-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UzhABXNveaMZME6EGAnqxIB7kOcTu70nQfax5GExT3h8YIhkSSVHrJvUOY96ESXZ 0jAW//Wqhvnng7BRfcFa3w== 0000820027-94-000604.txt : 19941221 0000820027-94-000604.hdr.sgml : 19941221 ACCESSION NUMBER: 0000820027-94-000604 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19941220 EFFECTIVENESS DATE: 19941220 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS STOCK FUND INC CENTRAL INDEX KEY: 0000052423 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410839317 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-11358 FILM NUMBER: 94565365 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712727 FORMER COMPANY: FORMER CONFORMED NAME: INVESTORS STOCK FUND INC DATE OF NAME CHANGE: 19831221 485BPOS 1 IDS STOCK FUND, INC. 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. 90 (File Number 2-11358) X and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 34 (File Number 811-498) X IDS STOCK 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) immediately upon filing pursuant to paragraph (b) X on Dec. 30, 1994, 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. Registrant has registered an indefinite number or amount of securities under the Securities Act of 1933 pursuant to Section 24f of the Investment Company Act of 1940. Registrant's Rule 24f-2 notice for its most recent fiscal year will be filed on or about Dec. 30, 1994. PAGE 2 Cross reference sheet showing location in the prospectus 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.
PART A PART B Page Number in Page Number Statement of Item No. in Prospectus Item No. Additional Information 1 3 10 25 2 5-6 11 26 3(a) 7 12 NA (b) NA (c) 7-9 13(a) 27-30;50-64 (d) 7 (b) 27-30 (c) 28 4(a) 5;9-11;20-24 (d) 31 (b) 9-11 (c) 9-11 14(a) 21-22*;46-49 (b) 46-49 5(a) 21-22 (c) 49 (b) 20-24 (b)(i) 24 15(a) NA (b)(ii) 22-23 (b) NA (b)(iii) 22-23 (c) 49 (c) 5 (d) 5 16(a)(i) 24* (e) 22-23 (a)(ii) 42-44;45-46 (f) 23-24 (a)(iii) 42-44;43 (g) 22-23 (b) 42-44;45-46 (c) NA 5A(a) * (d) None 5A(b) * (e) NA (f) 44-46 6(a) 21 (g) NA (b) NA (h) 49;49 (c) NA (i) 44;49 (d) NA (e) 3 17(a) 30-32 (f) 18-19 (b) 32-33 (g) 19 (c) 30-32 (d) 33 7(a) 23-24 (e) 33 (b) 8-9 (c) 16-17 18(a) 21* (d) 12-13 (b) NA (e) NA (f) 23-24 19(a) 35-39 (b) 34-35;35-39 8(a) 13-14 (c) NA (b) NA (c) 13 20 41-42 (d) 15 21(a) 44-45 9 None (b) 45 (c) NA 22(a) NA (b) 33-34 23 66-86
*Designates page number in the Prospectus which is hereby incorporated by reference in the Statement of Additional Information. PAGE 3 IDS Stock Fund Prospectus Dec. 30, 1994 The goals of IDS Stock Fund, Inc. are current income and growth of capital. The fund invests primarily in common stocks and securities convertible into common stock. This prospectus contains facts that can help you decide if the fund is the right investment for you. Read it before you invest and keep it for future reference. Additional facts about the fund are in a Statement of Additional Information (SAI), filed with the Securities and Exchange Commission. The SAI, dated Dec. 30, 1994, is incorporated here by reference. For a free copy contact IDS Shareholder Service. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. IDS Shareholder Service P.O. Box 534 Minneapolis, MN 55440-0534 612-671-3733 TTY: 800-846-4852 PAGE 4 Table of contents The fund in brief Goals Types of fund investments Manager and distributor Portfolio manager Sales charge and fund expenses Sales charge Operating expenses Performance Financial highlights Total returns Key terms Investment policies and risks Facts about investments and their risks Fund structure Valuing assets How to buy, exchange or sell shares How to buy shares How to exchange shares How to sell shares Reductions of the sales charge Waivers of the sales charge Special shareholder services Services Quick telephone reference Distributions and taxes Dividend and capital gain distributions Reinvestments Taxes How the fund is organized Shares Voting rights Shareholder meetings Directors and officers Investment manager and transfer agent Distributor About IDS General information PAGE 5 The fund in brief Goals IDS Stock Fund seeks to provide shareholders with current income and growth of capital. Because any investment involves risk, achieving these goals cannot be guaranteed. Only shareholders can change the goals. Types of fund investments The fund is a diversified mutual fund that invests primarily in common stocks and securities convertible into common stock. It also may invest in preferred stocks, debt securities, foreign securities, derivative instruments and money market instruments. Some of the fund's investments may be considered speculative and involve additional investment risks. Manager and distributor The fund is managed by IDS Financial Corporation (IDS), a provider of financial services since 1894. IDS currently manages more than $38 billion in assets for the IDS MUTUAL FUND GROUP. Shares of the fund are sold through IDS Financial Services Inc., a wholly owned subsidiary of IDS. Portfolio manager Joe Barsky joined IDS in 1979 and serves as senior portfolio manager. He was appointed to lead the management team of this fund in 1993. He also is the portfolio manager of IDS Equity Plus Fund. In addition, he serves as vice president and senior portfolio manager of IDS Equity Advisors, a division of IDS Advisory Group, Inc. Sales charge and fund expenses Sales charge When you buy shares, you pay a maximum sales charge of 5% of the public offering price. This charge can be reduced, depending on your total investments in IDS funds. See "Reductions of the sales charge." Shareholder transaction expenses Maximum sales charge on purchases (as a percent of offering price).................5% Operating expenses The fund pays certain expenses out of its assets. The expenses are reflected in the fund's daily share price and dividends, and are not charged directly to shareholder accounts. The following chart gives a projection of these expenses -- based on historical expenses. PAGE 6 Annual fund operating expenses (% of average daily net assets): Management fee 0.55% Other expenses 0.16% 12b-1 fee 0.05% Total 0.76% Example: Suppose for each year for the next 10 years, fund expenses are as above and annual return is 5%. If you sold your shares at the end of the following years, for each $1,000 invested, you would pay total expenses of: 1 year 3 years 5 years 10 years $57 $73 $90 $140 This example does not represent actual expenses, past or future. Actual expenses may be higher or lower than those shown. Because the fund pays annual distribution fees, shareholders who stay in the fund for more than 20 years may indirectly pay an equivalent of more than a 7.25% sales charge, the maximum permitted by the National Association of Securities Dealers. Fund expenses include fees paid to IDS for: o managing its portfolio, providing investment research and administrative services o distribution (known as 12b-1 fees, after the federal rule that authorizes them) o transfer agent services, including handling shareholder accounts and records. PAGE 7 Performance Financial highlights
IDS Stock Fund, Inc. Performance Financial highlights Fiscal year ended Oct. 31, Per share income and capital changes* 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 Net asset value, $21.24 $20.05 $20.02 $17.26 $20.76 $17.43 $17.04 $19.26 $16.76 $15.48 beginning of year Income from investment operations: Net investment income .58 .55 .64 .68 .83 .77 .56 .57 .60 .57 Net gains (losses) .21 2.93 1.11 4.02 (.87) 3.26 1.13 1.15 4.80 1.28 (both realized and unrealized) Total from investment .79 3.48 1.75 4.70 (.04) 4.03 1.69 1.72 5.40 1.85 operations Less distributions: Dividends from net (.60) (.53) (.63) (.74) (.85) (.70) (.55) (.58) (.61) (.57) investment income Distributions from (1.95) (1.76) (1.09) (1.20) (2.61) -- (.75) (3.36) (2.29) -- realized gains Total distributions (2.55) (2.29) (1.72) (1.94) (3.46) (.70) (1.30) (3.94) (2.90) (.57) Net asset value, $19.48 $21.24 $20.05 $20.02 $17.26 $20.76 $17.43 $17.04 $19.26 $16.76 end of year Ratios/supplemental data 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 Net assets, end of year $2,368 $2,059 $1,658 $1,513 $1,213 $1,347 $1,246 $1,309 $1,385 $1,306 (in millions) Ratio of expenses to .76% .73% .72% .65% .63% .60% .58% .57% .53% .54% average daily net assets Ratio of net income to 2.99% 2.75% 3.21% 3.59% 4.32% 3.94% 3.17% 2.53% 2.90% 3.36% average daily net assets Portfolio turnover rate 75% 76% 77% 58% 26% 54% 27% 42% 55% 122% (excluding short-term securities) Total return** 3.9% 18.8% 9.4% 29.0% (0.9%) 23.4% 10.1% 8.7% 32.4% 12.0% *For a share outstanding throughout the year. Rounded to the nearest cent. **Total return does not reflect payment of a sales charge.
The information in this table has been audited by KPMG Peat Marwick LLP, independent auditors. The independent auditors' report and additional information about the performance of the fund are contained in the fund's annual report which, if not included with this prospectus, may be obtained without charge. PAGE 8 Total returns Average annual total returns as of Oct. 31, 1994 Purchase 1 year 5 years 10 years made ago ago ago Stock -1.27 +10.39 +13.63 S&P 500 +3.88 +10.16 +14.75 Lipper Growth and Income Fund Index +3.06 +10.00 +13.51 Cumulative total returns as of Oct. 31, 1994 Purchase 1 year 5 years 10 years made ago ago ago Stock -1.27 +63.92 +258.86 S&P 500 +3.88 +62.20 +296.07 Lipper Growth and Income Fund Index +3.06 +61.08 +255.08 These examples show total returns from hypothetical investments in the fund. These returns are compared to those of popular indexes for the same periods. For purposes of calculation, information about the fund assumes a sales charge of 5%, makes no adjustments for taxes an investor may have paid on the reinvested income and capital gains, and covers a period of widely fluctuating securities prices. Returns shown should not be considered a representation of the fund's future performance. The fund invests in common stocks that may be different from those in the indexes. The indexes reflect reinvestment of all distributions and changes in market prices, but exclude brokerage commissions or other fees. Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of common stocks, is frequently used as a general measure of market performance. Lipper Growth and Income Fund Index, published by Lipper Analytical Services, Inc., includes 30 funds that are generally similar to the fund, although some funds in the index may have somewhat different investment policies or objectives. Key terms Net asset value (NAV) Value of a single fund share. It is the total market value of all of a fund's investments and other assets, less any liabilities, divided by the number of shares outstanding. The NAV is the price you receive when you sell your shares. It usually changes from day-to-day, and is calculated at the close of PAGE 9 business, normally 3 p.m. Central time, each business day (any day the New York Stock Exchange is open). Public offering price Price at which you buy shares. It is the NAV plus the sales charge. NAVs and public offering prices of IDS funds are listed each day in major newspapers and financial publications. Investment income Dividends and interest earned on securities held by the fund. Capital gains or losses Increase or decrease in value of the securities the fund holds. Gains or losses are realized when securities that have increased or decreased in value are sold. A fund also may have unrealized gains or losses when securities increase or decrease in value but are not sold. Distributions Payments to shareholders of two types: investment income (dividends) and realized net long-term capital gains (capital gains distributions). Total return Sum of all of your returns for a given period, assuming you reinvest all distributions. Calculated by taking the total value of shares you own at the end of the period (including shares acquired by reinvestment), less the price of shares you purchased at the beginning of the period. Average annual total return The annually compounded rate of return over a given time period (usually two or more years) -- total return for the period converted to an equivalent annual figure. Investment policies and risks The fund invests primarily in common stocks and securities convertible into common stock. Under normal market conditions, at least 65% of the fund's total assets will be so invested. Other investments will include preferred stocks, debt securities, derivative instruments and money market instruments. The various types of investments the portfolio manager uses to achieve investment performance are described in more detail in the next section and in the SAI. Facts about investments and their risks Common stocks: Common stocks are subject to market fluctuations. Stocks of larger, established companies that pay dividends may be less volatile than the stock market as a whole. Preferred stocks: If a company earns a profit, it generally must pay its preferred stockholders a dividend at a pre-established rate. PAGE 10 Convertible securities: These securities generally are preferred stocks or bonds that can be exchanged for other securities, usually common stock, at prestated prices. When the trading price of the common stock makes the exchange likely, the convertible securities trade more like common stock. For purposes of calculating the fund's 65% policy, only preferred stocks convertible into common stock are included. Debt securities: The price of an investment-grade bond fluctuates as interest rates change or if its credit rating is upgraded or downgraded. Prices of bonds below investment grade may react more to the ability of the issuing company to pay interest and principal when due. These bonds have greater price fluctuations and are more likely to experience a default. The fund may purchase securities rated C or better by Moody's Investors Service, Inc. (Moody's) or Standard & Poor's Corporation (S&P). Securities that are subsequently downgraded in quality may continue to be held and will be sold only when the fund's investment manager believes it is advantageous to do so. Foreign investments: Securities of foreign companies and governments may be traded in the United States, but often they are traded only on foreign markets. Frequently, there is less information about foreign companies and less government supervision of foreign markets. Foreign investments are subject to political and economic risks of the countries in which the investments are made, including the possibility of seizure or nationalization of companies, imposition of withholding taxes on income, establishment of exchange controls or adoption of other restrictions that might affect an investment adversely. If an investment is made in a foreign market, the local currency must be purchased. This is done by using a forward contract in which the price of the foreign currency in U.S. dollars is established on the date the trade is made, but delivery of the currency is not made until the securities are received. As long as the fund holds foreign currencies or securities valued in foreign currencies, the price of a fund share will be affected by changes in the value of the currencies relative to the U.S. dollar. Because of the limited trading volume in some foreign markets, efforts to buy or sell a security may change the price of the security, and it may be difficult to complete the transaction. The fund may invest up to 25% of its total assets in foreign investments. Derivative instruments: The portfolio manager may use derivative instruments in addition to securities to achieve investment performance. Derivative instruments include futures, options and forward contracts. Such instruments may be used to maintain cash reserves while remaining fully invested, to offset anticipated declines in values of investments, to facilitate trading, to reduce transaction costs, or to pursue higher investment returns. Derivative instruments are characterized by requiring little or no initial payment and a daily change in price based on or derived from a security, a currency, a group of securities or currencies, or an index. A number of strategies or combination of instruments can be used to achieve the desired investment performance characteristics. A small change in the value of the underlying security, currency or index will cause a sizable gain or loss in the price of the derivative instrument. Derivative instruments PAGE 11 allow the portfolio manager to change the investment performance characteristics very quickly and at lower costs. Risks include losses of premiums, rapid changes in prices, defaults by other parties, and inability to close such instruments. The fund will use derivative instruments only to achieve the same investment performance characteristics it could achieve by directly holding those securities and currencies permitted under the investment policies. The fund will designate cash or appropriate liquid assets to cover its portfolio obligations. No more than 5% of the fund's net assets can be used at any one time for good faith deposits on futures and premiums for options on futures that do not offset existing investment positions. For further information, see the options and futures appendix in the SAI. Securities and derivative instruments that are illiquid: Illiquid means the security or derivative instrument cannot be sold quickly in the normal course of business. Some investments cannot be resold to the U.S. public because of their terms or government regulations. All securities and derivative instruments, however, can be sold in private sales, and many may be sold to other institutions and qualified buyers or on foreign markets. The portfolio manager will follow guidelines established by the board of directors and consider relevant factors such as the nature of the security and the number of likely buyers when determining whether a security is illiquid. No more than 10% of the fund's net assets will be held in securities and derivative instruments that are illiquid. Money market instruments: Short-term debt securities rated in the top two grades are used to meet daily cash needs and at various times to hold assets until better investment opportunities arise. Generally less than 25% of the fund's total assets are in these money market instruments. However, for temporary defensive purposes these investments could exceed that amount for a limited period of time. The investment policies described above may be changed by the board of directors. Lending portfolio securities: The fund may lend its securities to earn income so long as borrowers provide collateral equal to the market value of the loans. The risks are that borrowers will not provide collateral when required or return securities when due. Unless shareholders approve otherwise, loans may not exceed 30% of the fund's net assets. Fund structure At some time in the future, the Board of the fund may decide to convert to a master/feeder structure. If the Board makes that decision, the fund would seek to achieve its goal by investing all of its assets in another investment company with the same goal as the fund, rather than investing directly in a portfolio of securities. Valuing assets PAGE 12 o Securities (except bonds) and assets with available market values are valued on that basis. o Securities maturing in 60 days or less are valued at amortized cost. o Bonds and assets without readily available market values are valued according to methods selected in good faith by the board of directors. How to buy, exchange or sell shares How to buy shares If you're investing in this fund for the first time, you'll need to set up an account. Your financial planner will help you fill out and submit an application. Once your account is set up, you can choose among several convenient ways to invest. Important: When opening an account, you must provide IDS with your correct Taxpayer Identification Number (Social Security or Employer Identification number). See "Distributions and Taxes." When you buy shares for a new or existing account, the price you pay per share is determined at the close of business on the day your investment is received and accepted at the Minneapolis headquarters. Purchase policies: o Investments must be received and accepted in the Minneapolis headquarters on a business day before 3 p.m. Central time to be included in your account that day and to receive that day's share price. Otherwise your purchase will be processed the next business day and you will pay the next day's share price. o The minimums allowed for investment may change from time to time. o Wire orders can be accepted only on days when your bank, IDS, the fund and Norwest Bank Minneapolis are open for business. o Wire purchases are completed when wired payment is received and the fund accepts the purchase. o IDS and the fund are not responsible for any delays that occur in wiring funds, including delays in processing by the bank. o You must pay any fee the bank charges for wiring. o The fund reserves the right to reject any application for any reason. PAGE 13
Three ways to invest 1 By regular account Send your check and application Minimum amounts (or your name and account number Initial investment: $2,000 if you have an established account) Additional to: investments: $ 100 IDS Financial Services Inc. Account balances: $ 300* P.O. Box 74 Qualified retirement Minneapolis, MN 55440-0074 accounts: none Your financial planner will help you with this process. 2 By scheduled Contact your financial planner Minimum amounts investment plan to set up one of the following Initial investment: $100 scheduled plans: Additional investments: $100/mo o automatic payroll deduction Account balances: none (on active plans of o bank authorization monthly payments) o direct deposit of Social Security check o other plan approved by the fund 3 By wire If you have an established account, If this information is not you may wire money to: included, the order may be rejected and all money Norwest Bank Minneapolis received by the fund, less Routing No. 091000019 any costs the fund or IDS Minneapolis, MN incurs, will be returned Attn: Domestic Wire Dept. promptly. Give these instructions: Minimum amounts Credit IDS Account #00-30-015 Each wire investment: $1,000 for personal account # (your account number) for (your name). *If your account balance falls below $300, IDS will ask you in writing to bring it up to $300 or establish a scheduled investment plan. If you don't do so within 30 days, your shares can be redeemed and the proceeds mailed to you.
How to exchange shares You can exchange your shares of the fund at no charge for shares of any other publicly offered fund in the IDS MUTUAL FUND GROUP available in your state. For complete information, including fees and expenses, read the prospectus carefully before exchanging into a new fund. If your exchange request arrives at the Minneapolis headquarters before the close of business, your shares will be redeemed at the net asset value set for that day. The proceeds will be used to purchase new fund shares the same day. Otherwise, your exchange will take place the next business day at that day's net asset value. For tax purposes, an exchange represents a sale and purchase and may result in a gain or loss. However, you cannot create a tax loss (or reduce a taxable gain) by exchanging from the fund within 91 days of your purchase. For further explanation, see the SAI. PAGE 14 How to sell shares You can sell (redeem) your shares at any time. IDS Shareholder Service will mail payment within seven days after receiving your request. When you sell shares, the amount you receive may be more or less than the amount you invested. Your shares will be redeemed at net asset value at the close of business on the day your request is accepted at the Minneapolis headquarters. If your request arrives after the close of business, the price per share will be the net asset value at the close of business on the next business day. A redemption is a taxable transaction. If the fund's net asset value when you sell shares is more or less than the cost of your shares, you will have a gain or loss, which can affect your tax liability. Redeeming shares held in an IRA or qualified retirement account may subject you to certain federal taxes, penalties and reporting requirements. Consult your tax adviser.
Two ways to request an exchange or sale of shares 1 By letter Include in your letter: o the name of the fund(s) o your account number(s) (for exchanges, both funds must be registered in the same ownership) o your Taxpayer Identification Number (TIN) o the dollar amount or number of shares you want to exchange or sell o signature of all registered account owners o for redemptions, indicate how you want your sales proceeds delivered to you o any paper certificates of shares you hold Regular mail: IDS Shareholder Service Attn: Redemptions P.O. Box 534 Minneapolis, MN 55440-0534 Express mail: IDS Shareholder Service Attn: Redemptions 733 Marquette Ave. Minneapolis, MN 55402 2 By phone IDS Telephone Transaction o The fund and IDS will honor any telephone exchange or redemption request believed to be Service: authentic and will use reasonable procedures to confirm that they are. This includes 800-437-3133 or includes asking identifying questions and tape recording calls. So long as reasonable 612-671-3800 procedures are followed, neither the fund nor IDS will be liable for any loss resulting from fraudulent requests. o Phone exchange and redemption privileges automatically apply to all accounts except custodial, corporate or qualified retirement accounts unless you request these privileges NOT apply by writing IDS Shareholder Service. Each registered owner must sign the request. o IDS answers phone requests promptly, but you may experience delays when call volume is high. If you are unable to get through, use mail procedure as an alternative. o Phone privileges may be modified or discontinued at any time. Minimum amount Redemption: $100 Maximum amount Redemption: $50,000
PAGE 15 Exchange policies: o You may make up to three exchanges within any 30-day period, with each limited to $300,000. These limits do not apply to scheduled exchange programs and certain employee benefit plans or other arrangements through which one shareholder represents the interests of several. Exceptions may be allowed with pre-approval of the fund. o If your exchange creates a new account, it must satisfy the minimum investment amount for new purchases. o Once we receive your exchange request, you cannot cancel it. o Shares of the new fund may not be used on the same day for another exchange. o If your shares are pledged as collateral, the exchange will be delayed until written approval is obtained from the secured party. o IDS and the fund reserve the right to reject any exchange, limit the amount, or modify or discontinue the exchange privilege, to prevent abuse or adverse effects on the fund and its shareholders. For example, if exchanges are too numerous or too large, they may disrupt the fund's investment strategies or increase its costs. Redemption policies: o A "change of mind" option allows you to change your mind after requesting a redemption and to use all or part of the proceeds to buy new shares in the same account at the net asset value, rather than the offering price on the date of a new purchase. To do so, send a written request within 30 days of the date your redemption request was received. Include your account number and mention this option. This privilege may be limited or withdrawn at any time, and it may have tax consequences. o A telephone redemption request will not be allowed within 30 days of a phoned-in address change. Important: If you request a redemption of shares you recently purchased by a check or money order that is not guaranteed, the fund will wait for your check to clear. Please expect a minimum of 10 days from the date of purchase before IDS mails a check to you. (A check may be mailed earlier if your bank provides evidence satisfactory to the fund and IDS that your check has cleared.)
Three ways to receive payment when you sell shares 1 By regular or express mail o Mailed to the address on record. o Payable to names listed on the account. NOTE: The express mail delivery charges you pay will vary depending on the courier you select. PAGE 16 2 By wire o Minimum wire redemption: $1,000. o Request that money be wired to your bank. o Bank account must be in the same ownership as the IDS account. NOTE: Pre-authorization required. For instructions, contact your financial planner or IDS Shareholder Service. 3 By scheduled payout plan o Minimum payment: $50. o Contact your financial planner or IDS Shareholder Service to set up regular payments to you on a monthly, bimonthly, quarterly, semiannual or annual basis. o Buying new shares while under a payout plan may be disadvantageous because of the sales charges.
Reductions of the sales charge You pay a 5% sales charge on the first $50,000 of your total investment and less on investments after the first $50,000: Total investment Sales charge as a percent of:* Public Net offering amount price invested Up to $50,000 5.0% 5.26% Next $50,000 4.5 4.71 Next $150,000 4.0 4.17 Next $250,000 3.0 3.09 Next $500,000 2.0 2.04 Next $2,000,000 1.0 1.01 More than $3,000,000 0.5 0.50 * To calculate the actual sales charge on an investment greater than $50,000, amounts for each applicable increment must be totaled. See the SAI. Your sales charge may be reduced, depending on the totals of: o the amount you are investing in this fund now, o the amount of your existing investment in this fund, if any, and o the amount you and your immediate family (spouse or unmarried children under 21) are investing or have in other funds in the IDS MUTUAL FUND GROUP that carry a sales charge. Other policies that affect your sales charge: o IDS Cash Management Fund and IDS Tax-Free Money Fund do not carry sales charges. However, you may count investments in these funds if you acquired shares in them by exchanging shares from IDS funds that carry sales charges. o IRA purchases or other employee benefit plan purchases made through a payroll deduction plan or through a plan sponsored by an PAGE 17 employer, association of employers, employee organization or other similar entity, may be added together to reduce sales charges for all shares purchased through that plan. For more details, see the SAI. Waivers of the sales charge Sales charges do not apply to: o Current or retired trustees, directors, officers or employees of the fund or IDS or its subsidiaries, their spouses and unmarried children under 21. o Current or retired IDS planners, their spouses and unmarried children under 21. o Qualified employee benefit plans* if the plan: - has at least $1 million invested in funds of the IDS MUTUAL FUND GROUP; or - has 500 or more participants; or - uses a daily transfer recordkeeping service offering participants daily access to IDS funds. (Participants in certain qualified plans for which the initial sales charge is waived may be subject to a deferred sales charge of up to 4% on certain redemptions. For more information, see the SAI.) o Trust companies or similar institutions, and charitable organizations that meet the definition in Section 501(c)(3) of the Internal Revenue Code.* These must have at least $1 million invested in funds of the IDS MUTUAL FUND GROUP. o Purchases made within 30 days after certain redemptions. A waiver applies up to the amount redeemed from: - an IDS product in a qualified plan subject to a deferred sales charge; or - a qualified plan where IDS Trust Company acts as trustee and/or recordkeeper; or - IDS Strategy Fund. Send the fund a written request along with your payment, indicating the amount of the redemption and the date on which it occurred. o Purchases made with dividend or capital gain distributions from another fund in the IDS MUTUAL FUND GROUP that has a sales charge. *Eligibility must be determined in advance by IDS. To do so, contact your financial planner. Special shareholder services Services To help you track and evaluate the performance of your investments, IDS provides these services: PAGE 18 Quarterly statements listing all of your holdings and transactions during the previous three months. Yearly tax statements featuring average-cost-basis reporting of capital gains or losses if you redeem your shares along with distribution information - which simplifies tax calculations. A personalized mutual fund progress report detailing returns on your initial investment and cash-flow activity in your account. It calculates a total return to reflect your individual history in owning fund shares. This report is available from your financial planner. Quick telephone reference IDS Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 IDS Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 IDS Infoline Automated account information (TouchToneR phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 Distributions and taxes The fund distributes to shareholders investment income and net capital gains. It does so to qualify as a regulated investment company and to avoid paying corporate income and excise taxes. Dividend and capital gains distributions will have tax consequences you should know about. Dividend and capital gain distributions The fund distributes its net investment income (dividends and interest earned on securities held by the fund, less operating expenses) to shareholders of record at the end of each calendar quarter. Short-term capital gains distributed are included in net investment income. Net realized capital gains, if any, from selling securities are distributed at the end of the calendar year. Before they're distributed, both net investment income and net capital gains are included in the value of each share. After they're distributed, the value of each share drops by the per-share amount of the distribution. (If your distributions are reinvested, the total value of your holdings will not change.) PAGE 19 Reinvestments Dividends and capital gain distributions are automatically reinvested in additional shares of the fund, unless: o you request the fund in writing or by phone to pay distributions to you in cash, or o you direct the fund to invest your distributions in any publicly available IDS fund for which you've previously opened an account. You pay no sales charge on shares purchased through reinvestment from this fund into any IDS fund. The reinvestment price is the net asset value at close of business on the day the distribution is paid. (Your quarterly statement from IDS will confirm the amount invested and the number of shares purchased.) If you choose cash distributions, you will receive only those declared after your request has been processed. If the U.S. Postal Service cannot deliver the checks for the cash distributions, we will reinvest the checks into your account at the then-current net asset value and make future distributions in the form of additional shares. Taxes Distributions are subject to federal income tax and also may be subject to state and local taxes. Distributions are taxable in the year the fund pays them regardless of whether you take them in cash or reinvest them. Each January, IDS sends you a statement showing the kinds and total amount of all distributions you received during the previous year. You must report all distributions on your tax returns, even if they are reinvested in additional shares. "Buying a dividend" creates a tax liability. This means buying shares shortly before a net investment income or a capital gain distribution. You pay the full pre-distribution price for the shares, then receive a portion of your investment back as a distribution, which is taxable. Redemptions and exchanges subject you to a tax on any capital gain. If you sell shares for more than their cost, the difference is a capital gain. Your gain may be either short term (for shares held for one year or less) or long term (for shares held for more than one year). Your Taxpayer Identification Number (TIN) is important. As with any financial account you open, you must list your current and correct Taxpayer Identification Number (TIN) -- either your Social Security or Employer Identification number. The TIN must be certified under penalties of perjury on your application when you open an account at IDS. PAGE 20 If you don't provide the TIN to IDS, or the TIN you report is incorrect, you could be subject to backup withholding of 31% of taxable distributions and proceeds from certain sales and exchanges. You also could be subject to further penalties, such as: o a $50 penalty for each failure to supply your correct TIN o a civil penalty of $500 if you make a false statement that results in no backup withholding o criminal penalties for falsifying information You also could be subject to backup withholding because you failed to report interest or dividends on your tax return as required.
How to determine the correct TIN Use the Social Security or For this type of account: Employer Identification number of: Individual or joint account The individual or first person listed on the account Custodian account of a minor The minor (Uniform Gift/Transfer to Minors Act) A living trust The grantor-trustee (the person who puts the money into the trust) An irrevocable trust, pension The legal entity (not the trust or estate personal representative or trustee, unless no legal entity is designated in the account title) Sole proprietorship or The owner or partnership partnership Corporate The corporation Association, club or The organization tax-exempt organization
For details on TIN requirements, ask your financial planner or local IDS office for Federal Form W-9, "Request for Taxpayer Identification Number and Certification." Important: This information is a brief and selective summary of certain federal tax rules that apply to this fund. Tax matters are highly individual and complex, and you should consult a qualified tax adviser about your personal situation. How the fund is organized The fund is a diversified, open-end management investment company, as defined in the Investment Company Act of 1940. Originally PAGE 21 incorporated on Feb. 10, 1945 in Nevada, the fund changed its state of incorporation on June 13, 1986 by merging into a Minnesota corporation incorporated on April 7, 1986. The fund headquarters are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402- 3268. Shares The fund is owned by its shareholders. All shares issued by the fund are of the same class -- capital stock. Par value is 1 cent per share. Both full and fractional shares can be issued. The fund no longer issues stock certificates. Voting rights As a shareholder, you have voting rights over the fund's management and fundamental policies. You are entitled to one vote for each share you own. Shareholder meetings The fund does not hold annual shareholder meetings. However, the directors may call meetings at their discretion, or on demand by holders of 10% or more of the outstanding shares, to elect or remove directors. Directors and officers Shareholders elect a board of directors that oversees the operations of the fund and chooses its officers. Its officers are responsible for day-to-day business decisions based on policies set by the board. The board has named an executive committee that has authority to act on its behalf between meetings. The directors also serve on the boards of all of the other funds in the IDS MUTUAL FUND GROUP, except for Mr. Dudley, who is a director of all publicly offered funds. Directors and officers of the fund President and interested director William R. Pearce President of all funds in the IDS MUTUAL FUND GROUP. Independent directors Lynne V. Cheney Distinguished fellow, American Enterprise Institute for Public Policy Research. Robert F. Froehlke Former president of all funds in the IDS MUTUAL FUND GROUP. Heinz F. Hutter Former president and chief operating officer, Cargill, Inc. Anne P. Jones Attorney and telecommunications consultant. PAGE 22 Donald M. Kendall Former chairman and chief executive officer, PepsiCo, Inc. Melvin R. Laird Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Lewis W. Lehr Former chairman and chief executive officer, Minnesota Mining and Manufacturing Company (3M). Edson W. Spencer Former chairman and chief executive officer, Honeywell, Inc. Wheelock Whitney Chairman, Whitney Management Company. C. Angus Wurtele Chairman of the board and chief executive officer, The Valspar Corporation. Interested directors who are officers and/or employees of IDS William H. Dudley Executive vice president, IDS. David R. Hubers President and chief executive officer, IDS. John R. Thomas Senior vice president, IDS. Other officer Leslie L. Ogg Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and treasurer of the publicly offered funds. Refer to the SAI for the directors' and officers' biographies. Investment manager and transfer agent The fund pays IDS for managing its portfolio, providing administrative services and serving as transfer agent (handling shareholder accounts). Under its Investment Management and Services Agreement, IDS determines which securities will be purchased, held or sold (subject to the direction and control of the fund's board of directors). For these services the fund pays IDS a two-part fee. The first part is based on the combined average daily net assets of all funds in the IDS MUTUAL FUND GROUP, as follows: PAGE 23 Net assets of IDS MUTUAL Annual FUND GROUP* fee First $5 billion 0.46% Each additional Decreasing $5 billion percentages More than $50 billion 0.32% *Includes all funds except the money market funds. The second part is equal to 0.14% of the fund's average daily net assets during the fiscal year. This fee may be increased or decreased by a performance adjustment based on the Lipper Growth and Income Fund Index. The maximum adjustment is 0.08% of the fund's average daily net assets on an annual basis. For the fiscal year ended Oct. 31, 1994, the fund paid IDS a total investment management fee of 0.55% of its average daily net assets. Under the Agreement, the fund also pays taxes, brokerage commissions and nonadvisory expenses. In addition, under a separate Transfer Agency Agreement, IDS maintains shareholder accounts and records. The fund pays IDS an annual fee of $15 per shareholder account for this service. Distributor The fund sells shares through IDS Financial Services Inc., a wholly owned subsidiary of IDS, under a Distribution Agreement. Financial planners representing IDS Financial Services Inc. provide information to investors about individual investment programs, the fund and its operations, new account applications, exchange and redemption requests. The cost of these services is paid partially by the fund's sales charge. Portions of sales charges may be paid to securities dealers who have sold the fund's shares, or to banks and other financial institutions. The proceeds paid to others range from 0.8% to 4% of the fund's offering price depending on the monthly sales volume. To help defray costs not covered by sales charges, including costs for marketing, sales administration, training, overhead, direct marketing programs, advertising and related functions, the fund pays IDS a 12b-1 fee. This fee is paid under a Plan and Supplemental Agreement of Distribution that follows the terms of Rule 12b-1 of the Investment Company Act of 1940 (and a Securities and Exchange Commission order). Under this Agreement, the fund pays IDS $6 per shareholder account per year. The total 12b-1 fee paid by the fund for the fiscal year ended Oct. 31, 1994 was 0.05% of its average daily net assets. This fee will not cover all of the costs incurred by IDS. PAGE 24 Total management and distribution fees and expenses paid by the fund in the fiscal year ended Oct. 31, 1994 were 0.76% of its average daily net assets. Total fees and expenses (excluding taxes and brokerage commissions) cannot exceed the most restrictive applicable state expense limitation. About IDS General information The IDS family of companies offers not only mutual funds but also insurance, annuities, investment certificates and a broad range of financial management services. Besides managing investments for all publicly offered funds in the IDS MUTUAL FUND GROUP, IDS also manages investments for itself and its subsidiaries, IDS Certificate Company and IDS Life Insurance Company. Total assets under management on Oct. 31, 1994 were more than $105 billion. IDS Financial Services Inc. serves individuals and businesses through its nationwide network of more than 175 offices and more than 7,800 planners. Other IDS subsidiaries provide investment management and related services for pension, profit sharing, employee savings and endowment funds of businesses and institutions. IDS is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is a wholly owned subsidiary of American Express Company, a financial services company with headquarters at American Express Tower, World Financial Center, New York, NY 10285. The fund may pay brokerage commissions to broker-dealer affiliates of American Express and IDS. PAGE 25 STATEMENT OF ADDITIONAL INFORMATION FOR IDS STOCK FUND Dec. 30, 1994 This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus and the financial statements contained in the Annual Report which may be obtained from your IDS personal financial planner or by writing to IDS Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. This SAI is dated Dec. 30, 1994, and it is to be used with the prospectus dated Dec. 30, 1994, and the Annual Report for the fiscal year ended Oct. 31, 1994. PAGE 26 TABLE OF CONTENTS Goals and Investment Policies........................See Prospectus Additional Investment Policies................................p. 3 Portfolio Transactions........................................p. 6 Brokerage Commissions Paid to Brokers Affiliated with IDS.....p. 8 Performance Information.......................................p. 9 Valuing Fund Shares...........................................p. 10 Investing in the Fund.........................................p. 11 Redeeming Shares..............................................p. 15 Pay-out Plans.................................................p. 16 Exchanges.....................................................p. 17 Taxes.........................................................p. 17 Agreements....................................................p. 18 Directors and Officers........................................p. 22 Custodian.....................................................p. 25 Independent Auditors..........................................p. 25 Financial Statements..............................See Annual Report Prospectus....................................................p. 25 Appendix A: Foreign Currency Transactions....................p. 26 Appendix B: Options and Stock Index Futures Contracts........p. 31 Appendix C: Mortgage-Backed Securities.......................p. 38 Appendix D: Description of Corporate Bond Ratings............p. 39 Appendix E: Dollar-Cost Averaging............................p. 41 PAGE 27 ADDITIONAL INVESTMENT POLICIES These are investment policies in addition to those presented in the prospectus. Unless holders of a majority of the outstanding shares agree to make the change the fund will not: 'Make cash loans, if the total commitment amount exceeds 5% of the fund's total assets. 'Buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities companies engaged in the real estate business. 'Buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the fund from buying or selling options and futures contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities. 'Invest more than 5% of its total assets, at market value, in securities of any one company, government or political subdivision thereof, except the limitation will not apply to investments in securities issued by the U.S. government, its agencies or instrumentalities, and except that up to 25% of the fund's total assets may be invested without regard to this 5% limitation. 'Purchase more than 10% of the outstanding voting securities of an issuer. 'Concentrate in any one industry. According to the present interpretation by the staff of the Securities and Exchange Commission (SEC), this means no more than 25% of the fund's total assets, based on current market value at time of purchase, can be invested in any one industry. 'Borrow money or property, except as a temporary measure for extraordinary or emergency purposes, in an amount not exceeding one-third of the market value of its total assets (including borrowings) less liabilities (other than borrowings) immediately after the borrowing. The fund has not borrowed in the past and has no present intention to borrow. 'Make a loan of any part of its assets to IDS Financial Corporation (IDS), to the directors and officers of IDS or to its own directors and officers. 'Act as an underwriter (sell securities for others). However, under the securities laws the fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them. 'Lend portfolio securities in excess of 30% of its net assets, at market value. This policy may not be changed without shareholder approval. The current policy of the fund's board of directors is PAGE 28 to make these loans, either long- or short-term, to broker-dealers. In making such loans the fund gets the market price in cash, U.S. government securities, letters of credit or such other collateral as may be permitted by regulatory agencies and approved by the board of directors. If the market price of the loaned securities goes up, the fund will get additional collateral on a daily basis. The risks are that the borrower may not provide additional collateral when required or return the securities when due. During the existence of the loan, the fund receives cash payments equivalent to all interest or other distributions paid on the loaned securities. A loan will not be made unless the investment manager believes the opportunity for additional income outweighs the risks. 'Purchase securities of an issuer if the directors and officers of the fund and of IDS hold more than a certain percentage of the issuer's outstanding securities. The holdings of all directors and officers of the fund and of IDS who own more than 0.5% of an issuer's securities are added together, and if in total they own more than 5%, the fund will not purchase securities of that issuer. 'Invest in securities of investment companies except by purchase in the open market where the dealer's or sponsor's profit is the regular commission. The investment manager may wish to invest in another investment company if, for example, that is the only way to invest in a foreign market. If any such investment is ever made, not more than 10% of the fund's net assets, at market, will be so invested. To the extent the fund were to make such investments, the shareholder may be subject to duplicate advisory, administrative and distribution fees. Unless changed by the board of directors the fund will not: 'Buy on margin or sell short, but it may make margin payments in connection with transactions in stock index futures contracts. 'Pledge or mortgage its assets beyond 15% of the cost of total assets. If the fund were ever to do so, valuation of the pledged or mortgaged assets would be based on market value. For purposes of this policy, collateral arrangements for margin deposits on stock index futures contracts are not deemed to be a pledge of assets. 'Invest more than 5% of its net assets in warrants. Under one state's law no more than 2% of the fund's net assets may be invested in warrants not listed on an exchange. 'Invest in a company to control or manage it. 'Invest more than 5% of its total assets, at cost, in securities of companies, including any predecessors, that have a record of less than three years continuous operations. 'Invest in exploration or development programs, such as oil, gas or mineral programs. PAGE 29 'Invest in a company if the fund's investments would result in the total holdings of all IDS MUTUAL FUND GROUP funds being in excess of 15% of that company's issued shares. 'Invest more than 10% of the fund's net assets in securities and derivative instruments that are illiquid. For purposes of this policy illiquid securities include some privately placed securities, public securities and Rule 144A securities that for one reason or another may no longer have a readily available market, repurchase agreements with maturities greater than seven days, non- negotiable fixed-time deposits and over-the-counter options. In determining the liquidity of Rule 144A securities, which are unregistered securities offered to qualified institutional buyers, and interest-only and principal-only fixed mortgage-backed securities (IOs and POs) issued by the United States government or its agencies and instrumentalities, the investment manager, under guidelines established by the board of directors, will consider any relevant factors including the frequency of trades, the number of dealers willing to purchase or sell the security and the nature of marketplace trades. In determining the liquidity of commercial paper issued in transactions not involving a public offering under Section 4(2) of the Securities Act of 1933, the investment manager, under guidelines established by the board of directors, will evaluate relevant factors such as the issuer and the size and nature of its commercial paper programs, the willingness and ability of the issuer or dealer to repurchase the paper, and the nature of the clearance and settlement procedures for the paper. The fund may maintain a portion of its assets in cash and cash- equivalent investments. The cash-equivalent investments the fund may use are short-term U.S. and Canadian government securities and negotiable certificates of deposit, non-negotiable fixed-time deposits, bankers' acceptances and letters of credit of banks or savings and loan associations having capital, surplus and undivided profits (as of the date of its most recently published annual financial statements) in excess of $100 million (or the equivalent in the instance of a foreign branch of a U.S. bank) at the date of investment. Any cash-equivalent investments in foreign securities will be subject to the limitations on foreign investments described above. The fund also may purchase short-term corporate notes and obligations rated in the top two classifications by Moody's Investors Service, Inc. or Standard & Poor's Corporation or the equivalent and may use repurchase agreements with broker-dealers registered under the Securities Exchange Act of 1934 and with commercial banks. A risk of a repurchase agreement is that if the seller seeks the protection of the bankruptcy laws, the fund's ability to liquidate the security involved could be impaired. The fund may make contracts to purchase securities for a fixed price at a future date beyond normal settlement time (when-issued securities or forward commitments). Under normal market conditions, the fund does not intend to commit more than 5% of its total assets to these practices. The fund does not pay for the PAGE 30 securities or receive dividends or interest on them until the contractual settlement date. The fund will designate cash or liquid high-grade debt securities at least equal in value to its commitments to purchase the securities. When-issued securities or forward commitments are subject to market fluctuations and they may affect the fund's total assets the same as owned securities. Notwithstanding any of the fund's other investment policies, the fund may invest its assets in an open-end management investment company having substantially the same investment objectives, policies and restrictions as the fund for the purpose of having those assets managed as part of a combined pool. For a discussion about foreign currency transactions, see Appendix A. For a discussion on options and stock index futures contracts, see Appendix B. For a discussion on mortgage-backed securities, see Appendix C. For a description of corporate bond ratings, see Appendix D. PORTFOLIO TRANSACTIONS Subject to policies set by the board of directors, IDS is authorized to determine, consistent with the fund's investment goal and policies, which securities will be purchased, held or sold. In determining where the buy and sell orders are to be placed, IDS has been directed to use its best efforts to obtain the best available price and the most favorable execution except where otherwise authorized by the board of directors. In selecting broker-dealers to execute transactions, IDS may consider the price of the security, including commission or mark-up, the size and difficulty of the order, the reliability, integrity, financial soundness and general operation and execution capabilities of the broker, the broker's expertise in particular markets, and research services provided by the broker. On occasion, it may be desirable to compensate a broker for research services or for brokerage services by paying a commission that might not otherwise be charged or a commission in excess of the amount another broker might charge. The board of directors has adopted a policy authorizing IDS to do so to the extent authorized by law, if IDS determines, in good faith, that such commission is reasonable in relation to the value of the brokerage or research services provided by a broker or dealer, viewed either in the light of that transaction or IDS' overall responsibilities to the funds in the IDS MUTUAL FUND GROUP and other funds for which it acts as investment advisor. Research provided by brokers supplements IDS' own research activities. Such services include economic data on, and analysis of, U.S. and foreign economies; information on specific industries; information about specific companies, including earnings estimates; purchase recommendations for stocks and bonds; portfolio strategy services; political, economic, business and industry trend assessments; historical statistical information; market data services providing information on specific issues and prices; and technical analysis of various aspects of the securities markets, PAGE 31 including technical charts. Research services may take the form of written reports, computer software or personal contact by telephone or at seminars or other meetings. IDS has obtained, and in the future may obtain, computer hardware from brokers, including but not limited to personal computers that will be used exclusively for investment decision-making purposes, which include the research, portfolio management and trading functions and other services to the extent permitted under an interpretation by the SEC. When paying a commission that might not otherwise be charged or a commission in excess of the amount another broker might charge, IDS must follow procedures authorized by the board of directors. To date, three procedures have been authorized. One procedure permits IDS to direct an order to buy or sell a security traded on a national securities exchange to a specific broker for research services it has provided. The second procedure permits IDS, in order to obtain research, to direct an order on an agency basis to buy or sell a security traded in the over-the-counter market to a firm that does not make a market in that security. The commission paid generally includes compensation for research services. The third procedure permits IDS, in order to obtain research and brokerage services, to cause the fund to pay a commission in excess of the amount another broker might have charged. IDS has advised the fund it is necessary to do business with a number of brokerage firms on a continuing basis to obtain such services as the handling of large orders, the willingness of a broker to risk its own money by taking a position in a security, and the specialized handling of a particular group of securities that only certain brokers may be able to offer. As a result of this arrangement, some portfolio transactions may not be effected at the lowest commission, but IDS believes it may obtain better overall execution. IDS has assured the fund that under all three procedures the amount of commission paid will be reasonable and competitive in relation to the value of the brokerage services performed or research provided. All other transactions shall be placed on the basis of obtaining the best available price and the most favorable execution. In so doing, if in the professional opinion of the person responsible for selecting the broker or dealer, several firms can execute the transaction on the same basis, consideration will be given by such person to those firms offering research services. Such services may be used by IDS in providing advice to all the funds in the IDS MUTUAL FUND GROUP and other accounts advised by IDS, even though it is not possible to relate the benefits to any particular fund or account. Each investment decision made for the fund is made independently from any decision made for another fund in the IDS MUTUAL FUND GROUP or other account advised by IDS or any IDS subsidiary. When the fund buys or sells the same security as another fund or account, IDS carries out the purchase or sale in a way the fund agrees in advance is fair. Although sharing in large transactions may adversely affect the price or volume purchased or sold by the fund, the fund hopes to gain an overall advantage in execution. IDS has assured the fund it will continue to seek ways to reduce brokerage costs. PAGE 32 On a periodic basis, IDS makes a comprehensive review of the broker-dealers and the overall reasonableness of their commissions. The review evaluates execution, operational efficiency and research services. The fund paid total brokerage commissions of $4,511,330 for the fiscal year ended Oct. 31, 1994, $3,277,248 for fiscal year 1993, and $2,616,820 for fiscal year 1992. Substantially all firms through whom transactions were executed provide research services. In fiscal year 1994, transactions amounting to $34,048,000, on which $74,479 in commissions were imputed or paid, were specifically directed to firms. On Oct. 31, 1994, at the end of the fiscal year, the fund held securities of its regular brokers or dealers or of the parent of those brokers or dealers that derived more than 15% of gross revenue from securities-related activities as presented below: Value of Securities Owned at End of Name of Issuer Fiscal Year BankAmerica 27,187,500 First Chicago 51,737,500 Nations Bank 24,750,000 Goldman Sachs 11,285,626 Merrill Lynch & Co., Inc. 6,077,125 The portfolio turnover rate was 75% in the fiscal year ended Oct. 31, 1994, and 76% in fiscal year 1993. BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH IDS Affiliates of American Express Company (American Express) (of which IDS is a wholly owned subsidiary) may engage in brokerage and other securities transactions on behalf of the fund according to procedures adopted by the fund's board of directors and to the extent consistent with applicable provisions of the federal securities laws. IDS will use an American Express affiliate only if (i) IDS determines that the fund will receive prices and executions at least as favorable as those offered by qualified independent brokers performing similar brokerage and other services for the fund and (ii) the affiliate charges the fund commission rates consistent with those the affiliate charges comparable unaffiliated customers in similar transactions and if such use is consistent with terms of the Investment Management and Services Agreement. Information about brokerage commissions paid by the fund for the last three fiscal years to brokers affiliated with IDS is contained in the following table: PAGE 33
For the Fiscal Year Ended Oct. 31, 1994 1993 1992 Aggregate Percent of Aggregate Aggregate Dollar Aggregate Dollar Dollar Dollar Amount of Percent of Amount of Amount of Amount of Nature Commissions Aggregate Transactions Commissions Commissions of Paid to Brokerage Involving Payment Paid to Paid to Broker Affiliation Broker Commissions of Commissions Broker Broker Lehman Brothers Inc. (1) $152,293 3.38% 4.45% $ 83,455 $250,959 The Robinson Humphrey Company, Inc. (2) 14,274 0.31 0.42 None None American Enterprise Investment Services Inc. (3) 504,741 11.19 19.50 375,832 234,218
(1) Until May 31, 1994, under common control with IDS as a subsidiary of American Express. As of May 31, 1994, no longer a subsidiary of American Express. (2) Under common control with IDS as an indirect subsidiary of American Express. (3) Wholly owned subsidiary of IDS. PERFORMANCE INFORMATION The fund may quote various performance figures to illustrate past performance. Average annual total return and current yield quotations used by the fund are based on standardized methods of computing performance as required by the SEC. An explanation of these and any other methods used by the fund to compute performance follows below. Average annual total return The fund may calculate average annual total return for certain periods by finding the average annual compounded rates of return over the period that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1+T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment, made at the beginning of a period, at the end of the period (or fractional portion thereof) Aggregate total return The fund may calculate aggregate total return for certain periods representing the cumulative change in the value of an investment in the fund over a specified period of time according to the following formula: PAGE 34 ERV - P P where: P = a hypothetical initial payment of $1,000 ERV = ending redeemable value of a hypothetical $1,000 payment, made at the beginning of a period, at the end of the period (or fractional portion thereof) In its sales material and other communications, the fund may quote, compare or refer to rankings, yields or returns as published by independent statistical services or publishers and publications such as The Bank Rate Monitor National Index, Barron's, Business Week, Donoghue's Money Market Fund Report, Financial Services Week, Financial Times, Financial World, Forbes, Fortune, Global Investor, Institutional Investor, Investor's Daily, Kiplinger's Personal Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster, Newsweek, The New York Times, Personal Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today, U.S. News and World Report, The Wall Street Journal and Wiesenberger Investment Companies Service. VALUING FUND SHARES The value of an individual share is determined by using the net asset value before shareholder transactions for the day. On Nov. 1, 1994, the first business day following the end of the fiscal year, the computation looked like this:
Net assets before Shares outstanding Net asset value shareholder transactions at end of previous day of one share $2,354,678,395 divided by 121,549,661 equals $19.37
In determining net assets before shareholder transactions, the fund's portfolio securities are valued as follows as of the close of business of the New York Stock Exchange: 'Securities, except bonds other than convertibles, traded on a securities exchange for which a last-quoted sales price is readily available are valued at the last-quoted sales price on the exchange where such security is primarily traded. 'Securities traded on a securities exchange for which a last-quoted sales price is not readily available are valued at the mean of the closing bid and asked prices, looking first to the bid and asked prices on the exchange where the security is primarily traded and, if none exist, to the over-the-counter market. 'Securities included in the NASDAQ National Market System are valued at the last-quoted sales price in this market. 'Securities included in the NASDAQ National Market System for which a last-quoted sales price is not readily available, and other securities traded over-the-counter but not included in the NASDAQ National Market System are valued at the mean of the closing bid and asked prices. PAGE 35 'Futures and options traded on major exchanges are valued at the last-quoted sales price on their primary exchange. 'Foreign securities traded outside the United States are generally valued as of the time their trading is complete, which is usually different from the close of the New York Stock Exchange. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the current rate of exchange. Occasionally, events affecting the value of such securities may occur between such times and the close of the New York Stock Exchange that will not be reflected in the computation of the fund's net asset value. If events materially affecting the value of such securities occur during such period, these securities will be valued at their fair value according to procedures decided upon in good faith by the fund's board of directors. 'Short-term securities maturing more than 60 days from the valuation date are valued at the readily available market price or approximate market value based on current interest rates. Short- term securities maturing in 60 days or less that originally had maturities of more than 60 days at acquisition date are valued at amortized cost using the market value on the 61st day before maturity. Short-term securities maturing in 60 days or less at acquisition date are valued at amortized cost. Amortized cost is an approximation of market value determined by systematically increasing the carrying value of a security if acquired at a discount, or reducing the carrying value if acquired at a premium, so that the carrying value is equal to maturity value on the maturity date. 'Securities without a readily available market price, bonds other than convertibles and other assets are valued at fair value as determined in good faith by the board of directors. The board of directors is responsible for selecting methods it believes provide fair value. When possible, bonds are valued by a pricing service independent from the fund. If a valuation of a bond is not available from a pricing service, the bond will be valued by a dealer knowledgeable about the bond if such a dealer is available. The New York Stock Exchange, IDS and the fund will be closed on the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. INVESTING IN THE FUND Sales Charge Shares of the fund are sold at the public offering price determined at the close of business on the day an application is accepted. The public offering price is the net asset value of one share plus a sales charge. The public offering price for an investment of less than $50,000, made Nov. 1, 1994, was determined by dividing the net asset value of one share, $19.37, by 0.95 (1.00-0.05 for a maximum 5% sales charge) for a public offering price of $20.39. PAGE 36 The sales charge is paid to IDS Financial Services Inc. by the person buying the shares. Calculation of the Sales Charge Sales charges are determined as follows:
Within each increment, sales charge as a percentage of: Public Net Amount of Investment Offering Price Amount Invested First $ 50,000 5.0% 5.26% Next 50,000 4.5 4.71 Next 150,000 4.0 4.17 Next 250,000 3.0 3.09 Next 500,000 2.0 2.04 Next 2,000,000 1.0 1.01 More than 3,000,000 0.5 0.50
Sales charges on an investment greater than $50,000 are calculated for each increment separately and then totaled. The resulting total sales charge, expressed as a percentage of the public offering price and of the net amount invested, will vary depending on the proportion of the investment at different sales charge levels. For example, compare an investment of $60,000 with an investment of $85,000. The $60,000 investment is composed of $50,000 that incurs a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a sales charge of $450 (4.5% x $10,000). The total sales charge of $2,950 is 4.92% of the public offering price and 5.17% of the net amount invested. In the case of the $85,000 investment, the first $50,000 also incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs a sales charge of $1,575 (4.5% x $35,000). The total sales charge of $4,075 is 4.79% of the public offering price and 5.04% of the net amount invested. The following table shows the range of sales charges as a percentage of the public offering price and of the net amount invested on total investments at each applicable level. PAGE 37 On total investment, sales charge as a percentage of Public Net Offering Price Amount Invested Amount of Investment ranges from: First $ 50,000 5.00% 5.26% More than 50,000 to 100,000 5.00-4.75 5.26-4.99 More than 100,000 to 250,000 4.75-4.30 4.99-4.49 More than 250,000 to 500,000 4.30-3.65 4.49-3.79 More than 500,000 to 1,000,000 3.65-2.83 3.79-2.91 More than 1,000,000 to 3,000,000 2.83-1.61 2.91-1.63 More than 3,000,000 1.61-0.50 1.63-0.50
The initial sales charge is waived for certain qualified plans that meet the requirements described in the prospectus. Participants in these qualified plans may be subject to a deferred sales charge on certain redemptions. The deferred sales charge on certain redemptions will be waived if the redemption is a result of a participant's death, disability, retirement, attaining age 59 1/2, loans or hardship withdrawals. The deferred sales charge varies depending on the number of participants in the qualified plan and total plan assets as follows: Deferred Sales Charge Number of Participants Total Plan Assets 1-99 100 or more Less than $1 million 4% 0% $1 million or more 0% 0% _________________________________________________________ Reducing the Sales Charge Sales charges are based on the total amount of your investments in the fund. The amount of all prior investments plus any new purchase is referred to as your "total amount invested." For example, suppose you have made an investment of $20,000 and later decide to invest $40,000 more. Your total amount invested would be $60,000. As a result, $10,000 of your $40,000 investment qualifies for the lower 4.5% sales charge that applies to investments of more than $50,000 to $100,000. The total amount invested includes any shares held in the fund in the name of a member of your immediate family (spouse and unmarried children under 21). For instance, if your spouse already has invested $20,000 and you want to invest $40,000, your total amount invested will be $60,000 and therefore you will pay the lower charge of 4.5% on $10,000 of the $40,000. Until a spouse remarries, the sales charge is waived for spouses and unmarried children under 21 of deceased trustees, directors, PAGE 38 officers or employees of the fund or IDS or its subsidiaries and deceased planners. The total amount invested also includes any investment you or your immediate family already have in the other publicly offered funds in the IDS MUTUAL FUND GROUP where the investment is subject to a sales charge. For example, suppose you already have an investment of $25,000 in IDS Growth Fund and $5,000 in this fund. If you invest $40,000 more in this fund, your total amount invested in the funds will be $70,000 and therefore $20,000 of your $40,000 investment will incur a 4.5% sales charge. Finally, Individual Retirement Account (IRA) purchases, or other employee benefit plan purchases made through a payroll deduction plan or through a plan sponsored by an employer, association of employers, employee organization or other similar entity, may be added together to reduce sales charges for shares purchased through that plan. Systematic Investment Programs After you make your initial investment of $2,000 or more, you can arrange to make additional payments of $100 or more on a regular basis. These minimums do not apply to all systematic investment programs. You decide how often to make payments - monthly, quarterly or semiannually. You are not obligated to make any payments. You can omit payments or discontinue the investment program altogether. The fund also can change the program or end it at any time. If there is no obligation, why do it? Putting money aside is an important part of financial planning. With a systematic investment program, you have a goal to work for. How does this work? When you send in your payment, your money is invested at the public offering price. Your regular investment amount will purchase more shares when the net asset value per share decreases, and fewer shares when the net asset value per share increases. Each purchase is a separate transaction. After each purchase your new shares will be added to your account. Shares bought through these programs are exactly the same as any other fund shares. They can be bought and sold at any time. A systematic investment program is not an option or an absolute right to buy shares. The systematic investment program itself cannot ensure a profit, nor can it protect against a loss in a declining market. If you decide to discontinue the program and redeem your shares when their net asset value is less than what you paid for them, you will incur a loss. For a discussion on dollar-cost averaging, see Appendix E. Automatic Directed Dividends Dividends, including capital gain distributions, paid by another fund in the IDS MUTUAL FUND GROUP subject to a sales charge, may be used to automatically purchase shares of this fund without paying a PAGE 39 sales charge. Dividends may be directed to existing accounts only. Dividends declared by a fund are exchanged to this fund the following day. Dividends can be exchanged into one fund but cannot be split to make purchases in two or more funds. Automatic directed dividends are available between accounts of any ownership except: 'Between a non-custodial account and an IRA, or 401(k) plan account or other qualified retirement account of which IDS Trust Company acts as custodian; 'Between two IDS Trust Company custodial accounts with different owners (for example, you may not exchange dividends from your IRA to the IRA of your spouse); 'Between different kinds of custodial accounts with the same ownership (for example, you may not exchange dividends from your IRA to your 401(k) plan account, although you may exchange dividends from one IRA to another IRA). Moreover, dividends may be directed from accounts established under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) only into other UGMA or UTMA accounts with identical ownership. Each fund has a different investment goal described in its prospectus along with other information, including fees and expense ratios. Before exchanging dividends into another fund, you should read its prospectus. You will receive a confirmation that the automatic directed dividend service has been set up for your account. REDEEMING SHARES You have a right to redeem your shares at any time. For an explanation of redemption procedures, please see the prospectus. During an emergency, the board of directors can suspend the computation of net asset value, stop accepting payments for purchase of shares or suspend the duty of the fund to redeem shares for more than seven days. Such emergency situations would occur if: 'The New York Stock Exchange closes for reasons other than the usual weekend and holiday closings or trading on the Exchange is restricted, or 'Disposal of the fund's securities is not reasonably practicable or it is not reasonably practicable for the fund to determine the fair value of its net assets, or 'The SEC, under the provisions of the Investment Company Act of 1940, as amended, declares a period of emergency to exist. PAGE 40 Should the fund stop selling shares, the directors may make a deduction from the value of the assets held by the fund to cover the cost of future liquidations of the assets so as to distribute fairly these costs among all shareholders. PAY-OUT PLANS You can use any of several pay-out plans to redeem your investment in regular installments at no extra cost. While the plans differ on how the pay-out is figured, they all are based on the redemption of your investment. Net investment income dividends and any capital gain distributions will automatically be reinvested, unless you elect to receive them in cash. If you are redeeming a tax- qualified plan account for which IDS Trust Company acts as custodian, you can elect to receive your dividends and other distributions in cash when permitted by law. If you redeem an IRA or a qualified retirement account, certain restrictions, federal tax penalties and special federal income tax reporting requirements may apply. You should consult your tax adviser about this complex area of the tax law. IDS normally will not accept applications for a systematic investment in any fund in the IDS MUTUAL FUND GROUP subject to a sales charge while a pay-out plan for any of those funds is in effect. Occasional investments, however, may be accepted. To start any of these plans, please submit an authorization form supplied by IDS Shareholder Service. For a copy, write or call IDS Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534, 612- 671-3733. Your authorization must be received in the Minneapolis headquarters at least five days before the date you want your payments to begin. The initial payment must be at least $50. Payments will be made on a monthly, bimonthly, quarterly, semiannual or annual basis. Your choice is effective until you change or cancel it. The following pay-out plans are designed to take care of the needs of most shareholders in a way IDS can handle efficiently and at a reasonable cost. If you need a more irregular schedule of payments, it may be necessary for you to make a series of individual redemptions, in which case you will have to send in a separate redemption request for each pay-out. The fund reserves the right to change or stop any pay-out plan and to stop making such plans available. Plan #1: Pay-out for a fixed period of time If you choose this plan, a varying number of shares will be redeemed at net asset value at regular intervals during the time period you choose. This plan is designed to end in complete re- demption of all shares in your account by the end of the fixed period. PAGE 41 Plan #2: Redemption of a fixed number of shares If you choose this plan, a fixed number of shares will be redeemed at net asset value for each payment and that amount will be sent to you. The length of time these payments continue is based on the number of shares in your account. Plan #3: Redemption of a fixed dollar amount If you decide on a fixed dollar amount, whatever number of shares is necessary to make the payment will be redeemed in regular installments until your account is closed. Plan #4: Redemption of a percentage of net asset value Payments are made based on a fixed percentage of the net asset value of the shares in the account computed on the day of each payment. Percentages range from 0.25% to 0.75%. For example, if you are on this plan and arrange to take 0.5% each month, you will get $50 if the value of your account is $10,000 on the payment date. EXCHANGES If you buy shares in the fund and then exchange into another fund, it is considered a sale and subsequent purchase of shares. Under the tax laws, if this exchange is done within 91 days, any sales charge waived on a subsequent purchase of shares applies to the new shares acquired in the exchange. Therefore, you cannot create a tax loss or reduce a tax gain attributable to the sales charge when exchanging shares within 91 days. Retirement Accounts If you have a nonqualified investment in the fund and you wish to move part or all of those shares to an IRA or qualified retirement account in this fund, you can do so without paying a sales charge. However, this type of exchange is considered a sale of shares and may result in a gain or loss for tax purposes. In addition, this type of exchange may result in an excess contribution under IRA or qualified plan regulations if the amount exchanged plus the amount of the initial sales charge applied to the amount exchanged exceeds annual contribution limitations. For example: If you were to exchange $2,000 in shares from a nonqualified account to an IRA without considering the 5% ($100) initial sales charge applicable to that $2,000, you may be deemed to have exceeded current IRA annual contribution limitations. You should consult your tax adviser for further details about this complex subject. TAXES Net investment income dividends received should be treated as dividend income for federal income tax purposes. Corporate shareholders are generally entitled to a deduction equal to 70% of that portion of the fund's dividend that is attributable to dividends the fund received from domestic (U.S.) securities. For PAGE 42 the fiscal year ended Oct. 31, 1994, 50.76% of the fund's net investment income dividends qualified for the corporate deduction. Capital gain distributions received by individual and corporate shareholders, if any, should be treated as long-term capital gains regardless of how long they owned their shares. Short-term capital gains earned by the fund are paid to shareholders as part of their ordinary income dividend and are taxable. You may be able to defer taxes on current income from a fund by investing through an IRA, 401(k) plan account or other qualified retirement account. If you move all or part of a non-qualified investment in the fund to a qualified account, this type of exchange is considered a sale of shares. You pay no sales charge, but the exchange may result in a gain or loss for tax purposes, or excess contributions under IRA or qualified plan regulations. Under federal tax law, by the end of a calendar year the fund must declare and pay dividends representing 98% of ordinary income for that calendar year and 98% of net capital gains (both long-term and short-term) for the 12-month period ending Oct. 31 of that calendar year. The fund is subject to an excise tax equal to 4% of the excess, if any, of the amount required to be distributed over the amount actually distributed. The fund intends to comply with federal tax law and avoid any excise tax. The fund may be subject to U.S. taxes resulting from holdings in a passive foreign investment company (PFIC). A foreign corporation is a PFIC when 75% or more of its gross income for the taxable year is passive income or if 50% or more of the average value of its assets consists of assets that produce or could produce passive income. The fund has no current intention to invest in PFICs. This is a brief summary that relates to federal income taxation only. Shareholders should consult their tax adviser as to the application of federal, state and local income tax laws to fund distributions. AGREEMENTS Investment Management and Services Agreement The fund has an Investment Management and Services Agreement with IDS. For its services, IDS is paid a fee composed of an asset charge in two parts. The first part, the group asset charge, is based on the combined daily net assets of all funds in the IDS MUTUAL FUND GROUP, except the money market funds, including any new fund that may be organized in the future. The daily rate of the group asset charge is based upon the following schedule: PAGE 43 Group Asset Charge Group assets Annual rate at Effective (billions) each asset level annual rate First $5 0.460% 0.460% Next $5 0.440 0.450 Next $5 0.420 0.440 Next $5 0.400 0.430 Next $5 0.390 0.422 Next $5 0.380 0.415 Next $5 0.360 0.407 Next $5 0.350 0.400 Next $5 0.340 0.393 Next $5 0.330 0.387 Over $50 0.320 The aggregate net assets of all non-money market funds in the IDS MUTUAL FUND GROUP were $45,095,152,255 on Oct. 31, 1994, and the daily rate applied to the fund's assets was equal to approximately 0.39% on an annual basis. The second part of the asset charge is calculated at an annual rate of 0.14% and is based on the unique characteristics of the fund, including the fund's use of services provided by IDS in the areas of investment research, portfolio management, investment services and fund accounting. The total fee is calculated for each calendar day on the basis of net assets as of the close of business two business days prior to the day for which the calculation is made. Before the fee based on the asset charge is paid, it is adjusted for investment performance. The adjustment, determined monthly, will be calculated using the percentage point difference between the change in the net asset value of one share of the fund's capital stock and the change in the Lipper Growth and Income Fund Index Average (Average). The performance of one fund share is measured by computing the percentage difference between the opening and closing net asset value of one share of the fund, as of the last business day of the period selected for comparison, adjusted for dividend or capital gain distributions which are treated as reinvested at the end of the month during which the distribution was made. The performance of the Average for the same period is established by measuring the percentage difference between the beginning and ending Average for the comparison period. The performance is adjusted for dividend or capital gain distributions (on the securities which comprise the Average), which are treated as reinvested at the end of the month during which the distribution was made. One percentage point will be subtracted from the calculation to help assure that incentive adjustments are attributable to IDS' management abilities rather than random fluctuations and the result multiplied by 0.01%. That number will be multiplied times the fund's average net assets for the comparison period and then divided by the number of months in the comparison period to determine the monthly adjustment. PAGE 44 Where the fund's performance exceeds that of the Average, the base fee will be increased. Where the performance of the Average exceeds the performance of the fund, the base fee will be decreased. The maximum monthly increase or decrease will be 0.08% of the fund's average net assets on an annual basis. The 12 month comparison period rolls over with each succeeding month, so that it always equals 12 months, ending with the month for which the performance adjustment is being computed. The adjustment increased the fee by $282,277 for the fiscal year ended Oct. 31, 1994. The management fee is paid monthly. The total amount paid was $12,067,405 for the fiscal year ended Oct. 31, 1994, $9,693,683 for fiscal year 1993, and $8,781,443 for fiscal year 1992. Under the current Agreement, the fund also pays taxes, brokerage commissions and nonadvisory expenses, that include custodian fees; audit and certain legal fees; fidelity bond premiums; registration fees for shares; fund office expenses; consultants' fees; compensation of directors, officers and employees; corporate filing fees; Investment Company Institute dues; organizational expenses; expenses incurred in connection with lending portfolio securities of the fund; and expenses properly payable by the fund, approved by the board of directors. The fund paid nonadvisory expenses of $1,050,588 for the fiscal year ended Oct. 31, 1994, $951,316 for fiscal year 1993, and $610,917 for fiscal year 1992. Transfer Agency Agreement The fund has a Transfer Agency Agreement with IDS. This agreement governs IDS' responsibility for administering and/or performing transfer agent functions, for acting as service agent in connection with dividend and distribution functions and for performing shareholder account administration agent functions in connection with the issuance, exchange and redemption or repurchase of the fund's shares. Under the agreement, IDS will earn a fee from the fund determined by multiplying the number of shareholder accounts at the end of the day by a rate of $15 per year and dividing by the number of days in the year. The fees paid to IDS may be changed from time to time upon agreement of the parties without shareholder approval. The fund paid fees of $2,486,288 for the fiscal year ended Oct. 31, 1994. Distribution Agreement Under a Distribution Agreement, sales charges deducted for distributing fund shares are paid to IDS Financial Services Inc. daily. These charges amounted to $4,535,067 for the fiscal year ended Oct. 31, 1994. After paying commissions to personal financial planners, and other expenses, the amount retained was $1,519,069. The amounts were $1,924,690 and $708,885 for fiscal year 1993, and $1,898,365 and $735,793 for fiscal year 1992. PAGE 45 Additional information about commissions and compensation for the fiscal year ended Oct. 31, 1994, is contained in the following table:
(1) (2) (3) (4) (5) Net Compensation Name of Underwriting on Redemption Principal Discounts and and Brokerage Other Underwriter Commissions Repurchases Commissions Compensation IDS None None $504,741* $999,043** IDS Financial Services Inc. $4,535,067 None None None
*For further information see "Brokerage Commissions Paid to Brokers Affiliated with IDS." **Distribution fees paid pursuant to the Plan and Supplemental Agreement of Distribution. Plan and Supplemental Agreement of Distribution To help IDS defray the cost of distribution and servicing, not covered by the sales charges received under the Distribution Agreement, the fund and IDS entered into a Plan and Supplemental Agreement of Distribution (Plan). These costs cover almost all aspects of distributing the fund shares except compensation to the sales force. A substantial portion of the costs are not specifically identified to any one fund in the IDS MUTUAL FUND GROUP. Under the Plan, IDS is paid a fee determined by multiplying the number of shareholder accounts at the end of each day by a rate of $6 per year and dividing by the number of days in the year. The Plan must be approved annually by the directors, including a majority of the disinterested directors, if it is to continue for more than a year. At least quarterly, the directors must review written reports concerning the amounts expended under the Plan and the purposes for which such expenditures were made. The Plan and any agreement related to it may be terminated at any time by vote of a majority of directors who are not interested persons of the fund and have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan, or by vote of a majority of the outstanding voting securities of the fund or by IDS. The Plan (or any agreement related to it) shall terminate in the event of its assignment, as that term is defined in the Investment Company Act of 1940, as amended. The Plan may not be amended to increase the amount to be spent for distribution without shareholder approval, and all material amendments to the Plan must be approved by a majority of the directors, including a majority of the directors who are not interested persons of the fund and who do not have a financial interest in the operation of the Plan or any agreement related to it. The selection and nomination of such disinterested directors is the responsibility of such disinterested directors. No interested person of the fund, and no director who is not an interested person, has any direct or PAGE 46 indirect financial interest in the operation of the Plan or any related agreement. Total fees and nonadvisory expenses cannot exceed the most restrictive applicable state limitation. Currently, the most restrictive applicable state expense limitation, subject to exclusion of certain expenses, is 2.5% of the first $30 million of the fund's average daily net assets, 2% of the next $70 million and 1.5% of average daily net assets over $100 million, on an annual basis. At the end of each month, if the fees and expenses of the fund exceed this limitation for the fund's fiscal year in progress, IDS will assume all expenses in excess of the limitation. IDS then may bill the fund for such expenses in subsequent months up to the end of that fiscal year, but not after that date. No interest charges are assessed by IDS for expenses it assumes. DIRECTORS AND OFFICERS The following is a list of the fund's directors who, except for Mr. Dudley, also are directors of all other funds in the IDS MUTUAL FUND GROUP. Mr. Dudley is a director of all publicly offered funds. All shares have cumulative voting rights when voting on the election of directors. Lynne V. Cheney+' American Enterprise Institute for Public Policy Research (AEI) 1150 17th St., N.W. Washington, D.C. Distinguished Fellow AEI. Former Chair of National Endowment of the Humanities. Director, The Reader's Digest Association Inc., Lockheed Corp., and the Interpublic Group of Companies, Inc. (advertising). William H. Dudley+** 2900 IDS Tower Minneapolis, MN Executive vice president and director of IDS. Robert F. Froehlke+ 1201 Yale Place Minneapolis, MN Former president of all funds in the IDS MUTUAL FUND GROUP. Director, the ICI Mutual Insurance Co., Institute for Defense Analyses, Marshall Erdman and Associates, Inc. (architectual engineering) and Public Oversight Board of the American Institute of Certified Public Accountants. PAGE 47 David R. Hubers** 2900 IDS Tower Minneapolis, MN President, chief executive officer and director of IDS. Previously, senior vice president, finance and chief financial officer of IDS. Heinz F. Hutter+ P.O. Box 5724 Minneapolis, MN President and chief operating officer, Cargill, Incorporated (commodity merchants and processors) from February 1991 to September 1994. Executive vice president from 1981 to February 1991. Anne P. Jones+ 5716 Bent Branch Rd. Bethesda, MD Attorney and telecommunications consultant. Former partner, law firm of Sutherland, Asbill & Brennan. Director, Motorola, Inc. and C-Cor Electronics, Inc. Donald M. Kendall' PepsiCo, Inc. Purchase, NY Former chairman and chief executive officer, PepsiCo, Inc. Melvin R. Laird+ Reader's Digest Association, Inc. 1730 Rhode Island Ave., N.W. Washington, D.C. Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Chairman of the board, COMSAT Corporation, former nine-term congressman, secretary of defense and presidential counsellor. Director, Martin Marietta Corp., Metropolitan Life Insurance Co., The Reader's Digest Association, Inc., Science Applications International Corp., Wallace Reader's Digest Funds and Public Oversight Board (SEC Practice Section, American Institute of Certified Public Accountants). Lewis W. Lehr' 3050 Minnesota World Trade Center 30 E. Seventh St. St. Paul, MN Former chairman of the board and chief executive officer, Minnesota Mining and Manufacturing Company (3M). Director, Jack Eckerd Corporation (drugstores). Advisory Director, Peregrine Inc. (microelectronics). PAGE 48 William R. Pearce+* 901 S. Marquette Ave. Minneapolis, MN President of all funds in the IDS MUTUAL FUND GROUP since June 1993. Former vice chairman of the board, Cargill, Incorporated (commodity merchants and processors). Edson W. Spencer 4900 IDS Center 80 S. 8th St. Minneapolis, MN President, Spencer Associates Inc. (consulting). Chairman of the board, Mayo Foundation (healthcare). Former chairman of the board and chief executive officer, Honeywell Inc. Director, Boise Cascade Corporation (forest products) and CBS Inc. Member of International Advisory Councils, Robert Bosch (Germany) and NEC (Japan). John R. Thomas** 2900 IDS Tower Minneapolis, MN Senior vice president and director of IDS. Wheelock Whitney+ 1900 Foshay Tower 821 Marquette Ave. Minneapolis, MN Chairman, Whitney Management Company (manages family assets). C. Angus Wurtele 1101 S. 3rd St. Minneapolis, MN Chairman of the board and chief executive officer, The Valspar Corporation (paints). Director, Bemis Corporation (packaging), Donaldson Company (air cleaners & mufflers) and General Mills, Inc. (consumer foods). + Member of executive committee. ' Member of joint audit committee. * Interested person by reason of being an officer and employee of the fund. **Interested person by reason of being an officer, director, employee and/or shareholder of IDS or American Express. The board also has appointed officers who are responsible for day- to-day business decisions based on policies it has established. PAGE 49 Besides Mr. Pearce, who is president, the fund's other officer is: Leslie L. Ogg 901 S. Marquette Ave. Minneapolis, MN Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and treasurer of the publicly offered funds. On Oct. 31, 1994, the fund's directors and officers as a group owned less than 1% of the outstanding shares. During the fiscal year ended Oct. 31, 1994, no director or officer earned more than $60,000 from this fund. All directors and officers as a group earned $21,923, including $17,249 of retirement plan expense, from this fund. CUSTODIAN The fund's securities and cash are held by IDS Trust Company, 1200 Northstar Center West, 625 Marquette Ave., Minneapolis, MN 55402- 2307, through a custodian agreement. The custodian is permitted to deposit some or all of its securities in central depository systems as allowed by federal law. The custodian has entered into a sub-custodian arrangement with the Morgan Stanley Trust Company (Morgan Stanley), One Pierrepont Plaza, 8th Floor, Brooklyn, NY 11201-2775. As part of this arrangement, portfolio securities purchased outside the United States are maintained in the custody of various foreign branches of Morgan Stanley or in such other financial institutions as may be permitted by law and by the fund's sub-custodian agreement. INDEPENDENT AUDITORS The financial statements contained in the Annual Report to shareholders, for the fiscal year ended Oct. 31, 1994, were audited by independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center, 90 S. Seventh St., Minneapolis, MN 55402-3900. The independent auditors also provide other accounting and tax-related services as requested by the fund. FINANCIAL STATEMENTS The Independent Auditors' Report and the Financial Statements, including Notes to the Financial Statements and the Schedule of Investments in Securities, contained in the 1994 Annual Report to shareholders, pursuant to Section 30(d) of the Investment Company Act of 1940, as amended, are hereby incorporated in this SAI by reference. No other portion of the Annual Report however, is incorporated by reference. PROSPECTUS The prospectus for IDS Stock Fund dated Dec. 30, 1994, is hereby incorporated in this SAI by reference. PAGE 50 APPENDIX A FOREIGN CURRENCY TRANSACTIONS Since investments in foreign countries usually involve currencies of foreign countries, and since the fund may hold cash and cash- equivalent investments in foreign currencies, the value of the fund's assets as measured in U.S. dollars may be affected favorably or unfavorably by changes in currency exchange rates and exchange control regulations. Also, the fund may incur costs in connection with conversions between various currencies. Spot Rates and Forward Contracts. The fund conducts its foreign currency exchange transactions either at the spot (cash) rate prevailing in the foreign currency exchange market or by entering into forward currency exchange contracts (forward contracts) as a hedge against fluctuations in future foreign exchange rates. A forward contract involves an obligation to buy or sell a specific currency at a future date, which may be any fixed number of days from the contract date, at a price set at the time of the contract. These contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A forward contract generally has no deposit requirements. No commissions are charged at any stage for trades. The fund may enter into forward contracts to settle a security transaction or handle dividend and interest collection. When the fund enters into a contract for the purchase or sale of a security denominated in a foreign currency or has been notified of a dividend or interest payment, it may desire to lock in the price of the security or the amount of the payment in dollars. By entering into a forward contract, the fund will be able to protect itself against a possible loss resulting from an adverse change in the relationship between different currencies from the date the security is purchased or sold to the date on which payment is made or received or when the dividend or interest is actually received. The fund also may enter into forward contracts when management of the fund believes the currency of a particular foreign country may suffer a substantial decline against another currency. It may enter into a forward contract to sell, for a fixed amount of dollars, the amount of foreign currency approximating the value of some or all of the fund's portfolio securities denominated in such foreign currency. The precise matching of forward contract amounts and the value of securities involved generally will not be possible since the future value of such securities in foreign currencies more than likely will change between the date the forward contract is entered into and the date it matures. The projection of short- term currency market movements is extremely difficult and successful execution of a short-term hedging strategy is highly uncertain. The fund will not enter into such forward contracts or maintain a net exposure to such contracts when consummating the contracts would obligate the fund to deliver an amount of foreign currency in excess of the value of the fund's portfolio securities or other assets denominated in that currency. PAGE 51 The fund will designate cash or securities in an amount equal to the value of the fund's total assets committed to consummating forward contracts entered into under the second circumstance set forth above. If the value of the securities declines, additional cash or securities will be designated on a daily basis so that the value of the cash or securities will equal the amount of the fund's commitments on such contracts. At maturity of a forward contract, the fund may either sell the portfolio security and make delivery of the foreign currency or retain the security and terminate its contractual obligation to deliver the foreign currency by purchasing an offsetting contract with the same currency trader obligating it to buy, on the same maturity date, the same amount of foreign currency. If the fund retains the portfolio security and engages in an offsetting transaction, the fund will incur a gain or a loss (as described below) to the extent there has been movement in forward contract prices. If the fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline between the date the fund enters into a forward contract for selling foreign currency and the date it enters into an offsetting contract for purchasing the foreign currency, the fund will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to buy. Should forward prices increase, the fund will suffer a loss to the extent the price of the currency it has agreed to buy exceeds the price of the currency it has agreed to sell. It is impossible to forecast what the market value of portfolio securities will be at the expiration of a contract. Accordingly, it may be necessary for the fund to buy additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency the fund is obligated to deliver and a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received on the sale of the portfolio security if its market value exceeds the amount of foreign currency the fund is obligated to deliver. The fund's dealing in forward contracts will be limited to the transactions described above. This method of protecting the value of the fund's portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange that can be achieved at some point in time. Although such forward contracts tend to minimize the risk of loss due to a decline in value of hedged currency, they tend to limit any potential gain that might result should the value of such currency increase. Although the fund values its assets each business day in terms of U.S. dollars, it does not intend to convert its foreign currencies into U.S. dollars on a daily basis. It will do so from time to time, and shareholders should be aware of currency conversion PAGE 52 costs. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference (spread) between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Options on Foreign Currencies. The fund may buy put and write covered call options on foreign currencies for hedging purposes. For example, a decline in the dollar value of a foreign currency in which portfolio securities are denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of portfolio securities, the fund may buy put options on the foreign currency. If the value of the currency does decline, the fund will have the right to sell such currency for a fixed amount in dollars and will thereby offset, in whole or in part, the adverse effect on its portfolio which otherwise would have resulted. As in the case of other types of options, however, the benefit to the fund derived from purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, where currency exchange rates do not move in the direction or to the extent anticipated, the fund could sustain losses on transactions in foreign currency options which would require it to forego a portion or all of the benefits of advantageous changes in such rates. The fund may write options on foreign currencies for the same types of hedging purposes. For example, when the fund anticipates a decline in the dollar value of foreign-denominated securities due to adverse fluctuations in exchange rates, it could, instead of purchasing a put option, write a call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised and the diminution in value of portfolio securities will be fully or partially offset by the amount of the premium received. As in the case of other types of options, however, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If this does not occur, the option may be exercised and the fund would be required to buy or sell the underlying currency at a loss which may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the fund also may be required to forego all or a portion of the benefits which might otherwise have been obtained from favorable movements on exchange rates. All options written on foreign currencies will be covered. An option written on foreign currencies is covered if the fund holds currency sufficient to cover the option or has an absolute and immediate right to acquire that currency without additional cash PAGE 53 consideration upon conversion of assets denominated in that currency or exchange of other currency held in its portfolio. An option writer could lose amounts substantially in excess of its initial investments, due to the margin and collateral requirements associated with such positions. Options on foreign currencies are traded through financial institutions acting as market-makers, although foreign currency options also are traded on certain national securities exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to SEC regulation. In an over-the- counter trading environment, many of the protections afforded to exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over a period of time. Although the purchaser of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost. Foreign currency option positions entered into on a national securities exchange are cleared and guaranteed by the OCC, thereby reducing the risk of counterparty default. Further, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the over-the-counter market, potentially permitting the fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. The purchase and sale of exchange-traded foreign currency options, however, is subject to the risks of availability of a liquid secondary market described above, as well as the risks regarding adverse market movements, margining of options written, the nature of the foreign currency market, possible intervention by governmental authorities and the effects of other political and economic events. In addition, exchange-traded options on foreign currencies involve certain risks not presented by the over-the- counter market. For example, exercise and settlement of such options must be made exclusively through the OCC, which has established banking relationships in certain foreign countries for the purpose. As a result, the OCC may, if it determines that foreign governmental restrictions or taxes would prevent the orderly settlement of foreign currency option exercises, or would result in undue burdens on OCC or its clearing member, impose special procedures on exercise and settlement, such as technical changes in the mechanics of delivery of currency, the fixing of dollar settlement prices or prohibitions on exercise. Foreign Currency Futures and Related Options. The fund may enter into currency futures contracts to sell currencies. It also may buy put and write covered call options on currency futures. Currency futures contracts are similar to currency forward contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures call for payment of delivery in U.S. dollars. The fund may use currency futures for the same PAGE 54 purposes as currency forward contracts, subject to CFTC limitations, including the limitation on the percentage of assets that may be used, described in the prospectus. All futures contracts are aggregated for purposes of the percentage limitations. Currency futures and options on futures values can be expected to correlate with exchange rates, but will not reflect other factors that may affect the values of the fund's investments. A currency hedge, for example, should protect a Yen-denominated bond against a decline in the Yen, but will not protect the fund against price decline if the issuer's creditworthiness deteriorates. Because the value of the fund's investments denominated in foreign currency will change in response to many factors other than exchange rates, it may not be possible to match the amount of a forward contract to the value of the fund's investments denominated in that currency over time. The fund will not use leverage in its options and futures strategies. The fund will hold securities or other options or futures positions whose values are expected to offset its obligations. The fund will not enter into an option or futures position that exposes the fund to an obligation to another party unless it owns either (i) an offsetting position in securities or (ii) cash, receivables and short-term debt securities with a value sufficient to cover its potential obligations. PAGE 55 APPENDIX B OPTIONS AND STOCK INDEX FUTURES CONTRACTS The fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market. The fund may enter into stock index futures contracts traded on any U.S. or foreign exchange. The fund also may buy or write put and call options on these futures and on stock indexes. Options in the over-the- counter market will be purchased only when the investment manager believes a liquid secondary market exists for the options and only from dealers and institutions the investment manager believes present a minimal credit risk. Some options are exercisable only on a specific date. In that case, or if a liquid secondary market does not exist, the fund could be required to buy or sell securities at disadvantageous prices, thereby incurring losses. The fund may not invest more than 35% of its assets in derivatives. The fund may also invest in futures contracts in metals, but it will not do so until it has resolved certain regulatory issues associated with such investments. OPTIONS. An option is a contract. A person who buys a call option for a security has the right to buy the security at a set price for the length of the contract. A person who sells a call option is called a writer. The writer of a call option agrees to sell the security at the set price when the buyer wants to exercise the option, no matter what the market price of the security is at that time. A person who buys a put option has the right to sell a security at a set price for the length of the contract. A person who writes a put option agrees to buy the security at the set price if the purchaser wants to exercise the option, no matter what the market price of the security is at that time. An option is covered if the writer owns the security (in the case of a call) or sets aside the cash or securities of equivalent value (in the case of a put) that would be required upon exercise. The price paid by the buyer for an option is called a premium. In addition the buyer generally pays a broker a commission. The writer receives a premium, less another commission, at the time the option is written. The cash received is retained by the writer whether or not the option is exercised. A writer of a call option may have to sell the security for a below-market price if the market price rises above the exercise price. A writer of a put option may have to pay an above-market price for the security if its market price decreases below the exercise price. The risk of the writer is potentially unlimited, unless the option is covered. Options can be used to produce incremental earnings, protect gains and facilitate buying and selling securities for investment purposes. The use of options may benefit the fund and its shareholders by improving the fund's liquidity and by helping to stabilize the value of its net assets. PAGE 56 Buying options. Put and call options may be used as a trading technique to facilitate buying and selling securities for investment reasons. They also may be used for investment. Options are used as a trading technique to take advantage of any disparity between the price of the underlying security in the securities market and its price on the options market. It is anticipated the trading technique will be utilized only to effect a transaction when the price of the security plus the option price will be as good or better than the price at which the security could be bought or sold directly. When the option is purchased, the fund pays a premium and a commission. It then pays a second commission on the purchase or sale of the underlying security when the option is exercised. For record keeping and tax purposes, the price obtained on the purchase of the underlying security will be the combination of the exercise price, the premium and both commissions. When using options as a trading technique, commissions on the option will be set as if only the underlying securities were traded. Put and call options also may be held by the fund for investment purposes. Options permit the fund to experience the change in the value of a security with a relatively small initial cash investment. The risk the fund assumes when it buys an option is the loss of the premium. To be beneficial to the fund, the price of the underlying security must change within the time set by the option contract. Furthermore, the change must be sufficient to cover the premium paid, the commissions paid both in the acquisition of the option and in a closing transaction or in the exercise of the option and sale (in the case of a call) or purchase (in the case of a put) of the underlying security. Even then the price change in the underlying security does not ensure a profit since prices in the option market may not reflect such a change. Writing covered options. The fund will write covered options when it feels it is appropriate and will follow these guidelines: 'Underlying securities will continue to be bought or sold solely on the basis of investment considerations consistent with the fund's goals. 'All options written by the fund will be covered. For covered call options if a decision is made to sell the security, the fund will attempt to terminate the option contract through a closing purchase transaction. 'The fund will deal only in standard option contracts traded on national securities exchanges or those that may be quoted on NASDAQ (a system of price quotations developed by the National Association of Securities Dealers, Inc.). 'The fund will write options only as permitted under federal or state laws or regulations, such as those that limit the amount of total assets subject to the options. While no limit has been set by the fund, it will conform to the requirements of those states. PAGE 57 For example, California limits the writing of options to 50% of the assets of a fund. Net premiums on call options closed or premiums on expired call options are treated as short-term capital gains. Since the fund is taxed as a regulated investment company under the Internal Revenue Code, any gains on options and other securities held less than three months must be limited to less than 30% of its annual gross income. If a covered call option is exercised, the security is sold by the fund. The premium received upon writing the option is added to the proceeds received from the sale of the security. The fund will recognize a capital gain or loss based upon the difference between the proceeds and the security's basis. Premiums received from writing outstanding call options are included as a deferred credit in the Statement of Assets and Liabilities and adjusted daily to the current market value. Options are valued at the close of the New York Stock Exchange. An option listed on a national exchange, CBOE or NASDAQ will be valued at the last-quoted sales price or, if such a price is not readily available, at the mean of the last bid and asked prices. STOCK INDEX FUTURES CONTRACTS. Stock index futures contracts are commodity contracts listed on commodity exchanges. They currently include contracts on the Standard & Poor's 500 Stock Index (S&P 500 Index) and other broad stock market indexes such as the New York Stock Exchange Composite Stock Index and the Value Line Composite Stock Index, as well as narrower sub-indexes such as the S&P 100 Energy Stock Index and the New York Stock Exchange Utilities Stock Index. A stock index assigns relative values to common stocks included in the index and the index fluctuates with the value of the common stocks so included. A futures contract is a legal agreement between a buyer or seller and the clearinghouse of a futures exchange in which the parties agree to make a cash settlement on a specified future date in an amount determined by the stock index on the last trading day of the contract. The amount is a specified dollar amount (usually $100 or $500) multiplied by the difference between the index value on the last trading day and the value on the day the contract was struck. For example, the S&P 500 Index consists of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500 Index assigns relative weightings to the common stocks included in the Index, and the Index fluctuates with changes in the market values of those stocks. In the case of S&P 500 Index futures contracts, the specified multiple is $500. Thus, if the value of the S&P 500 Index were 150, the value of one contract would be $75,000 (150 x $500). Unlike other futures contracts, a stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract. For example, excluding any transaction costs, if the fund enters PAGE 58 into one futures contract to buy the S&P 500 Index at a specified future date at a contract value of 150 and the S&P 500 Index is at 154 on that future date, the fund will gain $500 x (154-150) or $2,000. If the fund enters into one futures contract to sell the S&P 500 Index at a specified future date at a contract value of 150 and the S&P 500 Index is at 152 on that future date, the fund will lose $500 x (152-150) or $1,000. Unlike the purchase or sale of an equity security, no price would be paid or received by the fund upon entering into futures contracts. However, the fund would be required to deposit with its custodian, in a segregated account in the name of the futures broker, an amount of cash or U.S. Treasury bills equal to approximately 5% of the contract value. This amount is known as initial margin. The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve borrowing funds by the fund to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good- faith deposit on the contract that is returned to the fund upon termination of the contract, assuming all contractual obligations have been satisfied. Subsequent payments, called variation margin, to and from the broker would be made on a daily basis as the price of the underlying stock index fluctuates, making the long and short positions in the contract more or less valuable, a process known as marking to market. For example, when the fund enters into a contract in which it benefits from a rise in the value of an index and the price of the underlying stock index has risen, the fund will receive from the broker a variation margin payment equal to that increase in value. Conversely, if the price of the underlying stock index declines, the fund would be required to make a variation margin payment to the broker equal to the decline in value. How the Fund Would Use Stock Index Futures Contracts. The fund intends to use stock index futures contracts and related options for hedging and not for speculation. Hedging permits the fund to gain rapid exposure to or protect itself from changes in the market. For example, the fund may find itself with a high cash position at the beginning of a market rally. Conventional procedures of purchasing a number of individual issues entail the lapse of time and the possibility of missing a significant market movement. By using futures contracts, the fund can obtain immediate exposure to the market and benefit from the beginning stages of a rally. The buying program can then proceed and once it is completed (or as it proceeds), the contracts can be closed. Conversely, in the early stages of a market decline, market exposure can be promptly offset by entering into stock index futures contracts to sell units of an index and individual stocks can be sold over a longer period under cover of the resulting short contract position. The fund may enter into contracts with respect to any stock index or sub-index. To hedge the fund's portfolio successfully, the fund PAGE 59 must enter into contracts with respect to indexes or sub-indexes whose movements will have a significant correlation with movements in the prices of the fund's portfolio securities. Special Risks of Transactions in Stock Index Futures Contracts. 1. Liquidity. The fund may elect to close some or all of its contracts prior to expiration. The purpose of making such a move would be to reduce or eliminate the hedge position held by the fund. The fund may close its positions by taking opposite positions. Final determinations of variation margin are then made, additional cash as required is paid by or to the fund, and the fund realizes a gain or a loss. Positions in stock index futures contracts may be closed only on an exchange or board of trade providing a secondary market for such futures contracts. For example, futures contracts transactions can currently be entered into with respect to the S&P 500 Stock Index on the Chicago Mercantile Exchange, the New York Stock Exchange Composite Stock Index on the New York Futures Exchange and the Value Line Composite Stock Index on the Kansas City Board of Trade. Although the fund intends to enter into futures contracts only on exchanges or boards of trade where there appears to be an active secondary market, there is no assurance that a liquid secondary market will exist for any particular contract at any particular time. In such event, it may not be possible to close a futures contract position, and in the event of adverse price movements, the fund would have to make daily cash payments of variation margin. Such price movements, however, will be offset all or in part by the price movements of the securities subject to the hedge. Of course, there is no guarantee the price of the securities will correlate with the price movements in the futures contract and thus provide an offset to losses on a futures contract. 2. Hedging Risks. There are several risks in using stock index futures contracts as a hedging device. One risk arises because the prices of futures contracts may not correlate perfectly with movements in the underlying stock index due to certain market distortions. First, all participants in the futures market are subject to initial margin and variation margin requirements. Rather than making additional variation margin payments, investors may close the contracts through offsetting transactions which could distort the normal relationship between the index and futures markets. Second, the margin requirements in the futures market are lower than margin requirements in the securities market, and as a result the futures market may attract more speculators than does the securities market. Increased participation by speculators in the futures market also may cause temporary price distortions. Because of price distortion in the futures market and because of imperfect correlation between movements in stock indexes and movements in prices of futures contracts, even a correct forecast of general market trends may not result in a successful hedging transaction over a short period. Another risk arises because of imperfect correlation between movements in the value of the futures contracts and movements in PAGE 60 the value of securities subject to the hedge. If this occurred, the fund could lose money on the contracts and also experience a decline in the value of its portfolio securities. While this could occur, IDS believes that over time the value of the fund's portfolio will tend to move in the same direction as the market indexes and will attempt to reduce this risk, to the extent possible, by entering into futures contracts on indexes whose movements it believes will have a significant correlation with movements in the value of the fund's portfolio securities sought to be hedged. It also is possible that if the fund has hedged against a decline in the value of the stocks held in its portfolio and stock prices increase instead, the fund will lose part or all of the benefit of the increased value of its stock which it has hedged because it will have offsetting losses in its futures positions. In addition, in such situations, if the fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements. Such sales of securities may be, but will not necessarily be, at increased prices which reflect the rising market. The fund may have to sell securities at a time when it may be disadvantageous to do so. OPTIONS ON STOCK INDEX FUTURES CONTRACTS. Options on stock index futures contracts are similar to options on stock except that options on futures contracts give the purchaser the right, in return for the premium paid, to assume a position in a stock index futures contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the period of the option. If the option is closed instead of exercised, the holder of the option receives an amount that represents the amount by which the market price of the contract exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. If the option does not appreciate in value prior to the exercise date, the fund will suffer a loss of the premium paid. OPTIONS ON STOCK INDEXES. Options on stock indexes are securities traded on national securities exchanges. An option on a stock index is similar to an option on a futures contract except all settlements are in cash. A fund exercising a put, for example, would receive the difference between the exercise price and the current index level. Such options would be used in the same manner as options on futures contracts. SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON STOCK INDEX FUTURES CONTRACTS AND OPTIONS ON STOCK INDEXES. As with options on stocks, the holder of an option on a futures contract or on a stock index may terminate a position by selling an option covering the same contract or index and having the same exercise price and expiration date. The ability to establish and close out positions on such options will be subject to the development and maintenance of a liquid secondary market. The fund will not purchase options unless the market for such options has developed sufficiently, so that the risks in connection with options are not greater than the risks in connection with stock index futures contracts transactions themselves. Compared to using futures contracts, purchasing PAGE 61 options involves less risk to the fund because the maximum amount at risk is the premium paid for the options (plus transaction costs). There may be circumstances, however, when using an option would result in a greater loss to the fund than using a futures contract, such as when there is no movement in the level of the stock index. TAX TREATMENT. As permitted under federal income tax laws, the fund intends to identify futures contracts as mixed straddles and not mark them to market, that is, not treat them as having been sold at the end of the year at market value. Such an election may result in the fund being required to defer recognizing losses incurred by entering into futures contracts and losses on underlying securities identified as being hedged against. Federal income tax treatment of gains or losses from transactions in options on futures contracts and stock indexes is currently unclear, although the fund's tax advisers currently believe marking to market is not required. Depending on developments, and although no assurance is given, the fund may seek Internal Revenue Service (IRS) rulings clarifying questions concerning such treatment. Certain provisions of the Internal Revenue Code may also limit the fund's ability to engage in futures contracts and related options transactions. For example, at the close of each quarter of the fund's taxable year, at least 50% of the value of its assets must consist of cash, government securities and other securities, subject to certain diversification requirements. Less than 30% of its gross income must be derived from sales of securities held less than three months. The IRS has ruled publicly that an exchange-traded call option is a security for purposes of the 50%-of-assets test and that its issuer is the issuer of the underlying security, not the writer of the option, for purposes of the diversification requirements. In order to avoid realizing a gain within the three-month period, the fund may be required to defer closing out a contract beyond the time when it might otherwise be advantageous to do so. The fund also may be restricted in purchasing put options for the purpose of hedging underlying securities because of applying the short sale holding period rules with respect to such underlying securities. Accounting for futures contracts will be according to generally accepted accounting principles. Initial margin deposits will be recognized as assets due from a broker (the fund's agent in acquiring the futures position). During the period the futures contract is open, changes in value of the contract will be recognized as unrealized gains or losses by marking to market on a daily basis to reflect the market value of the contract at the end of each day's trading. Variation margin payments will be made or received depending upon whether gains or losses are incurred. All contracts and options will be valued at the last-quoted sales price on their primary exchange. PAGE 62 APPENDIX C MORTGAGE-BACKED SECURITIES A mortgage pass through certificate is one that represents an interest in a pool, or group, of mortgage loans assembled by the Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) or non-governmental entities. In pass-through certificates, both principal and interest payments, including prepayments, are passed through to the holder of the certificate. Prepayments on underlying mortgages result in a loss of anticipated interest, and the actual yield (or total return) to the fund, which is influenced by both stated interest rates and market conditions, may be different than the quoted yield on certificates. Some U.S. government securities may be purchased on a "when-issued" basis, which means that it may take as long as 45 days after the purchase before the securities are delivered to the fund. Stripped Mortgage-Backed Securities. The fund may invest in stripped mortgage-backed securities. Generally, there are two classes of stripped mortgage-backed securities: Interest Only (IO) and Principal Only (PO). IOs entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the principal of the underlying pool of mortgage loans or mortgage-backed securities. The cash flows and yields on IOs and POs are extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of principal payments may adversely affect the yield to maturity of POs. If prepayments of principal are greater than anticipated, an investor may incur substantial losses. If prepayments of principal are slower than anticipated, the yield on a PO will be affected more severely than would be the case with a traditional mortgage- backed security. Mortgage-Backed Security Spread Options. The fund may purchase mortgage-backed security (MBS) put spread options and write covered MBS call spread options. MBS spread options are based upon the changes in the price spread between a specified mortgage-backed security and a like-duration Treasury security. MBS spread options are traded in the OTC market and are of short duration, typically one to two months. The fund would buy or sell covered MBS call spread options in situations where mortgage-backed securities are expected to under perform like-duration Treasury securities. PAGE 63 APPENDIX D DISCRIPTION OF CORPORATE BOND RATINGS Bond Ratings The ratings concern the quality of the issuing corporation. They are not an opinion of the market value of the security. Such ratings are opinions on whether the principal and interest will be repaid when due. A security's rating may change which could affect its price. Ratings by Moody's Investors Service, Inc. are Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D. Ratings by Standard & Poor's Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D. Bonds rated Aaa and AAA are judged to be of the best quality and carry the smallest degree of investment risk. Capacity to pay interest and repay principal is extremely strong. Prices are responsive only to interest rate fluctuations. Bonds rated Aa and AA also are judged to be high-grade although margins of protection for interest and principal may not be quite as good as Aaa or AAA rated securities. Long-term risk may appear greater than the Aaa or AAA group. Prices are primarily responsive to interest rate fluctuations. Bonds rated A are considered upper-medium grade. Protection for interest and principal is deemed adequate but susceptible to future impairment. The market prices of such obligations move primarily with interest rate fluctuations but also with changing economic or trade conditions. Bonds rated Baa and BBB are considered medium-grade obligations. Protection for interest and principal is adequate over the short- term; however, these obligations have certain speculative characteristics. They are susceptible to changing economic conditions and require constant review. Such bonds are more responsive to business and trade conditions than to interest rate fluctuations. Bonds rated Ba and BB are considered to have speculative elements. Their future cannot be considered well assured. The protection of interest and principal payments may be very moderate and not well safeguarded during future good and bad times. Uncertainty of position characterizes these bonds. Bonds rated B or lower lack characteristics of the desirable investments. There may be small assurance over any long period of time of the payment of interest and principal or of the maintenance of other contract terms. Some of these bonds are of poor standing and may be in default or have other marked short-comings. Bonds rated Caa and CCC are of poor standing. Such issues may be in default or there may be elements of danger with respect to principal or interest. PAGE 64 Bonds rated Ca and CC represent obligations that are highly speculative. Such issues are often in default or have other marked shortcomings. Bonds rated C are obligations with a higher degree of speculation. These securities have major risk exposures to default. Bonds rated D are in payment default. The D rating is used when interest payments or principal payments are not made on the due date. PAGE 65 APPENDIX E DOLLAR-COST AVERAGING A technique that works well for many investors is one that eliminates random buy and sell decisions. One such system is dollar-cost averaging. Dollar-cost averaging involves building a portfolio through the investment of fixed amounts of money on a regular basis regardless of the price or market condition. This may enable an investor to smooth out the effects of the volatility of the financial markets. By using this strategy, more shares will be purchased when the price is low and less when the price is high. As the accompanying chart illustrates, dollar-cost averaging tends to keep the average price paid for the shares lower than the average market price of shares purchased, although there is no guarantee. While this does not ensure a profit and does not protect against a loss if the market declines, it is an effective way for many shareholders who can continue investing through changing market conditions to accumulate shares in a fund to meet long term goals. Dollar-cost averaging Regular Market Price Shares Investment of a Share Acquired $100 $ 6.00 16.7 100 4.00 25.0 100 4.00 25.0 100 6.00 16.7 100 5.00 20.0 $500 $25.00 103.4 Average market price of a share over 5 periods: $5.00 ($25.00 divided by 5). The average price you paid for each share: $4.84 ($500 divided by 103.4). PAGE 66 Independent auditors' report ___________________________________________________________________ The board of directors and shareholders IDS Stock Fund, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of IDS Stock Fund, Inc. as of October 31, 1994, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended October 31, 1994, and the financial highlights for each of the years in the ten-year period ended October 31, 1994. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold but not received or delivered, and securities on loan, we request confirmations from brokers, and where replies are not received, we carry out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS Stock Fund, Inc. at October 31, 1994, and the results of its operations for the year then ended and the changes in its net assets for each of the years in the two-year period ended October 31, 1994, PAGE 67 and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota December 2, 1994 PAGE 68 Financial statements Statement of assets and liabilities IDS Stock Fund, Inc. Oct. 31, 1994
_____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1): Investments in securities of unaffiliated issuers (identified cost $2,220,483,972) $2,367,076,894 Investments in securities of affiliated issuers (identified cost $44,803,480) 46,406,250 _____________________________________________________________________________________________________________ Total investments in securities (identified cost $2,265,287,452) 2,413,483,144 Dividends and accrued interest receivable 5,824,546 Receivable for investment securities sold 32,123,553 Receivable for foreign currency contracts held, at value (Notes 1 and 6) 1,386,397 U.S. government securities held as collateral (Note 4) 27,158,074 _____________________________________________________________________________________________________________ Total assets 2,479,975,714 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Disbursements in excess of cash on demand deposit 7,651,080 Payable for investment securities purchased 62,233,320 Payable upon return of securities loaned (Note 4) 37,439,174 Payable for foreign currency contracts held, at value (Notes 1 and 6) 1,386,372 Accrued investment management and services fee 1,058,847 Accrued distribution fee 95,863 Accrued transfer agency fee 238,874 Other accrued expenses 350,273 Open option contracts written, at value (premium received $1,790,183)(Note 5) 1,771,518 _____________________________________________________________________________________________________________ Total liabilities 112,225,321 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $2,367,750,393 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value; outstanding 121,549,661 shares $ 1,215,497 Additional paid-in capital 2,029,565,703 Undistributed net investment income 4,526,952 Accumulated net realized gain (Note 1) 184,227,859 Unrealized appreciation (Note 6) 148,214,382 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $2,367,750,393 _____________________________________________________________________________________________________________ Net asset value per share of outstanding capital stock $ 19.48 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. PAGE 69
Financial statements Statement of operations IDS Stock Fund, Inc. Year ended Oct. 31, 1994
_____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Dividends (net of foreign taxes withheld of $976,751) $ 60,051,411 Dividends earned on affiliate issuers 770,050 Interest 21,217,499 _____________________________________________________________________________________________________________ Total income 82,038,960 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 12,067,405 Distribution fee 999,043 Transfer agency fee 2,486,288 Compensation of directors 4,808 Compensation of officers 17,115 Custodian fees 408,300 Postage 236,691 Registration fees 215,202 Reports to shareholders 69,597 Audit fees 30,000 Administrative 26,809 Other 42,066 _____________________________________________________________________________________________________________ Total expenses 16,603,324 _____________________________________________________________________________________________________________ Investment income -- net 65,435,636 _____________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including loss of $67,989 from foreign currency transactions) (Note 3) 182,359,148 Net realized gain on sale of affiliated security 525,300 Net realized gain on expired option contracts written (Note 5) 1,327,524 _____________________________________________________________________________________________________________ Net realized gain on investments and foreign currency 184,211,972 Net change in unrealized appreciation or depreciation (163,987,803) _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 20,224,169 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $85,659,805 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. PAGE 70
Financial statements Statements of changes in net assets IDS Stock Fund, Inc. Year ended Oct. 31,
_____________________________________________________________________________________________________________ Operations and distributions 1994 1993 _____________________________________________________________________________________________________________ Investment income -- net $ 65,435,636 $ 50,064,349 Net realized gain on investments and foreign currency 184,211,972 189,191,483 Net change in unrealized appreciation or depreciation (163,987,803) 75,180,622 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 85,659,805 314,436,454 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (66,287,242) (47,684,415) Net realized gain (189,047,838) (145,269,306) Excess distribution of realized gain (Note 1) -- (28,968) _____________________________________________________________________________________________________________ Total distributions (255,335,080) (192,982,689) _____________________________________________________________________________________________________________ Capital share transactions _____________________________________________________________________________________________________________ Proceeds from sales of 26,559,784 and 13,265,220 shares (Note 2) 517,092,765 267,880,638 Net asset value of 11,576,290 and 9,177,264 shares issued in reinvestment of distributions 226,574,033 176,369,824 Payments for redemptions of 13,522,239 and 8,219,963 shares (265,338,433) (165,004,017) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions representing net addition of 24,613,835 and 14,222,521 shares 478,328,365 279,246,445 _____________________________________________________________________________________________________________ Total increase in net assets 308,653,090 400,700,210 Net assets at beginning of year 2,059,097,303 1,658,397,093 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $4,526,952 and $5,437,453) $2,367,750,393 $2,059,097,303 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 71 Notes to financial statements IDS Stock Fund, Inc. __________________________________________________________________ 1. Summary of significant accounting policies The fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. Significant accounting policies followed by the fund are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price; securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of directors. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Options transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The fund also may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that the fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the fund pays a premium whether or not the option is exercised. The fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. PAGE 72 Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. The fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. Futures transactions In order to gain exposure to or protect itself from changes in the market, the fund may buy and sell stock index futures contracts traded on any U.S. or foreign exchange. The fund also may buy or write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The fund recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. PAGE 73 The fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The fund is subject to the credit risk that the other party will not complete the obligations of the contract. Federal taxes Since the fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. The effect on dividend distributions of certain book-to-tax differences is presented as "excess distributions" in the statement of changes in net assets. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. On the statement of assets and liabilities, as a result of permanent book-to-tax differences, undistributed net investment income has been decreased by $58,895 and accumulated net realized gain has been increased by $67,989 resulting in a net reclassification adjustment to decrease paid- in-capital by $9,094. Dividends to shareholders Dividends from net investment income, declared and paid each calendar quarter, are reinvested in additional shares of the fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend of the calendar year. PAGE 74 Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including level-yield amortization of premium and discount, is accrued daily. ___________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS Financial Corporation (IDS) a fee for managing its investments, recordkeeping and other specified services. The fee is a percentage of the fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.14% of average daily net assets. The fee is adjusted upward or downward by a performance incentive adjustment based on the fund's average daily net assets over a rolling 12-month period as measured against the change in the Lipper Growth and Income Fund Index. The maximum adjustment is 0.08% of the fund's average daily net assets after deducting 1% from the performance difference. If the performance difference is less than 1%, the adjustment will be zero. The adjustment increased the fee by $282,277 for the year ended Oct. 31, 1994. The fund also pays IDS a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15 per shareholder account. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. IDS will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by IDS Financial Services Inc. for distributing fund shares were $4,535,067 for the year ended Oct. 31, 1994. The fund also pays custodian fees to IDS Trust Company, an affiliate of IDS. The fund has a retirement plan for its independent directors. Upon retirement, directors receive monthly payments equal to one-half of the retainer fee for as many months as they served as directors up to 120 months. There are no death PAGE 75 benefits. The plan is not funded but the fundrecognizes the cost of payments during the time the directors serve on the board. The retirement plan expense amounted to $17,249 for the year ended Oct. 31, 1994. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $1,533,397,787 and $1,471,959,617, respectively, for the year ended Oct. 31, 1994. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with IDS were $671,308 for the year ended Oct. 31, 1994. ___________________________________________________________________ 4. Lending of portfolio securities At Oct. 31, 1994, securities valued at $37,217,750 were on loan to brokers. For collateral, the fund received $10,281,100 in cash and U.S. government securities valued at $27,158,074. Income from securities lending amounted to $380,271 for the year ended Oct. 31, 1994. The risks to the fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. ___________________________________________________________________ 5. Option contracts written The number of contracts and premium amounts associated with options written is as follows: Year ended Oct. 31, 1994 _________________________________________________ Puts Calls Contracts Premium Contracts Premium ___________________________________________________________________ Balance Oct. 31, 1993 -- $ -- -- $ -- Open 18,218 1,120,929 38,885 2,975,557 Expired (2,143) (179,217) (17,835) (1,148,307) Exercised -- -- (7,300) (978,779) ___________________________________________________________________ Balance Oct. 31, 199416,075 $ 941,712 13,750 $ 848,471 ___________________________________________________________________ PAGE 76 ___________________________________________________________________ 6. Foreign currency contracts At Oct. 31, 1994, the fund had entered into a foreign currency exchange contract that obligates the fund to deliver currency at a specified future date. The unrealized appreciation of $25 on this contract is included in the accompanying financial statements. The terms of the open contract is as follows:
U.S. dollar value U.S. dollar value Currency to be as of Currency to be as of Exchange date delivered Oct. 31, 1994 received Oct. 31, 1994 _____________________________________________________________________________________________________ Nov. 10, 1994 847,002 $1,386,372 1,386,397 $1,386,397 British Pound U.S. Dollar ______________________________________________________________________________ 7. Financial highlights "Financial highlights" showing per share data and selected information is presented on page 5 of the prospectus.
PAGE 77 Investments in securities IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1994 investments compared to net assets)
Investments in securities of unaffiliated issuers _____________________________________________________________________________________________________________________________ Common stocks (68.1%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Aerospace & defense (1.1%) Northrop Grumman 31,900 $ 1,399,613 United Technologies 375,000 23,625,000 ______________ Total 25,024,613 _____________________________________________________________________________________________________________________________ Automotive & related (3.1%) Chrysler 400,000 19,500,000 Dana 1,000,000 25,625,000 Goodyear Tire & Rubber 800,000 28,000,000 ______________ Total 73,125,000 _____________________________________________________________________________________________________________________________ Banks and savings & loans (3.6%) BankAmerica 625,000 27,187,500 First Chicago 700,000 34,300,000 NationsBank 500,000 (j) 24,750,000 ______________ Total 86,237,500 _____________________________________________________________________________________________________________________________ Beverages & tobacco (0.9%) UST 800,000 21,200,000 _____________________________________________________________________________________________________________________________ Building materials (0.2%) Tolmex 400,000 (b) 5,819,040 _____________________________________________________________________________________________________________________________ Chemicals (2.0%) Dow Chemical 325,000 23,887,500 Nalco Chemical 325,000 10,481,250 Witco 450,000 12,600,000 ______________ Total 46,968,750 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. PAGE 78 Computers & office equipment (5.8%) Amer Power Conversion 500,000 (c) 9,250,000 Banyan 600,000 (c) 10,350,000 Cisco Systems 400,000 12,050,000 COMPAQ Computer 225,000 9,028,125 Computer Assn Intl 225,000 11,165,625 Parametric Technology 200,000 (c,j) 7,200,000 Pitney Bowes 775,000 26,156,250 Solectron 325,000 (c) 9,059,375 Sterling Software 250,000 (c) 7,812,500 VMARK Software 40,000 (c) 650,000 Wall Data 275,000 (c,d) 9,968,750 Xerox 250,000 25,625,000 ______________ Total 138,315,625 _____________________________________________________________________________________________________________________________ Electronics (0.9%) Arrow Electronics 275,000 (c) 10,381,250 Intel 175,000 10,871,875 ______________ Total 21,253,125 _____________________________________________________________________________________________________________________________ Energy (7.2%) Amoco 425,000 26,934,375 Exxon 525,000 33,009,375 Repsol ADR 850,000 (b) 27,625,000 Royal Dutch Petroleum 250,000 (b) 29,125,000 Texaco 400,000 26,150,000 YPF Sociedad Anonima ADR 1,100,000 (b) 26,537,500 ______________ Total 169,381,250 _____________________________________________________________________________________________________________________________ Energy equipment & services (1.1%) Schlumberger 450,000 (b) 26,437,500 _____________________________________________________________________________________________________________________________ Financial services (3.2%) Holly Residential Property 175,000 2,537,500 Kranzco Realty Trust 20,000 345,000 Mutual Risk Management 500,000 13,687,500 Paribas 300,000 (b) 19,966,800 Sizeler Property 143,700 1,580,700 State Street Boston 257,400 8,590,725 Travelers 800,000 27,800,000 ______________ Total 74,508,225 _____________________________________________________________________________________________________________________________ PAGE 79 Health care (3.7%) Cordis 300,000 (j) 17,287,500 Merck 600,000 (d) 21,450,000 Pfizer 325,000 24,090,625 Schering-Plough 350,000 24,937,500 ______________ Total 87,765,625 _____________________________________________________________________________________________________________________________ Health care services (1.2%) Columbia Healthcare 250,000 10,406,250 Physician Corp of Amer 500,000 (j) 12,062,500 Service Corp Intl 200,000 5,325,000 ______________ Total 27,793,750 _____________________________________________________________________________________________________________________________ Industrial equipment & services (3.7%) General Signal 850,000 (d) 30,600,000 Giddings & Lewis 1,500,000 23,250,000 Illinois Tool Works 550,000 24,681,250 Stewart & Stevenson 247,000 9,509,500 ______________ Total 88,040,750 _____________________________________________________________________________________________________________________________ Industrial transportation (3.3%) CSX 400,000 29,000,000 Norfolk Southern 425,000 26,775,000 Union Pacific 475,000 23,215,625 ______________ Total 78,990,625 _____________________________________________________________________________________________________________________________ Insurance (1.1%) CIGNA 375,000 24,703,125 _____________________________________________________________________________________________________________________________ Leisure time & entertainment (0.5%) Hasbro 350,000 11,550,000 _____________________________________________________________________________________________________________________________ Media (3.4%) McGraw-Hill 350,000 26,162,500 Reader's Digest Assn 650,000 28,518,750 Tele-Communications 200,000 (c) 4,525,000 Time Warner 400,000 14,200,000 Viacom Cl B 151,537 (c) 5,947,827 Viacom Cl A 20,000 (c) 802,500 ______________ Total 80,156,577 _____________________________________________________________________________________________________________________________ PAGE 80 Metals (1.7%) Cyprus Minerals 750,000 19,968,750 RTZ 1,500,000 (b) 21,090,000 ______________ Total 41,058,750 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (4.9%) General Electric 525,000 25,659,375 Grupo Carso ADR 275,000 (b,c) 6,050,000 Hanson ADR 1,250,000 (b) 23,281,250 Hutchison Whampoa 4,500,000 (b) 20,785,500 Madeco ADR 200,000 (b) 6,250,000 Minnesota Mining & Mfg 625,000 34,609,375 ______________ Total 116,635,500 _____________________________________________________________________________________________________________________________ Paper & packaging (3.5%) Crown Cork & Seal 323,100 (c) 12,560,512 Kimberly-Clark 500,000 25,750,000 Kimberly-Clark de Mexico 1,000,000 (b) 19,842,900 Union Camp 500,000 23,750,000 ______________ Total 81,903,412 _____________________________________________________________________________________________________________________________ Retail (3.6%) Gap 600,000 20,250,000 Home Depot 93,700 4,263,350 Penney (JC) 500,000 25,312,500 Pep Boys Manny Moe & Jack 187,500 6,703,125 Sears Roebuck 600,000 29,700,000 ______________ Total 86,228,975 _____________________________________________________________________________________________________________________________ Utilities - electric (1.4%) Central Puerto ADR 300,000 (b,d) 9,900,000 Veba 70,000 (b) 23,467,570 ______________ Total 33,367,570 _____________________________________________________________________________________________________________________________ Utilities - natural gas (1.9%) Enron 700,000 22,662,500 Tenneco 500,000 (j) 22,125,000 ______________ Total 44,787,500 _____________________________________________________________________________________________________________________________ PAGE 81 Utilities - telephone (5.1%) AirTouch Communications 925,000 (c) 27,634,375 BCE 675,000 (b) 23,625,000 LIN Broadcasting 50,000 (c) 6,900,000 MCI Communications 450,000 10,350,000 Pacific Telesis Group 750,000 23,718,750 U S WEST 750,000 28,218,750 ______________ Total 120,446,875 _____________________________________________________________________________________________________________________________ Total common stocks of unaffiliated issuers (Cost: $1,457,453,656) 46,010,837 $1,611,699,662 _____________________________________________________________________________________________________________________________ Preferred stocks & other (7.8%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Bethlehem Steel $3.50 Cm Cv 350,000 (e) 18,812,500 Ceridan $2.75 Cm Cv 275,000 17,221,875 COINTEL 5.04% Cv 275,000 (f) 17,118,750 Equitable 6% Cm Cv 375,000 (e) 17,625,000 First Chicago Nextell 5.50% Cm Cv 750,000 17,437,500 Ford Motor 4.20% Cm Cv 200,000 19,350,000 General Motors 3.25% Cm Cv 300,000 16,837,500 Kenetech $1.67 Cm Cv 820,000 (f) 13,735,000 Parker & Parsley Capital $3.125 Cm Cv 325,000 (e) 16,981,250 Sears Roebuck 3.75% Cm Cv 300,000 16,987,500 Tenneco $2.80 Cm Cv 325,000 13,528,125 Viacom Rights 250,000 328,125 _____________________________________________________________________________________________________________________________ Total preferred stocks & other (Cost: $179,472,118) 4,545,000 $ 185,963,125 _____________________________________________________________________________________________________________________________ PAGE 82 _____________________________________________________________________________________________________________________________ Bonds (6.1%) _____________________________________________________________________________________________________________________________ Principal Issuer and coupon rate amount Value(a) _____________________________________________________________________________________________________________________________ Banco Nacional de Mexico 7% Cv 1999 $15,000,000 (b,e) $ 16,650,000 Banco Nacional de Mexico Euro 7% Cv 1999 5,000,000 (b) 5,618,750 Cemex 4.25% Cv 1997 6,000,000 (e) 6,202,500 Conner Peripherals 6.75% Cv 2001 15,000,000 11,775,000 Henderson Land Group Euro 4% Cv 1996 15,000,000 (b,e) 14,700,000 Medical Care Intl 6.75% Cv 2006 20,000,000 18,000,000 NAC Re 5.25% Cv 2002 15,000,000 (e) 12,600,000 Rogers Communications Zero Coupon 4.74% Cv 2013 50,000,000 (g) 17,500,000 Stone Container 6.75% Cv 2007 12,500,000 9,937,500 SynOptics Communications 5.25% 2003 25,000,000 (e) 18,125,000 Time Warner Zero Coupon 6.59% Cv 2012 40,000,000 (g) 12,300,000 _____________________________________________________________________________________________________________________________ Total bonds (Cost: $157,490,046) 218,500,000 $ 143,408,750 _____________________________________________________________________________________________________________________________ Short-term securities (18.0%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable date of at purchase maturity _____________________________________________________________________________________________________________________________ U.S. government agency (0.3%) Federal Natl Mtge Assn Disc Note 11-22-94 4.79% $ 6,500,000 $ 6,481,914 _____________________________________________________________________________________________________________________________ Certificate of Deposit (0.2%) Natl Bank Detroit 12-08-94 5.16 5,000,000 4,971,267 _____________________________________________________________________________________________________________________________ PAGE 83 Commercial paper (16.7%) Ameritech 11-15-94 5.03 10,500,000 10,479,583 Amgen 12-02-94 4.86 4,100,000 4,081,050 Aon 11-07-94 5.02 3,200,000 3,197,333 11-29-94 4.90 3,000,000 2,988,637 AT&T 11-16-94 4.94 3,100,000 3,093,671 Avco Financial Services 11-23-94 4.88 16,900,000 16,849,807 BBV Finance (Delaware) 12-19-94 4.98 6,700,000 6,654,498 01-19-95 5.46 6,600,000 6,521,827 Becton Dickinson 11-29-94 4.94 3,300,000 3,287,372 Beneficial 11-17-94 5.13 6,500,000 6,485,267 11-22-94 4.87 5,700,000 5,683,874 Cafco 11-22-94 4.87 4,000,000 3,988,683 11-29-94 4.90 15,000,000 14,943,183 Chevron Oil Finance 12-01-94 4.93 3,200,000 3,186,907 Ciesco LP 11-02-94 4.67 6,000,000 5,999,178 11-07-94 4.94 4,000,000 3,996,720 11-10-94 4.84 4,900,000 4,894,120 Colgate Palmolive 11-08-94 5.07 4,800,000 (h) 4,795,287 Commercial Credit 11-09-94 4.84 9,200,000 9,189,711 Commerzbank U.S. Finance 12-19-94 5.07 4,500,000 4,469,439 Consolidated Natural Gas 11-14-94 4.98 2,700,000 2,695,174 CPC Intl 12-13-94 5.18 8,200,000 (h) 8,149,813 01-09-95 5.55 5,000,000 (h) 4,948,181 Eiger Capital 11-21-94 4.85 3,800,000 (h) 3,789,803 11-28-94 4.94 6,000,000 (h) 5,977,860 Fleet Funding 12-01-94 4.93 4,300,000 (h) 4,282,442 Ford Motor Credit 11-17-94 5.12 4,500,000 4,489,820 11-18-94 5.03 5,000,000 4,988,194 General Electric Capital Services 11-18-94 4.90 6,300,000 6,285,482 Goldman Sachs Group 11-09-94 4.84 11,300,000 11,285,626 Kellogg 11-23-94 4.84 3,500,000 3,489,691 Merrill Lynch 11-28-94 5.03 6,100,000 6,077,125 PAGE 84 Metlife Funding 11-03-94 4.68 8,700,000 8,697,127 11-14-94 4.84 6,300,000 6,287,691 Michigan Consolidated Gas 11-22-94 4.97 7,000,000 6,979,869 Mobile Australia Finance (Delaware) 11-22-94 4.85 2,900,000 (h) 2,891,829 12-01-94 4.92 4,100,000 (h) 4,083,258 Motorola 11-16-94 4.82 1,300,000 1,297,400 Natl Australia Funding (Delaware) 11-01-94 4.90 7,900,000 7,900,000 Natl Bank of Detroit Canada 11-18-94 4.90 4,000,000 3,990,782 Nestle Capital 11-01-94 4.90 10,000,000 10,000,000 Norfolk Southern 11-14-94 5.08 3,700,000 (h) 3,693,253 12-05-94 4.90 6,200,000 (h) 6,167,939 Paccar Financial 12-21-94 5.12 5,700,000 5,657,714 Paribas Finance 11-23-94 4.85 7,000,000 6,979,338 Penney (JC) Funding 11-30-94 4.97 800,000 796,855 PepsiCo 11-10-94 5.05 7,100,000 7,091,089 Pioneer Hi-Bred Intl 12-05-94 4.95 6,100,000 6,071,598 Pitney Bowes Credit 11-08-94 4.83 3,600,000 3,596,226 12-05-94 5.09 1,600,000 1,591,895 01-11-95 5.43 5,000,000 4,946,700 Pittsburgh Natl Bank 01-06-95 5.50 10,000,000 10,000,149 St. Paul Companies 11-22-94 4.85 2,800,000 (h) 2,792,111 Sandoz 11-01-94 4.97 3,600,000 3,600,000 11-29-94 4.88 1,700,000 1,693,018 12-02-94 4.88 4,050,000 4,030,788 Sara Lee 12-16-94 5.18 4,000,000 3,973,067 SmithKline Beecham 11-30-94 4.90 7,000,000 6,972,482 Southern California Gas 11-02-94 4.85 5,200,000 5,199,304 11-10-94 5.03 11,000,000 10,986,250 12-05-94 4.91 4,569,000 (h) 4,545,855 12-06-94 4.91 7,000,000 (h) 6,963,094 PAGE 85 Southwestern Bell Capital 11-15-94 5.03 8,000,000 (h) 7,984,444 12-01-94 4.88 2,000,000 (h) 1,991,917 12-02-94 5.21 7,400,000 (h) 7,367,056 Sysco 11-21-94 4.99 9,800,000 (h) 9,773,050 USAA Capital 12-05-94 5.10 7,800,000 7,760,489 U S WEST Communications 11-04-94 4.79 5,900,000 5,897,665 11-14-94 4.86 5,000,000 4,991,297 ______________ Total 396,487,957 _____________________________________________________________________________________________________________________________ Letters of credit (0.8%) Bank of Amer- AES Barbers Point 12-07-94 5.20 8,000,000 7,956,302 Bank of Amer- Hyundai Motor Finance 12-08-94 5.17 7,200,000 7,160,322 First Natl Bankof Chicago- Commed Fuel 11-02-94 4.97 2,948,000 2,947,595 ______________ Total 18,064,219 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $426,068,152) 427,367,000 $ 426,005,357 _____________________________________________________________________________________________________________________________ Total investments in securities of unaffiliated issuers (Cost: $2,220,483,972) 696,422,837 $2,367,076,894 _____________________________________________________________________________________________________________________________ Investments in securities of affiliated issuers (i) _____________________________________________________________________________________________________________________________ Common stocks (1.9%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Ericsson (LM) ADR 11,000,000 (b) $ 22,687,500 Lukens 750,000 23,718,750 _____________________________________________________________________________________________________________________________ Total investments in securities of affiliated issuers (Cost: $44,803,480) 11,750,000 $ 46,406,250 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $2,265,287,452)(k) $2,413,483,144 _____________________________________________________________________________________________________________________________ PAGE 86 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Foreign security values and principal amounts are stated in U.S. dollars. (c) Presently non-income producing. (d) Security is partially or fully on loan. See Note 4 to the financial statements. (e) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the board of directors. (f) PRIDES - Preferred Redeemed Increased Dividend Equity Securities are structured as convertible preferred securities issued by a company. Investors receive an enhanced yield but based upon a specific formula, potential appreciation is limited. PRIDES pay dividends, have voting rights, are noncallable for three years and upon maturity, convert into shares of common stock. (g) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (h) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under the guidelines established by the board of directors. (i) Investments representing 5% or more of the outstanding voting securities of the issuer. (j) At Oct. 31, 1994, securities valued at $53,537,500 were held in escrow to cover open call options written as follows: Number Exercise Expiration Issuer of contracts price date Value(a) _______________________________________________________________________________________ Cordis 3,000 $65 Nov. 1994 $ 46,890 NationsBank 750 50 Nov. 1994 56,250 Parametric Technology 2,000 40 Dec. 1994 150,000 Physician Corp of Amer 5,000 25 Dec. 1994 218,500 Tenneco 3,000 45 Dec. 1994 393,750 _______________________________________________________________________________________ (k) At Oct. 31, 1994, the cost of securities for federal income tax purposes was $2,265,186,782 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $193,252,250 Unrealized depreciation (44,955,888) ___________________________________________________________________________________________ Net unrealized appreciation $148,296,362 ___________________________________________________________________________________________
PAGE 87 PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements filed as part of this post-effective amendment: Independent auditors' report dated December 2, 1994. Statement of assets and liabilities, Oct. 31, 1994. Statement of operations for year ended Oct. 31, 1994. Statements of changes in net assets for year ended Oct. 31, 1994 and Oct. 31, 1993. Notes to financial statements. Investments in securities, Oct. 31, 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 Registrant's Post-Effective Amendment No. 78 to Registration Statement No. 2-11358, is incorporated herein by reference. 2. Copy of By-laws, as amended January 12, 1989, filed electronically as Exhibit 2 to Registrant's Post-Effective Amendment No. 78 to Registration Statement No. 2-11358, is incorporated herein by reference. 3. Not applicable. 4. Copy of Stock certificate, filed as Exhibit 1 to Registrant's Form N-1Q for the calendar quarter ended December 31, 1976, is incorporated herein by reference. 5. Copy of Investment Management and Services Agreement between Registrant and IDS Financial Corporation, dated Nov. 14, 1991, filed electronically as Exhibit 5 to Registrant's Post-Effective Amendment No. 83 to Registration Statement No. 2-11358, is incorporated herein by reference. 6. Copy of Distribution Agreement between Registrant and IDS Financial Services Inc. dated January 1, 1987 filed electronically as Exhibit 3 to Registrant's Post-Effective Amendment No. 73 to Registration Statement No. 2-11358, is incorporated herein by reference. 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). Copy of Custodian Agreement dated July 1, 1985 filed as Exhibit 8(a) to Registration Statement No. 2-11358 to Post- Effective Amendment No. 68 is incorporated herein by reference. PAGE 88 (b). Copy of Sub-Custodian Agreement (Custody Agreement), between Morgan Stanley Trust Company and IDS Bank & Trust, dated Aug. 1992, filed as Exhibit 8(b) to Registrant's Post-Effective Amendment No. 88 to Registration Statement No. 2-11358, is incorporated herein by reference. 9(a). Copy of Plan and Agreement of Merger, dated April 10, 1986, filed electronically as Exhibit 9(a) to Registrant's Post-Effective Amendment No. 70 to Registration Statement No. 2-11358, is incorporated herein by reference. (b). Copy of Transfer Agency Agreement between Registrant and IDS Financial Corporation, dated Nov. 14, 1991, filed electronically as Exhibit 9(b) to Registrant's Post-Effective Amendment No. 83 to Registration Statement No. 2-11358, is incorporated herein by reference. (c). Copy of License Agreement, dated Jan. 25, 1988, between Registrant and IDS Financial Corporation, filed electronically as exhibit 9(c) to Post-Effective Amendment No. 83 to Registration Statement No. 2-11358 is incorporated herein by reference. 10. Not Applicable. 11. Independent Auditors' Consent is filed electronically herewith. 12. None. 13. Not Applicable. 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. 19 to Registration Statement No. 2-54516, are incorporated herein by reference. 15. Copy of Plan and Supplemental Agreement of Distribution between Registrant and IDS Financial Corporation, dated January 1, 1987 filed electronically as Exhibit 15 to Registrant's Post- Effective Amendment No. 76 to Registration Statement No. 2-11358, is incorporated herein by reference. 16(a). Not Applicable. (b). Schedule for computation of each performance quotation provided in the Registration Statement in response to Item 22 filed electronically as Exhibit 16(b) to Registrant's Post- Effective Amendment No. 76 to Registration Statement No. 2-11358, is incorporated herein by reference. 17. Financial Data Schedule, filed electronically herewith. 18(a). Directors' Power of Attorney dated November 10, 1994, to sign Amendments to this Registration Statement is herewith filed electronically as Exhibit 18(a). PAGE 89 18(b). Officers' Power of Attorney dated June 1, 1993, to sign Amendments to this Registration Statement filed electronically as Exhibit 17(a) to Post-Effective Amendment No. 87, is incorporated herein 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 Class Dec. 5, 1994 Common Stock 106,269 PAGE 90 Item 27. 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 91 PAGE 1
Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation) Directors and officers of IDS Financial Corporation who are directors and/or officers of one or more other companies: Ronald G. Abrahamson, Vice President--Field Administration American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-Field Administration Douglas A. Alger, Vice President--Total Compensation IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Total Compensation Jerome R. Amundson, Vice President and Controller--Mutual Funds Operations IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Controller-Mutual Funds Operations Peter J. Anderson, Director and Senior Vice President--Investments IDS Advisory Group Inc. IDS Tower 10 Director and Chairman Minneapolis, MN 55440 of the Board IDS Capital Holdings Inc. Director and President IDS Financial Services Inc. Senior Vice President- Investments IDS Fund Management Limited Director IDS International, Inc. Director, Chairman of the Board and Executive Vice President IDS Securities Corporation Executive Vice President- Investments NCM Capital Management Group, Inc. 2 Mutual Plaza Director 501 Willard Street Durham, NC 27701 Ward D. Armstrong, Vice President--Sales and Marketing, IDS Institutional Retirement Services IDS Financial Services Inc. IDS Tower 10 Vice President-Sales and Minneapolis, MN 55440 Marketing, IDS Institutional Retirement Services Alvan D. Arthur, Region Vice President--Pacific Northwest Region American Express Service Corporation IDS Tower 10 Vice President IDS Financial Services Inc. Minneapolis, MN 55440 Region Vice President- Pacific Northwest Region PAGE 2 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Kent L. Ashton, Vice President--Financial Education Services IDS Financial Services Inc. IDS Tower 10 Vice President-Financial Minneapolis, MN 55440 Education Services Joseph M. Barsky III, Vice President--Senior Portfolio Manager IDS Advisory Group Inc. IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-Senior Portfolio Manager Robert C. Basten, Vice President--Tax and Business Services IDS Financial Services Inc. IDS Tower 10 Vice President-Tax Minneapolis, MN 55440 and Business Services Timothy V. Bechtold, Vice President--Insurance Product Development IDS Financial Services Inc. IDS Tower 10 Vice President-Insurance Minneapolis, MN 55440 Product Development IDS Life Insurance Company Vice President-Insurance Product Development John D. Begley, Region Vice President--Mid-Central Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Mid-Central Region IDS Insurance Agency of Alabama Inc. Vice President-Mid-Central Region IDS Insurance Agency of Arkansas Inc. Vice President-Mid-Central Region IDS Insurance Agency of Massachusetts Inc. Vice President-Mid-Central Region IDS Insurance Agency of Nevada Inc. Vice President-Mid-Central Region IDS Insurance Agency of New Mexico Inc. Vice President-Mid-Central Region IDS Insurance Agency of North Carolina Inc. Vice President-Mid-Central Region IDS Insurance Agency of Ohio Inc. Vice President-Mid-Central Region IDS Insurance Agency of Wyoming Inc. Vice President-Mid-Central Region Carl E. Beihl, Vice President--Strategic Technology Planning IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Strategic Technology Planning PAGE 3 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Alan F. Bignall, Vice President--Financial Planning Systems American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Financial Planning Systems Brent L. Bisson, Region Vice President--Northwest Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Northwest Region IDS Insurance Agency of Alabama Inc. Vice President- Northwest Region IDS Insurance Agency of Arkansas Inc. Vice President- Northwest Region IDS Insurance Agency of Massachusetts Inc. Vice President- Northwest Region IDS Insurance Agency of Nevada, Inc. Vice President- Northwest Region IDS Insurance Agency of New Mexico Inc. Vice President- Northwest Region IDS Insurance Agency of North Carolina Inc. Vice President- Northwest Region IDS Insurance Agency of Ohio Inc. Vice President- Northwest Region IDS Insurance Agency of Wyoming Inc. Vice President- Northwest Region John C. Boeder, Vice President--Mature Market Group IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Mature Market Group IDS Life Insurance Company of New York Box 5144 Director Albany, NY 12205 Karl J. Breyer, Director, Senior Vice President--Corporate Affairs and General Counsel American Express Minnesota Foundation IDS Tower 10 Director Minneapolis, MN 55440 IDS Aircraft Services Corporation Director and President IDS Financial Services Inc. Senior Vice President- Corporate Affairs and Special Counsel Harold E. Burke, Vice President and Assistant General Counsel American Express Service Corporation IDS Tower 10 Vice President IDS Financial Services Inc. Minneapolis, MN 55440 Vice President and Assistant General Counsel PAGE 4 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Daniel J. Candura, Vice President--Marketing Support IDS Financial Services Inc. IDS Tower 10 Vice President-Marketing Minneapolis, MN 55440 Support Cynthia M. Carlson, Vice President--IDS Securities Services American Enterprise Investment IDS Tower 10 Director, President and Services Inc. Minneapolis, MN 55440 Chief Executive Officer IDS Financial Services Inc. Vice President-IDS Securities Services Orison Y. Chaffee III, Vice President--Field Real Estate IDS Financial Services Inc. IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Real Estate James E. Choat, Director and Senior Vice President--Field Management American Express Minnesota Foundation IDS Tower 10 Director American Express Service Corporation Minneapolis, MN 55440 Vice President IDS Financial Services Inc. Senior Vice President- Field Management IDS Insurance Agency of Alabama Inc. Vice President--North Central Region IDS Insurance Agency of Arkansas Inc. Vice President--North Central Region IDS Insurance Agency of Massachusetts Inc. Vice President--North Central Region IDS Insurance Agency of Nevada Inc. Vice President--North Central Region IDS Insurance Agency of New Mexico Inc. Vice President--North Central Region IDS Insurance Agency of North Carolina Inc. Vice President--North Central Region IDS Insurance Agency of Ohio Inc. Vice President--North Central Region IDS Insurance Agency of Wyoming Inc. Vice President-- North Central Region IDS Property Casualty Insurance Co. Director Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty IDS Financial Services Inc. IDS Tower 10 Vice President and General Minneapolis, MN 55440 Manager-IDS Property Casualty IDS Property Casualty Insurance Co. I WEG Blvd. Director and President DePere, Wisconsin 54115 PAGE 5 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Roger C. Corea, Region Vice President--Northeast Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Northeast Region IDS Insurance Agency of Alabama Inc. Vice President - Northeast Region IDS Insurance Agency of Arkansas Inc. Vice President - Northeast Region IDS Insurance Agency of Massachusetts Inc. Vice President - Northeast Region IDS Insurance Agency of Nevada Inc. Vice President - Northeast Region IDS Insurance Agency of New Mexico Inc. Vice President - Northeast Region IDS Insurance Agency of North Carolina Inc. Vice President - Northeast Region IDS Insurance Agency of Ohio, Inc. Vice President - Northeast Region IDS Insurance Agency of Wyoming Inc. Vice President - Northeast Region IDS Life Insurance Co. of New York Box 5144 Director Albany, NY 12205 Kevin F. Crowe, Region Vice President--Atlantic Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President - Atlantic Region Alan R. Dakay, Vice President--Institutional Insurance Marketing American Enterprise Life Insurance Co. IDS Tower 10 Director and President Minneapolis, MN 55440 American Partners Life Insurance Co. Director and President IDS Financial Services Inc. Vice President - Institutional Insurance Marketing IDS Life Insurance Company Vice President - Institutional Insurance Marketing William F. Darland, Region Vice President--South Central Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- South Central Region IDS Insurance Agency of Alabama Inc. Vice President- South Central Region IDS Insurance Agency of Arkansas Inc. Vice President - South Central Region PAGE 6 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) IDS Insurance Agency of Massachusetts Inc. Vice President- South Central Region IDS Insurance Agency of Nevada Inc. Vice President- South Central Region IDS Insurance Agency of New Mexico Inc. Vice President- South Central Region IDS Insurance Agency of North Carolina Inc. Vice President- South Central Region IDS Insurance Agency of Ohio Inc. Vice President- South Central Region IDS Insurance Agency of Wyoming Inc. Vice President- South Central Region William H. Dudley, Director and Executive Vice President--Investment Operations IDS Advisory Group Inc. IDS Tower 10 Director Minneapolis, MN 55440 IDS Capital Holdings Inc. Director IDS Financial Services Inc. Director and Executive Vice President- Investment Operations IDS Futures Corporation Director IDS Futures III Corporation Director IDS International, Inc. Director IDS Securities Corporation Director, Chairman of the Board, President and Chief Executive Officer Roger S. Edgar, Director and Senior Vice President--Information Systems IDS Financial Services Inc. IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Information Systems Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel IDS Financial Services Inc. IDS Tower 10 Senior Vice President and General Counsel IDS Insurance Agency of Alabama Inc. Director and Vice President IDS Insurance Agency of Arkansas Inc. Director and Vice President IDS Insurance Agency of Massachusetts Inc. Director and Vice President IDS Insurance Agency of Nevada Inc. Director and Vice President IDS Insurance Agency of New Mexico Inc. Director and Vice President IDS Insurance Agency of North Carolina Inc. Director and Vice President IDS Insurance Agency of Ohio Inc. Director and Vice President IDS Insurance Agency of Wyoming Inc. Director and Vice President IDS Real Estate Services, Inc. Vice President Investors Syndicate Development Corp. Director Robert M. Elconin, Vice President--Government Relations IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Government Relations IDS Life Insurance Company Vice President PAGE 7 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Mark A. Ernst, Vice President--Retail Services American Enterprise Investment IDS Tower 10 Director Services Inc. Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Retail Services Gordon M. Fines, Vice President--Mutual Fund Equity Investments IDS Advisory Group Inc. IDS Tower 10 Executive Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Mutual Fund Equity Investments IDS International Inc. Vice President and Portfolio Manager Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer American Enterprise Investment IDS Tower 10 Vice President Services Inc. Minneapolis, MN 55440 IDS Cable Corporation Director IDS Cable II Corporation Director IDS Capital Holdings Inc. Senior Vice President IDS Certificate Company Vice President IDS Financial Services Inc. Senior Vice President and Chief Financial Officer IDS Insurance Agency of Alabama Inc. Vice President IDS Insurance Agency of Arkansas Inc. Vice President IDS Insurance Agency of Massachusetts Inc. Vice President IDS Insurance Agency of Nevada Inc. Vice President IDS Insurance Agency of New Mexico Inc. Vice President IDS Insurance Agency of North Carolina Inc. Vice President IDS Insurance Agency of Ohio Inc. Vice President IDS Insurance Agency of Wyoming Inc. Vice President IDS Life Insurance Company Director IDS Life Series Fund, Inc. Vice President IDS Life Variable Annuity Funds A&B Vice President IDS Property Casualty Insurance Co. Director and Vice President IDS Real Estate Services, Inc. Vice President IDS Sales Support Inc. Director IDS Securities Corporation Vice President IDS Trust Company Director Investors Syndicate Development Corp. Vice President Douglas L. Forsberg, Vice President--Securities Services IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Securities Services PAGE 8 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Carl W. Gans, Region Vice President--North Central Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- North Central Region Robert G. Gilbert, Vice President--Real Estate IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Real Estate John J. Golden, Vice President--Field Compensation Development IDS Financial Services Inc. IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Compensation Development Harvey Golub, Director American Express Company American Express Tower Chairman and Chief World Financial Center Executive Officer New York, New York 10285 American Express Travel Chairman and Chief Related Services Company, Inc. Executive Officer National Computer Systems, Inc. 11000 Prairie Lakes Drive Director Minneapolis, MN 55440 Morris Goodwin Jr., Vice President and Corporate Treasurer American Enterprise Investment IDS Tower 10 Vice President and Services Inc. Minneapolis, MN 55440 Treasurer American Enterprise Life Insurance Co. Vice President and Treasurer American Express Minnesota Foundation Director, Vice President and Treasurer American Express Service Corporation Vice President and Treasurer IDS Advisory Group Inc. Vice President and Treasurer IDS Aircraft Services Corporation Vice President and Treasurer IDS Cable Corporation Vice President and Treasurer IDS Cable II Corporation Vice President and Treasurer IDS Capital Holdings Inc. Vice President and Treasurer IDS Certificate Company Vice President and Treasurer IDS Deposit Corp. Director, President and Treasurer IDS Financial Services Inc. Vice President and Corporate Treasurer PAGE 9 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) IDS Insurance Agency of Alabama Inc. Vice President and Treasurer IDS Insurance Agency of Arkansas Inc. Vice President and Treasurer IDS Insurance Agency of Massachusetts Inc. Vice President and Treasurer IDS Insurance Agency of Nevada Inc. Vice President and Treasurer IDS Insurance Agency of New Mexico Inc. Vice President and Treasurer IDS Insurance Agency of North Carolina Inc. Vice President and Treasurer IDS Insurance Agency of Ohio Inc. Vice President and Treasurer IDS Insurance Agency of Wyoming Inc. Vice President and Treasurer IDS International, Inc. Vice President and Treasurer IDS Life Insurance Company Vice President and Treasurer IDS Life Series Fund, Inc. Vice President and Treasurer IDS Life Variable Annuity Funds A&B Vice President and Treasurer IDS Management Corporation Vice President and Treasurer IDS Partnership Services Corporation Vice President and Treasurer IDS Plan Services of California, Inc. Vice President and Treasurer IDS Property Casualty Insurance Co. Vice President and Treasurer IDS Real Estate Services, Inc Vice President and Treasurer IDS Realty Corporation Vice President and Treasurer IDS Sales Support Inc. Director, Vice President and Treasurer IDS Securities Corporation Vice President and Treasurer Investors Syndicate Development Corp. Vice President and Treasurer NCM Capital Management Group, Inc. 2 Mutual Plaza Director 501 Willard Street Durham, NC 27701 Sloan Financial Group, Inc. Director Suzanne Graf, Vice President--Systems Services IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Systems Services PAGE 10 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) David A. Hammer, Vice President and Marketing Controller IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Marketing Controller IDS Plan Services of California, Inc. Director and Vice President Robert L. Harden, Region Vice President--Mid-Atlantic Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Mid Atlantic Region IDS Insurance Agency of Alabama Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of Arkansas Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of Massachusetts Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of Nevada Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of New Mexico Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of North Carolina Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of Ohio Inc. Vice President- Mid Atlantic Region IDS Insurance Agency of Wyoming Inc. Vice President- Mid Atlantic Region Lorraine R. Hart, Vice President--Insurance Investments American Enterprise Life IDS Tower 10 Vice President-Investments Insurance Company Minneapolis, MN 55440 American Partners Life Insurance Co. Director and Vice President-Investments IDS Certificate Company Vice President-Investments IDS Financial Services Inc. Vice President-Insurance Investments IDS Life Insurance Company Vice President-Investments Investors Syndicate Development Corp. Vice President-Investments Mark S. Hays, Vice President--Senior Portfolio Manager, IDS International IDS Financial Services Inc. IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager, IDS International IDS Fund Management Limited Director IDS International, Inc. Senior Vice President PAGE 11 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Brian M. Heath, Region Vice President--Southwest Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Southwest Region IDS Insurance Agency of Alabama Inc. Vice President- Southwest Region IDS Insurance Agency of Arkansas Inc. Vice President- Southwest Region IDS Insurance Agency of Massachusetts Inc. Vice President- Southwest Region IDS Insurance Agency of Nevada Inc. Vice President- Southwest Region IDS Insurance Agency of New Mexico Inc. Vice President- Southwest Region IDS Insurance Agency of North Carolina Inc. Vice President- Southwest Region IDS Insurance Agency of Ohio Inc. Vice President- Southwest Region IDS Insurance Agency of Texas Inc. Director and President IDS Insurance Agency of Wyoming Inc. Vice President- Southwest Region Raymond E. Hirsch, Vice President--Senior Portfolio Manager IDS Advisory Group Inc. IDS Tower 10 Vice President IDS Financial Services Inc. Minneapolis, MN 55440 Vice President-Senior Portfolio Manager James G. Hirsh, Vice President and Assistant General Counsel IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel IDS Securities Corporation Director, Vice President and General Counsel Paul C. Hopkins, Vice President--Senior Portfolio Manager-IDS International IDS Financial Services Inc. IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager-IDS International IDS International, Inc. Senior Vice President Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer American Enterprise Investment IDS Tower 10 Vice President and Services Inc. Minneapolis, MN 55440 Compliance Officer American Express Service Corporation Vice President IDS Financial Services Inc. Vice President- Government and Customer Relations IDS Securities Corporation Vice President and Chief Compliance Officer PAGE 12 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) David R. Hubers, Director, President and Chief Executive Officer American Express Service Corporation IDS Tower 10 Director and President Minneapolis, MN 55440 IDS Aircraft Services Corporation Director IDS Certificate Company Director IDS Financial Services Inc. Chairman, Chief Executive Officer and President IDS Life Insurance Company Director IDS Plan Services of California, Inc. Director and President IDS Property Casualty Insurance Co. Director Marietta L. Johns, Director and Senior Vice President--Field Management IDS Financial Services Inc. IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Field Management Douglas R. Jordal, Vice President--Taxes IDS Aircraft Services Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-Taxes Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning Development American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-IDS 1994 Implementation Planning and Financial Planning Development James E. Kaarre, Vice President--Marketing Information IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Marketing Information G. Michael Kennedy, Vice President--Investment Services and Investment Research IDS Financial Services Inc. IDS Tower 10 Vice President-Investment Minneapolis, MN 55440 Services and Investment Research Susan D. Kinder, Director and Senior Vice President--Human Resources American Express Minnesota Foundation IDS Tower 10 Director Minneapolis, MN 55440 American Express Service Corporation Vice President IDS Financial Services Inc. Senior Vice President- Human Resources PAGE 13 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Richard W. Kling, Director and Senior Vice President--Risk Management Products American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of Minneapolis, MN 55440 the Board American Partners Life Insurance Co. Director and Chairman of the Board IDS Financial Services Inc. Senior Vice President- Risk Management Products IDS Insurance Agency of Alabama Inc. Director and President IDS Insurance Agency of Arkansas Inc. Director and President IDS Insurance Agency of Massachusetts Inc. Director and President IDS Insurance Agency of Nevada Inc. Director and President IDS Insurance Agency of New Mexico Inc. Director and President IDS Insurance Agency of North Carolina Inc. Director and President IDS Insurance Agency of Ohio Inc. Director and President IDS Insurance Agency of Wyoming Inc. Director and President IDS Life Insurance Company Director and President IDS Life Series Fund, Inc. Director and President IDS Life Variable Annuity Funds A&B Member of Board of Managers, Chairman of the Board and President IDS Property Casualty Insurance Co. Director and Chairman of the Board IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the of New York Albany, NY 12205 Board and President Harold D. Knutson, Vice President--System Services IDS Financial Services Inc. IDS Tower 10 Vice President-- Minneapolis, MN 55440 System Services Paul F. Kolkman, Vice President--Actuarial Finance IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Actuarial Finance IDS Life Insurance Company Director and Executive Vice President IDS Life Series Fund, Inc. Vice President and Chief Actuary Claire Kolmodin, Vice President--Service Quality IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Service Quality David S. Kreager, Vice President--Field Management Development IDS Financial Services Inc. IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Management Development Christopher R. Kudrna, Vice President--Systems and Technology Development IDS Financial Services Inc. IDS Tower 10 Vice President-Systems and Minneapolis, MN 55440 Technology Development PAGE 14 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Director and Senior Vice President-Field Management and Business Systems Mitre Kutanovski, Region Vice President--Midwest Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Midwest Region Edward Labenski, Vice President--Senior Portfolio Manager IDS Advisory Group Inc. IDS Tower 10 Senior Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Senior Portfolio Manager Peter L. Lamaison, Vice President--IDS International Division IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 IDS International Division IDS Fund Management Limited Director and Chairman of the Board IDS International, Inc. Director, President and Chief Executive Officer Kurt A. Larson, Vice President--Senior Portfolio Manager IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager Ryan R. Larson, Vice President--IPG Product Development IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 IPG Product Development IDS Life Insurance Company Vice President- Annuity Product Development Daniel E. Laufenberg, Vice President and Chief U.S. Economist IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Chief U.S. Economist PAGE 15 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer IDS Financial Services Inc. IDS Tower 10 Senior Vice President and Minneapolis, MN 55440 Chief Marketing Officer IDS Life Insurance Company Director and Executive Vice President-Marketing IDS Plan Services of California, Inc. Director IDS Trust Company Director and Chairman of the Board Investors Syndicate Development Corp. Director Douglas A. Lennick, Director and Executive Vice President--Private Client Group American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Director and Executive Vice President-Private Client Group Mary J. Malevich, Vice President--Senior Portfolio Manager IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Senior Portfolio Manager IDS International Inc. Vice President and Portfolio Manager Fred A. Mandell, Vice President--Field Marketing Readiness IDS Financial Services Inc. IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Marketing Readiness William J. McKinney, Vice President--Field Management Support IDS Financial Services Inc. IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Management Support Thomas W. Medcalf, Vice President--Senior Portfolio Manager IDS Financial Services Inc. IDS Tower 10 Vice President-Senior Minneapolis, MN 55440 Portfolio Manager William C. Melton, Vice President-International Research and Chief International Economist IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 International Research and Chief International Economist PAGE 16 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Janis E. Miller, Vice President--Variable Assets IDS Cable Corporation IDS Tower 10 Director and President Minneapolis, MN 55440 IDS Cable II Corporation Director and President IDS Financial Services Inc. Vice President- Variable Assets IDS Futures Corporation Director and President IDS Futures III Corporation Director and President IDS Life Insurance Company Director and Executive Vice President-Variable Assets IDS Life Variable Annuity Funds A&B Director IDS Life Series Fund, Inc. Director IDS Management Corporation Director and President IDS Partnership Services Corporation Director and President IDS Realty Corporation Director and President IDS Life Insurance Company of New York Box 5144 Executive Vice President Albany, NY 12205 James A. Mitchell, Director and Executive Vice President--Marketing and Products American Enterprise Investment IDS Tower 10 Director Services Inc. Minneapolis, MN 55440 IDS Certificate Company Director and Chairman of the Board IDS Financial Services Inc. Executive Vice President- Marketing and Products IDS Life Insurance Company Director, Chairman of the Board and Chief Executive Officer IDS Plan Services of California, Inc. Director IDS Property Casualty Insurance Co. Director Pamela J. Moret, Vice President--Corporate Communications American Express Minnesota Foundation IDS Tower 10 Director and President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Corporate Communications Barry J. Murphy, Director and Senior Vice President--Client Service IDS Financial Services Inc. IDS Tower 10 Senior Vice President- Minneapolis, MN 55440 Client Service IDS Life Insurance Company Director and Executive Vice President-Client Service Robert J. Neis, Vice President--Information Systems Operations IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Information Systems Operations PAGE 17 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Vernon F. Palen, Region Vice President--Rocky Mountain Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Rocky Mountain Region IDS Insurance Agency of Alabama Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of Arkansas Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of Massachusetts Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of Nevada Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of New Mexico Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of North Carolina Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of Ohio Inc. Vice President- Rocky Mountain Region IDS Insurance Agency of Wyoming Inc. Vice President- Rocky Mountain Region James R. Palmer, Vice President--Insurance Operations IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Insurance Operations IDS Life Insurance Company Vice President-Taxes Judith A. Pennington, Vice President--Field Technology IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Field Technology George M. Perry, Vice President--Corporate Strategy and Development IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Corporate Strategy and Development IDS Property Casualty Insurance Co. Director Susan B. Plimpton, Vice President--Segmentation Development and Support IDS Financial Services Inc. IDS Tower 10 Vice President-- Minneapolis, MN 55440 Segmentation Development and Support PAGE 18 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Ronald W. Powell, Vice President and Assistant General Counsel IDS Cable Corporation IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant Secretary IDS Cable II Corporation Vice President and Assistant Secretary IDS Financial Services Inc. Vice President and Assistant General Counsel IDS Management Corporation Vice President and Assistant Secretary IDS Partnership Services Corporation Vice President and Assistant Secretary IDS Plan Services of California, Inc. Vice President and Assistant Secretary IDS Realty Corporation Vice President and Assistant Secretary James M. Punch, Vice President--TransAction Services IDS Financial Services Inc. Vice President-Trans Action Services Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments IDS Advisory Group Inc. IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-- Taxable Mutual Fund Investments Roger B. Rogos, Region Vice President--Great Lakes Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Great Lakes Region IDS Insurance Agency of Alabama Inc. Vice President- Great Lakes Region IDS Insurance Agency of Arkansas Inc. Vice President- Great Lakes Region IDS Insurance Agency of Massachusetts Inc. Vice President- Great Lakes Region IDS Insurance Agency of Nevada Inc. Vice President- Great Lakes Region IDS Insurance Agency of New Mexico Inc. Vice President- Great Lakes Region IDS Insurance Agency of North Carolina Inc. Vice President- Great Lakes Region IDS Insurance Agency of Ohio Inc. Vice President- Great Lakes Region IDS Insurance Agency of Wyoming Inc. Vice President- Great Lakes Region PAGE 19 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) ReBecca K. Roloff, Vice President--1994 Program Director IDS Financial Services Inc. IDS Tower 10 Vice President-1994 Minneapolis, MN 55440 Program Director Stephen W. Roszell, Vice President--Advisory Institutional Marketing IDS Advisory Group Inc. IDS Tower 10 President and Chief Minneapolis, MN 55440 Executive Officer IDS Financial Services Inc. Vice President-Advisory Institutional Marketing Robert A. Rudell, Vice President--IDS Institutional Retirement Services IDS Financial Services Inc. IDS Tower 10 Vice President-IDS Minneapolis, MN 55440 Institutional Retirement Services IDS Sales Support Inc. Director and President IDS Trust Company Director John P. Ryan, Vice President and General Auditor IDS Financial Services Inc. IDS Tower 10 Vice President and General Minneapolis, MN 55440 Auditor Erven A. Samsel, Director and Senior Vice President--Field Management American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Senior Vice President- Field Management IDS Insurance Agency of Alabama Inc. Vice President- New England Region IDS Insurance Agency of Arkansas Inc. Vice President- New England Region IDS Insurance Agency of Massachusetts Inc. Vice President- New England Region IDS Insurance Agency of Nevada Inc. Vice President- New England Region IDS Insurance Agency of New Mexico Inc. Vice President- New England Region IDS Insurance Agency of North Carolina Inc. Vice President- New England Region IDS Insurance Agency of Ohio Inc. Vice President- New England Region IDS Insurance Agency of Wyoming Inc. Vice President- New England Region PAGE 20 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) R. Reed Saunders, Director and Senior Vice President--Corporate Strategy and Development American Express Service Corporation IDS Tower 10 Director and Vice Minneapolis, MN 55440 President IDS Financial Services Inc. Director and Senior Vice President-Corporate Strategy and Development IDS Property Casualty Insurance Co. Director Stuart A. Sedlacek, Vice President--Assured Assets American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive Minneapolis, MN 55440 Vice President, Assured Assets IDS Certificate Company Director and President IDS Financial Services Inc. Vice President- Assured Assets IDS Life Insurance Company Director and Executive Vice President, Assured Assets Investors Syndicate Development Corp. Chairman of the Board and President Donald K. Shanks, Vice President--Property Casualty IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Property Casualty IDS Property Casualty Insurance Co. Senior Vice President F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real Minneapolis, MN 55440 Estate Loan Management American Partners Life Insurance Co. Vice President-Real Estate Loan Management IDS Certificate Company Vice President-Real Estate Loan Management IDS Financial Services Inc. Vice President-Senior Portfolio Manager Insurance Investments IDS Life Insurance Company Vice President-Real Estate Loan Management IDS Partnership Services Corporation Vice President IDS Real Estate Services Inc. Director and Vice President IDS Realty Corporation Vice President IDS Life Insurance Company of New York Box 5144 Vice President and Albany, NY 12205 Assistant Treasurer Judy P. Skoglund, Vice President--Human Resources and Organization Development IDS Financial Services Inc. IDS Tower 10 Vice President-Human Minneapolis, MN 55440 Resources and Organization Development PAGE 21 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Julian W. Sloter, Region Vice President--Southeast Region American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Region Vice President- Southeast Region IDS Insurance Agency of Alabama Inc. Vice President- Southeast Region IDS Insurance Agency of Arkansas Inc. Vice President- Southeast Region IDS Insurance Agency of Massachusetts Inc. Vice President- Southeast Region IDS Insurance Agency of Nevada Inc. Vice President- Southeast Region IDS Insurance Agency of New Mexico Inc. Vice President- Southeast Region IDS Insurance Agency of North Carolina Inc. Vice President- Southeast Region IDS Insurance Agency of Ohio Inc. Vice President- Southeast Region IDS Insurance Agency of Wyoming Inc. Vice President- Southeast Region Ben C. Smith, Vice President--Workplace Marketing IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Workplace Marketing William A. Smith, Vice President and Controller--Private Client Group IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Controller-Private Client Group James B. Solberg, Vice President--Advanced Financial Planning IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Advanced Financial Planning Bridget Sperl, Vice President--Human Resources Management Services IDS Financial Services Inc. IDS Tower 10 Vice President-Human Minneapolis, MN 55440 Resources Management Services Jeffrey E. Stiefler, Director American Express Company American Express Tower Director and President World Financial Center New York, NY 10285 PAGE 22 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Lois A. Stilwell, Vice President--Planner Training and Development IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Planner Training and Development William A. Stoltzmann, Vice President and Assistant General Counsel American Partners Life Insurance Co. IDS Tower 10 Director, Vice President, Minneapolis, MN 55440 General Counsel and Secretary IDS Financial Services Inc. Vice President and Assistant General Counsel IDS Life Insurance Company Vice President, General Counsel and Secretary IDS Life Series Fund, Inc. General Counsel and Assistant Secretary IDS Life Variable Annuity Funds A&B General Counsel and Assistant Secretary American Enterprise Life Insurance P.O. Box 534 Director, Vice President, Company Minneapolis, MN 55440 General Counsel and Secretary James J. Strauss, Vice President--Corporate Planning and Analysis IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Corporate Planning and Analysis Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD IDS Financial Services Inc. IDS Tower 10 Vice President-Information Minneapolis, MN 55440 Resource Management/ISD Fenton R. Talbott, Director ACUMA Ltd. ACUMA House President and Chief The Glanty, Egham Executive Officer Surrey TW 20 9 AT UK Neil G. Taylor, Vice President--Field Business Systems IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Field Business Systems PAGE 23 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) John R. Thomas, Director and Senior Vice President--Information and Technology IDS Bond Fund, Inc. IDS Tower 10 Director Minneapolis, MN 55440 IDS California Tax-Exempt Trust Trustee IDS Discovery Fund, Inc. Director IDS Equity Plus Fund, Inc. Director IDS Extra Income Fund, Inc. Director IDS Federal Income Fund, Inc. Director IDS Financial Services Inc. Senior Vice President- Information and Technology IDS Global Series, Inc. Director IDS Growth Fund, Inc. Director IDS High Yield Tax-Exempt Fund, Inc. Director IDS Investment Series, Inc. Director IDS Managed Retirement Fund, Inc. Director IDS Market Advantage Series, Inc. Director IDS Money Market Series, Inc. Director IDS New Dimensions Fund, Inc. Director IDS Precious Metals Fund, Inc. Director IDS Progressive Fund, Inc. Director IDS Selective Fund, Inc. Director IDS Special Tax-Exempt Series Trust Trustee IDS Stock Fund, Inc. Director IDS Strategy Fund, Inc. Director IDS Tax-Exempt Bond Fund, Inc. Director IDS Tax-Free Money Fund, Inc. Director IDS Utilities Income Fund, Inc. Director Melinda S. Urion, Vice President and Corporate Controller American Enterprise Life IDS Tower 10 Vice President and Insurance Company Minneapolis, MN 55440 Controller American Partners Life Insurance Co. Director, Vice President, Controller and Treasurer IDS Financial Services Inc. Vice President and Corporate Controller IDS Life Insurance Company Director, Executive Vice President and Controller IDS Life Series Fund, Inc. Vice President and Controller Wesley W. Wadman, Vice President--Senior Portfolio Manager IDS Advisory Group Inc. IDS Tower 10 Executive Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President- Senior Portfolio Manager IDS Fund Management Limited Director IDS International, Inc. Senior Vice President PAGE 24 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Norman Weaver, Jr., Director and Senior Vice President--Field Management American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Senior Vice President- Field Management IDS Insurance Agency of Alabama Inc. Vice President- Pacific Region IDS Insurance Agency of Arkansas Inc. Vice President- Pacific Region IDS Insurance Agency of Massachusetts Inc. Vice President- Pacific Region IDS Insurance Agency of Nevada Inc. Vice President- Pacific Region IDS Insurance Agency of New Mexico Inc. Vice President- Pacific Region IDS Insurance Agency of North Carolina Inc. Vice President- Pacific Region IDS Insurance Agency of Ohio Inc. Vice President- Pacific Region IDS Insurance Agency of Wyoming Inc. Vice President- Pacific Region Michael L. Weiner, Vice President--Corporate Tax Operations IDS Capital Holdings Inc. IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Vice President-Corporate Tax Operations IDS Futures III Corporation Vice President, Treasurer and Secretary IDS Futures Brokerage Group Vice President IDS Futures Corporation Vice President, Treasurer and Secretary Lawrence J. Welte, Vice President--Investment Administration IDS Financial Services Inc. IDS Tower 10 Vice President- Minneapolis, MN 55440 Investment Administration IDS Securities Corporation Director, Executive Vice President and Chief Operating Officer William N. Westhoff, Director and Senior Vice President--Fixed Income Management American Enterprise Life Insurance IDS Tower 10 Director Company Minneapolis, MN 55440 IDS Financial Services Inc. Senior Vice President- Fixed Income Management IDS Partnership Services Corporation Director and Vice President IDS Real Estate Services Inc. Director, Chairman of the Board and President IDS Realty Corporation Director and Vice President Investors Syndicate Development Corp. Director PAGE 25 Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)(cont'd) Edwin M. Wistrand, Vice President and Assistant General Counsel IDS Financial Services Inc. IDS Tower 10 Vice President and Minneapolis, MN 55440 Assistant General Counsel Michael R. Woodward, Director and Senior Vice President--Field Management American Express Service Corporation IDS Tower 10 Vice President Minneapolis, MN 55440 IDS Financial Services Inc. Senior Vice President- Field Management IDS Insurance Agency of Alabama Inc. Vice President- North Region IDS Insurance Agency of Arkansas Inc. Vice President- North Region IDS Insurance Agency of Massachusetts Inc. Vice President- North Region IDS Insurance Agency of Nevada Inc. Vice President- North Region IDS Insurance Agency of New Mexico Inc. Vice President- North Region IDS Insurance Agency of North Carolina Inc. Vice President- North Region IDS Insurance Agency of Ohio Inc. Vice President- North Region IDS Insurance Agency of Wyoming Inc. Vice President- North Region IDS Life Insurance Company Box 5144 Director of New York Albany, NY 12205
PAGE 26 Item 29. Principal Underwriters. (a) IDS Financial Services Inc. acts as principal underwriter for the following investment companies: IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS Discovery Fund, Inc.; IDS Equity Plus Fund, Inc.; IDS Extra Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt Fund, Inc.; IDS International Fund, Inc.; IDS Investment Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS Certificate Company. (b) As to each director, officer or partner of the principal underwriter: Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Ronald G. Abrahamson Vice President- None IDS Tower 10 Field Administration Minneapolis, MN 55440 Douglas A. Alger Vice President-Total None IDS Tower 10 Compensation Minneapolis, MN 55440 Jerome R. Amundson Vice President and None IDS Tower 10 Controller-Mutual Funds Minneapolis, MN 55440 Operations Peter J. Anderson Senior Vice President- None IDS Tower 10 Investments Minneapolis, MN 55440 Ward D. Armstrong Vice President- None IDS Tower 10 Sales and Marketing, Minneapolis, MN 55440 IDS Institutional Retirement Services Alvan D. Arthur Region Vice President- None IDS Tower 10 Pacific Northwest Region Minneapolis, MN 55440 Kent L. Ashton Vice President- None IDS Tower 10 Financial Education Minneapolis, MN 55440 Services PAGE 27 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Joseph M. Barsky III Vice President-Senior None IDS Tower 10 Portfolio Manager Minneapolis, MN 55440 Robert C. Basten Vice President-Tax None IDS Tower 10 and Business Services Minneapolis, MN 55440 Timothy V. Bechtold Vice President-Insurance None IDS Tower 10 Product Development Minneapolis, MN 55440 John D. Begley Region Vice President- None Olentangy Valley Center Mid-Central Region Suite 300 7870 Olentangy River Rd. Columbus, OH 43235 Carl E. Beihl Vice President- None IDS Tower 10 Strategic Technology Minneapolis, MN 55440 Planning Alan F. Bignall Vice President- None IDS Tower 10 Financial Planning Minneapolis, MN 55440 Systems Brent L. Bisson Region Vice President- None Seafirst Financial Northwest Region Center, Suite 1730 601 W. Riverside Ave. Spokane, WA 99201 John C. Boeder Vice President- None IDS Tower 10 Mature Market Group Minneapolis, MN 55440 Karl J. Breyer Senior Vice President- None IDS Tower 10 Corporate Affairs and Minneapolis, MN 55440 Special Counsel Harold E. Burke Vice President None IDS Tower 10 and Assistant Minneapolis, MN 55440 General Counsel Daniel J. Candura Vice President- None IDS Tower 10 Marketing Support Minneapolis, MN 55440 Cynthia M. Carlson Vice President-IDS None IDS Tower 10 Securities Services Minneapolis, MN 55440 PAGE 28 Item 29. (continued) Orison Y. Chaffee III Vice President-Field None IDS Tower 10 Real Estate Minneapolis, MN 55440 Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant James E. Choat Senior Vice President- None Suite 124 Field Management 6210 Campbell Rd. Dallas, TX 75248 Kenneth J. Ciak Vice President and None IDS Property Casualty General Manager- 1400 Lombardi Avenue IDS Property Casualty Green Bay, WI 54304 Roger C. Corea Region Vice President- None 345 Woodcliff Drive Northeast Region Fairport, NY 14450 Kevin F. Crowe Region Vice President- None IDS Tower 10 Atlantic Region Minneapolis, MN 55440 Alan R. Dakay Vice President- None IDS Tower 10 Institutional Insurance Minneapolis, MN 55440 Marketing William F. Darland Region Vice President- None Suite 108C South Central Region 301 Sovereign Court Manchester, MO 63011 William H. Dudley Director and Executive Director/ IDS Tower 10 Vice President- Trustee Minneapolis MN 55440 Investment Operations Roger S. Edgar Senior Vice President- None IDS Tower 10 Information Systems Minneapolis, MN 55440 Gordon L. Eid Senior Vice President None IDS Tower 10 and General Counsel Minneapolis, MN 55440 Robert M. Elconin Vice President- None IDS Tower 10 Government Relations Minneapolis, MN 55440 Mark A. Ernst Vice President- None IDS Tower 10 Retail Services Minneapolis, MN 55440 PAGE 29 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Gordon M. Fines Vice President- None IDS Tower 10 Mutual Fund Equity Minneapolis MN 55440 Investments Louis C. Fornetti Senior Vice President None IDS Tower 10 and Chief Financial Minneapolis, MN 55440 Officer Douglas L. Forsberg Vice President- None IDS Tower 10 Securities Services Minneapolis, MN 55440 Carl W. Gans Region Vice President- None IDS Tower 10 North Central Region Minneapolis, MN 55440 Robert G. Gilbert Vice President- None IDS Tower 10 Real Estate Minneapolis, MN 55440 John J. Golden Vice President- None IDS Tower 10 Field Compensation Minneapolis, MN 55440 Development Morris Goodwin Jr. Vice President and None IDS Tower 10 Corporate Treasurer Minneapolis, MN 55440 Suzanne Graf Vice President- None IDS Tower 10 Systems Services Minneapolis, MN 55440 David A. Hammer Vice President None IDS Tower 10 and Marketing Minneapolis, MN 55440 Controller Robert L. Harden Region Vice President- None Suite 403 Mid-Atlantic Region 8500 Leesburg Pike Vienna, VA 22180 Lorraine R. Hart Vice President- None IDS Tower 10 Insurance Investments Minneapolis, MN 55440 Mark S. Hays Vice President-Senior None IDS Tower 10 Portfolio Manager, IDS Minneapolis, MN 55440 International Brian M. Heath Region Vice President- None IDS Tower 10 Southwest Region Minneapolis, MN 55440 PAGE 30 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Raymond E. Hirsch Vice President-Senior None IDS Tower 10 Portfolio Manager Minneapolis, MN 55440 James G. Hirsh Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel Paul C. Hopkins Vice President- None IDS Tower 10 Senior Portfolio Manager, Minneapolis, MN 55440 IDS International Kevin P. Howe Vice President- None IDS Tower 10 Government and Minneapolis, MN 55440 Customer Relations David R. Hubers Chairman, Chief None IDS Tower 10 Executive Officer and Minneapolis, MN 55440 President Marietta L. Johns Senior Vice President- None IDS Tower 10 Field Management Minneapolis, MN 55440 Douglas R. Jordal Vice President-Taxes None IDS Tower 10 Minneapolis, MN 55440 Craig A. Junkins Vice President - IDS 1994 None IDS Tower 10 Implementation Planning Minneapolis, MN 55440 and Financial Planning Development James E. Kaarre Vice President- None IDS Tower 10 Marketing Information Minneapolis, MN 55440 G. Michael Kennedy Vice President-Investment None IDS Tower 10 Services and Investment Minneapolis, MN 55440 Research Susan D. Kinder Senior Vice President- None IDS Tower 10 Human Resources Minneapolis, MN 55440 Richard W. Kling Senior Vice President- None IDS Tower 10 Risk Management Products Minneapolis, MN 55440 Harold D. Knutson Vice President- None IDS Tower 10 System Services Minneapolis, MN 55440 PAGE 31 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Paul F. Kolkman Vice President- None IDS Tower 10 Actuarial Finance Minneapolis, MN 55440 Claire Kolmodin Vice President- None IDS Tower 10 Service Quality Minneapolis, MN 55440 David S. Kreager Vice President-Field None IDS Tower 10 Management Development Minneapolis, MN 55440 Christopher R. Kudrna Vice President- None IDS Tower 10 Systems and Technology Minneapolis, MN 55440 Development Steven C. Kumagai Director and Senior None IDS Tower 10 Vice President-Field Minneapolis, MN 55440 Management and Business Systems Mitre Kutanovski Region Vice President- None IDS Tower 10 Midwest Region Minneapolis, MN 55440 Edward Labenski Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Peter L. Lamaison Vice President- None One Broadgate IDS International London, England Division Kurt A. Larson Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Ryan R. Larson Vice President- None IDS Tower 10 IPG Product Development Minneapolis, MN 55440 Daniel E. Laufenberg Vice President and None IDS Tower 10 Chief U.S. Economist Minneapolis, MN 55440 Peter A. Lefferts Senior Vice President and None IDS Tower 10 Chief Marketing Officer Minneapolis, MN 55440 Douglas A. Lennick Director and Executive None IDS Tower 10 Vice President-Private Minneapolis, MN 55440 Client Group PAGE 32 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Mary J. Malevich Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Fred A. Mandell Vice President- None IDS Tower 10 Field Marketing Readiness Minneapolis, MN 55440 William J. McKinney Vice President- None IDS Tower 10 Field Management Minneapolis, MN 55440 Support Thomas W. Medcalf Vice President- None IDS Tower 10 Senior Portfolio Manager Minneapolis, MN 55440 William C. Melton Vice President- None IDS Tower 10 International Research Minneapolis, MN 55440 and Chief International Economist Janis E. Miller Vice President- None IDS Tower 10 Variable Assets Minneapolis, MN 55440 James A. Mitchell Executive Vice President- None IDS Tower 10 Marketing and Products Minneapolis, MN 55440 Pamela J. Moret Vice President- None IDS Tower 10 Corporate Communications Minneapolis, MN 55440 Barry J. Murphy Senior Vice President- None IDS Tower 10 Client Service Minneapolis, MN 55440 Robert J. Neis Vice President- None IDS Tower 10 Information Systems Minneapolis, MN 55440 Operations Vernon F. Palen Region Vice President- None Suite D-222 Rocky Mountain Region 7100 E. Lincoln Drive Scottsdale, AZ 85253 James R. Palmer Vice President- None IDS Tower 10 Insurance Operations Minneapolis, MN 55440 Judith A. Pennington Vice President- None IDS Tower 10 Field Technology Minneapolis, MN 55440 PAGE 33 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant George M. Perry Vice President- None IDS Tower 10 Corporate Strategy Minneapolis, MN 55440 and Development Susan B. Plimpton Vice President- None IDS Tower 10 Segmentation Development Minneapolis, MN 55440 and Support Ronald W. Powell Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel James M. Punch Vice President- None IDS Tower 10 TransAction Services Minneapolis, MN 55440 Frederick C. Quirsfeld Vice President-Taxable None IDS Tower 10 Mutual Fund Investments Minneapolis, MN 55440 Roger B. Rogos Region Vice President- None Suite 15, Parkside Place Great Lakes Region 945 Boardman-Canfield Rd Youngstown, Ohio 44512 ReBecca K. Roloff Vice President-1994 None IDS Tower 10 Program Director Minneapolis, MN 55440 Stephen W. Roszell Vice President- None IDS Tower 10 Advisory Institutional Minneapolis, MN 55440 Marketing Robert A. Rudell Vice President- None IDS Tower 10 IDS Institutional Minneapolis, MN 55440 Retirement Services John P. Ryan Vice President and None IDS Tower 10 General Auditor Minneapolis, MN 55440 Erven A. Samsel Senior Vice President- None 45 Braintree Hill Park Field Management Braintree, MA 02184 R. Reed Saunders Director and Senior None IDS Tower 10 Vice President-Corporate Minneapolis, MN 55440 Strategy and Development Stuart A. Sedlacek Vice President- None IDS Tower 10 Assured Assets Minneapolis, MN 55440 PAGE 34 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant Donald K. Shanks Vice President- None IDS Tower 10 Property Casualty Minneapolis, MN 55440 F. Dale Simmons Vice President-Senior None IDS Tower 10 Portfolio Manager, Minneapolis, MN 55440 Insurance Investments Judy P. Skoglund Vice President- None IDS Tower 10 Human Resources and Minneapolis, MN 55440 Organization Development Julian W. Sloter Region Vice President- None 9040 Roswell Rd. Southeast Region River Ridge-Suite 600 Atlanta, GA 30350 Ben C. Smith Vice President- None IDS Tower 10 Workplace Marketing Minneapolis, MN 55440 William A. Smith Vice President and None IDS Tower 10 Controller-Private Minneapolis, MN 55440 Client Group James B. Solberg Vice President- None IDS Tower 10 Advanced Financial Minneapolis, MN 55440 Planning Bridget Sperl Vice President- None IDS Tower 10 Human Resources Minneapolis, MN 55440 Management Services Lois A. Stilwell Vice President- None IDS Tower 10 Planner Training and Minneapolis, MN 55440 Development William A. Stoltzmann Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel James J. Strauss Vice President- None IDS Tower 10 Corporate Planning Minneapolis, MN 55440 and Analysis Jeffrey J. Stremcha Vice President-Information None IDS Tower 10 Resource Management/ISD Minneapolis, MN 55440 Neil G. Taylor Vice President- None IDS Tower 10 Field Business Systems Minneapolis, MN 55440 PAGE 35 Item 29. (Continued) Positions and Name and Principal Position and Offices Offices with Business Address with Underwriter Registrant John R. Thomas Senior Vice President- Director/ IDS Tower 10 Information and Trustee Minneapolis, MN 55440 Technology Melinda S. Urion Vice President and None IDS Tower 10 Corporate Controller Minneapolis, MN 55440 Wesley W. Wadman Vice President- None IDS Tower 10 Senior Portfolio Minneapolis, MN 55440 Manager Norman Weaver Jr. Senior Vice President- None Suite 215 Field Management 1501 Westcliff Drive Newport Beach, CA 92660 Michael L. Weiner Vice President- None IDS Tower 10 Corporate Tax Minneapolis, MN 55440 Operations Lawrence J. Welte Vice President- None IDS Tower 10 Investment Administration Minneapolis, MN 55440 William N. Westhoff Senior Vice President- None IDS Tower 10 Fixed Income Management Minneapolis, MN 55440 Edwin M. Wistrand Vice President and None IDS Tower 10 Assistant General Minneapolis, MN 55440 Counsel Michael R. Woodward Senior Vice President- None Suite 815 Field Management 8585 Broadway Merrillville, IN 46410 Item 29(c). Not applicable. Item 30. Location of Accounts and Records IDS Financial Corporation IDS Tower 10 Minneapolis, MN 55440 Item 31. Management Services Not Applicable. PAGE 36 Item 32. Undertakings (a) Not Applicable. (b) Not Applicable. (c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. PAGE 92 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, IDS Stock 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 16th day of December, 1994. IDS STOCK FUND, INC. 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 16th day of December, 1994. Signature Capacity /s/ William R. Pearce** President, Principal William R. Pearce Executive Officer and Director /s/ Leslie L. Ogg** Treasurer, Principal Leslie L. Ogg Financial Officer and Principal Accounting Officer /s/ Lynne V. Cheney* Lynne V. Cheney Director /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 93 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, to sign Amendments to this Registration Statement (File No. 2-11358/811-498) filed herewith electronically as Exhibit 18(a) by: ______________________________ Leslie L. Ogg **Signed pursuant to Officers' Power of Attorney, dated June 1, 1993, to sign Amendments to this Registration Statement (File No. 2-11358/811-498) filed electronically as Exhibit 17(b) to Post- Effective Amendment No. 87 by: ______________________________ Leslie L. Ogg PAGE 94 CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 90 TO REGISTRATION STATEMENT NO. 2-11358 This post-effective amendment comprises the following papers and documents: The facing sheet. Cross reference sheet. Part A. The prospectus. Part B. Statement of Additional Information. Part C. Financial Statements. Other Information. The Signatures. Exhibits. EX-99 2 EXHIBIT INDEX EXHIBIT INDEX 11 Independent Auditors' Consent. 17 Financial Data Schedule. 18(a) Directors' Power of Attorney, dated Nov. 10, 1994. EX-99.11-AUDCON 3 INDEPENDENT AUDITORS' CONSENT PAGE 1 INDEPENDENT AUDITORS' CONSENT ______________________________________________________________ The board of directors and shareholders IDS Stock Fund, Inc.: The audits referred to in our report dated December 2, 1994, included the related supplementary financial statment data in Schedule III on pages of part C of this Registration Statement. The supplementary financial statement data is the responsibility of Fund Management. Our responsibility is to express an opinion on this supplementary financial statement data based on our audit. In our opinion, such supplementary financial statement data, when considered with the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. We consent to the use of our report incorporated herein by reference and to the references to our Firm under the headings "Financial Highlights" in Part A and "INDEPENDENT AUDITORS" in Part B of the Registration Statement. KPMG Peat Marwick LLP Minneapolis, Minnesota December , 1994 PAGE 2 SCHEDULE III
IDS STOCK FUND, INC INVESTMENTS IN AFFILIATES (AS DEFINED IN SECTION 2 (a) OF THE INVESTMENT COMPANY ACT OF 1940) YEAR ENDED OCTOBER 31, 1994 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ___________________________________________________________________________________________________________________ Amount of equity in Name of issuer and Number of shares held net profit and loss Amount of Value at title of issuer at close of year for the year dividend income Oct. 31, 1994 ___________________________________________________________________________________________________________________ Common stocks: Ericsson (LM) ADR 11,000,000 N/A 416,500 22,687,500 Lukens Inc. 750,000 N/A 353,550 23,718,750 Hanson PLC ADR -- N/A -- __________ __________ 11,750,000 46,406,250 Note: (a) The total shares outstanding of the issuer increased so that the shares held by the Fund no longer represent an investment in affiliate as of October 31, 1994. PAGE 3 SCHEDULE III (CONT'D)
IDS STOCK FUND, INC. CHANGES IN INVESTMENTS IN AFFILIATES FOR THE FISCAL YEAR ENDED OCTOBER 31, 1994 Gross Gross Shares held purchases sales Shares held Market value Amount of Name of issuer at beginning and and at close at dividend and title of issuer of year additions reductions of year Oct. 31, 1994 income _________________________________________________________________________________________________________________ Common stock: Ericsson (LM) ADR -- 12,500,000 1,500,000 11,000,000 22,687,500 416,500 Lukens Inc. -- 750,000 -- 750,000 23,718,750 353,550 Hanson PLC ADR -- 1,250,000 -- (a) (a) (a) _________ __________ _________ __________ __________ _______ -- 14,400,000 1,500,000 11,750,000 46,406,250 770,050 ========= ========== ========= ========== ========== ======= Note: (a) The total shares outstanding of the issuer increased so that the shares held by the Fund no longer represent an investment in affiliate as of October 31, 1994.
EX-99.17-FDS 4 FINANCIAL DATA SCHEDULE PAGE 1 [ARTICLE] 6 [PERIOD-TYPE] YEAR [FISCAL-YEAR-END] OCT-31-1994 [PERIOD-END] OCT-31-1994 [INVESTMENTS-AT-COST] 2265287452 [INVESTMENTS-AT-VALUE] 2413483144 [RECEIVABLES] 39334496 [ASSETS-OTHER] 27158074 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 2479975714 [PAYABLE-FOR-SECURITIES] 62233320 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 49992001 [TOTAL-LIABILITIES] 112225321 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 2030781200 [SHARES-COMMON-STOCK] 121549661 [SHARES-COMMON-PRIOR] 96935826 [ACCUMULATED-NII-CURRENT] 4526952 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 184227859 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 148214382 [NET-ASSETS] 2367750393 [DIVIDEND-INCOME] 60821461 [INTEREST-INCOME] 21217499 [OTHER-INCOME] 0 [EXPENSES-NET] 16603324 [NET-INVESTMENT-INCOME] 65435636 [REALIZED-GAINS-CURRENT] 184211972 [APPREC-INCREASE-CURRENT] (163987803) [NET-CHANGE-FROM-OPS] 85659805 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (66287242) [DISTRIBUTIONS-OF-GAINS] (189047838) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 26559784 [NUMBER-OF-SHARES-REDEEMED] (13522239) [SHARES-REINVESTED] 11576290 [NET-CHANGE-IN-ASSETS] 308653090 [ACCUMULATED-NII-PRIOR] 50064349 [ACCUMULATED-GAINS-PRIOR] 189191483 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 12067405 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 16603324 [AVERAGE-NET-ASSETS] 2190186479 [PER-SHARE-NAV-BEGIN] 21.24 [PER-SHARE-NII] .58 [PER-SHARE-GAIN-APPREC] .21 [PER-SHARE-DIVIDEND] (.60) [PER-SHARE-DISTRIBUTIONS] (1.95) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 19.48 PAGE 2 [EXPENSE-RATIO] .76 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.18A-DIR-POA 5 DIRECTORS' POWER OF ATTORNEY, DATED NOV. 10, 1994 PAGE 1 DIRECTORS/TRUSTEES POWER OF ATTORNEY City of Minneapolis State of Minnesota Each of the undersigned, as directors and trustees of the below listed open-end, diversified investment companies that previously have filed registration statements and amendments thereto pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940 with the Securities and Exchange Commission: 1933 Act 1940 Act Reg. Number Reg. Number IDS Bond Fund, Inc. 2-51586 811-2503 IDS California Tax-Exempt Trust 33-5103 811-4646 IDS Discovery Fund, Inc. 2-72174 811-3178 IDS Equity Select Fund, Inc. 2-13188 811-772 IDS Extra Income Fund, Inc. 2-86637 811-3848 IDS Federal Income Fund, Inc. 2-96512 811-4260 IDS Global Series, Inc. 33-25824 811-5696 IDS Growth Fund, Inc. 2-38355 811-2111 IDS High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901 IDS International Fund, Inc. 2-92309 811-4075 IDS Investment Series, Inc. 2-11328 811-54 IDS Managed Retirement Fund, Inc. 2-93801 811-4133 IDS Market Advantage Series, Inc. 33-30770 811-5897 IDS Money Market Series, Inc. 2-54516 811-2591 IDS New Dimensions Fund, Inc. 2-28529 811-1629 IDS Precious Metals Fund, Inc. 2-93745 811-4132 IDS Progressive Fund, Inc. 2-30059 811-1714 IDS Selective Fund, Inc. 2-10700 811-499 IDS Special Tax-Exempt Series Trust 33-5102 811-4647 IDS Stock Fund, Inc. 2-11358 811-498 IDS Strategy Fund, Inc. 2-89288 811-3956 IDS Tax-Exempt Bond Fund, Inc. 2-57328 811-2686 IDS Tax-Free Money Fund, Inc. 2-66868 811-3003 IDS Utilities Income Fund, Inc. 33-20872 811-5522 hereby constitutes and appoints William R. Pearce and Leslie L. Ogg or either one of them, as her or his attorney-in-fact and agent, to sign for her or him in her or his name, place and stead any and all further amendments to said registration statements filed pursuant to said Acts and any rules and regulations thereunder, and to file such amendments with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting to either of them the full power and authority to do and perform each and every act required and necessary to be done in connection therewith. Dated the 10th day of November, 1994. PAGE 2 /s/ Lynne V. Cheney /s/ Melvin R. Laird Lynne V. Cheney Melvin R. Laird /s/ William H. Dudley /s/ Lewis W. Lehr William H. Dudley Lewis W. Lehr /s/ Robert F. Froehlke /s/ William R. Pearce Robert F. Froehlke William R. Pearce /s/ David R. Hubers /s/ Edson W. Spencer David R. Hubers Edson W. Spencer /s/ Heinz F. Hutter /s/ John R. Thomas Heinz F. Hutter John R. Thomas /s/ Anne P. Jones /s/ Wheelock Whitney Anne P. Jones Wheelock Whitney /s/ Donald M. Kendall /s/ C. Angus Wurtele Donald M. Kendall C. Angus Wurtele -----END PRIVACY-ENHANCED MESSAGE-----