EX-99.H8 FEE WAIVER 3 h8-feewaiver.txt MASTER FEE WAIVER AGREEMENT MASTER FEE WAIVER AGREEMENT This Agreement, dated June 1, 2005, is between American Express Financial Corporation ("AEFC"), in its capacity as investment advisor and administrator, American Express Client Service Corporation ("AECSC"), in its capacity as transfer agent, and American Express Financial Advisors Inc. ("AEFA"), in its capacity as distributor (AEFC, AECSC and AEFA collectively referred to as the "Service Providers"), and each of the American Express Funds and the Preferred Master Trusts on behalf of its underlying series funds or portfolios, listed in Schedule A (the term "Fund" is used to refer to either the registrant or the underlying fund or portfolio as the context requires). Under this Agreement, the Service Providers agree to waive fees and reimburse certain expenses, and the Fund agrees to accept those waivers and reimbursements, as described below and in Schedule B: 1. Applicable Agreements. To the extent that the Fund's total expenses exceed the expense ratios set out in Schedule B, the Service Providers agree to waive fees and reimburse certain expenses under one or more of the following agreements, as applicable: o Investment Management Services Agreement between the Fund and AEFC. o Administrative Services Agreement between the Fund and AEFC. o Transfer Agency Agreement between the Fund and AECSC. o Plan and Agreement of Distribution between the Fund and AEFA. The above-mentioned agreements may be amended from time to time. 2. Fee Caps. AEFC also agrees to pay certain non-advisory expenses of the Fund if necessary to meet the expense ratio limits set out in Schedule B. AEFC will determine the allocation of fee waivers and expense reimbursements among the applicable agreements. 3. Termination. With respect to any Fund, this Agreement will terminate on the date listed in Schedule B unless modified by written agreement of the Fund and the Service Providers or terminated earlier at the sole discretion of the Fund. Master Agreement - Fee Waivers 2 Schedule A List of Funds: AXP DISCOVERY SERIES, INC. AXP Core Bond Fund AXP Discovery Fund AXP Income Opportunities Fund AXP Inflation Protected Securities Fund AXP Limited Duration Bond Fund AXP FIXED INCOME SERIES, INC. AXP Diversified Bond Fund AXP GLOBAL SERIES, INC. AXP Threadneedle Emerging Markets Fund AXP Global Technology Fund AXP GOVERNMENT INCOME SERIES, INC. AXP Short Duration U.S. Government Fund AXP U.S. Government Mortgage Fund AXP GROWTH SERIES, INC. AXP Large Cap Equity Fund AXP Large Cap Value Fund AXP Quantitative Large Cap Equity Fund AXP INCOME SERIES, INC. AXP Selective Fund AXP INTERNATIONAL SERIES, INC. AXP Threadneedle International Fund AXP INVESTMENT SERIES, INC. AXP Mid Cap Value Fund AXP MARKET ADVANTAGE SERIES, INC. AXP Portfolio Builder - Conservative Fund AXP Portfolio Builder - Moderate Conservative Fund AXP Portfolio Builder - Moderate Fund AXP Portfolio Builder - Moderate Aggressive Fund AXP Portfolio Builder - Aggressive Fund AXP Portfolio Builder - Total Equity Fund AXP Small Company Index Fund AXP S&P 500 Index Fund AXP PARTNERS SERIES, INC. AXP Partners Aggressive Growth Fund AXP Partners Growth Fund AXP Partners Select Value Fund AXP Partners Small Cap Core Fund AXP Partners Small Cap Value Fund AXP PARTNERS INTERNATIONAL SERIES, INC. AXP Partners International Aggressive Growth Fund AXP Partners International Core Fund Master Agreement - Fee Waivers 3 AXP Partners International Small Cap Fund AXP SECTOR SERIES, INC. AXP Real Estate Fund AXP SPECIAL TAX-EXEMPT SERIES TRUST AXP Massachusetts Tax-Exempt Fund AXP Michigan Tax-Exempt Fund AXP New York Tax-Exempt Fund AXP Ohio Tax-Exempt Fund AXP STRATEGY SERIES, INC. AXP Partners Small Cap Growth Fund AXP TAX-EXEMT SERIES, INC. AXP Intermediate Tax-Exempt Fund AXP VARIABLE PORTFOLIO INCOME SERIES, INC. AXP VP Core Bond Fund AXP VP Income Opportunities Fund AXP VP Inflation Protected Securities Fund AXP VARIABLE PORTFOLIO INVESTMENT SERIES, INC. AXP VP Equity Select Fund AXP VP Mid Cap Value Fund AXP VP Large Cap Value Fund AXP VP S&P 500 Index Fund AXP VP Threadneedle Emerging Markets Fund AXP VARIABLE PORTFOLIO PARTNERS SERIES, INC. AXP VP Partners Select Value Fund AXP VP Partners Small Cap Value Fund AXP VARIABLE PORTFOLIO SELECT SERIES, INC. AXP VP Core Equity Fund GROWTH TRUST GROWTH AND INCOME TRUST INCOME TRUST TAX-FREE INCOME TRUST WORLD TRUST Master Agreement - Fee Waivers 4 Schedule B Fee Caps. The Service Providers agree to waive fees and reimburse certain expenses to the extent that total expenses exceed the following expense ratios:
Fund Class A Class B Class C Class D Class E Class I Class Y Effective Termination Date Date --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Core Bond 0.945% 1.695% 1.695% N/A N/A 0.695% 0.785% 08/01/04 07/31/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Discovery* 1.49% 2.27% 2.29% N/A N/A N/A 1.32% 08/01/04 07/31/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Diversified Bond 0.945% 1.695% 1.695% N/A N/A 0.735% 0.775% 09/01/04 08/31/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Global 1.82% 2.59% 2.59% N/A N/A 1.13% 1.63% 11/01/04 10/31/05 Technology --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Income 1.19% 1.95% 1.95% N/A N/A 0.88% 1.03% 08/01/04 07/31/05 Opportunities --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Inflation 0.84% 1.62% 1.62% N/A N/A 0.59% 0.69% 08/01/04 07/31/05 Protected Securities --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Intermediate TE 0.88% 1.64% 1.63% N/A N/A N/A 0.70% 12/01/04 11/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Large Cap % % % N/A N/A % % 08/01/04 07/31/05 Equity** --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Large Cap Value 1.35% 2.11 % 2.11% N/A N/A 1.03% 1.17% 08/01/04 07/31/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Limited 0.945% 1.705% 1.705% N/A N/A 0.675% 0.775% 08/01/04 07/31/05 Duration Bond --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Massachusetts TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Michigan TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Mid Cap Value 1.40% 2.16% 2.16% N/A N/A 0.93% 1.22% 10/01/04 09/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP New York TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Ohio TE 0.88% 1.64% 1.64% N/A N/A N/A N/A 07/01/04 06/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners 1.53% 2.32% 2.33% N/A N/A 1.21% 1.35% 06/01/05 05/31/06 Aggressive Growth --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ Master Agreement - Fee Waivers 5 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners Growth 1.50% 2.27% 2.27% N/A N/A 1.18% 1.31% 06/01/05 05/31/06 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners N/A N/A 11/01/04 10/31/05 International 1.75% 2.52% 2.52% 1.36% 1.58% Aggressive Growth --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners N/A N/A 11/01/04 10/31/05 International Core 1.75% 2.52% 2.52% 1.35% 1.58% --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners 1.95% 2.72% 2.72% N/A N/A 1.56% 1.78% 11/01/04 10/31/05 International Small Cap --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners Small 1.55% 2.31% 2.31% N/A N/A 1.30% 1.37% 06/01/05 05/31/06 Cap Core --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners Small 1.70% 2.46% 2.46% N/A N/A 1.20% 1.52% 04/01/05 03/31/06 Cap Growth --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Partners Small 1.59% 2.35% 2.35% N/A N/A 1.21% 1.42% 06/01/05 05/31/06 Cap Value Fund --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Portfolio 0.59% 1.37% 1.37% N/A N/A N/A 0.42% 02/01/05 01/31/06 Builder Funds --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Quantitative 1.25% 2.04% 2.06% N/A N/A 0.93% 1.06% 08/01/04 07/31/05 Large Cap Equity --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Real Estate 1.49% 2.27% 2.27% N/A N/A 1.17% 1.34% 07/01/04 06/30/05 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Selective 0.89% 1.64% 1.64% N/A N/A 0.59% 0.72% 06/01/05 05/31/06 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Short Duration 0.89% 1.64% 1.64% N/A N/A 0.59% 0.72% 06/01/05 05/31/06 U.S. Government --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Small Company 0.94% 1.70% N/A N/A N/A N/A 0.78% 02/01/05 01/31/06 Index --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP S&P 500 Index N/A N/A N/A 0.64% 0.39% N/A N/A 02/01/05 01/31/06 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Threadneedle 1.99% 2.75% 2.75% N/A N/A 1.47% 1.82% 11/01/04 10/31/05 Emerging Markets --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ Master Agreement - Fee Waivers 6 --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP Threadneedle 1.55% 2.31% 2.31% N/A N/A 1.07% 1.38% 11/01/04 10/31/05 International --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------ AXP U.S. Government 0.89% 1.64% 1.64% N/A N/A 0.59% 0.71% 06/01/05 05/31/06 Mortgage --------------------- ----------- ---------- ----------- --------- --------- ----------- ----------- ------------ ------------------
* AEFA waives its right to compensation under the 12b-1 Plan in the amount of .0375%. ** AEFC waives compensation under the Investment Management Service Agreement in the amount of .05% through July 31, 2005. AXP VP Funds
----------------------------------------------------- ------------ ------------------- ------------------------ Fund Fee Cap Effective Date Termination Date ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Core Bond 0.95% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Core Equity 0.40% 01/01/05 12/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Equity Select 1.10% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Income Opportunities 0.99% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Inflation Protected Securities 0.75% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Large Cap Value 1.05% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Mid Cap Value 1.08% 05/01/05 08/31/06 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Partners Select Value 1.15% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Partners Small Cap Value 1.30% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP S&P 500 Index 0.495% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------ AXP VP Threadneedle Emerging Markets 1.75% 09/01/04 08/31/05 ----------------------------------------------------- ------------ ------------------- ------------------------
Master Agreement - Fee Waivers 7 AXP DISCOVERY SERIES, INC. AXP FIXED INCOME SERIES, INC. AXPGLOBAL SERIES, INC. AXP GOVERNMENT INCOME SERIES, INC. AXP GROWTH SERIES, INC. AXP HIGH YIELD INCOME SERIES, INC. AXP INCOME SERIES, INC. AXP INTERNATIONAL SERIES, INC. AXP INVESTMENT SERIES, INC. AXP MARKET ADVANTAGE SERIES, INC. AXP PARTNERS SERIES, INC. AXP PARTNERS INTERNATIONAL SERIES, INC. AXP SECTOR SERIES, INC. AXP SPECIAL TAX-EXEMPT SERIES TRUST AXP STRATEGY SERIES, INC. AXP TAX-EXEMPT SERIES, INC. AXP VP INCOME SERIES, INC. AXP VP INVESTMENT SERIES, INC. AXP VP PARTNERS SERIES, INC. GROWTH TRUST GROWTH AND INCOME TRUST INCOME TRUST TAX-FREE INCOME TRUST WORLD TRUST By: /s/ Leslie L. Ogg ------------------------------- Leslie L. Ogg Vice President AMERICAN EXPRESS FINANCIAL CORPORATION AMERICAN EXPRESS FINANCIAL ADVISORS INC. By: /s/ Paula R. Meyer ------------------------------- Paula R. Meyer Senior Vice President and General Manager- Mutual Funds AMERICAN EXPRESS CLIENT SERVICE CORPORATION By: /s/ Bridget Sperl ------------------------------- Bridget Sperl Chairman of the Board, President and Chief Executive Officer