Class Y Shareholder Service Agreement

This  agreement  is between AXP Strategy  Fund,  Inc. on behalf of AXP Small Cap
Growth Fund (the Fund) and American Express Financial  Advisors Inc. (AEFA), the
principal  underwriter of the Fund, for services to be provided to  shareholders
of Class Y of the Fund by AEFA and other servicing agents.

AEFA represents that shareholders consider personal service a significant factor
in their  satisfaction with their investment.  AEFA represents that fees paid by
the  Fund  will  be  used  to  help  shareholders  thoughtfully  consider  their
investment goals and objectively monitor how well the goals are being achieved.

The Fund agrees to pay AEFA 0.10  percent of the net asset value of Class Y. The
Fund agrees to pay AEFA in cash within five (5) business days after the last day
of the month.

AEFA agrees to provide the Fund  annually a budget  covering its expected  costs
and a  quarterly  report of its actual  expenditures.  AEFA  agrees to meet with
representatives  of the Fund at their request to provide  information  as may be
reasonably  necessary  to  evaluate  its  performance  under  the  terms of this
agreement.

This  agreement  shall  continue in effect for a period of more than one year so
long as it is reapproved at least  annually at a meeting  called for the purpose
of voting on the agreement by a vote, in person, of the members of the Board who
are not  interested  persons of the Fund and have no  financial  interest in the
operation of the agreement, and of all the members of the Board.

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 Fund and have no financial  interest in the operation of the agreement or by
AEFA. The agreement will terminate  automatically in the event of its assignment
as that term is defined in the  Investment  Company Act of 1940.  This agreement
may be amended at any time provided the amendment is approved in the same manner
the agreement was initially approved and the amendment is agreed to by AEFA.

Approved as of this day of __________, 2000.

AXP STRATEGY SERIES, INC.                            AMERICAN EXPRESS
         AXP Small Cap Growth Fund                   FINANCIAL ADVISORS INC.




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Leslie L. Ogg                                                 Pamela J. Moret
Vice President                                                Vice President