PLAN AND AGREEMENT OF DISTRIBUTION
This plan and agreement, dated as of November 13, 2003, is by and between AXP(R)
Sector Series, Inc., a Minnesota Corporation, on behalf of its underlying series
AXP(R) Real Estate Fund (the "Fund") and American Express Financial Advisors
Inc., a Delaware Corporation, ("AEFA") the principal underwriter of the Fund,
for distribution services to the Fund.
The plan and agreement has been approved by members of the Board of Directors
(the "Board") of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the plan or any
related agreement, and all of the members of the Board, in person, at a meeting
called for the purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Fund will reimburse AEFA for expenses incurred in connection with
distributing the Fund's shares and providing personal service to
shareholders. These expenses include sales commissions; business,
employee and financial advisor expenses charged to distribution of
shares; and overhead appropriately allocated to the sale of shares.
2. A portion of the fee under the agreement will be used to compensate
AEFA, financial advisors and other servicing agents for personal
service to shareholders. Fees paid will be used to help shareholders
thoughtfully consider their investment goals and objectively monitor
how well the goals are being achieved.
3. AEFA agrees to monitor the services it provides, to measure the level
and quality of services, and to provide training and support to
financial advisors and servicing agents. AEFA will use its best efforts
to assure that other distributors provide comparable services to
shareholders.
4. The fee under this agreement will be equal as shown in Schedule A. The
amount so determined shall be paid to AEFA in cash within five (5)
business days after the last day of each month.
5. For each purchase of Class B shares, the Class B shares will be
converted to Class A shares in the ninth year of ownership.
6. The Fund understands that if a shareholder redeems Class B shares
before they are converted to Class A shares, AEFA will impose a sales
charge directly on the redemption proceeds to cover those expenses it
has previously incurred on the sale of those shares.
7. The Fund understand that if a shareholder redeems Class C shares in the
first year of ownership, AEFA will impose a sales charge directly on
the redemption proceeds to cover those expenses it has previously
incurred on the sale of those shares.
8. AEFA agrees to provide at least quarterly an analysis of expenses under
this agreement and to meet with representatives of the Fund as
reasonably requested to provide additional information.
9. The plan and agreement shall continue in effect for a period of more
than one year provided it is reapproved at least annually in the same
manner in which it was initially approved.
10. The plan and agreement may not be amended to increase materially the
amount that may be paid by the Fund without the approval of a least a
majority of the outstanding shares of the relevant class. Any other
amendment must be approved in the manner in which the plan and
agreement was initially approved.
11. This agreement may be terminated as to any class of the Fund at any
time without payment of any penalty by a vote of a majority of the
members of the Board who are not interested persons of the Fund and
have no financial interest in the operation of the plan and agreement,
or by vote of a majority of the outstanding shares of the relevant
class, or by AEFA. The plan and agreement will terminate automatically
in the event of its assignment as that term is defined in the
Investment Company Act of 1940.
12. This plan and agreement shall be governed by the laws of the State of
Minnesota.
AXP SECTOR SERIES, INC.
AXP Real Estate Fund
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Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
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Senior Vice President and General Manager -- Mutual Funds
Schedule A
AXP SECTOR SERIES, INC.
AXP Real Estate Fund
Fee Schedule
The fee for services under this Agreement is equal on an annual basis to the
following percentage of the average daily net assets of the Fund attributable to
a particular class:
Class A Class B Class C
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0.25% 1.00% 1.00%
For Class B and Class C shares, 0.75% shall be reimbursed for distribution
expenses. The additional 0.25% shall be paid to AEFA to compensate AEFA,
financial advisors and servicing agents for personal service to shareholders and
maintenance of shareholder accounts.