PLAN AND AGREEMENT OF DISTRIBUTION
                               FOR CLASS C SHARES

This plan and agreement, dated as of January 10, 2002, is by and between AXP(R)
Partners Series, Inc., a Minnesota Corporation, on behalf of its underlying
series AXP(R) Partners Select Value Fund and AXP(R) Partners Small Cap Core Fund
(individually a "Fund" and collectively the "Funds") and American Express
Financial Advisors Inc., a Delaware Corporation, ("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 C shares;
     and overhead appropriately allocated to the sale of Class C 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 on an annual basis to 1.00% of
     the average daily net assets of the Fund attributable to Class C 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.

5.   The Funds understands 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.


6.   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.

7.   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.

8.   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.

9.   This agreement may be terminated 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 Funds 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 Select Value Fund
      AXP Partners Small Cap Core Fund


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


AMERICAN EXPRESS FINANCIAL ADVISORS INC.


/s/ Paula R. Meyer
-----------------------------------
    Paula R. Meyer
    Vice President -- Mutual Funds