of
of New York Albany, NY 12205 the Board
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
John M. Knight American Express Financial IDS Tower 10 Vice President
Advisors Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Paul F. Kolkman, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Claire Kolmodin, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Steve C. Kumagai, American Express Financial IDS Tower 10 Director and Senior Vice
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440 President
President
Kurt A Larson, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Lori J. Larson, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Daniel E. Laufenberg, American Express Financial IDS Tower 10 Vice President and Chief
Vice President and Chief U.S. Advisors Inc. Minneapolis, MN 55440 U.S. Economist
Economist
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Peter A. Lefferts, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
American Express Trust Director
Company
IDS Plan Services of Director
California, Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Douglas A. Lennick, American Express Financial IDS Tower 10 Director and Executive
Director and Executive Vice Advisors Inc. Minneapolis, MN 55440 Vice President
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Mary J. Malevich, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Fred A. Mandell, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Timothy J. Masek American Express Financial IDS Tower 10 Vice President and
Vice President and Director Advisors Inc. Minneapolis, MN 55440 Director of Global Research
of Global Research
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Sarah A. Mealey, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Paula R. Meyer, American Enterprise Life IDS Tower 10 Vice President
Vice President Insurance Company Minneapolis, MN 55440
American Express Director
Corporation
American Express Financial Vice President
Advisors Inc.
American Partners Life Director and President
Insurance Company
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President
Investors Syndicate Director, Chairman of the
Development Corporation Board and President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
William P. Miller, Advisory Capital IDS Tower 10 Vice President
Vice President and Senior Strategies Group Inc. Minneapolis, MN 55440
Portfolio Manager
American Express Asset Senior Vice President and
Management Group Inc. Chief Investment Officer
American Express Financial Vice President and Senior
Advisors Inc. Portfolio Manager
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Shashank B. Modak American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Pamela J. Moret, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Trust Vice President
Company
IDS Life Insurance Company Executive Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Barry J. Murphy, American Express Client IDS Tower 10 Director and President
Director and Senior Vice Service Corporation Minneapolis, MN 55440
President
American Express Financial Senior Vice President
Advisors Inc.
IDS Life Insurance Company Director and Executive
Vice President
Mary Owens Neal, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Michael J. O'Keefe, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James R. Palmer, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Life Insurance Company Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Carla P. Pavone, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
Public Employee Payment Director and President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Thomas P. Perrine, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Susan B. Plimpton, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Ronald W. Powell, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Vice President and
Corporation Assistant Secretary
IDS Plan Services of Vice President and
California, Inc. Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James M. Punch, American Express Financial IDS Tower 10 Vice President and Project
Vice President and Project Advisors Inc. Minneapolis, MN 55440 Manager
Manager
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Frederick C. Quirsfeld, American Express Asset IDS Tower 10 Senior Vice President and
Director and Senior Vice Management Group Inc. Minneapolis, MN 55440 Senior Portfolio Manager
President
American Express Financial Senior Vice President
Advisors Inc.
Rollyn C. Renstrom, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
ReBecca K. Roloff, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Stephen W. Roszell, Advisory Capital IDS Tower 10 Director
Director and Senior Vice Strategies Group Inc. Minneapolis, MN 55440
President
American Express Asset Director, President and
Management Group Inc. Chief Executive Officer
American Express Asset Director
Management International,
Inc.
American Express Asset Director
Management Ltd.
American Express Financial Senior Vice President
Advisors Inc.
American Express Trust Director
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Erven A. Samsel, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
American Express Insurance Vice President
Agency of Idaho Inc.
American Express Insurance Vice President
Agency of Nevada Inc.
American Express Insurance Vice President
Agency of Oregon Inc.
American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.
IDS Insurance Agency of Vice President
Alabama Inc.
IDS Insurance Agency of Vice President
Arkansas Inc.
IDS Insurance Agency of Vice President
Massachusetts Inc.
IDS Insurance Agency of Vice President
New Mexico Inc.
IDS Insurance Agency of Vice President
North Carolina Inc.
IDS Insurance Agency of Vice President
Ohio Inc.
IDS Insurance Agency of Vice President
Wyoming Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Theresa M. Sapp American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Stuart A. Sedlacek, AMEX Assurance Company IDS Tower 10 Director
Director, Senior Vice Minneapolis, MN 55440
President and Chief Financial
Officer
American Enterprise Life Executive Vice President
Insurance Company
American Express Financial Senior Vice President and
Advisors Inc. Chief Financial Officer
American Express Trust Director
Company
American Partners Life Director and Vice President
Insurance Agency
IDS Certificate Company Director and President
IDS Life Insurance Company Executive Vice President
and Controller
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Donald K. Shanks, AMEX Assurance Company IDS Tower 10 Senior Vice President
Vice President Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
IDS Property Casualty 1 WEG Blvd. Senior Vice President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
F. Dale Simmons, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440
American Centurion Life Vice President
Assurance Company
American Enterprise Life Vice President
Insurance
American Express Financial Vice President
Advisors Inc.
American Partners Life Vice President
Insurance Company
IDS Certificate Company Vice President
IDS Life Insurance Company Vice President
IDS Partnership Services Director and Vice President
Corporation
IDS Real Estate Services Chairman of the Board and
Inc. President
IDS Realty Corporation Director and Vice President
IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Judy P. Skoglund, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Bridget Sperl, American Express Client IDS Tower 10 Vice President
Vice President Service Corporation Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
Public Employee Payment Director and President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Lisa A. Steffes, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
William A. Stoltzmann, American Enterprise Life IDS Tower 10 Director, Vice President,
Vice President and Assistant Insurance Company Minneapolis, MN 55440 General Counsel and
General Counsel Secretary
American Express Director, Vice President
Corporation and Secretary
American Express Financial Vice President and
Advisors Inc. Assistant General Counsel
American Partners Life Director, Vice President,
Insurance Company General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
IDS Life Series Fund Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity General Counsel and
Funds A & B Assistant Secretary
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James J. Strauss, American Express Financial IDS Tower 10 Vice President
Vice President and General Advisors Inc. Minneapolis, MN 55440
Auditor
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Jeffrey J. Stremcha, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
Barbara Stroup Stewart, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Keith N. Tufte American Express Financial IDS Tower 10 Vice President and
Vice President and Director Advisors Inc. Minneapolis, MN 55440 Director of Equity Research
of Equity Research
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Norman Weaver Jr., American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
American Express Insurance Vice President
Agency of Arizona Inc.
American Express Insurance Vice President
Agency of Idaho Inc.
American Express Insurance Vice President
Agency of Nevada Inc.
American Express Insurance Vice President
Agency of Oregon Inc.
American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.
IDS Insurance Agency of Vice President
Alabama Inc.
IDS Insurance Agency of Vice President
Arkansas Inc.
IDS Insurance Agency of Vice President
Massachusetts Inc.
IDS Insurance Agency of Vice President
New Mexico Inc.
IDS Insurance Agency of Vice President
North Carolina Inc.
IDS Insurance Agency of Vice President
Ohio Inc.
IDS Insurance Agency of Vice President
Wyoming Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Michael L. Weiner, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Sales Support Inc. Director, Vice President
and Assistant Treasurer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Lawrence J. Welte, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Jeffry F. Welter, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Edwin M. Wistrand, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel
American Express Financial Vice President and Chief
Advisors Japan Inc. Legal Officer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Michael D. Wolf, American Express Asset IDS Tower 10 Executive Vice President
Vice President Management Group Inc. Minneapolis, MN 55440 and Senior Portfolio
Manager
American Express Financial Vice President
Advisors Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Michael R. Woodward, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
American Express Insurance Vice President
Agency of Idaho Inc.
American Express Insurance Vice President
Agency of Nevada Inc.
American Express Insurance Vice President
Agency of Oregon Inc.
American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.
IDS Insurance Agency of Vice President
Alabama Inc.
IDS Insurance Agency of Vice President
Arkansas Inc.
IDS Insurance Agency of Vice President
Massachusetts Inc.
IDS Insurance Agency of Vice President
New Mexico Inc.
IDS Insurance Agency of Vice President
North Carolina Inc.
IDS Insurance Agency of Vice President
Ohio Inc.
IDS Insurance Agency of Vice President
Wyoming Inc.
IDS Life Insurance Company P.O. Box 5144 Director
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>
Item 27. Principal Underwriters.
(a) American Express Financial Advisors acts as principal underwriter for the
following investment companies:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery
Fund, Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.;
AXP Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth
Series, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP
Market Advantage Series, Inc.; AXP Money Market Series, Inc.; AXP New
Dimensions Fund, Inc.; AXP Precious Metals Fund, Inc.; AXP Progressive
Fund, Inc.; AXP Selective Fund, Inc.; AXP Special Tax-Exempt Series
Trust; AXP Stock Fund, Inc.; AXP Strategy Series, Inc.; AXP Tax-Exempt
Series, Inc.; AXP Tax-Free Money Fund, Inc.; AXP Utilities Income Fund,
Inc., Growth Trust; Growth and Income Trust; Income Trust; Tax-Free
Income Trust; World Trust; IDS Certificate Company; Strategist Income
Fund, Inc.; Strategist Growth Fund, Inc.; Strategist Growth and Income
Fund, Inc.; Strategist World Fund, Inc. and Strategist Tax-Free Income
Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
<S> <C> <C>
Name and Principal Business Address Position and Offices with Offices with Registrant
Underwriter
- -------------------------------------- ----------------------------------- -------------------------
Ronald G. Abrahamson Vice President-Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440
Douglas A. Alger Senior Vice President-Human None
IDS Tower 10 Resources
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President-Investment Vice President-Investments
IDS Tower 10 Operations
Minneapolis, MN 55440
Ward D. Armstrong Vice President-American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440
John M. Baker Vice President-Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440
Joseph M. Barsky III Vice President - Mutual Fund None
IDS Tower 10 Equities
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Risk Management None
IDS Tower 10 Products
Minneapolis, MN 55440
John D. Begley Group Vice President-Ohio/Indiana None
Suite 100
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President-Los Angeles None
Suite 900, E. Westside Twr Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President-Nonproprietary None
IDS Tower 10 Products
Minneapolis, MN 55440
Walter K. Booker Group Vice President-New Jersey None
Suite 200, 3500 Market Street
Camp Hill, NJ 17011
Bruce J. Bordelon Group Vice President - San None
1333 N. California Blvd., Suite 200 Francisco Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President-Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201
Douglas W. Brewers Vice President-Sales Support None
IDS Tower 10
Minneapolis, MN 55440
Karl J. Breyer Corporate Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Cynthia M. Carlson Vice President-American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440
James E. Choat Senior Vice President - Third None
IDS Tower 10 Party Distribution
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and General None
IDS Property Casualty Manager-IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President-Advisor Staffing, None
IDS Tower 10 Training and Support
Minneapolis, MN 55440
Henry J. Cormier Group Vice President-Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President-Arkansas/ None
Suite 200 Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice None
Suite 312 President-Carolinas/Eastern
7300 Carmel Executive Pk Georgia
Charlotte, NC 28226
Colleen Curran Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Luz Maria Davis Vice President-Communications None
IDS Tower 10
Minneapolis, MN 55440
Arthur E. Delorenzo Group Vice President - Upstate None
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice None
Suite 500, 8045 Leesburg Pike President-Washington/Baltimore
Vienna, VA 22182
Bradford L. Drew Group Vice President-Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President-Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440
James P. Egge Group Vice President-Western None
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer
Robert M. Elconin Vice President-Government None
IDS Tower 10 Relations
Minneapolis, MN 55440
Phillip W. Evans Group Vice President-Rocky None
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President-Mutual Fund Equity None
IDS Tower 10 Investments
Minneapolis, MN 55440
Douglas L. Forsberg Vice President - International None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440
William P. Fritz Group Vice President-Gateway None
Suite 160
12855 Flushing Meadows Dr
St. Louis, MO 63131
Carl W. Gans Group Vice President-Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440
David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440
Teresa A. Hanratty Senior Vice President-Field None
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President-Boston Metro None
Two Constitution Plaza
Boston, MA 02129
Lorraine R. Hart Vice President-Insurance None
IDS Tower 10 Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President and None
IDS Tower 10 Controller-Private Client Group
Minneapolis, MN 55440
Brian M. Heath Senior Vice President and General None
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President-Incentive None
IDS Tower 10 Management
Minneapolis, MN 55440
Jon E. Hjelm Group Vice President-Rhode None
319 Southbridge Street Island/Central-Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President-Tennessee None
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440
Debra A. Hutchinson Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
James M. Jensen Vice President and None
IDS Tower 10 Controller-Advice and Retail
Minneapolis, MN 55440 Distribution Group
Marietta L. Johns Senior Vice President-Field None
IDS Tower 10 Management
Minneapolis, MN 55440
Nancy E. Jones Vice President-Business None
IDS Tower 10 Development
Minneapolis, MN 55440
Ora J. Kaine Vice President-Financial Advisory None
IDS Tower 10 Services
Minneapolis, MN 55440
Linda B. Keene Vice President-Market Development None
IDS Tower 10
Minneapolis, MN 55440
G. Michael Kennedy Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Richard W. Kling Senior Vice President-Products None
IDS Tower 10
Minneapolis, MN 55440
John M. Knight Vice President-Investment Treasurer
IDS Tower 10 Accounting
Minneapolis, MN 55440
Paul F. Kolkman Vice President-Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440
Claire Kolmodin Vice President-Service Quality None
IDS Tower 10
Minneapolis, MN 55440
David S. Kreager Group Vice President-Greater None
Suite 108 Michigan
Trestle Bridge V
5136 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice None
IDS Tower 10 President-Direct and Interactive
Minneapolis, MN 55440 Group
Mitre Kutanovski Group Vice President-Chicago Metro None
Suite 680
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Lori J. Larson Vice President-Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President-Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President-Private Client Group
Minneapolis, MN 55440
Mary J. Malevich Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
<PAGE>
Fred A. Mandell Vice President-Field Marketing None
IDS Tower 10 Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President-Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of None
IDS Tower 10 Global Research
Minnapolis, MN 55440
Sarah A. Mealey Vice President-Mutual Funds None
IDS Tower 10
Minneapolis, MN 55440
Paula R. Meyer Vice President-Assured Assets None
IDS Tower 10
Minneapolis, MN 55440
William P. Miller Vice President and Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Shashank B. Modak Vice President - Technology Leader None
IDS Tower 10
Minneapolis, MN 55440
Pamela J. Moret Vice President-Variable Assets None
IDS Tower 10
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President-Client None
IDS Tower 10 Service
Minneapolis, MN 55440
Mary Owens Neal Vice President-Consumer Marketing None
IDS Tower 10
Minneapolis, MN 55440
Thomas V. Nicolosi Group Vice President-New York None
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President-Advisory Business None
IDS Tower 10 Systems
Minneapolis, MN 55440
James R. Palmer Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Marc A. Parker Group Vice None
10200 SW Greenburg Road President-Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation None
IDS Tower 10 Services and ARD Product
Minneapolis, MN 55440 Distribution
Thomas P. Perrine Senior Vice President-Group None
IDS Tower 10 Relationship Leader/American
Minneapolis, MN 55440 Express Technologies Financial
Services
Susan B. Plimpton Vice President-Marketing Services None
IDS Tower 10
Minneapolis, MN 55440
Larry M. Post Group Vice President-Philadelphia None
One Tower Bridge Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Diana R. Prost Group Vice None
3030 N.W. Expressway President-Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project None
IDS Tower 10 Manager-Platform I Value Enhanced
Minneapolis, MN 55440
Frederick C. Quirsfeld Senior Vice President-Fixed Income Vice President - Fixed Income
IDS Tower 10 Investments
Minneapolis, MN 55440
Rollyn C. Renstrom Vice President-Corporate Planning None
IDS Tower 10 and Analysis
Minneapolis, MN 55440
R. Daniel Richardson III Group Vice President-Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759
ReBecca K. Roloff Senior Vice President-Field None
IDS Tower 10 Management and Financial Advisory
Minneapolis, MN 55440 Service
Stephen W. Roszell Senior Vice None
IDS Tower 10 President-Institutional
Minneapolis, MN 55440
Max G. Roth Group Vice None
Suite 201 S IDS Ctr President-Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President-Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Theresa M. Sapp Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
Russell L. Scalfano Group Vice None
Suite 201 President-Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President-Arizona/Las None
Suite 205 Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
Donald K. Shanks Vice President-Property Casualty None
IDS Tower 10
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior Portfolio None
IDS Tower 10 Manager, Insurance Investments
Minneapolis, MN 55440
Judy P. Skoglund Vice President-Quality and None
IDS Tower 10 Service Support
Minneapolis, MN 55440
James B. Solberg Group Vice President-Eastern Iowa None
466 Westdale Mall Area
Cedar RapIDS, IA 52404
Bridget Sperl Vice President-Geographic Service None
IDS Tower 10 Teams
Minneapolis, MN 55440
Paul J. Stanislaw Group Vice President-Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer None
IDS Tower 10 Development
Minneapolis, MN 55440
Lois A. Stilwell Group Vice President-Outstate None
Suite 433 Minnesota Area/ North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
James J. Strauss Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Barbara Stroup Stewart Vice President-Channel Development None
IDS Tower 10
Minneapolis, MN 55440
Craig P. Taucher Group Vice None
Suite 150 President-Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice None
Suite 425 President-Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President Board Member
IDS Tower 10
Minneapolis, MN 55440
Keith N. Tufte Vice President and Director of None
IDS Tower 10 Equity Research
Minneapolis, MN 55440
Peter S. Velardi Group Vice None
Suite 180 President-Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President-Detroit Metro None
8115 East Jefferson Avenue
Detroit, MI 48214
Donald F. Weaver Group Vice President-Greater None
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance None
1010 Main St. Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President-Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440
Jeffry M. Welter Vice President-Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440
Thomas L. White Group Vice President-Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President-Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President-Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Michael D. Wolf Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Michael R. Woodward Senior Vice President-Field None
32 Ellicott St Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States None
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
</TABLE>
Item 27 (c). Not Applicable
Item 28. Location of Accounts and Records
American Express Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 29. Management Services
Not Applicable.
Item 30. Undertakings
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, AXP Tax-Free Money Fund, Inc. certifies
that it meets all of the requirements for effectiveness under Rule 485(b) under
the Securities Act and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis and State of Minnesota on the 24th day
of February, 2000.
AXP TAX-FREE MONEY FUND, INC.
By /s/ Arne H. Carlson**
Arne H. Carlson,
Chief executive officer
By /s/ John M. Knight
John M. Knight
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities indicated on the 24th day of February, 2000
Signatures Capacity
/s/ Arne H. Carlson* Chairman of the Board
Arne H. Carlson
/s/ H. Brewster Atwater, Jr.* Director
H. Brewster Atwater, Jr.
/s/ Lynne V. Cheney* Director
Lynne V. Cheney
/s/ William H. Dudley* Director
William H. Dudley
/s/ David R. Hubers* Director
David R. Hubers
/s/ Heinz F. Hutter* Director
Heinz F. Hutter
/s/ Anne P. Jones* Director
Anne P. Jones
<PAGE>
Signatures Capacity
/s/ William R. Pearce* Director
William R. Pearce
/s/ Alan K. Simpson* Director
Alan K. Simpson
/s/ John R. Thomas* Director
John R. Thomas
/s/ C. Angus Wurtele* Director
C. Angus Wurtele
* Signed pursuant to Directors' Power of Attorney, dated January 13, 2000, filed
electronically herewith as Exhibit (o)(1), by:
/s/Leslie L. Ogg
Leslie L. Ogg
** Signed pursuant to Officers' Power of Attorney, dated January 13, 2000, filed
electronically herewith as Exhibit (o)(2), by:
/s/Leslie L. Ogg
Leslie L. Ogg
<PAGE>
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 34 TO REGISTRATION STATEMENT NO.
2-66868
This post-effective amendment comprises the following papers and documents:
The facing sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements
Part C.
Other Information.
The signatures.
Exhibits.
Exhibit Index
Exhibit (a)(2) Articles of Amendment
Exhibit (d) Investment Management Services Agreement
Exhibit (e) Distribution Agreement
Exhibit (i) Opinion and Consent of Counsel
Exhibit (j) Independent Auditors' Consent
Exhibit (o)(1) Directors' Power of Attorney
Exhibit (o)(2) Officers' Power of Attorney
ARTICLES OF AMENDMENT
OF
IDS Tax-Free Money Fund, Inc
Pursuant to Section 302A.135 of the Minnesota Business Corporation Act,
IDS Tax-Free Money Fund, Inc., incorporated under the laws of the State of
Minnesota April 8, 1986, amends its Articles of Incorporation to change the name
of the corporation to AXP Tax-Free Money Fund, Inc. The new Article I shall be:
ARTICLE I - NAME
The name of this corporation (hereinafter called the "Fund") is:
AXP Tax-Free Money Fund, Inc.
The resolution to amend the Articles of Incorporation was approved by
the affirmative vote of a majority of the shares present and entitled to vote at
a regular meeting of shareholders on June 16, 1999, held pursuant to a written
notice given to each shareholder in the manner provided in Section 302A.435.
Dated this 16th day of June, 1999.
AXP Tax-Free Money Fund, Inc.
By /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President and Secretary
STATE OF MINNESOTA)
)SS.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledge before me this 16th day of June, 1999.
By /s/ Diane R. Kepp
Notary Public
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 1st day of July, 1999, by and between AXP Tax-Free
Money Fund, Inc. (the "Fund"), a Minnesota corporation, and American Express
Financial Corporation, a Delaware corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund 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 Fund. 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 its prospectuses and registration statements 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 Fund 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 Fund's 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.
<PAGE>
(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 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 Fund agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept
from the Fund in full payment for the services furnished, a fee for
each calendar day of each year equal to the total of 1/365th (1/366th
in each leap year) of each of the respective percentages set forth
below of the net assets of the Fund; to be computed 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.
Assets Annual Rate at
(Billions) Each Asset Leve
First $1.0 0.360%
Next 0.5 0.343
Next 0.5 0.325
Next 0.5 0.308
Next 1.0 0.290
Next 3.0 0.270
Over 6.5 0.250
(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 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 fee provided for hereunder shall be paid in cash by the Fund to
American Express Financial Corporation within five business days after
the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) 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.
<PAGE>
(e) Fees and charges of its independent certified public
accountants for services the Fund 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 Fund, 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 Fund 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 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 Fund.
(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 Fund 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 Fund 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.
(n) Expenses properly payable by the Fund, 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 bill 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.
<PAGE>
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
Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund 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 Fund 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 Fund 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
Fund as directors, officers, shareholders, or otherwise; or that
American Express Financial Corporation or any successor or assignee,
is or may be interested in the Fund as shareholder or otherwise,
provided, however, that neither American Express Financial
Corporation, 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.
(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 as principal or agent,
or with any corporation or partnership in which he 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.
(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 Fund's Board.
<PAGE>
(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 Fund) 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 Fund's 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 of the Fund
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 Fund 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
of the Fund 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 TAX-FREE MONEY FUND, INC.
By /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By /s/ Pamela J. Moret
Pamela J. Moret
Vice President
DISTRIBUTION AGREEMENT
Agreement made as of the 8th day of July, 1999, by and between AXP Tax-Free
Money Fund, Inc. (the "Fund"), a Minnesota corporation, and American Express
Financial Advisors Inc. ("AEFA"), a Delaware corporation.
Part One: DISTRIBUTION OF SECURITIES
(1) The Fund covenants and agrees that, during the term of this agreement and
any renewal or extension, AEFA shall have the exclusive right to act as
principal underwriter for the Fund and to offer for sale and to distribute
any and all shares issued or to be issued by the Fund.
The exclusive right to act as principal underwriter will not apply to
transactions by the Fund at net asset value as permitted by the currently
effective prospectus and statement of additional information (the
"prospectus") or to transactions by the Fund that do not involve sales to
the general public, including transactions between the Fund and its
shareholders only, transactions involving the reorganization of the Fund
and transactions involving the merger, consolidation or acquisition of
assets with another corporation or trust.
(2) AEFA hereby covenants and agrees to act as the principal underwriter of
shares issued and to be issued by the Fund during the period of this
agreement and agrees to offer for sale such shares as long as such shares
remain available for sale, unless AEFA is unable or unwilling to make such
offer for sale or sales or solicitations therefor legally because of any
federal, state, provincial or governmental law, rule or agency or for any
financial reason. AEFA agrees to develop reasonable time and effort to
effect sales of shares of the Fund but is not obligated to sell any
specific number of shares.
(3) With respect to the offering for sale and sale of shares to be issued by
the Fund, it is mutually understood and agreed that such shares are to be
sold on the following terms:
(a) AEFA has the right, as principal, to buy from the Fund the shares
needed to fill unconditional orders placed with AEFA by investors
or selling dealers (as defined below). The price AEFA will pay to
the Fund is the net asset value, determined as set forth in the
currently effective prospectus.
(b) The shares will be resold by AEFA to investors at the public
offering price, determined as set forth in the currently
effective prospectus, or to selling dealers having agreements
with AEFA upon the terms and conditions set forth in section
3(f). Shares may be sold to certain groups or in certain
transactions without a sales charge or at a reduced sales charge,
as described in the currently effective prospectus.
(c) AEFA also has the right, as agent for the Fund, to sell shares at
the public offering price or at net asset value to certain
persons and upon certain conditions as the Fund may from time to
time determine.
(d) The Fund or its transfer agent shall be promptly advised of all
orders received.
(e) The net asset value of the shares will be determined by the Fund
or any agent of the Fund in accordance with the method set forth
in the currently effective prospectus. In the event of a period
of emergency, the computation of the net asset value for the
purpose of determining the number of shares or fractional shares
to be acquired may be deferred until the close of business on the
first full business day following the termination of the period
of emergency. A period of emergency shall have the definition
given thereto in the Investment Company Act of 1940.
<PAGE>
(f) AEFA is authorized to enter into agreements with broker-dealers
that are lawfully registered under federal law and any applicable
state law or with other institutions lawfully able to distribute
securities (selling dealers) providing for the selling dealers to
obtain unconditional orders for purchases of the Fund's shares
from investors, provided however, that AEFA may in its discretion
refuse to accept orders for shares from any particular applicant
and may provide similar discretion to selling dealers. AEFA will
determine the portion of the sales charge that may be allocated
to the selling dealers. Shares sold to selling dealers are for
resale only at the public offering price determined as set forth
in the currently effective prospectus.
(4) The Fund agrees to make prompt and reasonable effort to do any and all
things necessary, in the opinion of AEFA to have and to keep the Fund's
shares properly registered or qualified in all appropriate jurisdictions
and, as to shares, in such amounts as AEFA may from time to time designate
in order that the Fund's shares may be offered or sold in such
jurisdictions.
(5) The Fund agrees that it will furnish AEFA with information with respect to
the affairs and accounts of the Fund, and in such form as AEFA may from
time to time reasonably require and further agrees that AEFA, at all
reasonable times, shall be permitted to inspect the books and records of
the Fund.
(6) AEFA agrees to indemnify and hold harmless the Fund and each person who has
been, is, or may hereafter be a director of the Fund against expenses
reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be
a party, which arises out of or is alleged to arise out of any
misrepresentation or omission to state a material fact, or out of any
alleged misrepresentation or omission to state a material fact, on the part
of AEFA or any agent or employee of AEFA or any other person for whose acts
AEFA is responsible or is alleged to be responsible, unless such
misrepresentation or omission was made in reliance upon information
furnished by the Fund. AEFA also agrees likewise to indemnify and hold
harmless the Fund and each such person in connection with any claim or in
connection with any action, suit or proceeding which arises out of or is
alleged to arise out of AEFA's (or an affiliate of AEFA's) failure to
exercise reasonable care and diligence with respect to its services
rendered. The term "expenses" includes amounts paid in satisfaction of
judgments or in settlements which are made with AEFA's consent. The
foregoing rights of indemnification shall be in addition to any other
rights to which the Fund or a director may be entitled as a matter of law.
(7) AEFA agrees to cause to be delivered to each purchaser a prospectus or
circular to be furnished by the Fund in the form required by the applicable
federal laws or by the acts or statutes of any applicable state, province
or country.
(8) In connection with the repurchase of shares, AEFA will act as agent of the
Fund. Any outstanding shares may be tendered for redemption at any time and
the Fund agrees to repurchase or redeem the shares in accordance with the
terms and conditions of the currently effective prospectus. The Fund will
pay the amount of the redemption price to shareholders on or before the
seventh business day after receiving the notice of redemption in proper
form. Any applicable contingent deferred sales charge will be paid to AEFA
and the balance will be paid to or for the account of the shareholder.
(9) AEFA and the Fund agree to use their best efforts to conform with all
applicable state and federal laws and regulations relating to any rights or
obligations under the terms of this agreement.
Part Two: ALLOCATION OF EXPENSES AND COMPENSATION
(1) Except as provided by the Plan and Agreement of Distribution any other
agreement between the parties, AEFA covenants and agrees that during the
period of this agreement it will pay or cause to be paid all expenses
incurred by AEFA or any of its affiliates, in the offering for sale or sale
of each class of the Fund's share.
(2) AEFA's compensation as principal underwriter shall be (a) that part of the
sales charge retained by AEFA and (b) amounts payable as contingent
deferred sales charges on certain redemptions of shares.
<PAGE>
Part Three: MISCELLANEOUS
(1) AEFA 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) AEFA shall be free to render to others services similar to those rendered
under this agreement.
(3) 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 Fund are or may be interested in AEFA as
directors, officers, shareholders or otherwise; that directors, officers,
shareholders or agents of AEFA are or may be interested in the Fund as
directors, officers, shareholders or otherwise; or that AEFA is or may be
interested in the Fund as shareholder or otherwise, provided however, that
neither AEFA nor any officer or director of AEFA or any officers or
directors of the Fund shall sell to or buy from the Fund any property or
security other than a security issued by the Fund, except in accordance
with a rule, regulation or order of the Securities and Exchange Commission.
(4) For the purposes of this agreement, a "business day" shall have the same
meaning as is given to the term in the By-laws of the Fund.
(5) Any notice under this agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the parties to this agreement at each
company'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) AEFA agrees that no officer, director or employee of AEFA 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:
(a) Officers, directors and employees of AEFA from having a financial
interest in the Fund or in AEFA.
(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 AEFA, 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 AEFA
if allowed by rule or order of the SEC and if made pursuant to
procedures adopted by the Board of Directors.
(7) AEFA agrees that, except as otherwise provided in this agreement or in the
Plan and Agreement of Distribution, or as may be permitted consistent with
the use of a broker-dealer affiliate of AEFA 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 securities issued by the Fund) or other assets by or for the Fund.
(8) This agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
(9) This agreement is governed by the laws of the state of Minnesota.
<PAGE>
Part Four: TERMINATION
(1) This agreement shall continue from year to year unless and until terminated
by AEFA or the Fund, except that such continuance shall be specifically
approved at least annually by a vote of a majority of the Board of
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, and by a majority of the Board of Directors or by
vote of a majority of the outstanding voting securities of the Fund. As
used in this paragraph, the term "interested person" shall have the meaning
as set forth in the 1940 Act.
(2) This agreement may be terminated by AEFA or the Fund at any time by giving
the other party sixty (60) days written notice of such intention to
terminate.
(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 WHEREOF, The parties hereto have executed the foregoing agreement on
the date and year first above written.
AXP TAX-FREE MONEY FUND, INC.
By /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By /s/ Pamela J. Moret
Pamela J. Moret
Vice President
February 24, 2000
AXP Tax-Free Money Fund, Inc.
IDS Tower 10
Minneapolis, Minnesota 55440
Gentlemen:
I have examined the Articles of Incorporation and the By-Laws of the Company and
all necessary certificates, permits, minute books, documents and records of the
Company, and the applicable statutes of the State of Minnesota, and it is my
opinion:
(a) That the Company is a corporation duly organized and existing under the
laws of the State of Minnesota with an authorized capital stock of
10,000,000,000 shares, all of $.01 par value, that such shares may be
issued as full or fractional shares;
(b) That all such authorized shares are, under the laws of the State of
Minnesota, redeemable as provided in the Articles of Incorporation of
the Company and upon redemption shall have the status of authorized
shares and unissued shares;
(c) That the Company registered on July 31, 1980 an indefinite number of
shares pursuant to Rule 24f-2 and is herewith filing a Rule 24f-2;
(d) That shares which were sold at not less than their par value and in
accordance with applicable federal and state securities laws were
legally issued, fully paid and nonassessable.
I hereby consent that the foregoing opinion may be used in connection with this
Post-Effective Amendment.
Very truly yours,
/s/Leslie L. Ogg
Leslie L. Ogg
Attorney at Law
901 S. Marquette Ave., Suite 2810
Minneapolis, Minnesota 55402-3268
Independent auditors' consent
The board and shareholders
AXP Tax-Free Money Fund, Inc.:
We consent to the use of our report incorporated herein by reference and to the
references to our Firm under the headings "Financial highlights" in Part A and
"INDEPENDENT AUDITORS" in Part B of the Registration Statement.
/s/KPMG LLp
KPMG LLP
Minneapolis, Minnesota
February 24, 2000
DIRECTORS/TRUSTEES POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors and trustees of the below listed
open-end, diversified investment companies that previously have filed
registration statements and amendments thereto pursuant to the requirements of
the Securities Act of 1933 and the Investment Company Act of 1940 with the
Securities and Exchange Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
AXP Bond Fund, Inc. 2-51586 811-2503
AXP California Tax-Exempt Trust 33-5103 811-4646
AXP Discovery Fund, Inc. 2-72174 811-3178
AXP Equity Select Fund, Inc. 2-13188 811-772
AXP Extra Income Fund, Inc. 2-86637 811-3848
AXP Federal Income Fund, Inc. 2-96512 811-4260
AXP Global Series, Inc. 33-25824 811-5696
AXP Growth Series, Inc. 2-38355 811-2111
AXP High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
AXP International Fund, Inc. 2-92309 811-4075
AXP Investment Series, Inc. 2-11328 811-54
AXP Managed Series, Inc. 2-93801 811-4133
AXP Market Advantage Series, Inc. 33-30770 811-5897
AXP Money Market Series, Inc. 2-54516 811-2591
AXP New Dimensions Fund, Inc. 2-28529 811-1629
AXP Precious Metals Fund, Inc. 2-93745 811-4132
AXP Progressive Fund, Inc. 2-30059 811-1714
AXP Selective Fund, Inc. 2-10700 811-499
AXP Special Tax-Exempt Series Trust 33-5102 811-4647
AXP Stock Fund, Inc. 2-11358 811-498
AXP Strategy Series, Inc. 2-89288 811-3956
AXP Tax-Exempt Series, Inc. 2-57328 811-2686
AXP Tax-Free Money Fund, Inc. 2-66868 811-3003
AXP Utilities Income Fund, Inc. 33-20872 811-5522
<PAGE>
hereby constitutes and appoints William R. Pearce, Arne H. Carlson and Leslie L.
Ogg or either one of them, as her or his attorney-in-fact and agent, to sign for
her or him in her or his name, place and stead any and all further amendments to
said registration statements filed pursuant to said Acts and any rules and
regulations thereunder, and to file such amendments with all exhibits thereto
and other documents in connection therewith with the Securities and Exchange
Commission, granting to either of them the full power and authority to do and
perform each and every act required and necessary to be done in connection
therewith.
Dated the 13th day of January, 2000.
/s/ H. Brewster Atwater, Jr. /s/ Anne P. Jones
H. Brewster Atwater, Jr. Anne P. Jones
/s/ Arne H. Carlson /s/ William R. Pearce
Arne H. Carlson William R. Pearce
/s/ Lynne V. Cheney /s/ Alan K. Simpson
Lynne V. Cheney Alan K. Simpson
/s/ William H. Dudley /s/ John R. Thomas
William H. Dudley John R. Thomas
/s/ David R. Hubers /s/ C. Angus Wurtele
David R. Hubers C. Angus Wurtele
/s/ Heinz F. Hutter
Heinz F. Hutter
Officers' Power of Attorney
City of Minneapolis
State of Minnesota
Each of the undersigned, as officers of the below listed open-end, diversified
investment companies that previously have filed registration statements and
amendments thereto pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940 with the Securities and Exchange
Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
AXP Bond Fund, Inc. 2-51586 811-2503
AXP California Tax-Exempt Trust 33-5103 811-4646
AXP Discovery Fund, Inc. 2-72174 811-3178
AXP Equity Select Fund, Inc. 2-13188 811-772
AXP Extra Income Fund, Inc. 2-86637 811-3848
AXP Federal Income Fund, Inc. 2-96512 811-4260
AXP Global Series, Inc. 33-25824 811-5696
AXP Growth Series, Inc. 2-38355 811-2111
AXP High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
AXP International Fund, Inc. 2-92309 811-4075
AXP Investment Series, Inc. 2-11328 811-54
AXP Variable Portfolio-Investment Series, Inc. 2-73115 811-3218
AXP Variable Portfolio-Managed Series, Inc. 2-96367 811-4252
AXP Variable Portfolio-Money Market Series, Inc. 2-72584 811-3190
AXP Variable Portfolio-Income Series, Inc. 2-73113 811-3219
AXP Managed Series, Inc. 2-93801 811-4133
AXP Market Advantage Series, Inc. 33-30770 811-5897
AXP Money Market Series, Inc. 2-54516 811-2591
AXP New Dimensions Fund, Inc. 2-28529 811-1629
AXP Precious Metals Fund, Inc. 2-93745 811-4132
AXP Progressive Fund, Inc. 2-30059 811-1714
AXP Selective Fund, Inc. 2-10700 811-499
AXP Special Tax-Exempt Series Trust 33-5102 811-4647
AXP Stock Fund, Inc. 2-11358 811-498
AXP Strategy Series, Inc. 2-89288 811-3956
AXP Tax-Exempt Series, Inc. 2-57328 811-2686
AXP Tax-Free Money Fund, Inc. 2-66868 811-3003
AXP Utilities Income Fund, Inc. 33-20872 811-5522
hereby constitutes and appoints the other as his attorney-in-fact and agent, to
sign for him in his name, place and stead any and all further amendments to said
registration statement filed pursuant to said Acts and any rules and regulations
thereunder, and to file such amendments with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting to either of them the full power and authority to do and perform each
and every act required and necessary to be done in connection therewith.
Dated the 13th day of January, 2000.
/s/ Arne H. Carlson /s/ Leslie L. Ogg
Arne H. Carlson Leslie L. Ogg
/s/ John R. Thomas /s/ Peter J. Anderson
John R. Thomas Peter J. Anderson
/s/ Frederick C. Quirsfeld /s/ John M. Knight
Frederick C. Quirsfeld John M. Knight
