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EXHIBIT 99.d(ii)(J)
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 Xxxxxxx,
Xxxxx & Company (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
compliance with such policies as the Trustees may from time to
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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, and any
guidelines or procedures adopted by the Trust's Board of Trustees, or
implemented by the Manager with respect to the Adviser; provided that with
respect to procedures governing transactions involving "affiliated persons," as
defined by the 1940 Act (such as those adopted pursuant to 1940 Act Rules 17a-7,
17e-1, and 10f-3), the Manager will identify any affiliated person of the
Manager and each Portfolio, other than affiliates of the Adviser, taking into
account all applicable exemptive orders and no-action relief applicable to the
Trust and the Portfolios. 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 Adviser shall not be responsible for any other expenses
unless expressly stated in writing. (With respect to any of the Portfolio assets
allocated for management by the Adviser, the Adviser in its sole discretion 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 and other investments for the
Portfolios and is directed to use its best efforts to obtain the best execution
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.
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Subject to such policies as the Board of Trustees may determine
consistent with Section 28(e) of the Securities Exchange Act of 1934, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of having caused
any such Portfolio to pay a broker or dealer, acting as agent, for effecting a
portfolio transaction at a price in excess of the amount of commission another
broker or dealer would have charged for effecting the transaction, if the
Adviser 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 or dealer, viewed in terms of either that particular transaction or the
Adviser's (or its affiliates') overall responsibilities with respect to any such
Portfolio and to its other clients as to which it exercises investment
discretion. The Adviser agrees not to engage in such "soft dollar" transactions
without first obtaining the prior written consent of the Manager.
The Manager shall notify the Adviser promptly, and in no event more
than 15 calendar days after quarter-end, of any non-compliance by the Portfolio
of Subchapter M of the Internal Revenue Code attributable to the portion of the
Portfolio managed by the Adviser.
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, within 15 business days after the end of each
quarter 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.
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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 reasonable
request. Manager represents that it and the Trust, on behalf of each Portfolio,
has received Parts I and II of Adviser's Form ADV.
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. In this connection, the Adviser
may, on occasion when the purchase or sale of a security is deemed to be in the
best interest of any such Portfolio as well as any other investment advisory
clients, to the extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be sold or purchased with those
of its other clients where such aggregation is not inconsistent with the
policies set forth in the Trust's registration statement. In such event,
allocation of the securities so sold or purchased, as well as expenses incurred
in the transaction, will be made by the Adviser in a manner that is fair and
equitable in the judgment of the Adviser in the exercise of its fiduciary
obligations to any Portfolio and to such other clients.
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 Manager and Adviser. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties ("disabling conduct") hereunder on the part of the Adviser, Adviser (and
its partners, officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with Adviser ("associated
persons")) will not be subject to liability to Manager, the Trust or any
Portfolios or any other person for any act or omission in the course of, or
connected with,
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rendering services hereunder or for any loss suffered by Manager, the Trust or
any Portfolios or any other person in connection with the matters to which this
Agreement relates (including, without limitation, as a result of the failure by
Manager or any of its affiliates to comply with this Agreement, or as a result
of any error of judgment) except to the extent specified in Section 36(b) of the
Investment Company Act of 1940 concerning loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services.
The Adviser shall not be liable for (i) any acts of any other
investment adviser or portfolio manager to any Portfolio(s) of the Trust with
respect to the portion of assets of any such Portfolio not managed by the
Adviser and (ii) acts of the Adviser which result from acts of the Manager or
the Trust, including but not limited to, a failure of the Manager or the Trust
to provide accurate and current information with respect to any records
maintained by the Manager or the Trust or any other investment adviser or
portfolio manages of any such Portfolio(s) or the Trust. In no event shall the
Adviser or its affiliates have any liability arising from the conduct of the
Trust, any Portfolio, or any other investment adviser or portfolio manager with
respect to the portion of a Portfolio's assets not allocated to the Adviser.
Manager hereby indemnifies, defends and protects Adviser and holds
Adviser and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Agreement. Manager also agrees to
indemnify and hold harmless Adviser for any Losses arising out of any disabling
conduct or breach committed by any other investment adviser to the Portfolio(s).
Adviser hereby indemnifies, defends and protects Manager and the Fund and holds
Manager harmless from and against any Losses arising out of the Adviser's
disabling conduct.
Each indemnifying party will be entitled to participate at its own
expense in the defense of covered claims or, if it so elects, to assume the
defense of any suit brought to enforce any such liability. If the indemnifying
party elects to assume the defense, such defense shall be conducted by counsel
chosen by the indemnifying party. In the event the indemnifying party elects to
assume the defense of any such suit and retain such counsel, the indemnified
party may retain additional counsel, but shall bear the fees and expenses of
such counsel unless the indemnifying party has specifically authorized the
retaining of such counsel. The indemnifying party shall not be liable to
indemnify the indemnified party for any settlement of any claim
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affected without the indemnified party's written consent, which consent shall
not be unreasonably withheld or delayed.
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. Notices
and other writings delivered or mailed postage prepaid to Manager at 0000 Xxxx
Xxxxxx Xxxx., XX 0000, Xx Xxxxx, XX 00000, or to Adviser at 00 Xxx Xxxx, Xxx
Xxxx, XX 00000, or to such other address as Manager or Adviser may hereafter
specify by written notice to the most recent address specified by the other
party,
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will be deemed to have been properly delivered or given hereunder to the
respective addressee.
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.
12. Use of Adviser's Name. It is understood that the name "Xxxxxxx,
Sachs & Co." or "Xxxxxxx Xxxxx" or any derivative thereof, any trade name,
trademark, trade device, service xxxx, symbol or logo associated with those
names are the valuable property of the Adviser and that the Manager has the
right to use such name (or derivative or logo), in offering materials of the
Trust and/or Portfolios with the prior written approval of the Adviser and for
so long as the Adviser is an investment adviser to the Trust and/or the
Portfolios. Upon termination of this Agreement between the Manager and the
Adviser, the Trust, Portfolios, and the Manager shall forthwith cease to use
such name (or derivative or logo).
Neither the Trust (including the Portfolios) nor the Manager shall use
the Adviser's name (or that of any affiliate, including the name "Xxxxxxx
Xxxxx") in promotional or sales related materials prepared by or on behalf of
the Manager or the Trust and/or the Portfolios, without prior review and
approval by the Adviser, which shall not be unreasonably withheld. In lieu of
approving each promotional or sales related item, Adviser may approve a standard
form or template for the use of its name in such material distributed on a
regular basis.
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.
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XXXXXXX, SACHS & COMPANY AMR INVESTMENT SERVICES, 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
Xxxxxxx, Sachs & Company, Inc.
AMR Investment Services, Inc. shall pay compensation to Xxxxxxx, Xxxxx
& Company, Inc. pursuant to section 3 of the Investment Advisory Agreement
between said for rendering investment management services with respect to the
Large Cap Growth Mileage Fund (the "Portfolio") in accordance with the following
annual percentage rates:
0.60% on the first $50 million in assets
0.50% on the next $150 million in assets
0.40% on assets above $200 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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