PLAN AND AGREEMENT OF DISTRIBUTION
This Plan and Agreement of Distribution ("Plan") is between AXP(R) Variable
Portfolio - Income Series, Inc., on behalf of its underlying series AXP(R)
Variable Portfolio - Income Opportunities Fund and AXP(R) Variable Portfolio -
Inflation Protected Securities Fund, a registered management investment company,
(individually a "Fund" and collectively the "Funds"), and IDS Life Insurance
Company ("IDS Life"). It is effective April 8, 2004.
The Plan provides that:
1. IDS Life will purchase the Funds' shares on behalf of its separate accounts
and the separate accounts of its affiliated life insurance companies
established for the purpose of funding variable life insurance, annuity
contracts or both (collectively referred to as "Variable Contracts").
Additionally, IDS Life may offer the Funds' shares to one or more
unaffiliated life insurance companies ("Unaffiliated Life Companies") for
purchase on behalf of certain of their separate accounts established for
the purpose of funding Variable Contracts.
2. The Funds will reimburse IDS Life up to 0.125% of its daily net assets for
various costs paid and accrued in connection with the distribution of the
Funds' shares and for services provided to existing and prospective
Variable Contract owners. Payments under the Plan are based on budgeted
expenses and shall be made within five (5) business days after the last day
of each month. At the end of each calendar year, IDS Life shall furnish a
declaration setting out the actual expenses it has paid and accrued. Any
money that has been paid in excess of the amount of these expenses shall be
returned to the Funds.
3. IDS Life represents that the money paid by the Funds will benefit the
Variable Contract owners and not the separate accounts that legally own the
shares and be for the following:
(a) Printing and mailing prospectuses, Statements of Additional
Information, supplements, and reports to existing and prospective
Variable Contract owners;
(b) Preparation and distribution of advertisement, sales literature,
brokers' materials and promotional materials relating to the
Funds;
(c) Presentation of seminars and sales meetings describing or
relating to the Funds;
(d) Training sales personnel regarding the Funds;
(e) Compensation of sales personnel for sale of the Funds' shares;
(f) Compensation of sales personnel for assisting Variable Contract
owners with respect to the Funds' shares;
(g) Overhead of IDS Life and its affiliates appropriately allocated
to the promotion of sale of the Funds' shares; and
(h) Any activity primarily intended to result in the sale of the
Funds' shares, including payments to Unaffiliated Life Companies.
4. IDS Life shall provide all information relevant and necessary for the Board
to make informed determinations about whether the Plan should be continued
and shall:
(a) Submit quarterly a report that sets out the expenses paid or
accrued by it, the names of the Unaffiliated Life Companies to
whom the Funds' shares are sold, and the payments made to each
Unaffiliated Life Company that has been reimbursed;
(b) monitor the level and quality of services provided by it and all
affiliated companies and will use its best efforts to assure that
in each case legitimate services are rendered in return for the
reimbursement pursuant to the Plan; and
(c) meet with the Funds' representatives, as reasonably requested, to
provide additional information.
5. IDS Life represents that it and all affiliated insurance company sponsors
will provide full disclosure of the Funds' 12b-1 Plan in the prospectus for
any separate account investing in the Funds and will clearly communicate
the combined effect of all fees and costs, including the reimbursement
under the 12b-1 Plan, imposed by the separate account and the Funds in
accordance with applicable laws.
6. All payments by IDS Life to Unaffiliated Life Companies shall be made
pursuant to a written agreement (Related Agreement). All such written
agreements will be in a form approved by a majority of the Funds'
independent members of the board and the board as a whole before it shall
be used. The Related Agreement shall:
(a) Require full disclosure of the combined effect of all fees and
charges in accordance with applicable laws;
(b) provide for termination at any time without penalty as required
by Rule 12b-1; and
(c) continue so long as its continuance is done in accordance with
the requirements of Rule 12b-1.
7. The Funds represent that the Plan has been approved as required by Rule
12b-1 and may continue for more than one year so long as it is continued as
required by Rule 12b-1 and shall terminate automatically in the event of an
assignment.
8. The Plan may not be amended to materially increase the amount of the
payments without
the approval of the outstanding voting securities.
AXP(R) VARIABLE PORTFOLIO - INCOME SERIES, INC.
AXP(R) Variable Portfolio - Income Opportunities Fund
AXP(R) Variable Portfolio - Inflation Protected Securities Fund
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Vice President
IDS LIFE INSURANCE COMPANY
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Director and Executive Vice President - Annuities