EXHIBIT 99.(d)(ii)(DD)
AMERICAN AADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 30th day of June, 2004 by and between AMR Investment
Services, Inc., a Delaware Corporation (the "Manager"), and NISA Investment
Advisors, L.L.C. (the "Adviser");
WHEREAS, American AAdvantage 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 sole 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
pursuant to Section 7 of this Agreement, 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 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
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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 use its best efforts to obtain the best net results with respect to brokers'
commissions and discounts as described in the Trust's current registration
statement as amended from time to time. In selecting brokers or dealers, the
Adviser may give consideration to factors other than price, including, but not
limited to, research services and market information. Any such services or
information which the Adviser receives in connection with activities for the
Trust may also be used for the benefit of other clients and customers of the
Adviser or any of its affiliates. 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.
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 daily
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).
The Adviser agrees: (1) that the blended fee in basis points charged to
the Trust will not exceed the blended fee in basis points charged to a similar
account of the same or smaller size; and (2) that the actual annual dollar fee
paid by any other client of the same or larger size for whom the Adviser
provides similar investment advisory services will not be less than the actual
annual dollar fee paid by the Trust. In the event that the fee charged to the
Trust exceeds the fee charged to an account described in (1) or (2) above, the
fee charged to the Trust shall automatically be reduced to match the fee charged
to such other account from the time such fee is charged to such other account.
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.
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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. Status of Adviser. 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 so long as its
services to the Trust are not impaired thereby. It is understood and
acknowledged that the advice given and timing of the Adviser's services to the
Trust may not necessarily relate to, and may differ from, the advice given
and/or timing of the Adviser's services to such other persons or concerns. The
Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly 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.
7. 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 will be surrendered promptly to the Manager or Trust on request.
8. Liability of Adviser. Adviser will not be liable for any loss suffered
by reason of any investment, decision, recommendation, or other action taken or
omitted in what Adviser in good faith believes to be the proper performance of
its duties hereunder. No provision of this Agreement shall be deemed to protect
the Adviser against any liability to the Trust or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith, or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.
9. 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.
10. 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
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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 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. 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.
11. 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.
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.
NISA INVESTMENT ADVISORS, L.L.C. AMR INVESTMENT SERVICES, INC.
By _________________________ By __________________________
Its ________________________ Its _________________________
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Schedule A
to the
American AAdvantage Funds
Investment Advisory Agreement
between
AMR Investment Services, Inc.
and
NISA Investment Advisors, L.L.C.
AMR Investment Services, Inc. ("AMRIS") shall pay compensation to NISA
Investment Advisors, L.L.C. ("NISA") pursuant to section 3 of the Investment
Advisory Agreement between said parties in accordance with the following annual
percentage rates for all Treasury Inflation Protected Securities assets under
NISA's management:
0.09% per annum on the first $50 million
0.07% per annum on the next $50 million
0.05% per annum on the excess over $100 million
If the management of the accounts commences or terminates at any time
other than the beginning or end of a calendar quarter, the fee shall be prorated
based on the portion of such calendar quarter during which the Agreement was in
force.
Dated: as of June 30, 2004
NISA INVESTMENT ADVISORS, L.L.C AMR INVESTMENT SERVICES, INC.
By: ___________________________ By: _____________________________
Name: Xxxxxxx X. Xxxxx
Title: President
