EXHIBIT 99.(h)(xvi)
SERVICE PLAN FOR THE
AMERICAN AADVANTAGE FUNDS SERVICE CLASS
AGREEMENT made this 1st day of May, 2003, by and between AMERICAN
AADVANTAGE FUNDS (the "Trust") and AMR INVESTMENT SERVICES, INC. ("AMR").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
offers for public sale distinct series of shares of beneficial interest, each
corresponding to a distinct portfolio (a "Fund"); and
WHEREAS, the Trust's Board of Trustees has authorized each of the Funds
to issue multiple classes of shares, including a class to be designated as the
Service Class, and in the future may authorize new Funds to issue multiple
classes, including such Service Class; and
WHEREAS, the Trust desires to adopt a Service Plan ("Plan") with
respect to the Service Class;
NOW, THEREFORE, the Trust hereby adopts this Plan with respect to the
Service Class.
1. A Fund is authorized to pay to AMR, or to such other entities
as approved by the Board, as compensation for shareholder services provided by
such entities to Service Class shareholders, an aggregate fee at the rate of up
to 0.25% on an annualized basis of the average daily net assets of the Service
Class of each such Fund which has approved this Plan in accordance with the
conditions of approval set forth herein. Such fee shall be calculated and
accrued daily and paid quarterly or at such other intervals as the Board shall
determine.
2. AMR or any other entity approved by the Board may spend such
amounts as it deems appropriate on any activities or expenses primarily intended
to result in or relate to the servicing of a participating Fund's Service Class
shares, including, but not limited to, the payment of service fees and transfer
agency or subtransfer agency expenses.
3. This Plan shall not take effect with respect to the Service
Class of a Fund unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Trust who are not "interested persons" of the Trust and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related thereto ("Independent Trustees"), cast in person at a meeting (or
meetings) called for the purpose of voting on such approval; and until the
Trustees who approve the Plan's taking effect with respect to such Fund have
reached the conclusion required by Rule 12b-1(e) under the 1940 Act.
4. After approval as set forth in paragraph 3, this Plan shall
take effect and continue in full force and effect with respect to a Service
Class of a Fund for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in paragraph 3.
5. AMR and any other recipient of payments hereunder shall
provide to the Board and the Board shall review, at least quarterly, a written
report of the amounts expended with respect to the Service Class of each
applicable Fund under this Plan and the purposes for which such expenditures
were made.
6. This Plan may be terminated with respect to the Service Class
of any Fund at any time by vote of the Board, or by vote of a majority of the
Independent Trustees.
7. This Plan may not be amended to increase materially the amount
of fees provided for in paragraph 1 hereof unless such amendment is approved in
the manner provided for initial approval in paragraph 3 hereof, and no material
amendment to the Plan shall be made unless approved in the manner provided for
approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by a Fund to AMR or any other
authorized entity under paragraph 1 hereof is not related directly to expenses
incurred by such entities on behalf of such Fund in providing shareholder
services hereunder, and paragraph 2 hereof does not obligate such Fund to
reimburse any such entity for such expenses. The fees set forth in paragraph 1
hereof will be paid by such Fund to such entities until the Plan is either
terminated or not renewed. If the Plan is terminated or not renewed with respect
to a Fund, any shareholder servicing expenses incurred by such entities on
behalf of such Fund in excess of payments of the fees specified in paragraph 1
hereof which have been received or accrued through the termination date are the
sole responsibility and liability of the entity incurring the expenses, and are
not obligations of such Fund.
9. While this Plan is in effect, the selection and nomination of
the Trustees who are not interested persons of the Trust shall be committed to
the discretion of the Trustees who are not interested persons of the Trust.
10. As used in this Plan, the term "interested person" shall have
the same meaning as that term has in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 5 hereof for a period of not less than six years from the date of this
Plan, the first two years in an easily accessible place.
12. The Trustees of the Trust and the shareholders of the Funds
shall not be liable for any obligations of the Trust or the Fund under this
Plan, and AMR or any other person, in asserting any rights or claims under this
Plan, shall look only to the assets and property of the Trust or the Funds in
settlement of such right or claim, and not to such Trustees or shareholders.
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IN WITNESS WHEREOF, the Trust has executed this Plan on the day and
year set forth below.
DATE AMERICAN AADVANTAGE FUNDS
_______________________ By: ________________________
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