SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
AXP STOCK 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: As soon as practicable after the
effective date of the Registration Statement.
Title of Securities Being Registered: Common Stock
No filing fee is due because of reliance on Section 24(f) of the Investment
Company Act of 1940.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine. It is proposed that this filing will become effective on
April 12, 2000.
<PAGE>
STRATEGIST MUTUAL FUND GROUP
- -------------------------------------------------------------------------------
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
- -------------------------------------------------------------------------------
To be held May 9, 2000
<TABLE>
<CAPTION>
<S> <C>
Strategist Growth Fund, Inc. Strategist Income Fund, Inc.
- - Strategist Growth Fund -Strategist Government Income Fund
- - Strategist Growth Trends Fund - Strategist High Yield Fund
- - Strategist Special Growth Fund - Strategist Quality Income Fund
Strategist Growth and Income Fund, Inc. Strategist World Fund, Inc.
- -Strategist Balanced Fund - Strategist Emerging Markets Fund
- - Strategist Equity Fund - Strategist World Growth Fund
- - Strategist Equity Income Fund - Strategist World Income Fund
- - Strategist Total Return Fund - Strategist World Technologies Fund
Strategist Tax-Free Income Fund, Inc.
- Strategist Tax-Free High Yield Fund
</TABLE>
Your Fund will hold a special shareholders' meeting at 2:00 p.m. on May 9, 2000,
at the IDS Tower, 80 South Eighth Street, Minneapolis, MN, in Conference Room A
on the 27th floor. This will be a joint meeting for all of the Funds listed
above. At the meeting, shareholders will consider the following:
o A proposal to approve an Agreement and Plan of Reorganization between the
Strategist Fund and the corresponding AXP Fund investing in the same master
fund. Under this Agreement, the Strategist Fund will transfer all of its
assets to the AXP Fund in exchange for Class A shares of the AXP Fund.
These shares will be distributed proportionately to you and the other
shareholders of the Strategist Fund. The AXP Fund will assume the
Strategist Fund's liabilities. The Board of Directors recommends that you
vote FOR the proposal.
o Any other business that may come before the meeting.
Please take a few minutes to read the proxy statement. It discusses the proposal
in more detail. If you were a shareholder on April 5, 2000, you may vote at the
meeting or any adjournment of the meeting. We hope you can attend the meeting.
For those of you who cannot attend, please complete and return the enclosed
proxy card. If you have questions, please call 1-800-___-____. This proxy
statement was first mailed to shareholders the week of April 14, 2000.
April 14, 2000
<PAGE>
- --------------------------------------------------------------------------------
COMBINED PROXY STATEMENT/PROSPECTUS
- --------------------------------------------------------------------------------
Dated April 14, 2000
This document is a proxy statement for each of the Strategist Funds and a
prospectus for the corresponding AXP Fund as shown in the table below. It
contains the information you should know before voting on the proposed
reorganization of the Strategist Fund into the corresponding AXP Fund (the
"Reorganization"). Please read it carefully and keep it for future reference.
The table shows the investment objective for each Strategist Fund and
corresponding AXP Fund. The address of the Strategist Fund is IDS Tower 10,
Minneapolis, Minnesota 55440-0010. The address of the AXP Fund is 901 Marquette
Avenue South, Suite 2810, Minneapolis, MN 55402-3268.
<TABLE>
<CAPTION>
Fund Names and Investment Objectives
<S> <C> <C>
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Fund AXP Fund Investment Objective
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Balanced AXP Mutual Balance of growth of capital and current income.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Emerging Markets AXP Emerging Markets Long-term capital growth.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Equity AXP Stock Current income and growth of capital.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Equity Income AXP Diversified High level of current income. Secondary goal is
Equity Income steady growth of capital.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Government AXP Federal Income High level of current income and safety
Income of principal consistent with investment in U.S.
government and government agency securities.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Growth AXP Growth Long-term capital growth.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Growth Trends AXP New Dimensions Long-term growth of capital.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist High Yield AXP Extra Income High current income. Secondary goal is capital
growth.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Quality Income AXP Selective Current income and preservation of
capital.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Special Growth AXP Research Long-term capital growth.
Opportunities
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Tax-Free High AXP High Yield High yield generally exempt from federal
Yield Tax-Exempt income taxes.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist Total Return AXP Managed Allocation Maximum total return through a combination of
growth of capital and current income.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist World Growth AXP Global Growth Long-term capital growth.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist World Income AXP Global Bond High total return through income and growth of
capital.
- ---------------------------- -------------------------- -----------------------------------------------------
Strategist World AXP Innovations Long-term capital growth.
Technologies
- ---------------------------- -------------------------- -----------------------------------------------------
</TABLE>
How the Reorganization Will Work
o The Strategist Fund will transfer all of its assets to the corresponding
AXP Fund. The AXP Fund will assume the Strategist Fund's stated
liabilities.
o The AXP Fund will issue Class A shares to the Strategist Fund in an amount
equal to the value of the assets it receives, less the liabilities it
assumes. These Class A shares will be distributed to the Strategist Fund's
shareholders in proportion to their holdings in the Strategist Fund. You
will not pay any sales charge in connection with this distribution of
shares.
Please note that the AXP Fund is not a bank deposit, is not federally insured,
is not endorsed by any bank or government agency and is not guaranteed to
achieve its goal.
As with all mutual funds, the Securities and Exchange Commission (the "SEC") has
not approved or disapproved these securities or passed on the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
Where to Get More Information
- ------------------------------------------------------- -----------------------------------------------------
<S> <C>
The AXP Fund's most recent prospectus and annual In the same envelope as this proxy
report. statement/prospectus.
- ------------------------------------------------------- -----------------------------------------------------
The AXP Fund's most recent statement of additional Incorporated by reference into this proxy
information and semi-annual report to statement/prospectus. For a copy at no charge,
shareholders (if a semi-annual report has been call toll-free 1-800-___-___ or write to the
issued subsequent to the most recent annual report). address below.
- ------------------------------------------------------- -----------------------------------------------------
The Strategist Fund's most recent prospectus. Incorporated by reference into this proxy
statement/prospectus. For a copy at no charge,
call toll-free 1-800-___-____ or write to the
address below.
- ------------------------------------------------------- -----------------------------------------------------
The Strategist Fund's most recent annual report and Incorporated by reference into this proxy
semi-annual report to shareholders (if a semi-annual statement/prospectus. For a copy at no charge,
report has been issued subsequent to the the most call toll-free 1-800-___-____ or write to the
recent annual report). address below.
- ------------------------------------------------------- -----------------------------------------------------
Statement of additional information dated the same Incorporated by reference into this proxy
date as this proxy statement/prospectus. This statement/prospectus. For a copy at no charge,
document contains information about both the call toll-free 1-800-___-____ or write to the
Strategist Fund and the AXP Fund. address below.
- ------------------------------------------------------- -----------------------------------------------------
To ask questions about this proxy Call toll-free 1-800-___-____ or
statement/prospectus. write to:
- ------------------------------------------------------- -----------------------------------------------------
</TABLE>
<PAGE>
TABLE OF CONTENTS
Page
A. Summary
o How the Reorganization Will Work __
o Comparison of the Strategist Fund and the AXP Fund __
o Tax Consequences __
o Risk Factors __
B. Fees and Expenses __
C. The Reorganization
o Terms of the Reorganization __
o Conditions to Closing the Reorganization __
o Termination of the Agreement __
o Tax Status of the Reorganization __
o Reasons for the Proposed Reorganization
and Board Deliberations __
o Boards' Determination
--
D. Information Concerning the Meeting
o Recommendation and Vote Required __
o Voting __
o Revoking your Proxy __
o Simultaneous Meetings __
o Solicitation of Proxies __
o Dissenters' Right of Appraisal __
o Other Business __
o Adjournment __
E. Capitalization and Ownership of Fund Shares
o Capitalization __
o Ownership of Fund Shares __
F. Experts __
G. Additional Information About the Funds' Businesses __
Exhibits
1. Agreement and Plan of Reorganization between __
the Strategist Fund and the AXP Fund.
2. Minnesota Business Corporation Act Sections __
302A.471 and 302A.473.
3. Most recent AXP Fund prospectus and annual report. __
A. SUMMARY
This proxy statement/prospectus is being used by the Board of Directors (the
"Board") of the Strategist Fund to solicit proxies to vote at a special meeting
of shareholders. The purpose of the meeting is to consider a proposal to approve
an Agreement and Plan of Reorganization (the "Agreement") providing for the
Reorganization of the Strategist Fund into the corresponding AXP Fund invested
in the same master fund.
The following is a summary. More complete information appears later in this
proxy statement/prospectus. You should read the entire proxy
statement/prospectus and the exhibits because they contain details that are not
in the summary. The materials in the statement of additional information dated
the same date as this proxy statement/prospectus for the Strategist Fund and the
AXP Fund are incorporated by reference into this proxy statement/prospectus.
<PAGE>
How the Reorganization Will Work.
o The Strategist Fund will transfer all of its assets to the corresponding
AXP Fund. The AXP Fund will assume the Strategist Fund's stated
liabilities.
o The AXP Fund will issue Class A shares to the Strategist Fund in an amount
equal to the value of the assets it receives, less the liabilities it
assumes. These Class A shares will be distributed to the Strategist Fund's
shareholders in proportion to their holdings in the Strategist Fund.
o Neither the Strategist Fund nor the shareholders of the Strategist Fund
will pay any sales charge in connection with the Reorganization.
o After the Reorganization is completed, Strategist shareholders will be
shareholders of Class A shares of the corresponding AXP Fund. The
Strategist Fund will be deregistered as a mutual fund and terminated under
state law.
<TABLE>
<CAPTION>
Table A-1.
Comparison of the Strategist Fund to the AXP Fund
<S> <C> <C>
- ------------------------------------- ----------------------------------- -----------------------------------
Strategist Fund AXP Fund
- ------------------------------------- ----------------------------------- -----------------------------------
General A series of capital stock of A series of capital stock of
an open-end management an open-end management
investment company organized investment company organized
as a Minnesota corporation. as a Minnesota corporation.
- ------------------------------------- ----------------------------------- -----------------------------------
Investment Structure A feeder fund investing all of A feeder fund investing all of
its assets in a master fund. its assets in a master fund.
- ------------------------------------- ----------------------------------- -----------------------------------
Investment Adviser American Express Financial AEFC is the investment adviser
Corporation ("AEFC") is the for the master fund.
investment adviser for the
master fund.
- ------------------------------------- ----------------------------------- -----------------------------------
Investment Objectives, Policies, Identical for both Funds.
Investment Strategies, Risks and
Restrictions
- ------------------------------------- -----------------------------------------------------------------------
Pricing Each Fund calculates its net asset value
per share at the close of trading on the
New York Stock Exchange (the "NYSE")
(normally 3:00 p.m. Central Time) each
business day.
- ------------------------------------- -----------------------------------------------------------------------
Classes of Shares One class of shares, offered Three classes of shares. Only
without a sales charge. Class A shares are being
Effective October 4, 1999 the offered to Strategist Fund
Strategist Fund discontinued a shareholders in this proxy
0.25% 12b-1 fee. statement/prospectus.
o Class A has a 5% front-end sales
charge and a 0.25% 12b-1 fee.*
o Class B has a contingent deferred
sales charge of 5% declining to
0% over 6 years and a 1% 12-b1 fee.
o Class Y is offered only to institutional
investors with no sales charge and a
0.10% service fee.
*No sales charge will be charged as part
of the Reorganization. On subsequent
purchases, the 5% sales charge will
be waived for former Strategist
shareholders.
- ------------------------------------- ----------------------------------- -----------------------------------
Buying and Selling Shares Strategist Fund shares are no Investors may purchase and
longer available for new redeem shares directly,
investment. Existing through their American Express
shareholders may make add-on financial advisor or through
purchases to existing accounts. other authorized
broker-dealers or third
parties.
- ------------------------------------- ----------------------------------- -----------------------------------
Minimum Investment Amounts Initial: No new investments Initial: $2,000*
allowed Subsequent: $100
Subsequent: $100 for existing
investors *The AXP Fund will waive the
minimum investment amount for any
Strategist Fund account that,
after the Reorganization, contains
less than $2,000.
- ------------------------------------- ----------------------------------- -----------------------------------
Exchanges Permitted only between Class A shares of the AXP Fund
existing accounts. may be exchanged for Class A
shares of 38 other AXP Funds.
- ------------------------------------- ----------------------------------- -----------------------------------
Voting Rights No cumulative voting rights Cumulative voting rights when
when voting on the election of voting on the election of
directors. directors.
- ------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
Tax Consequences. The Reorganization is expected to be tax-free for federal
income tax purposes and will not take place unless the Strategist Fund and the
AXP Fund receive a satisfactory opinion from the law firm of Ropes & Gray,
substantially to that effect.
Risk Factors. Because both the Strategist Fund and the AXP Fund invest in the
same master fund and are subject to the same investment objectives, investment
strategies and restrictions, the risks of an investment in the AXP Fund are
identical to the risks of an investment in the Strategist Fund. Risk factors are
described in more detail in the enclosed AXP Fund prospectus under the heading
"Risks".
B. FEES AND EXPENSES
The following table describes the fees and expenses that you pay if you buy and
hold shares of the Strategist Fund or Class A shares of the AXP Fund. The table
also shows pro forma expenses of Class A shares of the AXP Fund assuming the
proposed Reorganization had been effective during the most recent fiscal year.
<TABLE>
<CAPTION>
Table B-1.
Actual and Pro Forma Fund Expenses
For the Most Recent Fiscal Year
- -------------------------- ------------------ ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shareholder
Fees (fees
Fund paid directly Annual Operating Expensesa
from your (expenses that are deducted from Fund assets)
investment) (as a percent of average daily net assets)
- -------------------------- ------------------ ---------------------------------------------------------------
Maximum sales Management Distribution Other
charge feesb (12b-1) feesc expensesd Totale
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Balanced 0% 0.48% 0.25% 2.41% 3.14%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Mutual-Class A 5% 0.46% 0.25% 0.19% 0.90%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Mutual-Class A * 0.46% 0.25% 0.19% 0.90%
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Emerging 0% 1.10% 0.25% 4.82% 6.17%
Markets
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Emerging 5% 1.10% 0.25% 0.76% 2.11%
Markets-Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Emerging 1.10% 0.25% 0.76% 2.11%
Markets-Class A *
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Equity 0% 0.48% 0.25% 1.42% 2.15%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Stock-Class A 5% 0.48% 0.25% 0.15% 0.88%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Stock-Class A * 0.48% 0.25% 0.15% 0.88%
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Equity Income 0% 0.49% 0.25% 2.88% 3.62%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Diversified Equity 5% 0.49% 0.25% 0.22% 0.96%
Income-
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Diversified Equity 0.49% 0.25% 0.22% 0.96%
Income- *
Class A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Government 0% 0.50% 0.25% 0.66% 1.41%
Income
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Federal Income- 5% 0.50% 0.25% 0.23% 0.98%
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Federal Income- * 0.50% 0.25% 0.23% 0.98%
Class A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Growth 0% 0.52% 0.25% 0.26% 1.03%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Growth-Class A 5% 0.53% 0.25% 0.19% 0.97%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Growth-Class A * 0.53% 0.25% 0.19% 0.97%
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Growth Trends 0% 0.53% 0.25% 0.17% 0.95%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP New Dimensions - 5% 0.53% 0.25% 0.15% 0.93%
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP New Dimensions - 0.53% 0.25% 0.15% 0.93%
Class A *
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist High Yield 0% 0.56% 0.25% 1.04% 1.85%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Extra Income- 5% 0.56% 0.25% 0.20% 1.01%
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Extra Income- * 0.56% 0.25% 0.20% 1.01%
Class A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Quality Income 0% 0.52% 0.25% 2.81% 3.58%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Selective- 5% 0.51% 0.25% 0.22% 0.98%
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Selective- * 0.51% 0.25% 0.22% 0.98%
Class A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Special Growth 0% 0.64% 0.25% 1.38% 2.27%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Research 5% 0.63% 0.25% 0.33% 1.21%
Opportunities-
Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Research 0.63% 0.25% 0.33% 1.21%
Opportunities- *
Class A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Tax-Free High 0% 0.45% 0.25% 2.55% 3.25%
Yield
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP High Yield 5% 0.44% 0.25% 0.11% 0.80%
Tax-Exempt-Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP High Yield 0.44% 0.25% 0.11% 0.80%
Tax-Exempt-Class A *
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist Total Return 0% 0.44% 0.25% 0.62% 1.31%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Managed 5% 0.43% 0.25% 0.21% 0.89%
Allocation-Class A
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Managed 0.43% 0.25% 0.21% 0.89%
Allocation-Class A *
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist World Growth 0% 0.75% 0.25% 1.85% 2.85%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Global Growth-Class A 5% 0.74% 0.25% 0.32% 1.31%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Global Growth-Class * 0.74% 0.25% 0.32% 1.31%
A Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist World Income 0% 0.75% 0.25% 2.46% 3.46%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Global Bond-Class A 5% 0.74% 0.25% 0.28% 1.27%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Global Bond-Class A * 0.74% 0.25% 0.28% 1.27%
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
Strategist World 0% 0.72% 0.25% 2.24% 3.21%
Technologies
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Innovations-Class A 5% 0.72% 0.25% 0.15% 1.12%
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
AXP Innovations-Class A * 0.72% 0.25% 0.15% 1.12%
Pro Forma
- -------------------------- ------------------ ----------------- ----------------- -------------- ------------
*The 5% sales charge will be waived for former Strategist shareholders.
a For all Funds, operating expenses include expenses charged by both the Fund
and the master fund. Expenses are based on actual expenses for the last
fiscal year, restated to reflect current fees.
b The management fee is paid by the master fund and is allocated between the
Strategist Fund and the AXP Fund based on assets. For some Funds, the chart
shows a slight difference between the management fee for the Strategist
Fund and the management fee for the AXP Fund. This difference is due to
rounding.
c Effective October 4, 1999 the 0.25% distribution fee was discontinued for
the Strategist Fund.
d Other expenses include an administrative services fee, a transfer agency fee
and other nonadvisory expenses.
e For the Strategist Fund, AEFC and the Fund's distributor have agreed to
waive certain fees and to absorb certain other Fund expenses until the
end of the Fund's current fiscal year. The agreement may be terminated
at any time after that date. Under the agreement, total expenses will not
exceed 0.95% for Tax-Free High Yield; 1.10% for Government Income and
Quality Income; 1.20% for High Yield; 1.25% for Balanced, Equity and
Equity Income; 1.30% for Growth, Growth Trends and Total Return; 1.35% for
World Income and World Technologies; 1.40% for Special Growth; 1.75% for
World Growth; and 2.20% for Emerging Markets. For the most recent fiscal
year, actual total expenses with fee waivers and expense reimbursement were
0.95% for Tax-Free High Yield; 1.09% for Government Income, 1.09% for
Quality Income, 1.19% for High Yield; 0.98% for Balanced; 1.25% for
Equity; 1.25% for Equity Income; 1.03% for Growth; 0.95% for Growth
Trends; 1.22% for Total Return; 1.35% for World Income, 1.47% for World
Technologies; 1.39% for Special Growth; 1.71% for World Growth; and
2.20% for Emerging Markets.
</TABLE>
Example: This example is intended to help you compare the cost of investing in
the Fund with the cost investing in other mutual funds. Assume you invest
$10,000 and the Fund earns a 5% return. The operating expenses remain the same
each year. If you hold your shares until the end of the year shown, the
following table shows your costs under the current arrangements and your costs
if the proposed reorganization had been in effect. The numbers for the AXP Fund
reflect the costs that would be incurred if a shareholder paid $500 in sales
charge to purchase Class A shares. You will not incur that cost since the sales
charge will be waived for former Strategist Fund shareholders.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Fund 1 year 3 years 5 years 10 years
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Balanced $317 $969 $1,645 $3,451
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Mutual-Class A $587 $773 $974 $1,557
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Mutual-Class A Pro Forma $587 $773 $974 $1,557
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Emerging Markets $613 $1,819 $2,996 $5,823
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Emerging Markets-Class A $703 $1,128 $1,578 $2,824
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Emerging Markets-Class A Pro $703 $1,128 $1,578 $2,824
Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Equity $218 $673 $1,155 $2,487
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Stock-Class A $585 $767 $964 $1,534
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Stock-Class A Pro Forma $585 $767 $964 $1,534
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Equity Income $365 $1,109 $1,874 $3,882
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Diversified Equity Income- Class $593 $791 $1,005 $1,623
A
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Diversified Equity Income- Class $593 $791 $1,005 $1,623
A Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Government Income $144 $447 $772 $1,696
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Federal Income-Class A $595 $797 $1,015 $1,646
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Federal Income-Class A $595 $797 $1,015 $1,646
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Growth $105 $328 $570 $1,264
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Growth-Class A $594 $794 $1,010 $1,634
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Growth-Class A Pro Forma $594 $794 $1,010 $1,634
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Growth Trends $97 $303 $526 $1,171
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP New Dimensions-Class A $590 $782 $990 $1,590
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP New Dimensions-Class A Pro Forma $590 $782 $990 $1,590
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist High Yield $188 $582 $1,002 $2,174
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Extra Income-Class A $598 $806 $1,031 $1,679
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Extra Income-Class A $598 $806 $1,031 $1,679
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Quality Income $361 $1,097 $1,855 $3,847
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Selective-Class A $595 $797 $1,015 $1,646
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Selective-Class A $595 $797 $1,015 $1,646
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Special Growth $230 $710 $1,216 $2,610
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Research Opportunities- $617 $865 $1,133 $1,897
Class A
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Research Opportunities- $617 $865 $1,133 $1,897
Class A Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Tax-Free High Yield $328 $1,001 $1,698 $3,552
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP High Yield Tax-Exempt-Class A $578 $743 $923 $1,444
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP High Yield Tax-Exempt-Class A $578 $743 $923 $1,444
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist Total Return $133 $415 $719 $1,584
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Managed Allocation- $586 $770 $969 $1,545
Class A
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Managed Allocation- $586 $770 $969 $1,545
Class A Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist World Growth $288 $883 $1,504 $3,179
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Global Growth-Class A $627 $895 $1,183 $2,005
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Global Growth-Class A $627 $895 $1,183 $2,005
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist World Income $349 $1,062 $1,798 $3,740
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Global Bond-Class A $623 $883 $1,163 $1,962
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Global Bond-Class A $623 $883 $1,163 $1,962
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
Strategist World Technologies $324 $989 $1,679 $3,515
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Innovations-Class A $608 $838 $1,087 $1,800
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
AXP Innovations-Class A $608 $838 $1,087 $1,800
Pro Forma
- -------------------------------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
<PAGE>
C. THE REORGANIZATION
Terms of the Reorganization. The Board has approved the Agreement, a copy of
which is attached as Exhibit 1. The Agreement provides for Reorganization on the
following terms:
o The Reorganization is scheduled to occur on the first day that the NYSE is
open for business following shareholder approval and receipt of any
necessary regulatory approvals, but may occur on any later date agreed to
by the Funds.
o The Strategist Fund will transfer all of its assets to the AXP Fund and, in
exchange, the AXP Fund will assume the Strategist Fund's stated liabilities
and issue Class A shares.
o The AXP Fund will issue Class A shares to the Strategist Fund in an amount
equal to the value of the assets received by the AXP Fund, less the
liabilities assumed by the AXP Fund in the transaction. These shares will
immediately be distributed by the Strategist Fund to its shareholders in
proportion to their holdings in the Strategist Fund. As a result,
shareholders of the Strategist Fund will become Class A shareholders of the
AXP Fund.
o Neither the Strategist Fund nor the shareholders of the Strategist Fund
will pay any sales charge in connection with the Reorganization.
o The net asset value of both Funds will be computed as of 3:00 p.m. Central
time, on the closing date.
o After the Reorganization, the Strategist Fund will be deregistered as a
mutual fund and terminated under state law.
Conditions to Closing the Reorganization. The completion of the Reorganization
is subject to certain conditions described in the Agreement, including:
o The Strategist Fund will have declared and paid a dividend that will
distribute all of the Fund's taxable income, if any, to the shareholders of
the Strategist Fund for the taxable years ending at or prior to the
closing.
o The Funds will have received any approvals, consents or exemptions from the
SEC or any regulatory body necessary to carry out the Reorganization.
o A registration statement on Form N-14 will have been filed with the SEC and
declared effective for each of the Funds.
o The shareholders of the Strategist Funds will have approved the Agreement.
o The Funds will have received an opinion of tax counsel that the proposed
Reorganization will be tax-free for each Fund and its shareholders.
Termination of the Agreement. The Agreement and the transactions contemplated by
it may be terminated and abandoned by resolutions of the Board of the Strategist
Fund or the AXP Fund at any time prior to closing. In the event of a
termination, there will be no liability for damages on the part of either the
Strategist Fund or the AXP Fund or the directors, officers or shareholders of
either Fund.
Tax Status of the Reorganization. The Reorganization is expected to be tax-free
for federal income tax purposes and will not take place unless the Strategist
Fund and the AXP Fund receive a satisfactory opinion from the law firm of Ropes
& Gray, substantially to the effect that:
o The transfer of the Strategist Fund's assets to the AXP Fund in exchange
for Class A shares of the AXP Fund and the assumption of the Strategist
Fund's liabilities, followed by the distribution of those shares to the
Strategist Fund's shareholders and the termination of the Strategist Fund
will be a "reorganization" within the meaning of Section 368(a)(1) of the
Internal Revenue Code of 1986 (the "Code"), and the Strategist Fund and the
corresponding AXP Fund will each be a "party to the reorganization" within
the meaning of Section 368(b) of the Code.
o No gain or loss will be recognized by the Strategist Fund upon the transfer
of all of its assets to the AXP Fund or on the distribution by the
Strategist Fund of Class A shares of the AXP Fund to Strategist Fund
shareholders.
o No gain or loss will be recognized by the AXP Fund upon the receipt of the
Strategist Fund's assets solely in exchange for the issuance of the AXP
Fund's Class A shares to the Strategist Fund and the assumption of all of
the Strategist Fund's liabilities by the AXP Fund.
o The basis of the assets of the Strategist Fund acquired by the AXP Fund
will be, in each instance, the same as the basis of those assets in the
hands of the Strategist Fund immediately before the transfer.
o The tax holding period of the assets of the Strategist Fund in the hands of
the AXP Fund will include the Strategist Fund's tax holding period for
those assets.
o The shareholders of the Strategist Fund will not recognize gain or loss
upon the exchange of all their shares of the Strategist Fund solely for the
AXP Fund Class A shares as part of the Reorganization.
o The basis of the Class A shares of the AXP Fund received by the Strategist
Fund shareholders in the Reorganization will be the same as the basis of
the shares of the Strategist Fund surrendered in exchange.
o The tax holding period of the Class A shares of the AXP Fund received by
the Strategist Fund shareholders will include, for each shareholder, the
tax holding period of the shares of the Strategist Fund surrendered in
exchange, provided that the Class A shares of the AXP Fund were held as
capital assets on the date of the exchange.
Reasons for the Proposed Reorganization and Board Deliberations. The Board
believes that the proposed Reorganization will be advantageous to the Strategist
Fund shareholders for several reasons. The Board considered the following
matters, among others, in approving the Reorganization.
o Terms and Conditions of the Reorganization. The Board considered the terms
and conditions of the Reorganization as described in the previous
paragraphs.
o Tax Consequences. The Board considered the tax-free nature of the
Reorganization.
o Continuity of Investment. The Board took into account the fact that,
following the Reorganization, shareholders of the Strategist Funds will be
invested in a fund holding an identical investment securities portfolio,
with identical investment objectives, policies, and restrictions.
o Continued No-Load Purchases. The Board took into account that shareholders
of the Strategist Fund will be able to make future purchases of shares of
the AXP Fund on a no-load basis.
o Expense Ratios. Following the Reorganization, the expense ratio for the AXP
Fund is expected to be lower than the expense ratio of the Strategist Fund.
The Reorganization is expected to eliminate or reduce costs associated with
maintaining separate funds, including costs of separate audits, printing
costs and blue sky fees. The Strategist Fund has been unable to attract
sufficient assets to operate effectively without significant expense
subsidization. Since commencement of operations, AEFC has been waiving a
portion of its fees. AEFC has committed to continue capping fees through
the end of the 2000 fiscal year for the Strategist Fund, although waivers
can be discontinued at any time after that. AEFC does not expect to waive
fees indefinitely and, without continued fee waivers or growth in assets,
the Strategist Fund's expense ratios would likely exceed those of many
other funds with similar investment objectives. This could have an adverse
impact on the Strategist Fund's performance. As a result, it is possible
that the Strategist Fund's asset base will decline and the Strategist
Fund's expense ratio will rise even higher as fixed costs are spread over a
shrinking asset base.
The AXP Fund, on the other hand, has achieved viable size. Certain fixed
shareholder expenses (such as accounting fees, printing costs and blue sky
expenses) are expected to be lower for the AXP fund than they would be for
the Strategist Fund if AEFC discontinued waiving fees. Thus, Strategist
Fund shareholders will experience lower per share fixed costs by holding
AXP Fund shares than they would if they continued to hold shares in the
Strategist Fund. Expense ratios for each of the Funds for the last fiscal
year are shown under the heading "Fees and Expenses".
o Potential Benefits to AEFC and its Affiliates. The Board also considered
the potential benefits from the Reorganization that could be realized by
AEFC and its affiliates. The Board recognized that the potential benefits
to AEFC consist principally of the elimination of expenses incurred in
duplicative efforts to administer two separate funds. AEFC also will
benefit to the extent it no longer waives its fees. The Board also noted,
however, that shareholders of the Strategist Funds will benefit directly
from any decrease in overall operating ratios resulting from the proposed
Reorganization.
o Costs. The Board considered the fact that AEFC has agreed to bear the costs
of effecting the Reorganization.
o Alternative Solutions. The Board determined that the Reorganization
provided greater benefits to shareholders than other options, such as the
liquidation of the Strategist Fund. Liquidating the Strategist Fund would
require most shareholders, subject to federal income taxation, to recognize
either gains or losses in the current tax year when many shareholders might
prefer to defer those gains or losses. Another alternative, a voluntary
exchange into the corresponding AXP Fund, generally also would require
shareholders to recognize a gain or loss for tax purposes. The
Reorganization, on the other hand, is expected to be achieved on a tax-free
basis resulting in a deferral of any gain or loss for federal income tax
purposes. Any shareholder who does not want to participate in the
Reorganization may redeem shares and receive similar federal income tax
treatment as if the Strategist Fund was liquidated.
Boards' Determination. After considering the factors described above and other
relevant information, at a meeting held on March 10, 2000, the Strategist Fund
Board members, including a majority of the Independent Directors, found that
participation in the Reorganization is in the best interests of the Strategist
Fund and that the interests of existing shareholders of the Fund will not be
diluted as a result of the Reorganization. The Independent Directors were
advised, in their deliberations, by special counsel as to their fiduciary duties
under state law and the Investment Company Act of 1940 Act (the "1940 Act"), and
met separately on a number of occasions with counsel prior to approving the
Reorganization. In addition, AEFC agreed that, following the Reorganization, it
will provide the Independent Directors with the same level of indemnification
for their actions as directors of the Fund as is currently provided by the Fund.
The Board of Directors of the AXP Fund approved the Agreement at a meeting held
on March 8-9, 2000. The Board members considered the terms of the Agreement, the
provisions intended to avoid the dilution of shareholder interests and the
anticipated tax consequences of the Reorganization. The Board found that
participation in the Reorganization is in the best interests of the AXP Fund and
that the interests of existing shareholders of the Fund will not be diluted as a
result of the Reorganization.
<PAGE>
D. INFORMATION CONCERNING THE MEETING
Recommendation and Vote Required. The Board recommends that shareholders approve
the proposed Agreement. The Agreement must be approved by a majority of the
Fund's shares voted at the meeting. If the Agreement is not approved, the Board
will consider what further action should be taken.
Voting. Each share is entitled to one vote. For those of you who cannot come to
the meeting, the Board is asking permission to vote for you. The shares will be
voted as you instruct. Signed proxy cards returned without instructions will be
voted in favor of the proposal.
All votes count toward a quorum, regardless of how they are voted (For, Against
or Abstain). Broker non-votes will be counted toward a quorum but not toward the
approval of the proposal. Broker non-votes are shares for which the underlying
owner has not voted and the broker holding the shares does not have authority to
vote.
Revoking Your Proxy. If your plans change and you can attend the meeting, simply
inform the Secretary at the meeting that you will be voting your shares in
person. Also, if you change your mind after you vote, you may change your vote
or revoke it by writing us or by sending another card.
Simultaneous Meetings. The meeting of your Fund will be held simultaneously with
meetings of the other funds in the Strategist Fund Group. If any shareholder
objects to the holding of simultaneous meetings, the shareholder may move for an
adjournment of his or her Fund's meeting to a time immediately after the
simultaneous meetings so that a meeting of that Fund may be held separately. If
a shareholder makes this motion, the persons named as proxies will take into
consideration the reasons for the objection in deciding whether to vote in favor
of the adjournment.
Solicitation of Proxies. The Board is asking for your vote and for you to vote
as promptly as possible. AEFC will pay the expenses for the proxy material and
the postage. Supplementary solicitations may be made by mail, telephone,
electronic means or personal contact. The expenses of supplementary solicitation
will be paid by AEFC.
Dissenters' Right of Appraisal. Under Sections 302A.471 and 302A.473 of the
Minnesota Business Corporation Act, Strategist Fund shareholders are entitled to
assert dissenters' rights in connection with the Reorganization and obtain
payment of the "fair value" of their shares, provided that they comply with the
requirements of Minnesota law. A copy of the relevant provisions is attached as
Exhibit 2.
Notwithstanding the provisions of Minnesota law, the SEC has taken the position
that use of state appraisal procedures by a mutual fund would be a violation of
Rule 22c-1, the forward pricing rule, under the 1940 Act. This rule states that
no mutual fund may redeem its shares other than at net asset value next computed
after receipt of a request for redemption. It is the SEC's position that Rule
22c-1 supersedes appraisal provisions in state statutes.
In the interest of ensuring equal valuation for all shareholders, dissenters'
rights will be determined in accordance with the SEC's interpretation. As a
result, if any shareholder elects to exercise dissenters' rights under Minnesota
law, the Strategist Fund intends to submit this question to a court of competent
jurisdiction. In that event, a dissenting shareholder would not receive any
payment until the end of the court proceeding.
Other Business. The Board does not know at this time of any other business to
come before the meetings. If something does come up, the proxies will use their
best judgment to vote for you on the matter.
Adjournment. In the event that not enough votes in favor of the proposal are
received by the time scheduled for the meeting, the persons named as proxies may
move for one or more adjournments of the meeting for a period of not more than
120 days in the aggregate to allow further solicitation of shareholders on the
proposal. Any adjournment requires the affirmative vote of a majority of the
shares present at the meeting. The persons named as proxies will vote in favor
of adjournment those shares they are entitled to vote that have voted in favor
of the proposals. They will vote against any adjournment those shares that have
voted against any of the proposals. AEFC will pay the costs of any additional
solicitation and of any adjourned meeting.
<PAGE>
E. CAPITALIZATION AND OWNERSHIP OF FUND SHARES
Capitalization. The following table shows the capitalization of the Strategist
Fund and the AXP Fund as of January 31, 2000 and on a pro forma basis, assuming
the proposed Reorganization had taken place.
<TABLE>
<CAPTION>
Table E-1.
Capitalization
- ------------------------------------- ----------------------- -------------------- --------------------------
<S> <C> <C> <C>
Net Asset Value
Fund Net Assets Per Share Shares Outstanding
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Balanced $1,161,281 $14.78 78,578
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Mutual-Class A $3,012,986,456 $12.27 245,634,554
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Mutual-Class A Pro Forma $3,014,147,737 $12.27 245,729,198
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Emerging Markets $815,184 $5.42 150,403
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Emerging Markets-Class A $329,822,025 $6.45 51,139,182
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Emerging Markets-Class A Pro $330,637,209 $6.45 51,265,567
Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Equity $1,273,705 $32.90 38,709
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Stock-Class A $3,408,874,216 $26.50 128,621,349
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Stock-Class A Pro Forma $3,410,147,921 $26.50 128,669,413
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Equity Income $1,002,884 $9.67 103,702
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Diversified Equity Income- $1,951,227,943 $8.75 223,041,700
Class A
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Diversified Equity Income- $1,952,230,827 $8.75 223,156,315
Class A Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Government Income $835,317 $4.55 183,446
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Federal Income-Class A $1,419,320,623 $4.68 303,584,319
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Federal Income-Class A $1,420,155,940 $4.68 303,762,806
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Growth $28,361,926 $54.90 516,577
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Growth-Class A $5,733,020,508 $49.82 115,085,341
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Growth-Class A Pro Forma $5,761,382,434 $49.82 115,654,629
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Growth Trends $28,693,898 $36.66 782,767
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP New Dimensions-Class A $16,494,860,954 $34.61 476,591,186
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP New Dimensions-Class A Pro Forma $16,523,554,852 $34.61 477,420,250
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist High Yield $1,689,670 $3.74 451,314
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Extra Income-Class A $2,529,230,005 $3.76 673,106,022
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Extra Income-Class A $2,530,919,675 $3.76 673,555,402
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Quality Income $733,042 $8.63 84,963
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Selective-Class A $1,028,262,835 $8.41 122,242,342
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Selective-Class A $1,028,995, 877 $8.41 122,329,505
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Special Growth $1,947,464 $6.00 324,691
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Research Opportunities- $554,851,318 $7.61 72,874,413
Class A
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Research Opportunities- $556,798,782 $7.61 73,130,322
Class A Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Tax-Free High Yield $781,834 $4.18 186,884
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP High Yield Tax-Exempt-Class A $4,862,848,676 $4.23 1,148,909,444
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP High Yield Tax-Exempt-Class A $4,863,630,510 $4.23 1,149,094,275
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist Total Return $865,292 $12.69 68,208
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Managed Allocation- $1,920,005,783 $10.18 188,587,426
Class A
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Managed Allocation- $1,920,871,075 $10.18 188,672,425
Class A Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist World Growth $1,046,605 $10.80 96,912
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Global Growth-Class A $1,474,282,006 $9.71 151,891,801
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Global Growth-Class A $1,475,328,611 $9.71 151,999,587
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist World Income $598,838 $5.57 107,505
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Global Bond-Class A $521,627,535 $5.58 93,541,364
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Global Bond-Class A $522,226,373 $5.58 93,648,683
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
- ------------------------------------- ----------------------- -------------------- --------------------------
Strategist World Technologies $1,812,915 $16.74 108,321
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Innovations-Class A $12,025,199 $16.80 715,673
- ------------------------------------- ----------------------- -------------------- --------------------------
AXP Innovations-Class A $13,838,034 $16.80 823,585
Pro Forma
- ------------------------------------- ----------------------- -------------------- --------------------------
</TABLE>
Ownership of Fund Shares. The following table provides information on
shareholders who owned more than 5% of any Fund's outstanding shares as of
January 31, 2000. As of that date, AEFC or its parent company, American Express
Company, held more than 25% of the outstanding shares of each of the Strategist
Funds. Under the 1940 Act, any person who owns more than 25% of the voting
securities of a company is presumed to "control" the company. Under this
definition, as shown below, AEFC and American Express are deemed to be
controlling persons of the Strategist Funds. As of January 31, 2000, officers
and directors of each of the Funds as a group owned less than 1% of the
outstanding shares of each of the Funds.
<TABLE>
<CAPTION>
Table E-2.
Ownership of Fund Shares*
- ------------------------- ---------------- ------------------ ------------------ -------------------------
<S> <C> <C> <C> <C>
Percent of AXP Class A
Number of Shares Percent of Shares Held Following
Fund 5% Owners Held Shares Held the Reorganization
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Balanced AEFC (1) 52,033 66.2% 0.03%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Mutual None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Emerging AEFC 120,595 80.2% 0.20%
Markets
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Emerging Markets None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Equity AEFC 28,661 74.0% 3.13%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Stock None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Equity Income AEFC 82,394 79.5% 0.04%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Diversified Equity None --- --- ---
Income
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Government AEFC 133,558 72.8% 0.04%
Income (2) 17,265 9.4% **
(3) 10,895 5.9% **
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Federal Income None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Growth (4) 402,401 77.9% 0.38%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Growth None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Growth Trends (4) 621,855 79.5% 0.14%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP New Dimensions None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist High Yield AEFC 163,798 36.3% 0.02%
(5) 123,529 27.4% 0.02%
(6) 103,667 23.0% 0.01%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Extra Income None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Quality AEFC 70,160 84.0% 0.06%
Income (7) 5,303 6.2% **
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Selective None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Special AEFC 163,702 50.4% 0.18%
Growth
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Research None --- --- ---
Opportunities
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Tax-Free AEFC 141,173 75.5% 0.01%
High Yield (8) 16,723 9.0% **
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP High Yield None --- --- ---
Tax-Exempt
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist Total Return AEFC 58,061 85.1% 0.04%
(9) 6,530 9.6% **
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Managed Allocation None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist World Growth AEFC 80,173 82.7% 0.06%
(10) 6,185 6.4%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Global Growth None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist World Income AEFC 101,305 94.2% 0.11%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Global Bond None --- --- ---
- ------------------------- ---------------- ------------------ ------------------ -------------------------
- ------------------------- ---------------- ------------------ ------------------ -------------------------
Strategist World AEFC 108,321 100% 100%
Technologies
- ------------------------- ---------------- ------------------ ------------------ -------------------------
AXP Innovations AEFC 759,090 100% 100%
- ------------------------- ---------------- ------------------ ------------------ -------------------------
*For the AXP Fund, 5% ownership is shown for Class A shares.
**Less than 0.01%
</TABLE>
(1) AEFC, a Delaware corporation, is located at IDS Tower 10, Minneapolis, MN
55440-0010.
(2) Norrine F. Baggett, 326 East Southfield Road, Shreveport, LA 71105.
(3) Nadia Hamidian, 22 68th Street, Guttenberg, NJ 07093.
(4) American Express Company, a Delaware corporation, the parent company of
AEFC, is located at American Express Tower, World Financial Center, New
York, NY 10285.
(5) American Latvian Association in the US, Inc., 400 Hurley Ave., Rockville,
MD 20850.
(6) Latvijas Brivibas Fonds LTD, 400 Hurley Ave., Rockville, MD 20850.
(7) Barbara B. Ismel, 328 West 86th No. 2C, New York, NY 10024.
(8) John L. and Rosana L. Warren, 4971 Little Cub Creek Road, Evergreen, CO
80439.
(9) Peter L. Rowe and Fredda Rosenblatt, 6887 Palm Grove Court, West Palm
Beach, FL 33418.
(10) William J. and Frances M. Russell, 1443 Creekside Court, Vienna, VA 22182.
<PAGE>
F. EXPERTS
The audited financial statements for the Strategist Fund and the AXP Fund
incorporated in this proxy statement/prospectus by reference or included in the
Statement of Additional Information, have been audited by KPMG LLP, independent
auditors for the Funds, whose reports are included in the annual report. The
financial statements have been incorporated in this document in reliance on
KPMG's reports given on their authority as experts in auditing and accounting
matters.
G. ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES
The following table shows where in each Fund's prospectus you can find
additional information about the business of the Fund.
<TABLE>
<CAPTION>
Table G-1.
Additional Information
- ------------------------------------- -----------------------------------------------------------------------
Heading in Prospectus
- ------------------------------------- -----------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------- ----------------------------------- -----------------------------------
Type of Information Strategist Fund AXP Fund
- ------------------------------------- ----------------------------------- -----------------------------------
Investment objective Goal Goal
- ------------------------------------- ----------------------------------- -----------------------------------
Principal investment strategies Investment Strategy Investment Strategy
- ------------------------------------- ----------------------------------- -----------------------------------
Principal risks Risks Risks
- ------------------------------------- ----------------------------------- -----------------------------------
Fee table Fees and Expenses Fees and Expenses
- ------------------------------------- ----------------------------------- -----------------------------------
Management Management Management
- ------------------------------------- ----------------------------------- -----------------------------------
Fund share price Valuing Fund Shares Valuing Fund Shares
- ------------------------------------- ----------------------------------- -----------------------------------
Buying and selling fund shares Purchasing Shares; Purchasing Shares;
Exchanging/Selling Shares Exchanging/Selling Shares
- ------------------------------------- ----------------------------------- -----------------------------------
Distributions and taxes Distributions and Taxes Distributions and Taxes
- ------------------------------------- ----------------------------------- -----------------------------------
Financial highlights Financial Highlights Financial Highlights
- ------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
Each Fund is subject to the information requirements of the Securities Exchange
Act of 1934 and the 1940 Act and files reports, proxy materials and other
information with the SEC. These reports, proxy materials and other information
can be inspected and copied at the Public Reference Room maintained by the SEC
at 450 Fifth Street, N.W., Washington, D.C., the Midwest Regional Office of the
SEC at 500 West Madison Street, Suite 400, Chicago, Illinois 60611, and the
Northeast Regional Office of the SEC at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of these materials also can be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, copies of these documents may be viewed
on-line or downloaded from the SEC's website at http://www.sec.gov.
<PAGE>
Exhibit 1
Form of
Agreement and Plan of Reorganization
This Agreement and Plan of Reorganization dated as of March 10, 2000 (the
"Agreement") is between Strategist Growth and Income Fund, Inc. (the "Strategist
Corporation"), a Minnesota corporation, on behalf of Strategist Balanced Fund
(the "Acquired Fund"), a series of capital stock of the Strategist Corporation,
and AXP Investment Series, Inc. (the "AXP Corporation"), a Minnesota
corporation, on behalf of AXP Mutual (the "Acquiring Fund"), a series of capital
stock of the AXP Corporation. The Acquired Fund and the Acquiring Fund are
feeder funds investing in a single master trust.
In consideration of the mutual promises, the parties agree as follows:
1. Shareholder Approval
The Acquired Fund will call a meeting of its shareholders for the purpose
of approving the Agreement and the transactions it contemplates (the
"Reorganization"). The Acquiring Fund agrees to furnish data and
information, as reasonably requested, for the proxy statement to be
furnished to shareholders of the Acquired Fund.
2. Reorganization
a. Plan of Reorganization. At the closing, the Strategist Corporation will
convey all of the assets of the Acquired Fund to the Acquiring Fund. The
Acquiring Fund will assume all liabilities of the Acquired Fund, reflected
on an unaudited statement of assets and liabilities, as of the Closing. At
the Closing, the AXP Corporation will deliver Class A shares of the
Acquiring Fund, including fractional shares, to the Strategist Corporation.
The number of shares will be determined by dividing the value of the net
assets of the Acquired Fund, computed as described in paragraph 3(a), by
the net asset value of one share of the Acquiring Fund, computed as
described in paragraph 3(b). The Acquired Fund will not pay a sales charge
on the receipt of Acquiring Fund shares in exchange for the assets of the
Acquired Fund. In addition, the shareholders of the Acquired Fund will not
pay a sales charge on distribution to them of Class A shares of the
Acquiring Fund.
b. Closing and Effective Time of the Reorganization. The Reorganization and
all related acts necessary to complete the Reorganization (the "Closing")
will occur on the first day on which the New York Stock Exchange (the
"NYSE") is open for business following approval of shareholders of the
Acquired Fund and receipt of all necessary regulatory approvals, or such
later date as the parties may agree.
3. Valuation of Net Assets
a. The value of the net assets of the Acquired Fund will be computed as of
the close of regular trading on the NYSE on the day of Closing (the
"Valuation Date") using the valuation procedures in the Acquiring Fund's
prospectus.
b. The net asset value per share of Class A shares of the Acquiring Fund
will be determined as of the close of regular trading on the NYSE on the
Valuation Date, using the valuation procedures in the Acquiring Fund's
prospectus.
c. At the Closing, the Acquired Fund will provide the Acquiring Fund with a
copy of the computation showing the valuation of the Acquired Fund's net
assets on the Valuation Date. The Acquiring Fund will provide the Acquired
Fund with a copy of the computation showing the determination of the net
asset value per share of Class A shares of the Acquiring Fund on the
Valuation Date. Both computations will be certified by an officer of
American Express Financial Corporation.
4. Liquidation and Dissolution of the Acquired Fund
a. As soon as practicable after the Valuation Date, the Strategist
Corporation will liquidate the Acquired Fund and distribute Class A shares
of the Acquiring Fund to the Acquired Fund's shareholders of record. The
Acquiring Fund will establish shareholder accounts in the names of each
Acquired Fund shareholder, representing the respective pro rata number of
full and fractional shares of the Acquiring Fund due to each shareholder.
All issued and outstanding shares of the Acquired Fund will simultaneously
be cancelled on the books of the Strategist Corporation. Shareholder
accounts will be established by the Acquiring Fund or its transfer agent in
accordance with instructions from the Strategist Corporation.
b. Immediately after the Valuation Date, the share transfer books of the
Strategist Corporation relating to the Acquired Fund will be closed and no
further transfer of shares will be made.
c. Promptly after the distribution, the Acquiring Fund or its transfer
agent will notify each shareholder of the Acquired Fund of the number of
Class A shares distributed to the shareholder and confirm the registration
in the shareholder's name.
d. As promptly as practicable after the liquidation of the Acquired Fund,
and in no event later than twelve months from the date of the Closing, the
Acquired Fund will be dissolved.
5. Representations, Warranties and Covenants of the AXP Corporation on behalf
of the Acquiring Fund
The AXP Corporation represents and warrants to the Strategist Corporation
as follows:
a. Organization, Existence, etc. The AXP Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota and has the power to carry on its business as it is now
being conducted.
b. Registration as Investment Company. The Acquiring Fund is a series of
the AXP Corporation, registered under the Investment Company Act of 1940
(the "1940 Act") as an open-end, management investment company.
c. Capitalization. The Acquiring Fund has authorized capital of
10,000,000,000 shares of common stock, par value $0.01 per share. All of
the outstanding shares have been duly authorized and are validly issued,
fully paid and non-assessable. Since the Acquiring Fund is engaged in the
continuous offering and redemption of its shares, the number of outstanding
shares may vary daily.
d. Financial Statements. The audited financial statements as of the end of
the last fiscal year, and the subsequent unaudited semi-annual financial
statements, if any (the "Acquiring Fund Financial Statements"), fairly
present the financial position of the Acquiring Fund, and the results of
its operations and changes in its net assets for the periods shown.
e. Shares to be Issued Upon Reorganization. The shares to be issued in
connection with the Reorganization will be duly authorized and, at the time
of the Closing, will be validly issued, fully paid and non-assessable.
f. Authority Relative to the Agreement. The AXP Corporation has the power
to enter into and carry out the obligations described in this Agreement.
The Agreement and the transactions contemplated by it have been duly
authorized by the Board of Directors and no other proceedings by the AXP
Corporation or the Acquiring Fund are necessary.
g. No Violation. The AXP Corporation is not in violation of its Articles of
Incorporation or By-Laws (the "Articles") or in default in the performance
of any material agreement to which it is a party. The execution of this
Agreement and the completion of the transactions contemplated by it will
not conflict with, or constitute a breach of, any material contract or
other instrument to which the Acquiring Fund is subject. Nor will the
transactions result in any violation of the provisions of the Articles or
any law, administrative regulation or administrative or court decree
applicable to the Acquiring Fund.
h. Liabilities. There are no liabilities of the Acquiring Fund other than:
o liabilities disclosed in the Acquiring Fund Financial Statements
o liabilities incurred in the ordinary course of business subsequent to
the date of the latest annual or semi-annual financial statements, or
o liabilities previously disclosed to the Strategist Corporation, none
of which has been materially adverse to the business, assets or
results of operation of the Acquiring Fund.
i. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or,
to the knowledge of the Acquiring Fund, threatened, that would materially
and adversely affect the Acquiring Fund, its financial condition or the
conduct of its business, or that would prevent or hinder completion of the
transactions contemplated by this Agreement. The Acquiring Fund knows of no
facts that might form the basis for the institution of any such litigation,
proceeding or investigation and is not a party to or subject to the
provisions of any order, decree or judgment.
j. Contracts. Except for contracts and agreements previously disclosed to
the Strategist Corporation, the Acquiring Fund is not a party to or subject
to any material contract, debt instrument, plan, lease, franchise, license
or permit.
k. Taxes. The federal tax returns of the Acquiring Fund have been filed for
all taxable years since commencement of its operations. The Acquiring Fund
has qualified and will qualify as a regulated investment company under the
Internal Revenue Code with respect to each taxable year since commencement
of its operations.
l. Registration Statement. The Acquiring Fund will file a registration
statement on Form N-14 (the "Registration Statement") with the Securities
and Exchange Commission under the Securities Act of 1933 (the "1933 Act")
relating to the shares to be issued in the Reorganization. At the time the
Registration Statement becomes effective, at the time of the shareholders'
meeting and at the Closing, the Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading. However, none of
the representations and warranties in this subsection apply to statements
in, or omissions from, the Registration Statement made in reliance on
information furnished by the Strategist Corporation for use in the
Registration Statement.
6. Representations, Warranties and Covenants of the Strategist Corporation on
behalf of the Acquired Fund
The Strategist Corporation represents and warrants to the AXP Corporation
as follows:
a. Organization, Existence, etc. The Strategist Corporation is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota and has the power to carry on its business
as it is now being conducted.
b. Registration as Investment Company. The Acquired Fund is a series of the
Strategist Corporation, registered under the 1940 Act as an open-end,
management investment company.
c. Capitalization. The Acquired Fund has authorized capital of
10,000,000,000 shares of common stock, par value $0.01 per share. All of
the outstanding shares have been duly authorized and are validly issued,
fully paid and non-assessable. Since the Acquired Fund is engaged in the
continuous offering and redemption of its shares, the number of outstanding
shares may vary daily.
d. Financial Statements. The audited financial statements as of the end of
the last fiscal year, and the subsequent unaudited semi-annual financial
statements, if any, (the "Acquired Fund Financial Statements") fairly
present the financial position of the Acquired Fund, and the results of its
operations and changes in its net assets for the periods shown.
e. Authority Relative to the Agreement. The Strategist Corporation has the
power to enter into and to carry out its obligations under this Agreement.
The Agreement and the transactions contemplated by it have been duly
authorized by the Board of Directors and no other proceedings by the
Strategist Corporation or the Acquired Fund are necessary.
f. No Violation. The Strategist Corporation is not in violation of its
Articles or in default in the performance of any material agreement to
which it is a party. The execution of this Agreement and the completion of
the transactions contemplated by it will not conflict with or constitute a
breach of, any material contract to which the Acquired Fund is subject. Nor
will the transactions result in any violation of the provisions of the
Articles or any law, administrative regulation or administrative or court
decree applicable to the Acquired Fund.
g. Liabilities. There are no liabilities of the Acquired Fund other than:
o liabilities disclosed in the Acquired Fund Financial Statements
o liabilities incurred in the ordinary course of business subsequent to
the date of the latest annual or semi-annual financial statements, or
o liabilities previously disclosed to the AXP Corporation, none of which
has been materially adverse to the business, assets or results of
operation of the Acquired Fund.
h. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or,
to the knowledge of the Acquired Fund, threatened, that would materially
and adversely affect the Acquired Fund, its financial condition or the
conduct of its business, or that would prevent or hinder completion of the
transactions contemplated by this Agreement. The Acquired Fund knows of no
facts that might form the basis for the institution of any such litigation,
proceeding or investigation and is not a party to or subject to the
provisions of any order, decree or judgment.
i. Contracts. Except for contracts and agreements previously disclosed to
the AXP Corporation, the Acquired Fund is not a party to or subject to any
material contract, debt instrument, plan, lease, franchise, license or
permit.
j. Taxes. The federal tax returns of the Acquired Fund have been filed for
all taxable years since commencement of its operations. The Acquired Fund
has qualified and will qualify as a regulated investment company under the
Internal Revenue Code with respect to each taxable year since commencement
of its operations.
k. Fund Securities. All securities listed in the schedule of investments of
the Acquired Fund as of the Closing will be owned by the Acquired Fund free
and clear of any encumbrances, except as indicated in the schedule.
l. Registration Statement. The Acquired Fund will cooperate with the
Acquiring Fund and will furnish information relating to the Strategist
Corporation and the Acquired Fund required in the Registration Statement.
At the time the Registration Statement becomes effective, at the time of
the shareholders' meeting and at the Closing, the Registration Statement,
as it relates to the Strategist Corporation or the Acquired Fund, will not
contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading. However, the
representations and warranties in this subsection apply only to statements
in or omissions from the Registration Statement made in reliance upon
information furnished by the Strategist Corporation for use in the
Registration Statement.
7. Conditions to Obligations of the AXP Corporation
The obligations of the AXP Corporation with respect to the Reorganization
are subject to the satisfaction of the following conditions:
a. Shareholder Approval. This Agreement will have been approved by the
affirmative vote of the holders of the majority of the outstanding shares
of common stock of the Acquired Fund.
b. Representations, Warranties and Agreements. The Strategist Corporation
and the Acquired Fund will have complied with this Agreement and each of
the representations and warranties in this Agreement will be true in all
material respects as of the Closing. An officer of the Strategist
Corporation will provide a certificate to the AXP Corporation confirming
that, as of the Closing, the representations and warranties set forth in
Section 6 are true and correct and that there have been no material adverse
changes in the financial condition, results of operations, business,
properties or assets of the Acquired Fund since the date of its last
financial statement, except as otherwise indicated in any financial
statements, certified by an officer of the Strategist Corporation, and
delivered to the AXP Corporation on or prior to the last business day
before the Closing.
c. Regulatory Approvals.
o The Registration Statement referred to in Section 5(l) will be
effective and no stop orders under the 1933 Act will have been issued.
o All necessary approvals, consents and exemptions from federal and
state regulatory authorities will have been obtained.
d. Tax Opinion. The AXP Corporation will have received the opinion of Ropes
& Gray dated as of the Closing, as to the federal income tax consequences
of the Reorganization to the Acquiring Fund and its shareholders. For
purposes of rendering their opinion, Ropes & Gray may rely, as to factual
matters, upon the statements made in this Agreement, the proxy statement
which will be distributed to the shareholders of the Acquired Fund, and
other written representations as an officer of the Strategist Corporation
and the AXP Corporation, respectively will have verified as of Closing. The
opinion of Ropes & Gray will be to the effect that: (i) neither the
Acquired Fund nor the Acquiring Fund will recognize any gain or loss upon
the transfer of the assets of the Acquired Fund to, and assumption of its
liabilities by, the Acquiring Fund in exchange for shares of the Acquiring
Fund and upon the distribution of the shares to the Acquired Fund
shareholders in exchange for their shares of the Acquired Fund; (ii) the
shareholders of the Acquired Fund who receive shares of the Acquiring Fund
in the Reorganization will not recognize any gain or loss on the exchange
of their shares of the Acquired Fund for the shares of the Acquiring Fund;
(iii) the holding period and the basis of the shares received by the
Acquired Fund shareholders will be the same as the holding period and the
basis of the shares of the Acquired Fund surrendered in the exchange; (iv)
the holding period and the basis of the assets acquired by the Acquiring
Fund will be the same as the holding period and the basis of the assets to
the Acquired Fund immediately prior to the Reorganization.
e. Opinion of Counsel. The AXP Corporation will have received an opinion of
counsel for the Acquired Fund, dated as of the Closing, to the effect that:
(i) the Strategist Corporation is a corporation duly organized and validly
existing under the laws of the state of Minnesota; (ii) the Acquired Fund
is a series of the Strategist Corporation, an open-end investment company
registered under the 1940 Act; (iii) this Agreement and the Reorganization
have been duly authorized and approved by all requisite action of the
Strategist Corporation and the Acquired Fund and this Agreement has been
duly executed by, and is a valid and binding obligation of, the Acquired
Fund.
f. Declaration of Dividend. The Strategist Corporation will have declared a
dividend with respect to the Acquired Fund which, together with all
previous dividends, will have the effect of distributing to the Acquired
Fund's shareholders all of the Acquired Fund's investment company taxable
income for the taxable years ending on or prior to the Closing (computed
without regard to deduction for dividends paid) and all of its net capital
gain realized in taxable years ending on or prior to the Closing (after
reduction for capital loss carry forward).
8. Conditions to Obligations of the Strategist Corporation
The obligations of the Strategist Corporation with respect to the
Reorganization are subject to the satisfaction of the following conditions:
a. Shareholder Approval. This Agreement will have been approved by the
affirmative vote of the holders of the majority of the outstanding shares
of common stock of the Acquired Fund.
b. Representations, Warranties and Agreements. The Acquiring Fund will have
complied with this Agreement and each of the representations and warranties
in this Agreement will be true in all material respects as of the Closing.
An officer of the AXP Corporation will provide a certificate to the
Strategist Corporation confirming that, as of the Closing, the
representations and warranties set forth in Section 5 are true and correct
and that there have been no material adverse changes in the financial
condition, results of operations, business, properties or assets of the
Acquiring Fund since the date of its last financial statement, except as
otherwise indicated in any financial statements, certified by an officer of
the AXP Corporation, and delivered to the Strategist Corporation on or
prior to the last business day before the Closing.
c. Regulatory Approvals.
o The Registration Statement referred to in Section 5(l) will be
effective and no stop orders under the 1933 Act will have been issued.
o All necessary approvals, consents and exemptions from federal and
state regulatory authorities will have been obtained.
d. Tax Opinion. The Strategist Corporation will have received the opinion
of Ropes & Gray dated as of the Closing, as to the federal income tax
consequences of the Reorganization to the Acquired Fund and its
shareholders. For purposes of rendering their opinion, Ropes & Gray may
rely, as to factual matters, upon the statements made in this Agreement,
the proxy statement which will be distributed to the shareholders of the
Acquired Fund, and other written representations as an officer of the
Strategist Corporation and the AXP Corporation, respectively will have
verified as of Closing. The opinion of Ropes & Gray will be to the effect
that: (i) neither the Acquired Fund nor the Acquiring Fund will recognize
any gain or loss upon the transfer of the assets of the Acquired Fund to,
and assumption of its liabilities by, the Acquiring Fund in exchange for
shares of the Acquiring Fund and upon the distribution of the shares to the
Acquired Fund shareholders in exchange for their shares of the Acquired
Fund; (ii) the shareholders of the Acquired Fund who receive shares of the
Acquiring Fund in the Reorganization will not recognize any gain or loss on
the exchange of their shares of the Acquired Fund for the shares of the
Acquiring Fund; (iii) the holding period and the basis of the shares
received by the Acquired Fund shareholders will be the same as the holding
period and the basis of the shares of the Acquired Fund surrendered in the
exchange; (iv) the holding period and the basis of the assets acquired by
the Acquiring Fund will be the same as the holding period and the basis of
the assets to the Acquired Fund immediately prior to the Reorganization.
e. Opinion of Counsel. The Strategist Corporation will have received the
opinion of counsel for the Acquiring Fund, dated as of the Closing, to the
effect that: (i) the AXP Corporation is a corporation duly organized and
validly existing under the laws of the state of Minnesota; (ii) the
Acquiring Fund is a series of the AXP Corporation, an open-end investment
company registered under the 1940 Act; (iii) this Agreement and the
Reorganization have been authorized and approved by all requisite action of
the AXP Corporation and the Acquiring Fund and this Agreement has been duly
executed by, and is a valid and binding obligation of, the AXP Corporation;
and (iv) the shares to be issued in the Reorganization are duly authorized
and upon issuance in accordance with this Agreement will be validly issued,
fully paid and non-assessable shares of the Acquiring Fund.
9. Amendment; Termination; Non-Survival of Covenants, Warranties and
Representations
a. This Agreement may be amended in writing if authorized by the respective
Boards of Directors. The Agreement may be amended at any time before or
after approval by the shareholders of the Acquired Fund, but after
shareholder approval, no amendment shall be made that substantially changes
the terms of paragraphs 2 or 3.
b. At any time prior to the Closing, any of the parties may waive in
writing (i) any inaccuracies in the representations and warranties made to
it and (ii) compliance with any of the covenants or conditions made for its
benefit.
c. The Strategist Corporation may terminate this Agreement at any time
prior to the Closing by notice to the AXP Corporation if a material
condition to its performance or a material covenant of the AXP Corporation
is not fulfilled on or before the date specified for its fulfillment or a
material breach of this Agreement is made by the AXP Corporation and is not
cured.
d. The AXP Corporation may terminate this Agreement at any time prior to
the Closing by notice to the Strategist Corporation if a material condition
to its performance or a material covenant of the Strategist Corporation is
not fulfilled on or before the date specified for its fulfillment or a
material breach of this Agreement is made by the Strategist Corporation and
is not cured.
e. This Agreement may be terminated by any party at any time prior to the
Closing, whether before or after approval by the shareholders of the
Acquired Fund, without any liability on the part of either party or its
respective directors, officers, or shareholders, on written notice to the
other party, and shall be terminated without liability as of the close of
business on December 31, 2000, or a later date agreed upon by the parties,
if the Closing is not on or prior to that date.
f. The representations, warranties and covenants contained in this
Agreement, or in any document delivered in connection with this Agreement,
will survive the Reorganization.
10. Expenses
The expenses of the reorganization, whether or not the Reorganization is
completed, will be borne by American Express Financial Corporation.
11. General
a. Headings. The headings contained in this Agreement are for reference
purposes only and will not affect the meaning or interpretation of this
Agreement. Nothing in this Agreement is intended to confer upon any other
person any rights or remedies by reason of this Agreement.
b. Governing Law. This Agreement will be governed by the laws of the state
of Minnesota.
12. Indemnification
Each party will indemnify and hold the other and its officers and directors
(each an "Indemnitee") harmless from and against any liability or other
cost and expense, in connection with the defense or disposition of any
action, suit, or other proceeding, before any court or administrative or
investigative body in which the Indemnitee may be involved as a party, with
respect to actions taken under this Agreement. However, no Indemnitee will
be indemnified against any liability or expense arising by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the Indemnitee's position.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be signed.
Strategist Growth and Income Fund, Inc.
on behalf of Strategist Balanced Fund
By /s/ James A. Mitchell
James A. Mitchell
President
AXP Investment Series, Inc.
on behalf of AXP Mutual
By /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
The undersigned is a party to this Agreement for the purposes of Sections 3c and
10 only.
American Express Financial Corporation
By /s/ Pamela J. Moret
Pamela J. Moret
Senior Vice President
<PAGE>
Exhibit 2
Minnesota Business Corporation Act
Sections 302A.471 and 302A.473
Minnesota law requires that we provide you with a copy of the state law on
dissenters' rights. Notwithstanding the provisions of the law set out below, the
SEC has taken the position that use of state appraisal procedures by a
registered mutual fund such as the Strategist Fund would be a violation of Rule
22c-1, the forward pricing rule, under the 1940 Act. As a result, if any
shareholder elects to exercise dissenters' rights under Minnesota law, the
Strategist Fund intends to submit this question to a court of competent
jurisdiction. In that event, a dissenting shareholder would not receive any
payment until the end of the court proceeding.
302A.471. Rights of dissenting shareholders
Subdivision 1. Actions creating rights. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting shareholder in that
it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the redemption of
the shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase
shares or securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a matter, or
to cumulate votes, except as the right may be excluded or limited
through the authorization or issuance of securities of an existing or
new class or series with similar or different voting rights; except
that an amendment to the articles of an issuing public corporation
that provides that section 302A.671 does not apply to a control share
acquisition does not give rise to the right to obtain payment under
this section;
(b) A sale, lease, transfer, or other disposition of all or substantially all
of the property and assets of the corporation, but not including a
transaction permitted without shareholder approval in section 302A.661,
subdivision 1, or a disposition in dissolution described in section
302A.725, subdivision 2, or a disposition pursuant to an order of a court,
or a disposition for cash on terms requiring that all or substantially all
of the net proceeds of disposition be distributed to the shareholders in
accordance with their respective interests within one year after the date
of disposition;
(c) A plan of merger, whether under this chapter or under chapter 322B, to
which the corporation is a party, except as provided in subdivision 3;
(d) A plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring corporation, if the shares of the shareholder are
entitled to be voted on the plan; or
(e) Any other corporate action taken pursuant to a shareholder vote with
respect to which the articles, the bylaws, or a resolution approved by the
board directs that dissenting shareholders may obtain payment for their
shares.
Subdivision 2. Beneficial owners.
(a) A shareholder shall not assert dissenters' rights as to less than all of
the shares registered in the name of the shareholder, unless the
shareholder dissents with respect to all the shares that are beneficially
owned by another person but registered in the name of the shareholder and
discloses the name and address of each beneficial owner on whose behalf the
shareholder dissents. In that event, the rights of the dissenter shall be
determined as if the shares as to which the shareholder has dissented and
the other shares were registered in the names of different shareholders.
(b) The beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of
this section and section 302A.473, if the beneficial owner submits to the
corporation at the time of or before the assertion of the rights a written
consent of the shareholder.
Subdivision 3. Rights not to apply.
(a) Unless the articles, the bylaws, or a resolution approved by the board
otherwise provide, the right to obtain payment under this section does not
apply to a shareholder of the surviving corporation in a merger, if the
shares of the shareholder are not entitled to be voted on the merger.
(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on
an action described in subdivision 1, only shareholders as of the date
fixed, and beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise dissenters'
rights.
Subdivision 4. Other rights. The shareholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the corporation.
302A.473. Procedures for asserting dissenters' rights
Subdivision 1. Definitions.
(a) For purposes of this section, the terms defined in this subdivision have
the meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a corporation
immediately before the effective date of the corporate action referred to
in section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date of
the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in
section 549.09 for interest on verdicts and judgments.
Subdivision 2. Notice of action. If a corporation calls a shareholder meeting at
which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each shareholder of the right to
dissent and shall include a copy of section 302A.471 and this section and a
brief description of the procedure to be followed under these sections.
Subdivision 3. Notice of dissent. If the proposed action must be approved by the
shareholders, a shareholder who is entitled to dissent under section 302A.471
and who wishes to exercise dissenters' rights must file with the corporation
before the vote on the proposed action a written notice of intent to demand the
fair value of the shares owned by the shareholder and must not vote the shares
in favor of the proposed action.
Subdivision 4. Notice of procedure; deposit of shares.
(a) After the proposed action has been approved by the board and, if necessary,
the shareholders, the corporation shall send to all shareholders who have
complied with subdivision 3 and to all shareholders entitled to dissent if
no shareholder vote was required, a notice that contains:
(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the
date by which they must be received;
(2) Any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;
(3) A form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired
the shares or an interest in them and to demand payment; and
(4) A copy of section 302A.471 and this section and a brief description of
the procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting shareholder
must demand payment and deposit certificated shares or comply with any
restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all
other rights of a shareholder until the proposed action takes effect.
Subdivision 5. Payment; return of shares.
(a) After the corporate action takes effect, or after the corporation receives
a valid demand for payment, whichever is later, the corporation shall remit
to each dissenting shareholder who has complied with subdivisions 3 and 4
the amount the corporation estimates to be the fair value of the shares,
plus interest, accompanied by:
(1) The corporation's closing balance sheet and statement of income for a
fiscal year ending not more than 16 months before the effective date
of the corporate action, together with the latest available interim
financial statements;
(2) An estimate by the corporation of the fair value of the shares and a
brief description of the method used to reach the estimate; and
(3) A copy of section 302A.471 and this section, and a brief description
of the procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in paragraph (a) from
a person who was not a shareholder on the date the action dissented from
was first announced to the public or who is dissenting on behalf of a
person who was not a beneficial owner on that date. If the dissenter has
complied with subdivisions 3 and 4, the corporation shall forward to the
dissenter the materials described in paragraph (a), a statement of the
reason for withholding the remittance, and an offer to pay to the dissenter
the amount listed in the materials if the dissenter agrees to accept that
amount in full satisfaction. The dissenter may decline the offer and demand
payment under subdivision 6. Failure to do so entitled the dissenter only
to the amount offered. If the dissenter makes demand, subdivision 7 and 8
apply
(c) If the corporation fails to remit payment within 60 days of the deposit of
certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under
subdivision 4 and require deposit or restrict transfer at a later time.
Subdivision 6. Supplemental payment; demand. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the
shares plus interest, the dissenter may give written notice to the
corporation of the dissenter's own estimate of the fair value of the
shares, plus interest, within 30 days after the corporation mails the
remittance under subdivision 5, and demand payment of the difference.
Otherwise, a dissenter is entitled only to the amount remitted by the
corporation.
Subdivision 7. Petition; determination. If the corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand,
either pay to the dissenter the amount demanded or agreed to by the
dissenter after discussion with the corporation or file in a court a
petition requesting that the court determine the fair value of the shares,
plus interest. The petition shall be filed in the county in which the
registered office of the corporation is located, except that a surviving
foreign corporation that receives a demand relating to the shares of a
constituent domestic corporation shall file the petition in the county in
this state in which the last registered office of the constituent
corporation was located. The petition shall name as parties all dissenters
who have demanded payment under subdivision 6 and who have not reached
agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under
the rules of civil procedure. Nonresidents of this state may be served by
registered or certified mail or by publication as provided by law. Except
as otherwise provided, the rules of civil procedures apply to this
proceeding. The jurisdiction of the court is plenary and exclusive. The
court may appoint appraisers, with powers and authorities the court deems
proper, to receive evidence on and recommend the amount of the fair value
of the shares. The court shall determine whether the shareholder or
shareholders in question have fully complied with the requirements of this
section, and shall determine the fair value of the shares, taking into
account any and all factors the court finds relevant, computed by any
method or combination of methods that the court, in its discretion, sees
fit to use, whether or not used by the corporation or by a dissenter. The
fair value of the shares as determined by the court is binding on all
shareholders, wherever located. A dissenter is entitled to judgment in cash
for the amount by which the fair value of the shares as determined by the
court, plus interest, exceeds the amount, if any, remitted under
subdivision 5, but shall not be liable to the corporation for the amount,
if any, by which the amount, if any, remitted to the dissenter under
subdivision 5 exceeds the fair value of the shares as determined by the
court, plus interest.
Subdivision 8. Costs; fees; expenses.
(a) The court shall determine the costs and expenses of a proceeding under
subdivision 7, including the reasonable expenses and compensation of any
appraisers appointed by the court, and shall assess those costs and
expenses against the corporation, except that the court may assess part or
all of those costs and expenses against a dissenter whose action in
demanding payment under subdivision 6 is found to be arbitrary, vexatious,
or not in good faith.
(b) If the court finds that the corporation has failed to comply substantially
with this section, the court may assess all fees and expenses of any
experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily,
vexatiously, or not in good faith in bringing the proceeding, and may be
awarded to a party injured by those actions.
(c) The court may award, in its discretion, fees and expenses to an attorney
for the dissenters out of the amount awarded to the dissenters, if any.
<PAGE>
AXPSM
Stock Fund
PROSPECTUS
Nov. 29, 1999
American
Express(R)
Funds
AXP Stock Fund seeks to provide shareholders with current income and growth of
capital.
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.
AMERICAN
EXPRESS (logo)
<PAGE>
Table of Contents
TAKE A CLOSER LOOK AT:
The Fund 3p
Goal 3p
Investment Strategy 3p
Risks 5p
Past Performance 6p
Fees and Expenses 8p
Management 9p
Buying and Selling Shares 9p
Valuing Fund Shares 9p
Investment Options 10p
Purchasing Shares 11p
Transactions Through Third Parties
Sales Charges 14p
Exchanging/Selling Shares 18p
Distributions and Taxes 23p
Master/Feeder Structure 26p
Financial Highlights 30p
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.
Master/Feeder Structure Describes the Fund's investment structure.
Financial Highlights
Tables showing the Fund's financial performance.
<PAGE>
The Fund
GOAL AXP Stock Fund (the Fund) seeks to provide shareholders with current income
and growth of capital. Because any investment involves risk, achieving this goal
cannot be guaranteed.
The Fund seeks to achieve its goal by investing all of its assets in a master
portfolio rather than by directly investing in and managing its own portfolio of
securities. The master portfolio has the same goal and investment policies as
the Fund.
INVESTMENT STRATEGY
The Fund's assets primarily are invested in common stocks and securities
convertible into common stocks. Under normal market conditions, at least 65% of
the Fund's total assets are invested in these securities. In pursuit of its
income objective, the Fund will invest in income-producing equity securities
(such as convertible securities and preferred stocks) and short-term debt
instruments (such as commercial paper). The Fund may invest up to 25% of its
total assets in foreign investments.
The selection of common stocks 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 equity investments by:
o Considering opportunities and risks by reviewing overall market conditions
and industry outlook.
o Identifying market trends that AEFC believes will lead to good long-term
growth potential.
o Identifying large companies with strong, sustainable earnings growth based
on:
-- effective management (considering overall performance),
-- competitive market position, and
-- financial strength.
o Focusing on those companies that AEFC considers to be "blue chips." Blue
chip stocks are issued by companies with a market capitalization of at
least $1 billion, an established management, a history of consistent
earnings and a leading position within their respective industries.
<PAGE>
o Identifying investments that contribute to portfolio diversification.
o Identifying income-producing securities.
In evaluating whether to sell a security, AEFC considers, among other factors,
whether:
-- the security is overvalued relative to other potential investments,
-- the security has reached AEFC's price objective,
-- the company has met AEFC's earnings and/or growth expectations,
-- political, economic or other events could affect the company's
performance,
-- AEFC wishes to minimize potential losses (i.e., in a market
down-turn),
-- AEFC wishes to lock-in profits,
-- AEFC identifies a more attractive opportunity, and
-- the company or the security fails to meet the other standards
described above.
Although not a primary investment strategy, the Fund also may invest in other
instruments such as debt obligations (rated C or higher), and money market
securities. Additionally, the Fund may utilize derivative instruments (such as:
futures, options and forward contracts) to produce incremental earnings, to
hedge existing positions and to increase flexibility.
During weak or declining markets, the Fund may invest more of its assets in
money market securities. Although the Fund primarily will invest in these
securities to avoid losses, this type of investing also could prevent the Fund
from achieving its investment objective. During these times, AEFC may make
frequent securities trades that could result in increased fees, expenses, and
taxes.
For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.
<PAGE>
RISKS
Please remember that with any mutual fund investment you may lose money.
Principal risks associated with an investment in the Fund include:
Market Risk
Inflation Risk
Foreign 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.
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.
Foreign Risk
The following are all components of foreign 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.
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.
<PAGE>
PAST PERFORMANCE
The following bar chart and table indicate the risks and variability of
investing in the Fund by showing:
o how the Fund's performance has varied for each full calendar year shown on
the chart below, and
o how the Fund's average annual total returns compare to other recognized
indexes.
How the Fund has performed in the past does not indicate how the Fund will
perform in the future.
Class A Performance (based on calendar years)
+29.65% +1.73% +27.66% +6.82% +16.67% -2.86% +25.73% +19.41% +25.26% +19.28%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
During the period shown in the bar chart, the highest return for a calendar
quarter was +19.31% (quarter ending December 1998) and the lowest return for a
calendar quarter was -11.55% (quarter ending September 1998).
The 5% sales charge applicable to Class A shares of the Fund is not reflected in
the bar chart; if reflected, returns would be lower than those shown. The
performance of Class B and Class Y may vary from that shown above because of
differences in sales charges and fees.
The Fund's year to date return as of Sept. 30, 1999 was -0.70%.
<PAGE>
Average Annual Total Returns (as of Dec. 31, 1998)
1 year 5 years 10 years Since inception
Stock:
Class A +13.32% +15.66% +15.82% --%
Class B +14.38% --% --% +20.37%a
Class Y +19.36% --% --% +21.92%a
S&P 500 Index +28.57% +27.45% +24.01% +19.19%b
Lipper Growth and
Income Fund Index +13.58% +7.77% +17.82% +15.53%b
a Inception date was March 20, 1995.
b Measurement period started April 1, 1995.
This table shows total returns from hypothetical investments in Class A, Class B
and Class Y shares of the Fund. These returns are compared to the indexes shown
for the same periods. The performance of Classes A, B and Y vary because of
differences in sales charges and fees. Past performance for Class Y for the
periods prior to March 20, 1995 may be calculated based on the performance of
Class A, adjusted to reflect differences in sales charges, although not for
other differences in expenses.
For purposes of this calculation we assumed:
o a sales charge of 5% for Class A shares,
o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,
o no sales charge for Class Y shares, and
o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.
Standard &Poor's 500 Index (S&P 500), an unmanaged list of common stocks, is
frequently used as a general measure of market performance. The index reflects
reinvestment of all distributions and changes in market prices, but excludes
brokerage commissions or other fees. However, the S&P 500 companies may be
generally larger than those in which the Fund invests.
Lipper Growth and Income Fund Index, an unmanaged index published by Lipper
Analytical Services, Inc., includes 30 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different investment
policies or objectives.
<PAGE>
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)
Class A Class B Class Y
Maximum sales charge
(load) imposed on purchasesa
(as a percentage of offering price) 5% none none
Maximum deferred sales charge
(load) imposed on sales
(as a percentage of offering none 5% none
price at time of purchase)
Annual Fund operating expensesb (expenses that are deducted from Fund assets)
As a percentage of average daily Class A Class B Class Y
net assets:
Management feesc 0.48% 0.48% 0.48%
Distribution (12b-1) fees 0.25% 1.00% 0.00%
Other expensesd 0.15% 0.17% 0.24%
Total 0.88% 1.65% 0.72%
a This charge may be reduced depending on your total investments in American
Express mutual funds. See "Sales Charges."
b Both in this table and the following example fund operating expenses include
expenses charged by both the Fund and its Master Portfolio as described under
"Management." Expenses for Class A, Class B and Class Y are based on actual
expenses for the last fiscal year, restated to reflect current fees.
c Includes the impact of a performance adjustment fee that increased the
management fee by 0.01% for the most recent fiscal year.
d Other expenses include an administrative services fee, a shareholder services
fee for Class Y, 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
Class Aa $585 $767 $ 964 $1,534
Class Bb $668 $921 $1,098 $1,753d
Class Bc $168 $521 $ 898 $1,753d
Class Y $ 74 $230 $ 401 $ 898
a Includes a 5% sales charge.
b Assumes you sold your Class B shares at the end of the period and incurred the
applicable CDSC.
c Assumes you did not sell your Class B shares at the end of the period.
d Based on conversion of Class B shares to Class A shares in the ninth year of
ownership.
This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.
MANAGEMENT
The Fund's assets are invested in Equity Portfolio (the Portfolio), which is
managed by AEFC. Mike Kennedy, vice president and senior equity portfolio
manager, joined AEFC in 1985. In 1993 he became director of research at AEFC. In
1996 he was promoted to vice president and director of global research.
He has managed the assets of the Portfolio since July 1999.
Buying and Selling Shares
VALUING FUND SHARES
The public offering price for Class A is the net asset value (NAV) adjusted for
the sales charge. For Class B and Class Y, it is the NAV.
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).
<PAGE>
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 select agent.
The Fund's investments are valued based on market quotations, or where market
quotations are not readily available, based on methods selected in good faith by
the board. If the Fund's investment policies permit it to invest in securities
that are listed on foreign stock exchanges that trade on weekends or other days
when the Fund does not price its shares, the value of the Fund's underlying
investments may change on days when you could not buy or sell shares of the
Fund. Please see the SAI for further information.
INVESTMENT OPTIONS
1. Class A shares are sold to the public with a sales charge at the time of
purchase and an annual distribution (12b-1) fee.
2. Class B shares are sold to the public with a CDSC and an annual distribution
(12b-1) fee.
3. Class Y shares are sold to qualifying institutional investors without a
sales charge or distribution fee. Please see the SAI for information on
eligibility to purchase Class Y shares.
Investment options summary:
Class A Maximum sales charge of 5%
Initial sales charge waived or reduced for certain purchases
Annual distribution fee of 0.25% of average daily net assets*
Lower annual expenses than Class B shares
Class B No initial sales charge
CDSC on shares sold in the first six years (maximum of 5% in
first year, reduced to 0% after year six)
CDSC waived in certain circumstances
Shares convert to Class A in ninth year of ownership
Annual distribution fee of 1.00% of average daily net assets*
Higher annual expenses than Class A shares
Class Y No initial sales charge
No annual distribution fee
Service fee of 0.10% of average daily net assets
Available only to certain qualifying institutional investors
* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows it to pay distribution and servicing-related fees for the sale
of Class A and Class B shares. Because these fees are paid out of the Fund's
assets on an on-going basis, the fees may cost long-term shareholders more than
paying other types of sales charges imposed by some mutual funds.
<PAGE>
Should you purchase Class A or Class B shares?
If your investments in American Express mutual funds total $250,000 or more,
Class A shares may be the better option. If you qualify for a waiver of the
sales charge, Class A shares will be the best option.
If you invest less than $250,000, consider how long you plan to hold your
shares. Class B shares have a higher annual distribution fee and a CDSC for six
years. To help you determine what is best for you, consult your financial
advisor.
Class B shares convert to Class A shares in the ninth calendar year of
ownership. Class B shares purchased through reinvested dividends and
distributions also will convert to Class A shares in the same proportion as the
other Class B shares.
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. 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. If
your application does not specify which class of shares you are purchasing, we
will assume you are investing in Class A shares.
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.
<PAGE>
How to determine the correct TIN
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 The minor
(Uniform Gifts/Transfers to
Minors Act)
A revocable living trust The grantor-trustee (the person who puts the
money into the trust)
An irrevocable trust,
pension trust or estate The legal entity (not the personal representative
or trustee, 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
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.ustreas.gov/prod/forms_pubs/).
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: $300
Qualified accounts: none
If your account balance falls below $300, you will be asked to increase it to
$300 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.
<PAGE>
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: $100
Additional investments: $50/mo. for qualified accounts; $100/mo. for
nonqualified accounts
Account balances: none (on active plans with monthly payments)
If your account balance is below $2,000, you must make payments at least
monthly.
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
<PAGE>
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.
SALES CHARGES
Class A -- initial sales charge alternative
When you purchase Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:
Total investment Sales charge as percentage of:a
Public offering priceb Net amount invested
Up to $50,000 5.0% 5.26%
Next $50,000 4.5 4.71
Next $400,000 3.8 3.95
Next $500,000 2.0 2.04
$1,000,000 or more 0.0 0.00
a To calculate the actual sales charge on an investment greater than $50,000 and
less than $1,000,000, you must total the amounts of all increments that apply.
b Offering price includes a 5% sales charge.
The sales charge on Class A shares may be lower than 5%, depending on the
total amount:
o you now are investing in this Fund,
o you have previously invested in this Fund, or
o you and your primary household group are investing or have invested in
other American Express mutual funds that have a sales charge. (The primary
household group consists of accounts in any ownership for spouses or
domestic partners and their unmarried children under 21. For purposes of
this policy, domestic partners are individuals who maintain a shared
primary residence and have joint property or other insurable interests.)
AXP Tax-Free Money Fund and Class A shares of AXP Cash Management Fund do
not have sales charges.
<PAGE>
Other Class A sales charge policies:
o IRA purchases or other employee benefit plan purchases made through a
payroll deduction plan or through a plan sponsored by an employer,
association of employers, employee organization or other similar group, may
be added together to reduce sales charges for all shares purchased through
that plan, and
o if you intend to invest $1 million over a period of 13 months, you can
reduce the sales charges in Class A by filing a letter of intent. For more
details, please see the SAI.
Waivers of the sales charge for Class A shares
Sales charges do not apply to:
o current or retired board members, officers or employees of the Fund or AEFC
or its subsidiaries, their spouses or domestic partners and unmarried
children under 21.
o current or retired American Express financial advisors, their spouses or
domestic partners and unmarried children under 21.
o investors who have a business relationship with a newly associated
financial advisor who joined the Distributor from another investment firm
provided that (1) the purchase is made within six months of the advisor's
appointment date with the Distributor, (2) the purchase is made with
proceeds of shares sold that were sponsored by the financial advisor's
previous broker-dealer, and (3) the proceeds are the result of a sale of an
equal or greater value where a sales load was assessed.
o qualified employee benefit plans offering participants daily access to
American Express mutual funds. Eligibility must be determined in advance.
For assistance, please contact your financial advisor. (Participants in
certain qualified plans where the initial sales charge is waived may be
subject to a deferred sales charge of up to 4%.)
o shareholders who have at least $1 million invested in American Express
mutual funds. If the investment is sold in the first year after purchase, a
CDSC of 1% will be charged. The CDSC will be waived only in the
circumstances described for waivers for Class B shares.
o purchases made within 90 days after a sale of shares (up to the amount
sold):
-- of American Express mutual funds in a qualified plan subject to a
deferred sales charge, or
-- in a qualified plan or account where American Express Trust Company
has a recordkeeping, trustee, investment management, or investment
servicing relationship.
Send the Fund a written request along with your payment, indicating the date and
the amount of the sale.
<PAGE>
o purchases made:
-- with dividend or capital gain distributions from this Fund or from the
same class of another American Express fund that has a sales charge,
-- through or under a wrap fee product or other investment product
sponsored by the Distributor or another authorized broker-dealer,
investment adviser, bank or investment professional,
-- within the University of Texas System ORP,
-- within a segregated separate account offered by Nationwide Life
Insurance Company or Nationwide Life and Annuity Insurance Company,
-- within the University of Massachusetts After-Tax Savings Program,
-- with the proceeds from IDS Life Real Estate Variable Annuity
surrenders, or
-- through or under a subsidiary of AEFC offering Personal Trust
Services' Asset-Based pricing alternative.
Class B -- contingent deferred sales charge (CDSC) alternative
A CDSC is based on the sale amount and the number of calendar years -- including
the year of purchase -- between purchase and sale. The following table shows how
CDSC percentages on sales decline after a purchase:
If the sale is made during the: The CDSC percentage rate is:
First year 5%
Second year 4%
Third year 4%
Fourth year 3%
Fifth year 2%
Sixth year 1%
Seventh year 0%
If the amount you are selling causes the value of your investment in Class B
shares to fall below the cost of the shares you have purchased during the last
six years including the current year, the CDSC is based on the lower of the cost
of those shares purchased or market value.
<PAGE>
Example:
Assume you had invested $10,000 in Class B shares and that your investment had
appreciated in value to $12,000 after 15 months, including reinvested dividends
and capital gain distributions. You could sell up to $2,000 worth of shares
without paying a CDSC ($12,000 current value less $10,000 purchase amount). If
you sold $2,500 worth of shares, the CDSC would apply to the $500 representing
part of your original purchase price. The CDSC rate would be 4% because the sale
was made during the second year after the purchase.
Because the CDSC is imposed only on sales that reduce your total purchase
payments, you never have to pay a CDSC on any amount that represents
appreciation in the value of your shares, income earned by your shares, or
capital gains. In addition, the CDSC rate on your sale will be based on your
oldest purchase payment. The CDSC on the next amount sold will be based on the
next oldest purchase payment.
The CDSC on Class B shares will be waived on sales of shares:
o in the event of the shareholder's death,
o held in trust for an employee benefit plan, or
o held in IRAs or certain qualified plans if American Express Trust Company
is the custodian, such as Keogh plans, tax-sheltered custodial accounts or
corporate pension plans, provided that the shareholder is:
-- at least 59 1/2 years old AND
-- taking a retirement distribution (if the sale is part of a transfer to
an IRA or qualified plan, or a custodian-to-custodian transfer, the
CDSC will not be waived) OR
-- selling under an approved substantially equal periodic payment
arrangement.
<PAGE>
EXCHANGING/SELLING SHARES
Exchanges
You can exchange your Fund shares at no charge for shares of the same class of
any other publicly offered American Express mutual fund. Exchanges into AXP
Tax-Free Money Fund may only be made from Class A shares. 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.
You may make up to three exchanges (1 1/2 round trips) within any 30-day period.
These limits do not apply to scheduled exchange programs and certain employee
benefit plans. Exceptions may be allowed with pre-approval of the Fund.
Other exchange policies:
o Exchanges must be made into the same class of shares of the new fund.
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.
AECSC and the Fund reserve the right to reject any exchange, limit the amount,
or modify or discontinue the exchange privilege, to prevent abuse or adverse
effects on the Fund and its shareholders. For example, if exchanges are too
numerous or too large, they may disrupt the Fund's investment strategies or
increase its costs.
<PAGE>
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, minus any applicable CDSC.
You can change your mind after requesting a sale and use all or part of the
proceeds to purchase new shares in the same account from which you sold. If you
reinvest in Class A, you will purchase the new shares at NAV rather than the
offering price on the date of a new purchase. If you reinvest in Class B, any
CDSC you paid on the amount you are reinvesting also will be reinvested. To take
advantage of this option, send a request within 90 days of the date your sale
request was received and include your account number. This privilege may be
limited or withdrawn at any time and may have tax consequences.
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.)
Two ways to request an exchange or sale of shares
1 By letter:
Include in your letter:
o the name of the fund(s),
o the class of shares to be exchanged or sold,
o your mutual fund account number(s) (for exchanges, both funds must be
registered in the same ownership),
o your TIN,
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
<PAGE>
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
<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.
<PAGE>
Distributions and Taxes
As a shareholder you are entitled to your share of the Fund's net income and net
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 and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:
o you request distributions in cash, or
o you direct the Fund to invest your distributions in the same class of any
publicly offered American Express mutual fund for which you have previously
opened an account.
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.
<PAGE>
TAXES
Distributions are subject to federal income tax and may be subject to state and
local taxes in the year they are declared. You must report distributions on your
tax returns, even if they are reinvested in additional shares.
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.
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).
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.
Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.
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.
<PAGE>
Master/Feeder Structure
This Fund uses a master/feeder structure. This means that the Fund (a feeder
fund) invests all of its assets in the Portfolio (the master fund). Other feeder
funds also invest in the Portfolio. The master/feeder structure offers the
potential for reduced costs because it spreads fixed costs of portfolio
management over a larger pool of assets. The Fund may withdraw its assets from
the Portfolio at any time if the Fund's board determines that it is best. In
that event, the board would consider what action should be taken, including
whether to hire an investment advisor to manage the Fund's assets directly or to
invest all of the Fund's assets in another pooled investment entity. Here is an
illustration of the structure:
Investors buy shares in the Fund
The Fund buys units in the Portfolio
The Portfolio invests in securities, such as stocks or bonds
Other feeders may include mutual funds and institutional accounts. These feeders
buy the Portfolio's securities on the same terms and conditions as the Fund and
pay their proportionate share of the Portfolio's expenses. However, their
operating costs and sales charges are different from those of the Fund.
Therefore, the investment returns for other feeders are different from the
returns of the Fund.
<PAGE>
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 Portfolio is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Portfolio pays AEFC a fee for managing its
assets. The Fund pays its proportionate share of the fee. Under the Investment
Management Services Agreement, the fee for the most recent fiscal year was 0.48%
of its average daily net assets. Under the agreement, the Portfolio 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>
<TABLE>
<CAPTION>
Financial Highlights
Fiscal period ended Sept. 30,
Per share income and capital changesa
Class A
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996b 1995
Net asset value, beginning of period $24.18 $27.44 $22.49 $19.96 $19.48
Income from investment operations:
Net investment income (loss) .24 .29 .39 .43 .52
Net gains (losses)
(both realized and unrealized) 4.00 .22 6.11 3.17 1.96
Total from investment operations 4.24 .51 6.50 3.60 2.48
Less distributions:
Dividends from net investment income (.24) (.30) (.43) (.39) (.49)
Distributions from realized gains (2.04) (3.47) (1.12) (.68) (1.51)
Total distributions (2.28) (3.77) (1.55) (1.07) (2.00)
Net asset value, end of period $26.14 $24.18 $27.44 $22.49 $19.96
Ratios/supplemental data
Net assets, end of period
(in millions) $3,105 $2,783 $2,877 $2,307 $1,984
Ratio of expenses to average
daily net assetsc .82% .77% .78% .80%d .79%
Ratio of net investment income (loss)
to average daily net assets .90% 1.14% 1.58% 2.19%d 2.61%
Portfolio turnover rate
(excluding short-term securities) 76% 79% 82% 71% 69%
Total returne 17.71% 2.04% 30.22% 18.60% 14.44%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b The Fund's fiscal year-end was changed from Oct. 31 to Sept. 30, effective
1996.
c Effective fiscal period 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal period ended Sept. 30,
Per share income and capital changesa
Class B Class Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 1998 1997 1996b 1995c 1999 1998 1997 1996b 1995c
Net asset value,
beginning of period $24.05 $27.32 $22.42 $19.91 $18.03 $24.18 $27.44 $22.49 $19.96 $18.03
Income from investment operations:
Net investment
income (loss) .06 .10 .22 .28 .27 .27 .31 .42 .47 .29
Net gains (losses) (both
realized and unrealized) 3.96 .21 6.05 3.17 1.92 4.00 .22 6.11 3.17 2.01
Total from investment
operations 4.02 .31 6.27 3.45 2.19 4.27 .53 6.53 3.64 2.30
Less distributions:
Dividends from net
investment income (.06) (.11) (.25) (.26) (.31) (.27) (.32) (.46) (.43) (.37)
Distributions from
realized gains (2.04) (3.47) (1.12) (.68) -- (2.04) (3.47) (1.12) (.68) --
Total distributions (2.10) (3.58) (1.37) (.94) (.31) (2.31) (3.79) (1.58) (1.11) (.37)
Net asset value,
end of period $25.97 $24.05 $27.32 $22.42 $19.91 $26.14 $24.18 $27.44 $22.49 $19.96
Ratios/supplemental data
Net assets, end of
period (in millions) $349 $258 $203 $107 $29 $1,063 $1,027 $1,082 $870 $738
Ratio of expenses to
average daily net
assetsd 1.59% 1.53% 1.55% 1.57%e 1.61%e .72% .70% .66% .63%e .64%e
Ratio of net investment
income (loss) to average
daily net assets .12% .39% .85% 1.61%e 1.37%e 1.00% 1.21% 1.71% 2.36%e 2.38%e
Portfolio turnover rate
(excluding short-term
securities) 76% 79% 82% 71% 69% 76% 79% 82% 71% 69%
Total returnf 16.81% 1.27% 29.23% 17.78% 12.10% 17.81% 2.12% 30.38% 18.79% 12.80%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b The Fund's fiscal year-end was changed from Oct. 31 to Sept. 30, effective
1996.
c Inception date was March 20, 1995.
d Effective fiscal period 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of a sales charge.
The information in these tables 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.
</TABLE>
<PAGE>
American
Express(R)
Funds
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
1-800-SEC-0330). Reports and other information about the Fund are available on
the Commission's Internet site at (http://www.sec.gov). Copies of this
information may be obtained by writing and paying a duplicating fee to the
Public Reference Section of the Commission, Washington, D.C.
20549-6009.
Investment Company Act File #811-498
TICKER SYMBOL
Class A: INSTX Class B: IDSBX Class Y: IDSYX
AMERICAN
EXPRESS (logo)
S-6351-99 P (11/99)
<PAGE>
Form of Proxy Card
Proxy Card Front
Proxy Card
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Heidi S. Brommer, James A. Mitchell and Eileen
J. Newhouse, or any one of them, as proxies, with full power of substitution, to
represent and to vote all of the shares of the undersigned at the special
meeting to be held on May 9, 2000, and any adjournment thereof.
TO HAVE YOUR VOTE COUNTED, YOU MUST SIGN, DATE AND RETURN THIS PROXY. IT WILL BE
VOTED AS MARKED, OR IF NOT MARKED, WILL BE VOTED "FOR" THE PROPOSAL.
THE BOARD RECOMMENDS A VOTE
"FOR" THE PROPOSAL.
_______________________________________
Signature(s)
Date ______________________, 2000
Owners please sign as names appear at
left. Executors, administrators,
trustees, etc., should indicate
position when signing.
Proxy Card Back
Vote on Proposal
Approve the Agreement and Plan of Reorganization between the Strategist Fund and
the AXP Fund providing for the acquisition of all of the assets of the
Strategist Fund by the AXP Fund in exchange for Class A shares of the AXP Fund
and assumption by the AXP Fund of the liabilities of the Strategist Fund, to be
followed by distribution of those Class A shares to the shareholders of the
Strategist Fund and the subsequent termination of the Strategist Fund.
For _____ Against _____ Abstain _____
<PAGE>
Statement of Additional Information
April 14, 2000
AXP Mutual
AXP Stock
AXP Diversified Equity Income
AXP Emerging Markets
AXP Federal Income
AXP Growth
AXP New Dimensions
AXP Extra Income
AXP Selective
AXP Research Opportunities
AXP High Yield Tax-Exempt
AXP Managed Allocation
AXP Global Growth
AXP Global Bond
AXP Innovations
This statement of additional information ("SAI") covers each of the funds listed
above (each an "AXP Fund") and consists of this cover page and the following
information:
1. The AXP Fund's most recent SAI, dated as shown in the table below, which
has been previously filed and is incorporated by reference.
2. The AXP Fund's most recent annual report and semi-annual report to
shareholders, if a semi-annual report has been issued subsequent to the
date of the most recent annual report, for the period shown in the table
below, which have been previously filed and are incorporated by reference.
3. The Strategist Fund's most recent SAI, dated as shown in the table below,
which has been previously filed and is incorporated by reference.
4. The Strategist Fund's most recent annual report and, if applicable,
semi-annual report to shareholders, for the period shown in the table
below, which have been previously filed and are incorporated by reference.
This SAI is not a prospectus. It should be read in conjunction with the proxy
statement/prospectus, which may be obtained by calling 1-800-___-____ or writing
____________________________.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------ -------------------- -------------------
<S> <C> <C> <C> <C>
Annual Report Semi-Annual
Fund SAI (for period Report
(dated) ended) (if applicable)
(for period
ended)
- ---------------------------------------- ------------------ -------------------- -------------------
Strategist Balanced 11/29/99 9/30/99 NA
AXP Mutual 11/29/99 9/30/99 NA
Strategist Equity 11/29/99 9/30/99 NA
AXP Stock 11/29/99 9/30/99 NA
Strategist Equity Income 11/29/99 9/30/99 NA
AXP Diversified Equity Income 11/29/99 9/30/99 NA
Strategist Emerging Markets 12/30/99 10/31/99 NA
AXP Emerging Markets 12/30/99 10/31/99 NA
Strategist Government Income 7/30/99 5/31/99 11/30/99
AXP Federal Income 7/30/99 5/31/99 11/30/99
Strategist Growth 9/29/99 7/31/99 1/31/00
AXP Growth 9/29/99 7/31/99 1/31/00
Strategist Growth Trends 9/29/99 7/31/99 1/31/00
AXP New Dimensions 9/29/99 7/31/99 1/31/00
Strategist High Yield 7/30/99 5/31/99 11/30/99
AXP Extra Income 7/30/99 5/31/99 11/30/99
Strategist Quality Income 7/30/99 5/31/99 11/30/99
AXP Selective 7/30/99 5/31/99 11/30/99
Strategist Special Growth 9/29/99 7/31/99 1/31/00
AXP Research Opportunities 9/29/99 7/31/99 1/31/00
Strategist Tax-Free High Yield 1/28/00 11/30/99 NA
AXP High Yield Tax-Exempt 1/28/00 11/30/99 NA
Strategist Total Return 11/29/99 9/30/99 NA
AXP Managed Allocation 11/29/99 9/30/99 NA
Strategist World Growth 12/30/99 10/31/99 NA
AXP Global Growth 12/30/99 10/31/99 NA
Strategist World Income 12/30/99 10/31/99 NA
AXP Global Bond 12/30/99 10/31/99 NA
Strategist World Technologies 12/30/99 10/31/99 NA
AXP Innovations 12/30/99 10/31/99 NA
</TABLE>
<PAGE>
PART C. OTHER INFORMATION
Item 15. 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.
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.
Item 16. Exhibits
(1) Articles of Incorporation, as amended October 17, 1988, filed
electronically as Exhibit 1 to Registrant's Post-Effective Amendment No. 78
to Registration Statement No. 2-11358, are incorporated by reference.
(2) By-laws, as amended January 10, 1996, filed electronically as Exhibit 2 to
Registrant's Post-Effective Amendment No. 95 to Registration Statement No.
2-11358, are incorporated by reference.
(3) Voting Trust Agreement: Not Applicable.
(4) Form of Agreement and Plan of Reorganization, dated March 10, 2000, filed
electronically herewith as Exhibit 1 to Part A of this Registration
Statement.
(5) Stock certificate, filed as Exhibit 1 to Registrant's Form N-1Q for the
calendar quarter ended December 31, 1976, is incorporated by reference.
(6) Investment Management Services Agreement dated July 1, 1999 between Growth
and Income Trust and American Express Financial Corporation was filed
electronically as Exhibit (d) to Growth and Income Trust Post-Effective
Amendment No. 6 to Registration Statement No. 811-7393 on or about Nov. 29,
1999.
<PAGE>
(7) Distribution Agreement, dated July 8, 1999, between AXP Utilities Income
Fund, Inc. and American Express Financial Advisors Inc. is incorporated by
reference to Exhibit (e) to AXP Utilities Income Fund, Inc. Post-Effective
Amendment No. 22, to Registration Statement File No. 33-20872 filed on or
about August 27, 1999. Registrant's Distribution Agreement differs from the
one incorporated by reference only by the fact that Registrant is one
executing party.
(8) 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.
(9)(a) Custodian Agreement between Registrant and American Express Trust
Company, dated March 20, 1995, filed electronically as Exhibit 8(a) to
Registrant's Post-Effective Amendment No. 92 to Registration Statement
No. 2-11358, is incorporated by reference.
(9)(b) Addendum to the Custodian Agreement among IDS Stock Fund, Inc.,
American Express Trust Company and American Express Financial
Corporation dated May 13, 1996, filed electronically as Exhibit 8(b) to
Registrant's Post-Effective Amendment No. 95 to Registration Statement
No. 2 -11358, is incorporated by reference.
(9)(c) Custodian Agreement, dated May 13, 1999, between American Express
Trust Company and The Bank of New York is incorporated by reference to
Exhibit (g)(3) to IDS Precious Metals Fund, Inc. Post-Effective
Amendment No. 33 to Registration Statement File No. 2-93745 filed on
or about May 24, 1999.
(9)(d) Custodian Agreement Amendment between IDS International Fund, Inc. and
American Express Trust Company, dated October 9, 1997, filed
electronically on or about December 23, 1997 as Exhibit 8(c) to IDS
International Fund, Inc.'s Post-Effective Amendment No. 26 to
Registration Statement No. 2-92309, is incorporated by reference.
Registrant's Custodian Agreement Amendment differs from the one
incorporated by reference only by the fact that Registrant is one
executing party.
(10)(a) Plan and Agreement of Distribution dated July 1, 1999 between AXP
Discovery Fund, Inc. and American Express Financial Advisors Inc. is
incorporated by reference to Exhibit (m) to AXP Discovery Fund, Inc.
Post-Effective Amendment No. 36 to Registration Statement File No.
2-72174 filed on or about July 30, 1999. Registrant's Plan and
Agreement of Distribution differs from the one incorporated by
reference only by the fact that Registrant is one executing party.
(10)(b) Rule 18f-3 Plan, dated April 1999, is incorporated by reference to
Exhibit (o) to IDS Precious Metals Fund, Inc. Post-Effective Amendment
No. 33 to Registration Statement File No. 2-93745 filed on or about
May 24, 1999.
(11) Opinion and consent of counsel as to the legality of the securities
being registered, is filed electronically herewith.
(12) Tax Opinion to be filed by amendment.
(13)(a) Administrative Services Agreement between Registrant and American
Express Financial Corporation, dated March 20, 1995, filed
electronically as Exhibit 9(e) to Registrant's Post-Effective
Amendment No. 92 to Registration Statement No. 2-11358, is
incorporated by reference.
<PAGE>
(13)(b) Agreement and Declaration of Unitholders between IDS Stock Fund, Inc.
and Strategist Growth and Income Fund, Inc. dated May 13, 1996, filed
electronically as Exhibit 9(f) to Registrant's Post-Effective
Amendment No. 95 to Registration Statement No. 2 -11358, is
incorporated by reference.
(13)(c) License Agreement, dated Jan. 25, 1988, between Registrant and IDS
Financial Corporation, filed electronically as Exhibit 9(c) to
Post-Effective Amendment No. 83 to Registration Statement No. 2-11358,
is incorporated by reference.
(13)(d) License Agreement, dated June 17, 1999, between Registrant and American
Express Company is incorporated by reference to Exhibit (h)(4) to
Registrant's Post-Effective Amendment No. 98 filed on or about
September 23, 1999.
(13)(e) Plan and Agreement of Merger, dated April 10, 1986, filed
electronically as Exhibit 9(a) to Registrant's Post-Effective
Amendment No. 70 to Registration Statement No. 2-11358, is
incorporated by reference.
(13)(f) Class Y Shareholder Service Agreement between IDS Precious Metals Fund,
Inc. and American Express Financial Advisors Inc., dated May 9, 1997,
filed electronically on or about May 27, 1997 as Exhibit 9(e) to IDS
Precious Metals Fund, Inc.'s Amendment No. 30 to Registration Statement
No. 2-93745, is incorporated by reference. Registrant's Class Y
Shareholder Service Agreement differs from the one incorporated by
reference only by the fact that Registrant is one executing party.
(13)(g) Transfer Agency Agreement between Registrant and American Express
Client Service Corporation, dated Feb. 1, 1999, is incorporated by
reference to Exhibit (h)(7) to Registrant's Post-Effective Amendment
No. 98 filed on or about September 23, 1999.
(14) Independent Auditors' Consent to be filed by amendment.
(15) Omitted Financial Statements: Not Applicable.
(16)(a) Directors' Power of Attorney to sign Amendments to this Registration
Statement dated January 13, 2000, is filed electronically herewith.
(16)(b) Officers' Power of Attorney to sign Amendments to this Registration
Statement, dated January 13, 2000, is filed electronically herewith.
(16)(c) Trustees' Power of Attorney to sign Amendments to this Registration
Statement, dated Jan. 13, 2000, is filed electronically herewith.
(16)(d) Officers' Power of Attorney to sign Amendments to this Registration
Statement, dated January 13, 2000, is filed electronically herewith.
(17) Additional Exhibits: Not Applicable.
<PAGE>
Item 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act [17 CFR 230.145c], the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The Registrant undertakes to file by Post-Effective Amendment an
Opinion of Counsel supporting the tax consequences of the proposed
reorganization within a reasonable time after receipt of such opinion.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant, in the City of Minneapolis and State of
Minnesota on the 13th day of March, 2000.
AXP STOCK FUND, INC.
By /s/ Arne H. Carlson**
Arne H. Carlson
By /s/ John M. Knight
John M. Knight, Treasurer
As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities indicated on the 13th
day of March, 2000.
Signature Capacity
________________________ Director
Peter J. Anderson
/s/ H. Brewster Atwater, Jr.* Director
H. Brewster Atwater, Jr.
/s/ Arne H. Carlson* Chairman of the Board
Arne H. Carlson
/s/ Lynne V. Cheney* Director
Lynne V. Cheney
/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>
Signature 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 (16)(a), by:
/s/ Leslie L. Ogg
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney, dated January 13, 2000, filed
electronically herewith as Exhibit (16)(b), by:
/s/ Leslie L. Ogg
Leslie L. Ogg
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, GROWTH AND INCOME TRUST consents to
the filing of this Registration Statement signed on behalf of the Registrant, in
the City of Minneapolis and State of Minnesota on the 13th day of March, 2000.
GROWTH AND INCOME TRUST
By /s/ Arne H. Carlson****
Arne H. Carlson
By /s/ John M. Knight
John M. Knight, Treasurer
As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities indicated on the 13th
day of March, 2000.
Signatures Capacity
________________________ Trustee
Peter J. Anderson
/s/ H. Brewster Atwater, Jr.*** Trustee
H. Brewster Atwater, Jr.
/s/ Arne H. Carlson*** Chairman of the Board
Arne H. Carlson
/s/ Lynne V. Cheney*** Trustee
Lynne V. Cheney
/s/ David R. Hubers*** Trustee
David R. Hubers
/s/ Heinz F. Hutter*** Trustee
Heinz F. Hutter
/s/ Anne P. Jones*** Trustee
Anne P. Jones
/s/ William R. Pearce*** Trustee
William R. Pearce
/s/ Alan K. Simpson*** Trustee
Alan K. Simpson
<PAGE>
Signatures Capacity
/s/ John R. Thomas*** Trustee
John R. Thomas
/s/ C. Angus Wurtele*** Trustee
C. Angus Wurtele
*** Signed pursuant to Trustees' Power of Attorney dated January 13, 2000, filed
electronically herewith as Exhibit (16)(c), by:
/s/ Leslie L. Ogg
Leslie L. Ogg
**** Signed pursuant to Officers' Power of Attorney dated January 13, 2000,
filed electronically herewith as Exhibit (16)(d), by:
/s/ Leslie L. Ogg
Leslie L. Ogg
<PAGE>
CONTENTS OF THIS
REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Other Information.
Exhibits.
Undertakings.
The Signatures.
<PAGE>
AXP Stock Fund, Inc.
EXHIBIT INDEX
Exhibit (11) Opinion and consent of counsel.
Exhibit (16)(a) Directors/Trustees Power of Attorney, dated January 13, 2000
Exhibit (16)(b) Officers' Power of Attorney, dated January 13, 2000
Exhibit (16)(c) Trustees' Power of Attorney, dated January 13, 2000
Exhibit (16)(d) Officers' Power of Attorney, dated January 13, 2000
<PAGE>
Opinion of Counsel
March 13, 2000
AXP Stock Fund, Inc.
IDS Tower 10
Minneapolis, Minnesota 55440-0010
Gentlemen:
I have examined the Articles of Incorporation and the By-Laws of AXP Stock Fund,
Inc. (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 that the shares sold in accordance with
applicable federal and state securities laws will be legally issued, fully paid
and nonassessable.
This opinion may be used in connection with the Registration Statement.
Sincerely,
/s/ Leslie L. Ogg
Leslie L. Ogg
Attorney at Law
901 S. Marquette Ave., Suite 2810
Minneapolis, Minnesota 55402-3268
<PAGE>
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
<PAGE>
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
<PAGE>
TRUSTEES POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as 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 Investment
Company Act of 1940 with the Securities and Exchange Commission:
1940 Act
Reg. Number
Growth Trust 811-07395
Growth and Income Trust 811-07393
Income Trust 811-07307
Tax-Free Income Trust 811-07397
World Trust 811-07399
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 Act 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
<PAGE>
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:
1940 Act
Reg. Number
Growth Trust 811-07395
Growth and Income Trust 811-07393
Income Trust 811-07307
Tax-Free Income Trust 811-07397
World Trust 811-07399
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 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/ 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
