EXHIBIT 99.(d)(16)
SUB-INVESTMENT ADVISORY AGREEMENT
BETWEEN ASTON ASSET MANAGEMENT LLC
AND RIVER ROAD ASSET MANAGEMENT, LLC
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this ___ day
of March, 2007 by and between ASTON ASSET MANAGEMENT LLC (hereinafter referred
to as the "Investment Adviser") and RIVER ROAD ASSET MANAGEMENT, LLC
(hereinafter referred to as the "Subadviser"), which Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one instrument.
W I T N E S S E T H:
WHEREAS, the Investment Adviser has been retained by Aston Funds, a
Delaware statutory trust (the "Trust"), a registered management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act") to
provide investment advisory services to the Trust with respect to certain series
of the Trust set forth in Schedule A hereto as may be amended from time to time
(hereinafter referred to as a "Fund" and collectively, the "Funds" of the
Trust);
WHEREAS, the Investment Adviser wishes to enter into a contract with
the Subadviser to provide research, analysis, advice and recommendations with
respect to the purchase and sale of securities, and make investment commitments
with respect to such portion of each Fund's assets as shall be allocated to the
Subadviser by the Investment Adviser from time to time (the "Allocated Assets"),
subject to oversight by the Trustees of the Trust and the supervision of the
Investment Adviser.
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and intending to be bound, the parties agree as follows:
1. In accordance with the Investment Advisory Agreement between the
Trust and the Investment Adviser ("Investment Advisory Agreement") with respect
to the Funds, the Investment Adviser hereby appoints the Subadviser to act as
Subadviser with respect to the Allocated Assets for the period and on the terms
set forth in this Agreement. The Subadviser accepts such appointment and agrees
to render the services set forth herein, for the compensation provided herein.
2. As compensation for the services enumerated herein, the Investment
Adviser will pay the Subadviser a fee with respect to the Allocated Assets,
which shall be calculated and payable monthly in arrears based on the average
daily net assets of the Fund, in an amount equal to 50% of the positive
difference, if any, of (x) the advisory fee payable to the Investment Adviser
with respect to the Allocated Assets of the Fund (before reduction of the fee
payable to Subadviser) minus (y) the sum of: (i) any investment advisory fees
waived by the Investment Adviser pursuant to an Expense Limitation Agreement
with the Fund, (ii) any reimbursement of expenses by the Investment Adviser
pursuant to an Expense Limitation Agreement with the Fund, and (iii) any
payments made by the Investment Adviser to third parties that provide
distribution, shareholder services or similar services on behalf of the Fund. If
the foregoing
calculation results in a negative amount, such amount shall be payable by the
Subadviser within 30 days of receipt of notice from the Investment Adviser,
which notice shall include the basis for the calculation.
For the purposes of this Agreement, a Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus (as used herein
this term includes the related Statement of Additional Information).
If this Agreement shall become effective subsequent to the first day of
a month, or shall terminate before the last day of a month, the Subadviser's
compensation for such fraction of the month shall be prorated based on the
number of calendar days of such month during which the Agreement is effective.
3. This Agreement shall become effective with respect to a Fund as of
the date set forth opposite the Fund's name as set forth on Schedule A hereto
(the "Effective Date"), provided that it has been approved by the Trustees of
the Trust in accordance with the provisions of the 1940 Act and the rules
thereunder and, if so required by the 1940 Act and the rules thereunder, by the
shareholders of the Fund in accordance with the requirements of the 1940 Act and
the rules thereunder.
4. This Agreement shall continue in effect for the initial term set
forth in Schedule A. It shall be renewed automatically thereafter with respect
to a Fund by the Investment Adviser and the Subadviser for successive periods
not exceeding one year, if and only if such renewal and continuance is
specifically approved at least annually by the Board of Trustees of the Trust or
by a vote of the majority of the outstanding voting securities of the Fund as
prescribed by the 1940 Act and provided further that such continuance is
approved at least annually thereafter by a vote of a majority of the Trust's
Trustees, who are not parties to such Agreement or interested persons of such a
party, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement will terminate automatically with respect to a Fund
without the payment of any penalty upon termination of the Investment Advisory
Agreement relating to a Fund (accompanied by simultaneous notice to the
Subadviser) or upon sixty days' written notice to the Subadviser that the
Trustees of the Trust, the Investment Adviser or the shareholders by vote of a
majority of the outstanding voting securities of the Fund, as provided by the
1940 Act, have terminated this Agreement. This Agreement may also be terminated
by the Subadviser with respect to a Fund without penalty upon sixty days'
written notice to the Investment Adviser and the Trust.
This Agreement shall terminate automatically with respect to a Fund in
the event of its assignment or, upon notice thereof to the Subadviser, the
assignment of the Investment Advisory Agreement, unless its continuation
thereafter is approved by the Board of Trustees of the Trust and the
shareholders of the Fund if so required by the 1940 Act (in each case as the
term "assignment" is defined in Section 2(a)(4) of the 1940 Act, subject to such
exemptions as may be granted by the SEC by any rule, regulation, order or
interpretive guidance).
5. Subject to the oversight of the Board of Trustees of the Trust and
the supervision of the Investment Adviser, the Subadviser will provide an
investment program for the Allocated Assets, including investment research and
management with respect to securities and
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investments, including cash and cash equivalents, and will determine from time
to time what securities and other investments will be purchased, retained or
sold. The Subadviser will provide the services under this Agreement in
accordance with each Fund's investment objective, policies and restrictions as
stated in the Prospectus, as provided to the Subadviser by the Investment
Adviser. The Subadviser further agrees that, in all matters relating to the
performance of this Agreement, it:
(a) shall act in conformity with the Trust's Declaration of Trust,
By-Laws and currently effective registration statements under the 1940 Act and
the Securities Act of 1933 and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of each Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act and the
Investment Advisers Act of 1940 and the rules thereunder, and all other
applicable federal and state laws and regulations. The Trust agrees to provide
Subadviser with copies of the Trust's Declaration of Trust, By-Laws,
Registration Statements, written policies, procedures and guidelines, and
written instructions and directions of the Trustees, and any amendments or
supplements to any of them at, or, if practicable, before the time such
materials, instructions or directives become effective;
(b) will pay expenses incurred by it in connection with its
activities under this Agreement other than the cost of securities and other
investments (including brokerage commissions and other transaction changes, if
any) purchased for each Fund, provided that the Subadviser will not pay for or
provide a credit with respect to any research provided to it in accordance with
Section 5(c);
(c) will place orders pursuant to its investment determinations for
each Fund either directly with any broker or dealer, or with the issuer. In
placing orders with brokers or dealers, the Subadviser will attempt to obtain
the best overall price and the most favorable execution of its orders. Subject
to policies established by the Trustees of the Trust and communicated to the
Subadviser, it is understood that the Subadviser 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 Investment
Adviser or the Trust or in respect of a Fund under this Agreement, or otherwise,
solely by reason of its having caused the 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 Subadviser determines in
good faith that the commission 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 Subadviser's overall responsibilities with respect
to the accounts, including the Fund, as to which it exercises investment
discretion;
(d) will review the daily valuation of securities owned by the
Allocated Assets of each Fund as obtained on a daily basis by the Fund's
administrator and furnished by it to Subadviser, and will promptly notify the
Trust and the Investment Adviser if the Subadviser believes that any such
valuations may not properly reflect the market value of any securities owned by
the Fund, provided, however, that the Subadviser is not required by this
sub-paragraph
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to obtain valuations of any such securities from brokers or dealers or
otherwise, or to otherwise independently verify valuations of any such
securities;
(e) unless otherwise instructed, will be responsible for voting all
proxies of each Fund in accordance with the Proxy Voting Policies and Guidelines
of Subadviser (the "Proxy Policy"), provided that such Proxy Policy and any
amendments thereto are furnished to the Trust;
(f) will attend regular business and investment-related meetings
with the Trust's Board of Trustees and the Investment Adviser if requested to do
so by the Trust and/or the Investment Adviser, and at its expense, shall supply
the Board, the officers of the Trust, and the Investment Adviser with all
information and reports reasonably required by them and reasonably available to
the Subadviser relating to the services provided by the Subadviser hereunder;
and
(g) will maintain books and records with respect to the securities
transactions for the Allocated Assets of each Fund and proxy voting record for
the Allocated Assets of the Fund, furnish to the Investment Adviser and the
Trust's Board of Trustees such periodic and special reports as they may request
with respect to the Fund, and provide in advance to the Investment Adviser all
of the Subadviser's reports to the Trust's Board of Trustees for examination and
review within a reasonable time prior to the Trust's Board meetings.
6. The Investment Adviser or its affiliates may, from time to time,
engage other subadvisers to advise other series of the Trust (or portions
thereof) or other registered investment companies (or series or portions
thereof) that may be deemed to be under common control (each a "Sub-Advised
Fund"). The Subadviser agrees that it will not consult with any other
unaffiliated subadviser engaged by the Investment Adviser or its affiliates with
respect to transactions in securities or other assets concerning a Fund or
another Sub-Advised Fund, except to the extent permitted by the rules under the
1940 Act that permit certain transactions with a subadviser or its affiliates.
7. Subadviser agrees with respect to the services provided to each Fund
that it:
(a) will promptly communicate to the Investment Adviser such
information relating to Fund transactions as the officers and Trustees of the
Trust may reasonably request and as communicated to the Subadviser; and
(b) will treat confidentially and as proprietary information of the
Trust all records and other information relative to each Fund and its prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval may not be withheld where Subadviser is advised by counsel
that the Subadviser may be exposed to civil or criminal contempt or other
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust).
8. In compliance with the requirements of Rule 31a-3 under the 1940
Act, Subadviser acknowledges that all records which it maintains for the Trust
are the property of the
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Trust and agrees to surrender promptly to the Trust any of such records upon the
Trust's request, provided, that Subadviser may retain copies thereof at its own
expense. Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act relating to transactions placed by Subadviser for the
Fund. Subadviser further agrees to maintain each Fund's proxy voting record with
respect to the Allocated Assets in a form mutually agreeable between the parties
and which contains the information required by Form N-PX under the 0000 Xxx.
9. It is expressly understood and agreed that the services to be
rendered by the Subadviser to the Investment Adviser under the provisions of
this Agreement are not to be deemed to be exclusive, and the Subadviser shall be
free to provide similar or different services to others so long as its ability
to provide the services provided for in this Agreement shall not be materially
impaired thereby. In addition, but without limiting any separate agreement
between the Subadviser and the Investment Adviser to the contrary, nothing in
this Agreement shall limit or restrict the right of any director, officer, or
employee of the Subadviser who may also be a Trustee, officer, or employee of
the Trust, 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. The Investment Adviser agrees that it will furnish currently to the
Subadviser all information with reference to each Fund and the Trust that is
reasonably necessary to permit the Subadviser to carry out its responsibilities
under this Agreement, and the parties agree that they will from time to time
consult and make appropriate arrangements as to specific information that is
required under this paragraph and the frequency and manner with which it shall
be supplied. Without limiting the generality of the foregoing, Investment
Adviser will furnish to Subadviser procedures consistent with the Trust's
contract with each Fund's custodian from time to time (the "Custodian"), and
reasonably satisfactory to Subadviser, for consummation of portfolio
transactions for each Fund by payment to or delivery by the Custodian of all
cash and/or securities or other investments due to or from the Fund, and
Subadviser shall not have possession or custody thereof or any responsibility or
liability with respect to such custody. Upon giving proper instructions to the
Custodian, Subadviser shall have no responsibility or liability with respect to
custodial arrangements or the acts, omissions or other conduct of the Custodian.
11. The Subadviser and its directors, officers, stockholders, employees
and agents shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Investment Adviser or the Trust in connection with
any matters to which this Agreement relates or for any other act or omission in
the performance by the Subadviser of its duties under this agreement except that
nothing herein contained shall be construed to protect the Subadviser against
any liability by reason of the Subadviser's willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by reckless disregard of
its obligations or duties under this Agreement.
12. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby. Except to the extent governed by federal law
including the 1940 Act, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without applying the
principles of conflicts of law thereunder.
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13. No provision of this Agreement may be changed, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, discharge or termination is sought. No
amendment of this Agreement shall be effective with respect to the Trust until
approved as required by applicable law.
14. Any notice to be given hereunder may be given by personal
notification or by facsimile transmission, to the party specified at the address
stated below:
To the Investment Adviser at:
Aston Asset Management LLC
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
To the Subadviser at:
River Road Asset Management, LLC
Xxxxxxxxx Xxxxx, Xxxxx 0000
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
To a Fund or the Trust at:
Aston Funds
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
or addressed as such party may from time to time designate by notice to other
parties in accordance herewith.
15. The Subadviser agrees that for any claim by it against a Fund in
connection with this Agreement or the services rendered under this Agreement, it
shall look only to assets of a Fund for satisfaction and that it shall have no
claim against the assets of any other portfolios of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ATTEST: ASTON ASSET MANAGEMENT LLC
By:
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ATTEST: RIVER ROAD ASSET MANAGEMENT, LLC
By:
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SCHEDULE A
FUND EFFECTIVE DATE INITIAL TERM
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Aston/River Road Small-Mid Cap Fund March __, 2007 December 31, 2008
