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EXHIBIT 99.d(ii)(K)
AMERICAN AADVANTAGE MILEAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of July 31, 2000 by and between AMR Investment
Services, Inc., a Delaware Corporation (the "Manager"), and X.X. Xxxxxx
Investment Management Inc.(the "Adviser");
WHEREAS, American AAdvantage Mileage Funds (the "Trust"), a
Massachusetts Business Trust, is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended,
consisting of several series (portfolios) of shares, each having its own
investment policies; and
WHEREAS, the Trust has retained the Manager to provide the Trust with
business and asset management services, subject to the control of the Board of
Trustees;
WHEREAS, the Trust's agreement with the Manager permits the Manager to
delegate to other parties certain of its asset management responsibilities; and
WHEREAS, the Manager desires to retain the Adviser to render investment
management services to the Trust with respect to certain of its investment
portfolios and such other investment portfolios as the Trust and the Adviser may
agree upon and so specify in the Schedule(s) attached hereto (collectively the
"Portfolios") and as described in the Trust's registration statement on Form
N-1A as amended from time to time, and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. Duties of the Adviser. The Manager employs the Adviser to manage the
investment and reinvestment of such portion, if any, of the Portfolios' assets
as is designated by the Manager from time to time, and, with respect to such
assets, to continuously review, supervise, and administer the investment program
of the Portfolios, to determine in the Adviser's discretion the securities to be
purchased or sold, to provide the Manager and the Trust with records concerning
the Adviser's activities which the Trust is required to maintain, and to render
regular reports to the Manager and to the Trust's officers and Trustees
concerning the Adviser's discharge of the foregoing responsibilities. The
Adviser shall discharge the foregoing responsibilities subject to the Manager's
oversight and the control of the officers and the Trustees of the Trust and in
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compliance with such policies as the Trustees may from time to time establish,
and in compliance with the objectives, policies, and limitations for each such
Portfolio set forth in the Trust's current registration statement as amended
from time to time and applicable laws and regulations. The Adviser accepts such
employment and agrees to render the services for the compensation specified
herein and to provide at its own expense the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein. (With respect to any of the Portfolio
assets allocated for management by the Adviser, the Adviser can request that the
Manager make the investment decisions with respect to that portion of assets
which the Adviser deems should be invested in short-term money market
instruments. The Manager agrees to provide this service.) The Manager will
instruct the Trust's Custodian(s) to hold and/or transfer the Portfolios' assets
in accordance with Proper Instructions received from the Adviser. (For this
purpose, the term "Proper Instructions" shall have the meaning(s) specified in
the applicable agreement(s) between the Trust and its custodian(s).) The Adviser
will not be responsible for the cost of securities or brokerage commissions or
any other Trust expenses except as specified in this Agreement.
2. Portfolio Transactions. The Adviser is authorized to select the
brokers or dealers (including, to the extent permitted by law and applicable
Trust guidelines, the Adviser or any of its affiliates) that will execute the
purchases and sales of portfolio securities for the Portfolios and is directed
to seek the best overall terms available. In assessing the best overall terms
available for any transaction, the Adviser will consider factors it deems
relevant, including, without limitation, the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission, if
any, for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in evaluating the
best overall terms available, the Adviser is authorized to consider the
brokerage and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Portfolios and/or
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser agrees not to engage in such "soft dollar" transactions
without first obtaining the prior written consent of the Manager. The Adviser
will promptly communicate to the Manager and to the officers and the Trustees of
the Trust such information relating to portfolio transactions as they may
reasonably request.
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3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Manager shall pay
to the Adviser compensation at the rate specified in Schedule(s) attached hereto
and made a part of this Agreement. Such compensation shall be paid to the
Adviser quarterly in arrears, and shall be calculated by applying the annual
percentage rate(s) as specified in the attached Schedule(s) to the average
month-end assets of the specified Portfolios during the relevant quarter. Solely
for the purpose of calculating the applicable annual percentage rates specified
in the attached Schedule(s), there shall be included such other assets as are
specified in said Schedule(s).
4. Other Services. At the request of the Trust or the Manager, the
Adviser in its discretion may make available to the Trust office facilities,
equipment, personnel, and other services. Such office facilities, equipment,
personnel and services shall be provided for or rendered by the Adviser and
billed to the Trust or the Manager at a price to be agreed upon by the Adviser
and the Trust or the Manager.
5. Reports. The Manager (on behalf of the Trust) and the Adviser agree
to furnish to each other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may reasonably
request.
6. Services to other Investment Companies or Accounts. The services of
the Adviser to the Trust are not to be deemed exclusive, and the Adviser and its
directors, officers, employees and affiliates shall be free to render similar
services to others provided that whenever the Trust and one or more other
accounts or investment companies advised by the Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a methodology believed to be equitable to each entity. The
Adviser agrees to allocate similarly opportunities to sell securities. The Trust
recognizes that, in some cases, this procedure may limit the size of the
position that may be acquired or sold for the Portfolios. In addition, the Trust
understands that the persons employed by the Adviser to assist in the
performance of the Adviser's duties hereunder will not devote their full time to
such service and nothing contained herein shall be deemed to limit or restrict
the right of the Adviser or any affiliate of the Adviser to engage in and devote
time and attention to other business or to render services of whatever kind or
nature.
7.Status of Adviser. The Adviser shall be deemed to be an independent
contractor and shall, unless otherwise expressly
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provided or authorized, have no authority to act for or represent the Manager or
the Trust in any way or otherwise be deemed an agent to the Manager of the
Trust.
8. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
Investment Company Act of 1940 which are prepared or maintained by the Adviser
on behalf of the Manager or the Trust are the property of the Manager or the
Trust and copies of any of such records will be surrendered promptly to the
Manager or Trust on request.
9. Liability of Adviser. The Adviser shall exercise its best judgment
in rendering its services under this Agreement. The Adviser shall not be liable
for any error of judgment for any loss suffered by the Portfolios in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
10. Permissible Interests. To the extent permitted by law, Trustees,
agents, and shareholders of the Trust are or may be interested in the Adviser
(or any successor thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of the
Adviser are or may be interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor thereof) is or may be interested in
the Trust as a shareholder or otherwise; provided that all such interests shall
be fully disclosed between the parties on an ongoing basis and in the Trust's
registration statement as required by law.
11. Duration and Termination. This Agreement, unless sooner terminated
as provided herein, shall continue for two years after its initial approval as
to each Portfolio and thereafter for periods of one year for so long as such
continuance thereafter is specifically approved at least annually (a) by the
vote of a majority of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Trustees of
the Trust or by vote of a majority of the outstanding voting securities of each
Portfolio; provided, however, that if the shareholders of any Portfolio fail to
approve the Agreement as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the Investment Company
Act of 1940 and rules thereunder. The foregoing requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the Investment Company Act
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of 1940 and the rules and regulations thereunder. This Agreement may be
terminated as to any Portfolio at any time, without the payment of any penalty,
by the Manager, by vote of a majority of the Trustees of the Trust or by vote of
a majority of the outstanding voting securities of the Portfolio on not less
than 30 days nor more than 60 days written notice to the Adviser, or by the
Adviser at any time without the payment of any penalty, on 60 days written
notice to the Trust and will terminate five business days after the Adviser
receives written notice of the termination of the agreement between the Trust
and the Manager. This Agreement will automatically and immediately terminate in
the event of its assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the other party at the
primary office of such party, unless such party has previously designated
another address.
As used in this Section 10, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting securities" shall
have the respective meanings set forth in the Investment Company Act of 1940 and
the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission under said Act.
12. Indemnification. The Manager agrees to indemnify and hold harmless
the Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorneys' fees and other related expenses) ("Losses"),
howsoever arising, from or in connection with the performance by the Adviser of
its duties under this Agreement; provided, however, that nothing contained
herein shall require that the Adviser be indemnified for Losses resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties hereunder. The Adviser agrees to indemnify and hold harmless the
Manager from and against any and all Losses resulting from the Adviser's willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties hereunder.
13. Disclosure. Neither the Trust nor the Manager shall, without the
prior written consent of the Adviser, make representations regarding or
reference to the Adviser or any affiliates in any disclosure document,
advertisement, sales literature or other promotional materials. However, the
Adviser may approve the use of its name or a template or standard description
for material distributed on a regular basis.
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
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15. Governing Law. This Agreement shall be governed in accordance with
the internal laws of the State of Texas, without giving effect to principles of
conflict of laws.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this instrument is not binding upon any of the Trustees, officers, or
shareholders of the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
X.X. XXXXXX INVESTMENT AMR INVESTMENT SERVICES, INC.
MANAGEMENT INC.
By By
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Xxxxxxx X. Xxxxx
Name: President
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Title:
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Schedule A to the
American AAdvantage Mileage Funds
Investment Advisory Agreement
between
AMR Investment Services, Inc.
and
X.X. Xxxxxx Investment Management, Inc.
AMR Investment Services, Inc. shall pay compensation to X.X. Xxxxxx
Investment Management Inc. pursuant to section 3 of the Investment Advisory
Agreement between said for rendering investment management services with respect
to the Large Cap Growth Fund (the "Portfolio") in accordance with the following
annual percentage rates:
0.45% on the first $25 million in assets
0.40% on assets above $25 million
To the extent that the Portfolio invests all of its investable assets
(i.e., securities and cash) in another investment company, however, no portion
of the advisory fee attributable to the Portfolio as specified above shall be
paid for the period that the Portfolio's assets are so invested.
DATED: July 31, 2000
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