<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-1
POST-EFFECTIVE AMENDMENT NUMBER 14 TO
REGISTRATION STATEMENT NO. 2-95577
IDS FLEXIBLE SAVINGS CERTIFICATE
UNDER
THE SECURITIES ACT OF 1933
IDS CERTIFICATE COMPANY
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
6725
(Primary Standard Industrial Classification Code Number)
41-6009975
(I.R.S. Employer Identification No.)
IDS Tower 10, Minneapolis, MN 55440-0010, (612) 671-3131
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Bruce A. Kohn, IDS Tower 10, Minneapolis, MN 55440-0010
(612) 671-2221
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24f-2 of the Investment Company Act of 1940. Registrants' Rule
24f-2 Notices for its most recent fiscal year (December 31) will be
filed on or about February 28, 1995.
<PAGE>
PAGE 2
Explanatory Note
The prospectus contained in Part I of the Registration Statement
will be used, with minor variations, in connection with the
following Registration Statement: No. 33-22503. Compared to the
first prospectus in Part I of the Post-Effective Amendment No. 13
to Registration Statement No. 2-95577, the first several pages of
the prospectuses vary to describe the unique attributes of the
certificate. The balance of the prospectus is almost identical for
the certificates.
<PAGE>
PAGE 3
PART I. CROSS REFERENCE SHEET FOR PROSPECTUS
PURSUANT TO RULE 404(c)
IDS STOCK MARKET CERTIFICATE - DIRECT MAIL
AND VARIATIONS
Item Caption in
Number Prospectus
Item 1. Forepart of the
Registration Statement
and Outside Front Cover
Page of Prospectus.
Item 2. Inside Front and Where to get information about
Outside Back Cover Pages IDSC; Table of Contents.
of Prospectus.
Item 3. Summary Informa- About the certificate
tion, Risk Factors
and Ratio of Earnings
to Fixed Charges.
Item 4. Use of Proceeds. How your money is used and
protected; Investment policies
Item 5. Determination of Not Applicable.
Offering Price.
Item 6. Dilution. Not Applicable.
Item 7. Selling Security Not Applicable.
Holders
Item 8. Plan of How your certificate
Distribution. is managed.
Item 9. Description of About the Certificate;
Securities to Be How to invest and withdraw
Registered. funds.
Taxes on your earnings.
Item 10. Interests of Not Applicable.
Named Experts and Counsel.
<PAGE>
PAGE 4
PART I. CROSS REFERENCE SHEET FOR PROSPECTUS
PURSUANT TO RULE 404(c) (Continued)
Item Caption in
Number Prospectus
Item 11. Information with Invested and guaranteed by
Respect to the Registrant. IDSC; Regulated by government;
Relationship between IDSC and
American Express Financial
Corporation; Capital structure
and certificates issued;
Directors and Officers.
Item 12. Disclosure of Directors and Officers
Commission Position on
Indemnification for
Securities Act Liabilities.
<PAGE>
PAGE 5
IDS Stock Market Certificate
Prospectus April 26, 1995
Potential for stock market growth with safety of principal
IDS Stock Market Certificates are issued by IDS Certificate Company
(IDSC). You can purchase this certificate with a single investment
of at least $1,000 but not more than $1 million (unless you receive
prior authorization from IDSC to invest more). As long as you stay
within this limit, you can make additional investments at the end
of a term. Your principal is guaranteed by IDSC. You can
participate in any increase of the stock market based on the S&P
500 Index while protecting your principal. In addition, you decide
whether part of your return will be guaranteed or whether all of it
will be tied to the market. You can keep your certificate for up
to 14 terms.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This prospectus describes terms and conditions of your IDS Stock
Market Certificate. It contains facts that can help you decide if
the certificate is the right investment for you. Read the
prospectus before you invest and keep it for future reference. No
one has the authority to change the terms and conditions of the IDS
Stock Market Certificate as described in the prospectus, or to bind
IDSC by any statement not in it.
Issuer: Distributor:
IDS Certificate Company American Express
IDS Tower 10 Financial Advisors Inc.
Minneapolis, MN 55440-0010 IDS Tower 10
______________ (toll free) or Minneapolis, MN 55440-0010
______________ (Minneapolis/
St. Paul area)
TTY numbers:
______________ (toll free) or
______________ (Minneapolis/
St. Paul area)
American Express companies<PAGE>
PAGE 6
Where to get information about IDSC
IDSC is subject to the reporting requirements of the Securities
Exchange Act of 1934. Reports and other information on IDSC are
filed with the Securities and Exchange Commission (SEC). Copies
can be obtained from the Public Reference Section of the SEC, 450
5th St., N.W., Washington, D.C. 20549, at prescribed rates. Or you
can inspect and copy information in person at the SEC's Public
Reference Section and at the following regional offices:
Northeast Regional Office
7 World Trade Center, Suite 1300
New York, NY 10048
Midwest Regional Office
Northwestern Atrium Center
500 West Madison St., Suite 1400
Chicago, IL 60611
Pacific Regional Office
5670 Wilshire Blvd., 11th Floor
Los Angeles, CA 90036
Initial interest and participation rates
IDSC guarantees return of your principal. The interest on your
certificate is linked to stock market performance as measured by
the Standard & Poor's 500 Stock Index (S&P 500 Index) as explained
under "About the certificate" below.
Here are the interest rates and market participation percentages in
effect on the date of this prospectus, April 26, 1995:
Maximum Market participation Minimum
return percentage interest
10% 100% (full) None
10% 25% (partial) 2.5% to 3.5%
These rates may or may not be in effect when you apply to purchase
your certificate. If you choose the partial participation options
for your certificate, your minimum interest rate will be between
2.5% and 3.5%. Rates for later terms are set at the discretion of
IDSC and may also differ from the rates shown here. We reserve the
right to issue other securities with different provisions.
<PAGE>
PAGE 7
Table of contents
About the certificate
Investment amounts 4p
Face amount and principal 4p
Certificate term 4p
Value at maturity 5p
Receiving cash before end of the term 5p
Interest 5p
Promotions and pricing flexibility 7p
Historical data on the S&P 500 Index 8p
Calculation of return 10p
About the S&P 500 index 12p
Opportunities at the end of a term 13p
How to invest and withdraw funds
Buying your certificate 14p
Full and partial withdrawals 15p
IRA's 19p
Transfer of ownership 19p
For more information 19p
Taxes on your earnings
Retirement accounts 20p
Gifts to minors 20p
Foreign investors 21p
How your money is used and protected
Invested and guaranteed by IDSC 22p
Regulated by government 23p
Backed by our investments 23p
Investment policies 24p
How your money is managed
Relationship between IDSC and American Express
Financial Corporation 25p
Capital structure and certificates issued 26p
Investment management and services 26p
Distribution 27p
Employment of other American Express affiliates 29p
Directors and officers 29p
Auditors 32p
Annual Financial information
Summary of selected financial information
Management's discussion and analysis of
financial condition and results of operations
Report of independent auditors
Financial statements
Notes to financial statements
<PAGE>
PAGE 8
About the certificate
Investment amounts
You may purchase the IDS Stock Market Certificate with a single
investment of at least $1,000 but not more than $1 million payable
in U.S. currency. You may also make additional lump-sum
investments in any amount at the end of any term as long as your
total amount paid in is not more than the $1 million.
The certificate may be used as an investment for your Individual
Retirement Account (IRA). If so used, the amount of your
contribution (investment) will be subject to limitations in
applicable federal law.
Face amount and principal
The face amount of your certificate is the amount of your initial
investment. Your principal is the value of your certificate at the
beginning of each subsequent term. Your principal is guaranteed by
IDSC. It consists of the amount you actually invest plus interest
credited to your account and any additional investment you make
less withdrawals, penalties and any interest paid to you in cash.
For example: Assume your initial investment (face amount) of
$10,000 has earned a return of 7.25%. Interest is credited to your
account at the end of the term. You have not taken any interest as
cash, or made any withdrawals. You have invested an additional
$2,500 prior to the beginning of the next term. Your principal for
the next term will equal:
$10,000.00 Face Amount (initial investment)
plus 725.00 Interest credited to your account at the
end of the term
plus 5.00 Interim interest (See "Interim interest")
minus ($0.00) Interest paid to you in cash
plus 2,500.00 Additional investment to your certificate
minus ($0.00) Withdrawals and applicable penalties
$13,230.00 Principal at the beginning of the next
term.
Certificate term
Your first certificate term is a 12-month period that begins on the
Wednesday after your application is accepted and ends the Tuesday
before the one-year anniversary of its acceptance. For example, if
your application is accepted on a Wednesday, your first term would
begin the next Wednesday. Your certificate will earn interest at
the interim interest rate then in effect until the term begins. It
will not earn any participation interest until the term begins. If
you choose to continue to receive participation interest,
subsequent terms are 12-month periods that begin on the Wednesday
following the 14-day grace period at the end of the prior 12-month <PAGE>
PAGE 9
term. You may begin your next term on any Wednesday during the
14-day period by providing prior written instructions to IDSC. If
you choose to receive fixed interest, subsequent terms will be up
to 12 months as described in "Fixed interest" under "Interest"
below.
Value at maturity
Your certificate matures after 14 terms, and you will receive a
check for its value. At maturity, the value of your certificate
will be the total of your actual investments, plus credited
interest not paid to you in cash, less any withdrawals and
withdrawal penalties. Certain other fees may apply.
Receiving cash before end of term
If you need money before your certificate term ends, you may
withdraw part or all of its value at any time, less any penalties
that apply. Procedures for withdrawing money, as well as
conditions under which penalties apply, are described in "Full and
partial withdrawals" under "How to invest and withdraw funds."
Interest
You may select from two types of participation interest for your
first term. The two types are 1) full participation, or 2) partial
participation together with minimum interest. Both of these
options have an upper limit which is the maximum annual return
explained below. After your first term, you may choose not to
participate in any market movement and receive a fixed rate of
interest.
Full participation interest: With this option you participate 100%
in any percentage increase in the S&P 500 Index up to the maximum
return. You earn interest only if the value of the S&P 500 Index
is higher on the last day of your term than it was on the first day
of your term. Thus, your return is linked to stock market
performance. The S&P 500 Index is frequently used to measure the
relative performance of the stock market. For a more detailed
discussion of the Index, see "About the S&P 500 Index".
Partial participation and minimum interest: This option allows you
to participate in a certain part (market participation rate) of any
increase in the S&P 500 Index together with a rate of interest
guaranteed in advance for each term (minimum interest). Your
return is composed of two parts:
1. A percentage of any increase in the S&P 500 Index, and
2. A rate of interest guaranteed in advance for each term.
Together, they cannot exceed the maximum return.
The market participation rate and the minimum interest rate on the
date of this prospectus are listed on the inside cover under
"Initial interest and participation rates." <PAGE>
PAGE 10
Fixed interest: After your first term, this option allows you to
stop participating in the market entirely for one or more terms.
You may choose to receive a fixed rate of interest for any term
after the first term. During the term when you are receiving fixed
interest, you can change from your fixed interest selection to
again participate in the market. If you make the change from fixed
interest to participation interest, your next term would begin on
the Wednesday following our receipt of notice of your new
selection. In this way, you may have a term (during which you
would earn fixed interest) that is less than 12 months. You may
not change from participation interest to fixed interest during a
term.
Maximum annual return: This is the cap, or upper limit, of your
return. Your total return including both participation and minimum
interest for a term for which you have chosen participation
interest will be limited to this maximum return percentage.
Determining the S&P 500 index value: The stock market closes at 3
p.m. Central time and the S&P 500 Index value is available at
approximately 4:30 p.m. This is the value we currently use to
determine participation interest. Occasionally, Standard & Poor's
Corporation (S&P) makes minor adjustments to the closing value
after 4:30 p.m. and the value we use may not be exactly the one
that is published the next business day. In the future, we may use
a later time cut-off if it becomes feasible to do so. If the stock
market is not open or the S&P 500 Index is unavailable as of the
last day of your term, the preceding business day for which a value
is available will be used instead.
Interim interest: When we accept your application, we pay interim
interest to your account for the time before your first term
begins. We also pay interim interest for the 14-day period between
terms unless you write or call to ask us to begin your next term
earlier. You may withdraw this interest in cash at any time before
it becomes part of your certificate's principal without a
withdrawal penalty. If it is not withdrawn, the interest will
become part of your certificate's principal at the start of the
next succeeding term. For example, the interest you earn between
the end of the first and the beginning of the second term will
become part of the principal at the start of your third term.
Interim interest rates for the time before your first term begins
will be within a range 10 to 110 basis points (0.10% to 1.10%)
above the average interest rate published for 12-month certificates
of deposit in the BANK RATE MONITORTM National Index (the BRM
Index). If the BRM Index is no longer publicly available or
feasible to use, IDSC may use another, similar index as a guide for
setting rates.
The BANK RATE MONITOR is a weekly magazine published in North Palm
Beach, FL 33408 by Advertising News Service Inc., an independent
national news organization that collects and disseminates
information about bank products and interest rates. Advertising
News Service has no connection with IDSC, American Express
<PAGE>
PAGE 11
Financial Corporation or any of their affiliates. The BRM Index
used by IDSC is a 25-city index.
The BRM Index is an index of rates and annual effective yields
offered on various length certificates of deposit by large banks
and thrifts in metropolitan areas. The frequency of compounding
varies among the banks and thrifts. Certificates of deposit in the
BRM Index are government insured fixed-rate time deposits.
The BANK RATE MONITOR may be available in your local library. To
obtain information or current BRM Index rates, call ___________
_______ _________ ___________ ___________ _______ ____________ __
______________ or TTY: ______________.
Earning interest: Participation interest is calculated, credited
and compounded at the end of your certificate term. Minimum
interest accrues daily and is credited and compounded at the end of
your certificate term. Fixed interest accrues and is credited
daily and compounds at the end of your term. Both minimum and
fixed interest are calculated on a 30-day month and 360-day year
basis. Interim interest accrues and is credited daily and
compounds at the end of your term immediately following the period
in which interim interest is paid.
Rates for future periods: After the initial term, the maximum
return, market participation percentage or minimum interest rate on
your certificate may be greater or less than those shown on the
front of this prospectus. In setting future interest rates, a
primary consideration will be the prevailing investment climate.
Rates are reviewed weekly, and we have complete discretion as to
what interest rate will be declared.
To find out what your certificate's new maximum return, market
participation percentage and minimum interest rate will be for your
next term, please consult the following:
American Express
Financial Advisors: o Your
o Our _______________ at ______________
Promotions and pricing flexibility
From time to time, IDSC may sponsor or participate in promotions
involving one or more of the certificates and their respective
terms. For example, we may offer different rates to new clients,
to existing clients, or to individuals who purchase or use products
or services offered by American Express Financial Advisors or its
subsidiaries. These promotions will generally be for a specified
period of time.
We also may offer different rates based on your amount invested,
maturity selected, geographic location and whether the certificate
is purchased for an IRA or a qualified retirement account.<PAGE>
PAGE 12
Historical Data on the S&P 500 Index
The following chart illustrates the month-end closing values of the
index from Dec. 31, 1983 through Feb. 28, 1995. The values of the
S&P 500 Index are reprinted with the permission of S&P.
S&P 500 Index Average Annual Return
Beginning date Period held Average annual
Dec. 31, in years return
___________________________________________________________________
1983 10 ____%
1988 5 ____
1993 1 ____
<PAGE>
PAGE 13
The next chart illustrates, on a moving 12-month basis, the price
return of the S&P 500 Index measured for every 12-month period
beginning with the period ended Dec. 31, 1984. The price return is
the percentage return for each period using month-end closing
prices of the S&P 500 Index. Dividends and other distributions on
the securities comprising the S&P 500 Index are not included in
calculating the price return.
Using the same data on price returns described above, the next
graph expands on the information in the preceding chart by
illustrating the distribution of all of the 12-month price returns
of the S&P 500 Index beginning with the 12-month period ending Dec.
31, 1984. The graph also shows the number of times these price
returns fell within certain ranges.<PAGE>
PAGE 14
The last chart illustrates, on a moving weekly basis, the actual
12-month return of the IDS Stock Market Certificate at full and
partial participation compared to the price return of the NYSE
Composite IndexR through October 1992 and the S&P 500 Index after
October 1992. For non-guaranteed funds received before Nov. 3,
1992, and guaranteed funds received before Nov. 4, 1992, IDS Stock
Market Certificate participation interest was based on the NYSE
Composite IndexR rather than the S&P 500 Index.
The NYSE Composite IndexR is a registered service mark of the New
York Stock Exchange, Inc. (NYSE) and is a composite covering price
movements of all common stocks listed on the NYSE. Because the IDS
Stock Market Certificate was first available on Jan. 24, 1990, the
performance reflects the returns on the one-year anniversary date,
falling on a Wednesday, of each of the weeks shown.
The recent historical experience of an index should not be taken as
an indication of future performance of the stock market or the
certificate. No assurance can be given that an index will not
decline or that certificate holders will receive interest on their
accounts beyond any minimum interest or fixed interest selected.
Calculation of return
The increase or decrease in the S&P 500 Index, as well as the
actual return paid to you, is calculated as follows:
Rate of return on S&P 500 Index
Term ending value of S&P 500 Index minus
Term beginning value of S&P 500 Index divided by
Term beginning value of S&P 500 Index equals
Rate of return on S&P 500 Index
The actual return paid to you will depend on your interest
participation selection.<PAGE>
PAGE 15
For example, assume:
Term ending value of S&P 500 Index 458
Term beginning value of S&P 500 Index 422
Maximum return 10%
Minimum return 2.5%
Partial participation rate 25%
458 Term ending value of S&P 500 Index
minus 422 Term beginning value of S&P 500 Index
equals 36 Difference between beginning and ending values
36 Difference between beginning and ending values
divided by 422 Term beginning value of S&P 500 Index
equals 8.53% Percent increase - full participation return
8.53% Percent increase or decrease
times 25.00% Partial participation rate
equals 2.13%
plus 2.50% 2.50% minimum interest rate
equals 4.63% Partial participation return
In both cases in the example, the return would be less than the 10%
maximum.
Maximum Return and Partial Participation Minimum Rate History - The
following table illustrates the maximum annual returns and partial
participation minimum rates that have been in effect since the
Stock Market Certificate was introduced.
Partial
Maximum participation
Purchase date annual return minimum rate
Jan. 24, 1990 18.00% 5.00%
Feb. 5, 1992 18.00 4.00
May 13, 1992 15.00 4.00
Sept. 9, 1992 12.00 3.00
Nov. 11, 1992 10.00 2.50
Nov. 2, 1994 10.00 2.75
Examples
To help you understand the way this certificate works, here are
some hypothetical examples. The following are three different
examples of market scenarios and how they affect the certificate's
return. Assume for all examples that you purchased the certificate
with a $10,000 original investment. Also assume that the partial
participation rate is 25%, the minimum interest rate for partial
participation is 2.5%, and the maximum total return for full and
partial participation is 10%.<PAGE>
PAGE 16
<TABLE><CAPTION>
- ------------------------------------------------------------------------------------------
1. If the Market and the S&P 500 Index value rise
Week 1/Wed Week 52/Tues
<S> <C> <C> <C>
S&P 500 S&P 500
Index 425 8% Increase in the S&P 500 Index Index 459
Full participation interest Partial participation interest and Minimum interest
$10,000 Original investment $10,000 Original investment
+ 800 8% x $10,000 + 250 2.5% Minimum interest rate x $10,000
Participation interest + 200 25% x 8% x $10,000 participation interest
$10,800 Ending balance $10,450 Ending balance
(8% total return) (4.5% total return)
- ------------------------------------------------------------------------------------------
2. If the Market and the S&P 500 Index value fall
Week 1/Wed Week 52/Tues
S&P 500 S&P 500
Index 425 4% Decrease in the S&P 500 Index Index 408
Full participation interest Partial participation interest and Minimum interest
$10,000 Original investment $10,000 Original investment
+ 0 Participation interest + 250 2.5% Minimum interest rate x $10,000
$10,000 Ending balance + 0 Participation interest
(0% Total return) $10,250 Ending balance
(2.5% Total return)
- ----------------------------------------------------------------------------------------
3. If the Market and the S&P 500 Index value rise above maximum return
Week 1/Wed Week 52/Tues
S&P 500 S&P 500
Index 425 16% Increase in the S&P 500 Index Index 493
Full participation interest Partial participation interest and Minimum interest
$10,000 Original investment $10,000 Original investment
+ 1,000 (10% x $10,000) + 250 2.5% Minimum interest rate x $10,000
Maximum interest + 400 25% x 16% x $10,000 Participation interest
$11,000 Ending balance $10,650 Ending balance
(10% Total return) (6.5% Total return)
</TABLE>
About the S&P 500 Index
The description in this prospectus of the S&P 500 Index including
its make-up, method of calculation and changes in its components
are derived from publicly available information regarding the S&P
500 Index. IDS Certificate Company (IDSC) does not assume any
responsibility for the accuracy or completeness of such
information.
The S&P 500 Index is composed of 500 common stocks, most of which
are listed on the New York Stock Exchange. The S&P 500 Index is
published by S&P and is intended to provide an indication of the
pattern of common stock movement. Standard & Poor's Corporation
(S&P) chooses the 500 stocks to be included in the S&P 500 Index
with the aim of achieving a distribution by broad industry
groupings that approximates the distribution of these groupings in
the common stock population of the New York Stock Exchange.
Changes in the S&P 500 Index are reported daily in the financial
pages of many major newspapers.
"Standard & Poor's ", "S&P ", "S&P 500 ", "Standard & Poor's 500",
and "500" are trademarks of McGraw-Hill, Inc. and have been
licensed for use by IDSC. The certificate is not sponsored,
endorsed, sold or promoted by S&P. S&P makes no representation or
warranty, express or implied, to the owners of the certificate or
any member of the public regarding the advisability of investing in
securities generally or in the certificate particularly or the
ability of the S&P 500 Index to track general stock market
performance. S&P's only relationship to IDSC is the licensing of <PAGE>
PAGE 17
certain trademarks and trade names of S&P and of the S&P 500 Index
which is determined, composed and calculated by S&P without regard
to IDSC or the certificate. S&P has no obligation to take the
needs of IDSC or the owners of the certificate into consideration
in determining, composing or calculating the S&P 500 Index. S&P is
not responsible for and has not participated in the determination
of the timing of, prices at, or quantities of the certificate to be
issued or in the determination or calculation of the equation by
which the certificate is to be converted into cash. S&P has no
obligation or liability in connection with the administration,
marketing or trading of the certificate.
S&P does not guarantee the accuracy and/or the completeness of the
S&P 500 Index or any data included therein and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P
makes no warranty, express or implied, as to the results to be
obtained by IDSC, owners of the certificate, or any person or
entity from the use of the S&P 500 Index or any data included
therein. S&P makes no express or implied warranties, and expressly
disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any
data included therein. Without limiting any of the foregoing, in
no event shall S&P have any liability for any special, punitive,
indirect, or consequential damages (including lost profits), even
if notified of the possibility of such damages.
If for any reason the S&P 500 Index were to become unavailable or
not reasonably feasible to use, we would use a comparable stock
market index for determining participation interest. If this were
to occur, you would be sent a notice indicating the comparable
index that will be used and be given the option to withdraw your
certificate balance, if desired, and receive your principal,
without being assessed a withdrawal charge.
Opportunities at the end of a term
Grace period: When your certificate term ends, you have 14 days
before a new term automatically begins. During this 14-day grace
period you can:
o change your interest selection,
o add money to your certificate,
o withdraw part or all of your money without a withdrawal
penalty or loss of interest, or
o receive your interest in cash.
Fixed interest only: The grace period does not apply if you made
the change from fixed interest back to participation interest
during a term as discussed in "Fixed interest" under "Interest"
above. Instead, your new 12-month term will begin on the Wednesday
following our receipt of your notice of your new interest
selection.<PAGE>
PAGE 18
New term: If you do not make changes, your certificate will
continue with your current selections when the new term begins 14
days later. You will earn interim interest during this 14-day
grace period. If you don't want to wait 14 days before starting
your next market participation term, you must call or give us
written instructions before your current term ends. Or, you may
phone in your instructions and follow up the call with written
verification. You can tell us to start your next term on any
Wednesday during the grace period immediately following our receipt
of your notice. Your notice may also tell us to change your
interest selection, add to your certificate or withdraw part of
your money. Term end notification cannot be sent in advance
because indexing information and interest (if any) are included.
Any additional payments received during the current term will be
applied at the end of the current term. By starting your new term
early and waiving the 14-day grace period, you are choosing to
start your next term without knowing the ending value of your
current term.
How to invest and withdraw funds
Buying your certificate
Your ________________________ will help you fill out and submit an
application to open an account with us and purchase a certificate.
We will process the application at our corporate offices in
Minneapolis. When your application is accepted, you will receive a
confirmation showing the acceptance date, the date your term begins
and the interest selection you have made detailing your market
participation percentage and, if applicable, the guaranteed minimum
interest rate for your first term. After your term begins, we will
send you notice of the value of the S&P 500 Index on the day your
term began. The rates in effect on the date we accept your
application are the rates that apply to your certificate.
IMPORTANT: When opening an account, you must provide IDSC with
your correct Taxpayer Identification Number (Social Security Number
or Employer Identification Number or a Form W-8 or approved
substitute). See "Taxes on your earnings."
Purchase policies:
o If you purchase a certificate with a personal check or other non-
guaranteed funds, American Express Financial Corporation must
convert your check to federal funds (e.g., monies of member banks
within the Federal Reserve Bank) before your purchase will be
accepted and you begin earning interest. This could take up to two
business days.
o IDSC has the authority to determine whether to accept an
application.
A number of special policies apply to purchases, withdrawals and
exchanges within IRAs. See "IRAs: special policies."
<PAGE>
PAGE 19
Two ways to make additional investments at term end
1
By mail
Send your check along with your name and account number to:
Regular mail: Express mail:
_______________________ ________________________
_______________________ ________________________
_______________________ ________________________
_______________________ ________________________
2
By wire
If you have an established account, you may wire money to:
________________________
________________________
________________________
________________________
Give these instructions: Credit IDS Account #00-30-015 for
personal account # (your account number) for (your name).
If this information is not included, the order may be rejected and
all money received less any costs IDSC incurs will be returned
promptly.
o Minimum amount you may wire: $1,000
o Wire orders can be accepted only on days when your bank,
American Express Financial Corporation, IDSC, Norwest Bank
Minneapolis and _____________ are open for business.
o Wire purchases are completed when wired payment is received
and we accept the purchase.
o Wire investments must be received and accepted in the
Minneapolis headquarters on a business day before ___ Central
time to be credited that day. Otherwise your purchase will be
processed the next business day.
o IDSC, American Express Financial Corporation and American
Express Financial Advisors Inc. are not responsible for any
delays that occur in wiring funds, including delays in
processing by the bank.
o You must pay any fee the bank charges for wiring.
Full and partial withdrawals
You may withdraw your certificate for its full value or make a
partial withdrawal of $100 or more at any time. However:<PAGE>
PAGE 20
o Full and partial withdrawals of principal during a term are
subject to penalties, described below.
o You may not make a partial withdrawal if it would reduce your
certificate balance to less than $1,000. If you request such
a withdrawal, we will contact you for revised instructions.
Penalties for withdrawal during a term: If you withdraw money
during a term, you will pay a penalty of 2% of the principal
withdrawn. (The 2% penalty is waived upon death of the certificate
owner or if it is for an IRA and you have reached age 70 1/2.)
When you request a full or partial withdrawal during a term, we pay
you from the principal of your certificate.
Loss of interest: If you make a withdrawal at any time other than
at the end of the term, you will lose interest accrued on the
withdrawal amount since minimum and participation interest is
credited only at the end of a term. However, accrued fixed and
interim interest will be paid to the date of the withdrawal.
Following are examples describing a $2,000 withdrawal during a term
for participation and fixed interest:
Participation interest
$10,000.00 Account balance
0.00 Interest (interest is credited at the end of
the term)
( 2,000.00) Withdrawal of principal
(40.00) 2% withdrawal penalty
$ 7,960.00 Balance after withdrawal.
You will forfeit any accrued interest on the
withdrawal amount.
Fixed interest
$10,000.00 Account balance
100.00 Interest credited to date
(100.00) Withdrawal of credited interest
(1,900.00) Withdrawal of principal
(38.00) 2% withdrawal penalty (on $1,900
principal withdrawn)
$ 8,062.00 Balance after withdrawal.
IRAs: In addition, you may be subject to IRS penalties for early
withdrawals if your certificate is in an IRA.
Other full and partial withdrawal policies:
o If you request a partial or full withdrawal of a certificate
recently purchased or added to by a check or money order that
is not guaranteed, we will wait for your check to clear. <PAGE>
PAGE 21
Please expect a minimum of 10 days from the date of your
payment before IDSC mails a check to you. (A check may be
mailed earlier if your bank provides evidence that your check
has cleared.)
o If your certificate is pledged as collateral, any withdrawal
will be delayed until we get approval from the secured party.
o Any payments to you may be delayed under applicable rules,
regulations or orders of the SEC.
Two ways to request a withdrawal
1
By phone
Call between 8 a.m. and 6 p.m. your local time:
______________ (toll free) or
______________ (Minneapolis/St. Paul area)
TTY numbers:
______________ (toll free) or
______________ (Minneapolis/St. Paul area)
o Maximum phone request: $50,000
o A telephone withdrawal request will not be allowed within 30
days of a phoned-in address change.
o We will honor any telephone request believed to be authentic
and will use reasonable procedures to confirm that they are,
such as asking identifying questions. As long as the
procedures are followed, neither IDSC nor American Express
Financial Corporation will be liable for any loss resulting
from fraudulent requests.
You may request that telephone withdrawals not be authorized from
your account by writing [Virtual Bank].
2
By mail
Send your name, account number and request for a withdrawal to:
Regular mail:
________________________
________________________
________________________
________________________
<PAGE>
PAGE 22
Express mail:
_______________________
_______________________
_______________________
_______________________
Written requests are required for:
o Transactions over $50,000
o Custodial accounts where the minor has reached the age at
which custodianship should terminate.
Two ways to receive payment when you withdraw funds
1
By regular or express mail
o Mailed to address on record; please allow seven days for
mailing
o Payable to name(s) you requested
o For express mail, you will pay charges that vary depending on
the courier you select. For a partial withdrawal leaving a
remaining balance of more than $1,000, these charges will be
deducted from the remaining balance. If the remaining balance
is less than $1,000, or if it is a full withdrawal, charges
are deducted from proceeds of the withdrawal.
2
By wire
o Minimum wire withdrawal: $500
o Request that money be wired to your bank
o Bank account must be in same ownership as IDSC account
o Pre-authorization required. Complete the bank wire
authorization section in the application or use a form
supplied by your ________________________. All registered
owners must sign.
o A service fee, if any, may be deducted from your balance (for
partial withdrawals) or from the proceeds of a full
withdrawal.
<PAGE>
PAGE 23
IRAs: special policies
o If the certificate is purchased for an IRA, the terms and
conditions of the certificate apply to the IRA as the owner of
this certificate. However, the terms of the IRA, as
interpreted by the trustee, will determine how a participant's
individual IRA is administered. These terms may differ from
the terms of the certificate.
o The annual custodial fee for an IRA may be deducted from your
certificate account. It may reduce the amount payable at
maturity or the amount received upon an early withdrawal.
o IRA withdrawals may be subject to withdrawal penalties or loss
of interest even if they are not subject to federal tax
penalties.
o We will waive withdrawal penalties on withdrawals for IRA
accounts of clients who have reached age 70 1/2.
o If you withdraw all funds from your last account in an IRA at
American Express Trust Company, a $25 termination fee will
apply.
o The IRA termination fee will be waived if withdrawal occurs
upon the account owner's death.
Transfer of ownership
While the certificate is not negotiable, IDSC will transfer
ownership upon written notification to [Virtual Bank]. However, if
you have purchased your certificate for an IRA, you may be unable
to transfer or assign the certificate without losing the account's
favorable status. Please consult your tax advisor.
For more information
For information on purchases, withdrawals, exchanges, transfers of
ownership, proper instructions and other service questions
regarding your certificate, please consult the [Virtual Bank]
Service team at
_______________ or
TTY: ______________.
Taxes on your earnings
Participation and minimum interest on your certificate is taxable
when credited to your account. Fixed and interim interest are
fully taxable as earned. Each calendar year we provide certificate
owners and the IRS with reports of all earnings over $10 (Form
1099). Withdrawals are reported to the certificate owner and the
IRS on Form 1099-B, Proceeds from Broker Transactions.
<PAGE>
PAGE 24
Revised proposed regulations: The IRS has issued revised proposed
regulations governing the tax treatment of debt instruments which
provide for variable rates of interest, including interest based on
the price of property that is actively traded or on an index of the
prices of such property. Under these revised proposed regulations,
the IDS Stock Market Certificate is likely to constitute a debt
instrument that would be treated as a variable rate debt instrument
(VRDI) rather than a contingent debt instrument (CDI). If the
Stock Market Certificate constitutes a VRDI, then the income earned
on the certificate will be treated as original issue discount and
reported when credited to the holder's account. If the certificate
is not treated as a VRDI, but rather is treated as a CDI, then the
owner may have taxable income to report, even though the account
owner has not received any cash distributions. Furthermore, the
timing and character of the income may be different from that of a
VRDI. IDSC cannot guarantee whether the revised proposed
regulations will be adopted as final in this present form or will
again be modified. As always, you should consult your tax adviser
for information regarding the tax implications of your certificate.
Retirement accounts
If you are using the certificate as an investment for an IRA,
income tax rules for your IRA apply. Generally, you will pay no
income taxes on your investment's earnings--and, in many cases, on
part or all of the investment itself--until you begin to make
withdrawals.
IDSC will withhold federal income taxes of 10% on IRA withdrawals
unless you tell us not to.
Withdrawals from retirement accounts are generally subject to a
penalty tax of 10% by the IRS if you make them before age 59 1/2,
unless you are disabled or if they are made by your beneficiary in
the event of your death. (Other exceptions may also apply.)
Consult your tax advisor to see how these rules apply to you before
you request a distribution from your IRA.
Gifts to minors
The certificate may be given to a minor under either the Uniform
Gifts or Uniform Transfers to Minors Act (UGMA/UTMA), whichever
applies in your state. UGMAs/UTMAs are irrevocable. Generally,
under federal tax laws, income over $1,200 on property owned by
children under age 14 will be taxed at the parents' marginal tax
rate, while income on property owned by children 14 or older will
be taxed at the child's rate.
Your Taxpayer Identification Number (TIN) and backup withholding:
As with any financial account you open, you must list your current
and correct Taxpayer Identification Number (TIN)--either your
Social Security or Employer Identification Number. The TIN must be
certified under penalties of perjury on your application when you
open an account with IDSC.<PAGE>
PAGE 25
If you don't provide the TIN to IDSC, or the TIN you report is
incorrect, you could be subject to backup withholding of 31% of
your interest earnings. You could also be subject to further
penalties, such as:
o $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
o criminal penalties for falsifying information.
You could also be subject to backup withholding because you failed
to report interest on your tax return as required.
To help you determine the correct TIN to use on various types of
accounts, please use this chart:
Use the Social Security or
For this type of account Employer Identification Number of
Individual or joint The individual or first person
listed on the account
Custodian account of a minor The minor
(Uniform Gifts/Transfers to
Minors Act)
A living trust The grantor-trustee (the person
who puts the money into the trust)
An irrevocable trust The legal entity (not the personal
or estate representative or trustee, unless
no legal entity is designated in
the account title)
Sole proprietorship or The owner or partnership
partnership
Corporate The corporation
Association, club or The organization
tax-exempt organization
For details on TIN requirements, ask your personal financial
advisor or local American Express Financial Advisors' office for
Federal Form W-9, Request for Taxpayer Identification Number and
Certification.
Foreign investors
If you are not a citizen or resident of the United States, you must
supply IDSC with Form W-8, Certificate of Foreign Status when you
purchase your certificate, and you must resupply it every three
years. You must also supply both a current mailing address and an
address of foreign residency, if different. IDSC will not accept
purchases of certificates by nonresident aliens without an<PAGE>
PAGE 26
appropriately certified Form W-8 (or approved substitute). Also,
if you do not supply Form W-8 you will be subject to backup
withholding on interest payments and withdrawals.
It is most likely that interest on the certificate is "portfolio
interest" as defined in U.S. Internal Revenue Code Section 871(h)
if earned by a nonresident alien. However, if the certificate is
treated as a CDI, part of the earned income may be treated as
capital gain instead of portfolio interest. Even though your
interest income or capital gain is not taxed by the U.S.
government, it will be reported at year end to you and to the U.S.
government on a Form 1042S, Foreign Person's U.S. Source Income
Subject to Withholding. The United States participates in various
tax treaties with foreign countries, which provide for sharing of
tax information.
Estate tax: If you are a nonresident alien and you die while
owning a certificate, IDSC will need a statement from persons IDSC
believes are knowledgeable about your estate. The statement must
be in a form satisfactory to IDSC and must tell us that, on your
date of death, your estate did not include any property in the
United States for U.S. estate tax purposes. If we do not receive
the statement, we generally will not take action regarding your
certificate until we receive a transfer certificate from the IRS.
In general, a transfer certificate requires the opening of an
estate in the United States and provides assurance that the IRS
will not claim your IDS certificate to satisfy estate taxes.
IMPORTANT: This information is a brief and selective summary of
certain federal tax rules that apply to this certificate. Tax
matters are highly individual and complex, and you should consult a
qualified tax adviser about your personal situation.
How your money is used and protected
Invested and guaranteed by IDSC
The IDS Stock Market Certificate is issued and guaranteed by IDSC,
a wholly owned subsidiary of American Express Financial
Corporation. We are by far the largest issuer of face amount
certificates in the United States, with total assets of more than
$___ billion and a net worth in excess of $___ million on Dec. 31,
1994.
We back our certificates by investing the money received and
keeping the invested assets on deposit. Our investments generate
interest and dividends, out of which we pay:
o interest to certificate owners
o various expenses, including taxes, fees to American Express
Financial Corporation for advisory and other services and
distribution fees to American Express Financial Advisors Inc.
<PAGE>
PAGE 27
For a review of significant events relating to our business, see
"Management's discussion and analysis of financial condition and
results of operations."
Most banks and thrifts offer investments known as certificates of
deposit that are similar to our certificates in many ways. Early
withdrawal of bank CDs often results in penalties. Banks and
thrifts generally have federal deposit insurance for their deposits
and lend much of the money deposited to individuals, businesses and
other enterprises. Other financial institutions and some insurance
companies may offer investments with comparable combinations of
safety and return on investment.
Regulated by government
Because the IDS Stock Market Certificate is a security, its offer
and sale are subject to regulation under federal and state
securities laws. (It is a face-amount certificate--not a bank
product, an equity investment, a form of life insurance or an
investment trust.)
The federal Investment Company Act of 1940 requires us to keep
investments on deposit in a segregated custodial account to protect
all of our outstanding certificates. These investments back the
entire value of your certificate account. Their carrying value
must exceed the required carrying value of the outstanding
certificates by at least $250,000. As of Dec. 31, 1994, the
carrying value of these investments exceeded the required carrying
value of our outstanding certificates by more than $___ million.
Backed by our investments
Our investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1993:
Type of investment Net amount invested
preferred stocks __%
government agency bonds __
corporate and other bonds __
mortgages __
municipal bonds __
cash and cash equivalents __
More than 95% of our securities portfolio (bonds and preferred
stocks) is rated investment grade. For additional information
regarding securities ratings, please refer to Note 3B in the
financial statements.
Most of our investments are on deposit with American Express Trust
Company (formerly IDS Trust Company), Minneapolis, although we also
maintain separate deposits as required by certain states. American
Express Trust Company is a wholly owned subsidiary of American
Express Financial Corporation. Copies of our Dec. 31, 1994 <PAGE>
PAGE 28
schedule of Investments in Securities of Unaffiliated Issuers are
available upon request. For comments regarding the valuation,
carrying values and unrealized appreciation (depreciation) of
investment securities, see Notes 1, 2 and 3 to the financial
statements.
Investment policies
In deciding how to diversify the portfolio--among what types of
investments in what amounts--the officers and directors of IDSC use
their best judgment, subject to applicable law. The following
policies currently govern our investment decisions:
Purchasing securities on margin: We will not purchase any
securities on margin or participate on a joint basis or a joint-
and-several basis in any trading account in securities.
Commodities: We have not and do not intend to purchase or sell
commodities or commodity contracts.
Underwriting: We do not intend to engage in the public
distribution of securities issued by others. However, if we
purchase unregistered securities and later resell them, we may be
considered an underwriter under federal securities laws.
Borrowing money: From time to time we have established a line of
credit if management believed borrowing was necessary or desirable.
While a line of credit does not currently exist, it may be
established again in the future. We may pledge some of our assets
as security. We may occasionally use repurchase agreements as a
way to borrow money. Under these agreements, we sell debt
securities to our lender, and repurchase them at the sales price
plus an agreed-upon interest rate within a specified period of
time.
Real estate: We may invest directly in real estate, though we have
not generally done so in the past. We do invest in mortgage loans.
Lending securities: We may lend some of our securities to broker-
dealers and receive cash equal to the market value of the
securities as collateral. We invest this cash in short-term
securities. If the market value of the securities goes up, the
borrower pays us additional cash. During the course of the loan,
the borrower makes cash payments to us equal to all interest,
dividends and other distributions paid on the loaned securities.
We will try to vote these securities if a major event affecting our
investment is under consideration.
When-issued securities: Most of our investments are in debt
securities, some of which are purchased on a when-issued basis. It
may take as long as 45 days before these securities are issued and
delivered to us. We generally do not pay for these securities or
start earning on them until delivery. We have established
procedures to ensure that sufficient cash is available to meet
when-issued commitments.<PAGE>
PAGE 29
Options: We buy or sell various types of options contracts for
hedging purposes or as a trading technique to facilitate securities
purchases or sales. We buy interest rate caps for hedging
purposes. These pay us a return if interest rates rise above a
specified level.
Restrictions: There are no restrictions on concentration of
investments in any particular industry or group of industries or on
rates of portfolio turnover.
How your certificate is managed
Relationship between IDSC and American Express Financial
Corporation
IDSC was originally organized as Investors Syndicate of America,
Inc., a Minnesota corporation, on Oct. 15, 1940, and began business
as an issuer of face amount investment certificates on Jan. 1,
1941. The company became a Delaware corporation on Dec. 31, 1977,
and changed its name to IDS Certificate Company on April 2, 1984.
Before IDSC was created, American Express Financial Corporation,
our parent company and organizer, had issued similar certificates
since 1894. On Jan. 1, 1995, American Express Financial
Corporation changed its name from IDS Financial Corporation. IDSC
and American Express Financial Corporation have never failed to
meet their certificate payments.
During its many years in operation, American Express Financial
Corporation has become a leading manager of investments in
mortgages and securities. As of Dec. 31, 1994, IDS managed
investments, including its own, of more than $99 billion. American
Express Financial Advisors Inc. provides a broad range of financial
advising services for individuals and businesses through its
nationwide network of more than ___ offices and more than _____
personal financial advisors. American Express Financial Advisors'
financial advising services are comprehensive, beginning with a
detailed written analysis that's tailored to your needs. Your
analysis may address one or all of these six essential areas:
financial position, protection planning, investment planning,
income tax planning, retirement planning, and estate planning.
American Express Financial Corporation itself is a wholly owned
subsidiary of American Express Company (American Express), a
financial services company with executive offices at American
Express Tower, World Financial Center, New York, NY 10285.
American Express is a financial services company engaged through
subsidiaries in other businesses including:
o travel related services (including American Express Card (R)
and Travelers Cheque operations through American Express
Travel Related Services Company, Inc. and its subsidiaries),
and<PAGE>
PAGE 30
o international banking services (through American Express Bank
Ltd. and its subsidiaries).
American Express Financial Advisors Inc. is not a bank, and the
securities offered by it, such as face amount certificates issued
by IDSC, are not backed or guaranteed by any bank, nor are they
insured by the FDIC.
Capital structure and certificates issued
IDSC has authorized, issued and has outstanding 150,000 shares of
common stock, par value of $10 per share. American Express
Financial Corporation owns all of the outstanding shares.
As of Dec. 31, 1994, IDSC had issued (in face amount)
$______________ of installment certificates and $______________ of
single payment certificates.
Investment management and services
Under an Investment Advisory and Services Agreement, American
Express Financial Corporation acts as our investment adviser and is
responsible for:
o providing investment research,
o making specific investment recommendations
o executing purchase and sale orders according to our policy of
obtaining the best price and execution.
All these activities are subject to direction and control by our
board of directors and officers. Our agreement with American
Express Financial Corporation requires annual renewal by our board,
including a majority of directors who are not interested persons of
American Express Financial Corporation or IDSC as defined in the
federal Investment Company Act of 1940.
For its services, we pay American Express Financial Corporation a
monthly fee, equal on an annual basis to a percentage of the total
book value of certain assets (included assets):
Advisory and Services Fee Computation:
Included Assets Percentage of Total Book Value
First $250 million 0.75%
Next 250 million 0.65
Next 250 million 0.55
Next 250 million 0.50
Any amount over $1 billion 0.45
Included assets are all assets of IDSC except mortgage loans, real
estate, and any other asset on which we pay an advisory or service
fee.
<PAGE>
PAGE 31
Advisory and services fees for the past three years were:
Percentage of
Year Total fees included assets
1994 $
1993 $
1992 $
Estimated advisory and services fees for 1994 are $__________.
Other expenses payable by IDSC: The Investment Advisory and
Services Agreement provides that we will pay:
o costs incurred by us in connection with real estate and
mortgages,
o taxes,
o depository and custodian fees,
o brokerage commissions,
o fees and expenses for services not covered by other agreements
and provided to us at our request, or by requirement, by
attorneys, auditors, examiners and professional consultants
who are not officers or employees of American Express
Financial Corporation,
o fees and expenses of our directors who are not officers or
employees of American Express Financial Corporation,
o provision for certificate reserves (interest accrued on
certificate owner accounts), and
o expenses of customer settlements not attributable to sales
function.
Distribution
Under a Distribution Agreement with American Express Financial
Advisors Inc. we pay for the distribution of this certificate as
follows:
o 1.25% of the initial investment on the first day of the
certificate's term, and
o 1.25% of the certificate's reserve at the beginning of each
subsequent term,
for certificates sold through American Express financial advisors
or through American Express Bank International (AEBI) or Coutts &
Co (USA) International (Coutts) representatives.
For certificates sold on a direct marketing basis, we pay American
Express Financial Advisors Inc. for the distribution of this
certificate as follows:
o 1.00% of the initial investment on the first day of the
certificate's term, and<PAGE>
PAGE 32
o 1.00% of the certificate's reserve at the beginning of each
subsequent term.
This fee is not assessed to your certificate account.
Total distribution fees paid to American Express Financial Advisors
Inc. for all series of certificates amounted to $__________ during
the year ended Dec. 31, 1994. We expect to pay American Express
Financial Advisors Inc. distribution fees amounting to $__________
during 1995.
See Note 1 to financial statements regarding deferral of
distribution fee expense.
American Express Financial Advisors Inc. pays commissions to its
personal financial advisors and pays other selling expenses in
connection with services to us. Our board of directors, including
a majority of directors who are not interested persons of American
Express Financial Advisors Inc. or IDSC, approved this distribution
agreement.
Selling Agent Agreements with AEBI and Coutts: In turn, under
Selling Agent Agreements with AEBI and Coutts, American Express
Financial Advisors Inc. compensates each for their services as
Selling Agents of this certificate as follows:
o AEBI is paid a fee equal to 1.0% per term of the principal
amount of each certificate.
o Coutts is paid a fee equal to 0.80% per term of the principal
amount of each certificate for which Coutts is the selling
agent.
Coutts is compensated on additional investments made by its clients
who are former clients of AEBI. These clients must have
continuously owned a certificate since Nov. 10, 1994. Coutts is
also compensated on exchanges made by such clients to other
certificates only to the extent that a client has the right to make
additional investments or exchanges.
American Express Financial Advisors has entered into a consulting
agreement with AEBI under which AEBI provides consulting services
related to any selling agent agreements between American Express
Financial Advisors Inc. and other Edge Act corporations. For these
services, American Express Financial Advisors Inc. pays AEBI a fee
for this certificate equal to 0.20% per term of the principal
amount of each certificate for which another Edge Act corporation
is the selling agent.
Such payments will be made quarterly in arrears.
These fees are not assessed to your certificate account.
AEBI and Coutts are Edge Act corporations organized under the
provisions of Section 25(a) of the Federal Reserve Act. AEBI is a
wholly owned subsidiary of American Express Bank Ltd. (AEB Ltd.)
Coutts is an indirect wholly owned subsidiary of NatWest PLC. As
Edge Act corporations, AEBI and Coutts are subject to the <PAGE>
PAGE 33
provisions of Section 25(a) of the Federal Reserve Act and
Regulation K of the Board of Governors of the Federal Reserve
System (the Federal Reserve). They are supervised and regulated by
the Federal Reserve.
Although AEBI and Coutts are banking entities, the Stock Market
Certificate is not a bank product, nor is it backed or guaranteed
by AEBI, by AEB Ltd., by Coutts, by NatWest PLC or by any other
bank, nor is it guaranteed or insured by the FDIC or any other
federal agency. AEBI is registered where necessary as a securities
broker-dealer.
Employment of other American Express affiliates
American Express Financial Corporation may employ an affiliate of
American Express as executing broker for our portfolio transactions
only if:
o we receive prices and executions at least as favorable as
those offered by qualified independent brokers performing
similar services;
o the affiliate charges us commissions consistent with those
charged to comparable unaffiliated customers for similar
transactions; and
o the affiliate's employment is consistent with the terms of the
current Investment Advisory and Services Agreement and federal
securities laws.
Directors and officers
IDSC's directors, chairman, president and controller are elected
annually for a term of one year. The other executive officers are
appointed by the president.
We paid a total of $_______ during 1994 to directors not employed
by American Express Financial Corporation.
<PAGE>
PAGE 34
Board of directors
David R. Hubers*
Age 52
Director since April 1987
President and chief executive officer of American Express Financial
Corporation since 1993. Senior vice president and chief financial
officer of American Express Financial Corporation from 1984 to
1993.
Charles W. Johnson
Age 65
Director since August 1989
Former vice president and group executive, Industrial Systems, with
Honeywell Inc. Retired 1989.
Edward Landes
Age 75
Director since May 1984
Development consultant. Former sales manager - Supplies Division
and district manager - Data Processing Division of IBM Corporation.
Retired 1983.
John V. Luck
Ph.D. Age 69
Director since April 1987
Former senior vice president - Science and Technology with General
Mills, Inc. Employed with General Mills Inc. since 1970. Retired
1987.
James A. Mitchell*
Age 54
Director since January 1994
Chairman of the board of directors since February, 1994. Executive
vice president - marketing and products of American Express
Financial Corporation since February 1994. Senior vice president -
insurance operations of American Express Financial Corporation and
president and chief executive officer of IDS Life Insurance Company
from 1986 to 1994.
Harrison Randolph
Age 79
Director since 1968
<PAGE>
PAGE 35
Gordon H. Ritz
Age 67
Director since 1968
President, Con Rad Broadcasting Corp. Director, Sunstar Foods and
Mid-America Publishing.
Stuart A. Sedlacek*
Age 37
Director since January 1994
President since February 1994. Vice president - assured assets of
American Express Financial Corporation since March 1994. Vice
president and portfolio manager from 1988 to 1994. Executive vice
president - assured assets of IDS Life Insurance Company since
March 1994.
*"Interested Person" of IDSC as that term is defined in Investment
Company Act of 1940.
Executive officers
Stuart A. Sedlacek*
Age 37
President since February 1994
Louis C. Fornetti
Age 45
Vice president since January 1990
Chief financial officer of American Express Financial Corporation
since 1993 and senior vice president, corporate controller and
director of American Express Financial Corporation since 1988.
Morris Goodwin Jr.
Age 43
Vice president and treasurer since 1989.
Vice president and corporate treasurer of American Express
Financial Corporation since 1989. Chief financial officer and
treasurer of American Express Bank & Trust from 1988 to 1989.
Colleen Curran
Age 41
Secretary since 1990
Secretary and assistant vice president of American Express
Financial Corporation since 1990. Senior counsel to American
Express Financial Corporation since 1990. Counsel from 1985 to
1990.
<PAGE>
PAGE 36
Lorraine R. Hart
Age 43
Vice president-investments since February 1994.
Vice President - insurance investments of American Express
Financial Corporation since 1989. Vice president, investments of
IDS Life Insurance Company since 1992.
Jay C. Hatlestad
Age 37
Vice president and controller since 1994.
Director of finance - assured assets of American Express Financial
Corporation since 1994. Manager of investment accounting of IDS
Life Insurance Company from 1986 to 1994.
Bruce A. Kohn
Age 44
Vice president and general counsel since 1993
Counsel to American Express Financial Corporation since 1992.
Associate counsel from 1987 to 1992.
F. Dale Simmons
Age 57
Vice president - Real Estate Loan Management since 1993
Vice president of American Express Financial Corporation since
1992. Senior portfolio manager of American Express Financial
Corporation since 1989. Assistant vice president from 1987 to
1992.
The officers and directors as a group beneficially own less than 1%
of the common stock of American Express.
IDSC has provisions in its bylaws relating to the indemnification
of its officers and directors against liability, as permitted by
law. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed 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.
Auditors
A firm of independent auditors audits our financial statements at
the close of each fiscal year (Dec. 31). Copies of our annual
financial statements (audited) and semiannual financial statements
(unaudited) are available to any certificate owner upon request.
Ernst & Young, Minneapolis, has audited the financial statements
for each of the years in the three-year period ended Dec. 31, 1994.
These statements are included in this prospectus. Ernst & Young is
also the auditor for American Express, the parent company of
American Express Financial Corporation and IDSC.
<PAGE>
PAGE 37
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item
Number
Item 13. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and
distribution of the securities being registered are to be
borne by the registrant.
Item 14. Indemnification of Directors and Officers.
The By-Laws of IDS Certificate Company provide that it
shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that
he was or is a director, officer, employee or agent of
the company, or is or was serving at the direction of the
company, or any predecessor corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to
any threatened, pending or completed action, suit or
proceeding, wherever brought, to the fullest extent
permitted by the laws of the state of Delaware, as now
existing or hereafter amended.
The By-Laws further provide that indemnification
questions applicable to a corporation which has been
merged into the company relating to causes of action
arising prior to the date of such merger shall be
governed exclusively by the applicable laws of the state
of incorporation and by the by-laws of such merged
corporation then in effect. See also Item 17.
Item 15. Recent Sales of Unregistered Securities.
[To be furnished.]
Item 16. Exhibits and Financial Statement Schedules.
(a) The following exhibits to this Post-Effective Amendment
No. 10 to Registration Statement No. 2-95577 are
incorporated herein by reference or attached hereto:
1. (a) Copy of Distribution Agreement dated November
18, 1988, between Registrant and IDS Financial
Services Inc., filed electronically as Exhibit
1(a) to the Registration Statement for the
American Express International Investment
Certificate (now called, the IDS Investors
Certificate), is incorporated herein by
reference.
(c)(b)Selling Agent Agreement dated June 1, 1990,
between American Express Bank International and
IDS Financial Services Inc. for the IDS
Investors and IDS Stock Market Certificates,
filed electronically as Exhibit 1(c) to the
Post-Effective Amendment No. 5 to Registration
Statement No. 33-26844, is incorporated herein
by reference.<PAGE>
PAGE 38
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. (a) Continued
(c) Marketing Agreement dated October 10, 1991,
between Registrant and American Express Bank
Ltd., filed electronically as Exhibit 1(d) to
Post-Effective Amendment No. 31 to Registration
Statement 2-55252, is incorporated herein by
reference.
(d) Amendment to the Selling Agent Agreement dated
December 12, 1994 between IDS Financial
Services Inc. and American Express Bank
International, filed electronically as Exhibit
1(d) to Post-Effective Amendment No. 13 to
Registration Statement No. 2-95577, is
incorporated herein by reference.
(e) Selling Agent Agreement dated December 12, 1994
between IDS Financial Services Inc. and Coutts
& Co. (USA) International filed electronically
as Exhibit 1(e) to Post-Effective Amendment No.
13 to Registration Statement No. 2-95577, is
incorporated herein by reference.
(f) Consulting Agreement dated December 12, 1994
between IDS Financial Services Inc. and Coutts
& Co. (USA) filed electronically as Exhibit
1(f) to Post-Effective Amendment No. 13 to
Registration Statement No. 2-95577, is
incorporated herein by reference.
2. Not Applicable.
3. (a) Certificate of Incorporation, dated December
31, 1977, filed electronically as Exhibit 3(a)
to Post-Effective Amendment No. 2 to
Registration Statement No. 2-95577, is
incorporated herein by reference.
(b) Certificate of Amendment, dated February 9,
l984, filed electronically as Exhibit 3(b) to
Post-Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(c) By-Laws, dated December 31, 1977, filed
electronically as Exhibit 3(c) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
4. Not Applicable.
5. Not applicable.
6 through 9. -- None.
<PAGE>
PAGE 39
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. (a) Continued
10. (a) Investment Advisory and Services Agreement
between Registrant and IDS/American Express
Inc., dated January 12, 1984, filed
electronically as Exhibit 10(a) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(b) Depository and Custodial Agreement, between IDS
Certificate Company and IDS Trust Company dated
September 30, 1985, filed electronically as
Exhibit 10(b) to Post-Effective Amendment No. 2
to Registration Statement No. 2-95577, is
incorporated herein by reference.
(c) Loan Agreement between Registrant and Investors
Syndicate Development Corporation, dated
October 13, 1970, filed electronically as
Exhibit 10(c) to Post-Effective Amendment No. 2
to Registration Statement No. 2-95577, is
incorporated herein by reference.
(d) Agreement for the servicing of Residential
Mortgage Loans between ISA and Advance Mortgage
Company, Ltd., dated August 31, 1980, filed
electronically as Exhibit 10(d) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(e) Agreement for the servicing of Commercial
Mortgage Loans, between ISA and FBS Mortgage
Corporation, dated October 1, 1980, filed
electronically as Exhibit 10(e) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(f) Agreement by and between Registrant and
Investors Diversified Services, Inc. (now IDS
Financial Services Inc.) providing for the
purchase by IDS of a block of portfolio
securities from Registrant, filed as Exhibit -
10.5 to the September 30, 1981 quarterly report
on Form 10-Q of Alleghany Corporation, is
incorporated herein by reference.
(g) Transfer Agent Agreements for the servicing of
the American Express Savings Certificate filed
electronically as Exhibit 10(g) to Pre-
Effective Amendment No. 1 to Registration
Statement No. 33-25385, are incorporated herein
by reference.
<PAGE>
PAGE 40
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. (a) Continued
(h) Foreign Deposit Agreement dated November 21,
1990, between Registrant and IDS Bank & Trust,
filed electronically as Exhibit 10(h) to Post-
Effective Amendment No. 5 to Registration
Statement No. 33-26844, is incorporated herein
by reference.
11 through 24. -- None.
25. (a) Officers' Power of Attorney, dated May 17,
1994 is filed electronically as Exhibit
25(a) to Post-Effective Amendment No. 13
to Registration Statement No. 2-95577, is
incorporated herein by reference.
(b) Directors' Power of Attorney, dated May
13, 1994 is filed electronically as
Exhibit 25(b) to Post-Effective Amendment
No. 13 to Registration Statement No. 2-
95577, is incorporated herein by
reference.
26 through 28. None.
(b) The financial statement schedules for IDS
Certificate Company filed electronically
as Exhibit 16(b) in Post-Effective
Amendment No. 35 to Registration Statement
No. 2-55252 for Series D-1 Investment
Certificate, are incorporated by reference
herewith.
Item 17. Undertakings.
Without limiting or restricting any liability on the part
of the other, American Express Financial Advisors Inc.,
as underwriter, will assume any actionable civil
liability which may arise under the Federal Securities
Act of 1933, the Federal Securities Exchange Act of 1934
or the Federal Investment Company Act of 1940, in
addition to any such liability arising at law or in
equity, out of any untrue statement of a material fact
made by its agents in the due course of their business in
selling or offering for sale, or soliciting applications
for, securities issued by the Company or any omission on
the part of its agents to state a material fact necessary
in order to make the statements so made, in the light of
the circumstances in which they were made, not misleading
(no such untrue statements or omissions, however, being
admitted or contemplated), but such liability shall be
subject to the conditions and limitations described in
said Acts. American Express Financial Advisors Inc. will
also assume any liability of the Company for any amount
or amounts which the Company legally may be compelled to
pay to any purchaser under said Acts because of any<PAGE>
PAGE 41
untrue statements of a material fact, or any omission to
state a material fact, on the part of the agents of
American Express Financial Advisors Inc. to the extent of
any actual loss to, or expense of, the Company in
connection therewith. The By-Laws of the Registrant
contain a provision relating to Indemnification of
Officers and Directors as permitted by applicable law.
<PAGE>
PAGE 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Minneapolis and State of Minnesota, on the 6th day of February
1995.
IDS CERTIFICATE COMPANY
By /s/ Stuart A. Sedlacek*
Stuart A. Sedlacek, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment has been signed below by the following persons in their
capacities on February 6th, 1995.
Signature Capacity
/s/ Stuart A. Sedlacek* ** President and Director
Stuart A. Sedlacek
/s/ Morris Goodwin* Treasurer and Principal
Morris Goodwin Financial Officer
/s/ Jay C. Hatlestad* Controller and
Jay C. Hatlestad Principal Accounting Officer
/s/ David R. Hubers** Director
David R. Hubers
/s/ Charles W. Johnson** Director
Charles W. Johnson
/s/ Edward Landes** Director
Edward Landes
/s/ John V. Luck** Director
John V. Luck
Signatures continued on next page.
<PAGE>
PAGE 43
Signatures continued from previous page.
Signature Capacity
/s/ James A. Mitchell** Director
James A. Mitchell
/s/ Harrison Randolph** Director
Harrison Randolph
/s/ Gordon H. Ritz** Director
Gordon H. Ritz
*Signed pursuant to Officers' Power of Attorney dated May 17, 1994
filed electronically as Exhibit 25(a) to Post-Effective Amendment
No. 13 to Registration Statement No. 2-95577, incorporated herein
by reference.
______________________.
Bruce A. Kohn
**Signed pursuant to Directors' Power of Attorney dated May 13,
1994 filed electronically as Exhibit 25(b) to Post-Effective
Amendment No. 13 to Registration Statement No. 2-95577,
incorporated herein by reference.
_________________________.
Bruce A. Kohn
<PAGE>
PAGE 44
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 14 TO REGISTRATION
STATEMENT NO. 2-95577
Cover Page
Explanatory Note
Cross-reference sheet
Prospectus
Part II Information
Signatures
