Supplemental Terms and Conditions to
the Management Agreement between
the American AAdvantage Funds
and
AMR Investment Services, Inc.
with respect to the
American AAdvantage Intermediate Bond Fund
The attached amended Schedule A is hereby incorporated into
the Management Agreement dated April 3, 1987, as supplemented on
November 1, 1995 and December 17, 1996, (the "Agreement") between
the American AAdvantage Funds and AMR Investment Services, Inc.
To the extent that there is any conflict between the terms of the
Agreement and these Supplemental Terms and Conditions
("Supplement"), this Supplement shall govern.
Dated: July 25, 1997
American AAdvantage Funds
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President and
Assistant Secretary
AMR Investment Services, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
Amended
Schedule A
to the
Management Agreement
between
AMR Investment Services, Inc.
and the
American AAdvantage Funds
I. Base Fee
As compensation pursuant to section 6 of the Management
Agreement between AMR Investment Services, Inc. (the "Manager")
and the American AAdvantage Funds (the "AAdvantage Trust"), the
AAdvantage Trust shall pay to the Manager a fee, computed daily
and paid monthly, at the following rate:
(1) 0.10% of the net assets of the Balanced Portfolio,
the Growth and Income Portfolio and the International
Equity Portfolio 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; and
(2) 0.15% of the net assets of the Money Market
Portfolio, the Municipal Money Market Portfolio and the
U.S. Government Money Market Portfolio; and
(3) 0.25% of the net assets of the Intermediate Bond
Portfolio and the Limited-Term Income Portfolio.
II. Securities Lending Duties and Fees
A. Manager Duties
The Manager agrees to provide the following services in
connection with the investment of cash collateral received
from the securities lending activities of each Portfolio of
the AAdvantage Trust: (a) assist the securities lending
agent (the "Agent") in determining which specific securities
are available for loan, (b) monitor the Agent to ensure that
securities loans are effected in accordance with its
instructions and within the procedures adopted by the Board
of Trustees of the AAdvantage Trust, (c) prepare appropriate
periodic reports for, and seek appropriate approvals from,
the Board of Trustees of the AAdvantage Trust with respect
to securities lending activities, (d) respond to Agent
inquiries concerning Agent's compliance with applicable
guidelines, and (e) perform such other duties as necessary.
B. Securities Lending Fees
As compensation for services provided by the Manager in
connection with securities lending activities of each
Portfolio of the AAdvantage Trust, the lending Portfolio
shall pay to the Manager, with respect to cash collateral
posted by borrowers, a fee equal to 25% of the net monthly
interest income (the gross interest income earned by the
investment of cash collateral, less the amount paid to
borrowers as well as related expenses) from such activities
and, with respect to loan fees paid by borrowers when a
borrower posts collateral other than cash, a fee equal to
25% of such loan fees.
DATED: July 25, 1997
