AMERISTOCK ETF TRUST INVESTMENT ADVISORY AGREEMENT
Exhibit
(d)
THIS
INVESTMENT ADVISORY AGREEMENT (the “Agreement”) is made this ___ day of
__________, 2007, by and between Ameristock ETF Trust, a statutory trust
organized and existing under the laws of the State of Delaware (the
“Trust”), and Ameristock Corporation (the “Investment Adviser”), a corporation
organized and existing under the laws of the State of California.
RECITALS
1. The
Trust
is a series-type, open-end management investment company, registered under
the
Investment Company Act of 1940, as amended (the “1940 Act”), that currently
consists of the investment portfolios listed in Appendix A,
attached
hereto, (each, a “Fund”);
2. The
Trust
issues shares of beneficial interest for each Fund only in aggregations of
one
hundred thousand (100,000) shares (each a “creation unit”) which shares
represent undivided interests in a Fund;
3. The
Trust
desires to retain the Investment Adviser to provide overall management of the
Trust and of each Fund, including investment advisory services, in the manner
and on the terms and conditions set forth in this Agreement;
4. The
Investment Adviser is willing to provide general management and investment
advisory services to the Trust and to each Fund on the terms and conditions
set
forth in this Agreement;
NOW,
THEREFORE, in consideration of the promises and the covenants herein, the Trust
and the Investment Adviser agree as follows:
ARTICLE
I
Duties
of the Investment Adviser
The
Trust
engages the Investment Adviser to act as the Trust’s general manager and
investment adviser to provide investment advisory and general management
services to it and to each existing Fund, for the period and on the terms and
conditions set forth in this Agreement. This Agreement may be extended to any
additional Funds that the Trust may establish in the future on the same terms
and conditions. The Investment Adviser hereby accepts such engagement and agrees
during such period, at its own expense to provide or to arrange to provide,
such
investment advisory and general management services, and to assume the
obligations set forth in this Agreement for the compensation provided for
herein.
The
Investment Adviser shall, for all purposes herein, be an independent contractor
and shall, except as expressly provided or authorized herein or otherwise,
have
no authority to act for or represent the Trust or a Fund in any way or otherwise
be deemed an agent of the Trust or a Fund.
Subject
to supervision by the Board, the Investment Adviser shall have and exercise
full
investment discretion and authority to act as an agent for the Trust in buying,
selling or otherwise disposing of or managing the investments of each Fund,
directly or through investment subadvisers.
The
Investment Adviser shall be subject to: (1) the restrictions of the Trust’s
Declaration of Trust, as amended from time to time, (2) the provisions of the
1940 Act and the Investment Advisers Act of 1940, as amended (the “Advisers
Act”), (3) the statements relating to each Fund’s investment objectives,
investment strategies and investment restrictions as set forth in the currently
effective (and as amended from time to time) registration statement of the
Trust
(the “registration statement”) under the Securities Act of 1933, as amended, (4)
any applicable provisions of the Internal Revenue Code of 1986, as amended
(the
“Code”), and (5) all other federal and state laws and regulations applicable to
the Trust and the Funds.
(a) General
Management Services.
The
Investment Adviser shall supervise and oversee all custody, distribution,
transfer agency, dividend disbursing, legal, accounting and administrative
services by third parties that have contracted with the Trust to provide such
services (“Service Providers”). The Investment Adviser shall also be responsible
for the performance of various administrative functions for the Trust
including:
(1) coordinate
the efforts of the Trust’s counsel and independent auditors; assist in
establishing accounting policies of each Fund; assist in resolving of accounting
and legal issues; establish and monitor each Fund's operating
budget;
(2) provide
administrative services (not otherwise provided by third parties) necessary
for
each Fund's operations as an exchange-traded open-end investment company
including, but not limited to, preparing reports and notices to the Board of
Trustees and shareholders, and assist with investors and public relations
matters;
(3) monitor
state and federal laws as may apply to the Trust or the Funds.
(b) Investment
Advisory Services.
The
Investment Adviser shall provide the Trust with such investment research, advice
and supervision as the Trust may from time to time consider necessary for the
proper management of the assets of each Fund, shall furnish continuously an
investment program for each Fund, shall determine from time to time which
securities or other investments shall be purchased, sold or exchanged for the
various Funds, including providing or obtaining such services as may be
necessary in managing, acquiring or disposing of securities, cash or other
investments. The Investment Adviser shall initially determine and make such
modifications to the identity and number of shares of the securities to be
accepted in exchange for creation units for each Fund and the securities that
will be applicable that day to redemption requests.
2
The
Trust
has furnished the Investment Adviser with copies of the Trust’s registration
statement and Declaration of Trust as currently in effect and agrees during
the
continuance of this Agreement to furnish the Investment Adviser with copies
of
any amendments or supplements thereto before or at the time the amendments
or
supplements become effective. The Investment Adviser and any Service Providers
will be entitled to rely on all documents furnished by the Trust.
Except
as
instructed by the Board, the Investment Adviser shall make decisions for the
Trust as to the manner in which voting rights, rights to consent to corporate
action, and any other rights pertaining to the Trust’s securities shall be
exercised. If the Board at any time makes any determination as to investment
policy and notifies the Investment Adviser of such determination, the Investment
Adviser shall be bound by such determination until notified to the
contrary.
The
Investment Adviser shall take, on behalf of each Fund, all actions which it
considers necessary to implement the investment strategies of such Fund, and
in
particular, to place all orders for the purchase or sale of securities or other
investments for the account of each Fund with brokers and dealers selected
by
it, and to that end, the Investment Adviser is authorized as the agent of the
Trust to give instructions to the Trust’s custodian as to deliveries of
securities or other investments and payments of cash for the account of each
Fund.
In
connection with the selection of brokers or dealers and the placing of purchase
and sale orders, the Investment Adviser is directed to seek to obtain best
execution and price within the policy guidelines determined by the Board from
time to time. To the extent permitted by the policy guidelines, the Investment
Adviser is authorized to consider, in the selection of brokers and dealers
to
execute Fund transactions, not only the available prices and rates of brokerage
commissions, but also other relevant factors which may include, without
limitation: (1) the execution capabilities of such brokers and dealers, (2)
research, brokerage and other services provided by such brokers and dealers
which the Investment Adviser believes will enhance its general Fund management
capabilities, (3) the size of the transaction, (4) the difficulty of execution,
(5) the operational facilities of such brokers and dealers, and (6) the risk
to
such a broker or dealer of positioning a block of securities.
In
connection with the foregoing, the Investment Adviser is specifically authorized
to pay those brokers and dealers who provide brokerage and research services
to
it a higher commission than that charged by other brokers and dealers if the
Investment Adviser determines in good faith that the amount of such commission
is reasonable in relation to the value of such services in terms of either
the
particular transaction or in terms of the Investment Adviser’s overall
responsibilities with respect to the Trust, the Fund and to any other client
accounts or Funds which the Investment Adviser advises. The execution of such
transactions shall not be considered to represent an unlawful breach of any
duty
created by this Agreement or otherwise.
The
Investment Adviser also is authorized to aggregate purchase and sale orders
for
securities held (or to be held) in a Fund with similar orders being made on
the
same day for other client accounts or Funds managed by the Investment Adviser.
When an order is so aggregated: (1) the actual prices applicable to the
aggregated transaction will be averaged and the Fund and each other account
or
Fund participating in the aggregated transaction shall be treated as having
purchased or sold its portion of the securities at such average price, and
(2)
all transaction costs incurred in effecting the aggregated transaction shall
be
shared on a pro-rata basis among the accounts or Funds (including the Funds)
participating in the transaction. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for the
Fund.
3
Subject
to applicable laws and regulations, the Investment Adviser may attempt to
allocate equitably portfolio transactions among the Funds and the portfolios
of
its other clients purchasing or selling securities whenever decisions are made
to purchase or sell securities by a Fund and one or more of such other clients
simultaneously. In making such allocations the main factors to be considered
will be the respective investment objectives of the Fund and such other clients,
the relative size of portfolio holdings of the same or comparable securities,
the availability of cash for investment by the Fund and such other clients,
the
size of investment commitments generally held by the Fund and such other clients
and opinions of the persons responsible for recommending investments to the
Fund
and such other clients.
As
part
of carrying out its obligations to manage the investment and reinvestment of
the
assets of each Fund consistent with the requirements under the 1940 Act, the
Investment Adviser shall:
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(1)
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Perform
research and obtain and analyze pertinent economic, statistical,
and
financial data relevant to the investment policies of each Fund as
set
forth in the registration
statement;
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(2)
|
Consult
with the Board and furnish to the Board recommendations with respect
to an
overall investment strategy for each Fund for approval, modification,
or
rejection by the Board;
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(3)
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Seek
out and implement specific investment opportunities, consistent with
any
investment strategies approved by the
Board;
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(4)
|
Take
such steps to implement any overall investment strategies approved
by the
Board for each Fund, including making and carrying out day-to-day
decisions to acquire or dispose of securities, managing investments
and
otherwise arranging for, the payment of distributions and
dividends;
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(5)
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Regularly
report to the Board with respect to the implementation of any approved
overall investment strategy and any other activities in connection
with
management of the assets of each
Fund;
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(6)
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Maintain,
in the form and for the periods required by Rule 31a-2 of the 1940
Act,
all records relating to each Fund’s investments that are required to be
maintained by the Trust pursuant to paragraphs (b)(5), (b)(6), (b)(7),
(b)(9), (b)(10) and (f) of Rule 31a-1 of the 1940
Act;
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(7)
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Monitor
the registration of shares of each Fund under applicable federal
and state
securities laws;
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4
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(8)
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Assist
in the preparation and filing of the Trust’s and the Funds’ federal, state
and local tax returns;
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(9)
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To
the extent required by appropriate Service Providers, assist in
determining each business day the net asset value of the shares of
each
Fund.
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ARTICLE
II
The
Investment Adviser
The
Investment Adviser is registered with the SEC under the Advisers Act. The
Investment Adviser shall remain so registered throughout the term of this
Agreement and shall notify the Trust immediately if the Investment Adviser
ceases to be so registered. The Investment Adviser is a wholly-owned subsidiary
of ▇▇▇▇▇▇▇▇▇▇ Holdings, Inc.
The
Investment Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide the Trust with
a
copy of that code, together with evidence of its adoption. Within 90 days of
the
end of each calendar quarter during which this Agreement remains in effect,
an
appropriate officer of the Investment Adviser shall certify to the Trust that
the Investment Adviser has complied with the requirements of Rule 17j-1 (as
amended from time to time) during the previous quarter and that there have
been
no violations of the Investment Adviser’s code of ethics or, if such a violation
has occurred, that appropriate action has been taken in response to such
violation. Upon written request of the Trust, the Investment Adviser shall
permit representatives of the Trust to examine the reports (or summaries of
the
reports) required to be made to the Investment Adviser by Rule 17j-1(c)(1)
and
other records evidencing enforcement of the code of ethics.
ARTICLE
III
Allocation
of Charges and Expenses
(a)
The
Investment Adviser.
The
Investment Adviser assumes the expense of and shall pay for maintaining the
staff and personnel necessary to perform its obligations under this Agreement,
and shall at its own expense provide the office space, equipment and facilities
for such personnel, and shall pay all compensation of officers and trustees
of
the Trust who are affiliated persons of the Investment Adviser.
With
the
exception of those expenses set forth in subsection (b) below, the Investment
Adviser will also assume all expenses of the Trust and each Fund, including,
without limitation, determination of daily price computations, placement of
securities orders (excluding brokerage commissions), related bookkeeping, fees
of the administrator, expenses for legal and auditing services, costs of
printing proxy materials, custody and transfer agency fees, expenses of
redemption of shares, SEC filing fees, expenses of registering the shares under
the federal securities laws, accounting fees, printing costs, and insurance.
(b)
The
Trust. The
Trust
assumes and shall pay or cause to be paid the following expenses of the Trust
and each Fund: (i) brokerage commissions and other expenses connected with
the
execution of portfolio transactions; (ii) taxes; (iii) interest; (iv)
independent trustee compensation, out-of-pocket expenses of independent trustees
in connection with attending board meetings, and educational expenses for
independent trustees; (v) “12b-1” fees (if any); and (vi) extraordinary expenses
(including, without limitation, litigation and indemnification costs and
expenses).
5
ARTICLE
IV
Compensation
of the Investment Adviser
For
the
services rendered, the facilities furnished and expenses assumed by the
Investment Adviser, the Trust shall pay to the Investment Adviser at the end
of
each calendar month a fee for each Fund calculated as a percentage of the
average daily net assets of each Fund at the annual rate of 0.15 percent (15
basis points). The
Investment Adviser’s fee is accrued daily at 1/365th
of the
applicable annual rate. For the purpose of the fee accrual, the daily net assets
of each Fund are determined in the manner and at the times set forth in the
Trust’s current registration statement. On days for which the values of a Fund's
net assets are not determined, the fee shall be accrued on the most recently
determined net assets adjusted for subsequent daily income and expense
accruals.
In
the
event of termination of this Agreement, all compensation due through the date
of
termination will be calculated on a pro-rated basis through the date of
termination and paid within fifteen business days of the date of
termination.
ARTICLE
V
Limitation
of Liability of the Investment Adviser
The
Investment Adviser shall not be liable for any error of judgment or mistake
of
law or for any loss arising out of any investment or for any act or omission
in
the management of the Trust, except for (1) willful misfeasance, bad faith
or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder, and (2) to the extent
specified in Section 36(b) of the 1940 Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of
compensation.
ARTICLE
VI
Activities
of the Investment Adviser
The
Investment Adviser’s services under this Agreement are not exclusive. The
Investment Adviser reserves the right to manage other investment companies
and
other investment accounts for other clients, which may at times invest in the
same or similar securities to those invested in by the Funds.
It
is
further understood that trustees, officers, and shareholders of the Trust are
or
may become interested persons of the Investment Adviser, as directors, officers,
employees or shareholders, and that directors, officers, employees and
shareholders of the Investment Adviser are or may become similarly interested
persons of the Trust, and that the Investment Adviser may become interested
in
the Trust as a shareholder or otherwise.
6
ARTICLE
VII
Books
and Records
The
Investment Adviser hereby undertakes and agrees to maintain all records not
maintained by the Administrator pursuant to its agreements with the Trust or
with the Investment Adviser, in the form and for the period required by Rule
31a-2 under the 1940 Act.
The
Investment Adviser agrees that all books and records which it maintains for
the
Trust are the property of the Trust and further agrees to surrender promptly
to
the Trust any such books, records or information upon the Trust’s request. All
such books and records shall be made available, within five business
days of a written request, to the Trust’s accountants or auditors during regular
business hours at the Investment Adviser’s offices. The Trust or its authorized
representative shall have the right to copy any records in the possession of
the
Investment Adviser or Administrator that pertain to the Trust. Such books,
records, information or reports shall be made available to properly authorized
government representatives consistent with state and federal law and/or
regulations. In the event of the termination of this Agreement, all such books,
records or other information shall be returned to the Trust free from any claim
or assertion of rights by the Investment Adviser.
The
Investment Adviser further agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Trust has authorized such disclosure, or if such disclosure is
required by federal or state regulatory authorities.
ARTICLE
VIII
Effectiveness,
Duration and Termination of this Agreement
This
Agreement shall not become effective unless and until it is approved by the
Board, including a majority of trustees who are not parties to this Agreement
or
interested persons of any such party, and, to the extent required by law, by
the
vote of a majority of the outstanding voting shares of each Fund. This Agreement
shall become effective on the date which it is so approved. This Agreement
may
be extended to cover any investment Funds of the Trust that may be created
in
the future. This agreement shall become effective as to each such future Fund
when it is approved by the Board, including a majority of trustees who are
not
parties to this Agreement or interested persons of any such party, and, to
the
extent required by law, by the vote of a majority of the outstanding voting
shares of such Fund.
As
to
each Fund of the Trust, this Agreement shall continue in effect until July
1,
2008, and thereafter is subject to annual approval by (1) the Board or (2)
the
vote of a majority of the outstanding voting securities of the Fund, provided
that in either event such continuance also is approved by a majority of the
independent trustees by a vote cast in person at a meeting called for the
purpose of voting on such approval.
7
This
Agreement may be terminated at any time as to any Fund or as to all Funds,
without penalty, on 60 days’ written notice by the Board or by vote of a
majority of the outstanding votes attributable to the applicable Fund, or on
60
days’ notice by the Investment Adviser. If this Agreement is terminated only
with respect to one or more, but less than all, of the Funds, or if a different
investment adviser is appointed with respect to a new Fund, the Agreement shall
remain in effect with respect to the remaining Funds. This Agreement will
terminate automatically in the event of its assignment.
A
Fund
may use the name Ameristock only so long as this Agreement or any extension,
renewal or amendment thereof remains in effect as to such Fund and with the
permission of the Investment Adviser.
ARTICLE
IX
Amendments
of this Agreement
This
Agreement may be amended as to a Fund only if such amendment is specifically
approved by (1) the vote of a majority of outstanding votes attributable to
that
Fund, and (2) a majority of those trustees 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, or as otherwise permitted by
law.
ARTICLE
X
Definitions
of Certain Terms
The
terms
“assignment,” “affiliated person,” and “interested person,” when used in this
Agreement, shall have the respective meanings specified in the 1940 Act. The
term “majority of the outstanding votes” attributable to the shares of a Fund
means the lesser of (1) 67% or more of the votes attributable to such Fund
present at a meeting if the holders of more than 50% of such votes are present
or represented by proxy, or (2) more than 50% of the votes attributable to
shares of the Fund.
ARTICLE
XI
Governing
Law
This
Agreement shall be construed in accordance with laws of the State of California,
and applicable provisions of the Advisers Act and the 1940 Act.
ARTICLE
XII
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.
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IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date written above.
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Signature________________________
By: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
President & Treasurer
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ATTEST:
_________________
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AMERISTOCK
CORPORATION
Signature________________________
By: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
President
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ATTEST:
________________
9
Appendix
A
List
of the Funds in the Ameristock ETF Trust
Ameristock/▇▇▇▇
1-Year Treasury Fund
Ameristock/▇▇▇▇
2-Year Treasury Fund
Ameristock/▇▇▇▇
5-Year Treasury Fund
Ameristock/▇▇▇▇
10-Year Treasury Fund
Ameristock/▇▇▇▇
20-Year Treasury Fund
10