ADVISORS SERIES TRUST INVESTMENT ADVISORY AGREEMENT
THIS
INVESTMENT ADVISORY AGREEMENT is made as of the 7th day
of March, 2008, by and between Advisors Series Trust, a Delaware statutory
trust
(hereinafter called the "Trust"), on behalf of each series of the Trust as
listed in Schedule A attached hereto (each a “Fund” and together the "Funds")
and American Trust Investment Advisors, LLC, a New Hampshire limited liability
company (hereinafter called the "Advisor").
WITNESSETH:
WHEREAS,
the Trust is an open-end management investment company, registered as such
under
the Investment Company Act of 1940, as amended (the "Investment Company Act");
and
WHEREAS,
each Fund is a series of the Trust having separate assets and liabilities;
and
WHEREAS,
the Advisor is registered as an investment advisor under the Investment Advisers
Act of 1940 (the "Advisers Act") and is engaged in the business of supplying
investment advice as an independent contractor; and
WHEREAS,
the Trust desires to retain the Advisor to render advice and services to the
Funds pursuant to the terms and provisions of this Agreement, and the Advisor
desires to furnish said advice and services;
NOW,
THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1.
APPOINTMENT OF ADVISOR. The Trust hereby employs the Advisor and the
Advisor hereby accepts such employment, to render investment advice and related
services with respect to the assets of the Funds for the period and on the
terms
set forth in this Agreement, subject to the supervision and direction of the
Trust's Board of Trustees.
2.
DUTIES OF ADVISOR.
(a)
GENERAL DUTIES. The Advisor shall act as investment advisor to the
Funds and shall supervise investments of the Funds on behalf of the Funds in
accordance with the investment objectives, policies and restrictions of the
Funds as set forth in the Funds' and Trust's governing documents, including,
without limitation, the Trust's Agreement and Declaration of Trust and By-Laws;
the Funds' prospectus, statement of additional information and undertakings;
and
such other limitations, policies and procedures as the Trustees may impose
from
time to time in writing to the Advisor. In providing such services,
the Advisor shall at all times adhere to the provisions and restrictions
contained in the federal securities laws, applicable state securities laws,
the
Internal Revenue Code, the Uniform Commercial Code and other applicable
law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish
the Funds with advice and recommendations with respect to the investment of
each
Fund's assets and the purchase and sale of portfolio securities for each Fund,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e., placing the orders); (ii) manage and oversee the
investments of the Funds, subject to the ultimate supervision and direction
of
the Trust's Board of Trustees; (iii) vote proxies for the Funds, file
ownership reports under Section 13 of the Securities Exchange Act of 1934 for
the Funds, and take other actions on behalf of the Funds; (iv) maintain the
books and records required to be maintained by the Funds except to the extent
arrangements have been made for such books and records to be maintained by
the
administrator or another agent of the Funds; (v) furnish reports,
statements and other data on securities, economic conditions and other matters
related to the investment of each Fund's assets which the Funds' administrator
or distributor or the officers of the Trust may reasonably request; and
(vi) render to the Trust's Board of Trustees such periodic and special
reports with respect to each Fund's investment activities as the Board may
reasonably request, including at least one in-person appearance annually before
the Board of Trustees.
(b)
BROKERAGE. The Advisor shall be responsible for decisions to buy and
sell securities for the Funds, for broker-dealer selection, and for negotiation
of brokerage commission rates, provided that the Advisor shall not direct orders
to an affiliated person of the Advisor without general prior authorization
to
use such affiliated broker or dealer for the Trust's Board of Trustees. The
Advisor's primary consideration in effecting a securities transaction will
be
execution at the most favorable price. In selecting a broker-dealer to execute
each particular transaction, the Advisor may take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a continuing basis.
The price to each Fund in any transaction may be less favorable than that
available from another broker-dealer if the difference is reasonably justified
by other aspects of the portfolio execution services offered.
Subject
to such policies as the Board of Trustees of the Trust may determine and
consistent with Section 28(e) of the Securities and Exchange Act of 1934, as
amended, the Advisor shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
its
having caused the Funds to pay a broker or dealer that provides (directly or
indirectly) brokerage or research services to the Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall responsibilities with respect
to
the Trust. Subject to the same policies and legal provisions, the Advisor is
further authorized to allocate the orders placed by it on behalf of the Funds
to
such brokers or dealers who also provide research or statistical material,
or
other services, to the Trust, the Advisor, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine, and the Advisor shall report on such allocations regularly to the
Trust, indicating the broker-dealers to whom such allocations have been made
and
the basis therefor.
On
occasions when the Advisor deems the purchase or sale of a security to be in
the
best interest of the Funds as well as of other clients, the Advisor, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients.
3.
REPRESENTATIONS OF THE ADVISOR.
(a)
The
Advisor shall use its best judgment and efforts in rendering the advice and
services to the Funds as contemplated by this Agreement.
(b)
The
Advisor shall maintain all licenses and registrations necessary to perform
its
duties hereunder in good order.
(c)
The
Advisor shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or
self-regulatory organization regulations.
(d)
The
Advisor shall maintain errors and omissions insurance in an amount at least
equal to that disclosed to the Board of Trustees in connection with their
approval of this Agreement.
4.
INDEPENDENT CONTRACTOR. The Advisor shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent
the
Trust or the Funds in any way, or in any way be deemed an agent for the Trust
or
for the Funds. It is expressly understood and agreed that the services to be
rendered by the Advisor to the Funds under the provisions of this Agreement
are
not to be deemed exclusive, and the Advisor shall be free to render similar
or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
5.
ADVISOR'S PERSONNEL. The Advisor shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Advisor shall be
deemed to include persons employed or retained by the Advisor to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical
and
scientific developments, and such other information, advice and assistance
as
the Advisor or the Trust's Board of Trustees may desire and reasonably request
and any compliance staff and personnel required by the Advisor.
6.
EXPENSES.
(a)
With
respect to the operation of the Funds, the Advisor shall be responsible for
(i)
each Fund’s organizational expenses, (ii) providing the personnel, office space
and equipment reasonably necessary for the operation of the Funds, (iii) the
expenses of printing and distributing extra copies of the Funds' prospectus,
statement of additional information, and sales and advertising materials (but
not the legal, auditing or accounting fees attendant thereto) to prospective
investors (but not to existing shareholders) to the extent such expenses are
not
covered by any applicable plan adopted pursuant to Rule 12b-1 under the
Investment Company Act, (iv) the costs of any special Board of Trustees meetings
or shareholder meetings convened for the primary benefit of the Advisor, and
(v)
any costs of liquidating or reorganizing the Funds (unless such cost is
otherwise allocated by the Board of Trustees). If the Advisor has agreed to
limit the operating expenses of the Funds, the Advisor shall also be responsible
on a monthly basis for any operating expenses that exceed the agreed upon
expense limit.
(b)
The
Fund is responsible for and has assumed the obligation for payment of all of
its
expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses;
all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Funds
including all fees and expenses of its custodian, shareholder services agent
and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any;
a
pro rata portion of expenditures in connection with meetings of each Fund's
shareholders and the Trust's Board of Trustees that are properly payable by
the
Funds; salaries and expenses of officers of the Trust, including without
limitation the Trust’s Chief Compliance Officer, and fees and expenses of
members of the Trust's Board of Trustees or members of any advisory board or
committee who are not members of, affiliated with or interested persons of
the
Advisor; insurance premiums on property or personnel of each Fund which inure
to
its benefit, including liability and fidelity bond insurance; the cost of
preparing and printing reports, proxy statements, prospectuses and statements
of
additional information of the Funds or other communications for distribution
to
existing shareholders; legal, auditing and accounting fees; all or any portion
of trade association dues or education program expenses determined appropriate
by the Board of Trustees; fees and expenses (including legal fees) of
registering and maintaining registration of its shares for sale under federal
and applicable state and foreign securities laws; all expenses of maintaining
and servicing shareholder accounts, including all charges for transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other agents
for
the benefit of the Funds, if any; and all other charges and costs of its
operation plus any extraordinary and non-recurring expenses, except as herein
otherwise prescribed.
(c)
The
Advisor may voluntarily absorb certain Fund expenses or waive the Advisor's
own
advisory fee.
(d)
To
the extent the Advisor incurs any costs by assuming expenses which are an
obligation of the Funds as set forth herein, each Fund shall promptly reimburse
the Advisor for such costs and expenses, except to the extent the Advisor has
otherwise agreed to bear such expenses. To the extent the services for which
a
Fund is obligated to pay are performed by the Advisor, the Advisor shall be
entitled to recover from such Fund to the extent of the Advisor's actual costs
for providing such services. In determining the Advisor's actual costs, the
Advisor may take into account an allocated portion of the salaries and overhead
of personnel performing such services.
(e)
The
Advisor may not pay fees in addition to any Fund distribution or servicing
fees
to financial intermediaries, including without limitation banks, broker-dealers,
financial advisors, or pension administrators, for sub-administration,
sub-transfer agency or any other shareholder servicing or distribution services
associated with shareholders whose shares are held in omnibus or other group
accounts, except with the prior authorization of the Trust’s Board of
Trustees. Where such arrangements are authorized by the Trust’s Board
of Trustees, the Advisor shall report regularly to the Trust on the amounts
paid
and the relevant financial institutions.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a)
Each
Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all investment management and advisory services furnished
or
provided to such Fund pursuant to this Agreement, an annual management fee
at
the rate set forth in Schedule A to this Agreement.
(b)
The
management fee shall be accrued daily by each Fund and paid to the Advisor
on
the first business day of the succeeding month.
(c)
The
initial fee under this Agreement shall be payable on the first business day
of
the first month following the effective date of this Agreement and shall be
prorated as set forth below. If this Agreement is terminated prior to the end
of
any month, the fee to the Advisor shall be prorated for the portion of any
month
in which this Agreement is in effect which is not a complete month according
to
the proportion which the number of calendar days in the month during which
the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of
termination.
(d)
The
fee payable to the Advisor under this Agreement will be reduced to the extent
of
any receivable owed by the Advisor to the Fund and as required under any expense
limitation applicable to a Fund.
(e)
The
Advisor voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of a Fund under this
Agreement. Any such reduction or payment shall be applicable only to such
specific reduction or payment and shall not constitute an agreement to reduce
any future compensation or reimbursement due to the Advisor hereunder or to
continue future payments. Any such reduction will be agreed to prior to accrual
of the related expense or fee and will be estimated daily and reconciled and
paid on a monthly basis.
(f)
Any
such reductions made by the Advisor in its fees or payment of expenses which
are
a Fund's obligation are subject to reimbursement by the Fund to the Advisor,
if
so requested by the Advisor, in subsequent fiscal years if the aggregate amount
actually paid by the Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement, the Advisor
may recoup reimbursements made in any fiscal year of a Fund over the following
three fiscal years. Any such reimbursement is also contingent upon
Board of Trustees review and approval at time the reimbursement is made. Such
reimbursement may not be paid prior to the Fund's payment of current ordinary
operating expenses.
(g)
The
Advisor may agree not to require payment of any portion of the compensation
or
reimbursement of expenses otherwise due to it pursuant to this Agreement. Any
such agreement shall be applicable only with respect to the specific items
covered thereby and shall not constitute an agreement not to require payment
of
any future compensation or reimbursement due to the Advisor
hereunder.
8.
NO SHORTING; NO BORROWING. The Advisor agrees that neither it nor any
of its officers or employees shall take any short position in the shares of
a
Fund. This prohibition shall not prevent the purchase of such shares by any
of
the officers or employees of the Advisor or any trust, pension, profit-sharing
or other benefit plan for such persons or affiliates thereof, at a price not
less than the net asset value thereof at the time of purchase, as allowed
pursuant to rules promulgated under the Investment Company Act. The Advisor
agrees that neither it nor any of its officers or employees shall borrow from
a
Fund or pledge or use a Fund's assets in connection with any borrowing not
directly for the Fund's benefit. For this purpose, failure to pay any amount
due
and payable to a Fund for a period of more than thirty (30) days shall
constitute a borrowing.
9.
CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS. Nothing
herein contained shall be deemed to require the Trust or the Funds to take
any
action contrary to the Trust's Agreement and Declaration of Trust, By-Laws,
or
any applicable statute or regulation, or to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct
of
the affairs of the Trust and Funds. In this connection, the Advisor acknowledges
that the Trustees retain ultimate plenary authority over the Funds and may
take
any and all actions necessary and reasonable to protect the interests of
shareholders.
10.
REPORTS AND ACCESS. The Advisor agrees to supply such information to
the Funds' administrator and to permit such compliance inspections by the Funds'
administrator as shall be reasonably necessary to permit the administrator
to
satisfy its obligations and respond to the reasonable requests of the
Trustees.
11.
ADVISOR'S LIABILITIES AND INDEMNIFICATION.
(a)
The
Advisor shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Funds' offering
materials (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion
therein.
(b)
The
Advisor shall be liable to the Funds for any loss (including brokerage charges)
incurred by the Funds as a result of any improper investment made by the
Advisor.
(c)
In
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the obligations or duties hereunder on the part of the Advisor, the Advisor
shall not be subject to liability to the Trust or the Funds or to any
shareholder of the Funds for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained
in
the purchase, holding or sale of any security by the Funds. Notwithstanding
the
foregoing, federal securities laws and certain state laws impose liabilities
under certain circumstances on persons who have acted in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation
of
any rights which the Trust, the Funds or any shareholder of the Funds may have
under any federal securities law or state law.
(d)
Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any
such
person, an "Indemnified Party") against any loss, liability, claim, damage
or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e)
No
provision of this Agreement shall be construed to protect any Trustee or officer
of the Trust, or officer of the Advisor, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12.
NON-EXCLUSIVITY; TRADING FOR ADVISOR'S OWN ACCOUNT. The Trust's
employment of the Advisor is not an exclusive arrangement. The Trust may from
time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Advisor may act as investment
advisor for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts
or
the accounts of others for whom it or they may be acting, provided, however,
that the Advisor expressly represents that it will undertake no activities
which
will adversely affect the performance of its obligations to the Funds under
this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms
to
the requirements of the Investment Company Act and the Advisers Act and has
been
approved by the Trust's Board of Trustees.
13.
TERM.
This
Agreement shall become effective at the time the Funds commence operations
pursuant to an effective amendment to the Trust's Registration Statement under
the Securities Act of 1933, as amended and shall remain in effect for a period
of two (2) years, unless sooner terminated as hereinafter provided. This
Agreement shall continue in effect thereafter for additional periods not
exceeding one (l) year so long as such continuation is approved for the Funds
at
least annually by (i) the Board of Trustees of the Trust or by the vote of
a
majority of the outstanding voting securities of each Fund and (ii) the vote
of
a majority of the Trustees of the Trust who are not parties to this Agreement
nor interested persons thereof, cast in person at a meeting called for the
purpose of voting on such approval. The terms "majority of the outstanding
voting securities" and "interested persons" shall have the meanings as set
forth
in the Investment Company Act.
14.
RIGHT TO USE NAME
The
Advisor warrants that the Funds' names are not deceptive or misleading and
that
the Advisor has rights to any distinctive name used by the Funds. The
Funds acknowledges that their use of any distinctive name is derivative of
its
relationship with the Advisor. The Funds may use the names “Advisors
Series Trust,” “American Trust” or any name derived from or using the name
“American Trust” only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect. Within sixty (60) days from such
time as this Agreement shall no longer be in effect, the Funds shall cease
to
use such a name or any other name connected with the Advisor.
15.
TERMINATION; NO ASSIGNMENT.
(a)
This
Agreement may be terminated by the Trust on behalf of the Funds at any time
without payment of any penalty, by the Board of Trustees of the Trust or by
vote
of a majority of the outstanding voting securities of a Fund, upon sixty (60)
days' written notice to the Advisor, and by the Advisor upon sixty (60) days'
written notice to the Funds. In the event of a termination, the Advisor shall
cooperate in the orderly transfer of the Funds' affairs and, at the request
of
the Board of Trustees, transfer any and all books and records of the Funds
maintained by the Advisor on behalf of the Funds.
(b)
This
Agreement cannot be assigned without the consent of the Board of
Trustees. This Agreement shall terminate automatically in the event
of any transfer or assignment thereof, as defined in the Investment Company
Act.
16.
NONPUBLIC PERSONAL INFORMATION.
Notwithstanding any provision
herein to the contrary, the Advisor
hereto agrees on behalf of itself and its directors, trustees, shareholders,
officers, and employees (1) to treat confidentially and as proprietary
information of the Trust (a) all records and other information relative to
the
Funds’ prior, present, or potential shareholders (and clients of said
shareholders) and (b) any Nonpublic Personal Information, as defined under
Section 248.3(t) of Regulation S-P (“Regulation S-P”), promulgated under the
Xxxxx-Xxxxx-Xxxxxx Act (the “G-L-B Act”), and (2) except after prior
notification to and approval in writing by the Trust, not to use such records
and information for any purpose other than the performance of its
responsibilities and duties hereunder, or as otherwise permitted by Regulation
S-P or the G-L-B Act, and if in compliance therewith, the privacy policies
adopted by the Trust and communicated in writing to the Advisor. Such
written approval shall not be unreasonably withheld by the Trust and may not
be
withheld where the Advisor may be exposed to civil or criminal contempt or
other
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
17.
ANTI-MONEY LAUNDERING COMPLIANCE. The Advisor acknowledges that, in
compliance with the Bank Secrecy Act, as amended, the USA PATRIOT Act, and
any
implementing regulations thereunder (together, “AML Laws”), the Trust has
adopted an Anti-Money Laundering Policy. The Advisor agrees to comply with
the
Trust’s Anti-Money Laundering Policy and the AML Laws, as the same may apply to
the Advisor, now and in the future. The Advisor further agrees to provide to
the
Trust and/or the Administrator such reports, certifications and contractual
assurances as may be reasonably requested by the Trust. The Trust may disclose
information regarding the Advisor to governmental and/or regulatory or
self-regulatory authorities to the extent required by applicable law or
regulation and may file reports with such authorities as may be required by
applicable law or regulation.
18.
CERTIFICATIONS; DISCLOSURE CONTROLS AND PROCEDURES. The Advisor
acknowledges that, in compliance with the Xxxxxxxx-Xxxxx Act of 2002, and the
implementing regulations promulgated thereunder, the Trust and the Funds are
required to make certain certifications and have adopted disclosure controls
and
procedures. To the extent reasonably requested by the Trust, the Advisor agrees
to use its best efforts to assist the Trust and the Funds in complying with
the
Xxxxxxxx-Xxxxx Act of 2002 and implementing the Trust’s disclosure controls and
procedures. The Advisor agrees to inform the Trust of any material development
related to the Funds that the Advisor reasonably believes is relevant to the
Funds’ certification obligations under the Xxxxxxxx-Xxxxx Act of
2002.
19.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected
thereby.
20.
CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof
or
otherwise affect their construction or effect.
21.
GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without giving effect
to
the conflict of laws principles thereof; provided that nothing herein shall
be
construed to preempt, or to be inconsistent with, any federal law, regulation
or
rule, including the Investment Company Act and the Advisers Act and any rules
and regulations promulgated thereunder.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.
|
on
behalf of the
AMERICAN
TRUST FUNDS
|
AMERICAN
TRUST INVESTMENT
ADVISORS,
LLC
|
|
By:
/s/ Xxxxxxx X.
Xxxx
Name: Xxxxxxx
X.
Xxxx
Title:
President
|
By:
/s/ Xxxx X.
Xxxxxxx
Name:
Xxxx X.
Xxxxxxx
Title:
President
|
SCHEDULE
A
|
Series
or Fund of Advisors Series Trust
|
Annual
Fee Rate
|
|
American
Trust Energy Alternatives Fund
|
1.00%
|
