AMR INVESTMENT SERVICES TRUST
MANAGEMENT AGREEMENT
Agreement made as of this 1st day of October, 1995 between the AMR
Investment Services Trust, a New York business trust (the "AMR Trust"), and AMR
Investment Services, Inc. (the "Manager"), a Delaware corporation.
WHEREAS, the AMR Trust is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company consisting of one or more series (portfolios) of shares, each having its
own investment policies; and
WHEREAS, the Manager is an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the AMR Trust desires to retain the Manager as investment
adviser and administrator to furnish administrative, investment advisory and
portfolio management services to the AMR Trust with respect to such portfolios
as the AMR Trust and the Manager shall agree upon from time to time
(collectively, the "Portfolios"), and the Manager is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The AMR Trust hereby appoints the Manager as investment
adviser and administrator of the AMR Trust and each Portfolio listed on Schedule
A of this Agreement (as such schedule may be amended from time to time) for the
period and on the terms set forth in this Agreement. The Manager accepts such
appointment and agrees to render the services herein set forth. In the
performance of its duties, the Manager will act in the best interests of the AMR
Trust and each Portfolio and will comply with (a) applicable laws and
regulations, including, but not limited to, the 1940 Act, (b) the terms of this
Agreement, (c) the AMR Trust's Declaration of Trust and currently effective
registration statement under the 1940 Act, and any amendments thereto, (d) any
relevant undertakings to state securities regulators which have been provided to
the Manager, (e) the stated investment objective, policies and restrictions of
each applicable Portfolio, and (f) such other guidelines as the Board of
Trustees of the AMR Trust ("Board of Trustees") reasonably may establish.
2. DUTIES AS INVESTMENT ADVISER.
(a) Subject to the supervision of the Board of Trustees, the Manager
will provide a continuous investment program for each Portfolio, including
investment research and management with respect to all securities, investments
and cash equivalents in each Portfolio. The Manager will determine from time to
time what securities and other investments will be purchased, retained or sold
by each Portfolio. The Manager will exercise full discretion and act for each
Portfolio in the same manner and with the same force and effect as such
Portfolio itself might or could do with respect to purchases, sales, or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Manager will place orders pursuant to its investment
determinations for each Portfolio either directly with the issuer or through
other broker-dealers ("brokers"). In the selection of brokers and the placement
of orders for the purchase and sale of portfolio investments for the Portfolios,
the Manager shall use its best efforts to obtain for the Portfolios the most
favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions for brokerage and research
services as described below. In using its best efforts to obtain the most
favorable price and execution available, the Manager, bearing in mind the AMR
Trust's best interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission, the
timing of the transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker involved and the
quality of service rendered by the broker in other transactions. Subject to such
policies as the Board of Trustees may determine, the Manager shall not be deemed
to have acted unlawfully or to have breached any duty created by this Agreement
or otherwise solely by reason of its having caused a Portfolio to pay a broker
that provides brokerage and research services to the Manager an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker would have charged for effecting that
transaction if the Manager determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker, viewed in terms of either that particular
transaction or the Manager's overall responsibilities with respect to the AMR
Trust and to other clients of the Manager as to which the Manager exercises
investment discretion. The AMR Trust agrees that any entity or person associated
with the Manager which is a member of a national securities exchange is
authorized to effect any transaction on such exchange for the account of the AMR
Trust which is permitted by Section 11(a) of the Securities Exchange Act of
1934, as amended, and the AMR Trust hereby consents to the retention of
compensation for such transactions.
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(c) The Manager will provide the Board of Trustees on a regular basis
with economic and investment analyses and reports and make available to the
Board upon request any economic, statistical and investment services normally
available to institutional or other customers of the Manager.
(d) Any of the foregoing functions with respect to any or all
Portfolios may be delegated by the Manager, at the Manager's expense, to one or
more appropriate parties, including an affiliated party ("Advisers"), subject to
such approval by the Board of Trustees and shareholders of each affected
Portfolio as may be required by the 1940 Act. In connection with any such
delegation, the Manager shall:
(i) oversee the performance of delegated functions by any Adviser and
furnish the AMR Trust with quarterly evaluations and analyses
concerning the performance of delegated responsibilities by those
parties;
(ii) allocate the portion of each Portfolio's assets to be
managed by an Adviser and coordinate the investment
activities of the Advisers;
(iii) if appropriate, recommend changes in Advisers or the
addition of Advisers, subject to the necessary approvals
under the 1940 Act; and
(iv) be responsible for compensating the Advisers in the
manner specified in its advisory agreements with the
Advisers.
3. DUTIES AS ADMINISTRATOR. The Manager will assist in administering
the affairs of the AMR Trust subject to the supervision of the Board of Trustees
and the following understandings:
(a) The Manager will supervise all aspects of the operations of the AMR
Trust except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of Trustees of its
responsibility for and control of the conduct of the AMR Trust's affairs.
(b) The Manager will investigate and, with appropriate approval of the
Board of Trustees, select necessary service companies to conduct certain
operations of the AMR Trust, including the AMR Trust's custodian, transfer
agent, dividend disbursing agent, independent public accountant and attorney.
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(c) The Manager will provide the AMR Trust with such administrative and
clerical services as are deemed necessary or advisable by the Board of Trustees,
including the maintenance of certain books and records of the AMR Trust and each
Portfolio which are not maintained by the AMR Trust's custodian or any Adviser.
(d) The Manager will arrange, but not pay, for the periodic updating of
prospectuses and statements of additional information and supplements thereto,
proxy material, tax returns and reports to shareholders and the Securities and
Exchange Commission.
(e) The Manager will provide the AMR Trust with, or obtain for it,
adequate office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
(f) The Manager will hold itself available to respond to shareholder
inquiries.
(g) Any of the foregoing functions with respect to any or all
Portfolios may be delegated by the Manager, at the Manager's expense, to another
appropriate party (including an affiliated party), subject to such approval by
the Board of Trustees. The Manager shall oversee the performance of delegated
functions by any such party and shall furnish to the AMR Trust with quarterly
evaluations and analyses concerning the performance of delegated
responsibilities by those parties.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Manager hereby agrees that all records which it
maintains for the AMR Trust are the property of the AMR Trust and further agrees
to surrender promptly to the AMR Trust any of such records upon the AMR Trust's
request. The Manager further agrees to preserve for the periods prescribed by
Rule 3la-2 under the 1940 Act the records required to be maintained by Rule
3la-1 under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the AMR Trust will bear
all expenses not specifically assumed by the Manager incurred in its operations
and the offering of its shares. Expenses borne by the AMR Trust will include,
but not be limited to, the following (or each Portfolio's proportionate share of
the following): (a) brokerage commissions relating to securities purchased or
sold by the AMR Trust or any losses incurred in connection therewith; (b) fees
payable to and expenses incurred on behalf of the AMR Trust by the Manager; (c)
expenses of organizing the AMR Trust and the Portfolios; (d) filing fees and
expenses relating to the registration and qualification of the AMR Trust's
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shares and the AMR Trust under federal or state securities laws and maintaining
such registrations and qualifications; (e) distribution fees, if any; (f) fees
and salaries payable to the members of the Board of Trustees and officers who
are not officers or employees of the Manager or interested persons (as defined
in the 0000 Xxx) of any investment adviser or distributor of the AMR Trust; (g)
taxes (including any income or franchise taxes) and governmental fees; (h) costs
of any liability, uncollectible items of deposit and other insurance or fidelity
bonds; (i) any costs, expenses or losses arising out of any liability of or
claim for damage or other relief asserted against the AMR Trust for violation of
any law; (j) legal, accounting and auditing expenses, including legal fees of
special counsel for the independent trustees; (k) charges of custodians,
transfer agents and other agents; (l) costs of preparing share certificates; (m)
expenses of setting in type and printing Prospectuses and supplements thereto
for existing shareholders, reports and statements to shareholders and proxy
material; (n) any extraordinary expenses (including fees and disbursements of
counsel) incurred by the AMR Trust; and (o) fees and other expenses incurred in
connection with membership in investment company organizations.
The AMR Trust may pay directly any expense incurred by it in its normal
operations and, if any such payment is consented to by the Manager and
acknowledged as otherwise payable by the Manager pursuant to this Agreement, the
AMR Trust may reduce the fee payable to the Manager pursuant to paragraph 7
hereof by such amount. To the extent that such deductions exceed the fee payable
to the Manager on any monthly payment date, such excess shall be carried forward
and deducted in the same manner from the fee payable on succeeding monthly
payment dates.
In addition, if the expenses borne by the AMR Trust or any Portfolio in
any fiscal year exceed the applicable expense limitations imposed by the
securities regulations of any state in which shares are registered or qualified
for sale to the public, the Manager will reimburse the AMR Trust or Portfolio
for any excess up to the amount of the fee payable to it during that fiscal year
pursuant to paragraph 7 hereof.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement with respect to each Portfolio, the AMR Trust will
pay the Manager, effective from the date of this Agreement, a fee which is
computed daily and paid monthly from each Portfolio's assets at the annual rates
as percentages of that Portfolio's average daily net assets under Manager's
management as set forth in the attached Schedule A, which schedule can be
modified from time to time to reflect changes in annual rates or the addition or
deletion of a Portfolio from the terms of this Agreement, subject to appropriate
approvals required by the 1940 Act. If this Agreement becomes effective or
terminates with respect to any Portfolio before the end of any month, the fee
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for the period from the effective date to the end of the month or from the
beginning of such month to the date of termination, as the case may be, shall be
prorated according to the proportion that such period bears to the full month in
which such effectiveness or termination occurs.
8. LIMITATION OF LIABILITY OF THE MANAGER. The Manager shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the AMR Trust or any Portfolio in connection with the matters to which this
Agreement relate except a loss resulting from the 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. Any
person, even though also an officer, partner, employee, or agent of the Manager,
who may be or become an officer, trustee, employee or agent of the AMR Trust
shall be deemed, when rendering services to the AMR Trust or acting in any
business of the AMR Trust, to be rendering such services to or acting solely for
the AMR Trust and not as an officer, partner, employee, or agent or one under
the control or direction of the Manager even though paid by it.
9. DURATION AND TERMINATION. This Agreement shall become effective upon
its execution; provided that, with respect to any Portfolio now existing or
hereafter created, this agreement shall not take effect unless it first has been
approved by a vote of the majority of those trustees of the AMR Trust who are
not parties to this Agreement or interested persons of such party, cast in
person at a meeting called for the purpose of voting on such approval, and by
vote of a majority of that Portfolio's outstanding voting securities. This
Agreement shall remain in full force and effect continuously thereafter until
terminated without the payment of any penalty by any one of the following:
(a) By vote of a majority of its trustees, or by the affirmative vote
of a majority of the outstanding Shares of such Portfolio, the AMR Trust may at
any time terminate this Agreement with respect to any or all Portfolios by
providing not more than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager at its principal offices.
(b) With respect to any Portfolio, if (i) the trustees or the
shareholders of that Portfolio by the affirmative vote of a majority of the
outstanding shares of such Portfolio, and (ii) a majority of the trustees who
are not interested persons of the AMR Trust or of 6 the Manager or of any
Adviser, by vote cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the continuance of
this Agreement, then this Agreement shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the expiration
of one year from the
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effective date of the last such continuance, whichever is later; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of a Portfolio for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the 1940 Act and the
rules and regulations thereunder with respect to that Portfolio.
(c) The Manager may at any time terminate this Agreement with respect
to any or all Portfolios by not less than 60 days' written notice delivered or
mailed by registered mail, postage prepaid to the AMR Trust.
(d) This Agreement automatically and immediately will terminate in the
event of its assignment.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
with respect to any Portfolio shall be effective until approved by vote of the
holders of a majority of that Portfolio's outstanding voting securities.
11. NAME OF AMR TRUST. The AMR Trust may use the name "AMR Investment
Services Trust" only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect, including any similar agreement with any
organization which shall have succeeded to the business of the Manager. At such
time as such an agreement shall no longer be in effect, the AMR Trust will (to
the extent that it lawfully can) cease to use any name derived from the AMR
Investment Services Trust or AMR Investment Services, Inc., or any successor
organization.
12. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Texas, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act. To the extent that the
applicable laws of the State of Texas conflict with the applicable provisions of
the 1940 Act, the latter shall control.
13. DEFINITIONS. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person," and "assignment" shall have
the same meanings as such terms have in the 1940 Act.
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. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
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15. NOTICE. Notice hereby is given that this Agreement is executed by
the AMR Trust's Trustees and/or officers in their capacities as Trustees and/or
officers and the obligations of this Agreement are not binding upon any of them
or the shareholders individually; rather, they are binding only upon the assets
and property of AMR Trust.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Attest: AMR INVESTMENT SERVICES TRUST
/s/ Xxxxxx x. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
By: ________________________ By: ______________________________
Attest: AMR INVESTMENT SERVICES, INC.
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxx
By: ________________________ By: ______________________________
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SCHEDULE A
TO THE
MANAGEMENT AGREEMENT
BETWEEN
AMR INVESTMENT SERVICES, INC.
AND THE
AMR INVESTMENT SERVICES TRUST
As compensation pursuant to section 7 of the Management Agreement
between AMR Investment Services, Inc. (the "Manager") and the AMR Investment
Services Trust (the "AMR Trust"), the AMR Trust shall pay to the Manager a fee,
computed daily and paid monthly, at the following annual rates as percentages of
each Portfolio's average daily net assets:
(1) 0.15% of the net assets of the Money Market Portfolio, the
Municipal Money Market Portfolio and the U.S. Treasury Money
Market Portfolio;
(2) 0.25% of the net assets of the Limited-Term Income Portfolio;
(3) 0.10% of the net assets of the Balanced Portfolio, the Growth
and Income Portfolio and the International Equity Portfolio;
(4) plus all fees payable by the Manager with respect to such
Portfolios pursuant to any Investment Advisory Agreement entered
into pursuant to Paragraph 2(d) of said Management Agreement.
DATED: October 1, 1995
