<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
American Independence Funds Trust
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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<PAGE>
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
3435 Stelzer Road
Columbus, Ohio 43219
Stock Fund
October 25, 2000
Dear Shareholder,
You are cordially invited to attend a Special Meeting of Shareholders of the
Stock Fund (the "Fund"), a series of American Independence Funds Trust, to be
held at 10:00 a.m. (Eastern Standard time) on November 15, 2000, at the Fund's
offices located at 3435 Stelzer Road, Columbus, Ohio 43219.
The purpose of the Special Meeting is to approve a new investment sub-advisory
agreement for the Fund between AMR Investment Services, Inc., investment sub-
adviser of the Fund ("AMR"), and Barrow, Hanley, Mewhinney & Strauss, Inc.
("Barrow Hanley") (the "New Sub-Advisory Agreement"). Shareholders are being
asked to approve the New Sub-Advisory Agreement as a result of the acquisition
of United Asset Management Corporation, the parent company of Barrow Hanley, by
Old Mutual plc, which resulted in the automatic termination of the sub-advisory
agreement previously in effect between AMR and Barrow Hanley. The terms of the
New Sub-Advisory Agreement are the same in all material respects as the previous
sub-advisory agreement between AMR and Barrow Hanley.
Included with this letter are a Notice of Special Meeting of Shareholders, a
Proxy Statement and a proxy card. Regardless of the number of shares you own, it
is important that your shares are represented and voted. If you cannot
personally attend the Special Shareholders' Meeting, we would appreciate your
promptly voting, signing and returning the enclosed proxy card in the postage-
paid envelope provided.
We thank you for your time and for your investment in the American Independence
Funds Trust.
Sincerely,
David Bunstine
President
American Independence Funds Trust
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
3435 Stelzer Road
Columbus, Ohio 43219
Stock Fund
October 25, 2000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders of the Stock Fund, a series of American
Independence Funds Trust, a Delaware business trust, will be held at the Fund's
offices, located at 3435 Stelzer Road, Columbus, Ohio 43219, on November 15,
2000 at 10:00 a.m. (Eastern Standard time) for the following purposes:
1. To approve a new investment sub-advisory agreement between AMR Investment
Services, Inc. and Barrow, Hanley, Mewhinney & Strauss, Inc.
2. To transact such other business as may properly come before the Meeting, or
any adjournments thereto.
Shareholders of record at the close of business on October 16, 2000, are
entitled to notice of, and to vote at, the Meeting. The Stock Fund is a series
of American Independence Funds Trust.
David Bunstine
President
American Independence Funds Trust
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 15, 2000
Stock Fund
INTRODUCTION
This proxy statement is solicited by the Board of Trustees (the "Board") of
American Independence Funds Trust (the "Trust") for voting at the special
meeting of shareholders of the Stock Fund (the "Fund") to be held at 10:00 a.m.
(Eastern Standard time) on November 15, 2000, at the Fund's offices at 3435
Stelzer Road, Columbus, Ohio 43219, and at any and all adjournments thereof (the
"Meeting"), for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders. This proxy statement was first mailed to shareholders
on or about October 25, 2000.
PROPOSAL
The purpose of the Meeting is to have shareholders vote on a proposal to approve
a new investment sub-advisory agreement (the "New Sub-Advisory Agreement") for
the Fund between AMR Investment Services, Inc. ("AMR"), and Barrow, Hanley,
Mewhinney & Strauss, Inc. ("Barrow Hanley").
Each share of the Fund is entitled to one vote on the Proposal and on each other
matter that it is entitled to vote upon at the Meeting.
Each valid proxy that we receive will be voted in accordance with your
instructions and as the persons named in the proxy determine on such other
business as may come before the Meeting. If no instructions are given on an
executed proxy that has been returned to us, that proxy will be voted FOR the
Proposal. Shareholders who execute proxies may revoke them at any time before
they are voted, either by writing to the Trust, or by voting in person at the
Meeting.
The Proposal requires the affirmative vote of a "majority of the outstanding
voting securities" of the Fund. The term "majority of the outstanding voting
securities" of the Fund as defined by the Investment Company Act of 1940, as
amended (the "1940 Act"), means: the affirmative vote of the lesser of (i) 67%
of the voting securities of the Fund present at the meeting if more than 50% of
the outstanding shares of the Fund are present in person or by proxy or (ii)
more than 50% of the outstanding shares of the Fund.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
The Board of Trustees of the Trust has fixed the close of business on October
16, 2000 as the record date (the "Record Date") for determining holders of the
Fund's shares entitled to notice of and to vote at the Meeting. At the close of
business on the Record Date, there were 7,539,697 shares outstanding of the
Fund.
1
<PAGE>
ANNUAL AND SEMI-ANNUAL REPORT
A copy of the Fund's annual report for the fiscal year ending October 31, 1999
and semi-annual report for the period ended April 30, 2000 is available without
charge upon request by writing to the Trust, 3435 Stelzer Road, Columbus, Ohio
43219, or by calling 1-888-266-8787.
BACKGROUND
INTRUST Financial Services, Inc. (the "Adviser") serves as the investment
adviser of the Fund pursuant to an Advisory Agreement dated November 25, 1996.
The Adviser, through its portfolio management team continuously reviews,
supervises and administers the Fund's investment program. The Adviser also
provides certain administrative services necessary for the Fund's operations.
The Adviser entered into an investment sub-advisory agreement on behalf of the
Fund with AMR, dated January 3, 2000, and AMR, in turn, engaged Barrow Hanley as
investment sub-advisor pursuant to an investment sub-advisory agreement dated
January 3, 2000 (the "Prior Sub-Advisory Agreement"). Under this arrangement,
Barrow Hanley has the primary responsibility for the investment decisions of the
Fund and AMR provides investment oversight and analysis of Barrow Hanley's
activities to the Adviser and the Board. The Prior Sub-Advisory Agreement was
approved by the Board on November 22, 1999 and was approved by shareholders of
the Fund on December 28, 1999.
On September 25, 2000, Old Mutual plc, acquired United Asset Management
Corporation, the parent company of Barrow Hanley (the "Acquisition"), and as a
result, Barrow Hanley became an indirect subsidiary of Old Mutual plc. The
Acquisition is deemed a "change in control" of Barrow Hanley, and therefore an
"assignment," as defined in the 1940 Act, of the Prior Sub-Advisory Agreement
between AMR and Barrow Hanley. As required by the 1940 Act, the Prior Sub-
Advisory Agreement automatically terminated upon its assignment.
At a special meeting of the Board held on October 10, 2000, the Board, after
careful consideration of a variety of factors (see "The Trustees Considerations"
below), determined that the continuation of Barrow Hanley as sub-advisor to the
Fund was in the best interests of the Fund and its shareholders, and unanimously
approved the New Sub-Advisory Agreement between AMR and Barrow Hanley, subject
to shareholder approval. The New Sub-Advisory Agreement is substantially
identical to the Prior Sub-Advisory Agreement. (See "Comparison of the New Sub-
Advisory Agreement to the Prior Sub-Advisory Agreement" below and the form of
the New Sub-Advisory Agreement attached hereto as Exhibit A.)
At the special meeting of the Board held on October 10, 2000, the Board also
unanimously approved and ratified an interim investment sub-advisory agreement
(the "Interim Agreement") between AMR and Barrow Hanley pursuant to which Barrow
Hanley has continued to provide investment advisory services to the Fund since
the date of the Acquisition, under terms substantially similar to the terms of
the Prior Sub-Advisory Agreement. The Interim Agreement will be in effect for no
more than 150 days from the date of the Acquisition and may be
2
<PAGE>
terminated by vote of the Board or a majority of the outstanding voting
securities of the Fund at any time upon 10 calendar days' notice.
The Interim Agreement provides for fees payable to Barrow Hanley for its sub-
advisory services at the same rate as payable under the Prior Sub-Advisory
Agreement and requires that compensation earned under the Interim Agreement will
be held in an interest-bearing escrow account until the termination of the
Interim Agreement. Under the terms of the Interim Agreement, if shareholders
approve the New Sub-Advisory Agreement, Barrow Hanley is entitled to receive the
amount held in the escrow account (including interest earned), or, if
shareholders do not approve the New Sub-Advisory Agreement, Barrow Hanley is
entitled to receive the lesser of (i) the fees held in the escrow account
(including interest earned) or (ii) the cost incurred by Barrow Hanley while
performing under the Interim Agreement (plus interest earned).
In the event that the New Sub-Advisory Agreement is not approved by shareholders
of the Fund, the Board will have to determine what additional steps are in the
best interests of the Fund and its shareholders.
INFORMATION CONCERNING THE ACQUISITION
On June 16, 2000, Old Mutual plc, a public limited company based in the United
Kingdom ("Old Mutual"), OM Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Old Mutual and United Asset Management Corporation
("UAM"), entered into an Agreement and Plan of Merger for Old Mutual to acquire
UAM. On September 25, 2000, Old Mutual acquired 93% of the outstanding common
stocks of UAM for $25 per share in cash. As of October 5, 2000 Old Mutual had
acquired the remaining outstanding stock of UAM for $25 per share in cash. The
total cost of the Acquisition of UAM is valued at approximately $1.46 billion.
Old Mutual is a United Kingdom-based financial services group with a substantial
life assurance business in South Africa and other southern African countries and
an integrated, international portfolio of activities in asset management,
banking and general insurance. UAM had approximately $188 billion in assets
under management in institutional and individual private accounts and mutual
funds. The acquisition of UAM increased Old Mutual's assets under management to
approximately $275 billion.
No change in Barrow Hanley's investment personnel, investment style, method of
operation, or the location where it conducts its business have been made nor are
such changes contemplated as a result of the Old Mutual acquisition of UAM. The
revenue sharing agreement and employment contracts that Barrow Hanley's
principals entered into with UAM have survived the Acquisition. Barrow Hanley
will continue to enjoy complete autonomy in its investment process and
operations. Barrow Hanley will continue to retain approximately 50% of all
revenues earned by Barrow Hanley.
3
<PAGE>
THE LEGAL FRAMEWORK
Section 15(a) of the 1940 Act provides for the automatic termination of an
investment advisory agreement in the event there is a change in control of an
investment company's adviser. UAM's transaction with Old Mutual resulted in a
change of control of UAM and its affiliated advisers causing the Prior Sub-
Advisory Agreement between AMR and Barrow Hanley to terminate effective upon the
closing of the Acquisition.
Section 15(a) of the 1940 Act also prohibits any person from serving as an
investment adviser to a registered investment company except pursuant to written
contract that has been approved by the registered investment company's
shareholders. Therefore, in order for Barrow Hanley to continue to provide
investment advisory services to the Fund, shareholders of the Fund must approve
the New Sub-Advisory Agreement. The Board believes that it is in the best
interests of the Fund for Barrow Hanley to continue to manage the Fund's
portfolio.
Section 15(f) of the 1940 Act provides that a manager or investment adviser to a
registered investment company, and the affiliates of such adviser (such as UAM),
may receive any amount or benefit in connection with a sale of any interest in
such manager or investment adviser which results in an assignment of an
investment advisory contract if the following two conditions are satisfied: (1)
for a period of three years after such assignment, at least 75% of the board of
directors or trustees of the investment company cannot be "interested persons"
(within the meaning of Section 2(a)(19) of the 1940 Act) of the new investment
adviser or its predecessor, and (2) no "unfair burden" (as defined in the 1940
Act) may be imposed on the investment company as a result of the assignment or
any express or implied terms, conditions or understandings applicable thereto.
Consistent with the first condition of Section 15(f), Old Mutual and UAM have
agreed in the Agreement and Plan of Merger that, for a period of three years
after the Closing, they will not take or recommend any action that would cause
more than 25% of the Trustees to be interested persons of the entity acting as
the Fund's sub-adviser.
With respect to the second condition of Section 15(f), an unfair burden on an
investment company is defined in the 1940 Act to include any arrangement during
the two-year period after any such transaction occurs whereby the manager or
investment adviser or its predecessor or successor, or any interested person of
such adviser, predecessor or successor, receives or is entitled to receive any
compensation of two types, either directly or indirectly. The first type is
compensation from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company,
other than bona fide ordinary compensation as principal underwriter for such
company. The second type is compensation from the investment company or its
security holders for other than bona fide investment advisory or other services.
In the Agreement and Plan of Merger, Old Mutual and UAM have agreed not to take
or recommend any action that would constitute an unfair burden on the Fund
within the meaning of Section 15(f).
4
<PAGE>
COMPARISON OF THE NEW SUB-ADVISORY AGREEMENT AND THE PRIOR SUB-ADVISORY
AGREEMENT
Other than the change in the effective date and termination date, the terms of
the New Sub-Advisory Agreement is substantially identical in all material
respects to the Prior Sub-Advisory Agreement, including the total amount of
compensation paid to the sub-advisers. The following description of the New
Sub-Advisory Agreements is only a summary. You should refer to Exhibit A for a
form of the complete New Sub-Advisory Agreement.
Under the New Sub-Advisory Agreement and the Prior Sub-Advisory Agreement, as
compensation for the services performed by Barrow Hanley, AMR pays Barrow Hanley
a fee, accrued daily and paid monthly in accordance with the following rates per
annum of the aggregate average daily net assets of AMR and its subsidiaries
under management by Barrow Hanley:
0.30% per annum on the first $200 million;
0.20% per annum on the next $300 million;
0.15% per annum on the next $500 million;
0.125% per annum on the excess over $1 billion.
As is the case under the Prior Sub-Advisory Agreement, the New Sub-Advisory
Agreement provides that Barrow Hanley will manage the investment and
reinvestment of the Fund's assets and, with respect to such assets, continuously
review, supervise, and administer the investment program of the Fund, determine
in its discretion the securities to be purchased or sold, provide AMR and the
Trust with records concerning Barrow Hanley's activities which the Trust is
required to maintain, and render regular reports to AMR and the Trust's officers
and Board concerning Barrow Hanley's discharge of the foregoing
responsibilities. Barrow Hanley will discharge the foregoing responsibilities
subject to AMR's oversight and the control of the officers and the Board and in
compliance with such policies as the Board may from time to time establish, and
in compliance with the objectives, policies and limitation for the Fund set
forth in the Trust's current registration statement as amended from time to
time, and applicable laws and regulations.
If approved by shareholders, the New Sub-Advisory Agreement will continue in
effect with respect to the Fund for two years from its effective date, and will
continue in effect thereafter for successive annual periods, provided its
continuance is specifically approved at least annually by (1) a majority vote,
cast in person at a meeting called for that purpose, of the Board or (2) a vote
of the holders of a majority of the outstanding voting securities (as defined in
the 1940 Act and the rules thereunder) of the Fund, and (3) in either event by a
majority of the Trustees who are not parties to the New Sub-Advisory Agreement
or interested persons of the Trust or of any such party. The New Sub-Advisory
Agreement provides that it may be terminated at any time, without penalty, by
the Adviser or the Fund upon not less than 30 days' notice but not more than 60
days' written notice or by Barrow Hanley upon 60 days' written notice.
Both the Prior Sub-Advisory Agreement and the New Sub-Advisory Agreement provide
that the Barrow Hanley has no liability to the Trust or shareholders for any act
or omission in connection with rendering services under the respective
agreements, including any
5
<PAGE>
loss arising out of any investment, except for liability resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the sub-adviser of its duties under the Agreements.
THE BOARD OF THE TRUST HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS APPROVE AND
VOTE "FOR" THE PROPOSAL.
The Board has determined that the New Sub-Advisory Agreement is fair and in the
best interests of the fund's shareholders. In making this recommendation, the
Board exercised its independent judgment based on a careful review of the
proposed arrangement and potential benefits.
THE TRUSTEES' CONSIDERATIONS
The New Sub-Advisory Agreement was presented to the Board for its consideration
at a Board of Trustees' meeting held on October 10, 2000. The Board, and,
separately, the independent Trustees, voted unanimously to approve the New Sub-
Advisory Agreement.
In evaluating the New Sub-Advisory Agreement, the Board considered information
furnished by the Adviser, AMR and Barrow Hanley, including: (i) information
about AMR and Barrow Hanley personnel, operations and management of the Fund;
(ii) comparative data as to the Fund's investment performance and advisory fees;
(iii) representations by Barrow Hanley that it would provide advisory and other
services to the Fund of a scope and quality at least equivalent to the scope and
quality of the services provided to the Fund under the Prior Sub-Advisory
Agreement; (iv) representations by Barrow Hanley that the same personnel would
continue to provide advisory services to the Fund; and (v) information regarding
Old Mutual and the Acquisition.
The Board also considered that the terms of the New Sub-Advisory Agreement will
remain materially unchanged from those of the Prior Sub-Advisory Agreement and
that the sub-advisory fees payable to Barrow Hanley by AMR will remain the same.
Based upon its evaluation, the Board concluded that AMR's engagement of Barrow
Hanley as sub-adviser to the Fund has provided the Fund the access to highly
effective management and advisory services and capabilities and that the
continued provision of investment advisory services by Barrow Hanley is in the
best interests of the Fund.
The Board concluded further that the terms of the New Sub-Advisory Agreement,
including the fees contemplated thereby, are fair and reasonable and in the best
interests of the Fund and its shareholders.
In order to provide for the services described above in the New Sub-Advisory
Agreement, the shareholders are being asked to approve the New Sub-Advisory
Agreement.
6
<PAGE>
THE ADVISER AND SUB-ADVISORS
Adviser
-------
INTRUST Financial Services, Inc., 105 North Main Street, Box One, Wichita,
Kansas 67202, serves as the investment adviser of the Fund pursuant to an
Advisory Agreement dated November 25, 1996 (the "Advisory Agreement"). The
Advisory Agreement was most recently approved by shareholders on April 28, 1997
and its continuance was most recently approved by the Board on August 29, 2000.
The Adviser is a wholly owned subsidiary of INTRUST Bank N.A. ("INTRUST Bank")
which, in turn, is a majority-owned subsidiary of INTRUST Financial Corporation
(formerly, First Bancorp of Kansas), a bank holding company. INTRUST Bank and
INTRUST Financial Corporation are located at 105 North Main Street, Box One,
Wichita, Kansas 67202. Prior to March 1, 2000, INTRUST Bank served as the
investment adviser to the Fund. To accommodate pending changes to the regulatory
requirements applicable to banks which serve as investment advisers to
registered investment companies contained in the Investment Advisers Act of
1940, as amended, the responsibilities of INTRUST Bank as adviser to the Fund
were assumed by INTRUST Financial Services, Inc. in the first quarter of 2000.
The Adviser, through its portfolio management team, continuously reviews,
supervises and administers the Fund's investment programs. The Adviser also
provides certain administrative services necessary for the Fund's operations.
For its services the Adviser receives from the Fund a fee, payable monthly, at
the annual rate of 1.00% of the Fund's average daily net assets. The Adviser has
agreed to waive a portion of its fee in order to limit the Fund's total
operating expenses to 1.29% through March 1, 2001. For the fiscal year ended
October 31, 1999, the total amount payable by the Fund to the Adviser for its
services was $614,019, and, of this amount, the Adviser waived $145,130.
The directors and executive officers of the Adviser and their positions during
the past two years are as follows:
INTRUST Financial Services, Inc.
--------------------------------
Name Position and Office
---- -------------------
Hugo H. Ernst President and Chief Executive Officer
Ron Baldwin Director; Vice Chairman
(Hired February, 1996) INTRUST Bank;
Executive Vice President Fourth Financial
Corporation prior to February, 1996)
Phillip J. Owings Director; Executive Vice President (Senior
Vice President prior to March 1998),
INTRUST Bank
The Adviser currently serves as investment manager to 11 separate portfolios of
the Trust, all of which are currently operational and being offered to
investors. The net assets and the management fee paid to the Adviser (expressed
as a percentage of average daily net assets) by
7
<PAGE>
each portfolio managed by the Adviser which has a similar investment
objective to the Fund are set forth in the table below:
<TABLE>
<CAPTION> ANNUAL
NET ASSETS MANAGEMENT FEE
NAME OF PORTFOLIO (OCTOBER 10, 2000) (BEFORE WAIVERS)
----------------- ------------------ ----------------
<S> <C> <C>
International Multi-Manager Fund $59,100,289 0.40%(1)
NestEgg 2010 Fund 11,356,731 0.70%(2)
NestEgg 2020 Fund 19,066,680 0.70%(2)
NestEgg 2030 Fund 8,860,023 0.70%(2)
NestEgg 2040 Fund 8,745,874 0.70%(2)
</TABLE>
(1) The Adviser is currently contractually waiving a portion of its management
fee such that total expenses after fee waivers and expense reimbursements are
limited to 1.29% for both Service Shares and Premium Shares.
(2) The Adviser is currently contractually waiving a portion of its management
fee and reimbursing other expenses such that total expenses, after fee waivers
and expense reimbursements, are limited to 1.50% for both Service Shares and
Premium Shares.
INTRUST Bank also serves as the Fund's Custodian. During the fiscal year ended
October 31, 1999, the Fund paid Custodian fees to INTRUST Bank N.A. of $29,786
without taking into account applicable fee waivers (including such fee waivers,
the amount was $25,029).
AMR Investment Services, Inc.
-----------------------------
AMR serves as sub-adviser to the Fund pursuant to an Investment Sub-Advisory
Agreement dated January 3, 2000. The Agreement was approved by the Board on
November 22, 1999 and was approved by shareholders of the Fund on December 28,
1999. AMR is a wholly owned subsidiary of AMR Corporation, the parent company of
American Airlines, Inc. The address of AMR and AMR Corporation is 4333 Amon
Carter Blvd., MD 5645, Fort Worth, TX 76155. AMR was organized in 1986 to
provide investment management, advisory, administrative and asset management
consulting services. As of June 30, 2000, AMR had approximately $21.9 billion of
assets under management, including approximately $9.3 billion under active
management and $12.6 billion as named fiduciary or financial adviser. Of the
total, approximately $14.5 billion of assets are related to AMR Corporation. The
principals of AMR are set forth in the table below:
AMR Investment Services, Inc.
-----------------------------
Name Position and Office
----
Donald J. Carty Chairman of the Board
8
<PAGE>
Thomas W. Horton Vice Chairman of the Board
Robert W. Baker Director
William F. Quinn President
James A. Beer Vice President and Treasurer
Charles D. Marlett Corporate Secretary
The business address of each of the foregoing is 4333 Amon Carter Blvd., Fort
Worth, TX 76155.
AMR currently serves as investment manager to the following funds with a similar
investment objective to the Fund: the AMR Investment Services Large Cap Value
Portfolio ("Large Cap Value Portfolio"), a series of the AMR Investment Services
Trust; the American AAdvantage Large Cap Value Fund ("Large Cap Value Fund"), a
series of the American AAdvantage Funds; and the American AAdvantage Large Cap
Value Mileage Fund ("Large Cap Value Mileage Fund"), a series of the American
AAdvantage Mileage Funds. The Large Cap Value Fund and Large Cap Value Mileage
Fund seek their investment objectives by investing all of their investable
assets in the Large Cap Value Portfolio. The net assets of each of these
portfolios and the management fee paid to AMR by each of these portfolios
(expressed as a percentage of average daily net assets) are set forth in the
table below:
NET ASSETS ANNUAL
NAME OF PORTFOLIO (SEPTEMBER 30, 2000) MANAGEMENT FEE
----------------- -------------------- ---------------
Large Cap Value Portfolio $752,058 30%
Large Cap Value Fund 746,644 0*
Large Cap Value Mileage Fund 5,414 0*
* No management fee is paid to AMR since this Fund invests all of its investable
assets in the Large Cap Value Portfolio.
Barrow, Hanley, Mewhinney & Strauss, Inc.
------------------------------------------
Barrow Hanley is a wholly owned subsidiary of UAM located at One International
Place, Boston, Massachusetts 02110, which in turn is a wholly owned subsidiary
of Old Mutual, plc, located at Lansdowne House, 57 Berkeley Square, London, UK
5D8. The address of Barrow Hanley is 3232 McKinney Avenue, 15th Floor, Dallas,
TX 75204. Barrow Hanley is engaged in the business of providing investment
advice to institutional and individual client accounts having assets of
approximately $26.1 billion as of September 30, 2000. The President and Chief
Executive Officer of Barrow Hanley is James P. Barrow.
Barrow, Hanley also serves as adviser or sub-adviser to the following funds with
a similar investment objective to the Fund: American AAdvantage Large Cap Value
Fund, American AAdvantage Balanced Fund, Vanguard Windsor II Fund, Vanguard
Selected Value Fund, Vanguard Variable Annuity Fund and ICMA Vantagepoint Equity
Income Fund. The size of
9
<PAGE>
each of these portfolios are set forth below:
NET ASSETS
NAME OF PORTFOLIO SEPTEMBER 30, 2000
----------------- ------------------
American AAdvantage Large Cap Value Fund $ 225,111,359
American AAdvantage Balanced Fund 247,019,573
Vanguard Windsor II Fund 14,473,343,349
Vanguard Selected Value Fund 144,200,000
Vanguard Variable Annuity Fund 47,438,882
ICMA Vantagepoint Equity Income Fund 152,458,934
The American AAdvantage Large Cap Value Fund, American AAdvantage Balanced
Fund and the Vanguard Windsor II Fund pay Barrow Hanley a fee for its services
in accordance with the following schedule (expressed as a percentage of average
daily net assets):
0.30% per annum on the first $200 million;
0.20% per annum on the next $300 million;
0.15% per annum on the next $500 million;
0.125% per annum on the excess over $1 billion.
The Vanguard Selected Value Fund pays Barrow Hanley a fee for its services in
accordance with the following schedule(expressed as a percentage of average
daily net assets):
0.40% per annum on the first $100 million;
0.35% per annum on the next $200 million;
0.25% per annum on the next $300 million;
0.20% per annum on the next $400 million;
0.35% per annum on the excess over $1 billion.
The Vanguard Variable Annuity Fund pays Barrow Hanley a fee at the annual rate
of 0.125% of its average daily net assets.
ICMA Vantagepoint Equity Income Fund pays Barrow Hanley a fee for its
services in accordance with the following schedule (expressed as a percentage of
average daily net assets):
0.75% per annum on the first $10 million
0.50% per annum on the next $15 million
0.25% per annum on the next $175 million
0.20% per annum on the next $600 million
0.15% per annum on the next $200 million
0.125% per annum on the excess over $1 billion
THE UNDERWRITER AND ADMINISTRATOR
The Fund's principal underwriter is BISYS Fund Services Limited Partnership
d/b/a BISYS Fund Services ("BISYS"), 3435 Stelzer Road, Columbus, Ohio 43219.
BISYS also serves as the Fund's Administrator.
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SHAREHOLDER MEETING COSTS AND VOTING PROCEDURES
The Trust Instrument of the Trust provides that the presence at a shareholder
meeting in person or by proxy of one-third of the shares of the Fund entitled to
vote at the Meeting constitutes a quorum. Thus, the Meeting will take place on
its scheduled date if one-third or more of the shares of the Fund are
represented. If a quorum of shareholders of the Fund is not present or if a
quorum is present but sufficient votes in favor of the Proposal are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies with respect to any
proposal for which sufficient votes have not been received. Any such adjournment
will require the affirmative vote of a majority of the votes cast on the
question of adjournment in person or by proxy. The persons named as proxies will
vote in favor of any such adjournment.
Share represented by proxies that reflect abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons entitled to vote and
(ii) the broker or nominee does not have discretionary voting power on a
particular matter) will be counted as shares that are present and entitled to
vote on the matter for purposes of determining the presence of a quorum. Votes
cast by proxy or in person at the Meeting will be counted by persons appointed
tellers for the Meeting. The tellers will count the total number of votes cast
"for" approval of the Proposal for purposes of determining whether sufficient
affirmative votes have been cast. Abstentions and broker non-votes have the
effect of a negative vote with respect to the Proposal.
As of the close of business on October 16, 2000, INTRUST Bank, 105 North Main
Street, Box One, Wichita, Kansas 67202, owned of record 99.88% of the shares of
the Fund and thus may be deemed to control the Fund. As owner of more than 50%
of the Fund's shares, INTRUST will be able to cast the deciding vote on the
Proposal. To the knowledge of management, at the close of business on October
16, 2000, the officers and Trustees of the Trust owned, collectively, less than
1% of the shares of the Fund.
The Adviser and Sub-advisers to the Fund will be responsible for the cost of
preparing, printing and mailing the enclosed proxy, accompanying notice and
proxy statement and all other costs in connection with solicitation of proxies
related to the required approvals including any additional solicitations made by
letter, telephone or telegraph.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any matters that will be presented for action at the
Meeting other than the matters set forth herein. Should any other matters
requiring a vote of shareholders arise, the proxy in the accompanying form will
confer upon the persons entitled to vote the shares represented by such proxy
the discretionary authority to vote matters in accordance with their best
judgment.
Any shareholder proposal intended to be presented at the next shareholder
meeting must be received by the Trust for inclusion in its proxy statement and
form of proxy relating to such meeting at a reasonable time before the
solicitation of proxies for the meeting is made.
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PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
David Bunstine
President
American Independence Funds Trust
October 25, 2000
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<PAGE>
Exhibit A
---------
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this ________ day of ________________, 2000 by and between
AMR Investment Services, Inc., a Delaware Corporation (the "Adviser"), and
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Sub-Adviser");
WHEREAS, the American Independence Funds Trust (the "Trust"), a Delaware
business trust, is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act"),
consisting of several Funds of shares, each having its own investment policies;
and
WHEREAS, the Trust has retained INTRUST Financial Services, Inc. ("INTRUST") to
provide the Trust with business and asset management services for the INTRUST
Stock Fund (the "Fund"), subject to the control of the Trust's Board of
Trustees;
WHEREAS, INTRUST has retained the Adviser to provide the Trust with business and
asset management services for the Fund;
WHEREAS, INTRUST's agreement with the Adviser permits the Adviser to delegate to
other parties certain of its asset management responsibilities; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
management services to the Fund, and the Sub-Adviser is willing to render such
services;
NOW THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. Duties of Sub-Adviser. The Adviser employs the Sub-Adviser to manage the
investment and reinvestment of the Fund's assets and, with respect to such
assets, to continuously review, supervise, and administer the investment program
of the Fund, to determine in the Sub-Adviser's discretion the securities to be
purchased or sold, to provide the Adviser and the Trust with records concerning
the Sub-Adviser's activities which the Trust is required to maintain, and to
render regular reports to the Adviser and to the Trust's officers and Trustees
concerning the Sub-Adviser's discharge of the foregoing responsibilities. The
Sub-Adviser shall discharge the foregoing responsibilities subject to the
Adviser's oversight and the control of the officers and the Trustees of the
Trust and in compliance with such policies as the Trustees may from time to time
establish, and in compliance with the objectives, policies, and limitations for
such Fund set forth in the Trust's current registration statement as amended
from time to time, and applicable laws and regulations. The Sub-Adviser accepts
such employment and agrees to render the services for the compensation specified
herein and to provide at its own expense the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein. The Sub-Adviser will instruct the
Trust's Custodian(s) to hold and/or transfer the Fund's assets in accordance
with Proper Instructions received from the Sub-Adviser. (For this purpose, the
term "Proper Instructions" shall have the meaning(s) specified in the applicable
agreement(s) between the Trust and its custodians.) The Sub-Adviser will not be
responsible for Trust expenses except as specified in this Agreement.
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<PAGE>
2. Fund Transactions. The Sub-Adviser is authorized to select the brokers or
dealers (including, to the extent permitted by law and applicable Trust
guidelines, the Sub-Adviser or any of its affiliates) that will execute the
purchases and sales of Fund securities for the Fund and is directed to use its
best efforts to obtain the best net results with respect to brokers' commissions
and discounts as described in the Trust's current registration statement as
amended from time to time. In selecting brokers or dealers, the Sub-Adviser may
give consideration to factors other than price, including, but not limited to,
research services and market information. Any such services or information which
the Sub-Adviser receives in connection with activities for the Trust may also be
used for the benefit of other clients and customers of the Sub-Adviser or any of
its affiliates. The Sub-Adviser will promptly communicate to the Adviser and to
the officers and the Trustees of the Trust such information relating to Fund
transactions as they may reasonably request.
3. Compensation of the Sub-Adviser. For the services to be rendered by the Sub-
Adviser as provided in Sections 1 and 2 of this Agreement, the Adviser shall pay
to the Sub-Adviser compensation at the rate specified in Schedule A attached
hereto and made a part of this Agreement. Such compensation shall be paid to the
Sub-Adviser quarterly in arrears, and shall be calculated by applying the annual
percentage rate(s) as specified in the attached Schedule A to the average month-
end assets of the specified Funds during the relevant quarter. Solely for the
purpose of calculating the applicable annual percentage rates specified in the
attached Schedule(s), there shall be included such other assets as are specified
in said Schedule(s).
4. Other Services. At the request of the Trust or the Adviser, the Sub- Adviser
in its discretion may make available to the Trust office facilities, equipment,
personnel, and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Sub-Adviser and billed to the
Trust or the Adviser at a price to be agreed upon by the Sub- Adviser and the
Trust or the Adviser.
5. Reports. The Adviser (on behalf of the Trust) and the Sub-Adviser agree to
furnish to each other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may reasonably
request.
6. Status of Sub-Adviser. The services of the Sub-Adviser to the Trust are not
to be deemed exclusive, and the Sub-Adviser and its directors, officers,
employees and affiliates shall be free to render similar services to others so
long as its services to the Trust are not impaired thereby. The Sub-Adviser
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Adviser or the Trust in any way or otherwise be deemed an agent to the Adviser
or the Trust.
7. Certain Records. Any records required to be maintained and preserved pursuant
to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the 1940 Act
which are prepared or maintained by the Sub-Adviser on behalf of the Adviser or
the Trust are the property of the Adviser or the Trust and will be surrendered
promptly to the Adviser or Trust on request.
8. Liability of Sub-Adviser. No provision of this Agreement shall be deemed to
protect the Sub-Adviser against any liability to the Trust 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 this Agreement.
9. Permissible Interests. To the extent permitted by law, Trustees, agents, and
shareholders of the Trust are or may be interested in the Sub-Adviser (or any
successor thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of the Sub-
Adviser are or may be interested in the Trust as Trustees, shareholders or
otherwise; and the Sub-Adviser (or any successor thereof) is or may be
interested in the Trust as a shareholder or otherwise; provided that all such
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<PAGE>
interests shall be fully disclosed between the parties on an ongoing basis and
in the Trust's registration statement as required by law.
10. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue for two years after its initial approval and
thereafter for periods of one year for so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund; provided, however,
that if the shareholders of the Fund fail to approve the Agreement as provided
herein, the Sub-Adviser may continue to serve hereunder in the manner and to the
extent permitted by the 1940 Act and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder. This Agreement may be terminated at any time, without
the payment of any penalty, by the Adviser, by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Fund on not less than 30 days' nor more than 60 days' written
notice to the Sub-Adviser, or by the Sub-Adviser at any time without the payment
of any penalty, on 60 days' written notice to the Adviser and the Trust. This
Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at the primary office of
such party, unless such party has previously designated another address.
As used in this Section 10, the terms "assignment," "interested persons," and a
"vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
11. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
the State of Delaware, and notice is hereby given that this instrument is not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
Barrow, Hanley, Mewhinney, & Strauss, Inc. AMR Investment Services, Inc.
By: _______________________ By: _______________________
Title: ____________________ Title: ____________________
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<PAGE>
Schedule A
to the
Investment Sub-Advisory Agreement
between
AMR Investment Services, Inc.
and
Barrow, Hanley, Mewhinney & Strauss, Inc.
AMR Investment Services, Inc. shall pay compensation to Barrow, Hanley,
Mewhinney & Strauss, Inc. pursuant to section 3 of the Investment Sub-Advisory
Agreement between said parties in accordance with the following annual
percentage rates:
0.30% per annum on the first $200 million;
0.20% per annum on the next $300 million;
0.15% per annum on the next $500 million;
0.125% per annum on the excess over $1 billion.
In calculating the amount of assets under management solely for the purpose
of determining the applicable percentage rate, there shall be included all
other assets or trust assets of the AMR Investment Services Trust and
American Airlines, Inc. also under management by the Sub-Adviser (except
assets managed by the Sub-Adviser under the HALO Bond Program).
DATED: _________________, 2000
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<PAGE>
[Shareholder Name]
[Title (if applicable)]
[Address]
[Address]
[Shares Held]
American Independence Funds Trust
SPECIAL MEETING OF SHAREHOLDERS
November 15, 2000
Stock Fund
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF AMERICAN INDEPENDENCE FUNDS
TRUST
The undersigned hereby appoints David Bunstine and George Stevens proxies of the
undersigned, each with the power to appoint his substitute, for the Special
Meeting of Shareholders of the Stock Fund (the "Fund"), a separate series of
American Independence Funds Trust, to be held at 10:00 a.m. (Eastern Standard
Time) on November 15, 2000, at the Fund's offices located at 3435 Stelzer Road,
Columbus, Ohio 43219, and at any and all adjournments thereof (the "Meeting"),
to vote, as designated below, all shares of the Fund, held by the undersigned at
the close of business on October 16, 2000.
A signed proxy will be voted in favor of the Proposal listed below unless you
have specified otherwise. Please sign, date and return this proxy promptly. You
may vote only if you held shares in the Fund at the close of business on October
16, 2000. Your signature authorizes the proxies to vote in their discretion on
such other business as may properly come before the Meeting including, without
limitation, all matters incident to the conduct of the Meeting.
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PLEASE VOTE BY FILLING IN ONE OF THE BOXES BELOW.
PROPOSAL: To approve a new investment sub-advisory agreement between AMR and
Barrow, Hanley, Mewhinney & Strauss, Inc. with respect to the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
Signed: ____________________________________ Dated: __________________
[Shareholder Name]
Signed: ____________________________________ Dated: __________________
[Signature(s) (if held jointly)]
Please sign exactly as the name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give your full title. If shares
are held jointly, each shareholder should sign.
2
