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PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 82 (File No. 2-13188) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY (ACT OF 1940)
Amendment No. 38 (File No. 811-772) X
IDS EQUITY SELECT FUND, INC.
IDS Tower 10, Minneapolis, Minnesota 55440-0010
Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810
Minneapolis, MN 55402-3268
(612) 330-9283
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
X immediately upon filing pursuant to paragraph (b)
on (date), pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i)
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of rule 485
If appropriate, check the following box:
This Post-Effective Amendment designates a new effective date
for a previously filed Post-Effective Amendment.
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24-f of the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for its most recent fiscal year was filed on or about
Jan. 27, 1995.
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PAGE 2
Cross reference sheet showing location in the prospectus and the
statement of additional information of the information called for
by the items enumerated in Part A and B of Form N-1A.
Negative answers omitted from prospectus are so indicated.
<TABLE><CAPTION>
PART A PART B
Section Section in
Item No. in Prospectus Item No. Statement of Additional Information
<S> <C> <C> <C>
1 Cover page of prospectus 10 Cover page of SAI
2 The fund in brief; Sales charge and fund 11 Table of Contents
expenses
12 NA
3(a) Financial highlights
(b) NA 13(a) Additional Investment Policies; all
(c) Performance appendices except Dollar-Cost Averaging
(d) Financial highlights (b) Additional Investment Policies
(c) Additional Investment Policies
4(a) The fund in brief; Investment policies and (d) Portfolio Transactions
risks; How the fund is organized
(b) Investment policies and risks 14(a) Directors and officers of the fund;**
(c) Investment policies and risks Directors and officers
(b) Directors and Officers
5(a) Directors and officers; Directors and (c) Directors and Officers
officers of the fund (listing)
(b) How the fund is organized; About American 15(a) NA
Express Financial Corporation (b) NA
(b)(i) About American Express Financial (c) Directors and Officers
Corporation -- General Information
(b)(ii) Investment manager and transfer agent 16(a)(i) How the fund is organized; About American
(b)(iii) Investment manager and transfer agent Express Financial Corporation**
(c) Portfolio manager (a)(ii) Agreements: Investment Management Services
(d) The fund in brief Agreement, Plan and Supplemental
(e) Investment manager and transfer agent Agreement of Distribution
(f) Distributor (a)(iii) Agreements: Investment Management Services Agreement
(g) Investment manager and transfer agent (b) Agreements: Investment Management Services Agreement
(c) NA
5A(a) * (d) Agreements: Administrative Services
(b) * Agreement, Shareholder Service Agreement
(e) NA
6(a) Shares; Voting rights (f) Agreements: Distribution Agreement
(b) NA (g) NA
(c) NA (h) Custodian; Independent Auditors
(d) Voting Rights (i) Agreements: Transfer Agency Agreement; Custodian
(e) Cover page; Special shareholder services
(f) Dividends and capital gains distributions; 17(a) Portfolio Transactions
Reinvestments (b) Brokerage Commissions Paid to Brokers Affiliated
(g) Taxes with American Express Financial Corporation
(c) Portfolio Transactions
7(a) Distributor (d) Portfolio Transactions
(b) Key terms; Valuing assets (e) Portfolio Transactions
(c) How to buy, exchange or sell shares
(d) How to buy shares 18(a) Shares and Voting rights**
(e) NA (b) NA
(f) Distributor
19(a) Investing in the Fund
8(a) How to sell shares (b) Valuing Fund Shares; Investing in the Fund
(b) NA (c) NA
(c) How to buy shares: Three ways to invest
(d) How to buy, exchange or sell shares: 20 Taxes
Redemption policies -- "Important..."
21(a) Agreements: Distribution Agreement
9 None (b) Agreements: Distribution Agreement
(c) NA
22(a) Performance Information (for money market
funds only)
(b) Performance Information (for all funds except
money market funds)
23 Financial Statements
*Designates information is located in annual report.
**Designates page number in prospectus.
/TABLE
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PART A. Registrant's effective prospectus to this registration
statement is hereby incorporated by reference.
PART B. Registrant's effective statement of additional
information for this registration statement is hereby
incorporated by reference.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS:
These financial statements filed electronically as Item
24(a) to Registrant's Post-Effective Amendment No. 81
to Registration Statement No. 2-13188 are incorporated
herein by reference:
- Independent Auditors' Report dated Jan. 6, 1995
- Statement of Assets and Liabilities, Nov. 30, 1994
- Statement of Operations, Year ended Nov. 30, 1994
- Statement of Changes in Net Assets, for the two-year
period ended Nov. 30, 1993 and Nov. 30, 1994
- Notes to Financial Statements
- Investments in Securities, Nov. 30, 1994
- Notes to Investments in Securities
(b) EXHIBITS:
1. Copy of Articles of Incorporation, as amended October 17,
1988, filed electronically as Exhibit 1 to Post-Effective
Amendment No. 64 to Registration Statement 2-13188 is hereby
incorporated by reference.
2. Copy of By-laws, as amended January 12, 1989, filed
electronically as Exhibit 2 to Post-Effective Amendment No.
69 to Registration Statement No. 2-13188 are hereby
incorporated by reference.
3. Not Applicable.
4. Copy of Stock certificate, filed as Exhibit 4 to Post-
Effective Amendment No. 55 to Registration Statement No. 2-
13188 is hereby incorporated by reference.
5. Form of Investment Management Services Agreement between
Registrant and American Express Financial Corporation, dated
March 20, 1995, filed electronically as Exhibit 5 to
Registrant's Post-Effective Amendment No. 81 to Registration
Statement No. 2-13188 is incorporated herein by reference.
6. Form of Distribution Agreement between Registrant and
American Express Financial Advisors, Inc., dated March 20,
1995, filed electronically as Exhibit 6 to Registrant's Post-
Effective Amendment No. 81 to Registration Statement No. 2-
13188 is incorporated herein by reference.
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PAGE 4
7. All employees are eligible to participate in a profit sharing
plan. Entry into the plan is Jan. 1 or July 1. The
Registrant contributes each year an amount up to 15 percent
of their annual salaries, the maximum deductible amount
permitted under Section 404(a) of the Internal Revenue Code.
8(a). Form of Custodian Agreement between Registrant and American
Express Trust Company, dated March 20, 1995, filed
electronically as Exhibit 8(a) to Registrant's Post-Effective
Amendment No. 81 to Registration Statement No. 2-13188 is
incorporated herein by reference.
8(b). Form of Custody Agreement between Morgan Stanley Trust
Company and IDS Bank & Trust dated May, 1993 is filed
electronically herewith.
9(a). Copy of Agreement of Merger, dated April 10, 1986 filed
electronically as Exhibit 9 to Post-Effective Amendment No.
58 to Registration Statement No. 2-13188 is hereby
incorporated by reference.
9(b). Form of Transfer Agency Agreement between Registrant
and American Express Financial Corporation, dated March
20, 1995, filed electronically as Exhibit 9(b) to
Registrant's Post-Effective Amendment No. 81 to
Registration Statement No. 2-13188 is incorporated
herein by reference.
9(c). Copy of License Agreement, dated January 25, 1988, filed
electronically as Exhibit 9(c) to Post-Effective Amendment
No. 69 to Registration Statement No. 2-13188 is hereby
incorporated by reference.
9(d). Form of Shareholder Service Agreement between Registrant and
American Express Financial Advisors, Inc., dated March 20,
1995, filed electronically as Exhibit 9(d) to Registrant's
Post-Effective Amendment No. 81 to Registration Statement No.
2-13188 is incorporated herein by reference.
9(e). Form of Administrative Services Agreement between Registrant
and American Express Financial Corporation, dated March 20,
1995, filed electronically as Exhibit 9(e) to Registrant's
Post-Effective Amendment No. 81 to Registration Statement No.
2-13188 is incorporated herein by reference.
10. Not Applicable.
11. Independent Auditors' Consent filed electronically as Exhibit
11 to Registrant's Post-Effective Amendment No. 81 to
Registration Statement No. 2-13188 is incorporated herein by
reference.
12. None.
13. Not Applicable.
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14. Forms of Keogh, IRA and other retirement plans, filed as
Exhibits 14(a) through 14(n) to IDS Growth Fund, Inc., Post-
Effective Amendment No. 34 to Registration Statement No. 2-
38355 on Sept. 8, 1986, are incorporated herein by reference.
15. Form of Plan and Agreement of Distribution between Registrant
and American Express Financial Advisors Inc., dated March 20,
1995, filed electronically as Exhibit 15 to Registrant's
Post-Effective Amendment No. 81 to Registration Statement No.
2-13188 is incorporated herein by reference.
16. Copy of Schedule for computation of each performance
quotation provided in the Registration Statement in response
to Item 22(b), filed as Exhibit 16 to Post-Effective
Amendment No. 76 is hereby incorporated by reference.
17. Financial Data Schedule filed electronically as Exhibit 17 to
Registrant's Post-Effective Amendment No. 81 to Registration
Statement No. 2-13188 is incorporated herein by reference.
18. Copy of plan pursuant to Rule 18f-3 under the 1940 Act is
filed electronically herewith.
19(a). Directors' Power of Attorney to sign Amendments to this
Registration Statement, dated Nov. 10, 1994, filed
electronically as Exhibit 18(a) to Registrant's Post-
Effective Amendment No. 80, is incorporated herein by
reference.
19(b). Officers' Power of Attorney to sign Amendments to this
Registration Statement, dated June 1, 1993, filed
electronically as Exhibit 17(b) to Post-Effective
Amendment No. 77 is hereby incorporated by reference.
Item 25. Persons Controlled by or Under Common Control with
Registrant.
None.
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Holders as of
Title of Class May 1, 1995
Common Stock 44,695
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Equity Select
Fund, Inc., certifies that it meets the requirements for the
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Minneapolis and State of Minnesota on the 8th day of
May, 1995.
IDS EQUITY SELECT FUND, INC.
By /s/ Melinda S. Urion
Melinda S. Urion, Treasurer
By /s/ William R. Pearce**
William R. Pearce, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on the 8th day of
May, 1995.
Signature Capacity
/s/ William R. Pearce** President and Principal
William R. Pearce Executive Officer and
Director
/s/ Leslie L. Ogg** Vice President, General
Leslie L. Ogg Counsel and Secretary
/s/ Lynne V. Cheney* Director
Lynne V. Cheney
/s/ William H. Dudley* Director
William H. Dudley
/s/ Robert F. Froehlke* Director
Robert F. Froehlke
/s/ David R. Hubers* Director
David R. Hubers
/s/ Heinz F. Hutter*
Heinz F. Hutter Director<PAGE>
PAGE 7
Signature Capacity
/s/ Anne P. Jones* Director
Anne P. Jones
/s/ Donald M. Kendall* Director
Donald M. Kendall
/s/ Melvin R. Laird* Director
Melvin R. Laird
/s/ Lewis W. Lehr* Director
Lewis W. Lehr
/s/ Edson W. Spencer* Director
Edson W. Spencer
/s/ John R. Thomas* Director
John R. Thomas
/s/ Wheelock Whitney* Director
Wheelock Whitney
/s/ C. Angus Wurtele* Director
C. Angus Wurtele
*Signed pursuant to Directors' Power of Attorney dated November 10,
1994, filed electronically as Exhibit 18(a) to Registrant's Post-
Effective Amendment No. 80, by:
/s/ Leslie L. Ogg
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated June 1,
1993, filed electronically as Exhibit 17(b) to Registrant's Post-
Effective Amendment No. 77 by:
/s/ Leslie L. Ogg
Leslie L. Ogg
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CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 82
TO REGISTRATION STATEMENT NO. 2-13188
This Post-Effective Amendment comprises the following papers and
documents:
The facing sheet.
The cross reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Financial Statements.
Other information.
Exhibits.
The signatures.
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<PAGE>
PAGE 1 IDS Bond Fund, Inc.
March 20, 1995
Plan under Section 18f-3(d)
Filed pursuant to Item 24(b)(18) of Form N-lA
Separate Arrangements
Each class of shares will represent interests in the same portfolio
of investments of the Fund and be identical except those
differences that relate to (a) the impact of the disproportionate
payments made under the Rule 12b-1 plan; (b) the impact of the
disproportionate payments made because of service fees; (c) the
differences in class expenses including transfer agent fees and any
other expense determined by the board of directors to be a class
expense; and (d) the difference in voting rights on the 12b-1 plan,
exchange privileges and class designations. The current classes of
shares are as follows:
Class A shares - 5% initial sales charge waived or reduced
for certain purchases.
Class B shares - contingent deferred sales charge ranging
from 5% down to 0% after six years.
Class Y shares - no sales charge
Expense Allocation Procedures
American Express Financial Corporation, as the Fund's
administrator, on a daily basis shall allocate the income,
expenses, and realized and unrealized gains and losses of the Fund
on the basis of the relative percentage of net assets of each class
of shares, except class specific expenses for service fees, 12b-1
distribution fees, and transfer agent fees which shall be paid
directly by each class as follows:
Class A and Class B service fee - 17.5 basis points
Class B distribution fee - 75 basis points
Class B transfer agent fee - an additional $1 for each
shareholder account
Should at any time an expense of a class be waived or reimbursed,
American Express Financial Corporation first shall determine that
such waiver or reimbursement would not result in another class
subsidizing the class, is fair and equitable to all classes and
does not operate to the detriment of another class and then shall
monitor the implementation and operation to assure the waiver or
reimbursement operates consistent with the determination. The board
of directors shall monitor the actions of American Express
Financial Corporation.
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Exchange Privileges
Shares of a class may be exchanged for shares of the same class of
another fund in the IDS MUTUAL FUND GROUP.
Conversion Privileges
Class B shares including a proportionate amount of shares acquired
through reinvestment of distributions shall convert after eight
years into Class A shares at relative net asset values without the
imposition of any fee.
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PAGE 10
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PAGE 1
CUSTODY AGREEMENT
This Custody Agreement is dated May, 1993 between MORGAN STANLEY
TRUST COMPANY, a New York State chartered trust company (the
"Custodian"), and IDS Bank & Trust (the "Customer").
1. The Customer hereby appoints the Custodian as a custodian of
securities and other property owned or under the control of the
Customer which are delivered to the Custodian, or any Subcustodian
as appointed below, from time to time to be held in custody for the
benefit of the Customer. The Customer instructs the Custodian to
establish on the books and records of the Custodian an account (the
"Account") in the name of the Customer. The Custodian shall record
in the Account and shall have general responsibility for the
safekeeping of all securities ("Securities"), cash and other
property (all such Securities, cash and other Property being
collectively the "Property") of the Customer so delivered for
custody. It is understood that the specific procedures the
Custodian will use in carrying out its responsibilities under this
Agreement are set forth in the procedures manual (the "Procedures
Manual") prepared by the Custodian and delivered to the Customer,
as such Procedures Manual may be amended from time to time by the
Custodian by 90 days prior written notice to the Customer (unless
the Customer agrees to a shorter period). The Customer acknowledges
that the Procedures Manual constitutes an integral part of this
Agreement.
2. The Property may be held in custody and deposit accounts that
have been established by the Custodian with one or more domestic or
foreign banks, or through the facilities of one or more clearing
agencies or central securities depositories, as listed on Exhibit
A
hereto (the "Subcustodians"), as such Exhibit may be amended from
time to time by the Custodian by written notice to the Customer.
The Custodian shall deliver to the Customer such information as is
necessary or appropriate for the Customer to determine that the
Customer is in compliance with Rule 17f-5 promulgated under the
Investment Company Act of 1940, as amended. The Custodian may hold
Property for all of its customers with a Subcustodian in a single
account that is identified-as belonging to the Custodian for the
benefit of its customers. Any Subcustodian may hold Property in a
securities depository and may utilize a clearing agency. The
Customer agrees that the Property may be physically held outside
the United States. The Custodian shall not be liable for any loss
resulting directly from the physical presence of any Property in a
foreign country (and not by virtue of the actions of the Custodian
or any Subcustodian) including, but not limited to, losses
resulting from nationalization, expropriation, exchange controls or
acts of war or terrorism. Except as provided in the previous
sentence, the liability of the Custodian for losses incurred by the
Customer in respect of Securities shall not be affected by the
Custodian's use of Subcustodians.
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PAGE 2
3. With respect to Property held by a Subcustodian pursuant to
Section 2:
(a) The Custodian will identify on its books as belonging to
the Customer any Property held by a Subcustodian for the
Custodian's account;
(b) The Custodian will hold Property through a Subcustodian
only if (i) such Subcustodian and any securities depository
or clearing agency in which such Subcustodian holds Property,
or any of their creditors, may not assert any right, charge
security interest, lien, encumbrance or other claim of any
kind to such Property except a claim of payment for its safe
custody or administration and (ii) beneficial ownership of
such Property may be freely transferred without the payment
of money or value other than for safe custody or
administration;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any property held by
the Subcustodian other than property of the Custodian's
customers and as held solely for the benefit of customers of
the Custodian; and
(d) In the event that the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian
will be required by its agreement with the Custodian to
identify on its books such Property as being held for the
account of the Custodian as a custodian for its customers.
4. The Custodian shall allow the Customer's accountants reasonable
access to the Custodian's records relating to the Property held by
the Custodian as such accountants may reasonably require in
connection with their examination of the Customer's affairs. The
Custodian shall also obtain from any Subcustodian (and will require
each Subcustodian to use reasonable efforts to obtain from any
securities depository or clearing agency in which it deposits
Property) an undertaking, to the extent consistent with local
practice and the laws of the jurisdiction or jurisdictions to which
such Subcustodian, securities depository or clearing agency is
subject, to permit independent public accountants such reasonable
access to the records of such Subcustodian, securities depository
or clearing agency as may be reasonably required in connection with
the examination of the Customer's affairs or to take such other
action as the Custodian in its judgment may deem sufficient to
ensure such reasonable access.
5. The Custodian shall provide such reports and other information
to the Customer and to such persons as the Customer directs as the
Custodian and the Customer may agree from time to time, including
such reports which are described in the Procedures Manual.
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PAGE 3
6. The Custodian shall make or cause any Subcustodian to make
payments from monies being held in the Account only:
(a) upon the purchase of Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon the delivery of such Securities;
(b) for payments to be made in connection with the
conversion, exchange or surrender of Securities;
(c) upon a request of the Customer that the Custodian return
monies being held in the Account;
(d) upon a request of the Customer that monies be exchanged
for or used to purchase monies denominated in a different
currency and then only upon receipt of such exchanged or
purchased monies;
(e) as provided in Section 8 and 12 hereof;
(f) upon termination of this Custody Agreement as hereinafter
set forth; and
(g) for any other purpose upon receipt of explicit
instructions of the Customer accompanied by evidence
reasonably acceptable to the Custodian as to the
authorization of such payment.
Except as provided in the last two sentences of this Section 6 and
as provided in Section 8, all payments pursuant to this Section 6
will be made only upon receipt by the Custodian of Authorized
Instructions (as hereinafter defined) from the Customer which shall
specify the purpose for which the payment is to be made. In the
event that it is not possible to make a payment in accordance with
Authorized Instructions of the Customer, the Custodian shall
proceed in accordance with the procedures set forth in the
Procedures Manual. Any payment pursuant to subsection (f) of this
Section 6 will be made in accordance with Section 16.
7. The Custodian shall make or cause any Subcustodian to make
transfers, exchanges or deliveries of Securities only:
(a) upon sale of such Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon receipt of payment therefor;
(b) upon exercise of conversion, subscription, purchase,
exchange or other similar rights pertaining to such
Securities and, if applicable to such exercise and if
consistent with practice in the applicable jurisdiction, only
on receipt of substitute or additional securities to be
received upon such exercise;
(c) as provided in Section 8 hereof;
(d) upon the termination of this Custody Agreement as
hereinafter set forth; and
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PAGE 4
(e) for any other purpose upon receipt of explicit
instructions of the Customer accompanied by evidence
reasonably acceptable to the Custodian as to the
authorization of such transfer, exchange or delivery.
Except as provided in the last two sentences of this Section 7 and
as provided in Section 8, all transfers, exchanges or deliveries of
Securities pursuant to this Section 7 will be made only upon
receipt by the Custodian of Authorized Instructions of the Customer
which shall specify the purpose for which the transfer, exchange or
delivery is to be made. In the event that it is not possible to
transfer Securities in accordance with Authorized Instructions of
the Customer, the Custodian shall proceed in accordance with the
procedures set forth in the Procedures Manual. Any transfer or
delivery pursuant to subsection (d) of this Section 7 will be made
in accordance with Section 16.
8. In the absence of Authorized Instructions from the Customer to
the contrary, the Custodian may, and may authorize any Subcustodian
to:
(a) make payments to itself or others for expenses of
handling Property or other similar items relating to its
duties under this Agreement, provided that all such payments
shall be accounted for to the Customer;
(b) receive and collect all income and principal with respect
to Securities and to credit cash receipts to the Account;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of
interim receipts or temporary securities for securities in
definitive form and the exchange of warrants, or other
documents of entitlement to securities, for the securities
themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
(e) execute in the Customer's name such ownership and other
certificates as may be required to obtain the payment of
income from Securities:
(f) pay or cause to be paid, from the Account, any and all
taxes and levies in the nature of taxes imposed on Property
by any governmental authority in connection with custody of
and transactions in such Property;
(g) endorse for collection, in the name of the Customer,
checks, drafts and other negotiable instruments; and
(h) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and
other dealings with the Property.
<PAGE>
PAGE 5
9. "Authorized Instructions" of the Customer shall mean
instructions received by telecopy, tested telex, electronic link or
other electronic means or by such other means as may be agreed in
writing in advance between the Customer and the Custodian. The
Custodian shall be entitled to act, and shall have no liability for
acting, in accordance with the terms of this Agreement or upon any
instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by one or more persons which the Customer has
previously identified to the Custodian as authorized to act on the
Customer's behalf.
10. Securities which must be held in registered form may be
registered in the name of the Custodian's nominee or, in the case
of Securities in the custody of an entity other than the Custodian,
in the name of such entity's nominee. The Customer agrees to hold
the Custodian and Subcustodians and any such nominee harmless from
any liability arising out of any such person acting as a holder of
record of such Securities. The Custodian may without notice to the
Customer cause any Securities to cease to be registered in the name
of any such nominee and to be registered in the name of the
Customer.
11. All cash received by the Custodian for the Account shall be
held by the Custodian as a short-term credit balance in favor of
the Customer and, if the Custodian and the Customer have agreed in
writing in advance that such credit balances shall bear interest,
the Customer shall earn interest at the rates and times as agreed
between the Custodian and the Customer. The Customer understands
that any such credit balances will not be accompanied by the
benefit of any governmental insurance.
12. From time to time, the Custodian may arrange or extend short-
term credit for the Customer which is (i) necessary in connection
with payment and clearance of securities and foreign exchange
transactions or (ii) pursuant to an agreed schedule, as and if set
forth in the Procedures Manual, of credits for dividends and
interest payments on Securities. All such extensions of credit
shall be repayable by the Customer on demand. The Custodian shall
be entitled to charge the Customer interest for any such credit
extension at rates to be agreed upon from time to time. In addition
to any other remedies available, the Custodian shall be entitled to
a right of set-off against the Property to satisfy the repayment of
such credit extensions and the payment of accrued interest thereon.
The Custodian may act as the Customer's agent or act as a principal
in foreign exchange transactions at such rates as are agreed from
time to time between the Customer and the Custodian.
13. The Customer represents that (i) the execution, delivery and
performance of this Agreement (including, without limitation, the
ability to obtain the short-term extensions of credit in accordance
with Section 12) are within the Customer's power and authority and
have been duly authorized by all requisite action (corporate or
otherwise) and (ii) this Agreement and each extension of short-term
credit extended or arranged for the benefit of the Customer in
accordance with Section 12 will at all <PAGE>
PAGE 6
times constitute a legal, valid and binding obligation of the
Customer and be enforceable against the Customer in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights in general and subject to the effect of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law).
The Custodian represents that the execution, delivery and
performance of this Agreement is within the Custodian's power and
authority and has been duly authorized by all requisite action of
the Custodian. This Agreement constitutes the legal, valid and
binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to the
effect of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
14. The Custodian shall be responsible for the performance of only
such duties as are set forth in this Agreement or the Procedures
Manual or contained in Authorized Instructions given to the
Custodian which are not contrary to the provisions of any relevant
law or regulation. The Custodian shall not be liable to the
Customer or to any other person for any action taken or omitted to
be taken by it in connection with this Agreement in the absence of
negligence or willful misconduct on the part of the Custodian. Upon
Custodian, the Customer agrees to deliver to the Custodian a duly
executed power of attorney, in form and substance satisfactory to
the Custodian, authorizing the Custodian to take any action or
execute any instrument on behalf of the Customer as necessary or
advisable to accomplish the purposes of this Agreement.
15. The Customer agrees to pay to the Custodian from time to time
such compensation for its services pursuant to this Agreement as
may be mutually agreed upon from time to time and the Custodian's
out-of-pocket or incidental expenses. The Customer hereby agrees to
hold the Custodian harmless from any liability or loss resulting
from any taxes or other governmental charges, and any expenses
related thereto, which may be imposed or assessed with respect to
the Account or any Property held therein. The Custodian is and any
Subcustodians are authorized to charge the Account for such items
and the Custodian shall have a lien, charge and security interest
on any and all Property for any amount owing to the Custodian from
time to time under this Agreement. Except as set forth in the
previous sentence, or otherwise permitted pursuant to the terms of
this agreement, the Custodian shall not pledge, assign, hypothecate
or otherwise encumber Property without Authorized Instructions; it
being understood that a Subcustodian will generally retain a lien
against securities which the Subcustodian has purchased for the
Account but for which the Customer has not yet paid. If the
Customer is a U.S. person as defined in Rule 902 promulgated by the
Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended (the "Act"), the Customer recognizes that, in
connection with the Customer's election from time to time to
participate in <PAGE>
PAGE 7
distributions of securities (whether pursuant to rights offerings,
warrant subscriptions, mergers, reorganizations or otherwise) which
have not been registered pursuant to the Act, the Custodian may
inform the issuer and its agents that the acquire of the securities
is a U.S. person. The Custodian shall not be responsible to the
Customer for the consequences of any issuer's or agent's refusal to
permit the Customer to acquire such securities, and the Customer
shall hold the Custodian harmless from liability to the issuer and
its agents in connection with any such election by the Customer.
16. This Agreement may be terminated by the Customer or the
Custodian by 90 days written notice to the other, sent by
registered mail. If notice of termination is given, the Customer
shall, within 60 days following the giving of such notice, deliver
to the Custodian a statement in writing specifying the successor
custodian or other person to whom the Custodian shall transfer the
Property. In either event the Custodian, subject to the
satisfaction of any lien it may have, will transfer the Property to
the person so specified. If the Custodian does not receive such
statement the Custodian, at its election, may transfer the Property
to a bank or trust company established under the laws of the United
States or any state thereof to be held and disposed of pursuant to
the provisions of this Agreement or may continue to hold the
Property until such a statement is delivered to the Custodian. In
such event the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian remains in
possession of any Property and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall
remain in full force and effect; provided, however, that the
Custodian shall no longer settle any transactions in securities for
the Account.
17. The Custodian, its agents and employees will maintain the
confidentiality of information concerning the Property held in the
Account, including in dealings with affiliates of the Custodian. In
the event the Custodian or any Subcustodian is requested or
required to disclose any confidential information concerning the
Property, the Custodian shall to the extent practicable and legally
permissible, promptly notify the Customer of such request or
requirement so that the Customer may seek a protective order or
waive the Custodian's or such Subcustodian's compliance with this
Section 17. In the absence of such a waiver, if the Custodian or
such Subcustodian is compelled, in the opinion of its counsel, to
disclose any confidential information, the Custodian or such
Subcustodian may disclose such information to such persons as, in
the opinion of counsel, is so required.
18. Any notice or other communication from the Customer to the
Custodian, unless otherwise provided by this Agreement, shall be
sent by certified or registered mail to Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York, 11201,
Attention: President, and any notice from the Custodian to the
Customer is to be mailed postage prepaid, addressed to the Customer
at the address appearing below, or as it may hereafter be changed
on the Custodian's records in accordance with notice from the
Customer.
<PAGE>
PAGE 8
19. The Custodian may assign all of its rights and obligations
hereunder to any other entity which is qualified to act as
custodian under the terms of this Agreement and majority-owned,
directly or indirectly, by Morgan Stanley Group Inc., and upon the
assumption of the rights and obligations hereunder by such entity,
such entity shall succeed to all of the rights and obligations of,
and be substituted for, the Custodian hereunder as if such entity
had been originally named as custodian herein. The Custodian shall
give prompt written notice to the Customer upon the effectiveness
of any such assignment.
This Agreement shall bind the successors and assigns of the
Customer and the Custodian and shall be governed by the laws of the
State of New York applicable to contracts executed in and to be
performed in that state.
________________________
By /s/ Mark Ellis
Name: Mark Ellis
Title: Vice President
Address for record: IDS Trust
1200 Northstar West
P.O. Box 534
Minneapolis, MN 55440-0534
________________________
Accepted:
MORGAN STANLEY TRUST COMPANY
By /s/ David P. Roccato
Authorized Signature
Roccato
