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EXHIBIT 99.d(ii)(L)
AMERICAN AADVANTAGE MILEAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of July, 2000 by and between AMR
Investment Services, Inc., a Delaware Corporation (the "Manager"), and Xxxxxx
Xxxxxxx Xxxx Xxxxxx Investment Management Inc. (the "Adviser");
WHEREAS, American AAdvantage Mileage Funds (the "Trust"), a
Massachusetts Business Trust, is an open-end 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. (a) 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 ("Assets"), 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, in such form as may be mutually agreed upon by the
parties, concerning the Adviser's discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities with respect to the
Assets subject to the Manager's oversight and the control of the officers and
the
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Trustees of the Trust and in compliance with such policies as the Trustees may
from time to time establish and provide to the Adviser in writing, 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. In the event that other
investment advisers are retained to render investment management services to a
Portfolio in addition to the Adviser, the Manager acknowledges and agrees that
the Adviser will not be held responsible for such other investment advisers'
compliance with policies and limitations applicable to the Portfolio. 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
the Assets allocated for management by the Adviser, the Adviser can request that
the Manager make the investment decisions with respect to that portion of the
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 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), a copy of
which, and any subsequent modifications thereto, shall be timely provided to the
Adviser.) 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. The Adviser shall provide to the Manager a copy of Part II of its
current Form ADV as filed with the Securities and Exchange Commission, and such
other information and reports related to the Adviser's management of the Assets
as may reasonably be requested by the Manager from time to time. The Manager
acknowledges and agrees that the Adviser may perform the services required under
this Agreement through the Adviser's employees, officers and/or agents.
(b) Duties of the Manager. The Manager shall provide (or cause the
Trust's Custodian(s) to provide) timely information to the Adviser regarding
such matters as the composition of assets of the Portfolios, cash requirements
and cash available for investment in the Portfolios, and all other information
as may be reasonably necessary for the Adviser to perform its responsibilities
hereunder. The Manager has furnished the Adviser with a copy of the current
prospectus and statement of additional information of each Portfolio and agrees
during the continuance of this Agreement to furnish the Adviser with copies of
any revisions or supplements relating to Portfolio or the management thereof at,
or, if practicable, before the time such
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revisions or supplements become effective. No revisions shall be made, nor
supplements issued, regarding a Portfolio or the Adviser without the prior
review of the Adviser. No written disclosure materials naming or relating to the
Adviser or its employees other than materials provided or approved by the
Adviser shall be used by the Manager, the Trust or their affiliates in offering
or marketing shares of the Trust or the Portfolios; provided, however, that the
Manager shall not be required to obtain prior approval for materials in which
the Adviser is merely referenced by name, along with the names of other
sub-advisers for the Portfolio(s), with no further description of the Adviser.
The Manager agrees to notify the Adviser of any decisions of the Trustees of the
Trust applicable to the Portfolio that may affect the duties of the Adviser
under this Agreement and to furnish the Adviser with copies of any financial
statements or reports made by a Portfolio to its shareholders and any further
materials or information which the Adviser may reasonably request to enable it
to perform its duties under 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 securities for the Portfolios. To the extent consistent
with applicable law, purchase or sell orders for the Portfolios may be
aggregated with contemporaneous purchase or sell orders of other clients of the
Adviser. The Adviser is directed to use its best efforts to obtain the most
favorable 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 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 in the manner specified in
the attached Schedule(s). Although the Manager may from time to time waive the
compensation it is
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entitled to receive from the Trust or the Portfolio(s), any such waiver will
have no effect on the Manager's obligation to pay the Adviser the compensation
set forth in the Schedule(s) attached hereto.
If, in the future, another investment adviser ("Fund Client") retains
the Adviser to sub-advise a portfolio (or portion thereof) registered under the
Investment Company Act of 1940 ("Fund Account"), and (i) such Fund Client has a
substantially similar business relationship with the Adviser, (ii) such Fund
Account has assets equal to or less than the Assets designated to the Adviser,
(iii) such Fund Account is managed in a substantially similar manner with
similar investment policies and guidelines as the Portfolio, and (iv) such Fund
Client receives a fee schedule that would result in a lower fee than the fee
provided for hereunder, then the Adviser will timely notify the Manager of such
lower fee arrangement. The following client accounts shall not be considered for
purposes of this paragraph: (i) accounts that pay incentive fees (i.e., fees
that are based all or in part on the performance of a client's account against
any benchmark or on capital appreciation or total returns of such account), (ii)
clients that maintain multiple accounts with the Adviser, (iii) clients that are
affiliates of the Adviser, and (iv) accounts that the Adviser has been retained
to replace an existing investment adviser.
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. 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. 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 or the Trust.
6. 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;
provided, however, that the Adviser may retain a copy of such records.
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7. (a) Standard of Care. Except as may otherwise be provided by
applicable laws and regulations, neither the Adviser nor any of its affiliates
or its or their officers, directors, employees or agents shall be subject to any
liability to the Manager, the Trust, the Portfolios or any shareholder of a
Portfolio or the Trust for any error of judgment or any loss arising out of any
investment or other act or omission in the course of, connected with, or arising
out of any service to be rendered under this Agreement, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties hereunder or by reason of the Adviser's reckless disregard of
its obligations and duties hereunder. The Manager acknowledges and agrees that
the Adviser makes no representation or warranty, express or implied, that any
level of performance or investment results will be achieved by the Portfolios or
the Assets designated by the Manager to the Adviser, or that the Portfolios or
such Assets will perform comparably with any standard or index, including other
clients of the Adviser, whether public or private.
(b) Indemnification. The Manager shall hold harmless and indemnify the
Adviser for any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys fees) ("Losses") incurred by the Adviser in
connection with the performance of its duties hereunder; provided, however, that
nothing contained herein shall require that the Adviser be indemnified for
Losses resulting from willful misfeasance, bad faith or gross negligence in the
performance of the Adviser's duties hereunder or by reason of the Adviser's
reckless disregard of its obligations and duties hereunder.
The Adviser shall hold harmless and indemnify the Manager for any and
all Losses incurred by the Manager that arise from the Adviser's willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder or by reason of the Adviser's reckless disregard of its obligations
and duties hereunder; provided, however, that nothing contained herein shall
require that the Manager be indemnified for Losses resulting from willful
misfeasance, bad faith or gross negligence in the performance of the Manager's
duties hereunder or by reason of the Manager's reckless disregard of its
obligations and duties hereunder.
8. Permissible Interests. To the extent permitted by law, Trustees,
agents, and shareholders of the Trust are or may be interested persons of the
Adviser (or any successor thereof) as directors, partners, officers, or
shareholders, or otherwise;
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directors, partners, officers, agents, and shareholders of the Adviser are or
may be interested persons of the Trust as Trustees, shareholders or otherwise;
and the Adviser (or any successor thereof) is or may be interested persons of
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.
9. Duration and Termination. This Agreement, unless sooner terminated
as provided herein, shall continue as to each Portfolio for two years after the
Portfolio's initial approval 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 the applicable Portfolio; provided, however, that if the
shareholders of the applicable 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 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 applicable 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 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 9, and Section 8 above, 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.
10. 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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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.
XXXXXX XXXXXXX XXXX XXXXXX AMR INVESTMENT SERVICES, INC.
INVESTMENT MANAGEMENT INC.
By By
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Xxxxxxx X. Xxxxx
President
Name:
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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
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Investment Management Inc.
AMR Investment Services, Inc. shall pay compensation to Xxxxxx Xxxxxxx
Xxxx Xxxxxx Investment Management Inc. (the "Adviser") pursuant to section 3 of
the Investment Advisory Agreement between said for rendering investment
management services with respect to the Emerging Markets Mileage Fund (the
"Portfolio") based on the following calculation:
(a) 1.10% on the first $100 million in Combined Assets,
0.90% on the next $50 million in Combined Assets,
0.80% on the next $50 million in Combined Assets, plus
0.70% on Combined Assets above $200 million,
multiplied by
(b) the ratio of the Portfolio's assets over the Combined Assets
For purposes of the above calculation, the "Combined Assets" shall
include, (i) the assets of the Portfolio, (ii) the employee benefit plan assets
of American Airlines, Inc., an affiliate of the Manager, managed by the Adviser
in Emerging Markets Portfolio(s) pursuant to an Investment Manager Agreement
dated July 31, 2000, and (iii) the assets of the American Airlines, Inc. Pilots
Variable Benefits Trust invested in the Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment
Management Emerging Markets Trust, a commingled trust vehicle sponsored and
managed by the Adviser, pursuant to an Adoption Agreement dated September 30,
1994.
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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