As filed with the Securities and Exchange Commission on February 28, 1997.
File No. 811-9098
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1
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AMR INVESTMENT SERVICES TRUST
(Exact Name of Registrant as Specified in Charter)
4333 Amon Carter Boulevard
Fort Worth, Texas 76155
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code: (817) 967-3509
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WILLIAM F. QUINN, PRESIDENT
4333 Amon Carter Boulevard
Fort Worth, Texas 76155
(Name and address of agent for service)
Copies to:
CLIFFORD J. ALEXANDER, ESQ.
ROBERT J. ZUTZ, ESQ.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W., 2nd Floor
Washington, D.C. 20036-1800
Telephone: (202) 778-9000
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<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed by the Registrant pursuant
to Section 8(b) of the Investment Company Act of 1940, as amended. Beneficial
interests in the series of the Registrant are not being registered under the
Securities Act of 1933, as amended, because such interests are issued solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of that act. Investments in the Registrant's series
may only be made by certain institutional investors, whether organized within or
without the United States (excluding individuals, S corporations, partnerships,
and grantor trusts beneficially owned by any individuals, S corporations, or
partnerships). This Registration Statement, as amended, does not constitute an
offer to sell, or the solicitation of an offer to buy, any beneficial interests
in any series of the Registrant.
<PAGE>
PART A
Responses to Items 1, 2, 3 and 5A have been omitted pursuant to
paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement are incorporated herein by reference from Post-Effective
Amendment No. 6 to the Registration Statement of American AAdvantage Mileage
Funds ("Mileage Trust") (1940 Act File No. 811-9018, EDGAR Accession No.
0000950134-97-001003), as filed with the Securities and Exchange Commission
("Commission") on February 14, 1997 ("Spoke Registration Statement"). Part A of
the Spoke Registration Statement includes a joint prospectus of American
AAdvantage Balanced Mileage Fund, American AAdvantage Growth and Income Mileage
Fund, American AAdvantage International Equity Mileage Fund, American AAdvantage
Limited-Term Income Mileage Fund, American AAdvantage Money Market Mileage Fund,
American AAdvantage Municipal Money Market Mileage Fund and American AAdvantage
U.S. Government Money Market Mileage Fund ("Spoke's Part A").
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
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AMR Investment Services Trust ("AMR Trust") is a diversified, open-end
management investment company that was organized as a New York common law trust
pursuant to a Declaration of Trust dated as of June 27, 1995, and amended as of
August 11, 1995.
Beneficial interests in the AMR Trust are divided into seven separate
diversified subtrusts or "series," each having a distinct investment objective
and distinct investment policies. These series -- the Balanced Portfolio, the
Growth and Income Portfolio, the International Equity Portfolio, the
Limited-Term Income Portfolio, the Money Market Portfolio, the Municipal Money
Market Portfolio, and the U.S. Government Money Market Portfolio (formerly, U.S.
Treasury Money Market Portfolio) (each a "Portfolio") -- commenced operations on
November 1, 1995. The assets of each Portfolio belong only to that Portfolio,
and the assets belonging to a Portfolio shall be charged with the liabilities of
that Portfolio and all expenses, costs, charges and reserves attributable to
that Portfolio. AMR Trust is empowered to establish, without investor approval,
additional portfolios that may have different investment objectives and
policies.
Beneficial interests in the Portfolios are offered solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended ("1933 Act").
Investments in the Portfolios may only be made by certain institutional
investors, whether organized within or without the United States (excluding
individuals, S corporations, partnerships, and grantor trusts beneficially owned
by any individuals, S corporations, or partnerships). This Registration
Statement, as amended, does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
AMR Investment Services, Inc. ("Manager") provides investment
management and administrative services to the Portfolios. The assets of the
Balanced Portfolio, the Growth and Income Portfolio and the International Equity
Portfolio are allocated by the Manager among investment advisers designated for
each of those Portfolios. Investment decisions for the Limited-Term Income
Portfolio, the Money Market Portfolio, the Municipal Money Market Portfolio and
the U.S. Government Money Market Portfolio are made directly by the Manager. See
Item 5, "Investment Advisers." Each investment adviser has discretion to
purchase and sell portfolio securities in accordance with the investment
objectives, policies and restrictions. Information on each Portfolio's
investment objective, policies, and risks is incorporated herein by reference
from the sections entitled "Investment Objectives, Policies and Risks" and
"Investment Restrictions" in the Spoke's Part A. Additional investment
techniques, features, and limitations concerning the Portfolios' investment
programs are described in Part B of this Registration Statement.
A-1
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ITEM 5. MANAGEMENT OF THE PORTFOLIOS.
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TRUSTEES AND OFFICERS
The AMR Trustees have general supervisory responsibility over the AMR
Trust's affairs. See "Trustees and Executive Officers" in Item 14 of Part B for
a complete description of the AMR Trustees.
EXPENSES
The AMR Trust pays all of its expenses other than those expressly
assumed by the Manager. Those expenses paid by the AMR Trust include: audits by
independent certified public accountants; custodian services; obtaining
quotations for calculating the value of each Portfolio's net asset value; taxes,
if any, and the preparation of the Portfolios' tax returns; brokerage fees and
commissions; interest; costs of AMR Trustees and investor meetings; fees for
filing reports with regulatory bodies and the maintenance of the AMR Trust's
existence as a New York trust; legal fees; fees and expenses of AMR Trustees who
are not directors, officers, employees or stockholders of the Manager or its
affiliates; insurance and fidelity bond premiums; and any extraordinary expenses
of a nonrecurring nature.
OTHER INFORMATION
A further description of how the business of the AMR Trust is managed
is incorporated herein by reference from various sections of the Spoke's Part A.
The following list identifies the specific sections of the Spoke's Part A under
which the further information required by Item 5 of Form N-1A may be found; each
listed section is incorporated herein by reference.
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Item 5(b) Management and Administration of the Mileage Trust;
Investment Advisers
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Item 5(c) Investment Advisers
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Item 5(d) Management and Administration of the Mileage Trust
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Item 5(e) Management and Administration of the Mileage Trust --
Custodian and Transfer Agent
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Item 5(g) Investment Objectives, Policies and Risks - Brokerage
Practices and Portfolio Turnover
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ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
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The AMR Trust was organized as a common law trust under New York law on
June 27, 1995. Under the Declaration of Trust, the AMR Trustees are authorized
to issue beneficial interests in separate subtrusts or "series" of the AMR
Trust. The AMR Trust currently has seven series (the Portfolios). The AMR Trust
reserves the right to create and issue additional series.
Each investor in a Portfolio is entitled to participate equally in the
Portfolio's earnings and assets and to a vote in proportion to the amount of its
investment in the Portfolio. Investment in a Portfolio may not be transferred,
but an investor may withdraw all or any portion of its investment at any time at
net asset value ("NAV"). Each investor in a Portfolio is liable for all
obligations of the Portfolio, but not of the other Portfolios. However, because
a Portfolio will indemnify each investor therein with respect to any liability
to which the investor may become subject by reason of being such an investor,
the risk of an investor in a Portfolio incurring financial loss on account of
such liability would be limited to circumstances in which the Portfolio had
inadequate insurance and was unable to meet its obligations (including
indemnification obligations) out of its assets.
A-2
<PAGE>
Investments in a Portfolio have no preemptive or conversion rights.
Each investor in a Portfolio is entitled to vote in proportion to its relative
beneficial interest in that Portfolio. The Portfolios normally will not hold
meetings of investors except as required under the 1940 Act. The AMR Trust would
be required to hold a meeting of investors in the event that at any time less
than a majority of its AMR Trustees holding office had been elected by
investors. Investors holding a 10% interest in the AMR Trust may call a meeting
of investors for the purpose of removing any AMR Trustee. An AMR Trustee may be
removed upon a majority vote of investors qualified to vote in the election. The
1940 Act requires the Portfolios to assist investors in calling such a meeting.
As of the date of this Registration Statement, the American AAdvantage
Balanced Fund, American AAdvantage Growth and Income Fund, American AAdvantage
International Equity Fund, American AAdvantage Limited-Term Income Fund,
American AAdvantage Money Market Fund, American AAdvantage Municipal Money
Market Fund and American AAdvantage U.S. Government Money Market Fund each own a
majority interest in its corresponding Portfolio of the AMR Trust. However, each
Fund has undertaken that, with respect to most matters on which the AMR Trust
seeks a vote of its interestholders, the Fund will seek a vote of its
shareholders and will vote its entire interest in the AMR Trust or its
corresponding Portfolio in proportion to the votes cast by that Fund's
shareholders.
The NAV of the Balanced, Growth and Income, International Equity and
Limited- Term Income Portfolios is determined as of 4:00 p.m. Eastern time on
each day on which the New York Stock Exchange (the "Exchange") is open for
trading, which excludes the following business holidays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day ("Business Day"). The NAV of the Money
Market, Municipal Money Market and U.S. Government Money Market Portfolios is
determined as of 4:00 p.m. Eastern time on each day on which the Exchange is
open for business except for Martin Luther King's Birthday, Columbus Day and
Veteran's Day ("Money Market Business Day"). The net asset value of each
investor's interest in a Portfolio will be determined by computing that
Portfolio's total assets, subtracting all of each Portfolio's liabilities, and
dividing the result by all the investors' beneficial interest of that Portfolio
outstanding at such time.
A Portfolio's net income consists of (1) all dividends, accrued
interest (including earned discount, both original issue and market discount),
and other income, including any net realized gains on the Portfolio's assets,
less (2) all actual and accrued expenses of the Portfolio, and amortization of
any premium, and net realized losses on the Portfolio's assets, all as
determined in accordance with generally accepted accounting principles. All of a
Portfolio's net income is allocated pro rata among the investors in the
Portfolio. A Portfolio's net income generally is not distributed to the
investors in the Portfolio, except as determined by the AMR Trustees from time
to time, but instead is included in the NAV of the investors' respective
beneficial interests in the Portfolio.
Under the current method of the Portfolios' operations, no Portfolio is
subject to any income tax. However, each investor in a Portfolio is taxable on
its share (as determined in accordance with the AMR Trust's Declaration of Trust
and the Internal Revenue Code of 1986, as amended ("Code"), and the regulations
promulgated thereunder) of that Portfolio's ordinary income and capital gain.
The Manager intends to continue to manage each Portfolio's assets, income and
distributions in such a way that an investment company investing in the
Portfolio will be able to satisfy the requirements of Subchapter M of the Code,
assuming that the investment company invested all of its assets in the
Portfolio. See Item 20 in Part B.
Investor inquiries may be directed to the Manager.
A-3
<PAGE>
ITEM 7. PURCHASE OF SECURITIES.
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Beneficial interests in the Portfolios are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. See Item 4, "General Description of
Registrant." Beneficial interests are purchased at the next share price
calculated after an investment is received and accepted.
Additional information on the time and method of valuation of the
Portfolios' assets is incorporated herein by reference from the section entitled
"Valuation of Shares" in the Spoke's Part A.
There is no minimum initial or subsequent investment in a Portfolio.
However, since each Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the return on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the AMR
Trust's custodian by a Federal Reserve Bank).
The AMR Trust reserves the right to cease accepting investments in a
Portfolio at any time or to reject any investment order.
ITEM 8. REDEMPTION OR REPURCHASE.
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An investor in any Portfolio may withdraw all or any portion of its
investment in the Portfolio at the NAV next calculated after the applicable
Portfolio has received and accepted the redemption request. Proceeds of a
withdrawal will be paid by the Portfolio in federal funds normally on the
Business Day the withdrawal is effected, but in any event within seven days,
except as extension may be permitted by law.
The right of any investor to receive payment with respect to any
withdrawal may be suspended, or the payment of the withdrawal proceeds
postponed, during any period in which the Exchange is closed (other than
weekends or holidays) or trading on the Exchange is restricted or to the extent
otherwise permitted by the 1940 Act.
ITEM 9. PENDING LEGAL PROCEEDINGS.
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Not applicable.
A-4
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PART B
ITEM 10. COVER PAGE.
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Part A contains information about the investment objectives and
policies of the Balanced Portfolio, the Growth and Income Portfolio, the
Limited-Term Income Portfolio, the International Equity Portfolio, the Money
Market Portfolio, the Municipal Money Market Portfolio and the U.S. Government
Money Market Portfolio (formerly, U.S. Treasury Money Market Portfolio)
(individually, "Portfolio"; collectively, "Portfolios"), each a subtrust or
"series" of the AMR Investment Services Trust ("AMR Trust"). This Part B should
only be read in conjunction with Part A. This section contains supplemental
information concerning the investment policies and portfolio strategies that the
AMR Trust may utilize, the types of securities and other instruments in which
the Portfolios may invest and certain risks attendant to those investment
policies and strategies. Capitalized terms used in Part B and not otherwise
defined herein have the meanings given them in Part A of this Registration
Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from the Spoke
Registration Statement. Part B of the Spoke Registration Statement includes the
joint statement of additional information ("SAI") of the American AAdvantage
Balanced Mileage Fund, American AAdvantage Growth and Income Mileage Fund,
American AAdvantage International Equity Mileage Fund, American AAdvantage
Limited-Term Income Mileage Fund, American AAdvantage Money Market Mileage Fund,
American AAdvantage Municipal Money Market Mileage Fund and American AAdvantage
U.S. Government Money Market Mileage Fund ("Spoke's Part B").
ITEM 11. TABLE OF CONTENTS.
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PAGE
General Information and History....................................B-1
Investment Objectives and Policies.................................B-1
Management of the Portfolios.......................................B-2
Control Persons and Principal Holders of Securities................B-2
Investment Advisory and Other Services.............................B-2
Brokerage Allocation and Other Practices...........................B-3
Capital Stock and Other Securities.................................B-4
Purchase, Redemption and Pricing of Interests......................B-4
Tax Status.........................................................B-5
Underwriters.......................................................B-5
Calculation of Performance Data....................................B-5
Financial Statements...............................................B-5
ITEM 12. GENERAL INFORMATION AND HISTORY.
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Prior to March 1, 1997, the name of the U.S. Government Money Market
Portfolio was "U.S. Treasury Money Market Portfolio."
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.
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Part A contains basic information about the investment objectives,
policies and limitations of each Portfolio. This section supplements the
discussion in Part A of the investment objectives, policies and limitations of
each Portfolio.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of each Portfolio, the types
of securities bought and investment techniques used by each Portfolio, and
certain risks attendant thereto, as well as other information on the Portfolios'
investment programs, is incorporated herein by reference from the sections
<PAGE>
entitled "Investment Restrictions," "Approach to Stock Selection" and "Other
Information" in the Spoke's Part B.
ITEM 14. MANAGEMENT OF THE PORTFOLIOS.
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The AMR Trustees provides broad supervision over the AMR Trust's
affairs. The Manager is responsible for the management of Trust assets, and the
AMR Trust's officers are responsible for the Trust's operations. Information
about the Trustees and officers of the AMR Trust is incorporated herein by
reference from the section entitled "Trustees and Officers of the Mileage Trust
and the AMR Trust" in the Spoke's Part B.
The AMR Trust compensates each AMR Trustee who is not an "interested"
person of the AMR Trust as defined by the 1940 Act ("Independent Trustee") by
providing such Trustee and his spouse with free airline travel on American
Airlines, Inc. and with payments in an amount equal to the Trustees' income tax
on the value of the airline travel. Trustees also are reimbursed for any
expenses incurred in attending meetings.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
- -------- ----------------------------------------------------
As of January 31, 1997, each Portfolio could be deemed to be under the
control of a corresponding series of the American AAdvantage Funds ("AAdvantage
Trust") or the Mileage Trust; both feeder funds that invest all of their
investable assets in the AMR Trust. As of that date, the controlling series of
AAdvantage Funds owned the indicated value of the outstanding interests in their
corresponding Portfolios: American AAdvantage Balanced Fund owned 99.7% of the
value of the outstanding interests in the Balanced Portfolio; American
AAdvantage Growth and Income Fund owned 99.4% of the value of the outstanding
interests in the Growth and Income Portfolio; American AAdvantage International
Equity Fund owned 97.2% of the value of the outstanding interests in the
International Equity Portfolio; American AAdvantage Limited-Term Income Fund
owned 99.5% of the value of the outstanding interests in the Limited-Term Income
Portfolio; American AAdvantage Money Market Fund and owned 93% of the value of
the outstanding interests in the Money Market Portfolio; American AAdvantage
Municipal Money Market Fund owned 69.8% of the value of the outstanding
interests in the Municipal Money Market Portfolio; and American AAdvantage U.S.
Government Money Market Fund owned 89.3% of the value of the outstanding
interests in U.S. Government Money Market Portfolio. So long as a Fund owns more
than 50% of the value of the outstanding interests in its corresponding
Portfolio, such Fund may require that Portfolio to take certain actions without
the approval of any other registered investment company that invests in the
Portfolio. However, where the action requires a vote of a Portfolio's
interestholders, the power of a Fund to control such action may depend on the
vote of the Fund's shareholders.
As of January 31, 1997, the following series of the Mileage Trust owned
5% or more of the value of the outstanding interests in their corresponding
Portfolios: American AAdvantage Money Market Mileage Fund owned 7% of the
outstanding interests in Money Market Portfolio; American AAdvantage Municipal
Money Market Mileage Fund owned 30.2% of the outstanding interests in Municipal
Money Market Portfolio; and American AAdvantage U.S. Government Money Market
Mileage Fund owned 10.7% of the outstanding interests in U.S. Government Money
Market Portfolio.
The AAdvantage Trust and the Mileage Trust have informed the AMR Trust
that, in most cases where a Fund is requested to vote on matters pertaining to
its corresponding Portfolio, the affected Fund will solicit proxies from its
shareholders and will vote its entire interest in the Portfolio in proportion to
the votes cast by the Fund's shareholders. It is anticipated that any other
registered investment company investing in a Portfolio will follow the same or a
similar practice.
The address of each of the above-described control persons or principal
holders of securities is 4333 Amon Carter Boulevard, MD 5645, Fort Worth, Texas
76155.
B-2
<PAGE>
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
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The Manager serves as investment manager and administrator to the AMR
Trust pursuant to a Management Agreement dated October 1, 1995, which obligates
the Manager to provide and oversee all administrative, investment advisory and
portfolio management services for the AMR Trust.
As described more fully in Item 5 in Part A, the Manager is paid a
management fee as compensation for providing or overseeing the provision of all
administrative, investment advisory and portfolio management services for the
AMR Trust. The Manager allocates the assets of the Balanced Portfolio, the
Growth and Income Portfolio and the International Equity Portfolio among
investment advisers designated for each of those Portfolios. Investment
decisions for the Limited-Term Income Portfolio and the Money Market Portfolios
are made directly by the Manager. See Item 5 in Part A.
NationsBank of Texas, N.A., Dallas, Texas, serves as the custodian for
the AMR Trust, except for the International Equity Portfolio, and as the
transfer agent for the AMR Trust. The Bank of New York, New York, New York,
serves as custodian for the International Equity Portfolio.
AMR Trust has selected Ernst & Young LLP, Dallas, Texas, as the
independent auditors who will audit its financial statements.
Further information on the investment management and other services
provided for or on behalf of each Portfolio is incorporated herein by reference
from the sections entitled "Management, Administrative Services and Distribution
Fees," and "Investment Advisory Agreements" in the Spoke's Part B. The following
list identifies the specific sections in the Spoke's Part B under which the
information required by Item 16 of Form N-1A may be found; each listed section
is incorporated herein by reference.
Item 16(a) Management, Administrative Services and Distribution Fees;
Investment Advisory Agreements
Item 16(b) Management, Administrative Services and Distribution Fees;
Investment Advisory Agreements
Item 16(c) Not applicable
Item 16(d) Not applicable
Item 16(e) Not applicable
Item 16(f) Not applicable
Item 16(g) Not applicable
Item 16(i) Not applicable
The total management fees accrued and paid by each Portfolio to the
Manager under the Management Agreement for the fiscal year ended October 31,
1996 were Balanced Portfolio -- $2,795,571; Growth and Income Portfolio --
$3,256,729; International Equity Portfolio -- $1,609,294; Limited-Term Income
Portfolio -- $455,769; Money Market Portfolio -- $2,525,768; Municipal Money
Market Portfolio -- $62,561; and U.S. Government Money Market Portfolio --
$147,536.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
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A description of each Portfolio's brokerage allocation and other
practices is incorporated herein by reference from the section entitled
"Portfolio Securities Transactions" in the Spoke's Part B.
B-3
<PAGE>
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
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Each investor in a Portfolio is entitled to a vote in proportion to the
amount of its investment therein. Investors in the Portfolios will vote together
in certain circumstances (e.g., election of the AMR Trustees and ratification of
the selection of auditors, as required by the 1940 Act and the rules
thereunder). One or more of the Portfolios could control the outcome of these
votes. Investors do not have cumulative voting rights, and investors holding
more than 50% of the aggregate beneficial interests in the AMR Trust or in a
Portfolio, as the case may be, may control the outcome of votes. The Trust is
not required and does not currently intend to hold annual meetings of investors,
but the Trust will hold special meetings of investors when a majority of the AMR
Trustees determines to do so or investors holding at least 10% of the interests
in the Trust (or a Portfolio) request in writing a meeting of investors in the
AMR Trust (or Portfolio). No material amendment may be made to the AMR Trust's
Declaration of Trust without the affirmative vote of investors.
The Trust or any series may enter into a merger or consolidation, or
sell all or substantially all of its assets, if approved by the AMR Trustees. A
Portfolio may be terminated (1) upon liquidation and distribution of its assets,
(2) if approved by the vote of at least two-thirds of its investors, or (3) by
the AMR Trustees on written notice to the Portfolio's investors.
The AMR Trust is organized as a common law trust under the laws of the
State of New York. Investors in a Portfolio will be held personally liable for
its obligations and liabilities, subject, however, to indemnification by the
Trust in the event that there is imposed upon an investor a greater portion of
the liabilities and obligations than its proportionate beneficial interest. The
Declaration of Trust also provides that the AMR Trust shall maintain appropriate
insurance for the protection of the Portfolios, investors, AMR Trustees,
officers, employees, and agents covering possible tort and other liabilities.
Thus, the risk of an investor incurring financial loss on account of such
liability is limited to circumstances in which the Portfolio had inadequate
insurance and was unable to meet its obligations out of its assets.
The Declaration of Trust further provides that obligations of a
Portfolio are not binding upon the AMR Trustees individually but only upon the
property of the Portfolio and the AMR Trustees will not be liable for any action
or failure to act, but nothing in the Declaration of Trust protects a Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
Upon liquidation or dissolution of any Portfolio, the investors therein
would be entitled to share pro rata in its net assets available for distribution
to investors.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF INTERESTS.
- -------- ----------------------------------------------
Beneficial interests in the Portfolios are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. See Items 4, 7 and 8 in Part A.
The net asset value of each Portfolio is computed each Business Day or
Money Market Business Day, as applicable, (defined in Item 7 in Part A) on which
shares are offered and orders accepted or upon receipt of a redemption request
as outlined in Part A.
It is the policy of the Money Market Portfolio, the Municipal Money
Market Portfolio and the U.S. Government Money Market Portfolio to attempt to
maintain a constant price per share of $1.00. There can be no assurance that a
$1.00 net asset value per share will be maintained. These Portfolios' investment
securities are valued based on the amortized cost valuation technique pursuant
to Rule 2a-7 under the 1940 Act. This involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity of any discount or
premium, even though the portfolio security may increase or decrease in market
value. Such market fluctuations are generally in response to changes in interest
rates. Use of the amortized cost valuation method requires these Portfolios to
purchase instruments having remaining maturities of 397 days or less, to
maintain a dollar weighted average portfolio maturity of 90 days or less, and to
invest only in securities determined by the AMR Trustees to be of high quality
with minimal credit risks.
B-4
<PAGE>
ITEM 20. TAX STATUS.
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Information on the taxation of the Portfolios is incorporated herein by
reference from the section entitled "Tax Information -- Taxation of the
Portfolios" in the Spoke's Part B, substituting for "Fund" whenever used therein
either "investor in a Portfolio" or "RIC investor" (I.E., an investor in a
Portfolio that intends to qualify as a regulated investment company ("RIC") for
federal income tax purposes), as the context requires.
ITEM 21. UNDERWRITERS.
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Not applicable.
ITEM 22. CALCULATIONS OF PERFORMANCE DATA.
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Not applicable.
ITEM 23. FINANCIAL STATEMENTS.
- -------- ---------------------
Audited financial statements for the Portfolios for the fiscal year
ended October 31, 1996, the reports of Ernst & Young LLP, independent auditors,
with respect to such audited financial statements of each Portfolio are
incorporated by reference from the Annual Report to Shareholders of the American
AAdvantage Mileage Funds for the fiscal year ended October 31, 1996, File Nos.
33-91058 and 811-9018, EDGAR Accession No. 0000950134-96-007126.
B-5
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- -------- ---------------------------------
(a) Financial Statements included as a part of this Registration
Statement:
Audited financial statements for the seven series of the AMR
Investment Services Trust, Balanced Portfolio, Growth and
Income Portfolio, International Equity Portfolio,
Limited-Maturity Income Portfolio, Money Market Portfolio,
Municipal Money Market Portfolio and U.S. Government Money
Market Portfolio, are incorporated into Part B by reference to
the Annual Report to Shareholders of American AAdvantage
Mileage Funds for the period ended October 31, 1996, File Nos.
33-91058 and 811-9018, Accession No. 0000950134-96-007126.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust*
(2) Bylaws -- none
(3) Voting trust agreement -- none
(4) Certificate of Interest Holder -- none
(5) (a)(i) Management Agreement with AMR Investment Services,
Inc. -- filed herewith
(ii) Supplemental Terms and Conditions to Management
Agreement with AMR Investment Services, Inc. --
A substantially similar copy of which was filed
as Exhibit 5(a) with the Post-Effective
Amendment No. 4 to Registration Statement of
American AAdvantage Mileage Funds, File Nos.
33-91058 and 811-9018, EDGAR Accession No.
0000950134-97-001003, and is incorporated by
reference. (This document differs only with
respect to the names of the parties.)
(b)(i) Investment Advisory Agreements with Subadvisers*
(ii) Investment Advisory Agreement with Hotchkis and
Wiley - A substantially similar copy of which was
filed as Exhibit 5(b) with the Post-Effective
Amendment No. 4 to Registration Statement of
American AAdvantage Mileage Funds, File Nos.
33-91058 and 811-9018, EDGAR Accession No.
0000950134-97-001003, and is incorporated by
reference. (This document differs only with
respect to the names of the parties and does not
contain a statement that to the extent that a Fund
invests all of its investable assets in another
investment company, no portion of the advisory fee
attributable to that Fund shall be paid for the
period that such Fund's assets are so invested.)
(6) Distribution Agreement -- none
(7) Bonus, profit sharing or pension plans -- none
(8) (a) Custodian Agreement with NationsBank of Texas, N.A. -
filed herewith
(b) Custodian Agreement with Bank of New York - filed
herewith
(9) Transfer Agency Agreement with NationsBank of Texas, N.A
-- filed herewith
<PAGE>
(10) Opinion and consent of counsel -- not applicable
(11) Consent of Independent Auditors - not applicable
(12) Financial statements omitted from prospectus -- none
(13) Letter of investment intent -- none
(14) Prototype retirement plan -- none
(15) Plan pursuant to Rule 12b-1 -- none
(16) Schedule for Computation of Performance Quotations -- not
applicable
(17) Financial Data Schedules - filed herewith
(18) Plan pursuant to Rule 18f-3 - none
* Incorporated by reference to the initial Registration Statement of the
Registrant on Form N-1A as filed with the Securities and Exchange Commission on
September 29, 1995.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
- -------- -------------------------------------------------------------
No person is controlled by or under common control with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
- -------- -------------------------------
NUMBER OF RECORD HOLDERS
PORTFOLIO AS OF JANUARY 31, 1997
--------- ----------------------
Balanced Portfolio 4
Growth and Income 4
Portfolio
Limited-Term Income 4
Portfolio
International Equity 5
Portfolio
Money Market Portfolio 4
Municipal Money Market 4
Portfolio
U.S. Government Money 4
Market Portfolio
ITEM 27. INDEMNIFICATION
- -------- ---------------
Article VI, Section 6.4 of the Declaration of Trust of the AMR Trust
provides that:
The Trust shall indemnify, to the fullest extent permitted by law
(including the 1940 Act), each Trustee, officer or employee of the Trust
C-2
<PAGE>
(including any Person who serves at the Trust's request as a director, officer
or trustee of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by such Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which such Person may be involved or
with which such Person may be threatened, while in office or thereafter, by
reason of such Person being or having been such a Trustee, officer or employee,
except with respect to any matter as to which such Person shall have been
adjudicated to have acted in bad faith, willful misfeasance, gross negligence or
reckless disregard of such Person's duties; provided, however, that as to any
matter disposed of by a compromise payment by such Person, pursuant to a consent
decree or otherwise, no indemnification either for such payment or for any other
expenses shall be provided unless there has been a determination that such
Person did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Person's office
(a) by the court or other body approving the settlement or other disposition;
(b) by a reasonable determination, based upon a review of readily available
facts as opposed to a full trial-type inquiry), that such Person did not engage
in such conduct by written opinion from independent legal counsel approved by
the Trustees; or (c) by a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry). The rights accruing
to any Person under these provisions shall not exclude any other right to which
such Person may be lawfully entitled; provided that no Person may satisfy any
right of indemnity or reimbursement granted in this Section 6.4 or in Section
6.2 hereof or to which such Person may be otherwise entitled except out of the
Trust Property.
According to Article VI, Section 6.5 of the Declaration of Trust, the
Trustees may make advance payments in connection with indemnification under
Section 6.4, provided that the following conditions are satisfied: (i) the
advances must be limited to amounts used, or to be used, for the preparation or
presentation of a defense to the action, including costs connected with the
preparation of a settlement; (ii) advances may be made only upon receipt of a
written promise by, or on behalf of, the recipient to repay the amount of the
advance which exceeds the amount which it is ultimately determined that he is
entitled to receive from the Trust by reason of indemnification; and (iii) (a)
such promise must be secured by a surety bond, other suitable insurance or an
equivalent form of security which assures that any repayment may be obtained by
the Trust without delay or litigation, which bond, insurance or other form of
security must be provided by the recipient of the advance, or (b) a majority of
a quorum of the Trust's disinterested, non-party Trustees, or an independent
legal counsel in a written opinion, shall determine, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that the recipient of the
advance ultimately will not be disqualified from indemnification under Section
6.4.
Section 8 of the Management Agreement between the Registrant and AMR
Investment Services, Inc. ("Manager") provides that the Manager shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Registrant or any Portfolio in connection with the matters to which the
Management 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 the
Management Agreement.
Section 8 of each Advisory Agreement between the Manager and each
Portfolio's investment subadvisor ("Subadvisors") states that no provision of
the Advisory Agreement shall be deemed to protect a Subadvisor against any
liability to the Registrant or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith, or gross negligence in
the performance of its duties or the reckless disregard of its obligations under
an Advisory Agreement.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT MANAGER AND INVESTMENT
SUBADVISERS
- -------- ---------------------------------------------------------------------
Information as to any other business, profession, vocation or
employment of a substantial nature in which each director or officer of the
Manager and each principal of a Subadviser is, or at any time during the past
C-3
<PAGE>
two years has been, engaged for his or her own account or in the capacity of
director, officer, employee, partner or trustee is incorporated herein by
reference from Item 28 in Part C of the Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of American AAdvantage Mileage Funds (1940
Act File No. 811-9018, EDGAR Accession No. 0000950134-97-001003), as filed with
the Securities and Exchange Commission on February 14, 1997.
ITEM 29. PRINCIPAL UNDERWRITER
- -------- ---------------------
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- -------- --------------------------------
The books and other documents required by Rule 31a-1 under the
Investment Company Act of 1940 are maintained in the physical possession of the
AMR Trust's custodian, Manager, transfer agent or investment advisers.
ITEM 31. MANAGEMENT SERVICES
- -------- -------------------
Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.
ITEM 32. UNDERTAKINGS
- -------- ------------
None.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment No. 1 to its Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Worth and the State of Texas on February
28, 1997.
AMR INVESTMENT SERVICES TRUST
By: /s/ William F. Quinn
-----------------------------
William F. Quinn
President
<PAGE>
<TABLE>
<CAPTION>
AMR INVESTMENT SERVICES TRUST
REGISTRATION STATEMENT ON FORM N-1A
INDEX TO EXHIBITS
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C> <C>
1 Amended and Restated Declaration of Trust*
2 Bylaws -- none N.A.
3 Voting trust agreement -- none N.A.
4 Certificate of Interest Holder -- none N.A.
5 (a) (i) Management Agreement with AMR Investment Services, Inc.
-- filed herewith
(ii) Supplemental Terms and Conditions to Management
Agreement with AMR Investment Services, Inc. - A
substantially similar copy of which was filed as Exhibit
5(a) with the Post-Effective Amendment No. 4 to
Registration Statement of American AAdvantage Mileage
Funds, File Nos. 33-91058 and 811-9018, EDGAR Accession
No. 0000950134-97-001003, and is incorporated by
reference. (This document differs only with respect to
the names of the parties.)
(b) (i) Investment Advisory Agreements with Subadvisers*
(ii) Investment Advisory Agreement with Hotchkis and Wiley -
A substantially similar copy of which was filed as
Exhibit 5(b) with the Post-Effective Amendment No. 4 to
Registration Statement of American AAdvantage Mileage
Funds, File Nos. 33-91058 and 811-9018, EDGAR Accession
No. 0000950134-97-001003, and is incorporated by
reference. (This document differs only with respect to
the names of the parties and does not contain a
statement that to the extent that a Fund invests all of
its investable assets in another investment company, no
portion of the advisory fee attributable to that Fund
shall be paid for the period that such Fund's assets are
so invested.)
6 Distribution Agreement -- none N.A.
7 Bonus, profit sharing or pension plans - none N.A.
8 (a) Custodian Agreement with NationsBank of Texas, N.A. - filed
herewith
(b) Custodian Agreement with Bank of New York - filed herewith
9 Transfer Agency Agreement with NationsBank of Texas, N.A --
filed herewith
10 Opinion and consent of counsel -- not applicable N.A.
11 Consent of Independent Auditors - not applicable N.A.
12 Financial statements omitted from prospectus -- none N.A.
13 Letter of investment intent -- none N.A.
14 Prototype retirement plan -- none N.A.
15 Plan pursuant to Rule 12b-1 -- none N.A.
16 Schedule for Computation of Performance Quotations -- not
applicable N.A.
17 Financial Data Schedules - filed herewith
18 Plan pursuant to Rule 18f-3 - none N.A.
* Incorporated by reference to the initial Registration Statement of the
Registrant on Form N-1A as filed with the Securities and Exchange Commission on
September 29, 1995.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 220
<NAME> AMR INVESTMENT SERVICES BALANCED PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 764769
<INVESTMENTS-AT-VALUE> 900785
<RECEIVABLES> 6706
<ASSETS-OTHER> 35
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 907526
<PAYABLE-FOR-SECURITIES> 10606
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1438
<TOTAL-LIABILITIES> 12044
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 895482
<DIVIDEND-INCOME> 15597
<INTEREST-INCOME> 24184
<OTHER-INCOME> 89
<EXPENSES-NET> 3105
<NET-INVESTMENT-INCOME> 36765
<REALIZED-GAINS-CURRENT> 67731
<APPREC-INCREASE-CURRENT> 27670
<NET-CHANGE-FROM-OPS> 132166
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 895482
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2005
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3105
<AVERAGE-NET-ASSETS> 862172
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 210
<NAME> AMR INVESTMENT SERVICES GROWTH AND INCOME PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 880481
<INVESTMENTS-AT-VALUE> 1113842
<RECEIVABLES> 2434
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1116310
<PAYABLE-FOR-SECURITIES> 3040
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1113
<TOTAL-LIABILITIES> 4153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1112157
<DIVIDEND-INCOME> 28031
<INTEREST-INCOME> 2577
<OTHER-INCOME> 60
<EXPENSES-NET> 3384
<NET-INVESTMENT-INCOME> 27284
<REALIZED-GAINS-CURRENT> 77846
<APPREC-INCREASE-CURRENT> 94294
<NET-CHANGE-FROM-OPS> 199424
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1112157
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2182
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3384
<AVERAGE-NET-ASSETS> 972112
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 250
<NAME> AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 335924
<INVESTMENTS-AT-VALUE> 389195
<RECEIVABLES> 1794
<ASSETS-OTHER> 15169
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 406158
<PAYABLE-FOR-SECURITIES> 678
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 984
<TOTAL-LIABILITIES> 1662
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 404496
<DIVIDEND-INCOME> 8527
<INTEREST-INCOME> 1389
<OTHER-INCOME> 54
<EXPENSES-NET> 1835
<NET-INVESTMENT-INCOME> 8135
<REALIZED-GAINS-CURRENT> 11172
<APPREC-INCREASE-CURRENT> 30752
<NET-CHANGE-FROM-OPS> 50059
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 404496
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1132
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1835
<AVERAGE-NET-ASSETS> 325410
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 240
<NAME> AMR INVESTMENT SERVICES LIMITED-TERM INCOME PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 171449
<INVESTMENTS-AT-VALUE> 174479
<RECEIVABLES> 1278
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 175791
<PAYABLE-FOR-SECURITIES> 2508
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 106
<TOTAL-LIABILITIES> 2614
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 173177
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12656
<OTHER-INCOME> 7
<EXPENSES-NET> 561
<NET-INVESTMENT-INCOME> 12102
<REALIZED-GAINS-CURRENT> (3216)
<APPREC-INCREASE-CURRENT> 458
<NET-CHANGE-FROM-OPS> 9344
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 173177
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 404
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 561
<AVERAGE-NET-ASSETS> 181350
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .31
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 230
<NAME> AMR INVESTMENT SERVICES MONEY MARKET PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 1755588
<INVESTMENTS-AT-VALUE> 1755588
<RECEIVABLES> 9671
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1765293
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 371
<TOTAL-LIABILITIES> 371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1765293
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 89923
<OTHER-INCOME> 0
<EXPENSES-NET> 2785
<NET-INVESTMENT-INCOME> 87138
<REALIZED-GAINS-CURRENT> 73
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 87211
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1764922
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2393
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2785
<AVERAGE-NET-ASSETS> 1597543
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 28
<NAME> AMR INVESTMENT SERVICES MUNICIPAL MONEY MARKET PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 81035
<INVESTMENTS-AT-VALUE> 81035
<RECEIVABLES> 274
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 81343
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 85
<TOTAL-LIABILITIES> 85
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 81258
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2275
<OTHER-INCOME> 0
<EXPENSES-NET> 79
<NET-INVESTMENT-INCOME> 2196
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2196
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 81258
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 92
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 126
<AVERAGE-NET-ASSETS> 61253
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
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<NAME> AMR INVESTMENT SERVICES US TREASURY MNY MKT PORTFOLIO
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</TABLE>
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.
<PAGE>
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.
2
<PAGE>
(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.
3
<PAGE>
(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
4
<PAGE>
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 1940 Act) 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
5
<PAGE>
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
6
<PAGE>
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.
7
<PAGE>
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/ Janice s. Goldshmid /s/ Barry Y. Greenberg
By: ________________________ By: ______________________________
Attest: AMR INVESTMENT SERVICES, INC.
/s/ Janice S. Goldshmid /s/ William F. Quinn
By: ________________________ By: ______________________________
8
<PAGE>
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
June 3, 1996
FEE SCHEDULE
Custodian Contract
between
AMR Investment Services Trust
and
NationsBank of Texas, N.A.
MONEY MARKET PORTFOLIOS
- -----------------------
(includes Money Market Portfolio, U S. Treasury Money Market Portfolio,
Municipal Money Market Portfolio, and AMR Investments Strategic Cash Business
Trust)
Less than $1.5 billion 1.3 basis points
$1.5 billion and greater 1.0 basis points
(excluding NationsBank assets) (less $90,225)
NON-MONEY MARKET PORTFOLIOS
- ---------------------------
(excluding International Equity Portfolio)
$257,746 per year
INTERNATIONAL EQUITY PORTFOLIO
- ------------------------------
$54,009 per year
<PAGE>
CUSTODIAN CONTRACT
between the
AMR INVESTMENT SERVICES TRUST
and
NATIONS BANK OF TEXAS, N.A.
<PAGE>
TABLE OF CONTENTS
PAGE
1. Employment of Custodian and Property to be Held by It....................1
2. Duties of the Custodian with Respect to Property of the Fund Held
by the Custodian.........................................................2
2.1 Holding Securities..............................................2
2.2 Delivery of Securities..........................................2
2.3 Registration of Securities......................................5
2.4 Bank Accounts...................................................5
2.5 Investment and Availability of Federal Funds....................6
2.6 Collection of Income............................................6
2.7 Payment of Fund Moneys..........................................7
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased.......................................................9
2.9 Appointment of Agents...........................................9
2.10 Deposit of Securities in Securities Systems.....................9
2.11 Segregated Account.............................................11
2.12 Ownership Certificates for Tax Purposes........................12
2.13 Proxies........................................................12
2.14 Communications Relating to Fund Portfolio Securities ..........13
2.15 Reports to Fund by Independent Public Accountants..............13
3. Proper Instructions.....................................................14
4. Actions Permitted Without Express Authority.............................14
S. Evidence of Authority...................................................15
6. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.......................... 15
7. Records.................................................................15
8. Opinion of Fund's Independent Accountant................................16
9. Compensation of Custodian...............................................16
10. Responsibility of Custodian.............................................16
11. Effective Period, Termination and Amendment.............................17
12. Successor Custodian.....................................................18
i
<PAGE>
13. Interpretive and Additional Provisions....................................19
14. Texas Law to Apply........................................................20
15. Prior Contracts...........................................................21
ii
<PAGE>
CUSTODIAN CONTRACT
AGREEMENT made as of the 1st day of November, 1995, between the AMR Investment
Services Trust, a New York common law trust having its principal place of
business at 4333 Amon Carter Boulevard, Fort Worth, Texas 76155, hereinafter
called the "Trust," and NationsBank of Texas, N.A., a national banking
association having its principal place of business at 1401 Elm Street, Dallas,
Texas 75201, hereinafter called the "Custodian,"
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
The Trust hereby employs the Custodian as the custodian of the assets of each of
the Trust' series of shares of beneficial interest. The term "Fund" as used
hereinafter shall mean each and all such series in existences as of the date
hereof and, if mutually agreed by the Trust and the Custodian at such time, each
such series hereafter designated by the Trust.
The Fund agrees to deliver to the Custodian all securities and cash owned by it,
and all payments of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Fund from time to
time, and the cash consideration received by it for such shares of beneficial
interest ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 3), the
Custodian shall from time to time employ one or more sub-custodians located in
the United States, provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN.
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the Fund,
other than securities which are maintained pursuant to Section 2.10 in a
clearing agency which acts as a securities depository or in a book-entry
system authorized by the U. S. Department of the Treasury, collectively
referred to herein as "Securities System".
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
<PAGE>
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article l; or for exchange for
a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
PROVIDED that, in any such case, the new securities are to be
delivered to the Custodian;
7) To the broker selling the same or its clearing agent, for
examination in accordance with the "street delivery" custom;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, BUT ONLY against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund, which
may be in the form of cash or obligations issued by the United
States government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U. S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery of
securities owned by the Fund prior to the receipt of such
collateral;
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, BUT ONLY against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
2
<PAGE>
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and Futures Commission Merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar organization
or organizations, regarding account deposits in connection with
transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind, as
may be described from time to time in the Fund's currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares
for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions, a properly executed copy of a
resolution of the Trustees of the Trust, specifying the securities
to be delivered, setting forth the purpose for which such delivery
is to be made, declaring such purposes to be proper Fund purposes,
and naming the person or persons to whom delivery of such
securities shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian (such nominee may be used in common with other Funds and other
registered investment companies having the same investment adviser as
the Fund), or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Fund under the terms of this Contract
shall be in "street name" or other good delivery form.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a
bank account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940. Funds held by the Custodian for the
Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable; PROVIDED, however,
that every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each such
bank or trust company and the funds to be deposited with each such bank
or trust company shall be approved by the Trustees of the Trust. Such
funds shall be deposited by the Custodian in its capacity as Custodian
and shall be withdrawable by the Custodian only in that capacity.
3
<PAGE>
2.5 INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions,
1) invest in such instruments as may be set forth in such
instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund; and
2) make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in the
amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.6 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to United States registered
securities held hereunder to which the Fund shall be entitled either by
law or pursuant to custom in the securities business, and shall collect
on a timely basis all income and other payments with respect to United
States bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or agent thereof and shall credit
such income, as collected, to the Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach and
present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when
due on securities held hereunder. Income due the Fund on United States
securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to
which the Fund is properly entitled.
2.7 PAYMENT OF FUND MONEYS. Upon receipt of Proper Instructions which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of domestic securities, futures contracts or
options on futures contracts for the account of the Fund but only
(a) against the delivery of such securities, or evidence of title
to futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under
the Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its agent
for this purpose) registered in the name of the Fund or in the
name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in accordance with
the conditions set forth in Section 2.10 hereof or (c) in the case
of repurchase agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer which is a member
of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities
(notwithstanding that the written confirmation of such repurchase
5
<PAGE>
transaction will be received subsequently) or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Fund;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as
set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: interest, taxes, management, accounting,
transfer agent and legal fees, and operating expenses of the Fund
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a properly executed copy of a
resolution of the Trustees of the Trust, specifying the amount of
such payment, setting forth the purpose for which such payment is
to be made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for purchase of
domestic securities for the account of the Fund is made by the
Custodian in advance of receipt of the securities purchased in the
absence of specific written instructions from the Fund to so pay
in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had
been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the Investment
Company Act of 1940, as amended, to act as a custodian, as its
agent to carry out such of the provisions of this Article 2 as the
Custodian may from time to time direct; PROVIDED, however, that
the appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
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<PAGE>
system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to domestic
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund;
3) The Custodian shall pay for domestic securities purchased for
the account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer domestic
securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies
of all advices from the Securities System of transfers of
domestic securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund confirmation of each transfer
to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund.
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
domestic securities deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 11
hereof;
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<PAGE>
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage
to the Fund resulting from use of the Securities System by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent
to enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has
not been made whole for any such loss or damage.
2.11 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section 2.10 hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission
or any registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with
options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund, (iii) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666,
or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv) for other
proper corporate purposes, BUT ONLY, in the case of clause (iv),
upon receipt of, in addition to --- ---- Proper Instructions, a
properly executed copy of a resolution of the Trustees of the
Trust, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
<PAGE>
income or other payments with respect to domestic securities of
the Fund held by it and in connection with transfers of such
securities.
2.13 PROXIES. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are
registered otherwise than in the name of the Fund or a nominee of
the Fund, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the
Fund such proxies, all proxy soliciting materials and all notices
relating to such securities.
2.14 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The
Custodian shall transmit promptly to the Fund all written
information (including, without limitation, pendency of calls and
maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put
options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of the domestic securities being held for the Fund. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to the Fund all written information received by the
Custodian from issuers of the domestic securities whose tender or
exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with
respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take
such action.
2.15 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian
shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including domestic securities deposited and/or
maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, which
shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund, to provide reasonable
assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, shall so
state.
3. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or initialled by
one or more person or persons as the Trustees of the Trust shall have from
time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement
of the purpose for which such action is requested. Oral
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<PAGE>
instructions will be considered Proper Instructions if the Custodian
reasonably believes them to have been given by a person authorized to give
such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Trustees of the Trust as to the authorization by the
Trust's Trustees accompanied by a detailed description of procedures
approved by the Trust's Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Trustees of the Trust and the Custodian are
satisfied that such procedures afford adequate safeguards for the Fund's
assets.
4. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, PROVIDED that all such payments shall be accounted
for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund except
as otherwise directed by the Trustees of the Fund.
5. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a properly executed copy of a document
evidencing action taken by the Trustees of the Trust as conclusive evidence (a)
of the authority of any person to act in accordance with such action or (b) of
any determination or of any action by the Trustees pursuant to the governing
instrument of the Trust, and such action may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
6. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Trustees of the Trust to keep the books of
account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus
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<PAGE>
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Trust to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of the Fund shall be made at the time or times
described from time to time in the Fund's currently effective prospectus.
7. RECORDS
The Custodian shall create and maintain all records relating to its activities
and obligations under this Contract in such manner as will meet the obligations
of the Fund under the Investment Company Act of 1940, with particular attention
to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal
and state tax laws and any other law or administrative rules or procedures which
may be applicable to the Fund. All such records shall be the property of the
Fund and shall at all times during the regular business hours of the Custodian
be open for inspection by duly authorized employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by the Fund and held by the Custodian and shall, when requested to do so
by the Fund and for such compensation as shall be agreed upon between the Fund
and the Custodian, include certificate numbers in such tabulations.
8. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
9. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund and the
Custodian.
10. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Contract and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to be signed by the proper party or parties. The Custodian shall be held to
the exercise of reasonable care in carrying out the provisions of this Contract,
but shall be kept indemnified by and shall be without liability to the Fund for
any action taken or omitted by it in good faith without negligence. It shall
10
<PAGE>
be entitled to rely on and may act upon advice of counsel (who may be counsel
for the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any purpose
or in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund assets to
the extent necessary to obtain reimbursement.
11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue in full
force and effect until terminated as hereinafter provided, may be amended at any
time by mutual agreement of the parties hereto and may be terminated by either
party by an instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; PROVIDED, however that the Custodian
shall not act under Section 2.10 hereof in the absence of receipt of an initial
certificate of the Trustees of the Trust that the Trustees of the Trust have
approved the initial use of a particular Securities System and the receipt of an
annual certificate of the Trustees of the Trust that the Trustees have reviewed
the use by the Fund of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended; PROVIDED FURTHER,
however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the governing instrument of the Fund, and further provided, that the Fund may
at any time by action of the Trustees (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
11
<PAGE>
12. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Trustees of the Trust, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a properly executed copy of a document evidencing action
taken by the Trustees of the Trust, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
action.
In the event that no written order designating a successor custodian or properly
executed copy of a document evidencing action taken by the Trustees of the Trust
shall have been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as defined in the
Investment Company Act of 1940, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the properly executed copy of a document
evidencing action taken by the Trustees of the Trust or of the Trustees to
appoint a successor custodian, the Custodian shall be entitled to fair
compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the Custodian shall
remain in full force and effect.
13. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition to
the provisions of this Contract as may in their joint opinion be consistent with
the general tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, PROVIDED that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
governing instrument of the Fund. No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an amendment of this
Contract.
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The Custodian agrees that any claims by it against the Trust under this Contract
may be satisfied only from the assets of the Trust; that the person executing
this Contract on behalf of the Trust has executed it in his capacity as an
officer of the Trust and not individually, and that the obligations of the Trust
arising out of this Contract are not binding upon such person or the Trust's
shareholders individually but are binding only upon the assets and property of
the Trust; and that no shareholders, trustees or officers of the Trust may be
held personally liable or responsible for any obligations of the Trust arising
out of this Contract.
The Trust agrees that the person executing this Contract on behalf of the
Custodian has executed it in his capacity as an officer of the Custodian and not
individually, and that the obligations of the Custodian arising out of this
Contract are not binding on such person or the Custodian's officers, directors,
employees or shareholders individually but are binding only upon the Custodian;
and that no officer, director, employee or shareholder of the Custodian may be
held personally liable or responsible for any obligations of the Custodian
arising out of this Contract.
14. TEXAS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted under
and in accordance with the laws of the State of Texas.
15. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
IN WITNESS HEREOF, each of the parties has caused this instrument to be executed
in its name and behalf by its duly authorized representative and its seal to be
hereunder affixed as of the day and year first written above.
ATTEST: AMR INVESTMENT SERVICES TRUST
/s/ Barry Y. Greenberg /s/ W. F. Quinn
____________________________________ _____________________________
Authorized Employee By:
ATTEST: NATIONSBANK OF TEXAS, N.A.
/s/ [Attestor] /s/ C.F. Lemms
____________________________________ ___________________________
Authorized Employee By:
14
<PAGE>
November 1, 1995
FEE SCHEDULE
Custodian Contract
between
AMR Investment Services Trust
and
NationsBank of Texas, N.A.
MONEY MARKET PORTFOLIOS
Less than $1.5 billion 1.3 basis points
$1.5 billion and greater 1.0 basis points
(excluding NationsBank assets) (less $90,225)
NON-MONEY MARKET PORTFOLIOS (excluding International Equity)
$257,746 per year
INTERNATIONAL EQUITY PORTFOLIO
$54,009 per year
CUSTODY AGREEMENT
Agreement made as of this 3rd day of March, 1997, between AMR
INVESTMENT SERVICES TRUST, a New York business trust organized and existing
under the laws of the State of New York, having its principal office and place
of business at 4333 Amon Carter Blvd., MD 5645, Fort Worth, Texas 76155
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its principal office and
place of business at 48 Wall Street, New York, New York 10286 (hereinafter
called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth, the
Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its successor
or successors and its nominee or nominees.
2. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of the
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian which is actually received by the Custodian and signed on behalf
of the Fund by any two Officers, and the term Certificate shall also include
Instructions.
4. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of the O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an investment company,
or any broker-dealer reasonably believed by the Custodian to be such a clearing
member.
5. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any Put
Option guarantee letter or similar document described in paragraph 8 of Article
V herein, or (b) any receipt described in Article V or VIII herein.
<PAGE>
6. "Covered Call Option" shall mean an exchange traded option entitling
the holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying Securities
(excluding Futures Contracts) which are owned by the writer thereof and subject
to appropriate restrictions.
7. "Composite Currency Unit" shall mean the European Currency Unit or
any other composite unit consisting of the aggregate of specified amounts of
specified Currencies as such unit may be constituted from time to time.
8. "Currency" shall mean money denominated in a lawful currency of any
country or the European Currency Unit.
9. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a resolution
of the Fund's Board of Trustees specifically approving deposits therein by the
Custodian.
10. "Financial Futures Contract" shall mean the firm commitment to buy
or sell fixed income securities including, without limitation, U.S. Treasury
Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month at an
agreed upon price.
11. "Futures Contract" shall mean a Financial Futures Contract and/or
Stock Index Futures Contracts.
12. "Futures Contract Option" shall mean an option with respect to
a Futures Contract.
13. "FX Transaction" shall mean any transaction for the purchase by one
party of an agreed amount in one Currency against the sale by it to the other
party of an agreed amount in another Currency.
14. "Instructions" shall mean instructions communications transmitted
by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed by an Officer or unsigned) and tested telex.
15. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
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such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the Custodian's effecting
an appropriate entry in its books and records.
16. "Money Market Security" shall be deemed to include, without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United States
or agencies or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public authority, commercial
paper, certificates of deposit and bankers' acceptances, repurchase agreements
with respect to the same and bank time deposits, where the purchase and sale of
such securities normally requires settlement in federal funds on the same day as
such purchase or sale.
17. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
18. "Officers" shall be deemed to include the President, any Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer, and any other person or persons, whether or
not any such other person is an officer of the Fund, duly authorized by the
Board of Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund and listed in the Certificate annexed
hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time.
19. "Option" shall mean a Call Option, Covered Call Option, Stock Index
Option and/or a Put Option.
20. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Officer or from a person reasonably believed
by the Custodian to be an Officer.
21. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to the writer thereof
for the exercise price.
22. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
23. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Stock Index Options, Stock Index
Futures Contracts, Stock Index Futures Contract Options, Financial Futures
Contracts, Financial Futures Contract Options, Reverse Repurchase Agreements,
common stocks and other securities having characteristics similar to common
stocks, preferred stocks, debt obligations issued by state or municipal
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governments and by public authorities, (including, without limitation, general
obligation bonds, revenue bonds, industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase, sell or subscribe for the same, or evidencing or representing
any other rights or interest therein, or any property or assets.
24. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such transactions
as the Fund may from time to time determine.
25. "Series" shall mean the various portfolios, if any, of the Fund as
listed on Appendix B hereto as amended from time to time.
26. "Shares" shall mean the shares of beneficial interest of the Fund,
each of which is, in the case of a Fund having Series, allocated to a particular
Series.
27. "Stock Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the value
of a particular stock index at the close of the last business day of the
contract and the price at which the futures contract is originally struck.
28. "Stock Index Option" shall mean an exchange traded option entitling
the holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
29. "Terminal Link" shall mean an electronic data transmission link
between the Fund and the Custodian requiring in connection with each use of the
Terminal Link by or on behalf of the Fund use of an authorization code provided
by the Custodian and at least two access codes established by the Fund.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian
of the Securities and moneys at any time owned by the Fund and allocated to a
Series during the period of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
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ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all moneys owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Custodian will not be responsible for any Securities and moneys not actually
received by it. The Custodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and moneys are
not finally collected. The Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit A hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all Securities
eligible for deposit therein, regardless of the Series to which the same are
specifically allocated and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales of Securities,
loans of Securities and deliveries and returns of Securities collateral. Prior
to a deposit of Securities specifically allocated to a Series in the Depository,
the Fund shall deliver to the Custodian a certified resolution of the Board of
Trustees of the Fund, substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities specifically allocated to
such Series eligible for deposit therein, and to utilize the Depository to the
extent possible with respect to such Securities in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys deposited
in either the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian acts in a
fiduciary or representative capacity and will be specifically allocated on the
Custodian's books to the separate account for the applicable Series. Prior to
the Custodian's accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series as provided
in this Agreement, the Custodian shall have received a certified resolution of
the Fund's Board of Trustees, substantially in the form of Exhibit C hereto,
approving, authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate actually
received by the Custodian, to accept, utilize and act in accordance with such
confirmations as provided in this Agreement with respect to such Series. All
Securities are to be held and disposed of by the Custodian for, and subject at
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<PAGE>
all times to the instructions of, the Fund pursuant to the terms of this
Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any Securities except as provided by
the terms of this Agreement.
2. The Custodian shall establish and maintain separate accounts, in the
name of each Series, and shall credit to the separate account for each Series
all moneys received by it for the account of the Fund with respect to such
Series. Money credited to a separate account for a Series shall be subject only
to drafts, orders, or charges of the Custodian pursuant to this Agreement and
shall be disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the name and
address of the person to whom the payment is to be made, the Series account from
which payment is to be made and the purpose for which payment is to be made; or
(c) In payment of the fees and in reimbursement of the
expenses and liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the Custodian
shall furnish the Fund with confirmations and a summary, on a per Series basis,
of all transfers to or from the account of the Fund for a Series, either
hereunder or with any co-custodian or sub-custodian appointed in accordance with
this Agreement during said day. Where Securities are transferred to the account
of the Fund for a Series, the Custodian shall also by book-entry or otherwise
identify as belonging to such Series a quantity of Securities in a fungible bulk
of Securities registered in the name of the Custodian (or its nominee) or shown
on the Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian shall furnish
the Fund with a detailed statement, on a per Series basis, of the Securities and
moneys held by the Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from time to
time be registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held in the
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<PAGE>
Book-Entry System or in the Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or through
the use of the Book-Entry System or the Depository with respect to Securities
held hereunder and therein deposited, shall with respect to all Securities held
for the Fund hereunder in accordance with preceding paragraph 4:
(a) Promptly collect all income, dividends and distributions
due or payable;
(b) Promptly give notice to the Fund and promptly present for
payment and collect the amount payable upon such Securities which are called,
but only if either (i) the Custodian receives a written notice of such call, or
(ii) notice of such call appears in one or more of the publications listed in
Appendix C annexed hereto, which may be amended at any time by the Custodian
without the prior notification or consent of the Fund;
(c) Promptly present for payment and collect the amount
payable upon all Securities which mature;
(d) Promptly surrender Securities in temporary form for
definitive Securities;
(e) Promptly execute, as custodian, any necessary declarations
or certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any Securities
held by the Custodian for such Series hereunder; and
(g) Promptly deliver to the Fund all notices, proxies, proxy
soliciting materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the Custodian, such
proxies and other similar materials to be executed by the registered owner (if
Securities are registered otherwise than in the name of the Fund), but without
indicating the manner in which proxies or consents are to be voted.
6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
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<PAGE>
(a) Promptly execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any Securities held by
the Custodian hereunder for the Series specified in such Certificate may be
exercised;
(b) Promptly deliver any Securities held by the Custodian
hereunder for the Series specified in such Certificate in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any right, warrant or conversion privilege and
receive and hold hereunder specifically allocated to such Series any cash or
other Securities received in exchange;
(c) Promptly deliver any Securities held by the Custodian
hereunder for the Series specified in such Certificate to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, and receive and hold hereunder specifically allocated
to such Series such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such delivery;
(d) Promptly make such transfers or exchanges of the assets of
the Series specified in such Certificate, and take such other steps as shall be
stated in such Certificate to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) Promptly present for payment and collect the amount
payable upon Securities not described in preceding paragraph 5(b) of this
Article which may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a Certificate no later
than the business day preceding the availability of any such instrument or
certificate. Prior to such availability, the Custodian shall comply with Section
17(f) of the Investment Company Act of 1940, as amended, in connection with the
purchase, sale, settlement, closing out or writing of Futures Contracts,
Options, or Futures Contract Options by making payments or deliveries specified
in Certificates received by the Custodian in connection with any such purchase,
sale, writing, settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by brokers,
dealers, or future commission merchants with respect to such Futures Contracts,
Options, or Futures Contract Options, as the case may be, confirming that such
Security is held by such broker, dealer or futures commission merchant, in
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book-entry form or otherwise, in the name of the Custodian (or any nominee of
the Custodian) as custodian for the Fund, provided, however, that
notwithstanding the foregoing, payments to or deliveries from the Margin Account
and payments with respect to Securities to which a Margin Account relates, shall
be made in accordance with the terms and conditions of the Margin Account
Agreement. Whenever any such instruments or certificates are available, the
Custodian shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option, or Futures Contract
Option for which such instruments or such certificates are available only
against the delivery to the Custodian of such instrument or such certificate,
and deliver any Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by the
Custodian of payment therefor. Any such instrument or certificate delivered to
the Custodian shall be held by the Custodian hereunder in accordance with, and
subject to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate or Oral
Instructions, specifying with respect to each such purchase: (a) the Series to
which such Securities are to be specifically allocated; (b) the name of the
issuer and the title of the Securities; (c) the number of shares or the
principal amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f) the total amount
payable upon such purchase; (g) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing broker, if any;
and (h) the name of the broker to whom payment is to be made. The Custodian
shall, upon receipt of Securities purchased by or for the Fund, pay to the
broker specified in the Certificate out of the moneys held for the account of
such Series the total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such Certificate or Oral
Instructions.
2. Promptly after each sale of Securities by the Fund, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase Agreement, the Fund shall deliver to the Custodian (i) with respect
to each sale of Securities which are not Money Market Securities, a certificate,
and (ii) with respect to each sale of Money Market Securities, a Certificate or
Oral Instructions, specifying with respect to each such sale: (a) the Series to
which such Securities were specifically allocated; (b) the name of the issuer
and the title of the Security; (c) the number of shares or principal amount
sold, and accrued interest, if any; (d) the date of sale; (e) the sale price per
unit; (f) the total amount payable to the Fund upon such sale; (g) the
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name of the broker through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. The Custodian shall deliver the Securities
specifically allocated to such Series to the broker specified in the Certificate
against payment upon receipt of the total amount payable to the Fund upon such
sale, provided that the same conforms to the total amount payable as set forth
in such Certificate or Oral Instructions.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Custodian a Certificate specifying with respect to each
Option purchased: (a) the Series to which such Option is specifically allocated;
(b) the type of option (put or call); (c) the name of the issuer and the title
and number of shares subject to such Option or, in the case of a Stock Index
Option, the stock index to which such Option relates and the number of Stock
Index Options purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the total amount payable by the Fund
in connection with such purchase; (h) the name of the Clearing Member through
whom such Option was purchased; and (i) the name of the broker to whom payment
is to be made. The Custodian shall pay, upon receipt of a Clearing Member's
statement confirming the purchase of such Option held by such Clearing Member
for the account of the Custodian (or any duly appointed and registered nominee
of the Custodian) as custodian for the Fund, out of moneys held for the account
of the Series to which such Option is to be specifically allocated, the total
amount payable upon such purchase to the Clearing Member through whom the
purchase was made, provided that the same conforms to the total amount payable
as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant
to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the Series to which such Option
was specifically allocated; (b) the type of Option (put or call); (c) the name
of the issuer and the title and number of shares subject to such Option or, in
the case of a Stock Index Option, the stock index to which such Option relates
and the number of Stock Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom the sale was
made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph 1 of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
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Custodian a Certificate specifying with respect to such Call Option: (a) the
Series to which such Call Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Call Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid by the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Call Option was exercised.
The Custodian shall, upon receipt of the Securities underlying the Call Option
which was exercised, pay out of the moneys held for the account of the Series to
which such Call Option was specifically allocated the total amount payable to
the Clearing Member through whom the Call Option was exercised, provided that
the same conforms to the total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Put Option: (a) the
Series to which such Put Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid to the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Put Option was exercised.
The Custodian shall, upon receipt of the amount payable upon the exercise of the
Put Option, deliver or direct the Depository to deliver the Securities
specifically allocated to such Series, provided the same conforms to the amount
payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to such Stock Index Option;
(a) the Series to which such Stock Index Option was specifically allocated; (b)
the type of Stock Index Option (put or call); (c) the number of Options being
exercised; (d) the stock index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the total amount to be received by the Fund in
connection with such exercise; and (h) the Clearing Member from whom such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Covered Call Option: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Custodian shall
deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among
Clearing Members dealing in Covered Call Options and shall impose, or direct the
Depository to impose, upon the underlying Securities specified in the
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Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the Custodian and not
deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered Call
Option and specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares subject
to the Covered Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable to the Fund
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver,
or direct the Depository to deliver, the underlying Securities as specified in
the Certificate against payment of the amount to be received as set forth in
such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series for which such Put Option was written; (b) the name of
the issuer and the title and number of shares for which the Put Option is
written and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the date such Put Option
is written; (g) the name of the Clearing Member through whom the premium is to
be received and to whom a Put Option guarantee letter is to be delivered; (h)
the amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior Security
Account for such Series; and (i) the amount of cash and/or the amount and kind
of Securities specifically allocated to such Series to be deposited into the
Collateral Account for such Series. The Custodian shall, after making the
deposits into the Collateral Account specified in the Certificate, issue a Put
Option guarantee letter substantially in the form utilized by the Custodian on
the date hereof, and deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no obligation to
issue any Put Option guarantee letter or similar document if it is unable to
make any of the representations contained therein.
9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put Option was
written; (b) the name of the issuer and title and number of shares subject to
the Put Option; (c) the Clearing Member from whom the underlying Securities are
to be received; (d) the total amount payable by the Fund upon such delivery; (e)
the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
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specifically allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in connection with
such Put Option, the Custodian shall pay out of the moneys held for the account
of the Series to which such Put Option was specifically allocated the total
amount payable to the Clearing Member specified in the Certificate as set forth
in such Certificate against delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option: (a) the Series for which such Stock Index Option was
written; (b) whether such Stock Index Option is a put or a call; (c) the number
of options written; (d) the stock index to which such Option relates; (e) the
expiration date; (f) the exercise price; (g) the Clearing Member through whom
such Option was written; (h) the premium to be received by the Fund; (i) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in the Senior Security Account for such
Series; (j) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Collateral Account
for such Series; and (k) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be deposited in a
Margin Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium specified in the
Certificate, make the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such receipts, if any,
which the Custodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index Options and
make the deposits into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written; (b)
such information as may be necessary to identify the Stock Index Option being
exercised; (c) the Clearing Member through whom such Stock Index Option is being
exercised; (d) the total amount payable upon such exercise, and whether such
amount is to be paid by or to the Fund; (e) the amount of cash and/or amount and
kind of Securities, if any, to be withdrawn from the Margin Account; and (f) the
amount of cash and/or amount and kind of Securities, if any, to be withdrawn
from the Senior Security Account for such Series; and the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Collateral
Account for such Series. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Custodian shall pay out of the moneys held for the account of the Series to
which such Stock Index Option was specifically allocated to the Clearing Member
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specified in the Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to a previously
written Option described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Fund shall promptly deliver
to the Custodian a Certificate specifying with respect to the Option being
purchased: (a) that the transaction is a Closing Purchase Transaction; (b) the
Series for which the Option was written; (c) the name of the issuer and the
title and number of shares subject to the Option, or, in the case of a Stock
Index Option, the stock index to which such Option relates and the number of
Options held; (d) the exercise price; (e) the premium to be paid by the Fund;
(f) the expiration date; (g) the type of Option (put or call); (h) the date of
such purchase; (i) the name of the Clearing Member to whom the premium is to be
paid; and (j) the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Collateral Account, a specified Margin Account, or
the Senior Security Account for such Series. Upon the Custodian's payment of the
premium and the return and/or cancellation of any receipt issued pursuant to
paragraphs 6, 8 or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction, the Custodian shall remove,
or direct the Depository to remove, the previously imposed restrictions on the
Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 Article III herein, and
upon the return and/or cancellation of any receipts issued by the Custodian,
shall make such withdrawals from the Collateral Account, and the Margin Account
and/or the Senior Security Account as may be specified in a Certificate received
in connection with such expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying with respect to such
Futures Contract, (or with respect to any number of identical Futures
Contract(s)): (a) the Series for which the Futures Contract is being entered;
(b) the category of Futures Contract (the name of the underlying stock index or
financial instrument); (c) the number of identical Futures Contracts entered
into; (d) the delivery or settlement date of the Futures Contract(s); (e) the
date the Futures Contract(s) was (were) entered into and the maturity date; (f)
whether the Fund is buying (going long) or selling (going short) on such Futures
Contract(s); (g) the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in the Senior Security Account for such Series; (h) the
name of the broker, dealer, or futures commission merchant through whom the
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Futures Contract was entered into; and (i) the amount of fee or commission, if
any, to be paid and the name of the broker, dealer, or futures commission
merchant to whom such amount is to be paid. The Custodian shall make the
deposits, if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall make payment out
of the moneys specifically allocated to such Series of the fee or commission, if
any, specified in the Certificate and deposit in the Senior Security Account for
such Series the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the Custodian
in accordance with the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian a Certificate specifying: (a)
the Futures Contract and the Series to which the same relates; (b) with respect
to a Stock Index Futures Contract, the total cash settlement amount to be paid
or received, and with respect to a Financial Futures Contract, the Securities
and/or amount of cash to be delivered or received; (c) the broker, dealer, or
futures commission merchant to or from whom payment or delivery is to be made or
received; and (d) the amount of cash and/or Securities to be withdrawn from the
Senior Security Account for such Series. The Custodian shall make the payment or
delivery specified in the Certificate, and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Series as may be specified in such Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
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ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Fund, the Fund shall promptly deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the Series to which such
Option is specifically allocated; (b) the type of Futures Contract Option (put
or call); (c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Contract
Option purchased; (d) the expiration date; (e) the exercise price; (f) the dates
of purchase and settlement; (g) the amount of premium to be paid by the Fund
upon such purchase; (h) the name of the broker or futures commission merchant
through whom such option was purchased; and (i) the name of the broker, or
futures commission merchant, to whom payment is to be made. The Custodian shall
pay out of the moneys specifically allocated to such Series, the total amount to
be paid upon such purchase to the broker or futures commissions merchant through
whom the purchase was made, provided that the same conforms to the amount set
forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) Series to
which such Futures Contract Option was specifically allocated; (b) the type of
Future Contract Option (put or call); (c) the type of Futures Contract and such
other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the broker of futures commission merchant through
whom the sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian of the
total amount payable to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
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Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the money and Securities specifically allocated to such
Series the deposits into the Senior Security Account, if any, as specified in
the Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a
call is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
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Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to
a previously written Futures Contract Option described in this Article in order
to liquidate its position as a writer of such Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) the Series to which such Option
is specifically allocated; (b) that the transaction is a closing transaction;
(c) the type of Future Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Option Contract; (d) the
exercise price; (e) the premium to be paid by the Fund; (f) the expiration date;
(g) the name of the broker or futures commission merchant to whom the premium is
to be paid; and (h) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawal from the Senior Security Account specified
in the Certificate. The withdrawals, if any, to be made from the Margin Account
shall be made by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased by
the Fund and described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein and, (b) make such withdrawals from and/or in
the case of an exercise such deposits into the Senior Security Account as may be
specified in a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article VI
hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying: (a) the Series
for which such short sale was made; (b) the name of the issuer and the title of
the Security; (c) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (d) the dates of the sale and settlement; (e) the
sale price per unit; (f) the total amount credited to the Fund upon such sale,
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if any, (g) the amount of cash and/or the amount and kind of Securities, if any,
which are to be deposited in a Margin Account and the name in which such Margin
Account has been or is to be established; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a Senior Security
Account, and (i) the name of the broker through whom such short sale was made.
The Custodian shall upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon such sale, if any,
as specified in the Certificate is held by such broker for the account of the
Custodian (or any nominee of the Custodian) as custodian of the Fund, issue a
receipt or make the deposits into the Margin Account and the Senior Security
Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such closing out: (a) the Series for which such transaction is being made; (b)
the name of the issuer and the title of the Security; (c) the number of shares
or the principal amount, and accrued interest or dividends, if any, required to
effect such closing-out to be delivered to the broker; (d) the dates of
closing-out and settlement; (e) the purchase price per unit; (f) the net total
amount payable to the Fund upon such closing-out; (g) the net total amount
payable to the broker upon such closing-out; (h) the amount of cash and the
amount and kind of Securities to be withdrawn, if any, from the Margin Account;
(i) the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account; and (j) the name of the broker
through whom the Fund is effecting such closing-out. The Custodian shall, upon
receipt of the net total amount payable to the Fund upon such closing-out, and
the return and/or cancellation of the receipts, if any, issued by the Custodian
with respect to the short sale being closed-out, pay out of the moneys held for
the account of the Fund to the broker the net total amount payable to the
broker, and make the withdrawals from the Margin Account and the Senior Security
Account, as the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate, or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate or Oral Instructions
specifying: (a) the Series for which the Reverse Repurchase Agreement is
entered; (b) the total amount payable to the Fund in connection with such
Reverse Repurchase Agreement and specifically allocated to such Series; (c) the
broker or dealer through or with whom the Reverse Repurchase Agreement is
entered; (d) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (e) the date of such Reverse Repurchase Agreement; and
(f) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in a Senior Security
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Account for such Series in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate or Oral Instructions make the delivery to the
broker or dealer, and the deposits, if any, to the Senior Security Account,
specified in such Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate or Oral Instructions to the Custodian specifying: (a)
the Reverse Repurchase Agreement being terminated and the Series for which same
was entered; (b) the total amount payable by the Fund in connection with such
termination; (c) the amount and kind of Securities to be received by the Fund
and specifically allocated to such Series in connection with such termination;
(d) the date of termination; (e) the name of the broker or dealer with or
through whom the Reverse Repurchase Agreement is to be terminated; and (f) the
amount of cash and/or the amount and kind of Securities to be withdrawn from the
Senior Securities Account for such Series. The Custodian shall, upon receipt of
the amount and kind of Securities to be received by the Fund specified in the
Certificate or Oral Instructions, make the payment to the broker or dealer, and
the withdrawals, if any, from the Senior Security Account, specified in such
Certificate or Oral Instructions.
ARTICLE X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall deliver or
cause to be delivered to the Custodian a Certificate specifying with respect to
each such loan: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities, (c) the
number of shares or the principal amount loaned, (d) the date of loan and
delivery, (e) the total amount to be delivered to the Custodian against the loan
of the Securities, including the amount of cash collateral and the premium, if
any, separately identified, and (f) the name of the broker, dealer, or financial
institution to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or
Depository only in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York Clearing House funds
and may deliver Securities in accordance with the customs prevailing among
dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
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Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be returned, (d)
the date of termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for which
such deposit or withdrawal is to be made and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be deposited by the Custodian into, or withdrawn
from, a Senior Securities Account, the Custodian shall be under no obligation to
make any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or Clearing Member in
whose name, or for whose benefit, the account was established as specified in
the Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall to the extent permitted by the Fund's
Declaration of Trust, investment restrictions and the Investment Company Act of
1940 have a continuing lien and security interest in and to any property at any
time held by the Custodian in any Collateral Account described herein. In
accordance with applicable law the Custodian may enforce its lien and realize on
any such property whenever the Custodian has made payment or delivery pursuant
to any Put Option guarantee letter or similar document or any receipt issued
hereunder by the Custodian. In the event the Custodian should realize on any
such property net proceeds which are less than the Custodian's obligations under
any Put Option guarantee letter or similar document or any receipt, such
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deficiency shall be a debt owed the Custodian by the Fund within the scope of
Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to the Custodian
a Certificate specifying the then market value of the Securities described in
such statement. In the event such then market value is indicated to be less than
the Custodian's obligation with respect to any outstanding Put Option guarantee
letter or similar document, the Fund shall promptly specify in a Certificate the
additional cash and/or Securities to be deposited in such Collateral Account to
eliminate such deficiency.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Trustees of the Fund, certified by the Secretary, or any Assistant
Secretary, either (i) setting forth with respect to the Series specified therein
the date of the declaration of a dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the shareholders of
record as of that date and the total amount payable to the Dividend Agent and
any sub-dividend agent or co-dividend agent of the Fund on the payment date, or
(ii) authorizing with respect to the Series specified therein the declaration of
dividends and distributions on a daily basis and authorizing the Custodian to
rely on Oral Instructions or a Certificate setting forth the date of the
declaration of such dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be determined,
the amount payable per Share of such Series to the shareholders of record as of
that date and the total amount payable to the Dividend Agent on the payment
date.
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2. Upon the payment date specified in such resolution, Oral
Instructions or Certificate, as the case may be, the Custodian shall pay out of
the moneys held for the account of each Series the total amount payable to the
Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund with
respect to such Series.
ARTICLE XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to
the Custodian a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade date, and
price; and
(b) The amount of money to be received by the Custodian for
the sale of such Shares and specifically allocated to the separate account in
the name of such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held for
the account of such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the moneys held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Custodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
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redemption in accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the moneys held in
the separate account of the Series of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion advance funds on
behalf of any Series which results in an overdraft because the moneys held by
the Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate or Oral Instructions, or
which results in an overdraft in the separate account of such Series for some
other reason, or if the fund is for any other reason indebted to the Custodian
with respect to a Series, including any indebtedness to The Bank of New York
under the Fund's Cash Management and Related Services Agreement, (except a
borrowing for investment or for temporary or emergency purposes using Securities
as collateral pursuant to a separate agreement and subject to the provisions of
paragraph 2 of this Article), such overdraft or indebtedness shall be deemed to
be a loan made by the Custodian to the Fund for such Series payable on demand
and shall bear interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to 1/2% over
Custodian's prime commercial lending rate in effect from time to time, such rate
to be adjusted on the effective date of any change in such prime commercial
lending rate but in no event to be less than 6% per annum. In addition, the Fund
hereby agrees that the Custodian shall have a continuing lien and security
interest in and to any property specifically allocated to such Series at any
time held by it for the benefit of such Series or in which the Fund may have an
interest which is then in the Custodian's possession or control or in possession
or control of any third party acting in the Custodian's behalf, provided that
such lien shall be enforceable only to the amount of the overdraft or
indebtedness and interest thereon. The Fund authorizes the Custodian, in its
sole discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of account standing to
such Series' credit on the Custodian's books. In addition, the Fund hereby
covenants that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business the Fund
had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall
prior to 9 a.m., New York City time, advise the Custodian, in writing, of each
such borrowing, shall specify the Series to which the same relates, and shall
not incur any indebtedness not so specified other than from the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
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borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the bank, (c) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund, or other loan
agreement, (d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund on the borrowing date, (g) the market value of
Securities to be delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the principal amount of any
particular Securities, and (h) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such loan is
in conformance with the Investment Company Act of 1940 and the Fund's
prospectus. The Custodian shall deliver on the borrowing date specified in a
Certificate the specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or loan
agreement. The Custodian shall deliver such Securities as additional collateral
as may be specified in a Certificate to collateralize further any transaction
described in this paragraph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and the Custodian
shall receive from time to time such return of collateral as may be tendered to
it. In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and number of shares or the principal amount of
any particular Securities to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XV
INSTRUCTIONS
1. With respect to any software provided by the Custodian to a Fund in
order for the Fund to transmit Instructions to the Custodian (the "Software"),
the Custodian grants to such Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Instructions
to, and receiving communications from, the Custodian in connection with its
account(s). The Fund agrees not to sell, reproduce, lease or otherwise provide,
directly or indirectly, the Software or any portion thereof to any third party
without the prior written consent of the Custodian.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize the Software and transmit Instructions to the
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Custodian. The Custodian shall not be responsible for the reliability,
compatibility with the Software or availability of any such equipment or
services or the performance or nonperformance by any nonparty to this Agreement.
3. The Fund acknowledges that the Software, all data bases made
available to the Fund by utilizing the Software (other than data bases relating
solely to the assets of the Fund and transactions with respect thereto), and any
proprietary data, processes, information and documentation (other than which are
or become part of the public domain or are legally required to be made available
to the public) (collectively, the "Information"), are the exclusive and
confidential property of the Custodian. The Fund shall keep the Information
confidential by using the same care and discretion that the Fund uses with
respect to its own confidential property and trade secrets and shall neither
make nor permit any disclosure without the prior written consent of the
Custodian. Upon termination of this Agreement or the Software license granted
hereunder for any reason, the Fund shall return to the Custodian all copies of
the Information which are in its possession or under its control or which the
Fund distributed to third parties.
4. The Custodian reserves the right to modify the Software from time to
time upon reasonable prior notice and the Fund shall install new releases of the
Software as the Custodian may direct. The Fund agrees not to modify or attempt
to modify the Software without the Custodian's prior written consent. The Fund
acknowledges that any modifications to the Software, whether by the Fund or the
Custodian and whether with or without the Custodian's consent, shall become the
property of the Custodian.
5. THE CUSTODIAN MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND
WITH REGARD TO THE SOFTWARE OR THE METHOD(S) BY WHICH THE FUND MAY TRANSMIT
INSTRUCTIONS TO THE CUSTODIAN, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6. Where the method for transmitting Instructions by the Fund involves
an automatic systems acknowledgment by the Custodian of its receipt of such
Instructions, then in the absence of such acknowledgment the Custodian shall not
be liable for any failure to act pursuant to such Instructions the Fund may not
claim that such Instructions were received by the Custodian, and the Fund shall
deliver a Certificate by some other means.
7. (a) The Fund agrees that where it delivers to the Custodian
Instructions hereunder, it shall be the Fund's sole responsibility to ensure
that only persons duly authorized by the Fund transmit such Instructions to the
Custodian. The Fund will cause all persons transmitting Instructions to the
Custodian to treat applicable user and authorization codes, passwords and
authentication keys with extreme care, and irrevocably authorizes the Custodian
to act in accordance with and upon Instructions received by it pursuant hereto.
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(b) The Fund hereby represents, acknowledges and agrees that
it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Custodian and that there may be more
secure methods of transmitting instructions to the Custodian than the method(s)
selected by the Fund.
8. The Fund hereby presents, warrants and covenants to the Custodian
that this Agreement has been duly approved by a resolution of its Board of
Trustees.
9. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, its ability to send
Instructions as promptly as practicable, and in any event within 24 hours after
the earliest of (i) discovery thereof, (ii) the Business Day on which discovery
should have occurred through the exercise of reasonable care and (iii) in the
case of any error, the date of actual receipt of the earliest notice which
reflects such error, it being agreed that discovery and receipt of notice may
only occur on a business day. The Custodian shall promptly advise the Fund
whenever the Custodian learns of any errors, omissions or interruption in, or
delay or unavailability of, the Fund's ability to send Instructions.
ARTICLE XVI
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as
sub-custodian for each Series' Foreign Securities (as such term is defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of 1940, as
amended) and other assets, the foreign banking institutions and foreign
securities depositories and clearing agencies designated on Schedule I hereto
("Foreign Sub-Custodians") to carry out their respective responsibilities in
accordance with the terms of the sub-custodian agreement between each such
Foreign Sub-Custodian and the Custodian, copies of which have been previously
delivered to the Fund and receipt of which is hereby acknowledged (each such
agreement, a "Foreign Sub-Custodian Agreement"). Upon receipt of a Certificate,
together with a certified resolution substantially in the form attached as
Exhibit E of the Fund's Board of Trustees, the Fund may designate any additional
foreign sub-custodian with which the Custodian has an agreement for such entity
to act as the Custodian's agent, as its sub-custodian and any such additional
foreign sub-custodian shall be deemed added to Schedule I. Upon receipt of a
Certificate from the Fund, the Custodian shall cease the employment of any one
or more Foreign Sub-Custodians for maintaining custody of the Fund's assets and
such Foreign Sub-Custodian shall be deemed deleted from Schedule I.
2. Each Foreign Sub-Custodian Agreement shall be substantially in the
form previously delivered to the Fund and will not be amended in a way that
materially adversely affects the Fund without the Fund's prior written consent.
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3. The Custodian shall identify on its books as belonging to each
Series of the Fund the Foreign Securities of such Series held by each Foreign
Sub-Custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by the Fund
or any Series against a Foreign Sub-Custodian as a consequence of any loss,
damage, cost, expense, liability or claim sustained or incurred by the Fund or
any Series if and to the extent that the Fund or such Series has not been made
whole for any such loss, damage, cost, expense, liability or claim.
4. Upon request of the Fund, the Custodian will, consistent with the
terms of the applicable Foreign Sub-Custodian Agreement, use reasonable efforts
to arrange for the independent accountants of the Fund to be afforded access to
the books and records of any Foreign Sub-Custodian insofar as such books and
records relate to the performance of such Foreign Sub-Custodian under its
agreement with the Custodian on behalf of the Fund.
5. The Custodian will supply to the Fund from time to time, as mutually
agreed upon, statements in respect of the securities and other assets of each
Series held by Foreign Sub-Custodians, including but not limited to, an
identification of entities having possession of each Series' Foreign Securities
and other assets, and advices or notifications of any transfers of Foreign
Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for the Custodian on behalf of the Series.
6. The Custodian shall furnish annually to the Fund, as mutually agreed
upon, information concerning the Foreign Sub-Custodians employed by the
Custodian. Such information shall be similar in kind and scope to that furnished
to the Fund in connection with the Fund's initial approval of such Foreign
Sub-Custodians and, in any event, shall include information pertaining to (i)
the Foreign Custodians' financial strength, general reputation and standing in
the countries in which they are located and their ability to provide the
custodial services required, and (ii) whether the Foreign Sub-Custodians would
provide a level of safeguards for safekeeping and custody of securities not
materially different form those prevailing in the United States. The Custodian
shall monitor the general operating performance of each Foreign Sub-Custodian.
The Custodian agrees that it will use reasonable care in monitoring compliance
by each Foreign Sub-Custodian with the terms of the relevant Foreign
Sub-Custodian Agreement and that if it learns of any breach of such Foreign
Sub-Custodian Agreement believed by the Custodian to have a material adverse
effect on the Fund or any Series it will promptly notify the Fund of such
breach. The Custodian also agrees to use reasonable and diligent efforts to
enforce its rights under the relevant Foreign Sub-Custodian Agreement.
7. The Custodian shall transmit promptly to the Fund all notices,
reports or other written information received pertaining to the Fund's Foreign
Securities, including without limitation, notices of corporate action, proxies
and proxy solicitation materials.
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8. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any Series and
delivery of securities maintained for the account of such Series may be effected
in accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of securities to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) against a receipt with the expectation of receiving later payment for
such securities from such purchaser or dealer.
9. Notwithstanding any other provision in this Agreement to the
contrary, with respect to any losses or damages arising out of or relating to
any actions or omissions of any Foreign Sub-Custodian the sole responsibility
and liability of the Custodian shall be to take appropriate action at the Fund's
expense to recover such loss or damage from the Foreign Sub-Custodian. It is
expressly understood and agreed that the Custodian's sole responsibility and
liability shall be limited to amounts so recovered from the Foreign
Sub-Custodian.
ARTICLE XVII
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the Fund shall
promptly deliver to the Custodian a Certificate or Oral Instructions specifying
with respect to such FX Transaction: (a) the Series to which such FX Transaction
is specifically allocated; (b) the type and amount of Currency to be purchased
by the Fund; (c) the type and amount of Currency to be sold by the Fund; (d) the
date on which the Currency to be purchased is to be delivered; (e) the date on
which the Currency to be sold is to be delivered; and (f) the name of the person
from whom or through whom such currencies are to be purchased and sold. Unless
otherwise instructed by a Certificate or Oral Instructions, the Custodian shall
deliver, or shall instruct a Foreign Sub-Custodian to deliver, the Currency to
be sold on the date on which such delivery is to be made, as set forth in the
Certificate, and shall receive, or instruct a Foreign Sub-Custodian to receive,
the Currency to be purchased on the date as set forth in the Certificate.
2. Where the Currency to be sold is to be delivered on the same day as
the Currency to be purchased, as specified in the Certificate or Oral
Instructions, the Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt and
delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
3. Any foreign exchange transaction effected by the Custodian in
connection with this Agreement may be entered with the Custodian, any office,
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branch or subsidiary of The Bank of New York Company, Inc., or any Foreign
Sub-Custodian acting as principal or otherwise through customary banking
channels. The Fund may issue a standing Certificate with respect to foreign
exchange transactions but the Custodian may establish rules or limitations
concerning any foreign exchange facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding Currency. Without
limiting the foregoing, the Fund shall bear the risks that rules or procedures
imposed by a Foreign Sub-Custodian or foreign depositories, exchange controls,
asset freezes or other laws, rules, regulations or orders shall prohibit or
impose burdens or costs on the transfer to, by or for the account of the Fund of
Securities or any cash held outside the Fund's jurisdiction or denominated in
Currency other than its home jurisdiction or the conversion of cash from one
Currency into another currency. The Custodian shall not be obligated to
substitute another Currency for a Currency (including a Currency that is a
component of a Composite Currency Unit) whose transferability, convertibility or
availability has been affected by such law, regulation, rule or procedure.
Neither the Custodian nor any Foreign Sub-Custodian shall be liable to the Fund
for any loss resulting from any of the foregoing events.
ARTICLE XVIII
CONCERNING THE CUSTODIAN
1. The Custodian shall use reasonable care in the performance of its
duties hereunder, and, except as hereinafter provided, neither the Custodian nor
its nominee shall be liable for any loss or damage, including reasonable counsel
fees, resulting from its action or omission to act or otherwise, either
hereunder or under any Margin Account Agreement, except for any such loss or
damage arising out of its own negligence or willful misconduct. In no event
shall the Custodian be liable to the Fund or any third party for special,
indirect or consequential damages or lost profits or loss of business, arising
under or in connection with this Agreement, even if previously informed of the
possibility of such damages and regardless of the form of action. The Custodian
may, with respect to questions of law arising hereunder or under any Margin
Account Agreement, apply for and obtain the advice and opinion of counsel to the
Fund, at the Fund's expense, or of its own counsel, and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice or opinion. The Custodian shall be liable to the Fund for any loss
or damage resulting from the use of the Book-Entry System or any Depository
arising by reason of any negligence or willful misconduct on the part of the
Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian
shall be under no obligation to inquire into, and shall not be liable for:
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(a) The validity of the issue of any Securities purchased,
sold, or written by or for the Fund, the legality of the purchase, sale or
writing thereof, or the propriety of the amount paid or received therefor;
(b) The legality of the sale or redemption of any Shares, or
the propriety of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend
by the Fund;
(d) The legality of any borrowing by the Fund using Securities
as collateral;
(e) The legality of any loan of portfolio Securities, nor
shall the Custodian be under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial institution or held
by it at any time as a result of such loan of portfolio Securities of the Fund
is adequate collateral for the Fund against any loss it might sustain as a
result of such loan. The Custodian specifically, but not by way of limitation,
shall not be under any duty or obligation periodically to check or notify the
Fund that the amount of such cash collateral held by it for the Fund is
sufficient collateral for the Fund, but such duty or obligation shall be the
sole responsibility of the Fund. In addition, the Custodian shall be under no
duty or obligation to see that any broker, dealer or financial institution to
which portfolio Securities of the Fund are lent pursuant to Article X of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or
(f) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund. In addition, the Custodian
shall be under no duty or obligation to see that any broker, dealer, futures
commission merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or Clearing
Member, to see that any payment received by the Custodian from any broker,
dealer, futures commission merchant or Clearing Member is the amount the Fund is
entitled to receive, or to notify the Fund of the Custodian's receipt or
non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money directly or by the
final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
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4. The Custodian shall have no responsibility and shall not be liable
for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to Securities held in
the Depository, unless the Custodian shall have actually received timely notice
from the Depository. In no event shall the Custodian have any responsibility or
liability for the failure of the Depository to collect, or for the late
collection or late crediting by the Depository of any amount payable upon
Securities deposited in the Depository which may mature or be redeemed, retired,
called or otherwise become payable. However, upon receipt of a Certificate from
the Fund of an overdue amount on Securities held in the Depository the Custodian
shall make a claim against the Depository on behalf of the Fund, except that the
Custodian shall not be under any obligation to appear in, prosecute or defend
any action suit or proceeding in respect to any Securities held by the
Depository which in its reasonable opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of reimbursement of
its costs and expenses in connection with any such action.
7. The Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Article XVI appoint one or more banking institutions
as Depository or Depositories, as Sub-Custodian or Sub-Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and moneys at any time
owned by the Fund, upon such terms and conditions as may be approved in a
Certificate or contained in an agreement executed by the Custodian, the Fund and
the appointed institution.
8. The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to, or held by it or by
any Foreign Sub-Custodian, for the account of the Fund and specifically
allocated to a Series are such as properly may be held by the Fund or such
Series under the provisions of its then current prospectus, or (b) to ascertain
whether any transactions by the Fund, whether or not involving the Custodian,
are such transactions as may properly be engaged in by the Fund.
9. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian all reasonable out-of-pocket expenses and such
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compensation as may be agreed upon in writing from time to time between the
Custodian and the Fund. The Custodian may charge such compensation and any
expenses with respect to a Series incurred by the Custodian in the performance
of its duties pursuant to such agreement against any money specifically
allocated to such Series. Unless and until the Fund instructs the Custodian by a
Certificate to apportion any loss, damage, liability or expense among the Series
in a specified manner, the Custodian shall also be entitled to charge against
any money held by it for the account of a Series such Series' pro rata share
(based on such Series net asset value at the time of the charge to the aggregate
net asset value of all Series at that time) of the amount of any loss, damage,
liability or expense, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. The expenses for which the
Custodian shall be entitled to reimbursement hereunder shall include, but are
not limited to, the expenses of sub-custodians and foreign branches of the
Custodian incurred in settling outside of New York City transactions involving
the purchase and sale of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be entitled
to rely upon any Oral Instructions actually received by the Custodian
hereinabove provided for. The Fund agrees to forward to the Custodian a
Certificate or facsimile thereof confirming such Oral Instructions in such
manner so that such Certificate or facsimile thereof is received by the
Custodian, whether by hand delivery, telecopier or other similar device, or
otherwise, by the close of business of the same day that such Oral Instructions
are given to the Custodian. The Fund agrees that the fact that such confirming
instructions are not received, or that contrary instructions are received, by
the Custodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund in acting upon
Oral Instructions given to the Custodian hereunder concerning such transactions
provided such instructions reasonably appear to have been received from an
Officer.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of the Custodian (including any sub-custodian records in Custodian's
possession) shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the Investment Company Act of 1940, as
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<PAGE>
amended, and other applicable securities laws and rules and regulations. The
Fund, or the Fund's authorized representatives including the Fund's independent
public accountants, shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by the Custodian to the
Fund or the Fund's authorized representative and the Fund shall reimburse the
Custodian its expenses of providing such copies. Upon reasonable request of the
Fund, the Custodian shall provide in hard copy or on micro-film, whichever the
Custodian elects, any records included in any such delivery which are maintained
by the Custodian on a computer disc, or are similarly maintained, and the Fund
shall reimburse the Custodian for its expenses of providing such hard copy or
micro-film.
13. The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-Entry
System, the Depository or O.C.C., and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
14. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including reasonable attorney's fees, howsoever arising or incurred because of
or in connection with this Agreement, including the Custodian's payment or
non-payment of checks pursuant to paragraph 6 of Article XIII as part of any
check redemption privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own negligence or willful
misconduct.
15. Subject to the foregoing provisions of this Agreement, including,
without limitation, those contained in Articles XVI and XVII the Custodian may
deliver and receive Securities, and receipts with respect to such Securities,
and arrange for payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or dealers in such
Securities. When the Custodian is instructed to deliver Securities against
payment, delivery of such Securities and receipt of payment therefor may not be
completed simultaneously. The Fund assumes all responsibility and liability for
all credit risks involved in connection with the Custodian's delivery of
Securities pursuant to instructions of the Fund, which responsibility and
liability shall continue until final payment in full has been received by the
Custodian.
16. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
17. Whenever the Custodian has the authority to deduct monies from the
account for a Series without a Certificate, it shall notify the Fund within one
business day of such deduction and the reason for it. Whenever the Custodian has
the authority to sell Securities or any other property of the Fund on behalf of
any Series without a Certificate, the Custodian will notify the Fund of its
- 34 -
<PAGE>
intention to do so and afford the Fund the reasonable opportunity to select
which Securities or other property it wishes to sell on behalf of such Series.
If the Fund does not promptly sell sufficient Securities or other property on
behalf of the Series, then, after notice, the Custodian may proceed with the
intended sale.
ARTICLE XIX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the Board of Trustees of the Fund, certified by the
Secretary, or any Assistant Secretary electing to terminate this Agreement and
designating a successor custodian or custodians, each of which shall be a bank
or trust company having not less than $2,000,000 aggregate capital, surplus and
undivided profits. In the event such notice is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the Custodian a copy of a
resolution of the Board of Trustees of the Fund, certified by the Secretary, or
any Assistant Secretary designating a successor custodian or custodians. In the
absence of such designation by the Fund, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian shall upon receipt
of a notice of acceptance by the successor custodian on that date deliver
directly to the successor custodian all Securities and moneys then owned by the
Fund and held by it as Custodian, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys then owned
by the Fund be deemed to be its own custodian and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book Entry System which
cannot be delivered to the Fund to hold such Securities hereunder in accordance
with this Agreement.
Notwithstanding the foregoing, the Fund may terminate this Agreement
upon the date specified in a written notice in the event of the bankruptcy of
the Custodian, or any other event that the Fund reasonably believes materially
adversely affects the continued financial viability of the Custodian.
- 35 -
<PAGE>
ARTICLE XX
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers. The Fund agrees to furnish to the Custodian
a new Certificate in similar form in the event that any such present Officer
ceases to be an Officer or in the event that other or additional Officers are
elected or appointed. Until such new Certificate shall be received, the
Custodian shall be fully protected in acting under the provisions of this
Agreement upon Oral Instructions or signatures of the present Officers as set
forth in the last delivered Certificate.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at 90
Washington Street, New York, New York 10286, or at such other place as the
Custodian may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund may from time to
time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian, or by the Custodian without the written consent of the Fund,
authorized or approved by a resolution of the Fund's Board of Trustees.
6. This Agreement shall be construed in accordance with the laws of the
State of New York without giving effect to conflict of laws principles thereof.
Each party hereby consents to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The State of New York, and notice is hereby given that
- 36 -
<PAGE>
this instrument is executed on behalf of the Board of Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund; provided, however, that
the Declaration of Trust of the Fund provides that the assets of a particular
Series of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a particular Series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.
- 37 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
AMR INVESTMENT SERVICES
TRUST
/s/ William F. Quinn
[SEAL] By:________________________
Name: William F. Quinn
Title: President
Attest:
/s/ Barry Y. Greenberg
- -----------------------
THE BANK OF NEW YORK
/s/ Joseph Melillo
[SEAL] By:_________________________
Name: Joseph Melillo
Title: Vice President
Attest:
/s/ [Attestor]
- -----------------------
<PAGE>
APPENDIX B
SERIES
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
<PAGE>
APPENDIX C
I, Ira R. Rosner, a Vice President with THE BANK OF NEW YORK do hereby
designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of March 3, 1997,
(the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis to deposit in the Book-Entry System, as defined in the Custody
Agreement, all securities eligible for deposit therein, regardless of the Series
to which the same are specifically allocated, and to utilize the Book-Entry
System to the extent possible in connection with its performance thereunder,
including, without limitation, in connection with settlements of purchases and
sale of securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
(SEAL)
<PAGE>
EXHIBIT B
CERTIFICATION
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of March 3, 1997,
(the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as defined in the
Custody Agreement, to the contrary to deposit in the Depository, as defined in
the Custody Agreement, all securities eligible for deposit therein, regardless
of the Series to which the same are specifically allocated, and to utilize the
Depository to the extent possible in connection with its performance thereunder,
including, without limitation, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
(SEAL)
<PAGE>
EXHIBIT B-l
CERTIFICATION
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of March 3, 1997,
(the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as defined in the
Custody Agreement, to the contrary to deposit in the Participants Trust Company
as Depository, as defined in the Custody Agreement, all securities eligible for
deposit therein, regardless of the series to which the same are specifically
allocated, and to utilize the Participants Trust Company to the extent possible
connection with its performance thereunder, including, without limitation, in
connection with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
(SEAL)
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of March 3, 1997,
(the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as defined in the
Custody Agreement, to the contrary, to accept, utilize and act with respect to
Clearing Member confirmations for Options and transaction in Options, regardless
of the Series to which the same are specifically allocated as such terms are
defined in the Custody Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
(SEAL)
<PAGE>
EXHIBIT D
CERTIFICATION
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund dated as of March 3, 1997,
(the "Custody Agreement") is authorized and instructed on a continuous and
ongoing basis to act in accordance with, and to rely on Instructions (as defined
in the Custody Agreement).
RESOLVED, that the Fund shall establish access codes and grant use of
such access codes only to Officers of the Fund as defined in the Custody
Agreement, shall establish internal safekeeping procedures to safeguard and
protect the confidentiality and availability of user and access codes, passwords
and authentication keys, and shall use instructions only in a manner that does
not contravene the Investment Company Act of 1940, as amended, or the rules and
regulations thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
<PAGE>
(SEAL)
EXHIBIT E
The undersigned, Barry Y. Greenberg, hereby certifies that he or she is
the duly elected and acting Vice President/Assistant Secretary of AMR INVESTMENT
SERVICES TRUST, a New York business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on November 22, 1996, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that the maintenance of the Fund's assets in each country
listed in Schedule I hereto be, and hereby is approved by the Board of Trustees
as consistent with the best interests of the Fund and its shareholders; and
further
RESOLVED, that the maintenance of the Fund's assets with the foreign
branches to The Bank of New York (the "Bank") listed in Schedule I located in
the countries specified therein, and with the foreign sub-custodians and
depositories listed in Schedule I located in the countries specified there in
be, and hereby is, approved by the Board of Trustees as consistent with the best
interest of the Fund and its shareholders; and further
RESOLVED, that the Sub-custodian Agreements presented to this meeting
between the bank and each of the foreign sub-custodians and depositories listed
in Schedule I providing for the maintenance of the Fund's assets with the
applicable entity, be and hereby are, approved by the Board of Trustees as
consistent with the best interests of the Fund and its shareholders; and further
RESOLVED, that the appropriate officers of the Fund are hereby
authorized to place assets of the Fund with the aforementioned foreign branches
and foreign sub-custodians and depositories as herein above provided; and
further
RESOLVED, that the appropriate officers of the Fund, or any of them,
are authorized to do any and all other acts, in the name of the Fund and on its
behalf, as they, or any of then, may determine to be necessary or desirable and
proper in connection with or in furtherance of the foregoing resolutions.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of AMR
INVESTMENT SERVICES TRUST, as of the 3rd day of March, 1997.
/s/ Barry Y. Greenberg
----------------------
(SEAL)
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AMR INVESTMENT SERVICES TRUST
AND
NATIONSBANK OF TEXAS, N.A.
<PAGE>
TABLE OF CONTENTS
PAGE
Article 1........Terms of Appointment; Duties of the Bank 1
Article 2...............................Fees and Expenses 3
Article 3......Representations and Warranties of the Bank 3
Article 4......Representations and Warranties of the Fund 4
Article 5 ................................Indemnification 4
Article 6..............Covenants of the Fund and the Bank 6
Article 7........................Termination of Agreement 7
Article 8......................................Assignment 8
Article 9.......................................Amendment 9
Article 10.............................Texas Law to Apply 9
Article 11............................Merger of Agreement 9
<PAGE>
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AMR INVESTMENT SERVICES TRUST
AND
NATIONSBANK OF TEXAS, N.A.
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
------------------------------------------------
AGREEMENT made as of the 1st day of November, 1995 by and between AMR INVESTMENT
SERVICES TRUST, a New York Common Law business trust, having its principal
office and place of business at 4333 Amon Carter Boulevard, Fort Worth, Texas
76155 (the "Trust"), AND NATIONSBANK OF TEXAS, N.A., a national banking
association, having its principal office and place of business at 1401 Elm St.,
Dallas, Texas 75202 (the "Bank").
WHEREAS, the Trust desires to appoint the Bank as its registrar, transfer agent,
dividend disbursing agent and agent in connection with certain other activities
and the Bank desires to accept such appointment; The term "Fund" as used herein
after shall mean each and all such series in existence as of the date hereof
and, if mutually agreed by the Trust and the Bank at such time, each such series
hereafter designated by the Trust.
NOW, THEREFORE, in consideration of the mutual convenants herein contained, the
parties hereto agree as follows:
ARTICLE 1 TERMS OF APPOINTMENT: DUTIES OF THE BANK
----------------------------------------
1.01 Subject to the terms and conditions set forth in this Agreement,
the Trust hereby employs and appoints the Bank to act as, and the Bank agrees to
act as, registrar of each of the Trust's series of units of beneficial interest
("Shares"), transfer agent for the Shares, dividend disbursing agent and agent
<PAGE>
for the shareholders of the Trust (the "Shareholders") in connection with any
dividend reinvestment plan as set out in the prospectus and statement of
additional information of the Trust. The term "Fund" as used herein shall mean
each and all such series of shares in existence as of the date hereof, and, if
mutually agreed by the Trust and the Bank at such time, each such series of
shares hereafter designated by the Trust.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with the Trust's then current prospectus and
statement of additional information, and procedures established from time to
time by agreement between the Trust and the Bank, the Bank shall:
(i) enter on the records of the Bank on behalf of the Fund the
appropriate number of Shares, as authorized by the
Shareholders, and hold such Shares in the appropriate
Shareholder account;
(ii) effect transfers of Shares by the registered owners thereof
upon receipt of appropriate documentation;
(iii) prepare and transmit payments for dividends and
distributions declared by the Fund; and
(iv) act as agent for Shareholders in connection with any
dividend reinvestment plan of the Trust as agreed between
the Trust and the Bank from time to time.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), the Bank shall: (i) perform all of the customary services
of a registrar, transfer agent, dividend disbursing agent and agent for the
Shareholders of the Trust in connection with any dividend reinvestment plan of
the Trust as consistent with all applicable regulations in effect as of the date
of this Agreement as more fully described in the attached fee schedule,
including but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies and
mailing Shareholder reports to current Shareholders, preparing and filing U. S.
Treasury Department Forms 1099 and other appropriate forms required with respect
to dividends and distributions by federal authorities for all registered
Shareholders, preparing and mailing confirmation forms and statements of account
to Shareholders for all confirmable transactions in Shareholder accounts, and
providing Shareholder account information.
2
<PAGE>
Procedures applicable to certain of these services described in paragraphs (a)
and (b) may be established from time to time by agreement between the Trust and
the Bank and shall be subject to the review and approval of the Trust. The
failure of the Trust to establish such procedures with respect to any service
shall not in any way diminish the duty and obligation of the Bank to perform
such service described in paragraph (a) and (b).
ARTICLE 2 FEES AND EXPENSES
-----------------
2.01 For the performance by the Bank of the provisions of this
Agreement, the Trust agrees to pay the Bank an annual maintenance fee as set out
in the initial fee schedule attached hereto. Such fee and out-of pocket expenses
and advances identified under Section 2.02 below may be changed from time to
time subject to mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees promptly to reimburse the Bank for reasonable out-of-pocket expenses or
advances incurred by the Bank for the items set out in the fee schedule attached
hereto. In addition, any other expenses incurred by the Bank at the request of
or with the consent of the Fund which are not properly borne by the Bank as part
of its duties and obligations under this Agreement will be promptly reimbursed
by the Fund. Postage and the cost of materials for mailing of dividends,
proxies, Fund reports and other mailings to all Shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior to the mailing
date of such materials.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE BANK
------------------------------------------
The Bank represents and warrants to the Fund that:
3.01 It is a national banking association duly organized and existing
and in good standing under the laws of the United States of America.
3.02 It is duly qualified to carry on its business in the State of
Texas.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3
<PAGE>
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE BANK
------------------------------------------
The Fund represents and warrants to the Bank that:
4.01 It is a duly organized New York common law.
4.02 It is empowered under applicable laws and by governing instrument
to enter into and perform this Agreement.
4.03 All necessary actions required by its governing instrument have
been taken to authorize it to enter into and perform this Agreement.
4.04 It is an open-end management investment company registered under
the Investment Company Act of 1940.
4.05 To assist the Bank in the performance of its duties hereunder, the
Trust will provide the Bank on a timely basis with the Trust's current effective
prospectus and statement of additional information immediately upon
effectiveness of each post-effective amendment to the Trust's registration
statement.
ARTICLE 5 INDEMNIFICATION
---------------
5.01 The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liabilities
arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors
of information, records and documents which (i) are received by the Bank or its
4
<PAGE>
agents or subcontractors and furnished to it by or on behalf of the Fund, and
(ii) have been prepared and/or maintained by the Fund or any other person or
firm on behalf of the Fund.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any written instructions or requests of the Fund's
representatives. "Written instructions" means written instructions delivered by
mail, tested telegram, telex or facsimile sending device and received by the
Bank, or its agents or subcontractors, signed by Authorized Persons as defined
in paragraph 5.03.
(e) The offer or sale of shares of Common Stock or of Shares in
violation of any requirement under the federal securities laws or regulations or
in violation of any stop order or other ruling by any federal agency.
(f) Any action or inaction taken by the Bank pursuant to written
instructions given to the Bank by an investment advisor of the Fund.
5.02 The Fund shall not be responsible for, and the Bank shall
indemnify and hold the Fund harmless from and against any and all losses,
damages, costs, charges, counsel fees, expense and liability arising out of or
attributable to the Bank's failure to comply with the terms of this Agreement or
any action or failure or omission to act by the Bank as a result of the Bank's
lack of good faith, negligence or willful misconduct or which arises out of the
breach of any representation or warranty of the Bank hereunder.
5.03 At any time the Bank may apply to any authorized officer of the
Fund for instructions, and may consult with legal counsel experienced in
securities matters (including counsel to the Fund) with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action reasonably taken or omitted by
it in reliance upon such instructions or upon the opinion of such counsel. The
Bank, its agents and subcontractors shall be protected and indemnified in acting
upon any paper or document furnished by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or persons
authorized by the Fund, as to which notice has been given to the Bank
("Authorized Persons"), or upon any instruction, information, data, records or
documents provided by Authorized Persons to the Bank or its agents or
subcontractors by telephone, in person, machine readable input, telex, CRT data
5
<PAGE>
entry or other similar means authorized by the Fund, and shall not be held to
have notice of any change of authority of any Authorized Person, until receipt
of written notice thereof from the Fund.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any losses, damages, costs, charges, counsel fees, payments, expenses
or liability resulting from such failure to perform or otherwise from such
causes. In addition, the Bank shall use reasonable care to minimize the
likelihood of such damage, loss of data, delays and/or errors and should such
damage, loss of data, delays and/or errors occur, the Bank shall use its best
efforts to mitigate the effects of such occurrence.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim or the institution of any
action or investigation for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly notify the other party
of such assertion or institution, and shall keep the other party advised with
respect to all developments concerning such claim. The party who may be required
to indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim. The party seeking indemnification
shall in no case confess any claim or make any compromise in any case in which
the other party may be required to indemnify it except with the other party's
prior written consent.
ARTICLE 6 COVENANTS OF THE FUND AND THE BANK
----------------------------------
6.01 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the documentation reflecting the action taken
by the Fund's authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the governing instrument of the Fund and all amendments
thereto.
The Bank represents and warrants that to the best of its knowledge, the
various procedures and systems which the Bank has implemented with regard to
safeguarding from loss or damage the share certificates, check forms, facsimile
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signature imprinting devices, and other property used in the performance of its
obligations hereunder are adequate and will enable the Bank to perform
satisfactorily its obligations hereunder and that the Bank will make such
changes therein from time to time as in its judgment are required for the secure
performance of its obligations hereunder.
6.02 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
6.03 The Bank and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
6.05 The Fund shall make all required filings under federal and state
securities laws.
ARTICLE 7 TERMINATION OF AGREEMENT
------------------------
7.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Any such termination shall not
effect the rights and obligations of the parties under Article 5 hereof.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Bank reserves the right to charge for any other
reasonable expenses and for its time at its customary rate associated with such
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termination. In the event that the Fund designates a successor to any of the
Bank's obligations hereunder, the Bank shall, at the expense and direction of
the Fund, transfer to such successor a certified list of the Shareholders of the
Fund, a complete record of the account of each Shareholder, and all other
relevant books, records and other data established or maintained by the Bank
hereunder.
ARTICLE 8 ASSIGNMENT
----------
8.01 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
The Bank agrees that any claims by it against the Trust under this
Agreement may be satisfied only from the assets of the Trust; that the person
executing this Agreement on behalf of the Trust has executed it in his capacity
as an officer of the Trust and not individually, and that the obligations of the
Trust arising out of this Agreement are not binding upon such person or the
Trust's shareholders individually but are binding only upon the assets and
property of the Trust; and that no shareholders, trustees or officers of the
Trust may be held personally liable or responsible for any obligations of the
Trust arising out of this Agreement.
The Trust agrees that the person executing this Agreement on behalf of
the Bank has executed it in his capacity as an officer of the Bank and not
individually, and that the obligations of the Bank arising out of this Agreement
are not binding on such person or the Bank's officers, directors, employees or
shareholders individually but are binding only upon the Bank; and that no
officer, director, employee or shareholder of the Bank may be held personally
liable or responsible for any obligations of the Bank arising out of this
Agreement.
ARTICLE 9 AMENDMENT
---------
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
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ARTICLE 10 TEXAS LAW TO APPLY
------------------
10.01 This Agreement shall be construed and the provision thereof
interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 11 MERGER OF AGREEMENT
- ---------- -------------------
11.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf under their seals by and through their duly
authorized officers, as of the day and year first above written.
ATTEST: AMR INVESTMENT SERVICES TRUST
/s Barry Y. Greenberg By: /s/ William F. Quinn
- ----------------------- --------------------------
Authorized Employee William F. Quinn
President
ATTEST: NATIONSBANK OF TEXAS, N.A.
/s/ C.F. Lemms BY: /s/ J. Brady
- ----------------------- -------------------------
Authorized Officer Senior Vice President
and Trust Officer
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November 1, 1995
FEE SCHEDULE
Registrar,
Transfer Agency and Service Agreement
between
AMR Investment Services Trust
and
NationsBank of Texas, N.A.
Compensation for all services to be performed:
$4,000 per year
