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(3)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section
240.14a-12
__________________________________________________
AMERICAN AADVANTAGE FUNDS
__________________________________________________
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and
0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
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:
5) Total fee paid:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
American AAdvantage Funds
American AAdvantage Mileage Funds
4333 Amon Carter Boulevard, MD 5645
Fort Worth, TX 76155
November 15, 1996
Dear Shareholder:
The American AAdvantage Funds and the American AAdvantage Mileage
Funds (the "Trusts") will hold a combined special meeting of
shareholders on December 16, 1996. The Notice of the Meeting, the
related Proxy Statement and proxy card(s) are enclosed. Your prompt
response will help eliminate the cost of further proxy solicitations.
The Proxy Statement explains each proposal in detail. Please read
it carefully. The proposals are summarized below:
Election of Trustees
Shareholders of each Trust will be asked to elect seven Trustees
to each Trust's corresponding Board of Trustees. Six of the
nominees are currently serving as Trustees of the Trusts.
Supplements to the Management Agreements
Shareholders of each Fund will be asked to approve a supplement to
the Management Agreement of each Trust relating to securities lending
activities. If the proposed supplements are approved, AMR Investment
Services, Inc. (the "Manager") will be additionally compensated for
the administrative and oversight functions it will perform with
respect to the securities lending activity of each Fund and its
corresponding portfolio. The base level of investment advisory fees
paid to the Manager will remain the same. The Manager will receive
additional compensation only if the Fund engages in securities
lending activities. The amount of such compensation will depend upon
the income generated by the securities loans.
Elimination of Investment Restriction of Money Market Funds
Shareholders of the American AAdvantage Money Market Fund and the
American AAdvantage Money Market Mileage Fund (the "Money Market
Funds") will be asked to approve the elimination of the fundamental
investment restriction which prohibits them from investing in other
investment companies. Since the time of their inception, each Money
Market Fund, as a fundamental policy, has been restricted from
purchasing the securities of other investment companies except in
certain limited circumstances. The Manager recommends the elimination
of this restriction and the adoption of a non-fundamental investment
restriction that would allow the Money Market Funds to invest up to
ten percent of their total assets in the securities of other
investment companies. This new non-fundamental restriction follows
the requirements of the Investment Company Act of 1940 and will
provide the Money Market Funds with additional options for satisfying
their short-term liquidity needs.
Voting Procedures
The Funds currently operate under a Hub and Spoke structure,
pursuant to which each of the operating Funds of the Trusts seeks its
investment objective by investing all of its investable assets in a
corresponding portfolio of the AMR Investment Services Trust ("AMR
Trust") which has an identical investment objective to the
corresponding Fund. Interest holders of the AMR Trust will hold a
separate meeting to vote on the same matters described above as they
relate to the AMR Trust. Shareholders of each Fund will be asked to
provide voting instructions as to the AMR Trust meeting. The Funds
will cast their votes in the same proportion as the votes cast by the
Funds' shareholders at the meeting.
Conclusion
We urge you to complete, sign and return the enclosed proxy
card(s) promptly, even if you plan to be present at the meeting. A
postage-paid return envelope is enclosed for this purpose. Should
you have any questions about the proposals, please do not hesitate to
contact us. We look forward to receiving your proxy.
Sincerely yours,
/s/ William F. Quinn
--------------------
William F. Quinn
President
American AAdvantage Funds
American AAdvantage Mileage Funds
(1)"Hub and Spoke" is a registered service mark of Signature
Financial Group, Inc.
<PAGE>
AMERICAN AADVANTAGE FUNDS
AMERICAN AADVANTAGE MILEAGE FUNDS
NOTICE OF
COMBINED SPECIAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
A combined special meeting of the shareholders of the American
AAdvantage Funds ("AAdvantage Trust") and the American AAdvantage
Mileage Funds ("Mileage Trust") (collectively, the "Trusts") will be
held on December 16, 1996 at 9:00 a.m. Central time at the offices of
AMR Investment Services, Inc. ("Manager"), 4333 Amon Carter
Boulevard, Fort Worth, Texas 76155, Room 6E1D-36, for the purposes
set forth below.
Under a Hub and Spoke operating structure, each of the currently
operating funds of the Trusts (the "Funds") seeks its investment
objective by investing all of its investable assets in a
corresponding portfolio of the AMR Investment Services Trust ("AMR
Trust"). As a result, you will be asked to vote twice on each of the
following proposals, once to approve that proposal on behalf of the
AMR Trust and once to approve that proposal on behalf of the Trusts
of which you are a shareholder.
(1) To authorize the Trusts, on behalf of the Funds, to vote at a
meeting of the AMR Trust:
(a) To elect the Board of Trustees of the AMR Trust (each
Trust);
(b) To approve a supplement to the AMR Trust Management
Agreement relating to securities lending activities (each
Fund);
(c) To approve the elimination of the Money Market
Portfolio's fundamental investment restriction relating to
investing in other investment companies (American AAdvantage
Money Market Fund ("Money Market Fund") and American
AAdvantage Money Market Mileage Fund ("Money Market Mileage
Fund") only).
(2) To elect the Boards of Trustees of the AAdvantage Trust and
the Mileage Trust (each Trust);
(3) To approve a supplement to the Management Agreements of the
AAdvantage Trust and the Mileage Trust relating to securities
lending activities (each Fund);
(4) To approve the elimination of the fundamental investment
restrictions of the Money Market Fund and the Money Market Mileage
Fund relating to investing in other investment companies (Money
Market Fund and Money Market Mileage Fund only); and
(5) To transact such other business as may properly come before
the meeting or any adjournments thereof.
You will be entitled to vote at the meeting and any adjournments
thereof if you owned shares of the Funds at the close of business on
October 31, 1996. If you owned shares in more than one Trust or
owned shares in either the Money Market Fund or the Money Market
Mileage Fund and another Fund, you may receive more than one proxy
card. Please be certain to vote each proxy card you receive. If you
attend the meeting, you may vote your shares in person.
If you do not expect to attend the meeting, please complete, date,
sign and return the enclosed proxy card(s) in the enclosed postage
paid envelope.
By order of the Board of Trustees,
CLIFFORD J. ALEXANDER
Secretary
November 15, 1996
4333 Amon Carter Boulevard
Fort Worth, Texas 76155
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy
card(s), date and sign the card(s), and return the card(s) in the
envelope provided. If you sign, date and return the proxy card(s)
but give no voting instructions, your shares will be voted "FOR" all
proposals noticed above. In order to avoid additional expense to the
Funds of further solicitation, management requests your cooperation
in mailing in your proxy card(s) promptly. Unless proxies are signed
by the appropriate persons, they will not be voted.
<PAGE>
AMERICAN AADVANTAGE FUNDS
AMERICAN AADVANTAGE MILEAGE FUNDS
4333 Amon Carter Boulevard
Fort Worth, Texas 76155
________________
PROXY STATEMENT
Combined Special Meeting of Shareholders
To Be Held on December 16, 1996
________________
This document is a Proxy Statement for the American AAdvantage Funds
("AAdvantage Trust") and the American AAdvantage Mileage Funds ("Mileage
Trust"). The AAdvantage Trust and the Mileage Trust each have seven
separate investment portfolios (each a "Fund" and collectively, the
"Funds") that are currently in operation. The AAdvantage Trust Funds are
as follows:
<TABLE>
<CAPTION>
Fund Name Abbreviated Name
<S> <C>
American AAdvantage Balanced Fund Balanced Fund
American AAdvantage Growth and Income Growth and Income Fund
Fund
American AAdvantage International International Equity Fund
Equity Fund
American AAdvantage Limited-Term Limited-Term Income Fund
Income Fund
American AAdvantage Money Market Fund Money Market Fund
American AAdvantage Municipal Money Municipal Money Market
Market Fund Fund
American AAdvantage U.S. Treasury U.S. Treasury Money Market
Money Market Fund Fund
</TABLE>
The Mileage Trust Funds are as follows:
<TABLE>
<CAPTION>
Fund Name Abbreviated Name
<S> <C>
American AAdvantage Balanced Mileage Balanced Mileage Fund
Fund
American AAdvantage Growth and Income Growth and Income Mileage
Mileage Fund Fund
American AAdvantage International International Equity
Equity Mileage Fund Mileage Fund
American AAdvantage Limited-Term Limited-Term Income
Income Mileage Fund Mileage Fund
American AAdvantage Money Market Money Market Mileage Fund
Mileage Fund
American AAdvantage Municipal Money Municipal Money Market
Market Mileage Fund Mileage Fund
American AAdvantage U.S. Treasury U.S. Treasury Money Market
Money Market Mileage Fund Mileage Fund
</TABLE>
This Proxy Statement is furnished in connection with the solicitation of
proxies made by, and on behalf of, the Board of Trustees of the AAdvantage
Trust and the Board of Trustees of the Mileage Trust to be used at the
Combined Special Meeting of Shareholders of the AAdvantage Trust and the
Mileage Trust and at any adjournments thereof ("Meeting"), to be held at
9:00 a.m. Central time on Monday, December 16, 1996, at the offices of AMR
Investment Services, Inc. ("Manager"). The Manager serves as manager and
administrator to the AAdvantage Trust, Mileage Trust and AMR Investment
Services Trust ("AMR Trust") (collectively, the "Trusts"). Brokers
Transaction Services, Inc., located at 7001 Preston Road, Dallas, Texas
75205, serves as underwriter to the Trusts. The purpose of the Meeting is
set forth in the accompanying Notice.
The Funds currently seek their investment objectives by investing all of
their investable assets in corresponding portfolios ("Portfolios") of the
AMR Trust, which have investment objectives identical to their
corresponding Funds. At a meeting of interest holders of the AMR Trust,
the AAdvantage Trust and the Mileage Trust each will vote its interest in
the AMR Trust in proportion to the votes cast by that Trust's shareholders
at the Meeting. Likewise, a Fund will vote its interest in its
corresponding Portfolio of the AMR Trust in proportion to the votes cast
by that Fund's shareholders when a meeting of interest holders of a
Portfolio of the AMR Trust is called. The AAdvantage Trust or the Mileage
Trust or each Fund of such Trust will vote shares for which they receive
no voting instructions in the same proportion as the shares for which they
do receive voting instructions. Because a Trust's votes are proportionate
to its percentage interest in the AMR Trust, the majority of the AMR
Trust's interest holders could approve an action against which a majority
of the outstanding voting securities of the AAdvantage Trust or the
Mileage Trust had voted. Similarly, the majority of a Portfolio's
interest holders could approve an action against which a majority of the
voting securities of its corresponding Fund had voted.
This Proxy Statement and the accompanying proxy card(s) will be mailed
to shareholders on or about November 15, 1996. The solicitation of
proxies will be made by mail, but also may include telephone or oral
communications by employees of the Manager, who will not receive any
compensation from the Trusts for such solicitation. Boston Financial Data
Services, Inc. has been retained by the Manager solely for the purpose of
mailing proxy materials to shareholders and tabulating voting results at a
cost of approximately $14,000. All expenses incurred in connection with
preparing these proxy materials will be borne pro rata by the AAdvantage
Trust, the Mileage Trust and the AMR Trust based upon relative net assets.
A majority of each applicable Fund's shares of beneficial interest
outstanding on October 31, 1996 ("Record Date"), represented in person or
by proxy, constitutes a quorum and a quorum must be present for the
transaction of business with respect to Proposals 1(b), 1(c), 3 and 4.
With respect to Proposals 1(a) and 2, a majority of AAdvantage Trust's and
Mileage Trust's shares of beneficial interest outstanding on the Record
Date, represented in person or by proxy, constitutes a quorum and must be
present for the transaction of business. If a quorum is present at the
Meeting but sufficient votes to approve any of the proposals are not
received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of
those shares represented at the Meeting in person or by proxy. If a quorum
is present, the persons named as proxies will vote those proxies that they
are entitled to vote FOR any such proposal in favor of such an
adjournment, and will vote those proxies required to be voted AGAINST any
such proposal against such adjournment. A shareholder vote may be taken
on one or more of the proposals in this Proxy Statement prior to any such
adjournment if sufficient votes have been received and it is otherwise
appropriate.
Abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted
FOR or AGAINST any adjournment. Abstentions and broker non-votes will not
be counted, however, as votes cast for purposes of determining whether
sufficient votes have been received to approve a proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote AGAINST
adjournment or AGAINST Proposals 1(b), 1(c), 3 and 4, for which the
required vote is a majority of the outstanding voting securities, as
defined below. Abstentions and broker non-votes will have no effect on
Proposals 1(a) and 2, for which the required vote is a plurality number of
the votes cast by each the AAdvantage Trust and the Mileage Trust.
The individuals named as proxies on the enclosed proxy card(s) will vote
in accordance with your directions as indicated thereon if your proxy card
is received and has been properly executed. If your proxy card is
properly executed and you give no voting instructions, your shares will be
voted in favor of the proposals described in this Proxy Statement. You
may revoke your proxy card by giving another proxy, by letter or telegram
revoking your initial proxy if received by the applicable Trust prior to
the Meeting, or by appearing and voting at the Meeting.
Each Fund of the AAdvantage Trust consists of multiple classes of
shares, including the AMR Class, PlanAhead Class and Institutional Class.
In addition, the Money Market Fund, Municipal Money Market Fund and U.S.
Treasury Money Market Fund offer Platinum Class shares. The Money Market
Mileage Fund consists of two classes of shares, the Mileage Class and the
Platinum Class. The other Mileage Trust Funds offer only one class of
shares. Each share of each class is entitled to one vote. None of the
proposals in this Proxy Statement requires separate voting by class. As
of the Record Date, there were issued and outstanding the following number
of shares of each Fund:
<TABLE>
<CAPTION>
AADVANTAGE TRUST Total Number MILEAGE TRUST Total
of Shares Number of
Outstanding Shares
Outstanding
<S> <C> <C> <C>
Balanced Fund 58,874,240 Balanced Mileage 155,886
Fund
Growth and 59,588,729 Growth and Income 322,195
Income Fund Mileage Fund
International 26,652,431 International 221,188
Equity Fund Equity Mileage
Fund
Limited-Term 17,759,500 Limited-Term 120,369
Income Fund Income Mileage
Fund
Money Market 1,633,809,605 Money Market 122,137,695
Fund Mileage Fund
Municipal Money 52,208,307 Municipal Money 28,725,574
Market Fund Market Mileage
Fund
U.S. Treasury 79,570,122 U.S. Treasury 10,637,562
Money Market Money Market
Fund Mileage Fund
</TABLE>
For a list of shareholders who owned of record five percent or more of
the shares of each Fund or of the AAdvantage Trust or the Mileage Trust as
of the Record Date, see Appendix A. To the knowledge of the Manager, the
executive officers and Trustees, as a group, owned less than one percent
of the outstanding shares of each Fund and of each the AAdvantage Trust
and the Mileage Trust as of October 31, 1996.
Shareholders of record at the close of business on the Record Date will
be entitled to vote at the Meeting. Each full share of the Funds is
entitled to one vote and each fractional share is entitled to a
proportionate share of one vote. You may obtain a copy of the AAdvantage
Trust's and Mileage Trust's most recent Annual and Semi-Annual Reports to
Shareholders, free of charge, by writing to the Manager at 4333 Amon
Carter Boulevard, MD 5645, Fort Worth, Texas 76155, or by calling 1-800-
388-3344.
Approval of Proposals 1(b), 1(c), 3 and 4 outlined below with respect
to a Fund or a Trust requires the affirmative vote of the holders of a
"majority of the outstanding voting securities" of that Fund or Trust
entitled to vote on the particular proposal, as such term is defined in
the Investment Company Act of 1940, as amended ("1940 Act"). For that
purpose, a vote of the holders of a "majority of the outstanding voting
securities" of a Fund or Trust means the lesser of either (1) the vote of
67% or more of the shares of such Fund or Trust present at the Meeting if
the holders of more than 50% of the outstanding Fund or Trust shares are
present or represented by proxy, or (2) the vote of the holders of more
than 50% of the outstanding shares of such Fund or Trust. Approval of
Proposals 1(a) and 2 require a plurality of each the AAdvantage Trust's
and the Mileage Trust's shares voted in person or by proxy at the Meeting.
Approval and implementation of Proposals 1(b) and 3 with respect to each
Fund is not conditioned upon approval of these proposals by the
shareholders of any other Fund. However, approval and implementation of
Proposals 1(c) and 4 is conditioned upon approval of these proposals by
shareholders of both the Money Market Fund and the Money Market Mileage
Fund. Listed below are the proposals the shareholders of each Fund are
being asked to consider:
<TABLE>
<CAPTION>
Fund: Proposals Applicable to
Fund:
<S> <C>
All Funds except for Money All Proposals except for
Market Fund and Money Market 1(c) and 4
Mileage Fund
Money Market Fund and Money All Proposals
Market Mileage Fund
</TABLE>
PROPOSAL 1(a): ELECTION OF THE BOARD OF TRUSTEES OF THE AMR TRUST (each
Trust).
PROPOSAL 2: ELECTION OF THE BOARDS OF TRUSTEES OF THE AADVANTAGE TRUST
AND THE MILEAGE TRUST (each Trust).
Proposals 1(a) and 2 relate to the election of seven Trustees to each
Board of Trustees of the AMR Trust, the AAdvantage Trust and the Mileage
Trust (each a "Board" and collectively, the "Boards") at the Meeting. All
of the nominees, except for Dr. Kneeland Youngblood, currently serve as
Trustees of the Trusts and have been nominated for reelection. Each Board
authorized an increase in the number of Trustees who serve on each Board
from six to seven. Such increase allows each Board to nominate an
additional Trustee who is not an "interested person" of the Trusts
("Independent Trustees"), as defined under the 1940 Act. If all nominees
are elected, then each Board will be composed of a majority of Independent
Trustees.
The Boards propose the election of the seven nominees named below to
serve as Trustees for each of the AMR Trust, the AAdvantage Trust and the
Mileage Trust. Each elected Trustee would hold office for an indefinite
term and until his successor is elected and qualified. The term of
Trustees elected will be until a Trustee either resigns or is removed from
office, or reaches a mandatory retirement age. Except for Messrs. Quinn,
O'Sullivan and Justin, each Trustee must retire at the end of the fiscal
year in which the Trustee reaches the age of 70. A majority of Trustees
then in office may fill Trustee vacancies caused by resignation, death or
expansion of a Board, provided that, after such selection, at least two-
thirds of the Trustees will have been elected by shareholders. Any
Trustee may be removed by a vote of the holders of two-thirds of all
outstanding shares of beneficial interest of the respective Trust
qualified to vote at a meeting of shareholders or interest holders, as
appropriate.
Election of a nominee for Trustee requires the vote of a plurality of
the shares voted in person or by proxy at the Meeting. It is the
intention of the persons named in the accompanying Proxy to vote FOR the
election of the nominees named below. All of the nominees named below
have consented to serve as Trustees if elected. If any of those nominees
should not be available for election due to unforeseen circumstances, it
is the intention of the persons named in the accompanying Proxy to vote
FOR such other person(s) as the Trustees may recommend.
The seven nominees for election as Trustees of each Board, their ages
and a description of their business experience during the past five years
are as follows:
Alan D. Feld, 59, Trustee, AAdvantage Trust, Mileage Trust and AMR Trust
(October 1996-Present); Partner, Akin, Gump, Strauss, Hauer & Feld LLP
(1960-Present)#; Director, Clear Channel Communications (1984-Present);
Director, CenterPoint Properties, Inc. (1994-Present).
Ben J. Fortson, 64, Trustee, AAdvantage Trust, Mileage Trust and AMR Trust
(October 1996-Present); President and Chief Executive Officer, Fortson Oil
Company (1958-Present); Director, Kimbell Art Foundation (1964-Present);
Director, Burnett Foundation (1987-Present); Honorary Trustee, Texas
Christian University (1986-Present).
William F. Quinn,* 49, Trustee and President, AAdvantage Trust (1987-
Present), Mileage Trust and AMR Trust (1995-Present); President, AMR
Investment Services, Inc. (1986-Present); Chairman, American Airlines
Employees Federal Credit Union (1989-Present); Trustee, American
Performance Funds (1990-1994); Director, Crescent Real Estate Equities,
Inc. (1994-Present).
John S. Justin, 80, Trustee, AAdvantage Trust (1989-Present), Mileage
Trust and AMR Trust (1995-Present); Chairman and Chief Executive Officer,
Justin Industries, Inc. (a diversified holding company) (1969-Present);
Executive Board Member, Blue Cross/Blue Shield of Texas (1985-Present);
Board Member, Zale Lipshy Hospital (1993-Present); Trustee, Texas
Christian University (1980-Present); Director and Executive Board Member,
Moncrief Radiation Center (1985-Present); Director, Texas New Mexico
Enterprises (1984-1993); Director, Texas New Mexico Power Company (1979-
1993).
Stephen D. O'Sullivan,* 61, Trustee, AAdvantage Trust (1987-Present),
Mileage Trust and AMR Trust (1995-Present); Consultant (1994-1995); Vice
President and Controller, American Airlines, Inc. (1985-1994).
Roger T. Staubach, 55, Trustee, AAdvantage Trust, Mileage Trust and AMR
Trust (1995-Present); Chairman of the Board and Chief Executive Officer
(1982-Present) and President (1983-1991) of The Staubach Company (a
commercial real estate company); Director, Halliburton Company (1991-
Present); Director, First USA, Inc. (1993-Present); Director, Brinker
International (1993-Present); Director, Columbus Realty Trust (1994-
Present); former quarterback of the Dallas Cowboys professional football
team.
Kneeland Youngblood, M.D.(2) 40, Physician (1982-Present); President,
Youngblood Enterprises, Inc., a health care investment and management firm
(1993-Present), Trustee, Teacher Retirement System of Texas (1993-1999), a
Gubernatorial appointment; Director, United States Enrichment Corporation
(1993-Present), a Presidential appointment; Director, Just For the Kids
(1995-Present); Member, Council on Foreign Relations (1995-Present).
# The law firm of Akin, Gump, Strauss, Hauer & Feld LLP ("Akin, Gump")
provides legal services to American Airlines, Inc., an affiliate of the
Manager. Mr. Feld has advised the Trusts that he has had no material
involvement in the services provided by Akin, Gump to American Airlines,
Inc. and that he has received no material benefit in connection with these
services. Akin, Gump does not provide legal services to the Manager or
AMR Corporation.
* By virtue of their current or former positions with AMR Corporation or
affiliated entities, Messrs. Quinn and O'Sullivan are deemed to be
"interested persons" of the AAdvantage Trust, the Mileage Trust and the
AMR Trust as that term is defined in the 1940 Act.
(2) Dr. Youngblood is the only nominee who does not serve currently as a
Trustee on each Board.
The Boards met four times for regularly scheduled meetings and one
time for a special meeting during the fiscal year ended October 31, 1996.
Each Trustee (who was then a Trustee), except Mr. O'Sullivan, attended at
least 75% or more of all meetings. The Board does not have an audit,
nominating or compensation committee.
Each Trust compensates each 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. Mr. O'Sullivan, who as a retiree of American
Airlines, Inc. already receives free airline travel, receives compensation
annually of up to three round-trip airline tickets for each of his three
adult children. Trustees also are reimbursed for any expenses incurred in
attending Board meetings. The direct aggregate and total remuneration
(including reimbursements of such expenses) paid to all Trustees on behalf
of each Trust for the fiscal year ended October 31, 1996 is shown below.
The Trusts do not offer Trustees a bonus, pension, profit sharing or
retirement plan.
<TABLE>
<CAPTION>
Aggregate Compensation From:
<S> <C> <C> <C> <C>
Total
Compensation
Name of AAdvantage Mileage Paid to
Trustee Trust Trust AMR Trust Trustees by
Fund Complex
William F. $0 $0 $0 $0
Quinn
Alan D. Feld1 $0 $0 $0 $0
Ben J. $0 $0 $0 $0
Fortson1
David G. Fox2 $2,542 $2,542 $5,084 $10,169
John S. Justin $373 $373 $746 $1,492
Stephen D. $458 $458 $916 $1,832
O'Sullivan
Roger T. $2,832 $2,832 $5,665 $11,330
Staubach
</TABLE>
1 Messrs. Feld and Fortson did not serve as Trustees during this
period.
2 Mr. Fox has resigned from each Board and is not seeking reelection.
PROPOSAL 1(b): APPROVAL OF A SUPPLEMENT TO THE AMR TRUST MANAGEMENT
AGREEMENT RELATING TO SECURITIES LENDING ACTIVITIES (each Trust).
PROPOSAL 3: APPROVAL OF A SUPPLEMENT TO THE MANAGEMENT AGREEMENTS OF THE
AADVANTAGE TRUST AND THE MILEAGE TRUST RELATING TO SECURITIES LENDING
ACTIVITIES (each Trust).
The Manager has entered into investment management contracts with the
AMR Trust, AAdvantage Trust and Mileage Trust (each a "Management
Agreement" and collectively, the "Management Agreements"). Shareholders
are being asked to approve supplements to the Management Agreements
pursuant to which the Manager will undertake to perform certain services
in connection with securities lending activities on behalf of the Funds
and Portfolios and receive, in addition to its base advisory fee,
compensation based on the income generated by these activities.
The Current Management Agreements
Under the current Management Agreements, the Manager is obligated to
provide or oversee the provision of all administrative, investment
advisory and portfolio management services for the Funds and Portfolios.
Pursuant to the Management Agreements, the Manager provides the Trusts
with: office space, office equipment and personnel necessary to manage
and administer the operations of the Trusts, including compliance with
reporting requirements; corresponding with shareholders; maintaining
internal bookkeeping, accounting and auditing services and records; and
supervising the provision of services to the Trusts by third parties. The
Manager also selects and changes investment advisers for the Funds and
Portfolios (subject to approval by the Boards of the respective Trusts),
allocates assets among the investment advisers, monitors the investment
advisers' investment programs and results and coordinates the investment
activities of the investment advisers to ensure compliance with regulatory
restrictions.
The Manager serves as the sole investment adviser to the corresponding
Portfolios of the Limited-Term Income Fund, the Limited-Term Income
Mileage Fund, the Money Market Fund, the Money Market Mileage Fund, the
Municipal Money Market Fund, the Municipal Money Market Mileage Fund, the
U.S. Treasury Money Market Fund and the U.S. Treasury Money Market Mileage
Fund. The assets of the corresponding Portfolios of each other Fund are
allocated by the Manager among investment advisers designated for that
Fund.
Each Trust pays all of its expenses other than those expressly assumed
by the Manager. Whenever a Fund's or Portfolio's expenses are below
applicable expense limits, the Manager can be reimbursed monthly for any
excess expenses it has assumed. Under the Management Agreements, the
Manager bears the expense of providing the above services and pays the
fees of the investment advisers of the Funds and their Portfolios. To the
extent that a Fund invests all of its investable assets in a Portfolio of
the AMR Trust, there are (1) no advisory fees paid under such Management
Agreements and (2) reduced administrative fees paid under such Management
Agreements and related Administrative Services Agreements.
As compensation for paying the investment advisory fees and for
providing the Portfolios with advisory and asset allocation services, the
Manager receives from the AMR Trust an annualized fee, which is calculated
and accrued daily and payable monthly, equal to the sum of (1) 0.25% of
the net assets of the Limited-Term Income Portfolio of the AMR Trust, (2)
0.15% of the net assets of the Money Market Portfolio, the Municipal Money
Market Portfolio and the U.S. Treasury Money Market Portfolio of the AMR
Trust, (3) 0.10% of the net assets of the other Portfolios of the AMR
Trust, plus (4) all fees payable by the Manager to the AMR Trust
investment advisers.
The Management Agreement between the Manager and the AMR Trust, which
is dated October 1, 1995, was approved by interest holders on August 3,
1995. The Management Agreement between the Manager and the AAdvantage
Trust, which is dated April 3, 1987, was approved by shareholders on
August 3, 1995. The Management Agreement between the Manager and the
Mileage Trust, which is dated October 1, 1995, was approved by the initial
shareholder on September 28, 1995.
Each Management Agreement remains in full force with respect to a Fund
or Portfolio for an initial term of two years, and thereafter so long as
its continuance is specifically approved at least annually with respect to
each Fund or Portfolio (1) by a vote of a majority of the outstanding
voting securities of that Fund or Portfolio, or (2) by a vote of a
majority of the Trustees of the Trust who are not parties to the agreement
or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on the Management Agreement.
Notwithstanding the foregoing, a Management Agreement may be terminated at
any time with respect to any Fund or Portfolio by either the Manager or
the Trustees of the Trust, without payment of any penalty, on sixty days'
written notice, by vote of the Trustees or by vote of a majority of the
outstanding voting securities of such Fund or Portfolio and will terminate
automatically in the event of its assignment.
In addition to the management fee, the Manager is paid an
administrative services fee for providing administrative and management
services (other than investment advisory services) to the Funds.
Administrative services fees for the fiscal year 1996 were approximately
$2,893,400 for the AAdvantage Trust and $71,300 for the Mileage Trust.
Pursuant to a Management Agreement with the Mileage Trust, administrative
fees for the 1996 fiscal year of approximately $72,900 were paid to the
Manager. In addition, for the fiscal year, distribution or shareholder
services fees under distribution plans adopted pursuant to Rule 12b-1 of
the 1940 Act were approximately $408,300 and $358,400, respectively, by
Funds of the AAdvantage Trust and Mileage Trust. Approximately $1,400 and
$167,500, respectively, of these fees pertaining to the Funds of the
AAdvantage Trust and the Mileage Trust were waived. Service fees for
fiscal 1996, pursuant to a service plan of the AAdvantage Trust, were
approximately $226,300, of which $4,900 was waived by the Manager. The
Manager will continue to provide these services after the proposed
Supplements to the Management Agreements are voted on by shareholders.
The Proposed Supplements to the Management Agreements
Each Fund and Portfolio (each a "Lender" and, collectively, "Lenders")
has the ability to increase its investment income by lending portfolio
securities to registered broker-dealers or other institutional investors
("Borrowers"). Each Lender may either lend its portfolio securities
directly or contract with a securities lending agent to do so. Any
contract between the Lenders and their securities lending agent typically
would set forth the manner in which all securities loans for the Lenders
will be transacted, including the types of securities that are eligible
for loan and the types of collateral to be received in connection with
each loan. Under a securities loan, a Lender, or its securities lending
agent, delivers portfolio securities owned by the Lender to a Borrower
against delivery by the Borrower to the Lender, or its securities lending
agent, of appropriate collateral. As collateral for the securities
loaned, the Lender usually receives cash or high quality liquid securities
(such as United States Government securities). The Lenders invest cash
collateral received from the loan of their securities, thereby generating
additional investment income for the Lenders. The Lenders also may
receive a loan fee from Borrowers who post collateral other than cash.
The Trusts are subject to regulatory and investment restrictions when
engaging in securities lending activities. Under the proposed supplements
to the Management Agreements (the "Supplements"), the Manager will
undertake to oversee the activities of the securities lending agent and
each Lender's participation in securities lending activities to ensure
compliance with all applicable regulatory and investment guidelines. The
Manager will determine which specific securities are available for loan
and will have the discretion and power to prevent any loan from being made
or to terminate any loan. The Manager will monitor the securities lending
agent to ensure that loans are effected in accordance with its
instructions and within the procedures adopted by the AMR Trust Board. In
addition, the Manager will prepare appropriate periodic reports for, and
seek appropriate approvals from, each Lender's Board.
If the Supplements are approved by shareholders, the Manager will be
compensated for the administrative and oversight functions it will perform
with respect to those Lenders that lend their securities. The base level
of the investment advisory fees paid to the Manager will remain the same.
The Manager will receive additional compensation only if the Lenders
engage in securities lending activities. The amount of such compensation
will depend on the income generated by the loan of securities of the
Lenders.
Under the Supplements, if a Borrower posts cash collateral for the
loan of a Lender's securities, the Manager will receive 25% of the net
annual interest income (the gross interest income earned by the investment
of cash collateral, less the amount paid to Borrowers as well as related
expenses) received from the investment of such cash. If a Borrower posts
collateral other than cash for the loan of a Lender's securities, the
Borrower will pay to the lender a loan fee for the use of the borrowed
securities. Under the Supplements, the Manager will receive 25% of the
loan fees posted by such Borrower as compensation for services provided in
connection with any such loan.
Subject to the receipt of an exemptive order pending with the
Securities and Exchange Commission, the Board of each Trust could elect to
invest cash collateral received by the Lenders from the loan of their
portfolio securities in shares of one or more private investment companies
managed by the Manager (the "Investment Funds"). The Manager will receive
compensation from the Investment Funds for providing portfolio management
and administrative services to the Investment Funds.
Shareholders are being asked to approve Supplements to the Management
Agreements with the AAdvantage Trust, Mileage Trust and AMR Trust.
However, it is currently contemplated that all securities lending
activities will be done only by the AMR Trust. To the extent that a Fund
invests all of its investable assets in a Portfolio of the AMR Trust, the
Manager will not receive any compensation under the Supplements to the
Management Agreements of the AAdvantage Trust and Mileage Trust.
For the fiscal year ended October 31, 1996, advisory fees under the
AMR Trust's Management Agreement were approximately $10,403,000 of which
approximately $5,161,000 was paid by the Manager to the AMR Trust
investment advisers. Advisory fees under the Management Agreement of
approximately $44,000 were waived during the period. The AAdvantage Trust
and the Mileage Trust did not pay any advisory fees under their Management
Agreements for the same period. If the Supplements to the Management
Agreements had been in effect during the past fiscal year, the AMR Trust
would have paid management fees of approximately $65,800 from the
securities lending activities conducted by the Trust during the year. The
difference in the management fees paid during that period and the
projected management fees that would have been paid if the Supplements had
been in effect is approximately 0.6%. The management fees for the
AAdvantage Trust and the Mileage Trust would have been unchanged if the
Supplements had been in effect.
Consideration by the Boards
At a meeting held on October 24, 1996, the Boards, including the
Independent Trustees of each Trust, evaluated the proposed Supplements to
the Management Agreements. The Boards considered that securities lending
activities generate additional investment income for the Lenders. The
Boards found that the Manager's supervision and involvement in the
Lenders' securities lending activities can assist the Lenders in the loan
of their securities and that such services can provide additional value to
the Lenders. The Boards found that such services were in addition to and
not duplicative of services the Manager provides under the existing
Management Agreements. The Boards also found that lending portfolio
securities and investing cash collateral in shares of the Investment Funds
would result in additional services that provide the Lenders and their
shareholders with additional benefits.
The Boards reviewed the ability of the Manager to provide the proposed
services to the Lenders and the projected cost of those services over the
next fiscal year. The Boards determined that it would be in the best
interest of each Fund and Portfolio for the Manager, pursuant to the
Supplements, to provide services in connection with securities lending
activities. The Boards reviewed the services that would be provided by
the Manager pursuant to the Supplements and analyzed the factors they
deemed relevant, including the nature, quality and scope of such services.
Accordingly, on October 24, 1996, the Boards, including the Independent
Trustees, unanimously approved, subject to the required
shareholder/interest holder approval described herein, the Supplements to
the Management Agreements between the Manager and the Trusts. The Boards
then recommended that the Supplements be submitted to shareholders for
their approval.
Portfolio Information
For the fiscal year ended October 31, 1996, the International Equity
Portfolio paid brokerage commissions to the following affiliates of
subadvisers to the Portfolio: $4,017 to Morgan Stanley, Inc., an affiliate
of Morgan Stanley Asset Management, $7,521 to Robert Fleming & Co., an
affiliate of Rowe Price-Fleming International, Inc. ("RPF") and $1,002 to
Jardine Fleming, also an affiliate of RPF. During that same period, the
Growth and Income Portfolio paid $2,500 in brokerage commissions to Sutro
& Company, an affiliate of Independence Investment Associates which is a
subadviser to that Portfolio. These amounts represented 2.26% of the
International Equity Portfolio's and 0.26% of the Growth and Income
Portfolio's aggregate brokerage commissions paid during the most recent
fiscal year.
About the Manager
AMR Investment Services, Inc., a Delaware corporation, is a
wholly-owned subsidiary of AMR Corporation, the parent company of American
Airlines, Inc., and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services to the
AAdvantage Trust and other investors. The principal offices of both the
Manager and AMR Corporation are at 4333 Amon Carter Boulevard, Fort Worth,
Texas 76155. As of September 30, 1996, the Manager had assets under
management (including assets under fiduciary advisory control) totaling
approximately $15 billion, including approximately $6 billion under active
management and $9 billion as named fiduciary or fiduciary adviser. Of the
total, approximately $11 billion in assets are related to AMR Corporation.
The principal executive officers and each director of the Manager,
including those officers and directors who are officers and Trustees of
the Trusts, are as follows:
<TABLE>
<CAPTION>
Name Principal Occupation
<S> <C>
Robert L. Director and Chairman of the Manager; Chairman,
Crandall President and Chief Executive Officer of AMR
Corporation; Director, Chairman, and Chief
Executive Officer of American Airlines, Inc.
Gerard J. Director and Vice Chairman of the Manager;
Arpey Senior Vice President and Chief Financial Officer
of AMR Corporation.
Jeffrey M. Vice President and Treasurer of the Manager, Vice
Jackson President of Corporate Development and Treasurer
of AMR Corporation.
Charles D. Secretary of the Manager; Corporate Secretary of
MarLett American Airlines, Inc.
Anne H. Director of the Manager; Senior Vice President
McNamara and General Counsel of AMR Corporation; Senior
Vice President, Administration and General
Counsel, American Airlines, Inc.
William F. President of the Manager and Trustee and
Quinn President of the Trusts.
Michael W. Vice President of the Manager and of the Trusts.
Fields
John B. Vice President of the Manager and of the Trusts.
Roberson
Nancy A. Vice President of the Manager and of the Trusts.
Eckl
Barry Y. Director of Legal and Compliance of the Manager
Greenberg and Vice President and Assistant Secretary of the
Trusts.
Rebecca L. Director of Finance of the Manager and Treasurer
Harris of the Trusts.
</TABLE>
The business address of each individual listed above is 4333 Amon
Carter Boulevard, MD 5645, Fort Worth, Texas 76155.
EACH BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 1(b) AND
3.
PROPOSAL 1(c): APPROVAL OF THE ELIMINATION OF THE MONEY MARKET PORTFOLIO'S
FUNDAMENTAL INVESTMENT RESTRICTION RELATING TO INVESTING IN OTHER
INVESTMENT COMPANIES (Money Market Fund and Market Mileage Fund only).
PROPOSAL 4: APPROVAL OF THE ELIMINATION OF THE FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE MONEY MARKET FUND AND THE MONEY MARKET MILEAGE FUND
RELATING TO INVESTING IN OTHER INVESTMENT COMPANIES (Money Market Fund and
Money Market Mileage Fund only).
On October 24, 1996, the Boards of each Trust approved, subject to
shareholder approval, the elimination of the fundamental restrictions of
the Money Market Portfolio, Money Market Fund and Money Market Mileage
Fund (collectively, the "Money Market Funds"), which prohibit those Funds
from investing their assets in securities issued by other investment
companies. Currently, these restrictions provide that the Money Market
Funds may not:
purchase the securities of other investment companies except in
connection with a merger, consolidation, acquisition of assets or other
reorganization approved by the Money Market Fund's shareholders or
interest holders, as appropriate.
Since the time of their inception, each Money Market Fund, as a
fundamental policy, has been restricted from purchasing such securities.
Currently, all other Funds may, as a non-fundamental investment
restriction, invest up to ten percent of their total assets in the
securities of other investment companies to the extent permitted by law.
The Manager believes that this restriction affecting only the Money
Market Funds is no longer necessary. The Manager recommends the
elimination of the restriction and the adoption of a non-fundamental
investment restriction that would allow the Money Market Funds to invest
up to ten percent of their total assets in the securities of other
investment companies. Such actions will provide the Money Market Funds
with additional investment options for satisfying their short-term
liquidity needs. By allowing the Money Market Funds to invest up to ten
percent of their total assets in other money market funds, the Money
Market Funds, under appropriate circumstances, will have the flexibility
to obtain a better return on their short-term investments without assuming
substantial risk. However, because any shares that a Money Market Fund
holds in another investment company will be subject to the management fees
and expenses of such investment company, investment by a Money Market Fund
in another investment company may result, in effect, in payment by
shareholders of duplicate fees and expenses.
If the removal of this investment restriction is approved by
shareholders, each Board intends to adopt a non-fundamental investment
restriction that could be changed by vote of a Board in response to
regulatory or market developments without approval by shareholders. The
non-fundamental investment restriction would provide that each Money
Market Fund may:
invest up to 10% of its total assets in the securities of other
investment companies to the extent permitted by law.
This restriction follows the investment restrictions set forth by the
1940 Act. The 1940 Act permits a fund to invest up to ten percent of its
total assets in the shares of other investment companies in the aggregate,
subject to the restrictions that: (1) a fund cannot acquire more than
three percent of the total outstanding voting stock of another investment
company and (2) a fund cannot invest more than five percent of the value
of its total assets in securities of a single other investment company.
Accordingly, the Boards believe that the proposed elimination of the
Money Market Funds' fundamental investment restrictions regarding
investing in other investment companies is in the best interest of the
Money Market Funds and their shareholders.
Approval and implementation of Proposals 1(c) and 4 are conditioned on
receiving approval from both Money Market Fund and Money Market Mileage
Fund shareholders as well as receiving approval on a similar proposal from
the interest holders of those Funds' corresponding portfolio of the AMR
Trust, the Money Market Portfolio. Such approval is required because the
Money Market Fund and the Money Market Mileage Fund must have
substantially the same investment restrictions as their corresponding
Money Market Portfolio. If approval is not received, the current Money
Market Funds' fundamental limitations will remain in effect.
EACH BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 1(c) AND
4.
SHAREHOLDER PROPOSALS
As a general matter, the AAdvantage Trust and the Mileage Trust do not
hold annual or other regular meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholders' meeting should send their written proposals to
their Trust at 4333 Amon Carter Boulevard, MD 5645, Fort Worth, Texas
76155. In addition, the AAdvantage Trust and the Mileage Trust are
required to convene a special shareholders' meeting upon written request
for such a meeting by their respective shareholders owning at least ten
percent of their outstanding shares.
OTHER BUSINESS
Management knows of no business to be presented to the Meeting other
than the matters set forth in this Proxy Statement, but should any other
matter requiring a vote of shareholders arise, the proxies will vote
thereon according to their best judgment and in the best interest of the
Funds.
By order of the Board of Trustees,
CLIFFORD J. ALEXANDER
Secretary
November 15, 1996
It is important that you execute and return
your Proxy Card(s) promptly.
<PAGE>
APPENDIX A
Balanced Fund Number of % of
Shares Shares
AMR Corporation and subsidiary 37,993,76 65%
companies and Employee Benefit Trusts 0
thereof
4333 Amon Carter Blvd.
Fort Worth, TX 76155
Retirement Advisors of America 10,730,84 18%
5005 LBJ Freeway, Suite 1350 3
Dallas, TX 75244
Sky Chefs Master Trust 6,443,239 11%
601 Ryan Plaza Drive
Arlington, TX 76011
Growth and Income Fund
AMR Corporation and subsidiary 54,323,67 91%
companies and Employee Benefit Trusts 9
thereof
4333 Amon Carter Blvd.
Fort Worth, TX 76155
International Equity Fund
AMR Corporation and subsidiary 21,977,780 83%
companies and Employee Benefit Trusts
thereof
4333 Amon Carter Blvd.
Fort Worth, TX 76155
Retirement Advisors of America 1,370,843 5%
5005 LBJ Freeway, Suite 1350
Dallas, TX 75244
Limited-Term Income Fund
AMR Corporation and subsidiary 6,154,287 35%
companies and Employee Benefit Trusts
thereof
4333 Amon Carter Blvd.
Fort Worth, TX 76155
Retirement Advisors of America 8,969,215 51%
5005 LBJ Freeway, Suite 1350
Dallas, TX 75244
Wachovia Bank of North Carolina 1,366,389 8%
P.O. Box 3099
Winston Salem, NC 27150
City of Chicago International Airport 102,316,406 6%
Revenue Bonds/Harris Trust and
Savings Bank Trustee
P.O. Box 755
Chicago, IL 60690
Investors Bank & Trust Securities 85,000,000 5%
Lending
89 South Street
Boston, MA 02111
U.S. Treasury Money Market Fund
Lone Star Airport Improvement 8,445,405 11%
Authority/
First National Bank of Chicago
Trustee
One First National Place
Chicago, IL 60670-0126
Grapevine Industrial Development 6,962,678 9%
Corp./
First National Bank of Chicago
Trustee
One First National Place
Chicago, IL 60670-0126
Balanced Mileage Fund
Maurice T. & Winifred A. Downing 8,633 5%
11 Beacon Street
Dumont, NJ 07628-1201
International Equity Mileage Fund
Ronald P. Soltman & Judith M. Cram 25,976 12%
6409 Westbourne Drive
Brentwood, TN 37027-4804
Limited-Term Income Mileage Fund
Bonnie Stern 53,385 44%
760 Park Lane
New York, NY 10021-4152
Arlene Weintraub 23,168 19%
530 Valley Road
Mont Clair, NJ 07043-2729
Robert W. & Martha H. Baker 12,788 11%
17 Ashton Court
Dallas, TX 75230
Municipal Money Market Mileage Fund
Eric and Catherine Kobren 5,943,586 21%
21A Farm Street
Dover, MA 02030-2303
Kimberly B., Gale B. & Howard A. 2,532,081 9%
Randall
1140 Parkinson Ave.
Palo Alto, CA 94301-3448
Harry V. Whitehill 1,766,371 6%
1533 N. Lee Trevino Ste. 210
El Paso, TX 79936-5161
Sidney & Dorothy Kohl 1,604,356 6%
305 Royal Poinciana Plaza
Palm Beach, FL 33480-4019
U.S. Treasury Money Market Mileage
Fund
Martin H. Proyect TTEE 1,345,507 13%
OSO LOC Tract D Trust
P.O. Box 98
Santa Fe, NM 87504-0098
Arvind & Lynne Kumra 659,357 6%
5088 Granada Court
Alta Loma, CA 91737-2467
Seymour, Elaine & Larry Licht 644,368 6%
& Alysia Krueger
P.O. Box 4383
Scottsdale, AZ 85261-4383
<PAGE>
PROXY
AMERICAN AADVANTAGE FUNDS
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
American AAdvantage U.S. Treasury Money Market Fund
Combined Special Meeting of Shareholders
December 16, 1996
The undersigned hereby appoints as proxies William F. Quinn, Barry Y.
Greenberg and Janice B. Schwarz, each with the power of substitution, and
hereby authorizes each of them to represent and to vote, as designated
below, all the shares of each of the above-referenced funds ("Funds")
held of record by the undersigned on October 31, 1996, at the meeting of
shareholders to be held on December 16, 1996, or any adjournment thereof,
with discretionary power to vote upon such other business as may properly
come before this meeting. Unless indicated to the contrary, this proxy
shall be deemed to grant authority to vote "FOR" the proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby acknowledges receipt of the Proxy Statement
prepared on behalf of the Board of Trustees with respect to the matter
designated below.
Please date and sign this proxy and return it in the enclosed postage-
paid envelope to Boston Financial Data Services, Inc. at Proxy Services,
P.O. Box 9261, Boston, MA 02205-8524. Please indicate your vote by placing
an "X" in the appropriate box below.
1. To authorize the American AAdvantage Funds ("AAdvantage Trust"), on
behalf of the Funds, to vote at a meeting of the AMR Investment Services
Trust ("AMR Trust") to:
(a) Elect the following seven individuals as Trustees of the AMR Trust
(All Funds): Alan D. Feld, Ben J. Fortson, William F. Quinn, John S.
Justin, Stephen D. O'Sullivan, Roger T. Staubach and Dr. Kneeland
Youngblood.
FOR ALL
FOR WITHHOLD EXCEPT
_____ _________ _________
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH
THAT NOMINEE'S NAME. YOUR SHARES WILL BE VOTED FOR THE REMAINING
NOMINEES.
(b) Approve a supplement to the AMR Trust Management Agreement
relating to securities lending activities (Each Fund).
FOR AGAINST ABSTAIN
_____ _________ _________
(c) Approve the elimination of the Money Market Portfolio's
fundamental investment restriction relating to investing in other
investment companies (American AAdvantage Money Market Fund only).
FOR AGAINST ABSTAIN
_____ _________ _________
2. Elect the following seven individuals as Trustees of the AAdvantage
Trust (All Funds): Alan D. Feld, Ben J. Fortson, William F. Quinn, John S.
Justin, Stephen D. O'Sullivan, Roger T. Staubach and Dr. Kneeland
Youngblood.
FOR ALL
FOR WITHHOLD EXCEPT
_____ _________ _________
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
3. Approve a supplement to the Management Agreement of the AAdvantage Trust
relating to securities lending activities (Each Fund).
FOR AGAINST ABSTAIN
_____ _________ _________
4. Approve the elimination of the American AAdvantage Money Market Fund's
fundamental investment restriction relating to investing in other
investment companies (American AAdvantage Money Market Fund only.
FOR AGAINST ABSTAIN
_____ _________ _________
Please be sure to sign and date this proxy.
Date
------------
Shareholder sign here Co-owner sign here
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