EXHIBIT (D)(26)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of ________, 2006 by and between ASTON FUNDS,
a Delaware statutory trust (the "Trust"), on behalf of each series of the Trust
set forth on Schedule A hereto as may be amended from time to time (each, a
"Fund" and collectively, the "Funds") and ASTON ASSET MANAGEMENT LLC, a Delaware
limited liability company (the "Adviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company; and
WHEREAS, the Trust wishes to retain the Adviser to render investment
advisory services to each Fund, and the Adviser is willing to furnish such
services to each Fund.
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Trust and the Adviser as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to each Fund for the periods and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. DUTIES OF ADVISER. As investment adviser, the Adviser shall: (i) manage
the investment and reinvestment of the assets of each Fund, (ii) continuously
review, supervise and administer the investment program of each Fund, (iii)
determine in its discretion, the assets to be held uninvested, (iv) provide the
Trust with records concerning the Adviser's activities which are required to be
maintained by the Trust and (v) render regular reports to the Trust's officers
and Board of Trustees concerning the Adviser's discharge of the foregoing
responsibilities. The Adviser shall discharge the foregoing responsibilities
subject to the oversight of the officers and the Board of Trustees of the Trust
and in compliance with the objectives, policies and limitations
set forth in each Fund's then effective prospectus and statement of additional
information. The Adviser shall determine from time to time what securities and
other investments will be purchased, retained, sold or exchanged by each Fund
and what portion of the assets of the Fund's portfolio will be held in the
various securities and other investments in which the Fund invests, and shall
implement those decisions, all subject to the provisions of the Trust's
Declaration of Trust and By-Laws, as amended from time to time, the 1940 Act,
and the applicable rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC") and interpretive guidance issued
thereunder by the SEC staff and any other applicable federal and state law, as
well as the investment objectives, policies and restrictions of the Fund
referred to above, and any other specific policies adopted by the Board and
communicated to the Adviser. Subject to applicable provisions of the 1940 Act
and direction from the Board, the investment program to be provided hereunder
may entail the investment of all or substantially all of the assets of a Fund in
one or more investment companies. The Adviser shall also provide advice and
recommendations with respect to other aspects of the business and affairs of the
Funds, shall exercise voting rights, rights to consent to corporate action and
any other rights pertaining to a Fund's portfolio securities subject to such
direction as the Board may provide, and shall perform such other functions of
investment management and supervision as may be directed by the Board.
3. DELEGATION OF DUTIES. Subject to the Board's approval, the Adviser
and/or a Fund may enter into contracts with one or more investment subadvisers,
including without limitation, affiliates of the Adviser, in which the Adviser
delegates to such investment subadvisers any or all its duties specified
hereunder, on such terms as the Adviser will determine to be necessary,
desirable or appropriate, provided that in each case the Adviser shall supervise
the activities of
2
each such subadviser and further provided that such contracts are entered into
in accordance with and meet all applicable requirements of the 1940 Act and
rules thereunder. Any such delegation shall not relieve the Adviser of any of
its duties hereunder.
4. MANAGER OF MANAGERS STRUCTURE. The Adviser shall also have the
authority, upon the approval of the Board and subject to applicable provisions
of the 1940 Act and the regulations thereunder, to select one or more
subadvisers to provide day-to-day portfolio management with respect to all or a
portion of the assets of any of the Funds and to allocate and reallocate the
assets of a Fund between and among any subadvisers so selected pursuant to a
"manager of managers" structure. The Fund acknowledges that the Adviser would
have the authority to retain and terminate subadvisers, engage new subadvisers
and make material revisions to the terms of the subadvisory agreements subject
to approval of the Board of Trustees, but not shareholder approval, under this
structure
5. PORTFOLIO TRANSACTIONS. The Adviser shall select and monitor the
selection of the brokers or dealers that will execute the purchases and sales of
securities for the Funds and is directed to use its best efforts to ensure that
the best available price and most favorable execution of securities transactions
for the Funds is obtained. Subject to policies established by the Board of
Trustees of the Trust and communicated to the Adviser, it is understood that the
Adviser will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Trust or in respect of a Fund, or be in breach of any
obligation owing to the Trust or in respect of a Fund under this Agreement, or
otherwise, solely by reason of its having caused a Fund to pay a member of a
securities exchange, a broker or a dealer a commission for effecting a
securities transaction for the Fund in excess of the amount of commission
another member of an exchange, broker or dealer would have charged if the
Adviser determines in good faith that the commission
3
paid was reasonable in relation to the brokerage or research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934 and
interpretive guidance issued by the SEC thereunder) provided by such member,
broker or dealer, viewed in terms of that particular transaction or the
Adviser's overall responsibilities with respect to the accounts, including the
Funds, as to which it exercises investment discretion. The Adviser will promptly
communicate to the officers and Trustees of the Trust such information relating
to Fund transactions as they may reasonably request.
6. EXPENSES. The Adviser shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Adviser shall not be responsible for a Fund's expenses,
including, without limitation: advisory fees; distribution fees; interest;
taxes; governmental fees; voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; organizational
costs of the Fund; the cost (including brokerage commissions, transaction fees
or charges, if any) in connection with the purchase or sale of the Fund's
securities and other investments and any losses in connection therewith; fees
and expenses of custodians, transfer agents, administrators, registrars,
independent pricing vendors or other agents; legal expenses; loan commitment
fees; expenses relating to share certificates; expenses relating to the issuing
and redemption or repurchase of the Fund's shares and servicing shareholder
accounts; expenses of registering and qualifying the Fund's shares for sale
under applicable federal and state law; expenses of preparing, setting in print,
printing and distributing prospectuses and statements of additional information
and any supplements thereto, reports, proxy statements, notices and dividends to
the Fund's shareholders; costs of stationery; website costs; costs of meetings
of the Board or any committee thereof,
4
meetings of shareholders and other meetings of the Fund except as otherwise
determined by the Trustees; Board fees; audit fees; travel expenses of officers,
Trustees and employees of the Trust who are not officers, employees or directors
of the Adviser or its affiliates, if any; and the Trust's pro rata portion of
premiums on any fidelity bond and other insurance covering the Trust and its
officers, Trustees and employees; litigation expenses and any non-recurring or
extraordinary expenses as may arise, including, without limitation, those
relating to actions, suits or proceedings to which the Fund is a party and the
legal obligation which the Fund may have to indemnify the Trust's Trustees and
officers with respect thereto.
The Adviser shall authorize and permit any of its directors, officers and
employees, who may be elected as Trustees or officers of the Trust, to serve in
the capacities in which they are elected. No officer or employee of the Trust or
a Fund shall receive from the Trust or a Fund any salary or other compensation
as such Trustee, officer or employee while he is at the same time a director,
officer, or employee of the Adviser or any affiliated company of the Adviser,
except as the Board may decide.
7. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in this Agreement, each Fund shall pay to the Adviser within
five business days after the end of each calendar month a monthly fee of
one-twelfth the annual rate set forth opposite the Fund's name on Schedule B
hereto based on the Fund's average daily net assets for that month. For the
purposes of this Agreement, each Fund's "net assets" shall be determined as
provided in the Fund's then-current Prospectus and Statement of Additional
Information.
In the event of termination of this Agreement, the fee provided in this
Section 6 shall be paid on a pro-rata basis, based on the number of days during
which this Agreement was in effect.
5
8. REPORTS. The Trust, on behalf of each Fund, and the Adviser agree to
furnish to each other such information regarding their operations with regard to
their affairs as each may reasonably request. Information and reports furnished
by the Adviser to the Board and the officers of the Trust shall be at the
Adviser's expense. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Adviser hereby agrees that any records that it maintains for a
Fund are the property of the Fund, and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request; provided, however, that
the Adviser may retain for its records copies of the records so surrendered. The
Adviser further agrees to arrange for the preservation of any such records for
the periods prescribed by Rule 31a-2 under the 1940 Act.
9. STATUS OF ADVISER. The services of the Adviser to the Funds are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Funds are not impaired thereby. In
addition, nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a Trustee, officer
or employee of the Trust or a Fund, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
10. LIABILITY OF ADVISER. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard by the Adviser of its obligations and
duties hereunder, the Adviser shall not be subject to any liability whatsoever
to a Fund, or to any shareholder of a Fund, for any error of judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Fund.
6
11. DURATION AND TERMINATION. The term of this Agreement shall commence
with respect to a Fund on the date set forth opposite the Fund's name as set
forth on Schedule A hereto (the "Effective Date"), provided that first it is
approved by the Board of Trustees of the Trust, including a majority of those
Trustees who are not parties to this Agreement or interested persons of any
party hereto, in the manner provided in Section 15(c) of the 1940 Act, and by
the holders of a majority of the outstanding voting securities of the Fund, and
shall continue in effect for the initial term set forth in Schedule A. This
Agreement shall continue in effect with respect to a Fund after its initial
term, provided such continuance is approved at least annually by (i) the Trust's
Board of Trustees or (ii) the vote of a majority of the outstanding voting
securities of the Fund; and in either event by a vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party in the manner provided in Section 15(c) of the 1940
Act. Notwithstanding the foregoing, this Agreement may be terminated with
respect to a Fund: (a) at any time without penalty by the Fund upon the vote of
a majority of the Trustees or by vote of the majority of the Fund's outstanding
voting securities, upon sixty (60) days' written notice to the Adviser or (b) by
the Adviser at any time without penalty, upon sixty (60) days' written notice to
the Fund. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act). Any notice under this Agreement shall
be given in writing, addressed and delivered or mailed postpaid, to the other
party at the principal office of such party.
As used in this Section 10, the terms "assignment," "interested person" and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act and Rule 18f-2
7
thereunder, subject to such exemptions as may be granted by the SEC by any rule,
regulation, order or interpretive guidance.
12. DECLARATION OF TRUST. The Adviser agrees that for services rendered to
a Fund, or for any claim by it in connection with services rendered to a Fund,
it shall look only to assets of that Fund for satisfaction and that it shall
have no claim against the assets of any other portfolios of the Trust.
13. GOVERNING LAW. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
_______________.
14. SEVERABILITY. If any provisions 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.
15. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and with such approvals as required by applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ATTEST ASTON FUNDS ON BEHALF OF THE SERIES
SET FORTH IN SCHEDULE A
By:
------------------------------------
Title:
---------------------------------
-------------------------------------
8
ATTEST ASTON ASSET MANAGEMENT LLC
By:
------------------------------------
Title:
---------------------------------
-------------------------------------
9
SCHEDULE A
FUND EFFECTIVE DATE INITIAL TERM
---- -------------- ------------
Aston/XxXxxxxxx Municipal Bond Fund 2 Years
Aston/TCH Fixed Income Fund 2 Years
Aston Balanced Fund 2 Years
Aston/Optimum Mid Cap Fund 2 Years
Aston/ABN AMRO Growth Fund 2 Years
Aston/Veredus Aggressive Growth Fund 2 Years
Aston/Veredus Select Growth Fund 2 Years
Aston/Montag & Xxxxxxxx Balanced Fund 2 Years
Aston/Montag & Xxxxxxxx Growth Fund 2 Years
Aston/Veredus SciTech Fund 2 Years
Aston/TAMRO Large Cap Value Fund 2 Years
Aston/TAMRO Small Cap Fund 2 Years
Aston/ABN AMRO Real Estate Fund 2 Years
Aston Value Fund 2 Years
Aston/TCH Investment Grade Bond Fund 2 Years
Aston/ABN AMRO High Yield Bond Fund 2 Years
Aston/River Road Dynamic Equity Income Fund 2 Years
Aston/River Road Small Cap Value Fund 2 Years
Aston/ABN AMRO Mid Cap Growth Fund 2 Years
10
SCHEDULE B
FUND ANNUAL FEE RATE
---- ---------------
Aston/XxXxxxxxx Municipal Bond Fund
Aston/TCH Fixed Income Fund
Aston Balanced Fund
Aston/Optimum Mid Cap Fund
Aston/ABN AMRO Growth Fund
Aston/Veredus Aggressive Growth Fund
Aston/Veredus Select Growth Fund
Aston/Montag & Xxxxxxxx Balanced Fund
Aston/Montag & Xxxxxxxx Growth Fund
Aston/Veredus SciTech Fund
Aston/TAMRO Large Cap Value Fund
Aston/TAMRO Small Cap Fund
Aston/ABN AMRO Real Estate Fund
Aston Value Fund
Aston/TCH Investment Grade Bond Fund
Aston/ABN AMRO High Yield Bond Fund
Aston/River Road Dynamic Equity Income Fund
Aston/River Road Small Cap Value Fund
Aston/ABN AMRO Mid Cap Growth Fund
11
