SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 27 (File No. 2-96367) [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 29 (File No. 811-4252) [X]
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AXP Variable Portfolio - Managed Series, Inc.
(Formerly known as IDS LIFE MANAGED FUND, INC.)
IDS Tower 10
Minneapolis, MN 55440-0010
Leslie L. Ogg - 901 S. Marquette Ave., 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)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on Oct. 29, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) 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.
<PAGE>
PART A
The combined Prospectus containing information for AXP Variable
Portfolio - Investment Series, Inc., AXP Variable Portfolio - Income
Series, Inc., AXP Variable Portfolio - Managed Series, Inc. and AXP
Variable Portfolio - Money Market Series, Inc. filed in Post-Effective
Amendment No. 40 to Registration Statement No. 2-73115 is incorporated by
reference.
PART B
The combined Statement of Additional Information containing information
for AXP Variable Portfolio - Investment Series, Inc., AXP Variable
Portfolio - Income Series, Inc., AXP Variable Portfolio - Managed Series,
Inc. and AXP Variable Portfolio - Money Market Series, Inc. filed in
Post-Effective Amendment No. 40 to Registration Statement No. 2-73115 is
incorporated by reference.
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) Articles of Incorporation as amended Oct. 13, 1989, filed electronically as
Exhibit No. 1 to Registrant's Post-Effective Amendment No. 13, are
incorporated by reference.
(b) By-Laws as amended Jan. 12, 1989, filed electronically as Exhibit No. 2 to
Registrant's Post-Effective Amendment No. 13, are incorporated by
reference.
(c) Stock certificate for common shares, is on file at the Registrant's
headquarters.
(d)(1) Investment Management Services Agreement between Registrant and IDS Life
Insurance Company, dated March 20, 1995, filed electronically as Exhibit
No. 5(a) to Registrant's Post-Effective Amendment No. 22, is incorporated
by reference.
(d)(2) Investment Management Services Agreement, dated Sept. 13, 1999, between
Registrant on behalf of AXP Variable Portfolio - Diversified Equity Income
Fund, and IDS Life Insurance Company, filed electronically herewith.
(d)(3) Investment Advisory Agreement between IDS Life Insurance Company and
American Express Financial Corporation dated Oct. 14, 1998, filed
electronically as Exhibit 5(b) to Registrant's Post-Effective Amendment No.
23 filed on or about Oct. 30, 1998, is incorporated by reference.
(d)(4) Addendum to Investment Advisory Agreement dated Oct. 14, 1999, between
IDS Life Insurance Company and American Express Financial Corporation filed
electronically as Exhibit (d)(5) to AXP Variable Portfolio-Investment
Series, Inc.'s Post-Effective Amendment No. 40 to Registration Statement
No. 2-73115 filed on or about Oct. 28, 1999, is incorporated by reference.
(d)(5) Administrative Services Agreement, dated March 20, 1995, between
Registrant and American Express Financial Corporation, filed electronically
as Exhibit No. 5(c) to Registrant's Post-Effective Amendment No. 16, is
incorporated by reference.
(d)(6) Administrative Services Agreement, dated Sept. 13, 1999, between
Registrant on behalf of AXP Variable Portfolio - Diversified Equity Income
Fund, and American Express Financial Corporation, filed electronically
herewith.
(e) Underwriting contracts: Not Applicable.
(f) 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.
(g)(1) Custodian Agreement between Registrant and American Express Trust
Company, dated March 20, 1995, filed electronically as Exhibit No. 8(b) to
Registrant's Post-Effective Amendment No. 16, is incorporated by reference.
(g)(2) Custodian Agreement dated Sept. 13, 1999, between Registrant on behalf of
AXP Variable Portfolio - Diversified Equity Income Fund and American
Express Trust Company, filed electronically herewith.
<PAGE>
(g)(3) Custodian Agreement dated May 13, 1999 between American Express Trust
Company and The Bank of New York filed electronically as Exhibit (g)(3) to
IDS Precious Metal Fund, Inc.'s Post-Effective Amendment No. 33,
Registration Statement No. 2-93745 filed on or about May 24, 1999, is
incorporated by reference.
(h)(1) License Agreement between Registrant and IDS Financial Corporation, dated
Jan. 25, 1988, filed electronically as Exhibit No. 9 to Registrant's
Post-Effective Amendment No. 13, is incorporated by reference.
(h)(2) License Agreement dated June 17, 1999 between the American Express Funds
and American Express Company filed electronically on or about Sept. 23,
1999 as Exhibit (h)(4) to AXP Stock Fund, Inc.'s Post-Effective Amendment
No. 98 to Registration Statement No. 2-11358, is incorporated by reference.
(i) Opinion and consent of counsel as to the legality of the securities being
registered, filed electronically herewith.
(j) Independent Auditors' Consent filed electronically as Exhibit (j) to
Post-Effective Amendment No. 40 to Registration Statement No. 2-73115, is
incorporated by reference.
(k) Omitted Financial Statements: Not Applicable.
(l) Initial Capital Agreements: Not Applicable.
(m) Plan and Agreement of Distribution dated Sept. 13, 1999, between Registrant
on behalf of AXP Variable Portfolio - Diversified Equity Income Fund and
IDS Life Insurance Company, filed electronically herewith.
(n) Financial Data Schedule: Not Applicable.
(o) Rule 18f-3 Plan: Not Applicable.
(p)(1) Directors' Power of Attorney to sign Amendments to this Registration
Statement, dated Jan. 14, 1999, filed electronically as Exhibit (p)(1) to
Post-Effective Amendment No. 37 to Registration Statement No. 2-73115 filed
on or about May 28, 1999, is incorporated by reference.
(p)(2) Officers' Power of Attorney to sign Amendments to this Registration
Statement, dated March 1, 1999, filed electronically as Exhibit (p)(2) to
Post-Effective Amendment No. 37 to Registration Statement No. 2-73115 filed
on or about May 28, 1999, is incorporated by reference.
<PAGE>
Item 24. Persons Controlled by or Under Common Control with Registrant
IDS Life and its subsidiaries are the record holders of all outstanding shares
of AXP Variable Portfolio - Investment Series, Inc., AXP Variable Portfolio -
Income Series, Inc., AXP Variable Portfolio - Money Market Series, Inc. and AXP
Variable Portfolio - Managed Series Inc. All of such shares were purchased and
are held by IDS Life and its subsidiaries pursuant to instructions from owners
of variable annuity contracts issued by IDS Life and its subsidiaries.
Accordingly, IDS Life disclaims beneficial ownership of all shares of each fund.
Item 25. Indemnification
The Articles of Incorporation of the registrant provide that the Fund shall
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that she or he is or was a director, officer, employee or
agent of the Fund, or is or was serving at the request of the Fund as a
director, officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may purchase
liability insurance and advance legal expenses, all to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or hereafter
amended. The By-laws of the registrant provide that present or former directors
or officers of the Fund made or threatened to be made a party to or involved
(including as a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by the Minnesota
Business Corporation Act, all as more fully set forth in the By-laws filed as an
exhibit to this registration statement.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Any indemnification hereunder shall not be exclusive of any other rights of
indemnification to which the directors, officers, employees or agents might
otherwise be entitled. No indemnification shall be made in violation of the
Investment Company Act of 1940.
<PAGE>
<TABLE>
<CAPTION>
Item 26. Business and Other Connections of Investment Advisor
(IDS Life Insurance Company).
Directors and officers of IDS Life Insurance Company who are directors and/or
officers of one or more other companies:
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Name and Title Other company(s) Address Title within other
company(s)
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Timothy V. Bechtold, American Centurion Life IDS Tower 10 Director and President
Executive Vice President Assurance Company Minneapolis, MN 55440
American Express Financial Vice President
Advisors Inc.
American Express Financial Vice President
Corporation
IDS Life Insurance Company P.O. Box 5144 Director and President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Mark W. Carter, American Express Financial IDS Tower 10 Senior Vice President and
Executive Vice President Advisors Inc. Minneapolis, MN 55440 Chief Marketing Officer
American Express Financial Director, Senior Vice
Corporation President and Chief
Marketing Officer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Robert M. Elconin, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Financial Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Lorraine R. Hart, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440
American Centurion Life Vice President
Assurance Company
American Enterprise Life Vice President
Insurance Company
American Express Financial Vice President
Advisors Inc.
American Express Financial Vice President
Corporation
American Partners Life Director and Vice
Insurance Company President
IDS Certificate Company Vice President
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Vice President
Funds A and B
Investors Syndicate Director and Vice
Development Corp. President
IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205
IDS Property Casualty 1 WEG Blvd. Vice President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Jeffrey S. Horton, AMEX Assurance Company IDS Tower 10 Vice President, Treasurer
Vice President Minneapolis, MN 55440 and Assistant Secretary
American Centurion Life Vice President and
Assurance Company Treasurer
American Enterprise Vice President and
Investment Services Inc. Treasurer
American Enterprise Life Vice President and
Insurance Company Treasurer
American Express Asset Vice President and
Management Group Inc. Treasurer
American Express Asset Vice President and
Management International Treasurer
Inc.
American Express Client Vice President and
Service Corporation Treasurer
American Express Vice President and
Corporation Treasurer
American Express Financial Vice President and
Advisors Inc. Treasurer
American Express Financial Vice President and
Corporation Corporate Treasurer
American Express Insurance Vice President and
Agency of Arizona Inc. Treasurer
American Express Insurance Vice President and
Agency of Idaho Inc. Treasurer
American Express Insurance Vice President and
Agency of Nevada Inc. Treasurer
American Express Insurance Vice President and
Agency of Oregon Inc. Treasurer
American Express Minnesota Vice President and
Foundation Treasurer
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Kentucky Inc.
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Maryland Inc.
American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Pennsylvania Inc.
American Partners Life Vice President and
Insurance Company Treasurer
IDS Cable Corporation Director, Vice President
and Treasurer
IDS Cable II Corporation Director, Vice President
and Treasurer
IDS Capital Holdings Inc. Vice President, Treasurer
and Assistant Secretary
IDS Certificate Company Vice President and
Treasurer
IDS Insurance Agency of Vice President and
Alabama Inc. Treasurer
IDS Insurance Agency of Vice President and
Arkansas Inc. Treasurer
IDS Insurance Agency of Vice President and
Massachusetts Inc. Treasurer
IDS Insurance Agency of Vice President and
New Mexico Inc. Treasurer
IDS Insurance Agency of Vice President and
North Carolina Inc. Treasurer
IDS Insurance Agency of Vice President and
Ohio Inc. Treasurer
IDS Insurance Agency of Vice President and
Wyoming Inc. Treasurer
IDS Life Insurance Company P.O. Box 5144 Vice President and
of New York Albany, NY 12205 Treasurer
IDS Life Series Fund Inc. Vice President and
Treasurer
IDS Life Variable Annuity Vice President and
Funds A & B Treasurer
IDS Management Corporation Director, Vice President
and Treasurer
IDS Partnership Services Vice President and
Corporation Treasurer
IDS Plan Services of Vice President and
California, Inc. Treasurer
IDS Real Estate Services, Vice President and
Inc. Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Sales Support Inc. Vice President and
Treasurer
American Express Financial Vice President and
Advisors Japan Inc. Treasurer
Investors Syndicate Vice President and
Development Corp. Treasurer
IDS Property Casualty 1 WEG Blvd. Vice President, Treasurer
Insurance Company DePere, WI 54115 and Assistant Secretary
Public Employee Payment Vice President and
Company Treasurer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
David R. Hubers, AMEX Assurance Company IDS Tower 10 Director
Director Minneapolis, MN 55440
American Express Financial Chairman, President and
Advisors Inc. Chief Executive Officer
American Express Financial Director, President and
Corporation Chief Executive Officer
American Express Service Director and President
Corporation
IDS Certificate Company Director
IDS Plan Services of Director and President
California, Inc.
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James M. Jensen, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Financial Vice President
Corporation
IDS Life Series Fund, Inc. Director
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Richard W. Kling, AMEX Assurance Company IDS Tower 10 Director
Director and President Minneapolis, MN 55440
American Centurion Life Director and Chairman of
Assurance Company the Board
American Enterprise Life Director and Chairman of
Insurance Company the Board
American Express Director and President
Corporation
American Express Financial Senior Vice President
Advisors Inc.
American Express Financial Director and Senior Vice
Corporation President
American Express Insurance Director and President
Agency of Arizona Inc.
American Express Insurance Director and President
Agency of Idaho Inc.
American Express Insurance Director and President
Agency of Nevada Inc.
American Express Insurance Director and President
Agency of Oregon Inc.
American Express Property Director and President
Casualty Insurance Agency
of Kentucky Inc.
American Express Property Director and President
Casualty Insurance Agency
of Maryland Inc.
American Express Property Director and President
Casualty Insurance Agency
of Pennsylvania Inc.
American Express Service Vice President
Corporation
American Partners Life Director and Chairman of
Insurance Company the Board
IDS Certificate Company Director and Chairman of
the Board
IDS Insurance Agency of Director and President
Alabama Inc.
IDS Insurance Agency of Director and President
Arkansas Inc.
IDS Insurance Agency of Director and President
Massachusetts Inc.
IDS Insurance Agency of Director and President
New Mexico Inc.
IDS Insurance Agency of Director and President
North Carolina Inc.
IDS Insurance Agency of Director and President
Ohio Inc.
IDS Insurance Agency of Director and President
Wyoming Inc.
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Manager, Chairman of the
Funds A and B Board and President
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
IDS Life Insurance Company P.O. Box 5144 Director and Chairman of
of New York Albany, NY 12205 the Board
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Paul F. Kolkman, American Express Financial IDS Tower 10 Vice President
Director and Executive Vice Advisors Inc. Minneapolis, MN 55440
President
American Express Financial Vice President
Corporation
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Paula R. Meyer, American Enterprise Life IDS Tower 10 Vice President
Director and Executive Vice Insurance Company Minneapolis, MN 55440
President
American Express Director
Corporation
American Express Financial Vice President
Advisors Inc.
American Partners Life Director and President
Insurance Company
IDS Certificate Company Director and President
American Express Financial Vice President
Corporation
Investors Syndicate Director, Chairman of the
Development Corporation Board and President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Pamela J. Moret, American Express Financial IDS Tower 10 Vice President
Executive Vice President Advisors Inc. Minneapolis, MN 55440
American Express Financial Vice President
Corporation
American Express Trust Vice President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Barry J. Murphy, American Express Client IDS Tower 10 Director and President
Director and Executive Vice Service Corporation Minneapolis, MN 55440
President
American Express Financial Senior Vice President
Advisors Inc.
American Express Financial Director and Senior Vice
Corporation President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
James R. Palmer, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
American Express Financial Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Stuart A. Sedlacek, AMEX Assurance Company IDS Tower 10 Director
Director and Executive Vice Minneapolis, MN 55440
President
American Enterprise Life Executive Vice President
Insurance Company
American Express Financial Senior Vice President and
Advisors Inc. Chief Financial Officer
American Express Financial Senior Vice President and
Corporation Chief Financial Officer
American Express Trust Director
Company
American Partners Life Director and Vice President
Insurance Agency
IDS Certificate Company Director and President
IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
F. Dale Simmons, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440
American Centurion Life Vice President
Assurance Company
American Enterprise Life Vice President
Insurance
American Express Financial Vice President
Advisors Inc.
American Express Financial Vice President
Corporation
American Partners Life Vice President
Insurance Company
IDS Certificate Company Vice President
IDS Partnership Services Director and Vice President
Corporation
IDS Real Estate Services Director and Vice President
Inc.
IDS Realty Corporation Director and Vice President
IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
William A. Stoltzmann, American Enterprise Life IDS Tower 10 Director, Vice President,
Vice President, General Insurance Company Minneapolis, MN 55440 General Counsel and
Counsel and Secretary Secretary
American Express Director, Vice President
Corporation and Secretary
American Express Financial Vice President and
Advisors Inc. Assistant General Counsel
American Express Financial Vice President and
Corporation Assistant General Counsel
American Partners Life Director, Vice President,
Insurance Company General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
IDS Life Series Fund Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity General Counsel and
Funds A & B Assistant Secretary
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Philip C. Wentzel, American Centurion Life IDS Tower 10 Vice President and
Vice President and Controller Assurance Company Minneapolis, MN 55440 Controller, Risk Management
American Enterprise Life Vice President and
Insurance Company Controller
IDS Life Insurance Company P.O. Box 5144 Vice President and
of New York Albany, NY 12205 Controller, Risk Management
</TABLE>
Item 27. Principal Underwriters
The Fund has no principal underwriter.
Item 28. Location of Accounts and Records
American Express Financial Corporation
IDS Tower 10
Minneapolis, MN 55440-0010
Item 29. Management Services
Not Applicable.
Item 30. Undertakings
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, AXP Variable Portfolio - Managed Series, Inc. certifies that it meets all
of the requirements for effectiveness of this Amendment to its Registration
Statement under Rule 485(b) of the Securities Act and has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Minneapolis and State of Minnesota
on the 28th day of October, 1999.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
By /s/ Arne H. Carlson**
Arne H. Carlson, Chief Executive Officer
By /s/ John Knight
John Knight, Treasurer
Pursuant to the requirements of the Securities Act this Amendment to its
Registration Statement has been signed below by the following persons in the
capacities indicated on the 28th day of October, 1999.
Signature Capacity
/s/ H. Brewster Atwater, Jr.* Director
H. Brewster Atwater, Jr.
/s/ Arne H. Carlson* Chairman of the Board
Arne H. Carlson
/s/ Lynne V. Cheney* Director
Lynne V. Cheney
/s/ David R. Hubers* Director
David R. Hubers
/s/ Heinz F. Hutter* Director
Heinz F. Hutter
/s/ Anne P. Jones* Director
Anne P. Jones
/s/ William R. Pearce* Director
William R. Pearce
/s/ Alan K. Simpson* Director
Alan K. Simpson
/s/ John R. Thomas* Director
John R. Thomas
<PAGE>
/s/ C. Angus Wurtele* Director
C. Angus Wurtele
*Signed pursuant to Directors' Power of Attorney dated Jan. 14, 1999, filed
electronically as Exhibit (p)(1) to Post-Effective Amendment No. 37 to
Registration Statement No. 2-73115, by:
/s/ Leslie L. Ogg
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated March 1, 1999, filed
electronically as Exhibit (p)(2) to Post-Effective Amendment No. 37 to
Registration Statement No. 2-73115, by:
/s/ Leslie L. Ogg
Leslie L. Ogg
<PAGE>
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NUMBER 27
TO REGISTRATION STATEMENT NO. 2-96367
This Post-Effective Amendment contains the following papers and documents:
The facing sheet.
Part A (incorporated by reference).
The prospectus.
Part B (incorporated by reference).
Statement of Additional Information.
Part C.
Other information.
The signatures.
Exhibits.
<PAGE>
AXP VARIABLE PORTFOLIO-MANAGED SERIES, INC.
File No. 2-96367/811-4252
EXHIBIT INDEX
Exhibit (d)(2): Investment Management Services Agreement, dated Sept. 13,
1999.
Exhibit (d)(6): Administrative Services Agreement, dated Sept. 13, 1999.
Exhibit (g)(2): Custodian Agreement, dated Sept. 13, 1999.
Exhibit (i): Opinion and Consent of Counsel.
Exhibit (m): Plan and Agreement of Distribution, dated Sept. 13, 1999.
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 13th day of September, 1999, by and between AXP
Variable Portfolio - Managed Series, Inc. (the "Corporation"), a Minnesota
corporation, on behalf of its underlying series fund AXP Variable Portfolio -
Diversified Equity Income Fund (the "Fund"), and IDS Life Insurance Company
("IDS Life"), a Minnesota corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund hereby retains IDS Life, and IDS Life hereby agrees, for the
period of this Agreement and under the terms and conditions hereinafter
set forth, to furnish the Fund continuously with suggested investment
planning; to determine, consistent with the Fund's investment
objectives and policies, which securities in IDS Life's discretion
shall be purchased, held or sold and to execute or cause the execution
of purchase or sell orders; to prepare and make available to the Fund
all necessary research and statistical data in connection therewith; to
furnish all services of whatever nature required in connection with the
management of the Fund including transfer agent and dividend-disbursing
agent services; to furnish or pay for all supplies, printed material,
office equipment, furniture and office space as the Fund may require;
and to pay or reimburse such expenses of the Fund as may be provided
for in Part Three; subject always to the direction and control of the
Board of Directors (the "Board"), the Executive Committee and the
authorized officers of the Fund. IDS Life agrees to maintain (directly
or through the contract described in paragraph (7) of this Part One) an
adequate organization of competent persons to provide the services and
to perform the functions herein mentioned. IDS Life agrees to meet with
any persons at such times as the Board deems appropriate for the
purpose of reviewing IDS Life's performance under this Agreement.
(2) IDS Life agrees that the investment planning and investment decisions
will be in accordance with general investment policies of the Fund as
disclosed to IDS Life from time to time by the Fund and as set forth in
its prospectuses and registration statements filed with the United
States Securities and Exchange Commission (the "SEC").
(3) IDS Life agrees that it will maintain all required records, memoranda,
instructions or authorizations relating to the acquisition or
disposition of securities for the Fund.
(4) The Fund agrees that it will furnish to IDS Life any information that
the latter may reasonably request with respect to the services
performed or to be performed by IDS Life under this Agreement.
(5) IDS Life is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund
and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein.
Subject to prior authorization by the Fund's Board of appropriate
policies and procedures, and subject to termination at any time by the
Board, IDS Life may also be authorized to effect individual securities
transactions at commission rates in excess of the minimum commission
rates available, to the extent authorized by law, if IDS Life
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or American Express Financial Corporation's
("AEFC") or IDS Life's overall responsibilities with respect to the
Fund and other funds for which it acts as investment adviser.
(6) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither IDS Life, nor any officer,
director or agent thereof shall be held liable to the Fund or its
creditors or shareholders for errors of judgment or for anything except
willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or reckless disregard of its obligations and duties
under the terms of this Agreement. It is further understood and agreed
that IDS Life may rely upon information furnished to it reasonably
believed to be accurate and reliable.
(7) The existence of an investment advisory agreement between IDS Life and
AEFC is specifically acknowledged and approved.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Fund agrees to pay to IDS Life, and IDS Life covenants and agrees
to accept from the Fund in full payment for the services furnished, a
fee composed of an asset charge and a performance incentive adjustment.
(a) The asset charge
(i) The asset charge for each calendar day of each year
shall be equal to the total of 1/365th (1/366th in
each leap year) of the amount computed in accordance
with paragraph (ii) below. The computation shall be
made for each day on the basis of net assets as of
the close of business of the full business day two
(2) business days prior to the day for which the
computation is being made. In the case of the
suspension of the computation of net asset value, the
asset charge for each day during such suspension
shall be computed as of the close of business on the
last full business day on which the net assets were
computed. Net assets as of the close of a full
business day shall include all transactions in shares
of the Fund recorded on the books of the Fund for
that day.
(ii) The asset charge shall be based on the net assets of
the Fund as set forth in the following table.
AXP Variable Portfolio - Diversified Equity Income Fund
Assets Annual rate at
(billions) each asset level
---------- ----------------
First $0.50 0.560%
Next 0.50 0.545
Next 1.00 0.530
Next 1.00 0.515
Next 3.00 0.500
Over 6.00 0.470
(b) The performance incentive adjustment
(i) The performance incentive adjustment, determined monthly, shall be computed
by measuring the percentage point difference between the performance of one
share of the Fund and the performance of the Lipper Equity Income Fund
Index (the "Index"). The performance of one share of the Fund shall be
measured by computing the percentage difference, carried to two decimal
places, between the opening net asset value of one share of the Fund and
the closing net asset value of such share as of the last business day of
the period selected for comparison, adjusted for dividends or capital gain
distributions treated as reinvested at the end of the month during which
the distribution was made but without adjustment for expenses related to a
particular class of shares. The performance of the Index will then be
established by measuring the percentage difference, carried to two decimal
places, between the beginning and ending Index for the comparison period,
with dividends or capital gain distributions on the securities which
comprise the Index being treated as reinvested at the end of the month
during which the distribution was made.
(ii) In computing the adjustment, one percentage point shall be deducted from
the difference, as determined in (b)(i) above. The result shall be
converted to a decimal value (e.g., 2.38% to 0.0238), multiplied by .01 and
then multiplied by the Fund's average net assets for the comparison period.
This product next shall be divided by 12 to put the adjustment on a monthly
basis. Where the performance of the Fund exceeds the Index, the amount so
determined shall be an increase in fees as computed under paragraph (a).
Where Fund performance is exceeded by the Index, the amount so determined
shall be a decrease in such fees. The percentage point difference between
the performance of the Fund and that of the Index, as determined above, is
limited to a maximum of 0.0008 per year.
(iii)The 12 month comparison period will roll over with each succeeding month,
so that it always equals 12 months, ending with the month for which the
performance adjustment is being computed.
(iv) If the Index ceases to be published for a period of more than 90 days,
changes in any material respect or otherwise becomes impracticable to use
for purposes of the adjustment, no adjustment will be made under this
paragraph (b) until such time as the Board approves a substitute index.
(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, the fee accrued shall be prorated on the
basis of the number of days that this Agreement is in effect during the
month with respect to which such payment is made.
(3) The fee provided for hereunder shall be paid in cash by the Fund to IDS
Life within five business days after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Fees payable to IDS Life for the latter's services under
this Agreement.
(b) All fees, costs, expenses and allowances payable to any
person, firm or corporation for services under any agreement
entered into by the Fund covering the offering for sale, sale
and distribution of the Fund's shares.
(c) All taxes of any kind payable by the Fund other than federal
original issuance taxes on shares issued by the Fund.
(d) All brokerage commissions and charges in the purchase and sale of
assets.
(2) The Fund agrees to reimburse IDS Life or its affiliates for the
aggregate cost of the services listed below incurred by IDS Life in its
operation of the Funds.
(a) All custodian or trustee fees, costs and expenses.
(b) Costs and expenses in connection with the auditing and
certification of the records and accounts of the Fund by
independent certified public accountants.
(c) Costs of obtaining and printing of dividend checks, reports to
shareholders, notices, proxies, proxy statements and tax
notices to shareholders, and also the cost of envelopes in
which such are to be mailed.
(d) Postage on all communications, notices and statements to
brokers, dealers, and the Funds' shareholders.
(e) All fees and expenses paid to directors of the Funds; however,
IDS Life will pay fees to directors who are officers or
employees of IDS Life or its affiliated companies.
(f) Costs of fidelity and surety bonds covering officers,
directors and employees of the Fund.
(g) All fees and expenses of attorneys who are not officers or
employees of IDS Life or any of its affiliates.
(h) All fees paid for the qualification and registration for
public sales of the securities of the Fund under the laws of
the United States and of the several states of the United
States in which the securities of the Fund shall be offered
for sale.
(i) Cost of printing prospectuses, statements of additional
information and application forms for existing shareholders,
and any supplements thereto.
(j) Any losses due to theft and defalcation of the assets of the
Fund, or due to judgments or adjustments not covered by surety
or fidelity bonds, and not covered by agreement or obligation.
(k) Expenses incurred in connection with lending portfolio securities
of the Fund.
(l) Expenses properly payable by the Fund, approved by the Board.
Part Four: MISCELLANEOUS
(1) IDS Life shall be deemed to be an independent contractor and, except as
expressly provided or authorized in this Agreement, shall have no
authority to act for or represent the Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that AEFC and IDS Life now render and may continue
to render investment advice and other services to other investment
companies and persons which may or may not have investment policies and
investments similar to those of the Fund and that AEFC and IDS Life
manage their own investments and/or those of their subsidiaries. AEFC
and IDS Life shall be free to render such investment advice and other
services and the Fund hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in AEFC or IDS Life or any successor or assignee thereof, as
directors, officers, stockholders or otherwise; that directors,
officers, stockholders or agents of AEFC or IDS Life are or may be
interested in the Fund as directors, officers, shareholders, or
otherwise; or that AEFC or IDS Life or any successor or assignee, is or
may be interested in the Fund as shareholder or otherwise, provided,
however, that neither AEFC or IDS Life, nor any officer, director or
employee thereof or of the Fund, shall sell to or buy from the Fund any
property or security other than shares issued by the Fund, except in
accordance with applicable regulations or orders of the SEC.
(5) Any notice under this Agreement shall be given in writing, addressed,
and delivered, or mailed postpaid, to the party to this Agreement
entitled to receive such, at such party's principal place of business
in Minneapolis, Minnesota, or to such other address as either party may
designate in writing mailed to the other.
(6) IDS Life agrees that no officer, director or employee of IDS Life will
deal for or on behalf of the Fund with himself as principal or agent,
or with any corporation or partnership in which he may have a financial
interest, except that this shall not prohibit:
(a) Officers, directors or employees of IDS Life from having a
financial interest in the Fund or in IDS Life.
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or
dealer, one or more of whose partners, officers, directors or
employees is an officer, director or employee of IDS Life,
provided such transactions are handled in the capacity of
broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
(c) Transactions with the Fund by a broker-dealer affiliate of IDS
Life as may be allowed by rule or order of the SEC, and if
made pursuant to procedures adopted by the Fund's Board.
(7) IDS Life agrees that, except as herein otherwise expressly provided or
as may be permitted consistent with the use of a broker-dealer
affiliate of IDS Life under applicable provisions of the federal
securities laws, neither it nor any of its officers, directors or
employees shall at any time during the period of this Agreement, make,
accept or receive, directly or indirectly, any fees, profits or
emoluments of any character in connection with the purchase or sale of
securities (except shares issued by the Fund) or other assets by or for
the Fund.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect for two years from the date of
this Agreement, or until a new agreement is approved by a vote of the
majority of the outstanding shares of the Fund and by vote of the
Fund's Board, including the vote required by (b) of this paragraph, and
if no new agreement is so approved, this Agreement shall continue from
year to year thereafter unless and until terminated by either party as
hereinafter provided, except that such continuance shall be
specifically approved at least annually (a) by the Board of the Fund or
by a vote of the majority of the outstanding shares of the Fund and (b)
by the vote of a majority of the directors who are not parties to this
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. As used in
this paragraph, the term "interested person" shall have the same
meaning as set forth in the Investment Company Act of 1940, as amended
(the "1940 Act").
(2) This Agreement may be terminated by either the Fund or IDS Life at any
time by giving the other party 60 days' written notice of such
intention to terminate, provided that any termination shall be made
without the payment of any penalty, and provided further that
termination may be effected either by the Board of the Fund or by a
vote of the majority of the outstanding voting shares of the Fund. The
vote of the majority of the outstanding voting shares of the Fund for
the purpose of this Part Five shall be the vote at a shareholders'
regular meeting, or a special meeting duly called for the purpose, of
67% or more of the Fund's shares present at such meeting if the holders
of more than 50% of the outstanding voting shares are present or
represented by proxy, or more than 50% of the outstanding voting shares
of the Fund, whichever is less.
(3) This Agreement shall terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning as set forth in
the 1940 Act.
IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
AXP Variable Portfolio - Diversified Equity Income Fund
By: /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
IDS LIFE INSURANCE COMPANY
By: /s/ Pamela J. Moret
Pamela J. Moret
Executive Vice President, Variable Assets
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 13th day of September, 1999, by and between AXP Variable
Portfolio Managed Series, Inc. (the "Corporation") a Minnesota corporation on
behalf of its underlying series fund AXP Variable Portfolio - Diversified Equity
Income Fund (the "Fund"), and American Express Financial Corporation, a Delaware
corporation.
Part One: SERVICES
(1) The Fund hereby retains American Express Financial Corporation, and
American Express Financial Corporation hereby agrees, for the period of
this Agreement and under the terms and conditions hereinafter set
forth, to furnish the Fund continuously with all administrative,
accounting, clerical, statistical, correspondence, corporate and all
other services of whatever nature required in connection with the
administration of the Fund as provided under this Agreement; and to pay
such expenses as may be provided for in Part Three hereof; subject
always to the direction and control of the Board of Directors, the
Executive Committee and the authorized officers of the Fund. American
Express Financial Corporation agrees to maintain an adequate
organization of competent persons to provide the services and to
perform the functions herein mentioned. American Express Financial
Corporation agrees to meet with any persons at such times as the Board
of Directors deems appropriate for the purpose of reviewing American
Express Financial Corporation's performance under this Agreement.
(2) The Fund agrees that it will furnish to American Express Financial
Corporation any information that the latter may reasonably request with
respect to the services performed or to be performed by American
Express Financial Corporation under this Agreement.
(3) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither American Express Financial
Corporation, nor any officer, director or agent thereof shall be held
liable to the Fund or its creditors or shareholders for errors of
judgment or for anything except willful misfeasance, bad faith, or
gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the terms of this
Agreement. It is further understood and agreed that American Express
Financial Corporation may rely upon information furnished to it
reasonably believed to be accurate and reliable.
Part Two: COMPENSATION FOR SERVICES
(1) The Fund agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept
from the Fund in full payment for the services furnished, based on the
net assets of the Fund as set forth in the following table:
AXP Variable Portfolio - Diversified Equity Income Fund
Assets Annual rate at
(billions) each asset level
---------- ----------------
First $0.50 0.040%
Next 0.50 0.035
Next 1.00 0.030
Next 1.00 0.025
Next 3.00 0.020
Over 6.00 0.020
The administrative fee for each calendar day of each year shall be
equal to 1/365th (1/366th in each leap year) of the total amount
computed. The computation shall be made for each such day on the basis
of net assets as of the close of business of the full business day two
(2) business days prior to the day for which the computation is being
made. In the case of the suspension of the computation of net asset
value, the administrative fee for each day during such suspension shall
be computed as of the close of business on the last full business day
on which the net assets were computed. As used herein, "net assets" as
of the close of a full business day shall include all transactions in
shares of the Fund recorded on the books of the Fund for that day.
(2) The administrative fee shall be paid on a monthly basis and, in the
event of the termination of this Agreement, the administrative fee
accrued shall be prorated on the basis of the number of days that this
Agreement is in effect during the month with respect to which such
payment is made.
(3) The administrative fee provided for hereunder shall be paid in cash by
the Fund to American Express Financial Corporation within five (5)
business days after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Administrative fees payable to American Express Financial
Corporation for its services under the terms of this
Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public
accountants for services the Fund requests.
(d) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against
the Fund, its directors and officers, (ii) it employs in
conjunction with a claim asserted by the Board of Directors
against American Express Financial Corporation, except that
American Express Financial Corporation shall reimburse the
Fund for such fees and expenses if it is ultimately determined
by a court of competent jurisdiction, or American Express
Financial Corporation agrees, that it is liable in whole or in
part to the Fund, and (iii) it employs to assert a claim
against a third party.
(e) Fees paid for the qualification and registration for public
sale of the securities of the Fund under the laws of the
United States and of the several states in which such
securities shall be offered for sale.
(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books,
periodicals, published services, and office supplies used by
the Fund, equal to the cost of such incurred by American
Express Financial Corporation.
(g) Fees of consultants employed by the Fund.
(h) Directors, officers and employees expenses which shall include
fees, salaries, memberships, dues, travel, seminars, pension,
profit sharing, and all other benefits paid to or provided for
directors, officers and employees, directors and officers
liability insurance, errors and omissions liability insurance,
worker's compensation insurance and other expenses applicable
to the directors, officers and employees, except the Fund will
not pay any fees or expenses of any person who is an officer
or employee of American Express Financial Corporation or its
affiliates.
(i) Filing fees and charges incurred by the Fund in connection
with filing any amendment to its articles of incorporation, or
incurred in filing any other document with the State of
Minnesota or its political subdivisions.
(j) Organizational expenses of the Fund.
(k) One-half of the Investment Company Institute membership dues
charged jointly to the American Express(R) Funds and American
Express Financial Corporation.
(l) Expenses properly payable by the Fund, approved by the Board of
Directors.
(2) American Express Financial Corporation agrees to pay all expenses
associated with the services it provides under the terms of this
Agreement. Further, American Express Financial Corporation agrees that
if, at the end of any month, the expenses of the Fund under this
Agreement and any other agreement between the Fund and American Express
Financial Corporation, but excluding those expenses set forth in (1)(b)
of this Part Three, exceed the most restrictive applicable state
expenses limitation, the Fund shall not pay those expenses set forth in
(1)(a) and (c) through (m) of this Part Three to the extent necessary
to keep the Fund's expenses from exceeding the limitation, it being
understood that American Express Financial Corporation will assume all
unpaid expenses and bill the Fund for them in subsequent months but in
no event can the accumulation of unpaid expenses or billing be carried
past the end of the Fund's fiscal year.
Part Four: MISCELLANEOUS
(1) American Express Financial Corporation shall be deemed to be an
independent contractor and, except as expressly provided or authorized
in this Agreement, shall have no authority to act for or represent the
Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that American Express Financial Corporation now
renders and may continue to render investment advice and other services
to other investment companies and persons which may or may not have
investment policies and investments similar to those of the Fund and
that American Express Financial Corporation manages its own investments
and/or those of its subsidiaries. American Express Financial
Corporation shall be free to render such investment advice and other
services and the Fund hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in anyway affected by the fact that directors, officers,
agents and/or shareholders of the Fund are or may be interested in
American Express Financial Corporation or any successor or assignee
thereof, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of American Express
Financial Corporation are or may be interested in the Fund as
directors, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may
be interested in the Fund as shareholder or otherwise, provided,
however, that neither American Express Financial Corporation, nor any
officer, director or employee thereof or of the Fund, shall sell to or
buy from the Fund any property or security other than shares issued by
the Fund, except in accordance with applicable regulations or orders of
the United States Securities and Exchange Commission.
(5) Any notice under this Agreement shall be given in writing, addressed,
and delivered, or mailed postpaid, to the party to this Agreement
entitled to receive such, at such party's principal place of business
in Minneapolis, Minnesota, or to such other address as either party may
designate in writing mailed to the other.
(6) American Express Financial Corporation agrees that no officer, director
or employee of American Express Financial Corporation will deal for or
on behalf of the Fund with himself as principal or agent, or with any
corporation or partnership in which he may have a financial interest,
except that this shall not prohibit officers, directors or employees of
American Express Financial Corporation from having a financial interest
in the Fund or in American Express Financial Corporation.
(7) The Fund agrees that American Express Financial Corporation may
subcontract for certain of the services described under this Agreement
with the understanding that there shall be no diminution in the quality
or level of the services and that American Express Financial
Corporation remains fully responsible for the services.
(8) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent
of the other party. This Agreement shall be governed by the laws of the
State of Minnesota.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect from year to year
thereafter as the parties may mutually agree; provided that either
party may terminate this Agreement by giving the other party notice in
writing specifying the date of such termination, which shall be not
less than 60 days after the date of receipt of such notice.
(2) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
AXP Variable Portfolio - Diversified Equity Income Fund
By: /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/ Pamela J. Moret
Pamela J. Moret
Vice President - Variable Assets
<PAGE>
CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT dated September 13, 1999, between AXP Variable
Portfolio - Managed Series, Inc., a Minnesota Corporation (the "Corporation") on
behalf of its underlying series fund AXP Variable Portfolio - Diversified Equity
Income Fund and American Express Trust Company, a corporation organized under
the laws of the State of Minnesota with its principal place of business at
Minneapolis, Minnesota (the "Custodian").
WHEREAS, the Corporation desires that its securities and cash be hereafter held
and administered by Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Corporation and the Custodian agree as follows:
Section 1. Definitions
The word "securities" as used herein shall be construed to include, without
being limited to, shares, stocks, treasury stocks, including any stocks of this
Corporation, notes, bonds, debentures, evidences of indebtedness, options to buy
or sell stocks or stock indexes, certificates of interest or participation in
any profit-sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts, voting
trust certificates, certificates of deposit for a security, fractional or
undivided interests in oil, gas or other mineral rights, or any certificates of
interest or participation in, temporary or interim certificates for, receipts
for, guarantees of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of any right or
interest in or to any cash, property or assets and any interest or instrument
commonly known as a security. In addition, for the purpose of this Custodian
Agreement, the word "securities" also shall include other instruments in which
the Corporation may invest including currency forward contracts and commodities
such as interest rate or index futures contracts, margin deposits on such
contracts or options on such contracts.
The words "custodian order" shall mean a request or direction, including a
computer printout, directed to the Custodian and signed in the name of the
Corporation by any two individuals designated in the current certified list
referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.
Section 2. Names, Titles and Signatures of Authorized Persons
The Corporation will certify to the Custodian the names and signatures of its
present officers and other designated persons authorized on behalf of the
Corporation to direct the Custodian by custodian order as herein before defined.
The Corporation agrees that whenever any change occurs in this list it will file
with the Custodian a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Corporation as having been duly adopted by the Board
of Directors or the Executive Committee of the Board of Directors of the
Corporation designating those persons currently authorized on behalf of the
Corporation to direct the Custodian by custodian order, as herein before
defined, and upon such filing (to be accompanied by the filing of specimen
signatures of the designated persons) the persons so designated in said
resolution shall constitute the current certified list. The Custodian is
authorized to rely and act upon the names and signatures of the individuals as
they appear in the most recent certified list from the Corporation which has
been delivered to the Custodian as herein above provided.
Section 3. Use of Subcustodians
The Custodian may make arrangements, where appropriate, with other banks having
not less than two million dollars aggregate capital, surplus and undivided
profits for the custody of securities. Any such bank selected by the Custodian
to act as subcustodian shall be deemed to be the agent of the Custodian.
The Custodian also may enter into arrangements for the custody of securities
entrusted to its care through foreign branches of United States banks; through
foreign banks, banking institutions or trust companies; through foreign
subsidiaries of United States banks or bank holding companies, or through
foreign securities depositories or clearing agencies (hereinafter also called,
collectively, the "Foreign Subcustodian" or indirectly through an agent,
established under the first paragraph of this section, if and to the extent
permitted by Section 17(f) of the Investment Company Act of 1940 and the rules
promulgated by the Securities and Exchange Commission thereunder, any order
issued by the Securities and Exchange Commission, or any "no-action" letter
received from the staff of the Securities and Exchange Commission. To the extent
the existing provisions of the Custodian Agreement are consistent with the
requirements of such Section, rules, order or no-action letter, they shall apply
to all such foreign custodianships. To the extent such provisions are
inconsistent with or additional requirements are established by such Section,
rules, order or no-action letter, the requirements of such Section, rules, order
or no-action letter will prevail and the parties will adhere to such
requirements; provided, however, in the absence of notification from the
Corporation of any changes or additions to such requirements, the Custodian
shall have no duty or responsibility to inquire as to any such changes or
additions.
Section 4. Receipt and Disbursement of Money
(1) The Custodian shall open and maintain a separate account or accounts in
the name of the Corporation or cause its agent to open and maintain
such account or accounts subject only to checks, drafts or directives
by the Custodian pursuant to the terms of this Agreement. The Custodian
or its agent shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
the Corporation. The Custodian or its agent shall make payments of cash
to or for the account of the Corporation from such cash only:
(a) for the purchase of securities for the portfolio of the
Corporation upon the receipt of such securities by the
Custodian or its agent unless otherwise instructed on behalf
of the Corporation;
(b) for the purchase or redemption of shares of capital stock of
the Corporation;
(c) for the payment of interest, dividends, taxes, management
fees, or operating expenses (including, without limitation
thereto, fees for legal, accounting and auditing services);
(d) for payment of distribution fees, commissions, or redemption
fees, if any;
(e) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the
Corporation held by or to be delivered to the Custodian;
(f) for payments in connection with the return of securities
loaned by the Corporation upon receipt of such securities or
the reduction of collateral upon receipt of proper notice;
(g) for payments for other proper corporate purposes;
(h) or upon the termination of this Agreement.
Before making any such payment for the purposes permitted under the terms of
items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1) of this section, the
Custodian shall receive and may rely upon a custodian order directing such
payment and stating that the payment is for such a purpose permitted under these
items (a), (b), (c), (d), (e), (f) or (g) or, where appropriate, a trade
affirmation report, and that in respect to item (g), a copy of a resolution of
the Board of Directors or of the Executive Committee of the Board of Directors
of the Corporation signed by an officer of the Corporation and certified by its
Secretary or an Assistant Secretary, specifying the amount of such payment,
setting forth the purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is made. Notwithstanding the above, for
the purposes permitted under items (a) or (f) of paragraph (1) of this section,
the Custodian may rely upon a facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of the
Corporation to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of
the Corporation and drawn on or to the order of the Corporation and to
deposit same to the account of the Corporation pursuant to this
Agreement.
Section 5. Receipt of Securities
Except as permitted by the second paragraph of this section, the Custodian or
its agent shall hold in a separate account or accounts, and physically
segregated at all times from those of any other persons, firms or corporations,
pursuant to the provisions hereof, all securities received by it for the account
of the Corporation. The Custodian shall record and maintain a record of all
certificate numbers. Securities so received shall be held in the name of the
Corporation, in the name of an exclusive nominee duly appointed by the Custodian
or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the Securities and Exchange
Commission may adopt, the Custodian may deposit all or any part of the
securities owned by the Corporation in a securities depository which includes
any system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities.
All securities are to be held or disposed of by the Custodian for, and subject
at all times to the instructions of, the Corporation pursuant to the terms of
this Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities, except pursuant
to the directive of the Corporation and only for the account of the Corporation
as set forth in Section 6 of this Agreement.
Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any securities of the
Corporation held by it pursuant to this Agreement. The Custodian agrees to
transfer, exchange or deliver securities held by it or its agent hereunder only:
(a) for sales of such securities for the account of the Corporation, upon
receipt of payment therefor;
(b) when such securities are called, redeemed, retired or otherwise
become payable;
(c) for examination upon the sale of any such securities in accordance with
"street delivery" custom which would include delivery against interim
receipts or other proper delivery receipts;
(d) in exchange for or upon conversion into other securities alone or other
securities and cash whether pursuant to any plan of
(e) merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(f) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(g) upon conversion of such securities pursuant to their terms into
other securities;
(h) upon exercise of subscription, purchase or other similar rights
represented by such securities; for loans of such securities by the
Corporation upon receipt of collateral; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a), (b), (c), (d),
(e), (f), (g) and (h), securities or cash received in exchange therefore shall
be delivered to the Custodian, its agent, or to a securities depository. Before
making any such transfer, exchange or delivery, the Custodian shall receive a
custodian order or a facsimile from the Corporation requesting such transfer,
exchange or delivery and stating that it is for a purpose permitted under
Section 6 or, where appropriate, a trade affirmation report, (whenever a
facsimile is utilized, the Corporation will also deliver an original signed
custodian order) and, in respect to item (i), a copy of a resolution of the
Board of Directors or of the Executive Committee of the Board of Directors of
the Corporation signed by an officer of the Corporation and certified by its
Secretary or an Assistant Secretary, specifying the securities, setting forth
the purpose for which such payment, transfer, exchange or delivery is to be
made, declaring such purpose to be a proper corporate purpose, and naming the
person or persons to whom such transfer, exchange or delivery of such securities
shall be made.
Section 7. Custodian's Acts Without Instructions
Unless and until the Custodian receives a contrary custodian order from the
Corporation, the Custodian shall or shall cause its agent to:
(a) present for payment all coupons and other income items held by the
Custodian or its agent for the account of the Corporation which call
for payment upon presentation and hold all cash received by it upon
such payment for the account of the Corporation;
(b) present for payment all securities held by it or its agent which mature
or when called, redeemed, retired or otherwise become payable;
(c) ascertain all stock dividends, rights and similar securities to be
issued with respect to any securities held by the Custodian or its
agent hereunder, and to collect and hold for the account of the
Corporation all such securities; and
(d) ascertain all interest and cash dividends to be paid to security
holders with respect to any securities held by the Custodian or its
agent, and to collect and hold such interest and cash dividends for the
account of the Corporation.
Section 8. Voting and Other Action
Neither the Custodian nor any nominee of the Custodian shall vote any of the
securities held hereunder by or for the account of the Corporation. The
Custodian shall promptly deliver to the Corporation all notices, proxies and
proxy soliciting materials with relation to such securities, such proxies to be
executed by the registered holder of such securities (if registered otherwise
than in the name of the Corporation), but without indicating the manner in which
such proxies are to be voted.
Custodian shall transmit promptly to the Corporation all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith) received by the Custodian
from issuers of the securities being held for the Corporation. With respect to
tender or exchange offers, the Custodian shall transmit promptly to the
Corporation all written information received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
Section 9. Transfer Taxes
The Corporation shall pay or reimburse the Custodian for any transfer taxes
payable upon transfers of securities made hereunder, including transfers
resulting from the termination of this Agreement. The Custodian shall execute
such certificates in connection with securities delivered to it under this
Agreement as may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such securities which may
be entitled to such exemption.
Section 10. Custodian's Reports
The Custodian shall furnish the Corporation as of the close of business each day
a statement showing all transactions and entries for the account of the
Corporation. The books and records of the Custodian pertaining to its actions as
Custodian under this Agreement and securities held hereunder by the Custodian
shall be open to inspection and audit by officers of the Corporation, internal
auditors employed by the Corporation's investment adviser, and independent
auditors employed by the Corporation. The Custodian shall furnish the
Corporation in such form as may reasonably be requested by the Corporation a
report, including a list of the securities held by it in custody for the account
of the Corporation, identification of any subcustodian, and identification of
such securities held by such subcustodian, as of the close of business of the
last business day of each month, which shall be certified by a duly authorized
officer of the Custodian. It is further understood that additional reports may
from time to time be requested by the Corporation. Should any report ever be
filed with any governmental authority pertaining to lost or stolen securities,
the Custodian will concurrently provide the Corporation with a copy of that
report.
The Custodian also shall furnish such reports on its systems of internal
accounting control as the Corporation may reasonably request from time to time.
Section 11. Concerning Custodian
For its services hereunder the Custodian shall be paid such compensation at such
times as may from time to time be agreed on in writing by the parties hereto in
a Custodian Fee Agreement.
The Custodian shall not be liable for any action taken in good faith upon any
custodian order or facsimile herein described, trade affirmation report, or
certified copy of any resolution of the Board of Directors or of the Executive
Committee of the Board of Directors of the Corporation, and may rely on the
genuineness of any such document which it may in good faith believe to have been
validly prepared or executed.
The Corporation agrees to indemnify and hold harmless Custodian and its nominee
from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or its nominee in
connection with the performance of this Agreement, except such as may arise from
the Custodian's or its nominee's own negligent action, negligent failure to act
or willful misconduct. Custodian is authorized to charge any account of the
Corporation for such items. In the event of any advance of cash for any purpose
made by Custodian resulting from orders or instructions of the Corporation, or
in the event that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Corporation shall be
security therefor.
The Custodian shall maintain a standard of care equivalent to that which would
be required of a bailee for hire and shall not be liable for any loss or damage
to the Corporation resulting from participation in a securities depository
unless such loss or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against any securities
depository or from use of an agent, unless such loss or damage arises by reason
of any negligence, misfeasance, or willful misconduct of officers or employees
of the Custodian, or from its failure to enforce effectively such rights as it
may have against any agent.
Section 12. Termination and Amendment of Agreement
The Corporation and the Custodian mutually may agree from time to time in
writing to amend, to add to, or to delete from any provision of this Agreement.
The Custodian may terminate this Agreement by giving the Corporation ninety
days' written notice of such termination by registered mail addressed to the
Corporation at its principal place of business.
The Corporation may terminate this Agreement at any time by written notice
thereof delivered, together with a copy of the resolution of the Board of
Directors authorizing such termination and certified by the Secretary of the
Corporation, by registered mail to the Custodian.
Upon such termination of this Agreement, assets of the Corporation held by the
Custodian shall be delivered by the Custodian to a successor custodian, if one
has been appointed by the Corporation, upon receipt by the Custodian of a copy
of the resolution of the Board of Directors of the Corporation certified by the
Secretary, showing appointment of the successor custodian, and provided that
such successor custodian is a bank or trust company, organized under the laws of
the United States or of any State of the United States, having not less than two
million dollars aggregate capital, surplus and undivided profits. Upon the
termination of this Agreement as a part of the transfer of assets, either to a
successor custodian or otherwise, the Custodian will deliver securities held by
it hereunder, when so authorized and directed by resolution of the Board of
Directors of the Corporation, to a duly appointed agent of the successor
custodian or to the appropriate transfer agents for transfer of registration and
delivery as directed. Delivery of assets on termination of this Agreement shall
be effected in a reasonable, expeditious and orderly manner; and in order to
accomplish an orderly transition from the Custodian to the successor custodian,
the Custodian shall continue to act as such under this Agreement as to assets in
its possession or control. Termination as to each security shall become
effective upon delivery to the successor custodian, its agent, or to a transfer
agent for a specific security for the account of the successor custodian, and
such delivery shall constitute effective delivery by the Custodian to the
successor under this Agreement.
In addition to the means of termination herein before authorized, this Agreement
may be terminated at any time by the vote of a majority of the outstanding
shares of the Corporation and after written notice of such action to the
Custodian.
<PAGE>
Section 13. General
Nothing expressed or mentioned in or to be implied from any provision of this
Agreement is intended to, or shall be construed to give any person or
corporation other than the parties hereto, any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns.
This Agreement shall be governed by the laws of the State of Minnesota.
This Agreement supersedes all prior agreements between the parties.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
AXP Variable Portfolio - Diversified Equity Income Fund
By: /s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
AMERICAN EXPRESS TRUST COMPANY
By: /s/ ChandraKant A. Patel
ChandraKant A. Patel
Vice President
Opinion of Counsel
October 28, 1999
AXP Variable Portfolio-Managed Series, Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
Gentlemen:
I have examined the Articles of Incorporation and the By-Laws of AXP Variable
Portfolio-Managed Series, Inc. (the Company) and all necessary certificates,
permits, minute books, documents and records of the Company, and the applicable
statutes of the State of Minnesota, and it is my opinion that the shares sold in
accordance with applicable federal and state securities laws will be legally
issued, fully paid, and nonassessable.
This opinion may be used in connection with the Post-Effective Amendment.
Sincerely,
/s/ Leslie L. Ogg
Leslie L. Ogg
Attorney at Law
901 S. Marquette Ave., Suite 2810
Minneapolis, Minnesota 55402-3268
Plan and Agreement of Distribution
This Plan and Agreement of Distribution ("Plan") is between AXP Variable
Portfolio - Managed Series, Inc. on behalf of its series of capital stock, AXP
Variable Portfolio - Diversified Equity Income Fund, a registered management
investment company, ("the Portfolio") and IDS Life Insurance Company ("IDS
Life"). It is effective September 13, 1999.
This Plan provides that:
1. IDS Life will purchase the Portfolio's shares on behalf of its separate
accounts and the separate accounts of its affiliated life insurance
companies established for the purpose of funding variable life
insurance, annuity contracts or both (collectively referred to as
"Variable Contracts"). Additionally, IDS Life may offer the Portfolio's
shares to one or more unaffiliated life insurance companies
("Unaffiliated Life Companies") for purchase on behalf on certain of
their separate accounts established for the purpose of funding Variable
Contracts.
2. The Portfolio will reimburse IDS Life up to 0.125% of its daily net
assets for various costs paid and accrued in connection with the
distribution of the Portfolio's shares and for services provided to
existing and prospective Variable Contract owners. Payments made under
the Plan are based on budgeted expenses and shall be made within five
(5) business days after each month. At the end of each calendar year,
IDS Life shall furnish a declaration setting out the actual expenses it
has paid and accrued. Any money that has been paid in excess of the
amount of these expenses shall be returned to the Portfolio.
3. IDS Life represents that the money paid by the Portfolio will benefit
the variable Contract owners and not the separate accounts that legally
own the shares and be for the following:
(a) printing and mailing prospectuses, Statements of Additional
Information, supplements, and reports to existing and
prospective Variable Contract owners;
(b) preparation and distribution of advertisement, sales
literature, brokers' materials and promotional materials
relating to the Portfolio;
(c) presentation of seminars and sales meetings describing or
relating to the Portfolio;
(d) training sales personnel regarding the Portfolio;
(e) compensation of sales personnel for sale of the Portfolio's
shares;
(f) compensation of sales personnel for assisting Variable
Contract owners with respect to the Portfolio shares;
(g) overhead of IDS Life and its affiliates appropriately
allocated to the promotion of sale of the Portfolio's shares;
and
(h) any activity primarily intended to result in the sale of the
Portfolio's shares, including payments to Unaffiliated Life
Companies.
4. IDS Life shall provide all information relevant and necessary for the
Board to make informed determinations about whether the Plan should be
continued and shall:
(a) submit quarterly a report that sets out the expenses paid or
accrued by it, the names of the Unaffiliated Life Companies to
whom the Portfolio's shares are sold, and the payments made to
each Unaffiliated Life Company that has been reimbursed;
(b) monitor the level and quality of services provided by it and
all affiliated companies and will use its best efforts to
assure that in each case legitimate services are rendered in
return for the reimbursement pursuant to the Plan ;and
(c) meet with the Portfolio's representatives, as reasonably
requested, to provide additional information.
5. IDS Life represents that it and all affiliated insurance company
sponsors will provide full disclosure of the Portfolio's 12b-1 Plan in
the prospectus for any separate account investing in the Portfolio and
will clearly communicate the combined effect of all fees and costs,
including the reimbursement under the 12b-1 Plan, imposed by the
separate account and the Portfolio in accordance with applicable laws.
6. All payments by IDS Life to Unaffiliated Life Companies shall be made
pursuant to a written agreement (Related Agreement). All such written
agreements will be in a form approved by a majority of the Portfolio's
independent members of the board and the board as a whole before it
shall be used. The Related Agreement shall:
(a) require full disclosure of the combined effect of all fees and
charges in accordance with applicable laws;
(b) provide for the termination at any time without penalty as
required by Rule 12b-1; and
(c) continue so long as its continuance is done in accordance with
the requirements of Rule 12b-1.
7. The Portfolio represents that the Plan has been approved as required by
Rule 12b-1 and may continue for more than one year so long as it is
continued as required by Rule 12b-1 and shall terminate automatically
in the event of an assignment.
8. The Plan may not be amended to materially increase the amount of the
payments without the approval of the outstanding voting securities.
AXP VARIABLE PORTFOLIO - MANAGED SERIES, INC.
AXP Variable Portfolio - Diversified Equity Income Fund
/s/ Leslie L. Ogg
Leslie L. Ogg
Vice President
IDS LIFE INSURANCE COMPANY
/s/ Pamela J. Moret
Pamela J. Moret
Executive Vice President, Variable Assets
