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Exhibit 99.b.5.b.ii
AMERICAN AADVANTAGE MILEAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1 day of November, 1995 by and between AMR
Investment Services, Inc., a Delaware Corporation, (the "Manager") and Xxxxxx
Xxxxxxx Asset 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 Advisers 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
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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. 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 agreements(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
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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).
The Adviser agrees that the fee charged to the Manager will be no more
than that charged for any other client of similar size receiving comparable
services. Furthermore, the Adviser agrees to notify the Manager on a timely
basis of any fee schedule it enters into with any other client of similar size
which is lower than the fee paid by the Manager.
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. 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.
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. No provision of this Agreement shall be
deemed to protect the Adviser against any liability to
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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 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.
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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.
Xxxxxx Xxxxxxx Asset Management AMR INVESTMENT SERVICES INC.
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Inc.
By /s/ X. XXXXXXXXX CEPUTO By /s/ X.X. XXXXX
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Xxxxxxx X. Xxxxx
Its Managing Director Its President
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Schedule A
to the
American AAdvantage Mileage Funds
Investment Advisory Agreement
between
AMR Investment Services, Inc.
and
Xxxxxx Xxxxxxx Asset Management Inc.
AMR Investment Services, Inc. shall pay compensation to Xxxxxx Xxxxxxx
Asset Management Inc. pursuant to section 3 of the Investment Advisory
Agreement between said parties in accordance with the following annual
percentage rates:
0.80% per annum on the first $25 million
0.60% per annum on the next $25 million
0.50% per annum on the next $25 million
0.40% per annum on all excess assets
In calculating the amount of assets under management solely for the
purposes of determining the applicable percentage rate, there should be
included all American Airlines Trust Funds under management by the Adviser.
To the extent that a 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 that Portfolio as specified above shall be
paid for the period that such Portfolio's assets are so invested.
DATED: November 1, 1995
