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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-1
IDS INVESTORS CERTIFICATE
POST-EFFECTIVE AMENDMENT NO. 9 TO
REGISTRATION STATEMENT NO. 33-26844
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, (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 of certificates
under the Securities Act of 1933 pursuant to Section 24-f of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for
its most recent fiscal year (December 31) will be filed on or about
February 28, 1995.
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PART I. CROSS REFERENCE SHEET FOR PROSPECTUS
PURSUANT TO RULE 404(c)
IDS INVESTORS CERTIFICATE
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
Outside Back Cover Pages about the Issuer. Table of
of Prospectus. Contents.
Item 3. Summary Informa- Table of Contents.
tion, Risk Factors
and Ratio of Earnings
to Fixed Charges.
Item 4. Use of Proceeds. Invested and Guaranteed By
the Issuer; Government
Regulation; 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 Money
Distribution. is Managed.
Item 9. Description of About the Certificate;
Securities to Be Tax Treatment of Your
Registered. Investment; Investment
Policies.
Item 10. Interests of Not Applicable.
Named Experts and Counsel.
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PART I. CROSS REFERENCE SHEET FOR PROSPECTUS
PURSUANT TO RULE 404(c) (Continued)
Item Caption in
Number Prospectus
Item 11. Information with About the Certificate; How to
Respect to the Registrant. Invest and Withdraw Funds;
Item 12. Disclosure of How Your Money is Used and
Commission Position on Protected; How Your Money
Indemnification for is Managed.
Securities Act Liabilities.
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IDS Investors Certificate
Prospectus
April 26, 1995
IDS Investors Certificates are issued by IDS Certificate Company
(the Issuer). The IDS Investors Certificate is a security
purchased with a single investment. You may purchase this
certificate by selecting a term of 1, 2, 3, 6, 12, 24 or 36 months,
and an initial investment of at least $250,000 but not more than $5
million (unless you receive prior authorization to invest more) in
the aggregate, exclusive of interest. Your principal and interest
are guaranteed by the Issuer. The Issuer guarantees a fixed rate
of interest depending upon the term you select. You may invest in
successive terms up to a total of 20 years from the issue date of
the certificate. Your interest rate will be determined as
described in "About the certificate."
This prospectus describes IDS Investors Certificate issued by the
Issuer and distributed by American Express Financial Advisors Inc.
American Express Bank International (AEBI) has an arrangement with
American Express Financial Advisors Inc. under which the
certificate is offered to AEBI's clients who are neither citizens
or residents of the United States, and to certain U.S. trusts. The
certificate is currently available through AEBI offices located in
Florida and New York. The certificate is also available to certain
clients of Coutts & Co (USA) International (Coutts) through its
office in California.
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.
Issuer: IDS Certificate Company
IDS Tower 10
Minneapolis, MN 55440-0010
1-800-437-3133 (toll free)
(612) 671-4737
(Minneapolis/St. Paul area)
TTY numbers:
1-800-846-4293 (toll free) or
(612) 671-1112
(Minneapolis/St. Paul area)
Distributor:
American Express Financial Advisors Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
Selling Agents:
American Express Bank International
American Express Tower
World Financial Center
New York, NY 10285-2300
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Coutts & Co (USA) International
421 North Rodeo Drive
Penthouse 1
Beverly Hills, CA 90210-4539
This prospectus describes terms and conditions of your IDS
Investors 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
Investors Certificate as described in the prospectus, or to bind
the Issuer by any statement not in it.
Where to get information about the Issuer
The Issuer is subject to the reporting requirements of the
Securities Exchange Act of 1934. Reports and other information on
the Issuer are filed with the Securities and Exchange Commission
(SEC). Copies can be obtained from the Public Reference Section of
the SEC, 450 5th St. NW, Washington, DC 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 Street
Suite 1400
Chicago, IL 60611
Pacific Regional Office
5670 Wilshire Blvd.
11th Floor
Los Angeles, CA 90036
Initial Interest Rates
The Issuer guarantees a fixed rate of interest for each term. For
the initial term, the rate will be within a specified range of
certain average interest rates generally referred to as the London
Interbank Offered Rates (LIBOR) as explained under "About the
certificate."
Here are the interest rates in effect on the date of this
prospectus, April 26, 1995:
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Actual
Simple Compound Effective
Interest Yield for Annualized
Term Rate* the Term ** Yield ***
1 month
2 month
3 month
6 month
12 month
24 month
36 month
* These are the rates for investments of $1 million. Rates may
depend on factors described in "Rates for new purchases" under
"About the certificate."
** Assuming monthly compounding for the number of months in the
term and a $1 million purchase.
*** Assuming monthly compounding for 12 months and a $1 million
purchase.
These rates may or may not be in effect when you apply to purchase
your certificate. Rates for future terms are set at the discretion
of the Issuer and may also differ from the rates shown here.
The Issuer reserves the right to issue other securities with
different terms.
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Table of Contents
About the certificate
Investment amounts and terms
Face amount and principal
Value at maturity
Receiving cash during the term
Interest
Rates for new purchases
Promotions and pricing flexibility
Additional investments
How to invest and withdraw funds
Buying your certificate
Full and partial withdrawals
When your certificate term ends
Transfer to other accounts
Retirement plans: special policies
Transfer of ownership
For more information
Tax treatment of your investment
Withholding taxes
Estate tax
Trusts
How your money is used and protected
Invested and guaranteed by the Issuer
Regulated by government
Backed by our investments
Investment policies
How your money is managed
Relationship between the Issuer and American Express Financial
Corporation
Capital structure and certificates issued
Investment management and services
Distribution
Employment of other American Express affiliates
Directors and officers
Auditors
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
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About the certificate
Investment amounts and terms
You may purchase the IDS Investors Certificate with an initial
payment of at least $250,000 payable in U.S. currency. Unless you
receive prior authorization, your total amount paid in any one or
more certificates, in the aggregate over the life of the
certificate, less withdrawals, cannot exceed $5 million.
After determining the amount you wish to invest, you select a term
of 1, 2, 3, 6, 12, 24 or 36 months for which the Issuer will
guarantee a specific interest rate. The Issuer guarantees the
principal of your certificate. At the end of the term, you may
have interest earned on the certificate during its term credited to
your certificate or paid to you. Investments in the certificate
may continue for successive terms up to a total of 20 years from
the issue date of the certificate. Generally, you will be able to
select any of the terms offered. But if your certificate is
nearing its 20-year maturity, you will not be allowed to select a
term that would carry the certificate past its maturity date.
Face amount and principal
The face amount of the certificate is the amount of your initial
investment, and will remain the same over the life of the
certificate. Any investment or withdrawal within 15 days of the
end of a term will be added on or deducted to determine principal
for the new term. A withdrawal at any other time is taken first
from interest credited to your investment during that term. The
principal is the amount that is reinvested at the beginning of each
subsequent term, and is calculated as follows:
Principal equals Face Amount (initial investment)
plus At the end of a term, interest credited to
your account during the term
minus Any interest paid to you in cash
plus Any additional investments to your
certificate
minus Any withdrawals, fees and applicable
penalties
Principal may change during a term as described in "Full and
partial withdrawals."
For example: Assume your initial investment (face amount) of
$500,000 earned $7,500 of interest during the term. You have not
taken any interest as cash or made any withdrawals. You have
invested an additional $250,000 prior to the beginning of the next
term. Your principal for the next term will equal:
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$500,000 face amount (initial investment)
plus 7,500 interest credited to your account
minus (0) interest paid to you in cash
plus 250,000 additional investment to your certificate
minus (0) withdrawals and applicable penalties or fees
$757,500 PRINCIPAL AT THE BEGINNING OF THE NEXT TERM
Value at maturity
You may continue to invest for successive terms for up to a total
of 20 years. Your certificate matures at 20 years from its issue
date. At maturity, the value of your certificate will be the total
of your purchase price, plus additional investments and any
credited interest not paid to you in cash, less any withdrawals and
penalties. Some fees may apply as described in "How to invest and
withdraw funds."
Receiving cash during the term
If you need your 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
Your investments earn interest from the date they are credited to
your account. Interest is compounded and credited at the end of
each certificate month (on the monthly anniversary of the issue
date.) Interest may be paid to you monthly in cash if you maintain
a principal balance of at least $500,000.
The Issuer declares and guarantees a fixed rate of interest for
each term during the life of your certificate. We calculate the
amount of interest you earn each certificate month by:
o applying the interest rate then in effect to
your balance each day
o adding these daily amounts to get a monthly
total
o subtracting interest accrued on any amount
you withdraw during the certificate month.
Interest is calculated on a 30-day month and 360-day year basis.
Rates for new purchases
When your application is accepted, you will receive a confirmation
of your purchase showing the rate that your investment will earn.
The Issuer guarantees that the rate in effect for your initial term
will be within a 100 basis point (1%) range of certain average
interest rates for comparable length dollar deposits available on
an interbank basis in the London market, and generally referred to
as the London Interbank Offered Rates (LIBOR). Initial rates for
specific terms are determined as follows:
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1 month Within a range 75 basis points below to 25 basis points
above the 1-month LIBOR rate.
2 months Within a range 75 basis points below to 25 basis points
above the 1-month LIBOR rate. (A 2-month LIBOR rate is
not published.)
3 months Within a range 75 basis points below to 25 basis points
above the 3-month LIBOR rate.
6 months Within a range 90 basis points below to 10 basis points
above the 6-month LIBOR rate.
12 months Within a range equal to or up to 100 basis points below
the 12-month LIBOR rate.
24 months Within a range 50 basis points below to 50 points above
the 12-month LIBOR rate. (A 24-month LIBOR rate is not
published.)
36 months Within a range 50 basis points below to 50 points above
the 12-month LIBOR rate. (A 36-month LIBOR rate is not
published.)
For example, if the LIBOR rate published on the date rates are
determined with respect to a 6-month deposit is 4.50%, the rate
declared on a 6-month IDS Investors Certificate would be between
3.60% and 4.60%. If the LIBOR rate published for a given week with
respect to 12-month certificates is 5.50%, the Issuer's rates in
effect that week for the 24- and 36-month IDS Investors
Certificates would be between 5.00% and 6.00%. When your
application is accepted, you will be sent a confirmation showing
the rate that your investment will earn for the first term.
LIBOR is the interbank-offered rates for dollar deposits at which
major commercial banks will lend for specific terms in the London
market. Generally, LIBOR rates quoted by major London banks will
be the same. However, market conditions, including movements in
the U.S. prime rate and the internal funding position of each bank,
may result in minor differences in the rates offered by different
banks. LIBOR is a generally accepted and widely quoted interest-
rate benchmark. The average LIBOR rate used by the Issuer is
published in The Wall Street Journal.
Rates for new purchases are reviewed and may change daily. The
guaranteed rate that is in effect for your chosen term on the day
your application is accepted at the Issuer's corporate office in
Minneapolis, Minnesota, U.S.A. will apply to your certificate. The
interest rates printed in the front of this prospectus may or may
not be in effect on the date your application to invest is
accepted. Rates for new purchases may vary depending on the amount
you invest, but will always be within the 100 basis point range
described above. You may obtain the current interest rates by
calling your AEBI or Coutts representative.
In determining rates based on the amount of your investment, the
Issuer may offer a rate based on your aggregate investment
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determined by totaling only the amounts invested in each
certificate that has a current balance exceeding a specified level.
The current balance considered in this calculation may be exclusive
of interest. The certificates whose balances are aggregated must
have identical ownership. The rate may be available only for a
certificate whose current balance exceeds a specified level.
Interest rates for the term you have selected will not change once
the term has begun.
Rates for future terms
Interest on your certificate for future terms may be greater or
less than the rates you receive during your first term. In setting
future interest rates for subsequent terms, a primary consideration
will be the prevailing investment climate, including the LIBOR
rates. Nevertheless, the Issuer has complete discretion as to what
interest rates it will declare beyond the initial term. The Issuer
will send you notice at the end of each term of the rate your
certificate will earn for the new term. You have a 15-day grace
period to withdraw your certificate without a withdrawal charge.
If LIBOR is no longer publicly available or feasible to use, the
Issuer may use another, similar index as a guide for setting rates.
Additional Investments
You may add to your investment within the 15 days following the end
of your term. A $25,000 minimum additional investment is required,
payable in U.S. currency. Your confirmation will show the
applicable rate. However, unless you receive prior approval from
the Issuer, your investment may not bring the aggregate net
investment of any one or more certificates held by you (excluding
any interest added during the life of the certificate and less
withdrawals) over $5 million. Additional investments of at least
$25,000 may be made by bank wire.
The Issuer must receive your additional investment within the 15
days following the end of a certificate's current term, if you wish
to increase your principal investment as of the first day of the
new term. Interest accrues from the first day of the new term or
the day your additional investment is accepted by the Issuer,
whichever is later, at the rate then in effect for your account.
Additional investments for 1-month terms must be received by the
end of the certificate's current term.
The interest rate for these additional investments is the rate then
in effect for your account. If your additional investment
increases the principal of your certificate so that your
certificate's principal has exceeded a break point for a higher
interest rate, the certificate will earn this higher interest rate
for the remainder of the term, from the date the Issuer accepts the
additional investment.
Earning interest:
At the end of each certificate month, interest is compounded and
credited to your account. A certificate month is the monthly
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anniversary of the issue date. Interest may be paid to you monthly
in cash if you maintain a principal balance of at least $500,000.
The amount of interest you earn each certificate month is
determined by applying the interest rate then in effect to the
daily balance of your certificate, and subtracting from that total
the interest accrued on any amount withdrawn during the month.
Interest is calculated on a 360-day year basis. This means
interest is calculated on the basis of a 30-day month even though
terms are determined on a calendar month.
How to invest and withdraw funds
Buying your certificate
This certificate is available only to AEBI or Coutts clients who
are neither citizens nor residents of the United States, and to
U.S. trusts organized under the laws of any state in the United
States, so long as the following are true:
o the trust is unconditionally revocable by the grantor or
grantors (the persons or persons who put the money into the
trust);
o there are no more than 10 grantors of the trust;
o all the grantors are neither citizens nor residents of the
United States;
o each grantor provides an appropriately certified Form W-8 (or
approved substitute), as described under "Tax Treatment of
Your Investment";
o the trustee of the trust is a bank organized under the laws of
the United States or any state in the United States; and
o the trustee supplies IDS Certificate Company with appropriate
tax documentation.
The certificate is available through AEBI offices located in
Florida and New York, and to the limited extent as described in the
section Selling Agreements with AEBI and Coutts, through a Coutts
office located in California. An AEBI or Coutts representative
will help you prepare your purchase application. The Issuer will
process the application at our corporate offices in Minneapolis,
MN, U.S.A. When your application is accepted, you will receive a
confirmation of your purchase, indicating your account number and
applicable rate of interest for your first term, as described under
"Rates for new purchases."
Important: When opening an account, you must provide the Issuer
with a Form W-8 or approved substitute. See "Taxes on your
earnings."
Purchase policies:
o You have 15 days from the date of purchase to cancel your
investment without penalty by notifying your AEBI or
Coutts representative, or by writing or calling the <PAGE>
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Client Service Organization at the address or phone number on
the cover of this prospectus. If you decide to cancel your
certificate within this 15-day period, you will not earn any
interest.
o The Issuer has complete discretion to determine whether to
accept an application.
Full and partial withdrawals
You may receive all or part of your money at any time. However:
o Full and partial withdrawals of principal are subject to
penalties, described below.
o Partial withdrawals during a term must be at least
$10,000. You may not make a partial withdrawal if it
would reduce your certificate balance to less than
$250,000. If you request such a withdrawal, we will
contact you for revised instructions.
o If a withdrawal reduces your account value to a point where we
pay a lower interest rate, you will earn the lower rate from
the date of the withdrawal.
o Withdrawals before the end of the certificate month will
result in loss of interest on the amount withdrawn.
You'll get the best result by timing a withdrawal at the
end of the certificate month.
Penalties for early withdrawal during a term:
When you request a full or partial withdrawal, we pay the amount
you request:
o first from interest credited during the current term
o then from the principal of your certificate.
Any additional investments or withdrawals during a term are added
to or deducted from the principal and are used in determining any
withdrawal charges.
Withdrawal penalties: For withdrawals during the term of more than
the interest credited that term, a 2% withdrawal penalty will be
deducted from the account's remaining balance.
For example, assume you invest $1 million in a certificate and
select a six-month term. Four months later assume you have earned
$27,000 in interest. The following demonstrates how the withdrawal
charge is deducted:
When you withdraw a specific amount of money, the Issuer has to
withdraw somewhat more from your account to cover the withdrawal
charge. For instance, suppose you request a $100,000 check on a $1
million investment. The first $27,000 paid to you is interest
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PAGE 14
earned that term, and the remaining $73,000 paid to you is
principal. The Issuer would send you a check for $100,000 and
deduct a withdrawal charge of $1,460 (2% of $73,000) from the
remaining balance of your certificate. Your new balance would be
$925,540.
Total investments $1,000,000
Interested credited $ 27,000
Total balance $1,027,000
Requested check $ 100,000
Credited interest withdrawn ( 27,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,460
Balance prior to withdrawal $1,027,000
Requested withdrawal check ($ 100,000)
Withdrawal charge ($ 1,460)
Total balance after withdrawal $ 925,540
Additionally, if you make a withdrawal during a certificate month,
you will not earn interest for the month on the amount withdrawn.
For more information on withdrawal charges, talk with your AEBI
representative.
When your certificate term ends
Shortly before the end of the term you have selected for your
certificate, the Issuer will send you a notice indicating the
interest rate that will apply to the certificate for the new term.
When your certificate term ends, the Issuer will automatically
renew your certificate for the same term unless you notify your
AEBI or Coutts representative otherwise. If you wish to select a
different term, you must notify your representative in writing
before the end of the grace period. You will not be allowed to
select a term that would carry the certificate past its maturity
date.
The interest rates that will apply to your new term will be those
in effect on the day the new term begins. We will send you a
confirmation showing the rate of interest that will apply to the
new term you have selected. This rate of interest will not be
changed during that term.
If you want to withdraw your certificate without a withdrawal
charge, you must notify us within 15 calendar days following the
end of a term.
You may also add to your investment within the 15 calendar days
following the end of your term. See "Additional investments" under
"About the Certificate."
Other full and partial withdrawal policies:
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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.
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.
Transferring Certificate Ownership
While this instrument is not a negotiable instrument, it may be
transferred or assigned on the Issuer's records if proper written
notice is received by the Issuer. Ownership may be assigned or
transferred to individuals or an entity who, for U.S. tax purposes,
is considered to be neither a citizen nor resident of the United
States. You may also pledge the certificate to AEBI or another
American Express affiliate or to Coutts as collateral security.
Your AEBI or Coutts representative can help you transfer ownership.
Giving Instructions and Written Notification
Your AEBI or Coutts representative will be happy to handle
instructions concerning your account. Written instructions may be
provided to either your representative's office or directly to the
Issuer.
Proper written notice to your AEBI or Coutts representative or the
Issuer must:
o be addressed to your AEBI or Coutts office or the Issuer's
corporate office, in which case it must identify your AEBI or
Coutts office,
o include your account number and sufficient information for the
Issuer to carry out your request, and
o be signed and dated by all registered owners.
The Issuer will acknowledge your written instructions. If your
instructions are incomplete or unclear, you will be contacted for
revised instructions.
In the absence of any other written mandate or instructions you
have provided to AEBI or Coutts, you may elect in writing, on your
initial or any subsequent purchase application, to authorize AEBI
or Coutts to act upon the sole verbal instructions of any one of
the named owners, and in turn to instruct the Issuer with regard to
any and all actions in connection with the certificate referenced
in the application as it may be modified from time to time by term
changes, renewals, additions or withdrawals. The individual
providing verbal instructions must be a named owner of the
certificate involved. In providing such authorization you agree
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PAGE 16
that the Issuer, its transfer agent AEBI and Coutts will not be
liable for any loss, liability, cost or expense arising in
connection with implementing such instructions, reasonably believed
by the Issuer, AEBI or Coutts, or their representatives, to be
genuine. You may revoke such authority at any time by providing
proper written notice to your AEBI or Coutts office.
All amounts payable to or by the Issuer in connection with this
certificate are payable at the Issuer's corporate office unless you
are advised otherwise.
By Bank Wire
You may wish to lock in a specific interest rate by using a bank
wire to purchase a certificate. Your representative can instruct
you about how to use this procedure. Using this procedure will
allow you to start earning interest at the earliest possible time.
The minimum that may be wired to purchase a new certificate is
$250,000.
Wire orders will be accepted only in U.S. currency and only on days
your bank, the Issuer and Norwest Bank Minneapolis are open for
business. The payment must be received by the Issuer before 12
noon Central U.S.A. time to be credited that day. Otherwise, it
will be processed the next business day. The wire purchase will
not be made until the wired amount is received and the purchase is
accepted by the Issuer. Wire transfers not originating from AEB
are accepted by IDSC's corporate office only from banks located in
the United States of America. Any delays that may occur in wiring
the funds, including delays in processing by the banks, are not the
responsibility of the Issuer. Wire orders may be rejected if they
do not contain complete information.
While the Issuer does not charge a service fee for incoming wires,
you must pay any charge assessed by your bank for the wire service.
If a wire order is rejected, all money received will be returned
promptly less any costs incurred in rejecting it.
Tax treatment of your investment
Interest paid on your certificate is "portfolio interest" as
defined in U.S. Internal Revenue Code Section 871(h) if earned by a
nonresident alien who has supplied the Issuer with Form W-8,
Certificate of Foreign Status. Form W-8 must be supplied with both
a current mailing address and an address of foreign residency, if
different. The Issuer will not accept purchases of certificates by
nonresident aliens without an appropriately certified Form W-8 (or
approved substitute). The Form W-8 must be resupplied every three
calendar years. If you have supplied a Form W-8 that certifies
that you are a nonresident alien, the interest income 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.
We are required to attach your Form W-8 to the forms sent to the
Internal Revenue Service (IRS). Your interest income will be
reported to the IRS even though it is not taxed by the U.S.
Government. The United States participates in various tax treaties
with foreign countries. Those treaties provide that tax
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PAGE 17
information may be shared upon request between the United States
and such foreign governments.
Withholding taxes
If you fail to provide a Form W-8 as required above, you will be
subject to backup withholding on interest payments and surrenders.
Estate tax
In the event of the death of a nonresident alien who owns a
certificate, the Issuer generally will not act on instructions with
regard to the certificate unless the Issuer first receives a
statement in a form satisfactory to the Issuer, from persons that
it reasonably believes are knowledgeable about and responsible for
the deceased person's estate. The statement must inform the Issuer
that, on the date of death, the estate did not include any property
in the United States for U.S. estate tax purposes. If such a
statement is not provided, the Issuer generally will not act on
instructions with regard to the certificate unless the Issuer first
receives 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
the certificate to satisfy estate taxes.
Trusts
If the investor is a trust described in "Buying your certificate"
under "How to invest and withdraw funds," the policies and
procedures described above will apply with regard to each grantor.
Issuer of the Certificate
IDS Certificate Company, an American Express company, issues the
IDS Investors Certificate. The Issuer is by far the largest issuer
of face amount certificates in the United States, with total assets
of more that $__ billion and a net worth in excess of $_____
million on December 31, 1994.
We back your 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 holders
o various expenses, including taxes, fees to American Express
for advisory and other services and distribution fees to
American Express Financial Advisors Inc.
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 CDs that are similar to our certificates in many ways.
Early withdrawals of bank CDs often result in penalties. Banks and
thrifts generally have federal deposit insurance for their deposits
and lend much of the money you deposit to individuals, businesses
<PAGE>
PAGE 18
and other enterprises. Other financial institutions may offer
investments with comparable combinations of safety and return on
investment.
Regulated by government
Because the IDS Investors Certificate is a security, its offer and
sale are subject to regulation under United States 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 December 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
The Issuer's investments are varied and of high quality. This was
the composition of our portfolio as of December 31, 1994.
Type of investment Net amount invested
Preferred stocks %
Government agency bonds %
Corporate and other bond %
Mortgages %
Municipal bonds %
Cash and cash equivalents %
More than ___% of the Issuer's securities portfolio (bonds and
preferred stocks) are rated investment grade. For additional
information regarding securities ratings, please refer to Note 3B
in the financial statements.
Most of the Issuer's investments are on deposit with American
Express Trust Company, Minneapolis, although the Issuer also
maintains separate deposits as required by certain states.
American Express Trust Company is a wholly owned subsidiary of
American Express Financial Corporation. Copies of the Issuer's
December 31, 1994 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 the
Issuer use their best judgment, subject to applicable law. The
following policies currently govern our investment decisions:
<PAGE>
PAGE 19
Purchasing securities on margin:
The Issuer 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:
The Issuer has not and does not intend to purchase or sell
commodities or commodity contracts.
Underwriting:
The Issuer does not intend to engage in the public distribution of
securities issued by others. However, if the Issuer purchases
unregistered securities and later resells them, the Issuer may be
considered an underwriter under federal securities laws.
Borrowing money:
From time to time the Issuer has 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. The Issuer may pledge some of its assets as
security. The Issuer may occasionally use repurchase agreements as
a way to borrow money. Under these agreements, the Issuer sells
debt securities to its lender, and repurchases them at the sales
price plus an agreed-upon interest rate within a specified period
of time.
Real estate:
The Issuer may invest directly in real estate, though we have not
generally done so in the past. The Issuer does invest in mortgage
loans.
Lending securities:
The Issuer may lend some of its securities to broker-dealers and
receive cash equal to the market value of the securities as
collateral. The Issuer invests this cash in short-term securities.
If the market value of the securities goes up, the borrower pays
the Issuer additional cash. During the course of the loan, the
borrower makes cash payments to the Issuer equal to all interest,
dividends and other distributions paid on the loaned securities.
The Issuer will try to vote these securities if a major event
affecting the investment is under consideration.
When-issued securities:
Most of the Issuer's 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 the
Issuer. The Issuer generally does not pay for these securities or
start earning on them until delivery. The Issuer has established
procedures to ensure that sufficient cash is available to meet
when-issued commitments.
<PAGE>
PAGE 20
Options:
The Issuer buys or sells various types of options contracts for
hedging purposes or as a trading technique to facilitate securities
purchases or sales. The Issuer buys interest rate caps for hedging
purposes. These pay 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.
Relationship between the Issuer and American Express Financial
Corporation
The Issuer was originally organized as Investors Syndicate of
America, Inc., a Minnesota corporation, on October 15, 1940, and
began business as an issuer of face amount investment certificates
on January 1, 1941. The company became a Delaware corporation on
December 31, 1977, and changed its name to IDS Certificate Company
(IDSC) on April 2, 1984.
Before IDSC was created, American Express Financial Corporation,
our parent company and organizer, had issued similar certificates
since 1894. As of January 1, 1995, IDS Financial Corporation
changed its name to American Express Financial Corporation. The
Issuer 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 in investments in
mortgages and securities. As of December 31, 1994, American
Express Financial Corporation managed investments, including its
own, of more than $__ billion. American Express Financial Advisors
Inc. provides a broad range of financial planning services for
individuals and businesses through its nationwide network of more
than ___ offices and more than _____ financial advisors. American
Express Financial Advisors Inc. financial planning 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, 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
business 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 21
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.
The Issuer has authorized, issued and has outstanding ____________
shares of common stock, par value of $10 per share. American
Express Financial Corporation Inc. owns all of the outstanding
shares.
As of December 31, 1994, the Issuer 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, and
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. The Issuer's agreement with
American Express Financial Corporation requires annual renewal by
the Issuer's 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, the Issuer pays 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 the Issuer except mortgage loans,
real estate, and any other asset on which we pay an advisory or a
service fee.
Advisory and services fees for past three years:
<PAGE>
PAGE 22
Percentage of
Year Total fees included assets
1994 $_______________ 0.50%
1993 $_______________ 0.50%
1992 $_______________ 0.49%
Estimated advisory and services fees for 1995 are $_____________.
Other expenses payable by the Issuer:
The Investment Advisory and Services Agreement provides that the
issuer will pay:
o costs incurred 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 the Issuer's 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 the Issuer's directors who are not
officers or employees of American Express Financial
Corporation,
o provision for certificate reserves (interest accrued on
certificate holder account), and
o expenses of customer settlements not attributable to sales
function.
Distribution
Under a Distribution Agreement with American Express Financial
Advisors Inc., the Issuer pays an annualized fee equal to 1% of the
amount outstanding for the distribution of this certificate.
Payments are made at the end of each term on certificates with a
1-, 2- or 3-month term. Payments are made each quarter from
issuance date on certificate with a 6-, 12-,24- or 36-month term.
Total distribution fees paid to American Express Financial Advisors
Inc. for all series of certificates amounted to $_____ during the
year ended December 31, 1994. The Issuer expects to pay American
Express Financial Advisors Inc. distribution fees amount to
$________ during 1995.
See Note 1 to financial statements regarding deferral of
distribution fee expense.
American Express Financial Advisors Inc. pays commissions to its
advisors and pays other selling expenses in connection with
services to the Issuer. The Issuer's board of directors, including
a majority of directors who are not interested persons of American
Express Financial Corporation or IDSC, approved this distribution
agreement.
<PAGE>
PAGE 23
Selling Agreements with AEBI and Coutts
In turn, under Selling Agent Agreements with AEBI and Coutts,
American Express Financial Advisors compensates each for their
services as Selling Agents of this certificate as follows:
o AEBI is paid an annualized fee ranging from 0.50% to 0.80% of
the reserve balance of each certificate, depending on the
amount outstanding for each such certificate, except that the
fee will be 0.30% of the reserve balance of each certificate
with an amount outstanding of $5 million or more when the
aggregate reserve balance for that certificate, and any other
certificate with identical ownership and an amount outstanding
of $5 million or more, is greater than $15 million.
o Coutts is paid an annualized fee ranging from 0.425% to 0.68%
of the reserve balance of each certificate owned by a client
who is a former client of AEBI, depending on the amount
outstanding for each certificate. These clients must have
continuously owned a certificate since November 10, 1994.
Coutts is also compensated on additional investments and
exchanges made by such clients to other certificates only to
the extent that clients have the right to make additional
investments to 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 and other Edge Act corporations. For these
services, American Express Financial Advisors pays AEBI a fee for
this certificate ranging from 0.075% to 0.12% of the reserve
balance of each certificate, depending on the amount outstanding
for each certificate for which another Edge Act corporation is the
selling agent.
Such payments will be made periodically in arrears.
These fees are not assessed to your certificate account.
Employment of other American Express affiliates
American Express Financial Corporation may employ affiliates of
American Express as executing broker for the Issuer's portfolio
transactions only if:
o it is determined that the prices and executions are at least
as favorable as those offered by qualified independent brokers
performing similar services;
o the affiliate charges 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.
<PAGE>
PAGE 24
Directors and officers
The Issuer's directors, chairman, president and controller are
elected annually for a term on one year. The other executive
officers are appointed by the president.
The Issuer paid a total of $_________ during 1994 to directors not
employed by American Express Financial Corporation.
Board of directors
David R. Hubers*
Age 52. Director since April 1987
President and chief executive officer of IDS since 1993. Senior
vice president and chief financial officer of IDS 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 53. Director since January 1994
Chairman of the board of directors since February, 1994. Executive
vice president - marketing and products of IDS since February 1994.
Senior vice president - insurance operations of IDS and president
and chief executive officer of IDS Life Insurance Company from 1986
to 1994.
Harrison Randolph
Age 79. Director since 1968
Gordon H. Ritz
Age 67. Director since 1968
President, Con Rad Broadcasting Corp. Director, Sunstar Foods and
Mid-America Publishing.
<PAGE>
PAGE 25
Stuart A. Sedlacek*
Age 37. Director since January 1994
President since February 1994. Vice president - assured assets of
IDS 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 1990.
Chief financial officer of IDS since 1993 and senior vice
president, corporate controller and director of IDS since 1988.
Morris Goodwin Jr.
Age 43. Vice president and treasurer since 1989.
Vice president and corporate treasurer of IDS since 1989. Chief
financial officer and treasurer of IDS Bank & Trust from 1988 to
1989.
Colleen Curran
Age 41. Secretary since 1990.
Secretary and assistant vice president of IDS since 1990. Senior
counsel to IDS since 1990. Counsel from 1985 to 1990.
Lorraine R. Hart
Age 43. Vice president--investments since February 1994. Vice
president--insurance investments of IDS since 1989. Vice
president--investments of IDS Life Insurance Company since 1992.
Jay Hatlestad
Age 37
Vice president and controller of IDS Certificate Company
since 1994.
Manager of investment accounting of IDS Life Insurance Company from
1986 to 1994.
Bruce A. Kohn
Age 43. Vice president and general counsel since 1993. Counsel to
IDS since 1992. Associate counsel from 1987 to 1992.
F. Dale Simmons
Age 56. Vice president--real estate loan management since 1993.
Vice president of IDS since 1992. Senior portfolio manager of IDS
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. The Issuer has provisions
<PAGE>
PAGE 26
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 of the Issuer
A firm of independent auditors audits the Issuer's financial
statements at the close of each fiscal year (December 31st).
Copies of the annual financial statements (audited) and semiannual
financial statements (unaudited) are available to any certificate
holder upon request.
Ernst & Young, Minneapolis, has audited the financial statements
for each of the years in the three-year period ended December 31,
1994. These statements are included in this prospectus. Ernst &
Young is also the auditor for American Express Company.
About American Express Bank International
AEBI is an Edge Act corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act. It is a wholly owned
subsidiary of American Express Bank Ltd. (AEB Ltd.). As an Edge
Act corporation, AEBI is subject to the 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). It
is supervised and regulated by the Federal Reserve.
AEBI has an extensive international high net-worth client base that
is serviced by a marketing staff in New York and Florida. The
banking and financial products offered by AEBI include checking,
money market and time deposits, credit services, check collection
services, foreign exchange, funds transfer, investment advisory
services and securities brokerage services. As of December 31,
1994, AEBI had total assets of $___ million and total equity of
$___ million.
Coutts is an Edge Act corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act. It is an indirect wholly
owned subsidiary of NatWest PLC. As an Edge Act corporation,
Coutts is subject to the 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). It is supervised and
regulated by the Federal Reserve.
Although AEBI and Coutts are banking entities, the IDS Investors
Certificate is not a bank product, nor is it backed or guaranteed
by AEBI or Coutts, by AEB Ltd., 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.
<PAGE>
PAGE 27
About American Express Company
American Express Company is a financial services company
principally engaged through subsidiaries in the following
businesses in addition to American Express Financial Corporation:
o travel related services (including American Express(R) Card
and Travelers Cheque operations through American Express
Travel Related Services Company, Inc. and its subsidiaries),
o investment and asset management services,
o information processing, communication and related services
(through American Express Information Services Company), and
o international banking services (through American Express Bank
Ltd. and its subsidiaries).
American Express Company's executive officers are located at
American Express Tower, World Financial Center, New York, NY.
Additional information about IDS Investors Certificate
Issuer:
IDS Certificate Company
Executive Offices
IDS Tower 10
Minneapolis, MN 55440-0010
Independent Auditors:
Ernst and Young
1400 Pillsbury Center
Minneapolis, MN 55402
Central Depository:
American Express Trust Company
1200 Northstar Center West
Minneapolis, MN 55402
Investment Manager:
American Express Financial Corporation Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
Distributor:
American Express Financial Advisors Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
Selling Agents:
American Express Bank International
American Express Tower
World Financial Center
New York, NY 10285-2300
Coutts & Co (USA) International
421 North Rodeo Drive
Penthouse 1
Beverly Hills, CA 90210-4539
<PAGE>
PAGE 28
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. 8 to Registration Statement No. 33-26844 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.
(b) Form of the Distribution Agreement for the
American Express Savings Certificate between
the Registrant and American Express Service
Corporation, filed electronically as Exhibit
1(b) to the Registration Statement for the
American Express International Investment
Certificate (now called, the IDS Investors
Certificate), is incorporated herein by
reference.<PAGE>
PAGE 29
(c)(c)Selling Agent Agreement dated June 1, 1990
between American Express Bank International and
IDS Financial Services Inc. for the IDS
Investors Certificate, filed electronically as
Exhibit 1 to the Pre-Effective Amendment 2 to
Registration Statement No. 33-26844 for the IDS
Investors Certificate is incorporated herein by
reference.
(d) Amendment to the Selling Agent Agreement dated
Dec. 12, 1994 between American Express Bank
International and IDS Financial Services Inc.
for the IDS Investors Certificate is filed
electronically.
(e) Selling Agent Agreement dated Dec. 12, 1994
between American Express Bank International,
Coutts & Co (USA) International and IDS
Financial Services Inc. for the Investors
Certificate is filed electronically.
(f) Consulting Agreement dated Dec. 12, 1994
between American Express Bank and IDS Financial
Services Inc. for the IDS Investors Certificate
is filed electronically.
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 29,
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.
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.<PAGE>
PAGE 30
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. (a) Continued
(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.
(h) Foreign Deposit Agreement dated November 24,
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.
<PAGE>
PAGE 31
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. (a) Continued
11 through 24. -- None.
25. (a) Officers' Power of Attorney, dated May 17,
1994, is filed electronically.
(b) Directors' Power of Attorney, dated May
13, 1994, is filed electronically.
26 through 28. -- None.
(b) The financial statement schedules for IDS
Certificate Company, filed electronically as
Exhibit 16(b) to 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, and American Express Bank International
and Coutts & Co (USA) International, as selling agents,
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 their respective
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 their respective 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., American Express Bank
International and Coutts & Co (USA) International 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
untrue statements of a material fact, or any omission to
state a material fact, on the part of the respective
agents of American Express Financial Advisors Inc.,
American Express Bank International, and Coutts & Co
(USA) International 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 32
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 25th day of January,
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 the
capacities on the 25th day of January, 1995.
Signature Capacity
/s/ Stuart A. Sedlacek* ** President and Director
Stuart A. Sedlacek
/s/ Morris Goodwin* Principal Financial Officer
Morris Goodwin and Treasurer
/s/ Jay Hatlestad* Controller and Principal
Jay Hatlestad 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 33
Signatures continued from previous page.
Signature Capacity
/s/ James A. Mitchell** Chairman of the Board
James A. Mitchell of Directors and Director
/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 by
________________________
Bruce A. Kohn
**Signed pursuant to Directors' Power of Attorney dated May 13,
1994 filed electronically by
________________________
Bruce A. Kohn
<PAGE>
PAGE 34
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 9 TO REGISTRATION
STATEMENT NO. 33-26844
Cover Page
Cross-reference sheet
Prospectus
Part II Information
Signatures
<PAGE>
PAGE 1
EXHIBIT INDEX
IDS CERTIFICATE COMPANY
16(a) 1(d) Amendment to the Selling Agent Agreement date
December 12, 1994 between IDS Financial Services
Inc. and American Express Bank International.
16(a) 1(e) Selling Agent Agreement dated December 12, 1994
between IDS Financial Services and Coutts & Co.
(USA) International.
16(a) 1(f) Consulting Agreement dated December 12, 1994 between
IDS Financial Services Inc. and American Express
Bank International.
16(a) 25(a) Officers' Power of Attorney, dated May 17, 1994.
16(a) 25(b) Directors' Power of Attorney, dated May 13, 1994.
<PAGE>
PAGE 1
Amendment to Selling Agent Agreement
WHEREAS, IDS Financial Services Inc. (the "Company") and American
Express Bank International ("AEBI") entered into a Selling Agent
Agreement made as of June 1, 1990 (the "Agreement"), with regard to
marketing of certain registered face-amount certificates offered by
IDS Certificate Company (the "Issuer"), and
WHEREAS, the parties thereto wish to amend that Agreement to
facilitate creation of an additional rate tier for the IDS
Investors Certificate,
NOW THEREFORE the parties thereto agree as follows:
1. The following is added to the end of Section 2(i) of Schedule
A to the Agreement:
provided, however, that for each Certificate with an amount
outstanding of $5 million or more, when the aggregate reserve
balance for that Certificate, and any other Certificate with
identical registered ownership and an amount outstanding of
$5 million or more, is greater than $15 million, the fee shall
be equal to .30% per annum of the amount outstanding.
2. The following is added to the end of Section VI
("Miscellaneous") of the Agreement:
(9) AEBI shall notify the Company and the Issuer of any
Certificate with an amount outstanding of $5 million or
more, when the aggregate reserve balance for that
Certificate, and any other Certificate with identical
registered ownership and an amount outstanding of $5
million or more, is greater than $15 million. Such
notice shall include sufficient detail to identify such
Certificates, including the name of the registered owner
and the account number of the Issuer for the account in
which each such Certificate is owned.
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the 12th day of December, 1994.
IDS FINANCIAL SERVICES INC.
By: /s/ Scott A. Hawkinson
Scott A. Hawkinson
Vice President
Attest: /s/ Colleen Curran
Colleen Curran
Secretary
AMERICAN EXPRESS BANK
INTERNATIONAL
By: /s/ Sergio Masvidal
Sergio Masvidal
Vice President
Attest: /s/ L. M. Abboud
L. M. Abboud
Assistant Secretary
<PAGE>
PAGE 1
SELLING AGENT AGREEMENT
This Agreement is made as of December 12, 1994, by and between IDS
Financial Services Inc., a Delaware corporation (the "Company"),
the principal distributor for certain registered face-amount
certificates offered by IDS Certificate Company (the "Issuer"), and
Coutts & Co (USA) International, a United States corporation
organized under the provisions of Section 25(a) of the Federal
Reserve Act (the "Agent").
I. ACTIVITIES
(1) During the term of this Agreement, the Agent and persons
designated by it shall have the non-exclusive right to
solicit applications for and to distribute those
face-amount certificates issued by the Issuer that the
Company may from time to time agree to permit the Agent
to offer to the Agent's clients ("Certificates"). The
Agent and the Company agree to be bound by the terms of
this Agreement in connection with any such offers of
Certificates. Each Certificate that the Company may
permit the Agent to offer shall be described in
Schedules attached hereto, which Schedules may be amended
or supplemented by the Company from time to time by
mailing a revised Schedule to the Agent. The Agent's
right to solicit applications for and to distribute
Certificates shall be limited to soliciting additional
investments in Existing Certificates and Exchange
Certificates and soliciting exchanges to Exchange
Certificates by clients of the Agent who have owned
Existing Certificates or Exchange Certificates
continuously since November 10, 1994, and who are former
clients of American Express Bank International, a United
States corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act ("AEBI").
Provided, however, that such additional investments and
exchanges shall be permitted only to the extent that such
a client has the right to make them under the client's
Existing Certificate or Exchange Certificate, as the case
may be. "Existing Certificates" are Certificates owned
by such clients on November 10, 1994. "Exchange
Certificates" are Certificates received in exchange for
Existing Certificates or in one or more subsequent
exchanges from one Certificate to another Certificate, so
long as each exchange is by the same client or clients
who owned the Existing Certificate.
(2) It is the Agent's responsibility to insure that any
investments in Certificates by its clients are suitable
for those clients. Therefore, the Agent shall cause
applications for Certificates to be made available to its
clients if the Agent, in its sole discretion, determines
that such products are appropriate or suitable for its
clients. The Company and the Issuer shall each have the
right, in its sole discretion, to the extent not
inconsistent with the Certificates, to decline to accept
investments by clients of the Agent in Certificates.
<PAGE>
PAGE 2
(3) The Agent agrees that all applications for Certificates
shall be made in writing on forms acceptable to the
Company and the Issuer; provided however, that the Agent
may accept telex or telephone purchase instructions from
its clients in accordance with Section VI(5) hereof.
Every application shall be subject to acceptance or
rejection by the Issuer according to the terms thereof.
The Agent shall handle applications in accordance with
instructions forwarded by the Company to the Agent from
time to time and shall obtain, keep on file and provide
copies to the Company and the Issuer of any and all tax
related documentation as required by law or requested by
the Company or the Issuer from time to time. The Agent
shall promptly remit to the Company or, upon the
Company's instructions, to the Issuer, the payment
tendered with each application, such payment to be in
conformity with the provisions of the Certificate for
which such application is made. Prior to the acceptance
by the Company or the Issuer of instructions from the
Agent with regard to a Certificate or prospective
investment in a Certificate, the Agent shall provide the
Company and the Issuer with written authorization from
the owner of or prospective investor in the Certificate,
as the case may be, that the Company and the Issuer may
accept such instructions from the Agent in the form in
which the Agent provides them.
(4) Company reserves the right in its discretion to suspend
sales or withdraw the offering of any Certificate in
whole or in part, without notice. Upon notice to the
Agent that the Company has so suspended sales or
withdrawn an offering, or of the suspension of the
effectiveness of a registration statement or amendment or
that a prospectus is not on file as described below in
this Section I(4), Certificates shall not be offered by
the Agent under any of the provisions of this Agreement
and no application for the purchase or sale of
Certificates hereunder shall be accepted if and so long
as the effectiveness of the current registration
statement or any necessary amendments thereto shall be
suspended under any of the provisions of the Securities
Act of 1933 (the "1933 Act") or any applicable state
securities laws or if and so long as a current prospectus
as required by Section 5(b)(2) of the 1933 Act or any
applicable state securities laws is not on file with the
Securities and Exchange Commission (the "SEC") or any
applicable state securities regulator, as the case may
be.
(5) The Agent and its personnel shall not make any
representations concerning a Certificate except
those contained in the prospectus therefor or any
applicable written sales literature approved by
Company in accordance with Section VI(2).
<PAGE>
PAGE 3
(6) The Agent and its personnel shall be responsible for
determining the suitability of each sale, and of any
other transaction recommended by the Agent to one or
more of its clients, and for servicing its client
accounts. Servicing client accounts shall include
the following:
i) serving as the primary contact for the Agent's
clients and prospects regarding Certificates;
ii) receiving from clients and prospects and timely
transmitting to Company instructions as to
sales, surrenders, ownership changes, term
changes and other actions sought with respect
to Certificates;
iii) answering client questions and inquiries
regarding Certificates;
iv) determining whether the actions sought by
clients concerning Certificate ownership,
transfer, surrender and the like are legally
permissible or advisable in all applicable
jurisdictions;
v) delivering to clients in a timely fashion all
of the documentation described in Section I(7)
hereof; provided, however, that the Agent has
received such documentation in a timely
fashion; and, if the Agent has not received
such documentation in a timely fashion,
delivering such documentation to clients
promptly after the Agent receives it;
vi) keeping and maintaining the records described
in Section I(8) hereof; and
vii) carrying out such other activities and
responsibilities as are described in this
Agreement and/or may be agreed to between the
Agent and Company from time to time.
(7) To the extent authorized by clients in writing to
the Company and the Issuer (or authorized by clients
by other means authorized in writing by the clients
and acceptable to the Company and the Issuer),
confirmations, tax statements, periodic statements
and other documentation required or permitted to be
sent to clients by the Issuer or the Company from
time to time shall be sent to the Agent for delivery
to clients per such client's instructions to the
Agent. The Agent shall be solely responsible for
delivering such documentation to its clients on a
timely basis and in accordance with clients'
instructions to the Agent.
(8) In connection with its activities hereunder, the
Agent shall keep, maintain and preserve such records
as and to the extent required by Section 31 of the
Investment Company Act of 1940 and Rule 31a-2(c)
thereunder. Any and all such records shall be
provided promptly upon the request of the Company or
the Issuer.
<PAGE>
PAGE 4
(9) If Certificates are registered in the name Coutts &
Co (USA) International or otherwise in street name,
or if the client has designated the Agent as selling
agent or servicing agent for the account, or if the
client has given the Issuer an instruction to
register a pledge of the account to the Agent and
the client is an appropriate person to give such an
instruction, or if the Agent is being compensated
for the account under this Agreement, then the Agent
shall be responsible for all confirmations, tax
statements, periodic statements and other
documentation, records and tax or other reporting
required to be sent to or made with regard to the
clients who are the beneficial owners of the
Certificates so registered, including but not be
limited to reporting requirements with regard to
1042, 1042S and W-8, and any withholding that would
be necessary and any other requirement applied by
the Internal Revenue Service; provided, however,
that the Company shall be responsible for tax
reporting to the Internal Revenue Service for
calendar year 1994, and the Company may discharge
this responsibility itself or through the services
of an affiliate or another service provider. At the
time that the Certificates are so registered, and at
the time of any change in the beneficial ownership
of any Certificate or in the amount of any
Certificate beneficially owned by any beneficial
owner, the Agent shall provide the Issuer and the
Company with the identities of and account
information about clients who are the beneficial
owners of the Certificates so registered. In any
event, if Certificates are registered in the name
Coutts & Co (USA) International or otherwise in
street name, the Agent shall provide the Issuer with
the names of the beneficial owners and the amount of
each Certificate beneficially owned by them at the
beginning of each calendar quarter. The Agent shall
provide the Issuer with copies of all tax statements
and other tax reporting documents, including but not
limited to documents prepared to meet the reporting
requirements with regard to 1042, 1042S and W-8, and
any withholding that would be necessary and any
other requirement applied by the Internal Revenue
Service.
II. COMPANY'S RESPONSIBILITY
The Company shall promptly provide the Agent with current
prospectuses, sales materials and other literature and information
legally required or reasonably requested by the Agent; provided,
however, that the Company and the Issuer shall not be obligated to
disclose proprietary information, trade secrets or other
confidential information.
<PAGE>
PAGE 5
III. COMPENSATION
The Company shall pay the Agent and the Agent accepts in full
payment for its activities hereunder, selling fees with respect to
each Certificate as described in the Schedule(s) attached hereto.
Such Schedule(s) may be amended or supplemented by the Company from
time to time by mailing a revised Schedule to the Agent.
IV. SELLING AGENT REPRESENTATIONS
The Agent represents and warrants that:
(1) It is legally permitted under applicable state and
federal laws, rules and regulations to offer
securities for sale to its customers;
(2) It is registered as a broker/dealer in those
jurisdictions in which it is required to be
registered and agrees to comply with all state and
federal laws, rules and regulations applicable to
transactions hereunder or applicable to the Agent
and with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. as may be
applicable to the Agent;
(3) It will not offer to sell the Certificates in any
state or other jurisdiction in which such products
may not lawfully be offered for sale;
(4) It will take the steps necessary to adequately train
and supervise its personnel in order to assure that
the Certificates are properly offered and advertised
for sale;
(5) It will deliver the appropriate current Certificate
prospectus (if it has been furnished to the Agent)
to each purchaser at or prior to the time of the
first offering or sale of a Certificate and, if a
more current appropriate Certificate prospectus has
become available since the last delivery of a
prospectus, at or prior to the time of any
subsequent offering or sale of a Certificate; and
(6) It will observe and comply with all applicable laws,
rules and regulations ("Laws") with respect to the
distribution, sale and servicing of the Certificates
and the conduct of its business in relation thereto,
including but not limited to Laws relating to
currency transactions, transporting funds or
monetary instruments in or out of the United States,
wire transfers and other financial transactions.
The foregoing warranties and representations shall be true and
accurate on the date hereof and shall continue to be true and
accurate during the term of this Agreement.
<PAGE>
PAGE 6
V. INDEMNIFICATION
(1) The Company authorizes the Agent, with respect to
Certificates described in Schedule A or B, to use
any current prospectuses furnished by the Company to
the Agent from time to time, in connection with the
sale of such Certificates. The Company agrees to
indemnify, defend and hold the Agent, its several
officers and directors, and any person who controls
the Agent within the meaning of Section 15 of the
1933 Act, free and harmless from and against any and
all claims, demands, liabilities and expenses
(including the cost of investigating or defending
such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the
Agent, its officers and directors, or any such
controlling person, may incur under the 1933 Act,
the Investment Company Act of 1940 or common law or
otherwise, arising out of or based upon:
(a) any untrue statement or alleged untrue
statement of a material fact contained in any
registration statement or any prospectus for
Certificates described in Schedule A or B;
(b) any omission or alleged omission to state a
material fact required to be stated in any
registration statement or any prospectus for
Certificates described in Schedule A or B, or
necessary to make the statements in any of them
not misleading (no such untrue statements or
omissions however being hereby admitted or
contemplated); or
(c) any violation by the Company of any provision
of this Agreement.
Provided, however, that the Company's agreement to indemnify
the Agent, its officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands,
liabilities or expenses (including cost of investigating or
defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) arising out of or based
upon any statements or representations made by the Agent or
its representatives or agents other than such statements and
representations as are contained in any registration statement
or prospectus and in such financial and other statements and
materials that had been furnished to the Agent by the Company
and were current at the time of such statements and
representations; and further provided that the Company's
agreement to indemnify the Agent shall not be deemed to cover
any liability to the Company or its shareholders or
certificateholders or to the Issuer or its shareholders or
certificateholders to which the Agent would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or negligence in the performance of the Agent's
duties, or by reason of the Agent's reckless disregard of its
obligations and duties under this Agreement or otherwise. The
Company's agreement to indemnify the Agent, its officers and <PAGE>
PAGE 7
directors, and any such controlling person, as aforesaid, is
expressly conditioned upon the Company's being notified of any
action brought against the Agent, its officers or directors,
or any such controlling person, such notification to be given
by letter or by telegram addressed to the Company at its
principal office in Minneapolis, Minnesota, and sent to the
Company by the person against whom such action is brought,
within forty-five (45) days after the summons or other first
legal process shall have been served. The failure so to
notify the Company of any such action shall not relieve the
Company from any liability that the Company may have to the
person against whom such action is brought by reason of any
such untrue or alleged untrue statement or omission or alleged
omission otherwise than on account of the Company's indemnity
agreement contained in this Section V(1).
The Company's indemnification agreement contained in this
Section V(1) (except so far as such indemnification agreement
is expressly limited as set forth herein) shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Agent, its
officers and directors, or any controlling person, and shall
survive the delivery of any Certificates. This agreement of
indemnity will inure exclusively to the Agent's benefit,
to the benefit of its several officers and directors, and
their respective estates, and to the benefit of the
controlling persons and their successors.
(2) The Agent agrees to indemnify, defend and hold the Company,
the Issuer and its transfer agent, their several officers and
directors, and any person who controls the Company, the Issuer
or its transfer agent within the meaning of Section 15 of the
1933 Act, free and harmless from and against any and all
claims, demands, interest or penalties, liabilities and
expenses (including the costs of investigating or defending
such claims, demands or liabilities and any counsel fees
incurred in connection therewith) that the Company, the Issuer
or its transfer agent, their officers or directors or any such
controlling person may incur under the 1933 Act, the
Securities Exchange Act of 1934, the Investment Company Act of
1940, federal, state, local or foreign tax law or regulation,
common law or otherwise, but only to the extent that such
liability or expense incurred shall arise out of or be based
upon:
(a) the use of any unauthorized sales literature,
advertisement or other information or materials;
(b) any untrue statement of material fact made by the Agent's
personnel or agents in selling or offering for sale, or
soliciting applications for, the Certificates or any
omission 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 hereby
admitted or contemplated);
(c) the offer or sale of Certificates in any state or other
jurisdiction in which such products may not be so offered
or sold;<PAGE>
PAGE 8
(d) any error, omission or other problem associated with the
Agent's performance of its activities under this
Agreement, including but not limited to such activities
as servicing client accounts and communicating to the
Company, the Issuer or its transfer agent any
instructions from a client or prospective client, whether
such instructions are provided to the Agent by telephone,
telex or otherwise;
(e) any misstatement, omission or other defect in any
tax-related documentation or form, including without
limitation Form W-8, or any failure to obtain or maintain
any such tax-related documentation or form;
(f) any untrue or alleged untrue statement of a material fact
contained in information furnished by the Agent to the
Company, the Issuer or its transfer agent and used in the
answers to any of the items of the registration statement
or in corresponding statements made in the prospectus, or
shall arise out of or be based upon any omission or
alleged omission to state a material fact in connection
with such information furnished by the Agent to the
Company, the Issuer or its transfer agent and required to
be stated in such answers or necessary to make such
information not misleading; provided, however, that the
Agent's agreement to indemnify the Company, the Issuer
and its transfer agent shall not be deemed to cover any
liability to the Agent or its shareholders to which the
Company would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or negligence
in the performance of the Company's duties, or by reason
of the Company's reckless disregard of its obligations
and duties under this Agreement or otherwise; or
(g) any violation of any provision of this Agreement or any
warranty or representation that was untrue when made or
became untrue during the term of this Agreement.
The agent's agreement to indemnify the Company, the Issuer and
its transfer agent, their officers and directors, and any
controlling person, as aforesaid, is expressly conditioned
upon the Agent's being notified of any action brought against
such parties, such notification to be given by letter or
telegram addressed to the Agent at its principal office in New
York, New York and sent to the Agent by the person against
whom such action is brought, within forty-five (45) days after
the summons or other first legal process shall have been
served. The failure so to notify the Agent of any action
shall not relieve the Agent from any liability that the Agent
may have by reason of any such untrue or alleged untrue
statement or omission or alleged omission otherwise than on
account of the Agent's indemnity agreement contained in this
Section V(2).
The Agent's indemnification agreement contained in this
Section V(2) (except so far as such indemnification agreement
is expressly limited as set forth herein) shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, the Issuer,<PAGE>
PAGE 9
its transfer agent, their officers and directors, or any
controlling person, and shall survive the delivery of any
Certificates. This agreement of indemnity will inure
exclusively to the benefit of the Company, the Issuer and its
transfer agent, to the benefit of their several officers and
directors, and their respective estates, and to the benefit of
the controlling persons and their successors.
(3) In case any action shall be brought against any indemnified
party under Sections V(1) or V(2), and the indemnified party
shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish to do
so, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. If the indemnifying
party opts to assume the defense of such action, the
indemnifying party will not be liable to the indemnified party
for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other
than:
(a) reasonable costs of investigation or the furnishing of
documents or witnesses; and
(b) all reasonable fees and expenses of separate counsel to
such indemnified party if (i) the indemnifying party and
the indemnified party shall have agreed to the retention
of such counsel or (ii) the indemnified party shall have
concluded reasonably that representation of the
indemnifying party and the indemnified party by the same
counsel would be inappropriate due to actual or potential
differing interests between them in the conduct of the
defense of such action.
VI. MISCELLANEOUS
(1) The Agent for all purposes herein shall be deemed to be
an independent contractor, and except as expressly
provided or authorized in this Agreement, shall have no
authority to act for, represent or bind the Company, the
Issuer or its transfer agent.
(2) The Agent shall use no advertisement, sales literature or
other materials with respect to a Certificate without
prior written approval by the Company. The Agent shall
submit any such advertisement, sales literature or
material to the Company for its prior review and
approval, which approval shall be in the Company's sole
discretion (subject to any direction to the Company by
the Issuer).
(3) The Agent shall be free to render to other persons, firms
and corporations services similar or dissimilar to those
herein described.
(4) Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed postpaid to
the party to this Agreement entitled to receive the same,
(a) if to the Company, at IDS Tower 10, Minneapolis, <PAGE>
PAGE 10
Minnesota 55440, Attn: Vice President-Assured Assets, and
(b) if to the Agent, at Suite 2600, 300 South Grand
Avenue, Los Angeles, California 90071, Attn: Operations
Manager, or to such other address as either party may
designate in writing to the other.
(5) The Agent may, at its own risk and subject to the
provisions of Section V(2)(d) hereof, accept telex or
telephone purchase, withdrawal or transfer instructions
from its clients in accordance with the Agent's internal
procedures. All such instructions shall nevertheless be
communicated in written form to the Company and shall be
subject to acceptance or rejection by the Issuer.
(6) The Company acknowledges that the Agent's clients are a
proprietary asset of the Agent. Unless the Company shall
have received prior approval from the Agent, the Company
shall not initiate any contact with any client of the
Agent who is permitted to purchase Certificates except i)
in connection with any administrative or servicing
activities normally incident to Certificates, ii) to the
extent a client of the Agent has requested that the
Company do so, or iii) as may be required by law or
regulation. The Company shall not disclose to third
parties the identities of any client of the Agent, unless
required to do so by authorized legal authorities,
including but not limited to U.S. or foreign tax
authorities, without prior approval from the Agent.
These provisions shall not preclude the Company from
initiating contact with any person who has ceased to be a
client of the Agent or who the Company does not know to
be a client of the Agent.
(7) This Agreement may be amended only by written instrument
executed by both parties hereto.
(8) This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an
original but all together only one Agreement.
VII. TERMINATION
(1) This Agreement shall continue in effect until December
12, 1995 and shall continue from year to year thereafter
unless and until terminated by either party as
hereinafter provided.
(2) This Agreement may be terminated without penalty by
either the Company or the Agent at any time whether prior
to, at or after the date hereof by giving the other party
at least sixty (60) days' prior written notice of such
intention to terminate.
(3) This Agreement will terminate automatically in the event
of its assignment (as defined in the Investment Company
Act of 1940.)
<PAGE>
PAGE 11
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
IDS FINANCIAL SERVICES INC.
/s/ Scott A. Hawkinson
Scott A. Hawkinson
Print name:
Title: Vice President
/s/ Colleen Curran
Colleen Curran
Print name:
Title: Secretary
COUTTS & CO (USA) INTERNATIONAL
/s/ Victor M. Echevarria
Victor M. Echevarria
Print name:
Title: Senior Vice President
/s/ Mark McCluskey
Mark McCluskey
Print name:
Title: Senior Vice President<PAGE>
PAGE 12
Schedule A
Effective as of December 12, 1994
1. Pursuant to Section I(1) of the Selling Agent Agreement dated
as of December 12, 1994, Coutts & Co (USA) International may
offer the IDS Investors Certificate ("Investors Certificate"),
which Investors Certificate guarantees interest in advance for
a term of 1, 2, 3, 6, 12, 24 or 36 months, at the client's
option, bearing LIBOR-based interest rates.
2. The Agent shall be compensated as follows on the basis of the
reserve balance of the Investors Certificates, if such
Investors Certificates are registered in the name Coutts & Co
(USA) International (or otherwise in street name with the
Agent as selling agent or servicing agent), or if the client
has designated the Agent as selling agent or servicing agent
for the account, or if the client has given the Issuer an
instruction to register a pledge of the account to the Agent
and the client is an appropriate person to give such an
instruction, or if the Company, the Issuer, the Agent and AEBI
agree in writing that the Agent should be compensated with
regard to the client's Investors Certificate account:
(a) For Investors Certificates with a reserve balance of
$1 million or more, a fee equal to .425% per annum
of the amount outstanding for each Investors
Certificate;
(b) For Investors Certificates with a reserve balance of
$500,000 to $999,999, a fee equal to .5525% per
annum of the amount outstanding for each Investors
Certificate; and
(c) For Investors Certificates with a reserve balance of
$250,000 to $499,999, a fee equal to .68% per annum
of the amount outstanding for each Investors
Certificate.
Provided, however, that no payment shall be made to the Agent,
or to any other selling agent or distributor (except the
Company) with whom the Company or the Issuer has a selling
agent or distribution agreement, of compensation as to which
the Company or the Issuer has actually received at its
principal office written notice of a competing claim to such
compensation from the Agent or such a selling agent or
distributor, until the parties disputing the payment resolve
their dispute or such payment is ordered by a court, panel of
arbitrators, or similar authority with jurisdiction over the
matter. Provided further, that the Agent shall be
compensated only for Certificates owned by clients of the
Agent who owned Certificates on November 10, 1994, who have
continuously owned an Existing Certificate or an Exchange
Certificate since that date, and who are former clients of
AEBI.
<PAGE>
PAGE 13
3. The amount outstanding shall be calculated as of the end of
each term or Investors Certificate quarter, as the case may
be. The calculations shall take into account any additions to
or withdrawals from an Investors Certificate. Compensation
shall be calculated on a 360-day year (30-day month) basis.
The Agent shall be paid after the end of each term for the 1,
2 and 3 month term Investors Certificates and after the end of
each Investors certificate quarter for the 6, 12, 24 and 36
month term Investors Certificates. The compensation payable
to the Agent for Certificate terms and quarters ending during
any given calendar month shall be aggregated and paid to the
Agent in a lump sum within 15 days after each calendar month
end.
Compensation calculated as described herein shall be paid on a
prorated basis from the date the Agent becomes entitled
thereto by (among other things) satisfying one of the four
conditions specified in the four clauses beginning with "if"
in the introductory language of Section 2 of this Schedule;
provided, however, that the Company, the Issuer, the Agent and
AEBI may agree in writing that, as to accounts specified in
writing, the Agent shall be entitled thereto commencing on
December 12, 1994.
<PAGE>
PAGE 14
SCHEDULE B
Effective as of December 12, 1994
1. Pursuant to Section I(1) of the Selling Agent Agreement, dated
as of December 12, 1994, the Agent may offer the IDS Stock
Market Certificate ("Market Certificate"), which Market
Certificate bears interest that may be tied in whole or in
part to any upward movement in a stock market index.
2. The Agent shall be compensated as follows on the basis of the
principal amount of the Market Certificates, if such
Certificates are registered in the name Coutts & Co (USA)
International (or otherwise in street name with the Agent as
selling agent or servicing agent), or if the client has
designated the Agent as selling agent or servicing agent for
the account, or if the client has given the Issuer an
instruction to register a pledge of the account to the Agent
and the client is an appropriate person to give such an
instruction, or if the Company, the Issuer, the Agent and AEBI
agree in writing that the Agent should be compensated with
regard to the client's Market Certificate account.
The Agent shall be paid a fee equal to 0.80% per term of the
principal amount of each such Market Certificate. For the
purposes of this Schedule B, "principal amount" shall be equal
to the amount invested, plus additional investments and
interest when credited to the account but less withdrawals and
penalties.
Provided, however, that no payment shall be made to the Agent,
or to any other selling agent or distributor (except the
Company) with whom the Company or the Issuer has a selling
agent or distribution agreement, of compensation as to which
the Company or the Issuer has actually received at its
principal office written notice of a competing claim to such
compensation from the Agent or such a selling agent or
distributor, until the parties disputing the payment resolve
their dispute or such payment is ordered by a court, panel of
arbitrators, or similar authority with jurisdiction over the
matter. Provided further, that the Agent shall be
compensated only for Certificates owned by clients of the
Agent who owned Certificates on November 10, 1994, who have
continuously owned an Existing Certificate or an Exchange
Certificate since that date, and who are former clients of
AEBI.
The Agent shall be paid quarterly in arrears, meaning that the
Agent shall be paid after the end of each of the the first
three quarterly anniversaries of the beginning of each term
and then after the end of each such term. For example, if a
term began on Wednesday, November 30, 1994, the Agent would be
paid after February 28, 1995; May 30, 1995; and August 30,
1995 and again after the term end on Tuesday, November 28,
1995. Compensation shall be calculated on a 90 day per term
quarter basis; provided, however, that compensation shall not
be earned during any period in which the Market Certificate is
<PAGE>
PAGE 15
earning only interim interest. Notwithstanding the foregoing,
during any term in which a client is receiving fixed interest,
if she/he elects to again participate in the market, the fee
shall be prorated for such partial quarter and paid after the
client's new term begins.
3. The compensation payable to the Agent for term quarters, or
prorated quarters, as the case may be, ending during any given
calendar month shall be aggregated and paid to the Agent in a
lump sum within 15 days after each calendar month end.
Compensation calculated as described herein shall be paid on a
prorated basis from the date the Agent becomes entitled
thereto by (among other things) satisfying one of the four
conditions specified in the four clauses beginning with "if"
in the introductory language of Section 2 of this Schedule;
provided, however, that the Company, the Issuer, the Agent and
AEBI may agree in writing that, as to accounts specified in
writing, the Agent shall be entitled thereto commencing on
December 12, 1994.
<PAGE>
PAGE 1
CONSULTING AGREEMENT
This Agreement is made as of December 12, 1994, by and between IDS
Financial Services Inc., a Delaware corporation (the "Company"),
the principal distributor for certain registered face-amount
certificates offered by IDS Certificate Company (the "Issuer"), and
American Express Bank International, a United States corporation
organized under the provisions of Section 25(a) of the Federal
Reserve Act (the "Consultant"). A corporation organized under said
provisions is sometimes referred to herein as an "Edge Act Bank."
WHEREAS the Company wishes to enter into selling agent agreements
from time to time with one or more other Edge Act Banks (the
"Agent" or "Agents");
WHEREAS in connection with such agreements the Company wishes to
obtain consulting services with regard to regulatory, compliance,
operational and other matters concerning Edge Act Banks, and
WHEREAS the Consultant is able to provide such consulting services,
NOW THEREFOR the Company and the Consultant agree to enter into
this Consulting Agreement as of the date first above written.
I. SERVICES
The Consultant shall, from time to time, upon request of the
Company or at the initiative of the Consultant, provide the Company
with advice and other consulting services with regard to
regulatory, compliance, operational and other matters concerning
Edge Act Banks and the sale of face-amount certificates through
Edge Act Banks, including such certificates issued by the Issuer
that the Company may from time to time agree to permit an Agent to
offer to the Agent's clients pursuant to a selling agent
agreement ("Certificates").
II. COMPENSATION
The Company shall pay the Consultant, and the Consultant accepts in
full payment for its services hereunder, consulting fees based on
Certificates held by clients of Agents, as described in the
Schedule(s) attached hereto. Such Schedule(s) may be amended or
supplemented by the Company from time to time by mailing a revised
Schedule to the Consultant.
III. MISCELLANEOUS
(1) The Consultant for all purposes herein shall be
deemed to be an independent contractor, and except
as expressly provided or authorized in this
Agreement, shall have no authority to act for,
represent or bind the Company, the Issuer or its
transfer agent.
(2) The Consultant shall be free to render to other
persons, firms and corporations services similar or
dissimilar to those herein described.
<PAGE>
PAGE 2
(3) Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed postpaid
to the party to this Agreement entitled to receive
the same, (a) if to the Company, at IDS Tower 10,
Minneapolis, Minnesota 55440, Attn: Vice
President-Assured Assets, and (b) if to the
Consultant, at 1221 Brickell Avenue, 8th Floor,
Miami, Florida 33131, Attn: President, or to such
other address as either party may designate in
writing to the other.
(4) This Agreement may be amended only by written
instrument executed by both parties hereto.
(5) This Agreement may be executed in any number of
counterparts, each executed counterpart constituting
an original but all together only one Agreement.
IV. TERMINATION
(1) This Agreement shall continue in effect until
December 12, 1995 and shall continue from year to
year thereafter unless and until terminated by
either party as hereinafter provided.
(2) This Agreement may be terminated without penalty by
either the Company or the Consultant at any time
whether prior to, at or after the date hereof by
giving the other party at least thirty (30) days'
prior written notice of such intention to terminate.
(3) This Agreement will terminate automatically in the
event of its assignment (as defined in the
Investment Company Act of 1940).
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
IDS FINANCIAL SERVICES INC.
/s/ Scott A. Hawkinson
Scott A. Hawkinson
Vice President
/s/ Colleen Curran
Colleen Curran
Secretary
AMERICAN EXPRESS BANK
INTERNATIONAL
/s/ Sergio Masvidal
Sergio Masvidal
President
/s/ L. M. Abboud
L. M. Abboud
Assistant Secretary<PAGE>
PAGE 3
Schedule A
to Consulting Agreement dated as of December 12, 1994, between IDS
Financial Services Inc. and American Express Bank International.
Schedule effective as of December 12, 1994
1. If an Agent offers the IDS Investors Certificate ("Investors
Certificate"), which Investors Certificate guarantees interest in
advance for a term of 1, 2, 3, 6, 12, 24 or 36 months, at the
client's option, bearing LIBOR-based interest rates, then the
consultant shall be compensated as follows:
The Consultant shall be compensated on the basis of the
reserve balance of the Investors Certificate held by clients of the
Agent and for the periods as to which the Agent is receiving
compensation. Such compensation to the Consultant shall be as
follows:
(a) For each such Investors Certificate with a reserve
balance of $1 million or more, a fee equal to 0.075% per
annum of the amount outstanding for such Investors
Certificate;
(b) For each such Investors Certificate with a reserve
balance of $500,000 to $999,999, a fee equal to 0.0975%
per annum of the amount outstanding for such Investors
Certificate; and
(c) For each such Investors Certificate with a reserve
balance of $250,000 to $499,999, a fee equal to 0.120%
per annum of the amount outstanding for such Investors
Certificate.
Provided, however, that no payment shall be made to the Consultant,
or to any selling agent or distributor (except the Company) with
whom the Company or the Issuer has a selling agent or distribution
agreement, of compensation as to which the Company or the Issuer
has actually received at its principal office written notice of a
competing claim to such compensation from the Consultant or such a
selling agent or distributor, until the parties disputing the
payment resolve their dispute or such payment is ordered by a
court, panel of arbitrators, or similar authority with jurisdiction
over the matter.
2. The amount outstanding shall be calculated as of the end of
each term or Investors Certificate quarter, as the case may
be. The calculations shall take into account any additions to
or withdrawals from an Investors Certificate. Compensation
shall be calculated on a 360-day year (30-day month) basis.
The Consultant shall be paid after the end of each term for
the 1, 2 and 3 month term Investors Certificates and after the
end of each Investors Certificate quarter for the 6, 12, 24
and 36 month term Investors Certificates. The compensation
payable to the Consultant for Certificate terms and quarters
ending during any given calendar month shall be aggregated and
paid to the Consultant in a lump sum within 15 days after each
calendar month end.
<PAGE>
PAGE 4
SCHEDULE B
to Consulting Agreement dated as of December 12, 1994, between IDS
Financial Services Inc. and American Express Bank International.
Schedule effective as of December 12, 1994
1. If an Agent offers the IDS Stock Market Certificate ("Market
Certificate"), which Market Certificate bears interest that
may be tied in whole or in part to any upward movement in a
stock market index, then the Consultant shall be compensated
as follows:
The Consultant shall be compensated on the basis of the
reserve balance of the Stock Market Certificate held by
clients of the Agent and for the periods as to which the
Agent is receiving compensation. Such compensation to the
Consultant shall be as follows:
The Consultant shall be paid a fee equal to 0.20% per term of
the principal amount of each such Market Certificate. For the
purposes of this Schedule B, "principal amount" shall be equal
to the amount invested, plus additional investments and
interest when credited to the account but less withdrawals and
penalties.
Provided, however, that no payment shall be made to the
Consultant, or to any selling agent or distributor (except the
Company) with whom the Company or the Issuer has a selling
agent or distribution agreement, of compensation as to which
the Company or the Issuer has actually received at its
principal office written notice of a competing claim to such
compensation from the Consultant or such a selling agent or
distributor, until the parties disputing the payment resolve
their dispute or such payment is ordered by a court, panel of
arbitrators, or similar authority with jurisdiction over the
matter.
The Consultant shall be paid quarterly in arrears, meaning
that the Consultant shall be paid after the end of the first
three quarterly anniversaries of the beginning of each term
and then after the end of each such term. For example, if a
term began on Wednesday, November 30, 1994, the Agent would be
paid after February 28, 1995; May 30, 1995; and August 30,
1995 and again after the term end on Tuesday, November 28,
1995. Compensation shall be calculated on a 90 day per term
quarter basis; provided, however, that compensation shall not
be earned during any period in which the Market certificate is
earning only interim interest. Notwithstanding the foregoing,
during any term in which a client is receiving fixed interest,
if she/he elects to again participate in the market, the fee
shall be prorated for such partial quarter and paid after the
client's new term begins.
2. The compensation payable to the Consultant for term quarters,
or prorated quarters, as the case may be, ending during any
given calendar month shall be aggregated and paid to the
Consultant in a lump sum within 15 days after each calendar
month end.
<PAGE>
PAGE 1
IDS CERTIFICATE COMPANY
POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned as an officer of IDS Certificate Company, a
face-amount certificate company registered under the Investment
Company Act of 1940, hereby constitutes and appoints James A.
Mitchell, Stuart A. Sedlacek, Jay C. Hatlestad, Colleen Curran,
Bruce A. Kohn and Morris Goodwin Jr., or any one of them, as his or
her attorney-in-fact and agent, to sign for him or her in his or
her name, place and stead any and all registration statements and
amendments thereto (with all exhibits and other documents required
or desirable in connection therewith) that may be prepared from
time to time in connection with said Company's existing or future
face-amount certificate products, and periodic reports on Form 10-
K, Form 10-Q and Form 8-K required pursuant to provisions of the
Securities Exchange Act of 1934, and any necessary or appropriate
states or other jurisdictions, and grants to any or all of them the
full power and authority to do and perform each and every act
required or necessary or appropriate in connection with such
signatures or filings.
Signed on this 17th day of May, 1994.
/s/ Stuart A. Sedlacek
Stuart A. Sedlacek
/s/ Morris Goodwin, Jr.
Morris Goodwin, Jr.
/s/ Jay C. Hatlestad
Jay C. Hatlestad
<PAGE>
PAGE 1
IDS CERTIFICATE COMPANY
POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned as a director of IDS Certificate Company, a
face-amount certificate company registered under the Investment
Company Act of 1940, hereby constitutes and appoints James A.
Mitchell, Stuart A. Sedlacek, Jay C. Hatlestad, Colleen Curran,
Bruce A. Kohn and Morris Goodwin Jr., or any one of them, as his
attorney-in-fact and agent, to sign for him in his name, place and
stead any and all registration statements and amendments thereto
(with all exhibits and other documents required or desirable in
connection therewith) that may be prepared from time to time in
connection with said Company's existing or future face-amount
certificate products, and periodic reports on Form 10-K, Form 10-Q
and Form 8-K required pursuant to provisions of the Securities
Exchange Act of 1934, and any necessary or appropriate states or
other jurisdictions, and grants to any or all of them the full
power and authority to do and perform each and every act required
or necessary or appropriate in connection with such signatures or
filings.
Signed on this 13th day of May, 1994.
/s/ David R. Hubers /s/ John V. Luck
David R. Hubers John V. Luck
/s/ Charles W. Johnson /s/ James A. Mitchell
Charles W. Johnson James A. Mitchell
/s/ Edward Landes /s/ Harrison Randolph
Edward Landes Harrison Randolph
/s/ Gordon H. Ritz /s/ Stuart A. Sedlacek
Gordon H. Ritz Stuart A. Sedlacek
