Plan and Agreement of Distribution


This plan and  agreement,  effective as of May 10, 2001, is between AXP Partners
Series,  Inc. on behalf of its underlying series AXP Partners  Fundamental Value
Fund,  AXP  Partners  Value  Fund and AXP  Partners  Small Cap  Value  Fund (the
"Funds") and American  Express  Financial  Advisors Inc.  (AEFA),  the principal
underwriter of the Funds, for distribution services to the Funds.

The plan and  agreement  has been  approved by members of the Board of Directors
(the "Board") of the Funds who are not interested  persons of the Funds 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 Funds will  reimburse AEFA for expenses  incurred in connection  with
       the  distribution of the Funds' shares and providing  personal service to
       shareholders.   These  expenses  include  sales  commissions;   business,
       employee and financial  advisor expenses charged to distribution of Class
       A and Class B shares; and overhead appropriately allocated to the sale of
       Class A and Class B 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.  AEFA  represents  that it will  continue  to
       provide  the same  level of service as was  provided  under the  previous
       shareholder service agreement.

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.     For Class A  shares,  the fee under  this  agreement  will be equal on an
       annual  basis  to 0.25%  of the  average  daily  net  assets  of the Fund
       attributable to Class A shares. 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 Class B  shares,  the fee under  this  agreement  will be equal on an
       annual  basis  to 1.00%  of the  average  daily  net  assets  of the Fund
       attributable to Class B shares. Of that amount, 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.  The
       amount  so  determined  shall  be paid to AEFA in cash  within  five  (5)
       business days after the last day of each month.

6.     For each purchase of Class B shares, the Class B shares will be converted
       to Class A shares in the ninth year of ownership.

7.     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.

8.     AEFA agrees to provide at least  quarterly an analysis of expenses  under
       this  agreement  and  to  meet  with  representatives  of  the  Funds  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 Funds  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 Class A or Class B 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.


AXP PARTNERS SERIES, INC.
         AXP Partners Fundamental Value Fund
         AXP Partners Value Fund
         AXP Partners Small Cap Value Fund



/s/ Leslie L. Ogg
--------------------------------------
    Leslie L. Ogg
    Vice President


AMERICAN EXPRESS FINANCIAL ADVISORS INC.



/s/ Pamela J. Moret
--------------------------------------
    Pamela J. Moret
    Senior Vice President