1
Exhibit 99.b.5.a.iii
Supplemental Terms and Conditions
of
Management Agreement between
American AAdvantage Funds
and
AMR Investment Services, Inc.
with respect to the American AAdvantage Balanced,
Growth and Income, International Equity and
Limited-Term Income Funds
The following terms and conditions hereby are incorporated into the
Management Agreement (the "Agreement") dated April 3, 1987 between American
AAdvantage Funds (the "Trust") and AMR Investment Services, Inc. (the
"Manager") with respect to the American AAdvantage Balanced Fund, the American
AAdvantage Growth and Income Fund, the American AAdvantage International Equity
Fund, the American AAdvantage Limited-Term Income Fund and such other
portfolios of the Trust as the Trust and the Manager may hereafter agree upon
(collectively, the "Funds"). 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.
1. The Trust and the Manager hereby acknowledge that the Manager
will henceforth provide administrative services to the Trust, with respect to
the Funds, pursuant to a separate Administrative Services Agreement dated
August 1, 1994, between the Trust and the Manager (the "Administrative Services
Agreement"). These administrative services shall include all services
currently provided by the Manager to the Trust other than those specified in
Paragraphs 2(B) and 3 of the Management Agreement.
2. Paragraph 6 of the Management Agreement is hereby amended to
read, with respect to the Funds, in its entirety, as follows:
6. Compensation of the Manager. In consideration of the
Manager's services as specified in this Agreement, the Manager shall
receive a fee as specified in the Schedule(s) attached hereto. This
fee constitutes the Manager's compensation solely with respect to the
investment advisory and portfolio allocation services performed
pursuant to Paragraphs 2(B) and 3 of this Agreement. In addition, the
Trust agrees to pay the Manager a fee pursuant to the Administrative
Services Agreement. The Trust and the Manager each acknowledge that
this fee represents the Manager's compensation for all services
performed under this Agreement other than the investment advisory and
portfolio allocation services specified in Paragraphs 2(B) and 3.
3. Notice is hereby given that the Management Agreement and this
Supplement are executed on behalf of the Trustees of the Trust and not
individually and that the obligations of the Agreement and Supplement are not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually, but are binding only upon the assets and property of the Fund to
which the Agreement and this Supplement relate.
Dated: August 1, 1994
AMR INVESTMENT SERVICES, INC.
By: /s/ ▇.▇. ▇▇▇▇▇
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Title: President
AMERICAN AADVANTAGE FUNDS
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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Title: Vice President, Treasurer and
Assistant Secretary