UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
ASTON FUNDS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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_________ ___, 2007
ASTON FUNDS
ASTON/TAMRO LARGE CAP VALUE FUND
ASTON/TAMRO SMALL CAP FUND
120 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
Dear Fellow Shareholder:
The Aston Funds listed above will hold a joint Special Meeting of
Shareholders (the "Special Meeting") on June 28, 2007, at 9:00 a.m. Eastern
time, at the offices of PFPC, Inc., 4400 Computer Drive, Westborough,
Massachusetts 01581. You are being asked to consider a proposal to approve a new
Sub-Investment Advisory Agreement on behalf of each Fund with Tasho Investment,
LLC, a recently formed entity that will acquire substantially all of the assets
of TAMRO Capital Partners, LLC ("TAMRO") and will assume the TAMRO name as soon
as practicable following the transaction. If you are a shareholder of record of
one or both of the Aston Funds listed above as of the close of business on May
15, 2007, you are entitled to vote on the proposal with respect to your fund(s).
Your portfolio manager will remain the same after the transaction and the new
subadviser will be owned principally by the current executive officers of TAMRO.
While we encourage you to read the Questions and Answers section and the
full text of the enclosed proxy statement, the proposal is summarized as
follows:
- For each Fund, to approve a new Sub-Investment Advisory Agreement
between Aston Asset Management LLC, each Fund's investment adviser,
and Tasho Investment, LLC (to be renamed TAMRO Capital Partners, LLC).
YOUR FUND'S BOARD OF TRUSTEES HAS APPROVED THE PROPOSAL AND URGES YOU TO
VOTE "FOR" EACH PROPOSAL.
YOUR VOTE IS IMPORTANT! Please review the attached proxy statement carefully.
Enclosed is a proxy card that we ask you to complete, sign, date and return as
soon as possible in the postage-paid envelope. You may also vote by telephone or
over the Internet using the toll-free telephone number or web address printed on
your proxy card. Thank you for your attention and your vote with regard to this
important proposal. Please call proxy services at [866-390-7202] if you need
more information.
Thank you for your response, and we look forward to serving your future
investment needs.
Sincerely,
/s/ Kenneth C. Anderson
-------------------------------------
Kenneth C. Anderson
President
_________ ___, 2007
IMPORTANT NOTICE TO FUND SHAREHOLDERS
While we encourage you to read the full text of the enclosed Proxy
Statement, here is a brief overview of the proposal, which will require a
shareholder vote.
QUESTIONS AND ANSWERS
Q: WHY AM I RECEIVING THIS PROXY STATEMENT?
A: TAMRO Capital Partners, LLC ("TAMRO") currently serves as subadviser
to Aston Asset Management LLC ("Aston") with respect to Aston/TAMRO
Large Cap Value Fund and Aston/TAMRO Small Cap Fund (each a "Fund,"
and collectively, the "Funds"), each a series of Aston Funds (the
"Trust"). On April 13, 2007, Tasho Investment, LLC ("Tasho"), which is
principally owned by the executive officers of TAMRO, entered into an
asset purchase agreement with TAMRO and ABN AMRO Asset Management
Holdings, Inc. ("ABN AMRO"), to purchase substantially all of the
assets related to TAMRO's investment advisory business. As soon as
practicable following the transaction, Tasho will change its name to
TAMRO Capital Partners, LLC. ABN AMRO acquired its interest in TAMRO
in February 2001, and is the sole capital interest holder in TAMRO.
Accordingly, the transaction is referred to herein as the "Buyback
Transaction." As a result of the Buyback Transaction, Tasho would
become the subadviser to Aston with respect to each Fund.
This proxy statement seeks shareholder approval of a new
Sub-Investment Advisory Agreement between Tasho and Aston with respect
to each Fund. If shareholders approve this proposal and the Buyback
Transaction is consummated, the current subadvisory agreement with
respect to each Fund will be terminated.
The enclosed Proxy Statement gives you additional information on the
proposed new Sub-Investment Advisory Agreement for your Fund. Please
refer to the Proxy Statement for a detailed explanation of the items
you are being asked to vote on.
Q: WHY IS A VOTE ON THE PROPOSED NEW SUBADVISORY AGREEMENT REQUIRED?
A: The Buyback Transaction will result in the termination of the current
Sub-Investment Advisory Agreement between each Fund and TAMRO. The
Investment Company Act of 1940, as amended ("1940 Act"), requires
shareholders to approve the new Sub-Investment Advisory Agreement
between Aston and Tasho for each Fund in order for it to become
effective.
Q: HOW WILL THE BUYBACK TRANSACTION AFFECT THE MANAGEMENT OF MY FUND?
A: Upon completion of the Buyback Transaction, Aston will remain the
investment adviser to your Fund and Tasho will serve as subadviser
with respect to your Fund. The current portfolio manager would
continue to act as the portfolio manager after the Buyback
Transaction, and Tasho expects to retain substantially all of the
personnel of TAMRO in place immediately prior to the Buyback
Transaction.
Q: WILL THE PROPOSED CHANGE RESULT IN HIGHER ADVISORY FEES?
A: No. The fees under the new Sub-Investment Advisory Agreement will
remain the same. In addition, the investment advisory agreement
between the Trust and Aston dated November 30, 2006 will remain
unchanged. As a result, the Buyback Transaction will not result in any
changes to the fees of your Fund.
Q: HAS THE BOARD OF TRUSTEES OF ASTON FUNDS APPROVED THE PROPOSAL?
A: Yes. The Trustees of Aston Funds, including the Independent Trustees,
have approved the proposal for each Fund and unanimously recommend
that you vote to approve it.
Q: WHAT HAPPENS UNTIL THE SHAREHOLDERS' MEETING IS HELD?
A: TAMRO will continue as the subadviser to your Fund until the Buyback
Transaction is consummated. The Buyback Transaction is conditioned on
shareholders approving the new Sub-Investment Advisory Agreement with
Tasho (to be renamed TAMRO) for each Fund.
Q: WHAT HAPPENS IF THE NEW SUBADVISORY AGREEMENT IS NOT APPROVED?
A: The closing of the Buyback Transaction is dependent on shareholders
approving the new Sub-Investment Advisory Agreement between Tasho and
Aston for each Fund. If the required approvals are not obtained or
other conditions to closing are not met, the parties are not obligated
to consummate the Buyback Transaction.
Q: WILL MY FUND PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS ASSOCIATED WITH
THIS SOLICITATION?
A: No. Tasho has agreed to pay half the costs. TAMRO and ABN AMRO have
agreed to pay the other half of the costs. The Funds will not bear any
of these costs.
Q: WHOM DO I CALL FOR MORE INFORMATION?
A: Please call Shareholder Services at (800) 992-8151.
ASTON FUNDS
ASTON/TAMRO LARGE CAP VALUE FUND
ASTON/TAMRO SMALL CAP FUND
120 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 2007
To the Shareholders of the Above Named Funds:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of
Aston/TAMRO Large Cap Value Fund and Aston/TAMRO Small Cap Fund (each a "Fund,"
collectively, the "Funds"), each a series of Aston Funds (the "Trust"), a
Delaware statutory trust, will be held at the offices of the Trust's
sub-administrator, PFPC Inc., 4400 Computer Drive, Westborough, Massachusetts
01581, on June 28, 2007 at 9:00 a.m. Eastern time (the "Special Meeting"), for
the following purpose and to transact such other business, if any, as may
properly come before the Special Meeting:
1. For each Fund, to approve a new Sub-Investment Advisory Agreement
between Aston Asset Management LLC, each Fund's investment adviser, and Tasho
Investment, LLC (to be renamed TAMRO Capital Partners, LLC).
The Board of Trustees has fixed the close of business on May 15, 2007 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Special Meeting or any adjournment thereof.
By Order of the Board of Trustees,
Gerald F. Dillenburg
Senior Vice President, Secretary and
Treasurer
_____________ ___, 2007
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY THE ACCOMPANYING PROXY
CARD, WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. YOU MAY
EXECUTE THE PROXY CARD USING THE METHODS DESCRIBED IN THE PROXY CARD. EXECUTING
THE PROXY CARD IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
SHAREHOLDERS ALSO HAVE THE OPTION TO PROVIDE THEIR VOTE BY TELEPHONE OR OVER THE
INTERNET BY FOLLOWING THE INSTRUCTIONS ACCOMPANYING THE PROXY CARD. PROXIES MAY
BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING A WRITTEN NOTICE
OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE SPECIAL
MEETING AND VOTING IN PERSON.
INSTRUCTIONS FOR VOTING
The following general rules apply to voting by mail and will help you to
properly sign your proxy card. Please read carefully, because if you do not sign
your proxy card properly your vote will be invalidated.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Both parties must sign, and the name of each party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp. by
John Doe, Treasurer
(2) ABC Corp. John Doe
John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee Jane B. Doe
u/t/d/ 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
Rather than mailing in your proxy, you may vote by telephone or over the
Internet using the toll-free telephone number or web address printed on your
proxy card. These options require you to input the control number located on
your proxy card. After inputting the control number you may enter your vote on
the proposal. You will have an opportunity to review your vote and make any
necessary changes before submitting your vote and terminating the telephone call
or Internet link.
____________ ___, 2007
ASTON FUNDS
ASTON/TAMRO LARGE CAP VALUE FUND
ASTON/TAMRO SMALL CAP FUND
120 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 2007
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Aston Funds ("Board" or "Trustees"), a
Delaware statutory trust (the "Trust"), for Aston/TAMRO Large Cap Value Fund and
Aston/TAMRO Small Cap Fund (each a "Fund," and collectively, the "Funds"), for
use at a Special Meeting of Shareholders of the Funds to be held at 9:00 a.m.
Eastern time on Thursday, June 28, 2007, at the offices of the Trust's
sub-administrator, PFPC Inc., 4400 Computer Drive, Westborough, Massachusetts
01581, and any adjournments thereof (the "Special Meeting").
This Proxy Statement and the accompanying Notice of Special Meeting and
proxy card are expected to be mailed to shareholders on or about __________ ___,
2007 or as soon as practical thereafter.
If the enclosed proxy card is properly executed and returned in time to be
voted at the Special Meeting, the shares of beneficial interest ("Shares")
represented by the proxy will be voted in accordance with the instructions
marked thereon. If no specification is made, the Shares will be voted FOR the
proposal. Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise either by attending the Special Meeting and
voting his or her Shares in person, or by submitting a letter of revocation or a
later-dated proxy to the Trust at the above address prior to the date of the
Special Meeting.
Shareholders of a Fund are entitled to one vote for each full Share held
and fractional votes for fractional Shares. One-third of the aggregate number of
Shares entitled to vote, present in person or by proxy, constitutes a quorum for
the transaction of business. Abstentions and broker "non-votes" (that is,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as Shares that are present but which have
not been voted for purposes of determining the presence of a quorum for
transacting business at the Special Meeting. In the event that a quorum is not
present at the Special Meeting, or in the event that a quorum is present but
sufficient votes to approve the proposal are not received, the persons named as
proxies on the enclosed proxy card may propose one or more adjournments of the
Special Meeting to permit further solicitation of proxies. The persons named as
proxies will vote upon such adjournment after consideration of all circumstances
that may bear upon a decision to adjourn the Special Meeting. Any business that
might have been transacted at the Special Meeting originally called may be
transacted at any such adjourned session(s) at which a quorum is present. Tasho
Investment, LLC ("Tasho"),
TAMRO Capital Partners, LLC ("TAMRO") and ABN AMRO Asset Management Holdings,
Inc. ("ABN AMRO") will pay the costs of preparing and distributing to
shareholders additional proxy materials, if required in connection with any
adjournment. Any adjournment will require the affirmative vote of a majority of
those Shares represented at the Special Meeting in person or by proxy.
The following table indicates which shareholders are solicited with respect
to the proposal:
PROPOSAL
APPROVE NEW SUBADVISORY
FUND AGREEMENT
---- -----------------------
Aston/TAMRO Large Cap Value Fund... X
Aston/TAMRO Small Cap Fund......... X
The proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund. The term "majority of the
outstanding voting securities," as used in this Proxy Statement, means the
affirmative vote of the lesser of (i) 67% of the voting securities of a
respective Fund present at the meeting if more than 50% of the outstanding
voting securities of the Fund are present in person or by proxy or (ii) more
than 50% of the outstanding voting securities of a respective Fund. Abstentions
and broker non-votes will have the effect of a "no" vote for purposes of
obtaining the requisite approval of the proposal.
The Board has fixed the close of business on May 15, 2007 as the record
date (the "Record Date") for the determination of shareholders of each Fund
entitled to notice of and to vote at the Special Meeting and all adjournments
thereof. At the close of business on May 1, 2007, the Funds have issued and
outstanding shares as follows:
CLASS OF SHARES
------------------------
FUND CLASS I CLASS N
---- ------- -------
Aston/TAMRO Large Cap Value Fund... N/A 1,172,360
Aston/TAMRO Small Cap Fund......... 6,649,229 11,944,797
As of February 28, 2007, the officers and Trustees of the Trust as a group
beneficially owned less than 1% of the shares of Aston/TAMRO Small Cap Fund. As
of February 28, 2007, the Trustees and officers of the Trust as a group
beneficially owned 4.29% of Class N Shares of Aston/TAMRO Large Cap Value Fund,
as follows:
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT PERCENT OF CLASS
-------------- -------------------------------------- --------- ----------------
Class N Leonard F. Amari, Trustee 22,390 1.79%
120 N. LaSalle Street
Chicago, IL 60602
Class N Robert A. Kushner, Trustee 0 0.00%
120 N. LaSalle Street
Chicago, IL 60602
Class N Gregory T. Mutz, Trustee 6,694 0.53%
120 N. LaSalle Street
Chicago, IL 60602
2
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT PERCENT OF CLASS
-------------- -------------------------------------- --------- -----------------
Class N Robert B. Scherer, Trustee 327 0.03%
120 N. LaSalle Street
Chicago, IL 60602
Class N Nathan Shapiro, Trustee 0 0.00%
120 N. LaSalle Street
Chicago, IL 60602
Class N Denis Springer, Trustee 0 0.00%
120 N. LaSalle Street
Chicago, IL 60602
Class N Stuart D. Bilton, Chairman and Trustee 22,044 1.76%
120 N. LaSalle Street
Chicago, IL 60602
CLASS N ALL TRUSTEES AND OFFICERS AS A GROUP 53,771 4.29%
As of May 1, 2007, to the best knowledge of the Funds, the following
persons owned of record or beneficially 5% or more of the outstanding shares of
each Fund.
ASTON/TAMRO LARGE CAP VALUE FUND
SHARES
TITLE OF CLASS SHAREHOLDER NAME AND ADDRESS OWNED PERCENT OWNED (%)
-------------- -------------------------------------- --------- -----------------
Class N DCGT as TTEE and/or Cust. 157,125 13.40%
FBO Various Qualified Plans
711 High Street
Des Moines, IA 50303
Class N Charles Schwab & Co., Inc. 133,013 11.35%
Special Custody Acct. for Exclusive of
Customers
101 Montgomery St.
San Francisco, CA 94104-4122
ASTON/TAMRO SMALL CAP FUND
SHARES
TITLE OF CLASS SHAREHOLDER NAME AND ADDRESS OWNED PERCENT OWNED (%)
-------------- -------------------------------------- --------- -----------------
Class I Sheldon & Co. 1,654,124 24.88%
c/o National City
Mutual Funds
P.O. Box 94984
Cleveland, OH 44101-4984
3
SHARES
TITLE OF CLASS SHAREHOLDER NAME AND ADDRESS OWNED PERCENT OWNED (%)
-------------- -------------------------------------- --------- -----------------
Class I Charles Schwab & Co., Inc. 1,510,904 22.72%
Special Custody Acct. for Exclusive of
Customers
101 Montgomery St.
San Francisco, CA 94104-4122
Class I Wells Fargo Bank NA FBO 1,111,059 16.71%
Nuclear Management Co. 401K
P.O. Box 1533
Minneapolis, MN 55480
Class I Merrill Lynch Pierce Fenner & Smith, 1,003,980 15.10%
Inc. for the Sole
Benefit of It's Customers
4800 Deer Lake Dr. East 3rd FL
Jacksonville, FL 32246
Class I DCGT as TTEE and/or Cust. 423,248 6.37%
FBO Principal Financial Group
Omnibus Qualified
711 High Street
Des Moines, IA 50303
Class I LaSalle Bank, N.A. 369,442 5.56%
Omnibus 66
P.O. Box 1443
Chicago, IL 60690-1443
Class N Charles Schwab & Co., Inc. 1,998,941 16.74%
Special Custody Account for Exclusive
of Customers
101 Montgomery St.
San Francisco, CA 94104-4122
Class N Wells Fargo Bank, N.A. 1,057,087 8.85%
FBO Retirement Plan Services
P.O. Box 1533
Minneapolis, MN 55480
Class N Wachovia Bank FBO 764,847 6.40%
Various Retirement Plans
1525 West Wt. Harris Blvd.
Charlotte, NC 28288-1151
Class N DCGT as TTEE and/or Cust. 669,055 5.60%
FBO Various Qualified Plans
711 High Street
Des Moines, IA 50303
4
THE FUNDS' MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT IS AVAILABLE
UPON REQUEST WITHOUT CHARGE BY WRITING THE TRUST AT P.O. BOX 9765, PROVIDENCE,
RHODE ISLAND 02940, BY CALLING TOLL-FREE 1-800-992-8151 OR BY DOWNLOADING AT
WWW.ASTONFUNDS.COM. TO HELP REDUCE FUND EXPENSES AND ENVIRONMENTAL WASTE, THE
FUNDS COMBINE MAILINGS FOR MULTIPLE ACCOUNTS GOING TO A SINGLE ADDRESS BY
DELIVERING THE FUNDS' REPORTS (ANNUAL AND/OR SEMI-ANNUAL REPORTS) AND PROXY
STATEMENTS IN A SINGLE ENVELOPE. IF YOU DO NOT WANT TO CONTINUE CONSOLIDATING
YOUR FUND MAILINGS AND PREFER TO RECEIVE SEPARATE MAILINGS WITH MULTIPLE COPIES
OF FUND REPORTS AND PROXY STATEMENTS, OR IF YOU CURRENTLY RECEIVE MULTIPLE
COPIES AND WOULD LIKE TO REQUEST A SINGLE COPY, PLEASE CALL ONE OF THE FUNDS'
REPRESENTATIVES AT 1-800-992-8151 OR WRITE TO THE ADDRESS ABOVE.
For your convenience, you may submit your vote by mail. If you are mailing
your proxy card, you are requested to:
- indicate your instructions on the enclosed proxy card;
- date and sign the proxy card;
- mail the proxy card promptly in the enclosed envelope, which requires
no postage if mailed in the United States; and
- allow sufficient time for the proxy card to be received on or before
__:__ a.m. Eastern time on ___________ ___, 2007.
Instead of mailing your proxy, you may vote by telephone or over the
Internet using the toll-free telephone number or web address printed on your
proxy card. These options require you to input the control number located on
your proxy card. After inputting the control number, you may enter your vote on
the proposal. You will have an opportunity to review your vote and make any
necessary changes before submitting your vote and terminating the telephone call
or Internet link.
BACKGROUND
Currently, TAMRO is the subadviser to Aston Asset Management LLC, 120 North
LaSalle Street, Chicago, IL 60602 ("Aston") with respect to each Fund. In
February 2007, TAMRO informed the Board of Trustees of the Trust that the
executive officers of TAMRO intended to purchase substantially all of the assets
of TAMRO relating to its investment advisory business. On April 13, 2007, Tasho,
which is principally owned by the current executive officers of TAMRO, entered
into an asset purchase agreement ("Agreement") with TAMRO and ABN AMRO to
purchase substantially all of the assets and liabilities of TAMRO related to its
investment advisory business. As soon as practicable following the transaction,
Tasho will change its name to TAMRO Capital Partners, LLC. ABN AMRO acquired its
interest in TAMRO in February 2001, and is the sole capital interest holder of
TAMRO. Accordingly, the transaction is referred to herein as the "Buyback
Transaction." ABN AMRO is located at 161 N. Clark Street, Chicago, IL 60601. ABN
AMRO is an indirect wholly owned subsidiary of ABN AMRO Holding N.V.
Subject to the satisfaction or waiver of all closing conditions under the
Agreement, ABN AMRO would receive cash consideration at closing, and
post-closing earnout payments. The Agreement provides for earnout payments to be
paid over a number of years. Upon the closing of the Buyback Transaction, Tasho
will serve as subadviser to Aston with respect to each Fund and would be
responsible for the day-to-day investment management of each Fund.
5
The Board of Trustees of Aston Funds met in person to consider a new
Sub-Investment Advisory Agreement with respect to each Fund at a meeting held on
March 22, 2007 and determined that each Agreement was in the best interest of
each Fund and its existing shareholders. Accordingly, the Board of Trustees,
including the Trustees who are not parties to the current Sub-Investment
Advisory Agreement, the proposed Sub-Investment Advisory Agreement, or who are
not "interested persons" of the Funds, or any current or proposed investment
adviser or subadviser as defined in the Investment Company Act of 1940, as
amended (the "1940 Act") (hereafter, the "Independent Trustees"), recommended
that shareholders approve a new Sub-Investment Advisory Agreement between Aston
and Tasho with respect to each Fund, as further described below.
In determining whether to approve the new Sub-Investment Advisory Agreement
in connection with the Buyback Transaction and whether to recommend approval of
the Agreement to shareholders, the Board received information and made inquiries
into all matters deemed relevant and considered the following factors, among
other things:
- The desire of the executive officers of TAMRO to acquire the business
from ABN AMRO;
- The pros and cons of being associated with a smaller, more
entrepreneurial company owned principally by management versus being
associated with a larger, more established parent company;
- The financial strength and resources of Tasho following the Buyback
Transaction and the background and reputation of its principals;
- The anticipated retention by Tasho of substantially all TAMRO
personnel, including persons responsible for portfolio management;
- The subadvisory and investment advisory fee rates for each Fund, which
will remain the same after the Buyback Transaction; and
- The undertaking by Tasho, TAMRO and ABN AMRO to bear all of the costs
to the Funds of the Buyback Transaction including the costs of
preparing, printing and mailing this Proxy Statement and related
solicitation expenses.
If shareholders of each Fund do not approve the proposal ("Requisite
Shareholder Approval"), TAMRO, ABN AMRO and Tasho are not obligated to
consummate the Buyback Transaction. Subject to customary closing conditions, the
Buyback Transaction is expected to close in the second quarter of 2007.
PROPOSAL TO APPROVE A NEW SUB-INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
TAMRO currently serves as the subadviser to Aston with respect to each Fund
under a Sub-Investment Advisory Agreement dated November 30, 2006 (the "Current
Subadvisory Agreement"). The Current Subadvisory Agreement was the result of a
recent transaction between Highbury Financial, Inc. ("Highbury") and ABN AMRO,
whereby ABN AMRO agreed to sell substantially all of its assets related to its
U.S. mutual fund business to Highbury (the "Highbury Transaction"). Shareholders
of the Aston/TAMRO Large Cap Value Fund last approved the Current Subadvisory
Agreement on August 25, 2006 and Shareholders of the Aston/TAMRO Small Cap Fund
last approved the Current Subadvisory
6
Agreement on September 20, 2006 as part of the Highbury Transaction (together,
the "Highbury Special Meeting"). The Board approved the Current Subadvisory
Agreement on May 9, 2006.
The 1940 Act requires a subadvisory agreement to be approved by the Board,
including the Independent Trustees, and each Fund's shareholders in order for it
to become effective. In anticipation of the Buyback Transaction, the Board met
in person on March 22, 2007 for purposes of, among other things, considering
whether it would be in the best interest of each Fund and its shareholders to
approve a new Sub-Investment Advisory Agreement between Tasho and Aston (the
"New Subadvisory Agreement"). At the Board meeting, and for the reasons
discussed below, the Board, including a majority of the Independent Trustees,
approved the New Subadvisory Agreement with respect to each Fund and recommended
its approval by shareholders. The Current Subadvisory Agreement will be
terminated as of the effective date of the New Subadvisory Agreement.
In the event shareholders of a Fund do not approve the New Subadvisory
Agreement, the Board will take such action as it deems to be in the best
interests of the Fund and its shareholders. Although shareholders of each Fund
vote separately on the proposal for their Fund, the proposals are dependent on
each other. If Requisite Shareholder Approval (as previously defined) is not
obtained, TAMRO, ABN AMRO and Tasho are not obligated to consummate the Buyback
Transaction. The form of the New Subadvisory Agreement is attached hereto as
Appendix A.
COMPARISON OF CURRENT SUBADVISORY AGREEMENT AND NEW SUBADVISORY AGREEMENT
The terms of the New Subadvisory Agreement are substantially the same as
those of the Current Subadvisory Agreement, except for the date of effectiveness
and the parties to the Agreement. There is no change in the subadvisory fee rate
payable by Aston. If approved by shareholders and assuming the Buyback
Transaction is consummated, the New Subadvisory Agreement will be effective as
of the closing date of the Buyback Transaction and will have an initial term,
with respect to each Fund, ending on December 31, 2008. The New Subadvisory
Agreement will continue in effect from year to year thereafter if such
continuance is approved on behalf of a Fund at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder. Below is a
comparison of certain terms of the Current Subadvisory Agreement to the terms of
the New Subadvisory Agreement.
Subadvisory Services. The advisory services to be provided by Tasho under
the New Subadvisory Agreement will be identical to the advisory services
provided under the Current Subadvisory Agreement. Both the Current Subadvisory
Agreement and New Subadvisory Agreement provide that the subadviser will furnish
an investment program in respect of, make investment decisions for and place all
orders for the purchase and sale of securities for the portion of the Fund's
investment portfolio allocated by the investment adviser to the subadviser, all
on behalf of the Fund and subject to oversight of the Trust's Board and the
supervision of Aston. In performing its duties under both the Current
Subadvisory Agreement and the New Subadvisory Agreement, the subadviser will
monitor the Fund's investments and will comply with the provisions of the
Trust's Declaration of Trust and By-Laws and the stated investment objectives,
policies and restrictions of the Fund.
Both the Current Subadvisory Agreement and the New Subadvisory Agreement
also include several provisions designed to accommodate the use of multiple
managers and/or a "manager of managers" structure. Both agreements (i) permit
the investment adviser to allocate portions of the portfolio to different
investment managers; (ii) prohibit the subadviser from consulting with other
subadvisers engaged by the investment adviser, except for affiliates; and (iii)
require shareholder approval for amendments to the subadvisory agreement only if
required by law. Shareholders of each Fund approved a "manager of managers"
structure at the Highbury Special Meeting.
7
On April 9, 2007, the Trust and Aston filed an application with the
Securities and Exchange Commission ("SEC") pursuant to Section 6(c) of the 1940
Act, for an order of exemption from Section 15(a) thereof and Rule 18f-2
thereunder and from certain disclosure requirements (the "SEC Order"). If
approved, a fund of the Trust advised by Aston would not be required to seek
shareholder approval of proposed changes in subadvisers or subadvisory
agreements. The Trust and Aston cannot predict when their application might be
approved. In 2003, the SEC proposed a new rule, Rule 15a-5, that would permit
one or more investment advisers to act as subadvisers to a mutual fund without
shareholder approval. If adopted, the proposed rule would eliminate the need for
a fund to obtain an SEC Order before its investment adviser may engage
subadvisers or amend subadvisory arrangements without shareholder approval. Rule
15a-5, as proposed, would require that the subadvisers retained to manage a fund
be unaffiliated with the investment adviser, directors, trustees and officers of
the investment adviser. In the event that Rule 15a-5 is adopted, the Trust's and
Aston's SEC Order would automatically terminate.
Compensation. Under both the Current Subadvisory Agreement and the New
Subadvisory Agreement, Aston pays the subadviser a management fee out of the
investment advisory fee it receives from the Fund. Aston receives a fee based on
each Fund's average daily net assets, computed daily and payable monthly, at the
following annual rates:
GROSS ADVISORY FEE
(AS A % OF AVERAGE
FUND DAILY NET ASSETS)
---- ------------------
Aston/TAMRO Large Cap Value Fund... 0.80%
Aston/TAMRO Small Cap Fund......... 0.90%
The subadvisory fee rate payable by Aston to Tasho with respect to each
Fund is identical to the subadvisory fee paid under the Current Subadvisory
Agreement. For the services provided pursuant to the Current Subadvisory
Agreement, Aston pays TAMRO a fee based on each Fund's average daily net assets,
computed daily and payable monthly, as follows:
FUND SUB-INVESTMENT ADVISORY FEE
---- ---------------------------
Aston/TAMRO Large Cap Value Fund... 50% of: Advisory Fee Less Expense
Waivers/Reimbursements and Payments to
Third-Party Intermediaries
Aston/TAMRO Small Cap Fund......... 50% of: Advisory Fee Less Expense
Waivers/Reimbursements and Payments to
Third-Party Intermediaries
Prior to the close of the Highbury Transaction, TAMRO served as investment
adviser to each Fund and received investment advisory fees as set forth below.
The investment advisory fees earned by TAMRO for each Fund for the fiscal year
ended October 31, 2006, as well as any fees waived or expenses reimbursed, are
set forth below:
8
GROSS
ADVISORY NET ADVISORY
FEES EARNED WAIVED FEES AFTER FEE REIMBURSED
FUND BY ADVISERS FEES WAIVERS* EXPENSES
---- ----------- -------- -------------- ---------
Aston/TAMRO Large Cap Value Fund... $ 153,760 $ 63,426 $ 90,334 --
Aston/TAMRO Small Cap Fund......... 1,668,134 220,883 1,447,251 --
----------
* Under the Current Subadvisory Agreement, Aston and TAMRO would have each
received fifty percent (50%) of the amount shown less fifty percent (50%)
of payments to third party intermediaries.
Appendix B includes the advisory fee rates and the net assets of another
mutual fund advised by TAMRO with a similar investment objective and policies as
the Aston/TAMRO Small Cap Fund.
Brokerage. Both the Current Subadvisory Agreement and New Subadvisory
Agreement authorize the subadviser to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Funds, subject
to its obligation to obtain best execution under the circumstances, which may
take account of the overall quality of brokerage and research services provided
to the subadviser. Both agreements permit the subadviser to rely on Section
28(e) of the Securities Exchange Act of 1934 in placing brokerage transactions.
Under that Section, a commission paid to a broker may be higher than that which
another qualified broker would have charged for effecting the same transaction,
provided that the subadviser determines in good faith that the commission is
reasonable in terms of either the transaction or the overall responsibility of
the subadviser to the Funds and its other clients and that the total commissions
paid by each Fund will be reasonable in relation to the benefits to the Fund
over the long term.
Payment of Expenses. Under the Current Subadvisory Agreement and New
Subadvisory Agreement, the subadviser agrees to pay all expenses it incurs in
connection with its activities under the Agreement other than the cost of
securities purchased for the Fund (including brokerage commissions and other
related expenses).
Limitation on Liability. Under the Current Subadvisory Agreement and New
Subadvisory Agreement, the subadviser and its directors, officers, stockholders,
employees and agents will not be liable for any error of judgment or mistake of
law or for any loss suffered by the subadviser or the Trust in connection with
any matters to which the subadviser relates or for any other act or omission in
the performance by the subadviser of its duties under either agreement, except
that nothing in either agreement 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 for its reckless
disregard of its obligations or duties under either agreement.
Continuance. The Current Subadvisory Agreement of each Fund is in effect
for an initial term ending December 31, 2008, and will continue thereafter for
successive one-year periods if such continuance is specifically approved at
least annually in the manner required by the 1940 Act. If the shareholders of a
Fund approve a New Subadvisory Agreement for that Fund and assuming consummation
of the Buyback Transaction, the New Subadvisory Agreement will be effective as
of the closing date of the Buyback Transaction and will have an initial term
ending on December 31, 2008. Thereafter, the New Subadvisory Agreement may be
continued for successive one-year periods if such continuance is approved on
behalf of the Fund at least annually in the manner required by the 1940 Act.
Termination. The Current Subadvisory Agreement and New Subadvisory
Agreement for each Fund provide that the agreement may be terminated at any time
without the payment of any penalty by the investment adviser on sixty (60) days'
written notice to the subadviser. The Current Subadvisory Agreement and New
Subadvisory Agreement also may be terminated by a Fund with respect to that Fund
9
by action of the Board or by a vote of a majority of the outstanding voting
securities of that Fund, accompanied by 60 days' written notice.
INFORMATION CONCERNING TASHO INVESTMENT LLC
Tasho, located at 1660 Duke Street, Alexandria, Virginia 22314, will be the
subadviser to each Fund after the close of the Buyback Transaction. Tasho is
expected to have approximately $750 million in assets under management acquired
from TAMRO in connection with the Buyback Transaction. As soon as practicable
following the Buyback Transaction, Tasho will change its name to TAMRO Capital
Partners, LLC.
Under the terms of the operating agreement that will govern Tasho following
the Buyback Transaction, four different groups will have an ownership interest
in Tasho: (1) existing executive management of TAMRO, including Mr. Philip Tasho
and Ms. Kathleen Neumann, and other employees of TAMRO ("Management"), (2) a
limited liability company owned by Management ("Management LLC"), (3) Northern
Lights Ventures LLC ("NLV") and (4) Stellate Partners, LLC ("Stellate"). NLV is
a private equity firm based in Tacoma, Washington. Stellate is a third-party
marketing firm based in South Carolina. One of the principals of NLV was a
founder of Stellate. Neither NLV nor Stellate, nor their principals, are
affiliated with either ABN AMRO or TAMRO. NLV and Stellate are in the business
of investing in, or forming strategic alliances with, investment management
firms. Other strategic alliances of NLV and Stellate may compete with TAMRO.
Both NLV and Stellate are recently established firms with limited operating
histories; however, principals of each firm have significant experience in the
investment management industry.
Management, directly and indirectly through Management LLC, will own
approximately 78% of the capital interest of Tasho. NLV and Stellate will own
approximately 22% of the capital interest of Tasho. NLV's interest is subject to
various protective covenants, preferences on liquidating distributions and
additional voting rights.
The managing member of Tasho will be Mr. Tasho. The managing member and
other officers of Tasho, including Ms. Neumann, will be responsible for the
day-to-day administration and management of Tasho's affairs. As part of the
Agreement, Tasho will acquire all rights, title, and interest in the TAMRO
trademarks and names. As a result, Tasho will use the TAMRO name after the
closing.
The table below lists the names and principal occupations of Tasho's
principal executive officers. The address of each officer listed below is 1660
Duke Street, Alexandria, Virginia 22314.
NAME TITLE/POSITION
---- --------------
Philip Tasho Managing Member; Chief Executive
Officer and Chief Investment Officer
Kathleen Neumann President
Betsy Moszeter Chief Operating Officer and Chief
Compliance Officer
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES IN APPROVING THE NEW SUBADVISORY
AGREEMENT
At a meeting of the Trustees of the Trust held on March 22, 2007, the Board
of Trustees, including the Independent Trustees, approved the New Subadvisory
Agreement and recommended that shareholders of each Fund vote to approve the
agreement. The Independent Trustees met separately from the "interested" Trustee
of the Trust and any officers of Aston, Tasho or their affiliates to consider
approval of the New Subadvisory Agreement and were assisted by independent legal
counsel in their
10
deliberations. The Board of Trustees considered materials presented and
discussions held at the February and March 2007 meetings specifically relating
to the approval of the New Subadvisory Agreement in connection with the purchase
of TAMRO's investment advisory business by Tasho.
The Board, including all of the Independent Trustees, determined that the
New Subadvisory Agreement with Tasho will enable the Funds to continue to enjoy
high-quality investment advisory services at costs that are appropriate,
reasonable and in the best interests of the Funds and their shareholders. In
making such determination, the Board, including all of the Independent Trustees,
reviewed materials provided by Aston and Tasho including information regarding
(i) the nature, extent and quality of services to be provided; (ii) the
sub-advisory fee to be charged and information regarding the expense ratios of
the Funds; (iii) fee waivers or expenses to be reimbursed; (iv) potential
benefits to be received by affiliates of the subadviser; and (v) information
regarding the impact of the Buyback Transaction on the services to be provided
to the Funds. The Board also determined that it was appropriate to take into
consideration the extensive information received throughout the year regarding
performance and operating results of the Funds, given the continuity of
portfolio management expected following the transaction. Among other matters
considered by the Board, including the Independent Trustees, in connection with
its approval of the New Subadvisory Agreement were the following:
Nature, Quality and Extent of Services. The Board considered the impact of
the Buyback Transaction on the nature, extent and quality of services expected
to be provided under the New Subadvisory Agreement. The Board considered
information regarding the financial strength and resources of Tasho following
the completion of the Buyback Transaction. The Board also considered the pros
and cons of being associated with a smaller, more entrepreneurial company owned
principally by management versus being associated with a larger, more
established parent company. The Board considered that the newly formed Company
intends to retain substantially all personnel of the existing subadviser. The
Board noted that the investment approach of the subadviser, and the experience
and skills of investment personnel responsible for the day-to-day management of
the Funds would not change as a result of the Buyback Transaction. The Board
considered the performance of the Funds, taking into account resources available
under current ownership and the resources expected under new ownership.
Additionally, the Board considered the performance of separate accounts with
substantially the same investment objective and strategies as the Funds. On the
basis of this evaluation, the Board concluded that the nature, quality and
extent of services to be provided by the subadviser are expected to be
satisfactory with respect to each Fund.
Fees, Profitability and Economies of Scale. The Board considered the
subadvisory fee rates under the New Subadvisory Agreement as well as the overall
management fee structure of the Funds. The Board considered that the subadvisory
fee rates were negotiated at arm's length between Aston and Tasho, two
unaffiliated parties, and that Aston will compensate the subadviser from its
fees. As part of its previous review of the investment advisory agreement with
Aston, the Board considered whether there will be economies of scale with
respect to the overall fee structure of the Funds and whether the Funds will
benefit from any economies of scale. The Board concluded that the economies of
scale were limited at this time.
Other Benefits to the Subadviser. The Board also considered the character
and amount of other incidental benefits received by the subadviser. The Board
considered potential benefits from the use of "soft dollars," noting that the
subadviser generally does use portfolio brokerage transactions to pay for
research services generated by parties other than the executing broker-dealer.
The Board concluded that any incidental benefits to be received by the
subadviser from its relationship with the Funds are expected to be reasonable.
11
Conclusion. Based on all of the information considered and the conclusions
reached, the Board determined that the terms of the New Subadvisory Agreement
are fair and reasonable, and that the approval of the New Subadvisory Agreement
is in the best interests of the Fund. No single factor was determinative in the
Board's analysis.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED
NEW SUBADVISORY AGREEMENT.
REQUIRED VOTE
Approval of this proposal requires the affirmative vote of a "majority of
the outstanding voting securities" of each Fund, as more fully described on page
2.
12
SUBMISSION OF SHAREHOLDER PROPOSALS
Under Delaware law, the Trust is not required to hold annual shareholders'
meetings, but it will hold special meetings as required or deemed desirable, or
upon the request of holders of at least 10% of the Trust's Shares entitled to
vote. Because the Trust does not hold regular meetings of shareholders, the
anticipated date of the next special shareholder meeting cannot be provided. Any
shareholder who wishes to submit a proposal for consideration at a subsequent
shareholders' meeting should mail the proposal promptly to the Trust. Any
proposal to be considered for submission to shareholders must comply with Rule
14a-8 under the Securities Exchange Act of 1934 and must be received by the
Trust within a reasonable time before the solicitation of proxies for that
meeting. The timely submission of a proposal does not guarantee its inclusion.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees is not aware of any matters that will be presented
for action at the Special Meeting other than the matters set forth herein.
Should any other matters requiring a vote of shareholders arise, it is intended
that the proxies that do not contain specific instructions to the contrary will
be voted in accordance with the judgment of the persons named in the enclosed
form of proxy.
DISTRIBUTOR AND ADMINISTRATOR
Set forth below are the names and addresses of the Trust's distributor and
administrator:
ADMINISTRATOR DISTRIBUTOR
------------- -----------
Aston Asset Management LLC PFPC Distributors, Inc.
120 North LaSalle Street 760 Moore Road
Chicago, IL 60602 King of Prussia, PA 19406
On November 30, 2006, as part of the Highbury Transaction, ABN AMRO
Investment Fund Services, Inc. ("AAIFS"), the Trust and the Board of Trustees
assigned the administration agreement between the Funds and AAIFS to Aston.
After the assignment, Aston became the Administrator to the Funds.
During the fiscal year ended October 31, 2006, Aston/TAMRO Large Cap Value
Fund paid AAIFS $24,574 for providing administrative services to the Fund, of
which $16,667 was paid to PFPC Inc., as sub-administrator. During the fiscal
year ended October 31, 2006, Aston/TAMRO Small Cap Fund paid AAIFS $108,629 for
providing administrative services to the Fund, of which $56,619 was paid to PFPC
Inc., as sub-administrator.
EXPENSES OF PROXY SOLICITATION
It is expected that the solicitation of proxies will be primarily by mail.
Officers and service contractors of the Trust may also solicit proxies by
telephone, telegraph, facsimile, Internet or in person. The cost of preparing,
printing and mailing the enclosed proxy card and Proxy Statement and all other
costs incurred in connection with the solicitation of proxies will be paid by
Tasho, TAMRO and ABN AMRO, and not by the Funds. The Funds have engaged
Computershare Fund Services to assist in the solicitation of proxies at an
estimated cost of $35,000, plus reasonable expenses.
13
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board,
----------------------------------------
Gerald F. Dillenburg
Senior Vice President, Secretary and
Treasurer
14
INDEX OF APPENDICES
APPENDIX A: FORM OF NEW SUB-INVESTMENT ADVISORY AGREEMENT
APPENDIX B: FEE RATES AND NET ASSETS OF FUND ADVISED BY TAMRO WITH A SIMILAR
INVESTMENT OBJECTIVE AND POLICIES
APPENDIX A
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT BETWEEN
ASTON ASSET MANAGEMENT LLC AND TASHO INVESTMENT, LLC
(TO BE RENAMED TAMRO CAPITAL PARTNERS, LLC)
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this _____ day of
________, 2007 by and between ASTON ASSET MANAGEMENT LLC (hereinafter referred
to as the "Investment Adviser") and TASHO INVESTMENT, 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.
WITNESSETH:
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 the Funds' 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).
A-1
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
Investment Adviser, the Subadviser will provide an investment program for the
Allocated Assets, including investment research and management with respect to
securities and 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
A-2
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
the Allocated Assets 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 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 the Allocated Assets 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
A-3
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 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 1940 Act.
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
A-4
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.
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
120 North LaSalle Street, 25th Floor
Chicago, Illinois 60602
Attn: President
Facsimile: (312) 268-1380
To the Subadviser at:
Tasho Investment, LLC (to be renamed TAMRO Capital Partners, LLC)
1660 Duke Street
Alexandria, Virginia 22314
Attn: President
Facsimile: (703) 836-0495
To a Fund or the Trust at:
Aston Funds
120 North LaSalle Street, 25th Floor
Chicago, Illinois 60602
Attn: President
Facsimile: (312) 268-1380
or addressed as such party may from time to time designate by notice to other
parties in accordance herewith.
A-5
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.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-6
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:
------------------------------------- ------------------------------------
ATTEST: TASHO INVESTMENT, LLC
By:
------------------------------------- ------------------------------------
A-7
SCHEDULE A
Fund Effective Date Initial Term
---- -------------- ------------
Aston/TAMRO Large Cap Value Fund December 31, 2008
Aston/TAMRO Small Cap Fund December 31, 2008
A-8
APPENDIX B
FEE RATES AND NET ASSETS OF FUND ADVISED BY
TAMRO WITH A SIMILAR INVESTMENT OBJECTIVE AND POLICIES
NET ASSETS
SIMILAR FUND FEE RATE AS OF 4/30/07
------------ ------------------------------------------- ----------------
Laudus Small-Cap MarketMasters Fund Assets below or equal to $80 million - 0.70% $37.78 million(1)
of average daily net assets
Assets over $80 million - 0.60% of average
daily net assets
----------
(1) The Laudus Small-Cap MarketMasters Fund is operated under a manager of
managers structure. The net assets shown represent the assets TAMRO manages
for the fund.
B-1
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
YOUR PROXY VOTE IS IMPORTANT!
AND NOW YOU CAN VOTE YOUR PROXY ON THE PHONE
OR THE INTERNET.
IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.
IT SAVES TIME! TELEPHONE AND INTERNET VOTING
IS INSTANTANEOUS - 24 HOURS A DAY.
IT'S EASY! JUST FOLLOW THESE SIMPLE STEPS:
1. READ YOUR PROXY STATEMENT AND HAVE IT AT
HAND.
2. CALL TOLL-FREE 1-866-525-2778 OR GO TO
WEBSITE: https://vote.proxy-direct.com
3. ENTER THE 14-DIGIT NUMBER LOCATED IN THE
SHADED BOX FROM YOUR PROXY CARD.
4. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.
5. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.
Please detach at perforation before mailing.
PROXY PROXY
ASTON FUND
ASTON/TAMRO LARGE CAP VALUE FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 28, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF ASTON FUNDS
The undersigned hereby appoints Teresa Hamlin and Aaron Remorenko, and each of
them, as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote all shares of Aston/TAMRO Large
Cap Value Fund (the "Fund") held of record by the undersigned on May 15, 2007,
at the special meeting of shareholders to be held June 28, 2007, and any
postponement or adjournments thereof.
By signing and dating the lower portion of this card, you authorize the proxies
to vote the proposal as marked, or if not marked, to vote "FOR" the proposal,
and to use their discretion to vote any other matter as may properly come before
the meeting. If you do not intend to personally attend the meeting, please
complete and mail this card at once in the enclosed envelope. The undersigned
hereby revokes any proxy previously given.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder(s). IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED
WITH NO DIRECTION MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA THE TELEPHONE: 1-866-525-2778
------------------------ -----------------------
999 99999 999 999
------------------------ -----------------------
NOTE: Please sign name or names as printed on the
proxy to authorize the voting of your shares as
indicated. Where shares are registered with joint
owners, all joint owners should sign. Persons signing
as executors, administrators, trustees, etc. should
so indicate.
-----------------------------------------------------
Signature
-----------------------------------------------------
Signature (if held jointly)
-----------------------------------------------------
Date
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY
Please detach at perforation before mailing.
<Table>
THE BOARD OF TRUSTEES OF ASTON FUNDS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSALS.
1. To approve a new Sub-Investment Advisory Agreement between Aston Asset Management LLC, the FOR AGAINST ABSTAIN
Fund's investment adviser, and Tasho Investment, LLC (to be renamed TAMRO Capital Partners, LLC). [ ] [ ] [ ]
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
</Table>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
YOUR PROXY VOTE IS IMPORTANT!
AND NOW YOU CAN VOTE YOUR PROXY ON THE PHONE
OR THE INTERNET.
IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.
IT SAVES TIME! TELEPHONE AND INTERNET VOTING
IS INSTANTANEOUS - 24 HOURS A DAY.
IT'S EASY! JUST FOLLOW THESE SIMPLE STEPS:
1. READ YOUR PROXY STATEMENT AND HAVE IT AT
HAND.
2. CALL TOLL-FREE 1-866-525-2778 OR GO TO
WEBSITE: https://vote.proxy-direct.com
3. ENTER THE 14-DIGIT NUMBER LOCATED IN THE
SHADED BOX FROM YOUR PROXY CARD.
4. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.
5. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.
Please detach at perforation before mailing.
PROXY PROXY
ASTON FUNDS
ASTON/TAMRO SMALL CAP FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 28, 2007
This Proxy is solicited on behalf of the Board of Trustees of Aston Funds
The undersigned hereby appoints Teresa Hamlin and Aaron Remorenko, and each of
them, as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote all shares of Aston/TAMRO Small
Cap Fund (the "Fund") held of record by the undersigned on May 15, 2007, at the
special meeting of shareholders to be held June 28, 2007, and any postponement
or adjournments thereof.
By signing and dating the lower portion of this card, you authorize the proxies
to vote the proposal as marked, or if not marked, to vote "FOR" the proposal,
and to use their discretion to vote any other matter as may properly come before
the meeting. If you do not intend to personally attend the meeting, please
complete and mail this card at once in the enclosed envelope. The undersigned
hereby revokes any proxy previously given.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder(s). IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED
WITH NO DIRECTION MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA THE TELEPHONE: 1-866-525-2778
------------------------ -----------------------
999 99999 999 999
------------------------ -----------------------
NOTE: Please sign name or names as printed on the
proxy to authorize the voting of your shares as
indicated. Where shares are registered with joint
owners, all joint owners should sign. Persons signing
as executors, administrators, trustees, etc. should
so indicate.
-----------------------------------------------------
Signature
-----------------------------------------------------
Signature (if held jointly)
-----------------------------------------------------
Date
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY
Please detach at perforation before mailing.
<Table>
THE BOARD OF TRUSTEES OF ASTON FUNDS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSALS.
1. To approve a new Sub-Investment Advisory Agreement between Aston Asset Management LLC, the FOR AGAINST ABSTAIN
Fund's investment adviser, and Tasho Investment, LLC (to be renamed TAMRO Capital Partners, LLC). [ ] [ ] [ ]
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
</Table>