SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-1
POST-EFFECTIVE AMENDMENT NUMBER 19 TO
REGISTRATION STATEMENT NUMBER 33-26844
AMERICAN EXPRESS INVESTORS CERTIFICATE
UNDER
THE SECURITIES ACT OF 1933
IDS CERTIFICATE COMPANY
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(Exact name of registrant as specified in charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
6725
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(Primary Standard Industrial Classification Code Number)
41-6009975
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(I.R.S. Employer Identification No.)
IDS Tower 10, Minneapolis, MN 55440, (612) 671-3131
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(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
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
<PAGE>
Explanatory Note
The prospectuses contained in Part I of the Registration Statement are
substantially similar and are for the same product. The prospectus indicated
"for selected investors" on the front cover contains the following differences
from the other Investors Certificate prospectus: The prospectus for selected
investors is designed for those selected persons who plan to invest at least $50
million in certain combinations of these certificates. This is indicated on the
front cover and again under "Investment amount and terms." There is also a
provision stating that if the certificate owner requests a withdrawal exceeding
$50 million that the issuer may defer payment for up to 30 days. This provision
is found under "Full and partial withdrawals."
<PAGE>
American Express Investors Certificate
Prospectus
April 26, 2000
Provides high fixed rates with capital preservation.
American Express Certificate Company (the Issuer, AECC or AXP Certificate
Company), a subsidiary of American Express Financial Corporation, issues
American Express Investors Certificates. You may:
o Purchase this certificate in any amount from $100,000 through $5 million.
o Select a term of one, two, three, six, 12, 24 or 36 months.
o Invest in successive terms up to a total of 20 years from the issue date of
the certificate.
This certificate is available in New York and Florida to persons who are neither
citizens nor residents of the United States and to certain U.S. trusts.
Like all investment companies, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
This certificate is backed solely by the assets of the Issuer. See "Risk
factors" on page 2p.
American Express Certificate Company is not a bank or financial institution, and
the securities it offers are not deposits or obligations of, or backed or
guaranteed or endorsed by, any bank or financial institution, nor are they
insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve
Board or any other agency.
The distributor and selling agent are not required to sell any specific amount
of certificates.
Issuer:
American Express Certificate Company
Unit 557
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133
612-671-3131
Distributor:
American Express Financial Advisors Inc.
Selling Agent:
American Express Bank International
<PAGE>
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) See
"About the certificate" for more explanation.
Here are the interest rates in effect April 26, 2000*:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Term Simple interest rate* Actual compound yield Effective annualized
for the term** yield***
1 month
2 month
3 month
6 month
12 month
24 month
36 month
* These are the rates for investments of $100,000. 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 $100,000 purchase.
*** Assuming monthly compounding for 12 months and a $100,000 purchase.
</TABLE>
These rates may or may not have changed 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.
Risk factors
You should consider the following when investing in this certificate:
This certificate is backed solely by the assets of the Issuer. Most of our
assets are debt securities whose price generally falls as interest rates
increase, and rises as interest rates decrease. Credit ratings of the issuers of
securities in our portfolio vary. See "Invested and guaranteed by the Issuer,"
"Regulated by the government," "Backed by our investments" and "Investment
policies" under "How your money is used and protected."
<PAGE>
Table of Contents
p
Initial interest Rates p
Risk Factors p
About the certificate p
Read and keep this prospectus p
Investment amounts and terms p
Face amount and principal p
Value at maturity p
Receiving cash during the term p
Interest p
Promotions and pricing flexibility p
Rates for new purchases p
Rates for future terms p
Additional investments p
Earning interest p
How to invest and withdraw funds p
Buying your certificate p
How to make investments at term end p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Transfer of ownership p
For more information p
Giving instructions and written notification p
Purchases by bank wire p
Tax treatment of your investment p
Withholding taxes p
Trusts p
How your money is used and protected p
Invested and guaranteed by the Issuer p
Regulated by government p
Backed by our investments p
Investment policies p
How your money is managed p
Relationship between the Issuer and American
Express Financial Corporation p
Capital structure and certificates issued p
Investment management and services p
Distribution p
Selling Agreement with American Express Bank International p
About American Express Bank International p
Other selling agents p
Transfer agent p
Employment of other American Express affiliates p
Directors and officers p
Independent auditors p
<PAGE>
Appendix p
Annual financial information p
Summary of selected financial information p
Management's discussion and analysis of financial
condition and results of operations p
Report of independent auditors p
Financial statements p
Notes to financial statements p
<PAGE>
About the certificate
Read and keep this prospectus
This prospectus describes terms and conditions of your American Express
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 American Express Investors Certificate as described
in the prospectus, or to bind the Issuer by any statement not in it.
This prospectus describes American Express Investors Certificate 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 nor
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. This
certificate also may be available through other selling agents.
Investment amounts and terms
You may purchase the American Express Investors Certificate in any amount from
$100,000 payable in U.S. currency. Unless you receive prior approval, your total
amount paid in any one or more certificates, in the aggregate over the life of
the certificates, less withdrawals, cannot exceed $5 million.
After determining the amount you wish to invest, you select a term of one, two,
three, six, 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."
<PAGE>
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:
$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, you will
receive a distribution for the value of your certificate, which 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 "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; and
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.
This certificate may be available through other distributors or selling agents
with different interest rates or related features and consequently with
different returns. You may obtain information about other such distributors or
selling agents by calling the Client Service Organization in Minneapolis at the
telephone numbers listed on the back cover.
Promotions and pricing flexibility
The Issuer may sponsor or participate in promotions involving the certificate
and its respective terms. For example, we may offer different rates to new
clients, to existing clients, or to individuals who purchase or use products or
services offered by American Express Company, or its affiliates. These
promotions will generally be for a specified period of time. We also may offer
different rates based on your amount invested.
<PAGE>
Rates for new purchases
When your application is accepted and we have received your initial investment,
we will send you 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 tied to 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). For investments of $1 million or more, initial rates for
specific terms are determined as follows:
1 month Within a range of 70 basis points below to 30 basis points above
the one-month LIBOR rate.
2 months Within a range of 70 basis points below to 30 basis
points above the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 70 basis points below to 30 basis points above
the three-month LIBOR rate.
6 months Within a range of 70 basis points below to 30 basis points above
the six-month LIBOR rate.
12 months Within a range of 70 basis points below to 30 basis points above
the 12-month LIBOR rate.
24 months Within a range of 50 basis points below to 50 basis points above
the 12-month LIBOR rate. (A 24-month LIBOR rate is not published.)
36 months Within a range of 50 basis points below to 50 basis points above
the 12-month LIBOR rate. (A 36-month LIBOR rate is not published.)
For investments from $500,000 to $999,999 initial rates for specific terms are
determined as follows:
1 month Within a range of 90 basis points below to 10 basis points above
the one-month LIBOR rate
2 months Within a range of 90 basis points below to 10 basis points
above the one-month LIBOR rate. (A two-month LIBOR rate is not
published.)
3 months Within a range of 90 basis points below to 10 basis points above
the three-month LIBOR rate.
6 months Within a range of 90 basis points below to 10 basis points above
the six-month LIBOR rate.
12 months Within a range of 90 basis points below to 10 basis points above
the 12-month LIBOR rate.
24 months Within a range of 85 basis points below to 15 basis points
above the 12-month LIBOR rate. (A 24-month LIBOR rate is not
published.)
36 months Within a range of 85 basis points below to 15 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published)
For investments from $250,000 to $499,999 initial rates for specific terms are
determined as follows:
1 month Within a range of 130 basis points below to 30 basis points below
the one-month LIBOR rate.
2 months Within a range of 130 basis points below to 30 basis points
below the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 130 basis points below to 30 basis points below
the three-month LIBOR rate.
6 months Within a range of 130 basis points below to 30 basis points below
the six-month LIBOR rate.
12 months Within a range of 130 basis points below to 30 basis points below
the 12-month LIBOR rate.
24 months Within a range of 85 basis points below to 15 basis
points above the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)
36 months Within a range of 85 basis points below to 15 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published.)
For investments of $100,000 to $249,999, initial rates for specific terms are
determined as follows:
1 month Within a range of 210 basis points below to 110 basis points below
the one-month LIBOR rate.
2 months Within a range of 210 basis points below to 110 basis
points below the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 210 basis points below to 110 basis points below
the three-month LIBOR rate.
6 months Within a range of 210 basis points below to 110 basis points below
the six-month LIBOR rate.
12 months Within a range of 210 basis points below to 110 basis points below
the 12-month LIBOR rate.
24 months Within a range of 175 basis points below to 75 basis
points below the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)
36 months Within a range of 175 basis points below to 75 basis
points below 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 six-month deposit is 6.50%, the rate declared on a six-month
American Express Investors Certificate greater than $250,000 but less than $1
million would be between 5.50% and 6.50%. If the LIBOR rate published for a
given week with respect to 12-month certificates is 7.00%, the Issuer's rates in
effect that week for the 24- and 36-month American Express Investors
Certificates greater than $250,000 would be between 6.15% and 7.15%. 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 have changed 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 other selling agent
representative.
In determining rates based on the amount of your investment, the Issuer may
offer a rate based on your aggregate investment 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. Part of the balance may be required to be invested in
terms of a specified minimum length. The aggregate investment may be required to
be for terms that average at least a specified minimum length. 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
or that is offered through a specified distributor or selling agent.
Interest rates for the term you have selected will not change once the term has
begun, unless a withdrawal reduces your account value to a point where we pay a
lower interest rate, as described in "Full and partial withdrawals" under "How
to invest and withdraw funds."
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 when your term ends. If your new term is a
one-month term, you may add to your investment on the first day of your new term
(the renewal date) or the following business day if the renewal date is a
non-business day. If your new term is greater than one month, 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 (unless your new investment is a
one-month 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. If your new term is a
one-month term, your additional investment 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 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.
<PAGE>
How to invest and withdraw funds
Buying your certificate
This certificate is available only to AEBI clients who are neither citizens nor
residents of the United States (or which are foreign corporations, partnerships,
estates or trusts) and to U.S. trusts organized under the laws of any state in
the United States, so long as the following are true in the case of such a U.S.
trust:
o the trust is unconditionally revocable by the grantor or grantors (the
person 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 AECC with appropriate tax documentation.
The certificate is available through AEBI offices located in Florida and New
York. An AEBI or other selling agent 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 and we have
received your initial investment, we will send you 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." See "Purchase
policies" below.
Important: When you open an account, you must provide 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 other selling agent
representative, or by writing or calling the 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 and sell a certificate.
How to make investments at term end
By wire
If you have an established account, you may wire money to:
Norwest Bank Minnesota
Routing No. 091000019
Minneapolis, MN
Attn: Domestic Wire Dept.
Give these instructions: Credit American Express Account #00-29-882 for personal
account # (your account number) for (your name).
<PAGE>
If this information is not included, the order may be rejected and all money
received less any costs AECC incurs will be returned promptly.
o Minimum amount you may wire: $1,000.
o Wire orders can be accepted only on days when your bank, AEFC, AECC and
Norwest Bank Minnesota are open for business.
o Purchases made by wire are accepted by AEFC only from banks located in the
United States.
o Wire purchases are completed when wired payment is received and we accept
the purchase.
o Wire investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to be credited
that day. Otherwise your purchase will be processed the next business day.
The Issuer, AEFC, its subsidiaries, AEBI, and other selling agents are not
responsible for any delays that occur in wiring funds, including delays in
processing by the bank.
o You must pay any fee the bank charges for wiring.
Full and partial withdrawals
You may receive all or part of your money at any time. However:
o If your withdrawal request is received in the Minneapolis headquarters on a
business day before 3 p.m. Central time, it will be processed that day and
payment will be sent the next business day. Otherwise, your request will be
processed one business day later.
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 $100,000. 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.
o If your certificate is pledged as collateral, any withdrawal will be
delayed until we get approval from the secured party.
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 withdrawals during a term exceeding the interest credited are deducted from
the principal and are used in determining any withdrawal charges. However, the
2% penalty is waived upon the death of the certificate owner.
<PAGE>
Withdrawal penalties: When a penalty applies, 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 $20,000 in interest.
The following demonstrates how the withdrawal charge is deducted:
When you withdraw a specific amount of money in excess of the interest credited,
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 $20,000 paid to you is interest earned that term,
and the remaining $80,000 paid to you is principal. The Issuer would send you a
check for $100,000 and deduct a withdrawal charge of $1,600 (2% of $80,000) from
the remaining balance of your certificate. Your new balance would be $918,400.
Total investments $ 1,000,000
Interest credited $ 20,000
Total balance $ 1,020,000
Requested check $ 100,000
Credited interest withdrawn $ (20,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,600
Balance prior to withdrawal $ 1,020,000
Requested withdrawal check $ (100,000)
Withdrawal charge $ (1,600)
Total balance after withdrawal $ 918,400
Additionally, if you make a withdrawal during a certificate month, you will not
earn interest for the month on the amount withdrawn.
Penalty exceptions: The 2% penalty is waived upon death of the certificate
owner.
For more information on withdrawal charges, talk with your AEBI or other selling
agent representative.
When your certificate term ends
On or shortly after 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 other selling agent 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.
For most terms, 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."
<PAGE>
Other full and partial withdrawal policies:
o If you request a partial or full withdrawal of a certificate recently
purchased or added to by a check or money order that is not guaranteed, we
will wait for your check to clear. Please expect a minimum of 10 days from
the date of your payment before the Issuer mails a check to you. We may mail
a check earlier if the 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 Securities and Exchange Commission (SEC).
Transfers to other accounts
You may transfer part or all of your certificate to other American Express
Certificates available through AEBI.
Transfer of ownership
While this certificate 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 Company affiliate or to another selling agent as collateral
security. Your AEBI or other selling agent representative can help you transfer
ownership.
For more information
For information on purchases, withdrawals, exchanges, transfers of ownership,
proper instructions and other service questions regarding your certificate,
please consult your AEBI relationship manager or other selling agent
representative, or call the Issuer's client service number in Minneapolis listed
on the back cover.
Giving instructions and written notification
Your AEBI or other selling agent representative will 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 other selling agent representative or the
Issuer must:
o be addressed to your AEBI or other selling agent office or the Issuer's
corporate office, in which case it must identify your AEBI or other selling
agent 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 your other selling agent, you may elect in writing, on your initial or
any subsequent purchase application, to authorize AEBI or your other selling
agent 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 that the Issuer,
its transfer agent, AEBI and other selling agents will not be liable for
<PAGE>
any loss, liability, cost or expense arising in connection with implementing
such instructions, reasonably believed by the Issuer, AEBI or your other selling
agent, or their representatives, to be genuine. You may revoke such authority at
any time by providing proper written notice to your AEBI or other selling
agent 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.
Purchases 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 $100,000.
Wire orders will be accepted only in U.S. currency and only on days your bank,
the Issuer and Norwest Bank Minnesota are open for business. The payment must be
received by the Issuer before 3 p.m. 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 AEBI or another selling agent
are accepted by AECC's corporate office only when originating 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, in effect before January 1, 2001, 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 1042-S, Foreign Person's U.S. Source
Income Subject to Withholding. 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 information may be shared upon request between the United
States and such foreign governments.
Changes in Tax Regulation
The U.S. Internal Revenue Service has issued new regulations changing the
certification requirements for nonresident aliens. As a result of the changes,
new Forms W-8 have been designed and are available for use. American Express
Certificate Company will need the new forms on file for all clients by January
1, 2001. Depending on your status, you may provide us with any one of four new
Forms W-8. Most clients will use Form W-8BEN, Certificate of Foreign Status of
Beneficial Owner for United States Tax Withholding, but consult your tax advisor
to ensure that you are using the correct form. The new Forms W-8 must be
resupplied every four calendar years, up from three years with the current form.
A few other changes may affect you. Foreign trusts must apply for a permanent
U.S. individual tax identification number (ITIN). Individuals applying for
benefits under a tax treaty will have additional requirements.
<PAGE>
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 withdrawals from certificates.
Estate tax: If you are a nonresident alien and you die while owning a
certificate, then, depending on the circumstances, the Issuer generally will not
act on instructions with regard to the certificate unless the Issuer first
receives, at a minimum, a statement from persons the Issuer believes are
knowledgeable about your estate. The statement must be satisfactory to the
Issuer and must tell us that, on your date of death, your estate did not include
any property in the United States for U.S. estate tax purposes. In other cases,
we generally will not take action regarding your certificate until we receive a
transfer certificate from the IRS or evidence satisfactory to the Issuer that
the estate is being administered by an executor or administrator appointed,
qualified and acting within the United States. In general, a transfer
certificate requires the opening of an estate in the United States and provides
assurance that the IRS will not claim your 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.
Important: The information in this prospectus is a brief and selective summary
of certain federal tax rules that apply to this certificate and is based on
current law and practice. Tax matters are highly individual and complex.
Investors should consult a qualified tax advisor about their own position.
How your money is used and protected
Invested and guaranteed by the Issuer
The Issuer, a wholly owned subsidiary of AEFC, issues and guarantees the
American Express Investors Certificate. We are by far the largest issuer of face
amount certificates in the United States, with total assets of more than $____
billion and a net worth in excess of $____ million on Dec. 31, 1999.
We back our certificates by investing the money received and keeping the
invested assets on deposit. Our investments generate interest and dividends, out
of which we pay:
o interest to certificate owners,
o and various expenses, including taxes, fees to AEFC for advisory and other
services, distribution fees to American Express Financial Advisors Inc. and
American Express Service Corporation (AESC), and selling agent fees to
selling agents.
For a review of significant events relating to our business, see "Management's
discussion and analysis of financial condition and results of operations." No
national rating agency rates our certificates.
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 deposited to
individuals, businesses and other enterprises. Other financial institutions and
some insurance companies may offer investments with comparable combinations of
safety and return on investment.
Regulated by government
Because the American Express Investors Certificate is a security, its offer and
sale are subject to regulation under federal and state securities laws. (The
American Express Investors Certificate is a face-amount certificate. It is not a
bank product, an equity investment, a form of life insurance or an investment
trust.)
<PAGE>
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 amortized cost must exceed the required carrying value of the
outstanding certificates by at least $250,000. As of Dec. 31, 1999, the
amortized cost of these investments exceeded the required carrying value of our
outstanding certificates by more than $___ million. The law requires us to use
amortized cost for these regulatory purposes. Among other things, the law
permits Minnesota statutes to govern qualified assets of AECC as described in
Note 2 to the financial statements. In general, amortized cost is determined by
systematically increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium, so that the
carrying value is equal to maturity value on the maturity date.
As a condition to regulatory relief from the SEC, AECC has agreed to maintain
capital and surplus equal to 5% of outstanding liabilities on certificates (not
including loans made on certificates in accordance with terms of some
certificates that no longer are offered by AECC). AECC is not obligated to
continue to rely on the relief and continue to comply with the conditions of the
relief. Similarly, AECC has entered into a written, informal agreement with the
Minnesota Commerce Department to maintain capital equal to 5% of the assets of
AECC (less any loans on outstanding certificates). When computing its capital,
AECC values its assets on the basis of statutory accounting for insurance
companies rather than generally accepted accounting principles.
Backed by our investments
The Issuer's investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1999:
Type of investment Net amount invested
Corporate and other bonds
Government agency bonds
Preferred stocks
Mortgages
Municipal bonds
As of Dec. 31, 1999 about __% of our securities portfolio (including bonds and
preferred stocks) is rated investment grade. For additional information
regarding securities ratings, please refer to Note 3B to the financial
statements.
Most of our investments are on deposit with American Express Trust Company,
Minneapolis, although we also maintain separate deposits as required by certain
states. American Express Trust Company is a wholly owned subsidiary of AEFC.
Copies of our Dec. 31, 1999, 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:
Debt securities-
Most of our investments are in debt securities as referenced in the table in
"Backed by our investments" under "How your money is used and protected."
The price of bonds generally falls as interest rates increase, and rises as
interest rates decrease. The price of a bond also fluctuates if its credit
rating is upgraded or downgraded. The price of bonds below investment grade may
react more to whether a company can pay interest and principal when due than to
changes in interest rates. They have greater price fluctuations, are more likely
to experience a default, and sometimes are referred to as junk bonds. Reduced
market liquidity for these bonds may occasionally make it more difficult to
value them. In
<PAGE>
valuing bonds, AECC relies both on independent rating agencies and the
investment manager's credit analysis. Under normal circumstances, at least 85%
of the securities in AECC's portfolio will be rated investment grade, or in the
opinion of AECC's investment advisor will be the equivalent of investment grade.
Under normal circumstances, AECC will not purchase any security rated below B-
by Moody's Investors Service, Inc. or Standard & Poor's Corporation. Securities
that are subsequently downgraded in quality may continue to be held by AECC and
will be sold only when AECC believes it is advantageous to do so.
As of Dec. 31, 1999, AECC held about __% of its investment portfolio (including
bonds, preferred stocks and mortgages) in investments rated below investment
grade.
Purchasing securities on margin -
We will not purchase any securities on margin or participate on a joint basis or
a joint-and-several basis in any trading account in securities.
Commodities -
We have not and do not intend to purchase or sell commodities or commodity
contracts except to the extent that transactions described in "Financial
transactions including hedges" in this section may be considered commodity
contracts.
Underwriting -
We do not intend to engage in the public distribution of securities issued by
others. However, if we purchase unregistered securities and later resell them,
we may be considered an underwriter (selling securities for others) under
federal securities laws.
Borrowing money -
From time to time we have established a line of credit with banks if management
believed borrowing was necessary or desirable. We may pledge some of our assets
as security. We may occasionally use repurchase agreements as a way to borrow
money. Under these agreements, we sell debt securities to our lender, and
repurchase them at the sales price plus an agreed-upon interest rate within a
specified period of time.
Real estate -
We may invest in limited partnership interests in limited partnerships that
either directly, or indirectly through other limited partnerships, invest in
real estate. We may invest directly in real estate. We also invest in mortgage
loans secured by real estate. We expect that equity investments in real estate,
either directly or through a subsidiary of AECC, will be less than 5% of AECC's
assets.
Lending securities -
We may lend some of our securities to broker-dealers and receive cash equal to
the market value of the securities as collateral. We invest this cash in
short-term securities. If the market value of the securities goes up, the
borrower pays us additional cash. During the course of the loan, the borrower
makes cash payments to us equal to all interest, dividends and other
distributions paid on the loaned securities. We will try to vote these
securities if a major event affecting our investment is under consideration. We
expect that outstanding securities loans will not exceed 10% of AECC's assets.
When-issued securities-
Some of our investments in debt securities are purchased on a when-issued or
similar basis. It may take as long as 45 days or more before these securities
are available for sale, issued and delivered to us. We generally do not pay for
these securities or start earning on them until delivery. We have established
procedures to ensure that sufficient cash is available to meet when-issued
commitments. When-issued securities are subject to market fluctuations and they
may affect AECC's investment portfolio the same as owned securities.
Financial transactions including hedges-
We buy or sell various types of options contracts for hedging purposes or as a
trading technique to facilitate securities purchases or sales. We may buy
interest rate caps for hedging purposes. These pay us a return if interest rates
rise above a specified level. If interest rates do not rise above a specified
level, the interest rate caps do not pay us a return. The Issuer may enter into
other financial transactions, including futures and other
<PAGE>
derivatives, for the purpose of managing the interest rate exposures associated
with the Issuer's assets or liabilities. Derivatives are financial instruments
whose performance is derived, at least in part, from the performance of an
underlying asset, security or index. A small change in the value of the
underlying asset, security or index may cause a sizable gain or loss in the fair
value of the derivative. We do not use derivatives for speculative purposes.
Illiquid securities -
A security is illiquid if it cannot be sold in the normal course of business
within seven days at approximately its current market value. Some investments
cannot be resold to the U.S. public because of their terms or government
regulations. All securities, however can be sold in private sales, and many may
be sold to other institutions and qualified buyers or on foreign markets. AECC's
investment advisor will follow guidelines established by the board and consider
relevant factors such as the nature of the security and the number of likely
buyers when determining whether a security is illiquid. No more than 15% of
AECC's investment portfolio will be held in securities that are illiquid. In
valuing its investment portfolio to determine this 15% limit, AECC will use
statutory accounting under an SEC order. This means that, for this purpose, the
portfolio will be valued in accordance with applicable Minnesota law governing
investments of life insurance companies, rather than generally accepted
accounting principles.
Restrictions -
There are no restrictions on concentration of investments in any particular
industry or group of industries or on rates of portfolio turnover.
How your money is managed
Relationship between the Issuer and American Express Financial Corporation
The Issuer was originally organized as Investors Syndicate of America, Inc., a
Minnesota corporation, on Oct. 15, 1940, and began business as an issuer of face
amount investment certificates on Jan. 1, 1941. The company became a Delaware
corporation on Dec. 31, 1977, changed its name to IDS Certificate Company on
April 2, 1984, and to American Express Certificate Company on April __,2000.
The Issuer files reports on Form 10K and 10-Q with the SEC. The public may read
and copy materials we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
Before the Issuer was created, AEFC (formerly known as IDS Financial
Corporation), our parent company, had issued similar certificates since 1894. As
of Jan. 1, 1995, IDS Financial Corporation changed its name to AEFC. The Issuer
and AEFC have never failed to meet their certificate payments.
During its many years in operation, AEFC has become a leading manager of
investments in mortgages and securities. As of Dec. 31, 1999, AEFC managed or
administered investments, including its own, of more than $___ billion. American
Express Financial Advisors Inc., a wholly owned subsidiary of AEFC, provides a
broad range of financial planning services for individuals and businesses
through its nationwide network of more than 180 offices and more than 9,000
financial advisors. American Express Financial Advisors' 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.
AEFC 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 Company is a
financial services company engaged through subsidiaries in other businesses
including:
o travel related services (including American Express(R) Card operations
through American Express Travel Related Services Company, Inc. and its
subsidiaries); and
<PAGE>
o international banking services (through American Express Bank Ltd. and its
subsidiaries including American Express Bank International) and Travelers
Cheque and related services.
Capital structure and certificates issued
The Issuer has authorized, issued and has outstanding 150,000 shares of common
stock, par value of $10 per share. AEFC owns all of the outstanding shares.
As of the fiscal year ended Dec. 31, 1999, the Issuer had issued (in face
amount) $__________ of installment certificates and $__________ of single
payment certificates. As of Dec. 31, 1999, the Issuer had issued (in face
amount) $__________ of installment certificates and $__________ of single
payment certificates since its inception in 1941.
Investment management and services
Under an Investment Advisory and Services Agreement, AEFC acts as our investment
advisor and is responsible for:
o providing investment research,
o making specific investment recommendations,
o and executing purchase and sale orders according to our policy of obtaining
the best price and execution.
All these activities are subject to direction and control by our board of
directors and officers. Our agreement with AEFC requires annual renewal by our
board, including a majority of directors who are not interested persons of AEFC
or the Issuer as defined in the federal Investment Company Act of 1940.
For its services, we pay AEFC 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 0.750%
Next 250 million 0.650
Next 250 million 0.550
Next 250 million 0.500
Any amount over 1 billion 0.107
Included assets are all assets of the Issuer except mortgage loans, real estate,
and any other asset on which we pay an outside advisory or service fee.
Advisory and services fee for the past three years
Percentage of
Year Total fees Included assets
1999 $ __________ ______%
1998 $ 9,084,332 0.24%
1997 $ 17,232,602 0.50%
Estimated advisory and services fees for 2000 are $__________.
<PAGE>
Other expenses payable by the Issuer: The Investment Advisory and Services
Agreement provides that we will pay:
o costs incurred by us in connection with real estate and mortgages;
o taxes;
o depository and custodian fees;
o brokerage commissions;
o fees and expenses for services not covered by other agreements and provided
to us at our request, or by requirement, by attorneys, auditors, examiners
and professional consultants who are not officers or employees of AEFC;
o fees and expenses of our directors who are not officers or employees of
AEFC;
o provision for certificate reserves (interest accrued on certificate owner
accounts); and
o expenses of customer settlements not attributable to sales function.
Distribution
Under a Distribution Agreement with American Express Financial Advisors Inc.,
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 one-, two- or three-month term. Payments are made each
quarter from issuance date on certificates with a six-, 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 Dec. 31,
1999. The Issuer expects to pay American Express Financial Advisors Inc.
distribution fees amounting to $________ during 1999.
See Note 1 to financial statements regarding deferral of distribution fee
expense.
American Express Financial Advisors Inc. pays 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 AEFC or AECC, approved
this distribution agreement.
Selling Agent Agreements with American Express Bank International
In turn, under a Selling Agent Agreement with AEBI, American Express Financial
Advisors compensates AEBI for its services as selling agent of this certificate
as follows:
AEBI is paid an annualized fee ranging from 0.50% to 1.25% of the reserve
balance of each certificate, depending on the amount outstanding for each such
certificate, with this exception: the fee will be 0.30% of the reserve balance
of each certificate with an amount outstanding of $1 million or more when:
o the aggregate reserve balance for that certificate, and any other
certificate with identical ownership and an amount outstanding of $1
million or more, is at least $20 million;
o the aggregate reserve balance is invested for terms that average at least
six months; and
o at least $5 million of this aggregate reserve balance is invested for a
term of 12 months or longer.
<PAGE>
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.
About AEBI
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. (AEBL). 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 Dec. 31,
1999, AEBI had total assets of $___ million and total equity of $___ million.
Although AEBI is a banking entity, the American Express Investors Certificate is
not a bank product, nor is it backed or guaranteed by AEBI, by AEBL, 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.
Other Selling agents
This certificate may be sold through other selling agents, under arrangements
with American Express Financial Advisors at commissions of up to:
o __% of the initial investment on the first day of the certificate's term; and
o __% of the certificate's reserve at the beginning of each subsequent term.
This fee is not assessed to your certificate account.
In addition, AECC may pay distributors, and American Express Financial Advisors
Inc. may pay selling agents, additional compensation for selling and
distribution activities under certain circumstances. From time to time, AECC or
American Express Financial Advisors Inc. may pay or permit other promotional
incentives, in cash or credit or other compensation.
Transfer agent
Under a Transfer Agency Agreement, American Express Client Service Corporation
(AECSC), a wholly owned subsidiary of AEFC, maintains certificate owner accounts
and records. AECC pays AECSC a monthly fee of one-twelfth of $10.353 per
certificate owner account for this service.
<PAGE>
Employment of other American Express affiliates
AEFC may employ an affiliate of American Express Company as executing broker for
our portfolio transactions only if:
o we receive prices and executions at least as favorable as those offered by
qualified independent brokers performing similar services;
o the affiliate charges us commissions consistent with those charged to
comparable unaffiliated customers for similar transactions; and
o the affiliate's employment is consistent with the terms of the current
Investment Advisory and Services Agreement and federal securities laws.
<PAGE>
Directors and officers
The Issuer's sole shareholder, AEFC, elects the board of directors that oversees
AECC's operations. The board annually elects the directors, chairman, president
and controller for a term of one year. The president appoints the other
executive officers.
We paid a total of $________ during 1999 to directors not employed by AEFC.
Board of directors
Rodney P. Burwell
Born in 1939. Director beginning in 1999. Chairman, Xerxes Corporation
(fiberglass storage tanks). Director, Fairview Corporation.
Charles W. Johnson
Born in 1929. Director since 1989. Director, Communications Holdings, Inc.
Acting president of Fisk University from 1998 to 1999. Former vice president and
group executive, Industrial Systems, with Honeywell, Inc. Retired 1989.
Jean B. Keffeler
Born in 1945. Director beginning in 1999. Independent management consultant.
Richard W. Kling*
Born in 1940. Director since 1996.
Chairman of the board of directors from 1996 to 2000. Director of IDS Life
Insurance Company since 1984; president since 1994. Executive vice president of
Marketing and Products of AEFC from 1988 to 1994. Senior vice president of AEFC
since 1994. Director of IDS Life Series Fund, Inc. and member of the board of
managers of IDS Life Variable Annuity Funds A and B.
Thomas R. McBurney
Born in 1938. Director beginning in 1999. President, McBurney Management
Advisors. Director, The Valspar Corporation (paints), Wenger Corporation,
Allina, Space Center Enterprises and Greenspring Corporation.
Paula R. Meyer*
Born in 1954. President since June 1998. Piper Capital Management (PCM)
President from October 1997 to May 1998. PCM Director of Marketing from June
1995 to October 1997. PCM Director of Retail Marketing from December 1993 to
June 1995.
Pamela J. Moret*
Born in 1956. Director since December 1999. Chair of the board of directors
since January 2000. Senior vice president - Investment Products since November
1999. Vice president - Variable Assets & Services from 1997 to 1999. Vice
president - Retail Services Group from 1996 to 1997. Vice president
Communications from 1992 to 1996. Various attorney positions in General
Counsel's Office from 1982 to 1992.
*"Interested Person" of AECC as that term is defined in Investment Company Act
of 1940.
Executive officers
Paula R. Meyer
Born in 1954. President since June 1998.
Jeffrey S. Horton
Born in 1961. Vice president and treasurer since December 1997. Vice president
and corporate treasurer of AEFC since December 1997. Controller, American
Express Technologies-Financial Services of AEFC from July 1997 to December 1997.
Controller, Risk Management Products of AEFC from May 1994 to July 1997.
Director of finance and analysis, Corporate Treasury of AEFC from June 1990 to
May 1994.
<PAGE>
Timothy S. Meehan
Born in 1957. Secretary since 1995. Secretary of AEFC and American Express
Financial Advisors Inc. since 1995. Senior counsel to AEFC since 1995. Counsel
from 1990 to 1995.
Lorraine R. Hart
Born in 1951. Vice president - Investments since 1994. Vice president -
Insurance Investments of AEFC since 1989. Vice president - Investments of IDS
Life Insurance Company since 1992.
Bruce A. Kohn
Born in 1951. Vice president and general counsel since 1993. Senior counsel to
AEFC since 1996. Counsel to AEFC from 1992 to 1996. Associate counsel from 1987
to 1992.
F. Dale Simmons
Born in 1937. Vice president - Real Estate Loan Management since 1993. Vice
president of AEFC since 1992. Senior portfolio manager of AEFC since 1989.
Assistant vice president from 1987 to 1992.
Philip C. Wentzel
Born in 1961. Vice president and controller of AECC since January 2000. Vice
president - Finance, Insurance Products of AEFC since 1997. Vice president and
controller of IDS Life since 1998. Director, Financial Reporting and Analysis -
IDS Life from 1992 to 1997.
The officers and directors as a group beneficially own less than 1% of the
common stock of American Express Company.
AECC has provisions in its bylaws relating to the indemnification of its
officers and directors against liability, as permitted by law. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Act and is therefore unenforceable.
Independent auditors
A firm of independent auditors audits our financial statements at the close of
each fiscal year (Dec. 31). Copies of our annual financial statements (audited)
and semiannual financial statements (unaudited) are available to any certificate
owner upon request.
Ernst & Young LLP, Minneapolis, has audited our financial statements for each of
the years in the three-year period ended Dec. 31, 1999. These statements are
included in this prospectus. Ernst & Young LLP is also the auditor for American
Express Company, the parent company of AEFC and AECC.
<PAGE>
Appendix
Description of corporate bond ratings
Bond ratings concern the quality of the issuing corporation. They are not an
opinion of the market value of the security. Such ratings are opinions on
whether the principal and interest will be repaid when due. A security's rating
may change which could affect its price. Ratings by Moody's Investors Service,
Inc. are Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Aaa/AAA - Judged to be of the best quality and carry the smallest degree of
investment risk. Interest and principal are secure.
Aa/AA - Judged to be high-grade although margins of protection for interest and
principal may not be quite as good as Aaa or AAA rated securities.
A - Considered upper-medium grade. Protection for interest and principal is
deemed adequate but may be susceptible to future impairment.
Baa/BBB - Considered medium-grade obligations. Protection for interest and
principal is adequate over the short-term; however, these obligations may have
certain speculative characteristics.
Ba/BB - Considered to have speculative elements. The protection of interest and
principal payments may be very moderate.
B - Lack characteristics of more desirable investments. There may be small
assurance over any long period of time of the payment of interest and principal.
Caa/CCC - Are of poor standing. Such issues may be in default or there may be
risk with respect to principal or interest.
Ca/CC - Represent obligations that are highly speculative. Such issues are often
in default or have other marked shortcomings.
C - Are obligations with a higher degree of speculation. These securities have
major risk exposures to default.
D - Are in payment default. The D rating is used when interest payments or
principal payments are not made on the due date.
Non-rated securities will be considered for investment. When assessing each
non-rated security, AECC will consider the financial condition of the issuer or
the protection afforded by the terms of the security.
<PAGE>
(Back cover)
Quick telephone reference*
Selling Agent:
American Express Bank International
Region offices
101 East 52nd Street
4th Floor
New York, NY 10022
(212) 415-9500
1221 Brickell Avenue
8th Floor
Miami, FL 33131
(305) 350-2502
*You may experience delays when call volumes are high.
American Express Investors Certificate
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133
612-671-3131
Distributed by American Express Financial Advisors Inc.
6037
<PAGE>
American Express Investors Certificate
Prospectus
April 26, 2000
(for selected investors)
Provides high fixed rates with capital preservation.
American Express Certificate Company (the Issuer, AECC or AXP Certificate
Company), a subsidiary of American Express Financial Corporation, issues
American Express Investors Certificates. You may:
o Purchase this certificate in any amount from $100,000 through $5
million unless you receive prior authorization from the Issuer to
invest more.
o Select a term of one, two, three, six, 12, 24 or 36 months.
o Invest in successive terms up to a total of 20 years from the issue
date of the certificate.
This prospectus is designed for selected persons who plan to invest at least $50
million in combinations of these certificates with authorization from the
Issuer. Unless you plan to invest at least $50 million, you should discuss with
your relationship manager whether this is the right prospectus for you.
This certificate is available in New York and Florida to persons who are neither
citizens nor residents of the United States and to certain U.S. trusts.
Like all investment companies, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
This certificate is backed solely by the assets of the Issuer. See "Risk
factors" on page 2p.
American Express Certificate Company is not a bank or financial institution, and
the securities it offers are not deposits or obligations of, or backed or
guaranteed or endorsed by, any bank or financial institution, nor are they
insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve
Board or any other agency.
The distributor and selling agent are not required to sell any specific amount
of certificates.
Issuer:
American Express Certificate Company
Unit 557
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133
612-671-3131
Distributor:
American Express Financial Advisors Inc.
Selling Agent:
American Express Bank International
<PAGE>
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) See
"About the certificate" for more explanation.
Here are the interest rates in effect April 26, 2000*:
Term Simple interest rate* Actual compound yield Effective annualized
for the term** yield***
1 month
2 month
3 month
6 month
12 month
24 month
36 month
* These are the rates for investments of $100,000. 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
$100,000 purchase.
*** Assuming monthly compounding for 12 months and a $100,000 purchase.
These rates may or may not have changed 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.
Risk factors
You should consider the following when investing in this certificate:
This certificate is backed solely by the assets of the Issuer. Most of our
assets are debt securities whose price generally falls as interest rates
increase, and rises as interest rates decrease. Credit ratings of the issuers of
securities in our portfolio vary. See "Invested and guaranteed by the Issuer,"
"Regulated by the government," "Backed by our investments" and "Investment
policies" under "How your money is used and protected."
<PAGE>
Table of Contents
p
Initial interest Rates p
Risk Factors p
About the certificate p
Read and keep this prospectus p
Investment amounts and terms p
Face amount and principal p
Value at maturity p
Receiving cash during the term p
Interest p
Promotions and pricing flexibility p
Rates for new purchases p
Rates for future terms p
Additional investments p
Earning interest p
How to invest and withdraw funds p
Buying your certificate p
How to make investments at term end p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Transfer of ownership p
For more information p
Giving instructions and written notification p
Purchases by bank wire p
Tax treatment of your investment p
Withholding taxes p
Trusts p
How your money is used and protected p
Invested and guaranteed by the Issuer p
Regulated by government p
Backed by our investments p
Investment policies p
How your money is managed p
Relationship between the Issuer and American
Express Financial Corporation p
Capital structure and certificates issued p
Investment management and services p
Distribution p
Selling Agreement with American Express Bank International p
About American Express Bank International p
Other selling agents p
Transfer agent p
Employment of other American Express affiliates p
Directors and officers p
Independent auditors p
<PAGE>
Appendix p
Annual financial information p
Summary of selected financial information p
Management's discussion and analysis of financial
condition and results of operations p
Report of independent auditors p
Financial statements p
Notes to financial statements p
<PAGE>
About the certificate
Read and keep this prospectus
This prospectus describes terms and conditions of your American Express
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 American Express Investors Certificate as described
in the prospectus, or to bind the Issuer by any statement not in it.
This prospectus describes American Express Investors Certificate 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 nor
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. This
certificate also may be available through other selling agents.
Investment amounts and terms
You may purchase the American Express Investors Certificate in any amount from
$100,000 payable in U.S. currency. Unless you receive prior approval, your total
amount paid in any one or more certificates, in the aggregate over the life of
the certificates, less withdrawals, cannot exceed $5 million. Unless you plan to
invest at least $50 million in total, with at least $5 million (exclusive of
interest) for a term of 12 months or longer, you should discuss with your
relationship manager whether this is the right prospectus for you.
After determining the amount you wish to invest, you select a term of one, two,
three, six, 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."
<PAGE>
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:
$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, you will
receive a distribution for the value of your certificate, which 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 "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; and
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.
This certificate may be available through other distributors or selling agents
with different interest rates or related features and consequently with
different returns. You may obtain information about other such distributors or
selling agents by calling the Client Service Organization in Minneapolis at the
telephone numbers listed on the back cover.
Promotions and pricing flexibility
The Issuer may sponsor or participate in promotions involving the certificate
and its respective terms. For example, we may offer different rates to new
clients, to existing clients, or to individuals who purchase or use products or
services offered by American Express Company, or its affiliates. These
promotions will generally be for a specified period of time. We also may offer
different rates based on your amount invested.
<PAGE>
Rates for new purchases
When your application is accepted and we have received your initial investment,
we will send you 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 tied to 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). For investments of $1 million or more, initial rates for
specific terms are determined as follows:
1 month Within a range of 70 basis points below to 30 basis points
above the one-month LIBOR rate.
2 months Within a range of 70 basis points below to 30 basis
points above the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 70 basis points below to 30 basis points
above the three-month LIBOR rate.
6 months Within a range of 70 basis points below to 30 basis points
above the six-month LIBOR rate.
12 months Within a range of 70 basis points below to 30 basis points
above the 12-month LIBOR rate.
24 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)
36 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published.)
For investments from $500,000 to $999,999 initial rates for specific terms are
determined as follows:
1 month Within a range of 90 basis points below to 10 basis points
above the one-month LIBOR rate.
2 months Within a range of 90 basis points below to 10 basis
points above the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 90 basis points below to 10 basis points
above the three-month LIBOR rate.
6 months Within a range of 90 basis points below to 10 basis points
above the six-month LIBOR rate.
12 months Within a range of 90 basis points below to 10 basis points
above the 12-month LIBOR rate.
24 months Within a range of 85 basis points below to 15 basis points
above the 12-month LIBOR rate.
(A 24 month LIBOR rate is not published.)
36 months Within a range of 85 basis points below to 15 basis points
above the 12-month LIBOR
rate.(A 36-month LIBOR rate is not published.)
For investments from $250,000 to $499,999 initial rates for specific terms are
determined as follows:
1 month Within a range of 130 basis points below to 30 basis points
below the one-month LIBOR rate.
2 months Within a range of 130 basis points below to 30 basis
points below the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 130 basis points below to 30 basis points
below the three-month LIBOR rate.
<PAGE>
6 months Within a range of 130 basis points below to 30 basis points
below the six-month LIBOR rate.
12 months Within a range of 130 basis points below to 30 basis points
below the 12-month LIBOR rate.
24 months Within a range of 85 basis points below to 15 basis
points above the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)
36 months Within a range of 85 basis points below to 15 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published.)
For investments of $100,000 to $249,999, initial rates for specific terms are
determined as follows:
1 month Within a range of 210 basis points below to 110 basis points
below the one-month LIBOR rate.
2 months Within a range of 210 basis points below to 110 basis
points below the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)
3 months Within a range of 210 basis points below to 110 basis points
below the three-month LIBOR rate.
6 months Within a range of 210 basis points below to 110 basis points
below the six-month LIBOR rate.
12 months Within a range of 210 basis points below to 110 basis points
below the 12-month LIBOR rate.
24 months Within a range of 175 basis points below to 75 basis
points below the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)
36 months Within a range of 175 basis points below to 75 basis
points below 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 six-month deposit is 6.50%, the rate declared on a six-month
American Express Investors Certificate greater than $250,000 but less than $1
million would be between 5.50% and 6.50%. If the LIBOR rate published for a
given week with respect to 12-month certificates is 7.00%, the Issuer's rates in
effect that week for the 24- and 36-month American Express Investors
Certificates greater than $250,000 would be between 6.15% and 7.15%. 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 have changed 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 other selling agent
representative.
<PAGE>
In determining rates based on the amount of your investment, the Issuer may
offer a rate based on your aggregate investment 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. Part of the balance may be required to be invested in
terms of a specified minimum length. The aggregate investment may be required to
be for terms that average at least a specified minimum length. 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
or that is offered through a specified distributor or selling agent.
Interest rates for the term you have selected will not change once the term has
begun, unless a withdrawal reduces your account value to a point where we pay a
lower interest rate, as described in "Full and partial withdrawals" under "How
to invest and withdraw funds."
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 when your term ends. If your new term is a
one-month term, you may add to your investment on the first day of your new term
(the renewal date) or the following business day if the renewal date is a
non-business day. If your new term is greater than one month, 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 (unless your new investment is a
one-month 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. If your new term is a
one-month term, your additional investment 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 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.
<PAGE>
How to invest and withdraw funds
Buying your certificate
This certificate is available only to AEBI clients who are neither citizens nor
residents of the United States (or which are foreign corporations, partnerships,
estates or trusts) and to U.S. trusts organized under the laws of any state in
the United States, so long as the following are true in the case of such a U.S.
trust:
o the trust is unconditionally revocable by the grantor or grantors (the
person 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 AECC with appropriate tax documentation.
The certificate is available through AEBI offices located in Florida and New
York. An AEBI or other selling agent 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 and we have
received your initial investment, we will send you 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." See "Purchase
policies" below.
Important: When you open an account, you must provide 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 other selling agent
representative, or by writing or calling the 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 and sell a certificate.
How to make investments at term end
By wire
If you have an established account, you may wire money to:
Norwest Bank Minnesota
Routing No. 091000019
Minneapolis, MN
Attn: Domestic Wire Dept.
<PAGE>
Give these instructions: Credit American Express Account #00-29-882 for personal
account # (your account number) for (your name).
If this information is not included, the order may be rejected and all money
received less any costs AECC incurs will be returned promptly.
o Minimum amount you may wire: $1,000.
o Wire orders can be accepted only on days when your bank, AEFC, AECC and
Norwest Bank Minnesota are open for business.
o Purchases made by wire are accepted by AEFC only from banks located in the
United States.
o Wire purchases are completed when wired payment is received and we accept
the purchase.
o Wire investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to be credited
that day. Otherwise your purchase will be processed the next business day.
o The Issuer, AEFC, its subsidiaries, AEBI, and other selling agents are not
responsible for any delays that occur in wiring funds, including delays in
processing by the bank.
o You must pay any fee the bank charges for wiring.
Full and partial withdrawals
You may receive all or part of your money at any time. However:
o If your withdrawal request is received in the Minneapolis headquarters on a
business day before 3 p.m. Central time, it will be processed that day and
payment will be sent the next business day.
Otherwise, your request will be processed one business day later.
o Full and partial withdrawals of principal are subject to penalties,
described below.
o If you request a withdrawal or a series of withdrawals exceeding
$50,000,000 in any 30-day period, the Issuer at its option may, prior to
the maturity of any of these certificates, defer any payment or payments to
the certificate owner for a period of not more than 30 days. If the Issuer
exercises this option, interest will accrue on any such payment or
payments, for the period of deferment, at a rate at least equal to that
applicable to the last term of the certificate.
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 $100,000. 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.
o If your certificate is pledged as collateral, any withdrawal will be
delayed until we get approval from the secured party.
<PAGE>
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 withdrawals during a term exceeding the interest credited are deducted from
the principal and are used in determining any withdrawal charges. However, the
2% penalty is waived upon the death of the certificate owner.
Withdrawal penalties: When a penalty applies, 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 $20,000 in interest.
The following demonstrates how the withdrawal charge is deducted:
When you withdraw a specific amount of money in excess of the interest credited,
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 $20,000 paid to you is interest earned that term,
and the remaining $80,000 paid to you is principal. The Issuer would send you a
check for $100,000 and deduct a withdrawal charge of $1,600 (2% of $80,000) from
the remaining balance of your certificate. Your new balance would be $918,400.
Total investments $ 1,000,000
Interest credited $ 20,000
Total balance $ 1,020,000
Requested check $ 100,000
Credited interest withdrawn $ (20,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,600
Balance prior to withdrawal $ 1,020,000
Requested withdrawal check $ (100,000)
Withdrawal charge $ (1,600)
Total balance after withdrawal $ 918,400
Additionally, if you make a withdrawal during a certificate month, you will not
earn interest for the month on the amount withdrawn.
Penalty exceptions: The 2% penalty is waived upon death of the certificate
owner.
For more information on withdrawal charges, talk with your AEBI or other selling
agent representative.
When your certificate term ends
On or shortly after 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 other selling agent 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.
<PAGE>
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.
For most terms, 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:
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 the Issuer mails a check to you. We may
mail a check earlier if the 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 Securities and Exchange Commission (SEC).
Transfers to other accounts
You may transfer part or all of your certificate to other American Express
Certificates available through AEBI.
Transfer of ownership
While this certificate 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 Company affiliate or to another selling agent as collateral
security. Your AEBI or other selling agent representative can help you transfer
ownership.
For more information
For information on purchases, withdrawals, exchanges, transfers of ownership,
proper instructions and other service questions regarding your certificate,
please consult your AEBI relationship manager or other selling agent
representative, or call the Issuer's client service number in Minneapolis listed
on the back cover.
Giving instructions and written notification
Your AEBI or other selling agent representative will 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 other selling agent representative or the
Issuer must:
o be addressed to your AEBI or other selling agent office or the Issuer's
corporate office, in which case it must identify your AEBI or other selling
agent 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.
<PAGE>
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 your other selling agent, you may elect in writing, on your initial or
any subsequent purchase application, to authorize AEBI or your other selling
agent 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 that the Issuer,
its transfer agent, AEBI and other selling agents 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 your other selling
agent, or their representatives, to be genuine. You may revoke such authority at
any time by providing proper written notice to your AEBI or other selling agent
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.
Purchases 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 $100,000.
Wire orders will be accepted only in U.S. currency and only on days your bank,
the Issuer and Norwest Bank Minnesota are open for business. The payment must be
received by the Issuer before 3 p.m. 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 AEBI or another selling agent
are accepted by AECC's corporate office only when originating 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, in effect before January 1, 2001, 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 1042-S, Foreign Person's U.S. Source
Income Subject to Withholding. 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 information may be shared upon request between the United
States and such foreign governments.
Changes in Tax Regulation
The U.S. Internal Revenue Service has issued new regulations changing the
certification requirements for nonresident aliens. As a result of the changes,
new Forms W-8 have been designed and are available for use. American Express
Certificate Company will need the new forms on file for all clients by January
1, 2001.
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Depending on your status, you may provide us with any one of four new Forms W-8.
Most clients will use Form W-8BEN, Certificate of Foreign Status of Beneficial
Owner for United States Tax Withholding, but consult your tax advisor to ensure
that you are using the correct form. The new Forms W-8 must be resupplied every
four calendar years, up from three years with the current form.
A few other changes may affect you. Foreign trusts must apply for a permanent
U.S. individual tax identification number (ITIN). Individuals applying for
benefits under a tax treaty will have additional requirements.
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 withdrawals from certificates.
Estate tax: If you are a nonresident alien and you die while owning a
certificate, then, depending on the circumstances, the Issuer generally will not
act on instructions with regard to the certificate unless the Issuer first
receives, at a minimum, a statement from persons the Issuer believes are
knowledgeable about your estate. The statement must be satisfactory to the
Issuer and must tell us that, on your date of death, your estate did not include
any property in the United States for U.S. estate tax purposes. In other cases,
we generally will not take action regarding your certificate until we receive a
transfer certificate from the IRS or evidence satisfactory to the Issuer that
the estate is being administered by an executor or administrator appointed,
qualified and acting within the United States. In general, a transfer
certificate requires the opening of an estate in the United States and provides
assurance that the IRS will not claim your 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.
Important: The information in this prospectus is a brief and selective summary
of certain federal tax rules that apply to this certificate and is based on
current law and practice. Tax matters are highly individual and complex.
Investors should consult a qualified tax advisor about their own position.
How your money is used and protected
Invested and guaranteed by the Issuer
The Issuer, a wholly owned subsidiary of AEFC, issues and guarantees the
American Express Investors Certificate. We are by far the largest issuer of face
amount certificates in the United States, with total assets of more than $____
billion and a net worth in excess of $____ million on Dec. 31, 1999.
We back our certificates by investing the money received and keeping the
invested assets on deposit. Our investments generate interest and dividends, out
of which we pay:
o interest to certificate owners,
o and various expenses, including taxes, fees to AEFC for advisory and other
services, distribution fees to American Express Financial Advisors Inc. and
American Express Service Corporation (AESC), and selling agent fees to
selling agents.
For a review of significant events relating to our business, see "Management's
discussion and analysis of financial condition and results of operations." No
national rating agency rates our certificates.
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 deposited to
individuals,
<PAGE>
businesses and other enterprises. Other financial institutions and some
insurance companies may offer investments with comparable combinations of safety
and return on investment.
Regulated by government
Because the American Express Investors Certificate is a security, its offer and
sale are subject to regulation under federal and state securities laws. (The
American Express Investors Certificate is a face-amount certificate. It is 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 amortized cost must exceed the required carrying value of the
outstanding certificates by at least $250,000. As of Dec. 31, 1999, the
amortized cost of these investments exceeded the required carrying value of our
outstanding certificates by more than $___ million. The law requires us to use
amortized cost for these regulatory purposes. Among other things, the law
permits Minnesota statutes to govern qualified assets of AECC as described in
Note 2 to the financial statements. In general, amortized cost is determined by
systematically increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium, so that the
carrying value is equal to maturity value on the maturity date.
As a condition to regulatory relief from the SEC, AECC has agreed to maintain
capital and surplus equal to 5% of outstanding liabilities on certificates (not
including loans made on certificates in accordance with terms of some
certificates that no longer are offered by AECC). AECC is not obligated to
continue to rely on the relief and continue to comply with the conditions of the
relief. Similarly, AECC has entered into a written, informal agreement with the
Minnesota Commerce Department to maintain capital equal to 5% of the assets of
AECC (less any loans on outstanding certificates). When computing its capital,
AECC values its assets on the basis of statutory accounting for insurance
companies rather than generally accepted accounting principles.
Backed by our investments
The Issuer's investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1999:
Type of investment Net amount invested
Corporate and other bonds
Government agency bonds
Preferred stocks
Mortgages
Municipal bonds
As of Dec. 31, 1999 about __% of our securities portfolio (including bonds and
preferred stocks) is rated investment grade. For additional information
regarding securities ratings, please refer to Note 3B to the financial
statements.
Most of our investments are on deposit with American Express Trust Company,
Minneapolis, although we also maintain separate deposits as required by certain
states. American Express Trust Company is a wholly owned subsidiary of AEFC.
Copies of our Dec. 31, 1999 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:
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Debt securities-
Most of our investments are in debt securities as referenced in the table in
"Backed by our investments" under "How your money is used and protected."
The price of bonds generally falls as interest rates increase, and rises as
interest rates decrease. The price of a bond also fluctuates if its credit
rating is upgraded or downgraded. The price of bonds below investment grade may
react more to whether a company can pay interest and principal when due than to
changes in interest rates. They have greater price fluctuations, are more likely
to experience a default, and sometimes are referred to as junk bonds. Reduced
market liquidity for these bonds may occasionally make it more difficult to
value them. In valuing bonds, AECC relies both on independent rating agencies
and the investment manager's credit analysis. Under normal circumstances, at
least 85% of the securities in AECC's portfolio will be rated investment grade,
or in the opinion of AECC's investment advisor will be the equivalent of
investment grade. Under normal circumstances, AECC will not purchase any
security rated below B- by Moody's Investors Service, Inc. or Standard & Poor's
Corporation. Securities that are subsequently downgraded in quality may continue
to be held by AECC and will be sold only when AECC believes it is advantageous
to do so.
As of Dec. 31, 1999, AECC held about __% of its investment portfolio (including
bonds, preferred stocks and mortgages) in investments rated below investment
grade.
Purchasing securities on margin -
We will not purchase any securities on margin or participate on a joint basis or
a joint-and-several basis in any trading account in securities.
Commodities -
We have not and do not intend to purchase or sell commodities or commodity
contracts except to the extent that transactions described in "Financial
transactions including hedges" in this section may be considered commodity
contracts.
Underwriting -
We do not intend to engage in the public distribution of securities issued by
others. However, if we purchase unregistered securities and later resell them,
we may be considered an underwriter (selling securities for others) under
federal securities laws.
Borrowing money -
From time to time we have established a line of credit with banks if management
believed borrowing was necessary or desirable. We may pledge some of our assets
as security. We may occasionally use repurchase agreements as a way to borrow
money. Under these agreements, we sell debt securities to our lender, and
repurchase them at the sales price plus an agreed-upon interest rate within a
specified period of time.
Real estate -
We may invest in limited partnership interests in limited partnerships that
either directly, or indirectly through other limited partnerships, invest in
real estate. We may invest directly in real estate. We also invest in mortgage
loans secured by real estate. We expect that equity investments in real estate,
either directly or through a subsidiary of AECC, will be less than 5% of AECC's
assets.
Lending securities -
We may lend some of our securities to broker-dealers and receive cash equal to
the market value of the securities as collateral. We invest this cash in
short-term securities. If the market value of the securities goes up, the
borrower pays us additional cash. During the course of the loan, the borrower
makes cash payments to us equal to all interest, dividends and other
distributions paid on the loaned securities. We will try to vote these
securities if a major event affecting our investment is under consideration. We
expect that outstanding securities loans will not exceed 10% of AECC's assets.
When-issued securities-
Some of our investments in debt securities are purchased on a when-issued or
similar basis. It may take as long as 45 days or more before these securities
are available for sale, issued and delivered to us. We generally do not
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pay for these securities or start earning on them until delivery. We have
established procedures to ensure that sufficient cash is available to meet
when-issued commitments. When-issued securities are subject to market
fluctuations and they may affect AECC's investment portfolio the same as owned
securities.
Financial transactions including hedges-
We buy or sell various types of options contracts for hedging purposes or as a
trading technique to facilitate securities purchases or sales. We may buy
interest rate caps for hedging purposes. These pay us a return if interest rates
rise above a specified level. If interest rates do not rise above a specified
level, the interest rate caps do not pay us a return. The Issuer may enter into
other financial transactions, including futures and other derivatives, for the
purpose of managing the interest rate exposures associated with [AECC's/the
Issuer's] assets or liabilities. Derivatives are financial instruments whose
performance is derived, at least in part, from the performance of an underlying
asset, security or index. A small change in the value of the underlying asset,
security or index may cause a sizable gain or loss in the fair value of the
derivative. We do not use derivatives for speculative purposes.
Illiquid securities -
A security is illiquid if it cannot be sold in the normal course of business
within seven days at approximately its current market value. Some investments
cannot be resold to the U.S. public because of their terms or government
regulations. All securities, however can be sold in private sales, and many may
be sold to other institutions and qualified buyers or on foreign markets. AECC's
investment advisor will follow guidelines established by the board and consider
relevant factors such as the nature of the security and the number of likely
buyers when determining whether a security is illiquid. No more than 15% of
AECC's investment portfolio will be held in securities that are illiquid. In
valuing its investment portfolio to determine this 15% limit, AECC will use
statutory accounting under an SEC order. This means that, for this purpose, the
portfolio will be valued in accordance with applicable Minnesota law governing
investments of life insurance companies, rather than generally accepted
accounting principles.
Restrictions -
There are no restrictions on concentration of investments in any particular
industry or group of industries or on rates of portfolio turnover.
How your money is managed
Relationship between the Issuer and American Express Financial Corporation
The Issuer was originally organized as Investors Syndicate of America, Inc., a
Minnesota corporation, on Oct. 15, 1940, and began business as an issuer of face
amount investment certificates on Jan. 1, 1941. The company became a Delaware
corporation on Dec. 31, 1977, changed its name to IDS Certificate Company on
April 2, 1984, and to American Express Certificate Company on April __,2000.
The Issuer files reports on Form 10K and 10-Q with the SEC. The public may read
and copy materials we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
Before the Issuer was created, AEFC (formerly known as IDS Financial
Corporation), our parent company, had issued similar certificates since 1894. As
of Jan. 1, 1995, IDS Financial Corporation changed its name to AEFC. The Issuer
and AEFC have never failed to meet their certificate payments.
During its many years in operation, AEFC has become a leading manager of
investments in mortgages and securities. As of Dec. 31, 1999, AEFC managed or
administered investments, including its own, of more than $___ billion. American
Express Financial Advisors Inc., a wholly owned subsidiary of AEFC, provides a
broad range of financial planning services for individuals and businesses
through its nationwide network of more than 180 offices and more than 9,000
financial advisors. American Express Financial Advisors' financial planning
services are comprehensive, beginning with a detailed written analysis that's
tailored to your needs. Your
<PAGE>
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.
AEFC 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 Company is a
financial services company engaged through subsidiaries in other businesses
including:
o travel related services (including American Express(R) Card operations
through American Express Travel Related Services Company, Inc. and its
subsidiaries); and
o international banking services (through American Express Bank Ltd. and its
subsidiaries including American Express Bank International) and Travelers
Cheque and related services.
Capital structure and certificates issued
The Issuer has authorized, issued and has outstanding 150,000 shares of common
stock, par value of $10 per share. AEFC owns all of the outstanding shares.
As of the fiscal year ended Dec. 31, 1999, the Issuer had issued (in face
amount) $__________ of installment certificates and $__________ of single
payment certificates. As of Dec. 31, 1999, the Issuer had issued (in face
amount) $__________ of installment certificates and $__________ of single
payment certificates since its inception in 1941.
Investment management and services
Under an Investment Advisory and Services Agreement, AEFC acts as our investment
advisor and is responsible for:
o providing investment research,
o making specific investment recommendations,
o and executing purchase and sale orders according to our policy of obtaining
the best price and execution.
All these activities are subject to direction and control by our board of
directors and officers. Our agreement with AEFC requires annual renewal by our
board, including a majority of directors who are not interested persons of AEFC
or the Issuer as defined in the federal Investment Company Act of 1940.
For its services, we pay AEFC 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 0.750%
Next 250 million 0.650
Next 250 million 0.550
Next 250 million 0.500
Any amount over 1 billion 0.107
Included assets are all assets of the Issuer except mortgage loans, real estate,
and any other asset on which we pay an outside advisory or service fee.
<PAGE>
Advisory and services fee for the past three years
Percentage of
Year Total fees Included assets
1999 $ _________ ______%
1998 9,084,332 0.24%
1997 17,232,602 0.50%
Estimated advisory and services fees for 2000 are $__________.
Other expenses payable by the Issuer: The Investment Advisory and Services
Agreement provides that we will pay:
o costs incurred by us in connection with real estate and mortgages;
o taxes;
o depository and custodian fees;
o brokerage commissions;
o fees and expenses for services not covered by other agreements and provided
to us at our request, or by requirement, by attorneys, auditors, examiners
and professional consultants who are not officers or employees of AEFC;
o fees and expenses of our directors who are not officers or employees of
AEFC;
o provision for certificate reserves (interest accrued on certificate owner
accounts); and
o expenses of customer settlements not attributable to sales function.
Distribution
Under a Distribution Agreement with American Express Financial Advisors Inc.,
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 one-, two- or three-month term. Payments are made each
quarter from issuance date on certificates with a six-, 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 Dec. 31,
1999. The Issuer expects to pay American Express Financial Advisors Inc.
distribution fees amounting to $________ during 2000.
See Note 1 to financial statements regarding deferral of distribution fee
expense.
American Express Financial Advisors Inc. pays 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 AEFC or AECC, approved
this distribution agreement.
Selling Agent Agreements with American Express Bank International
In turn, under a Selling Agent Agreement with AEBI, American Express Financial
Advisors compensates AEBI for its services as selling agent of this certificate
as follows:
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AEBI is paid an annualized fee ranging from 0.50% to 1.25% of the reserve
balance of each certificate, depending on the amount outstanding for each such
certificate, with this exception: the fee will be 0.30% of the reserve balance
of each certificate with an amount outstanding of $1 million or more when:
o the aggregate reserve balance for that certificate, and any other
certificate with identical ownership and an amount outstanding of $1
million or more, is at least $20 million;
o the aggregate reserve balance is invested for terms that average at least
six months; and
o at least $5 million of this aggregate reserve balance is invested for a
term of 12 months or longer.
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.
About AEBI
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. (AEBL). 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 Dec. 31,
1999, AEBI had total assets of $___ million and total equity of $___ million.
Although AEBI is a banking entity, the American Express Investors Certificate is
not a bank product, nor is it backed or guaranteed by AEBI, by AEBL, 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.
Other Selling agents
This certificate may be sold through other selling agents, under arrangements
with American Express Financial Advisors at commissions of up to:
o __% of the initial investment on the first day of the certificate's term;
and
o __% of the certificate's reserve at the beginning of each subsequent term.
This fee is not assessed to your certificate account.
In addition, AECC may pay distributors, and American Express Financial Advisors
Inc. may pay selling agents, additional compensation for selling and
distribution activities under certain circumstances. From time to time, AECC or
American Express Financial Advisors Inc. may pay or permit other promotional
incentives, in cash or credit or other compensation.
<PAGE>
Transfer agent
Under a Transfer Agency Agreement, American Express Client Service Corporation
(AECSC), a wholly owned subsidiary of AEFC, maintains certificate owner accounts
and records. AECC pays AECSC a monthly fee of one-twelfth of $10.353 per
certificate owner account for this service.
Employment of other American Express affiliates
AEFC may employ an affiliate of American Express Company as executing broker for
our portfolio transactions only if:
o we receive prices and executions at least as favorable as those offered by
qualified independent brokers performing similar services;
o the affiliate charges us commissions consistent with those charged to
comparable unaffiliated customers for similar transactions; and
o the affiliate's employment is consistent with the terms of the current
Investment Advisory and Services Agreement and federal securities laws.
<PAGE>
Directors and officers
The Issuer's sole shareholder, AEFC, elects the board of directors that oversees
AECC's operations. The board annually elects the directors, chairman, president
and controller for a term of one year. The president appoints the other
executive officers.
We paid a total of $______ during 1999 to directors not employed by AEFC.
Board of directors
Rodney P. Burwell
Born in 1939. Director beginning in 1999. Chairman, Xerxes Corporation
(fiberglass storage tanks). Director, Fairview Corporation.
Charles W. Johnson
Born in 1929. Director since 1989. Director, Communications Holdings, Inc.
Acting president of Fisk University from 1998 to 1999. Former vice president and
group executive, Industrial Systems, with Honeywell, Inc. Retired 1989.
Jean B. Keffeler
Born in 1945. Director beginning in 1999. Independent management consultant.
Richard W. Kling*
Born in 1940. Director since 1996.
Chairman of the board of directors from 1996 to 2000. Director of IDS Life
Insurance Company since 1984; president since 1994. Executive vice president of
Marketing and Products of AEFC from 1988 to 1994. Senior vice president of AEFC
since 1994. Director of IDS Life Series Fund, Inc. and member of the board of
managers of IDS Life Variable Annuity Funds A and B.
Thomas R. McBurney
Born in 1938. Director beginning in 1999. President, McBurney Management
Advisors. Director, The Valspar Corporation (paints), Wenger Corporation,
Allina, Space Center Enterprises and Greenspring Corporation.
Paula R. Meyer*
Born in 1954. President since June 1998. Piper Capital Management (PCM)
President from October 1997 to May 1998. PCM Director of Marketing from June
1995 to October 1997. PCM Director of Retail Marketing from December 1993 to
June 1995.
Pamela J. Moret*
Born in 1956. Director since December 1999. Chair of the board of directors
since January 2000. Senior vice president - Investment Products since November
1999. Vice president - Variable Assets & Services from 1997 to 1999. Vice
president - Retail Services Group from 1996 to 1997. Vice President
Communications from 1992 to 1996. Various attorney positions in General
Counsel's Office from 1982 to 1992.
*"Interested Person" of AECC as that term is defined in Investment Company Act
of 1940.
Executive officers
Paula R. Meyer
Born in 1954. President since June 1998.
Jeffrey S. Horton
Born in 1961. Vice president and treasurer since December 1997. Vice president
and corporate treasurer of AEFC since December 1997. Controller, American
Express Technologies-Financial Services of AEFC from July 1997 to December 1997.
Controller, Risk Management Products of AEFC from May 1994 to July 1997.
Director of finance and analysis, Corporate Treasury of AEFC from June 1990 to
May 1994.
<PAGE>
Timothy S. Meehan
Born in 1957. Secretary since 1995. Secretary of AEFC and American Express
Financial Advisors Inc. since 1995. Senior counsel to AEFC since 1995. Counsel
from 1990 to 1995.
Lorraine R. Hart
Born in 1951. Vice president - Investments since 1994. Vice president -
Insurance Investments of AEFC since 1989. Vice president - Investments of IDS
Life Insurance Company since 1992.
Bruce A. Kohn
Born in 1951. Vice president and general counsel since 1993. Senior counsel to
AEFC since 1996. Counsel to AEFC from 1992 to 1996. Associate counsel from 1987
to 1992.
F. Dale Simmons
Born in 1937. Vice president - Real Estate Loan Management since 1993. Vice
president of AEFC since 1992. Senior portfolio manager of AEFC since 1989.
Assistant vice president from 1987 to 1992.
Philip C. Wentzel
Born 1961. Vice president and controller of AECC since January 2000. Vice
president - Finance, Insurance Products of AEFC since 1977. Vice president and
controller of IDS Life since 1998. Director, Financial Reporting and Analysis -
IDS Life from 1992 to 1997.
The officers and directors as a group beneficially own less than 1% of the
common stock of American Express Company.
AECC has provisions in its bylaws relating to the indemnification of its
officers and directors against liability, as permitted by law. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Act and is therefore unenforceable.
Independent auditors
A firm of independent auditors audits our financial statements at the close of
each fiscal year (Dec. 31). Copies of our annual financial statements (audited)
and semiannual financial statements (unaudited) are available to any certificate
owner upon request.
Ernst & Young LLP, Minneapolis, has audited our financial statements for each of
the years in the three-year period ended Dec. 31, 1999. These statements are
included in this prospectus. Ernst & Young LLP is also the auditor for American
Express Company, the parent company of AEFC and AECC.
<PAGE>
Appendix
Description of corporate bond ratings
Bond ratings concern the quality of the issuing corporation. They are not an
opinion of the market value of the security. Such ratings are opinions on
whether the principal and interest will be repaid when due. A security's rating
may change which could affect its price. Ratings by Moody's Investors Service,
Inc. are Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Aaa/AAA - Judged to be of the best quality and carry the smallest degree of
investment risk. Interest and principal are secure.
Aa/AA - Judged to be high-grade although margins of protection for interest and
principal may not be quite as good as Aaa or AAA rated securities.
A - Considered upper-medium grade. Protection for interest and principal is
deemed adequate but may be susceptible to future impairment.
Baa/BBB - Considered medium-grade obligations. Protection for interest and
principal is adequate over the short-term; however, these obligations may have
certain speculative characteristics.
Ba/BB - Considered to have speculative elements. The protection of interest and
principal payments may be very moderate.
B - Lack characteristics of more desirable investments. There may be small
assurance over any long period of time of the payment of interest and principal.
Caa/CCC - Are of poor standing. Such issues may be in default or there may be
risk with respect to principal or interest.
Ca/CC - Represent obligations that are highly speculative. Such issues are often
in default or have other marked shortcomings.
C - Are obligations with a higher degree of speculation. These securities have
major risk exposures to default.
D - Are in payment default. The D rating is used when interest payments or
principal payments are not made on the due date.
Non-rated securities will be considered for investment. When assessing each
non-rated security, AECC will consider the financial condition of the issuer or
the protection afforded by the terms of the security.
<PAGE>
(Back cover)
Quick telephone reference*
Selling Agent:
American Express Bank International
Region offices
101 East 52nd Street
4th Floor
New York, NY 10022
(212) 415-9500
1221 Brickell Avenue
8th Floor
Miami, FL 33131
(305) 350-2502
*You may experience delays when call volumes are high.
American Express Investors Certificate
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133
612-671-3131
Distributed by American Express Financial Advisors Inc.
6040
<PAGE>
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.
(a) Securities Sold
1996 IDS Special Deposits* 41,064,846.74
1997 American Express Special Deposits 182,788,631.00
1998 American Express Special Deposits 91,416,078.00
1999 American Express Special Deposits 50,132,542.00
* Renamed American Express Special Deposits in April 1996.
(b) Underwriters and other purchasers
American Express Special Deposits are marketed by American Express Bank Ltd.
(AEB), an affiliate of IDS Certificate Company, to private banking clients of
AEB in the United Kingdom and Hong Kong.
(c) Consideration
All American Express Special Deposits were sold for cash. The aggregate offering
price was the same as the amount sold in the table above. Aggregate marketing
fees to AEB were $301,946.44 in 1996, $592,068.70 in 1997, $967,791.95 in 1998
and $877,981.60 in 1999.
<PAGE>
(d) Exemption from registration claimed
American Express Special Deposits are marketed, pursuant to the exemption in
Regulation S under the Securities Act of 1933, by AEB in the United Kingdom and
Hong Kong to persons who are not U.S. persons, as defined in Regulation S.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
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 No. 33-26844, for the American
Express International Investment Certificate (now
called, the IDS Investors Certificate) is
incorporated herein by reference.
2. Not Applicable.
3. (a) Certificate of Incorporation, dated December 31,
1977, filed electronically as Exhibit 3(a) to
Post-Effective Amendment No. 10 to Registration
Statement No.
2-89507, is incorporated herein by reference.
(b) Certificate of Amendment, dated April 2, 1984 filed
electronically as Exhibit 3(b) to Post-Effective
Amendment No. 10 to Registration Statement No.
2-89507, is incorporated herein by reference.
(c) Certificate of Amendment, dated September 12, 1995,
filed electronically as Exhibit 3(c) to Post-
Effective Amendment No. 44 to Registration Statement
No. 2-55252, is incorporated herein by reference.
(d) Certificate of Amendment, dated April 30, 1999, filed
electronically as Exhibit 3(a) to Registrant's March
31, 1999 Quarterly Report on Form 10-Q is
incorporated herein by reference.
(e) Current By-Laws are filed electronically herewith.
4. Not Applicable.
5. An opinion and consent of counsel as to the legality
of the securities being registered, filed
electronically as Exhibit 16(a)5 to Post-Effective
Amendment No. 18 to Registration Statement No.
33-26844 is incorporated herein by reference.
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(b) to Registrant's Post-Effective Amendment No. 3
to Registration Statement No. 2-89507, is
incorporated herein by reference.
<PAGE>
(b) Depositary and Custodial Agreement dated September
30, 1985 between IDS Certificate Company and IDS
Trust Company, filed electronically as Exhibit 10(b)
to Registrant's Post-Effective Amendment No. 3 to
Registration Statement No. 2-89507, is incorporated
herein by reference.
(c) Foreign Deposit Agreement dated November 21, 1990,
between IDS Certificate Company 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.
(d) Copy of Distribution Agreement dated March 29, 1996
between Registrant and American Express Service
Corporation filed electronically as Exhibit 1(b) to
Post-Effective Amendment No. 17 to Registration
Statement No. 2-95577, is incorporated herein by
reference.
(e) Selling Agent Agreement dated June 1, 1990, between
American Express Bank International and IDS Financial
Services Inc. for the American Express Investors and
American Express Stock Market Certificates, filed
electronically as Exhibit 1(c) to the Post-Effective
Amendment No. 5 to Registration Statement No.
33-26844, is incorporated herein by reference.
(f) Marketing Agreement dated October 10, 1991, between
Registrant and American Express Bank Ltd., filed
electronically as Exhibit 1(d) to Post-Effective
Amendment No. 31 to Registration Statement 2-55252,
is incorporated herein by reference.
(g) Amendment to the Selling Agent Agreement dated
December 12, 1994, between IDS Financial Services
Inc. and American Express Bank International, filed
electronically as Exhibit 1(d) to Post-Effective
Amendment No. 9 to Registration Statement No.
33-26844, is incorporated herein by reference.
(h) Selling Agent Agreement dated December 12, 1994,
between IDS Financial Services Inc. and Coutts & Co.
(USA) International, filed electronically as Exhibit
1(e) to Post-Effective Amendment No. 13 to
Registration Statement No. 2-95577, is incorporated
herein by reference.
(i) Consulting Agreement dated December 12, 1994, between
IDS Financial Services Inc. and American Express Bank
International, filed electronically as Exhibit 16(f)
to Post-Effective Amendment No. 13 to Registration
Statement No. 2-95577 is incorporated herein by
reference.
(j) Letter amendment dated January 9, 1997 to the
Marketing Agreement dated October 10, 1991, between
Registrant and American Express Bank Ltd. filed
electronically as Exhibit 10(j) to Post-Effective
Amendment No. 40 to Registration Statement No.
2-55252, is incorporated herein by reference.
(k) Form of Letter amendment dated April 7, 1997 to the
Selling Agent Agreement dated June 1, 1990 between
American Express Financial Advisors Inc. and American
Express Bank International, filed electronically as
Exhibit 10 (j) to Post-Effective Amendment No. 14 to
Registration Statement 33-26844, is incorporated
herein by reference.
<PAGE>
(l) Letter Agreement dated July 28, 1999 amending the
Selling Agent Agreement dated June 1, 1990, or a
schedule thereto, as amended, between American
Express Financial Advisors Inc.(formerly IDS
Financial Services Inc.) and American Express Bank
International, filed electronically to Registrant's
June 30, 1999 Quarterly Report on Form 10-Q, is
incorporated herein by reference.
(m) Letter Agreement dated July 28, 1999, amending the
Marketing Agreement dated October 10, 1991, or a
schedule thereto, as amended, between IDS Certificate
Company and American Express Bank Ltd., filed
electronically to Registrant's June 30, 1999
Quarterly Report on Form 10-Q, is incorporated herein
by reference.
(n) Selling Agent Agreement, dated March 10, 1999 between
American Express Financial Advisors Inc. and
Securities America, Inc., filed electronically as
Exhibit 10 (l) to Post-Effective Amendment No. 18 to
Registration Statement 33-26844, is incorporated
herein by reference.
11. through 22. -- None.
23. Consent of Independent Auditors' Report to be filed
with a subsequent post-effective amendment to this
registration statement.
24. (a) Officers' Power of Attorney, dated September 8, 1998,
filed electronically as Exhibit 24(a) to Post-
Effective Amendment No.22 to Registration Statement
No. 33-22503, is incorporated herein by reference.
(b) Directors' Power of Attorney, dated April 26, 1999,
filed electronically as Exhibit 24(a) to Registrant's
March 31, 1999 Quarterly Report is incorporated
herein by reference.
(c) Director's Power of Attorney, dated December
21, 1999, is filed electronically herewith.
25. through 27. -- None.
(b) The financial statement schedules for IDS
Certificate Company will be filed with a
subsequent post-effective amendment to Registration
Statement No. 2-55252 for Series D-1 Investment
Certificate.
Item 17. Undertakings.
Without limiting or restricting any liability on the part of
the other, American Express Financial Advisors Inc. (formerly,
IDS Financial Services Inc.), as underwriter, and American
Express Bank International, as selling agent 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
<PAGE>
admitted or contemplated), but such liability shall be subject
to the conditions and limitations described in said Acts.
American Express Financial Advisors Inc. and American Express
Bank 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.
and American Express Bank 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>
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 5th day of, January, 2000.
IDS CERTIFICATE COMPANY
By: /s/ Paula R. Meyer*
Paula R. Meyer, 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 5th day of,
January, 2000.
Signature Capacity
/s/ Paula R. Meyer* ** President and Director
Paula R. Meyer (Principal Executive Officer)
/s/ Jeffrey S. Horton* Vice President and Treasurer
Jeffrey S. Horton (Principal Financial Officer)
/s/ Jay C. Hatlestad* Vice President and Controller
Jay C. Hatlestad (Principal Accounting Officer)
/s/ Rodney P. Burwell** Director
Rodney P. Burwell
/s/ Charles W. Johnson** Director
Charles W. Johnson
/s/ Jean B. Keffeler** Director
Jean B. Keffeler
/s/ Richard W. Kling** Director
Richard W. Kling
/s/ Pamela J. Moret*** Director
Pamela J. Moret
/s/ Thomas R. McBurney** Director
Thomas R. McBurney
<PAGE>
*Signed pursuant to Officers' Power of Attorney dated September 8, 1998 filed
electronically as Exhibit 24(a) to Post-Effective Amendment No. 22 to
Registration Statement No. 33-22503, incorporated herein by reference.
/s/Bruce A. Kohn
Bruce A. Kohn
**Signed pursuant to Directors' Power of Attorney dated April 26, 1999 filed
electronically as Exhibit 24(a) to Registrant's March 31, 1999 Quarterly Report,
incorporated herein by reference.
/s/Bruce A. Kohn
Bruce A. Kohn
***Signed pursuant to Director's Power of Attorney dated December 21, 1999 filed
electronically as Exhibit 24(c) to this Post-Effective Amendment No. 19 to
Registration Statement No. 33-26844.
/s/Bruce A. Kohn
Bruce A. Kohn
<PAGE>
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 19 TO
REGISTRATION STATEMENT NO. 33-26844
Cover Page
Prospectus
Part II Information
Signatures
Exhibits
BY-LAWS OF
IDS CERTIFICATE COMPANY
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of Newcastle, State of Delaware.
Section 2. The Corporation may also have offices at such other places
as the board of directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 1. Meetings of the stockholders shall be held in the City of
Minneapolis, Minnesota, or at such other place, within or without the State of
Delaware, as may be designated by the board of directors, and at such time as
may be designated in the call and notice thereof.
Section 2. The annual meeting of stockholders for the election of
directors and the transaction of such other business as may properly come before
the meeting shall be held within thirteen months subsequent to the last annual
stockholder meeting.
Section 3. In the event the stockholders shall fail to hold an annual
meeting at the time specified therefor in Section 2 of this Article, or the
directors are not elected thereat, directors may be elected at a special meeting
held for that purpose upon call and notice as hereinafter provided for a special
meeting of stockholders.
Section 4. Special meetings of stockholders may be called for any
purpose or purposes at any time by the chairman of the board of directors, the
president, the secretary, the board of directors, and two or more members of the
board of directors, or in the manner hereinafter provided by one or more
stockholders holding not less than one-tenth of the issued and outstanding
shares of stock. Upon request, in writing, by registered mail or delivered in
person to the president, and vice-president, or secretary, by any person or
persons entitled to call a meeting of stockholders, such officer shall forthwith
cause notice to be given to the stockholders of a special meeting of
stockholders to be held at such time as such officer shall fix, not less than
ten nor more than sixty days after the receipt of such request. Any such request
shall state the purpose or purposes of the proposed meeting.
<PAGE>
Section 5. Written notice of each meeting of stockholders, stating the
time and place, and in case of a special meeting the purpose thereof, shall be
served upon or mailed to each stockholder of record at such address as appears
on the stock register of the Corporation, at least ten days before such meeting.
Section 6. Notice of the time, place and purpose of any meeting of
stockholders, whether required by statute, by the articles of incorporation or
by these by-laws, may be waived in writing by any stockholder. Such waiver may
be given before or after the meeting, and shall be filed with the secretary or
entered upon the records of the meeting.
Section 7. Any action which, by statute or by the articles of
incorporation, may be taken at a meeting of stockholders, may be taken without a
meeting if a consent in writing shall be signed by all of the holders of stock
who would be entitled to a notice of a meeting for such purpose.
Section 8. Business transacted at all special meetings shall be
confined to the objects stated in the call.
Section 9. The presence, at any meeting of stockholders, in person or
by proxy of the holders of a majority of the shares of stock issued and
outstanding shall constitute a quorum for the transaction of business, except as
otherwise provided by statute or by the articles of incorporation. If, however,
a quorum shall not be present at any meeting of stockholders, the stockholders
present in person or by proxy, shall have power to adjourn the meeting from time
to time, until a quorum shall be present. If any meeting of stockholders be
adjourned to another time or place, whether for lack of quorum or otherwise, no
notice as to such adjourned meeting need be given other than by an announcement,
giving the time and place thereof, at the meeting at which the adjournment is
taken. At such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The stockholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until final
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
Section 10. When a quorum is present at any meeting, the vote of the
holders of a majority of the shares of stock, present in person or by proxy,
shall decide any question brought before such meeting, unless the question is
one upon which, by express provision of the statutes or of the articles of
incorporation or of these by-laws, a different vote is required, in which case,
such express provision shall govern and control the decision of such question.
<PAGE>
Section 11. At each meeting of the stockholders, every stockholder of
record at the date fixed by the board of directors as the record date for the
determination of the persons entitled to vote at a meeting of stockholders, or,
if no date has been fixed, then at the date of the meeting, shall be entitled at
such meeting to one vote for each share of stock standing in his name on the
books of the Corporation. A stockholder may cast his vote or votes in person or
by proxy. The appointment of a proxy shall be in writing filed with the
secretary at or before the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall not be less than five nor more than fifteen, as the holders of the
shares of stock issued and outstanding may from time to time determine.
Directors shall be elected at the annual meeting of the stockholders of the
Corporation, except that if the number of directors is increased at any time
other than at an annual meeting of stockholders, an additional director or
directors to fill the places on the board created by any such increase may be
elected at a special meeting of stockholders called for that purpose. Each
director shall be elected to serve until the next annual meeting of the
stockholders and until his successor shall be elected and shall qualify.
Section 2. Vacancies in the board of directors shall be filled by the
remaining members of the board, though less than a quorum, and each person so
elected shall be a director until his successor is elected by the stockholders
who may make such election at their next annual meeting or at any special
meeting called for that purpose.
Section 3. The board of directors shall have the general management,
control and supervision of all business and affairs of the Corporation, and may
do all such lawful acts and things as are not by statute or by the articles of
incorporation or by the by-laws directed or required to be exercised or done by
the stockholders.
Section 4. The compensation of directors, officers, employees and
agents of the Corporation shall be fixed by the board of directors, or by such
person or persons as may be designated by the board.
<PAGE>
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more of their number to constitute
an executive committee, which, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Any such executive committee shall act only in the
interval between meetings of the board and shall be subject at all times to the
control and direction of the board. The executive committee shall keep regular
minutes of its proceedings and report the same to the board when required.
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
DESIGNATED BY THE BOARD
Section 1. The annual meeting of the board of directors of the
Corporation shall be held in the City of Minneapolis, Minnesota, as soon as
practicable after the final adjournment of the annual meeting of the
stockholders in each year, and no notice of such meeting shall be necessary to
the newly elected directors in order to legally constitute the meeting provided
a quorum shall be present; except, however, that such meeting may be held at
such other place, whether in such state or elsewhere, as a majority of the board
of directors may have previously determined.
Section 2. Regular meetings of the board of directors may be held
without notice at such time and place either within or without the State of
Minnesota as a majority of the board of directors may from time to time
determine.
Section 3. Special meetings of the board may be called by the president
on two days' notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two directors. Any director
may, in writing, either before or after the meeting, waive notice of the time
and place thereof; and without notice, any director by his presence at the
meeting shall be deemed to have waived notice.
Section 4. At all meetings of the board of directors, a majority of the
directors shall be necessary and sufficient to constitute a quorum for the
transaction of business; and the acts of a majority of the directors present at
a meeting at which a quorum is present shall be the acts of the board of
directors. If a quorum shall not be present at any meeting of the directors, the
directors present thereat may adjourn the meeting from time to time, until a
quorum shall be present. No notice of an adjourned meeting, whether for lack of
quorum or otherwise, need be given other than by an announcement, giving the
time and place thereof, at the meeting at which the adjournment is taken.
<PAGE>
Section 5. Any action required or permitted to be taken at any meeting
of the board of directors, or of any committee thereof, may be taken without a
meeting if all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 6. Members of the board of directors, or of any committee
designated by such board, may participate in a meeting of such board or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other
and participation in a meeting pursuant to this Section shall constitute
presence in person at such meeting.
Section 7. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more of their number to constitute
a dividend committee, which committee shall have and may exercise all the
authority of the board of directors with respect to declaring dividends and
authorizing return of capital of the Corporation to the holder of the
Corporation's common stock. The dividend committee shall keep regular minutes of
its proceedings and report the same to the board when required.
ARTICLE VI
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to a director or stockholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such director or
stockholder, at his address as appears on the records of the Corporation, with
postage thereon pre-paid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a Waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Any director by his presence at the meeting shall be deemed
to have waived notice.
<PAGE>
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be a chairman of the
board of directors, a president, one or more vice presidents (the number thereof
to be determined by the board of directors), a treasurer, a secretary and such
assistant treasurers, assistant secretaries, and such other officers and agents
as the board of directors may deem necessary. All officers of the Corporation
shall exercise such powers and perform such duties as shall be set forth in
these by-laws and as shall be determined from time to time by the board of
directors or by the president. Any two of the offices, except those of the
president and vice president, treasurer and assistant treasurer, and secretary
and assistant secretary, may be held by the same person.
Section 2. The board of directors, at its annual meeting, shall elect a
chairman of the board of directors from its own number and a president. The
president, or his designee, may appoint any officer of the Corporation below the
rank of president. None of the officers need be a director.
Section 3. The officers of the Corporation shall, except in the event
of death, resignation, or removal by the board of directors, hold office until
their successors are chosen and qualify in their stead. Any officer elected or
appointed by the board of directors may be removed at any time by the board of
directors with or without cause; such removal, however, shall be without
prejudice to the contract rights of the persons so removed. When a vacancy for
any reason occurs among the officers, the board of directors shall have the
power to appoint a successor to fill such vacancy for the unexpired term.
Section 4. The chairman of the board of directors shall preside at all
meetings of stockholders and directors, if present, and shall make reports to
the stockholders and the board of directors from time to time as may be required
of him, and shall have such other powers and perform such other duties as are
incident to his office or as may be assigned to him from time to time by the
board of directors.
Section 5. The president shall be the chief executive of the
Corporation; he shall have general and active management of the business of the
Corporation; shall make reports to the board of directors and stockholders;
shall see that all orders and resolutions of the board of directors are carried
into effect; and shall have such other powers and perform such other duties as
are incident to his office or as may be assigned to him from time to time by the
board of directors.
Section 6. Each vice president shall have such powers and shall perform
such duties as are incident to his office or as may be properly required of him
by the board of directors or the president.
<PAGE>
Section 7. The secretary shall attend all meetings of the board of
directors and of the stockholders and record their proceedings in a book to be
kept for that purpose and shall perform like duties for the executive committee
when required. In case the secretary shall be absent from any meeting, the
chairman of the meeting may appoint a temporary secretary to act at such
meeting. The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the board of directors. He shall
have the custody of the stock register, minute books and the seal of the
Corporation, and shall make such reports and perform such other duties as are
incident to his office or are properly required of him by the board of directors
or the president.
Section 8. The assistant secretary or assistant secretaries shall
perform the duties of the secretary in case of his absence or incapacity, and
shall perform such other duties as are properly required by the board of
directors, the president or the secretary.
Section 9. The treasurer shall have the custody of all the funds and
securities of the Corporation, and shall deposit all monies and valuables in the
name of and to the credit of the Corporation in such banks or depositories as
the board of directors may designate, and shall keep regular books of account,
and shall have custody of the books and records incident to his office and such
as the board of directors may direct, and he shall have such other powers and
shall perform such other duties as are incident to his office or which are
properly required of him by the board of directors or the president.
Section 10. The assistant treasurer or assistant treasurers shall
perform the duties of the treasurer in case of his absence or incapacity, and
shall perform such other duties as are properly required by the board of
directors, the president or the treasurer.
ARTICLE VIII
CLOSING OF TRANSFER BOOK
AND FIXING OF RECORD DATE
Section 1. The board of directors may fix a time, not more than sixty
or less than ten days preceding the date of any meeting of stockholders, as a
record date for the determination of the stockholders entitled to notice of and
to vote at such meeting, and in such case only stockholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed. The board of directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.
<PAGE>
Section 2. The board of directors may fix a time not exceeding sixty
days preceding the date fixed for the payment of any dividend or distribution,
or the date for the allotment of rights, or, subject to contract rights with
respect thereto, the date when any change or conversion or exchange of shares
shall be made or go into effect, as a payment of any such dividend, distribution
or allotment of rights, or to exercise rights in respect of any such change,
conversion or exchange of shares, and in such case only stockholders of record
on the date so fixed shall be entitled to receive payment of such dividend,
distribution or allotment of rights or to exercise such rights of change,
conversion or exchange of shares, as the case may be, notwithstanding any
transfer of any shares on the books of the Corporation after any record date
fixed as aforesaid. The board of directors may close the books of the
Corporation against the transfer of shares during the whole or any part of such
period.
ARTICLE IX
SHARES OF STOCK
Section 1. All certificates for shares of the capital stock of this
Corporation shall be signed by the president or any vice president and be
countersigned by the secretary or any assistant secretary, and shall be sealed
with the corporate seal, and shall be numbered and registered in the order in
which they are issued.
Section 2. All transfer of shares of stock shall be made only on the
books of the Corporation on application of the owner or assignee thereof, or by
proper power of attorney, in writing, on surrender of the certificates for such
shares; and all surrendered certificates shall be cancelled and filed by the
secretary or any assistant secretary.
Section 3. The board of directors shall have power and authority to
make all such rules and regulations as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of the capital stock
of the Corporation not inconsistent with the statutes, its articles of
incorporation, and its by-laws.
Section 4. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, except as expressly provided by the laws
of Delaware.
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ARTICLE X
LOST CERTIFICATES
Section 1. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been destroyed or lost
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed, and the board of directors, when
authorizing such issue of a new certificate or certificates, may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
give the Corporation a bond in such sum as it may direct, to indemnify the
Corporation against any claim arising from the issue of such new certificate.
ARTICLE XI
CONVEYANCES AND CONTRACTS
Section 1. The president, the chairman of the board, or any vice
president may with the secretary or any assistant secretary, sign, cause the
corporate seal to be affixed thereto when necessary, acknowledge and deliver all
conveyances, contracts, deeds, notes, mortgages, satisfactions, leases,
assignments, licenses, transfers, powers of attorney, certificates for shares of
stock, face amount certificates and all other similar and dissimilar
instruments. The board of directors may by resolution authorize any person or
any officer or officers alone or with another officer or officers to sign, cause
the corporate seal to be affixed thereto when necessary, acknowledge and deliver
any written instrument, or class of written instruments, for and on behalf of
the Corporation.
Section 2. All checks or demands for money and notes of the Corporation
shall be signed by the treasurer, assistant treasurer or such officer or
officers or such other person or persons as may from time to time by authorized
by the board of directors or by officers designated by the board or directors.
ARTICLE XII
INDEMNIFICATION
Section 1. The Corporation shall, to the fullest extent permitted by
applicable law, indemnify any person who is or was or has agreed to become a
director or officer of the Corporation and who is or was made or threatened to
be made a party to, and may, in its discretion, indemnify, any person who is or
<PAGE>
was or has agreed to become a director or officer and is otherwise involved in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, legislative or investigative, including an action by
or in the right of the Corporation to procure a judgment in its favor and an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which such person is serving or has served or has agreed to
serve in any capacity at the request of the Corporation, by reason of the fact
that he is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid or to be paid in
settlement, penalties, costs, charges and expenses, including attorneys' fees,
incurred in connection with such action or proceeding or any appeal thereof; if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The benefits of this Section 1. shall extend to the heirs,
executors, administrators and legal representatives of any person entitled to
indemnification under this Section.
Section 2. The board in its discretion may authorize the Corporation to
indemnify any person, other than a director or officer, for expenses incurred or
other amounts paid in any civil or criminal action, suit or proceeding, to which
such person was, or was threatened to be, made a party by reason of the fact
that he, his testator or intestate is or was an employee of the Corporation.
Section 3. The Corporation may indemnify any person to whom the
Corporation is permitted by applicable law or these by-laws to provide
indemnification or the advancement of expenses, whether pursuant to rights
granted pursuant to, or provided by, Delaware General Corporation Law or any
other law or these by-laws or other rights created by (i) a resolution of the
shareholder, (ii) a resolution of directors, or (iii) an agreement providing for
such indemnification, it being expressly intended that these by-laws authorize
the creation of other rights in any such manner. The right to be indemnified and
to the reimbursement or advancement of expenses incurred in defending a
proceeding in advance of its final disposition authorized by this Section 3.,
shall not be exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the certificate of incorporation,
by-laws, agreement, vote of the shareholder or otherwise.
Section 4. The right to indemnification conferred by Section 1., and
any indemnification extended under Section 3., (i) is a contract right pursuant
to which the person entitled thereto may bring suit as if the provisions thereof
were set forth in a separate written contract between the Corporation and such
person, (ii) is intended to be retroactive to events occurring prior to the
adoption of this Article XII, Sections 1. through 4., to the fullest extent
permitted by applicable law, and (iii) shall continue to exist after the
rescission or restrictive modification thereof with respect to events occurring
prior thereto.
<PAGE>
ARTICLE XIII
AMENDMENT OF BY-LAWS
Section 1. These by-laws may be altered at any regular meeting of the
stockholders, or at any special meeting of the stockholders, at which a quorum
is present or represented, provided notice of the proposed alteration is
contained in the notice of such meeting, by the affirmative vote of holders of a
majority of the shares issued and outstanding and entitled to vote at such
meeting present or represented thereat, or by the affirmative vote of a majority
of the board of directors at any regular meeting of the board or at any special
meeting if notice of the proposed alteration be contained in the notice of such
special meeting; provided, however, the board shall not make or alter any
by-laws fixing its number, qualifications, classifications or term of office.
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 Paula R. Meyer, Timothy S. Meehan, Bruce A. Kohn,
Jeffrey S. Horton and Philip C. Wentzel 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--whether pursuant to the requirements of
the Securities Act of 1933, the Investment Company Act of 1940 or otherwise--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 filings with 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 21st day of December 1999.
/s/Pamela J. Moret
Pamela J. Moret
