SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule 14(a)-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14(a)-11(c) or Sec. 240.14(a)-12
Rupay - Barrington Total Return Fund, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person 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 14(a)-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] 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 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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(4) Date Filed:
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RUPAY-BARRINGTON TOTAL
RETURN FUND, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
August 14, 1998
TO THE STOCKHOLDERS
RUPAY-BARRINGTON
TOTAL RETURN FUND, INC.
Notice is hereby given that an annual meeting of stockholders of
Rupay-Barrington Total Return Fund, Inc., (the "Company") will be held on August
14, 1998 at 9:00 a.m., local time, at the offices of The Rupay-Barrington
Financial Group, Inc., 1000 Ballpark Way, Suite 302, Arlington, Texas 76011 for
the following purposes:
1 To ratify the terms and conditions under which Rupay-Barrington
Advisors, Inc. (the "Advisor") has been providing services and receiving
advisory fees since January 4, 1997 and continuing through the date on
which the New Advisory Agreement (as defined in Item 2 below) is
approved by the Stockholders.
2 To approve the new investment advisory agreement (the "New Advisory
Agreement") between the Company and the Advisor.
3 To elect four persons to the Company's Board of Directors to serve until
the next annual meeting or until their successors shall have been
elected and qualified.
4 To approve a change of the name of the Company to Rupay-Barrington
Funds, Inc.
5 To ratify the action of the Board of Directors in selecting Tait, Weller
& Baker as auditors to examine the books and financial statements of the
Company for the period commencing January 1, 1998, and ending December
31, 1998.
6 To transact such other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on July 24, 1998, will be
entitled to vote at the meeting. We hope that you will attend the meeting, but
if you cannot do so, please fill in and sign the enclosed proxy, and return it
in the accompanying envelope as promptly as possible. Any stockholder attending
the meeting can vote in person even though a proxy has already been returned.
In order to save your Company the additional expense of further solicitation,
please be kind enough to complete and return your proxy card today.
Fritz Bensler
President
July 31, 1998
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RUPAY-BARRINGTON TOTAL
RETURN FUND, INC.
---------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
or on behalf of the Board of Directors of Rupay-Barrington Total Return Fund,
Inc. (the "Company") for use at an Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the offices of The Rupay-Barrington Financial Group,
Inc., 1000 Ballpark Way, Suite 302, Arlington, Texas 76011, on August 14, 1998
at 9:00 a.m., local time.
Proxy Solicitation
All proxies in the enclosed form which are properly executed and returned
to the Company will be voted as provided therein at the Annual Meeting or at any
adjournments thereof. A stockholder executing and returning a proxy has the
power to revoke it at any time before it is exercised by giving written notice
of such revocation to the Secretary of the Company. Signing and mailing the
proxy will not affect your right to give a later proxy or to attend the Annual
Meeting and vote your shares in person. Proxies which abstain are counted to
determine the presence of a quorum only. Broker non-votes are not counted for
any purpose.
The Board of Directors (the "Board") intends to bring before the meeting
the matters set forth in Items 1, 2, 3, 4 and 5 of the Notice of Annual Meeting
of Stockholders that accompanies this Proxy Statement. The persons named in the
enclosed proxy and acting thereunder will vote with respect to Items 1, 2, 3, 4
and 5 in accordance with the directions of the stockholder as specified on the
proxy card. If no choice is specified, the shares will be voted (i) FOR
ratification of the terms and conditions under which Rupay-Barrington Advisors,
Inc. (the "Advisor") has provided services to the Company since January 4, 1997
and continuing through the date on which the New Advisory Agreement is approved
by the stockholders as described in Item 1 (such terms and conditions are
referred to herein as the "Interim Advisory Agreement"); (ii) FOR approval of
the New Advisory Agreement between the Company and the Advisor as described in
Item 2; (iii) FOR election of the four (4) directors named in Item 3; (iv) FOR
approval to change the name of the Company to the Rupay-Barrington Funds, Inc.
as described in Item 4; and (v) FOR ratification of Tait, Weller & Baker as
auditors for 1998 in Item 5. If any other matters are properly presented to the
meeting for action, it is intended that the persons named in the enclosed Proxy
and acting thereunder will vote in accordance with the views of management
thereon. This Proxy Statement and form of Proxy are being first sent to
stockholders on or about July 31, 1998.
The affirmative vote of a majority of the outstanding shares of the
Company, which means the lesser of (a) 67% of the shares of the Company present
at a meeting when more than 50% of the outstanding shares are present in person
or by proxy or (b) more than 50% of the outstanding shares of the Company, is
required for the ratification of the Interim Advisory Agreement (Item 1) and
approval of the New Advisory Agreement (Item 2). With respect to the election of
Directors (Item 4) and ratification of the Company's engagement of Tait, Weller
& Baker as the Company's auditors for 1998, provided a quorum is present at the
meeting, the
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affirmative vote of a majority of the votes validly cast is required to elect
each of the four (4) nominees and for ratification of the selection of Tait,
Weller & Baker as auditors (Item 5). The affirmative vote of more than 50% of
the outstanding shares of the Company is required for the approval of the
Company's proposed name change (Item 4).
The Advisor will bear the entire cost of preparing, printing and mailing
this Proxy Statement, the Proxies and any additional materials which may be
furnished to stockholders. Solicitations may be undertaken by mail, telephone,
telegraph and personal contact. The Annual Report of the Company for its fiscal
year ending December 31, 1997, has been mailed to stockholders prior to the date
hereof. The Company will furnish, without charge, a copy of the 1997 Annual
Report to stockholders upon request by calling 1-800-688-1688.
Voting Securities and Principal Holders Thereof
Holders of Common Stock of the Company of record at the close of business
on July 24, 1998, will be entitled to vote at the Annual Meeting or any
adjournment thereof. As of July 24, 1998, the Company had outstanding
163,989.546 shares of Common Stock. The stockholders are entitled to one vote
per share on all business to come before the meeting. The shares of the Company
do not have cumulative voting rights. The officers and directors of the Company
as a group beneficially own, in the aggregate, 1,830.102 shares (approximately
1.12%) of the outstanding Common Stock of the Company, excluding shares held by
the Parent, and 10,651.905 shares (approximately 6.50%) of the outstanding
common stock of the Company, including shares held by the Parent.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of July 24, 1998, the following persons are officers and directors of
the Company or known by the Company to be beneficial owners of more than five
percent (5%) of the Company's outstanding shares:
Number of Shares
Name & Address Beneficially Owned Percentage of Company
Fritz Bensler (President and a Director)* -0- -0-
Judy A. Champine (Director)* 100.472 .061%
Glen Wilkerson (Director)* 99.458 .061%
Bradley D. Newman (Director)* 402.643 .246%
Larry S. Mao (Senior Vice President --
Operations and Secretary)* 1,227.529 .749%
Dixon R. Holman (Vice President)* -0- -0-
Anchor Bay Dental 58,560.046 35.710%
25050-23 Mile Road, Suite A
New Baltimore, Michigan 48047
Attn.: Donald J. Burkhardt
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The Rupay-Barrington Financial Group, 8,821.803 5.379%
Inc.
1000 Ballpark Way, Suite 302
Arlington, Texas 76011
Attn.: Dixon Holman
All Officers and Directors as a 10,651.905 6.496%
Group (including shares held by
The Rupay- Barrington Financial
Group, Inc.)
* The address is S The Rupay-Barrington Financial Group, Inc.,1000 Ballpark Way,
Suite 302, Arlington, Texas 76011
BACKGROUND
Pursuant to a Stock Purchase Agreement dated as of January 4, 1997, JPJ
Asset Group, Inc. ("JPJ"), a wholly-owned subsidiary of JPJ Investment
Management, Inc., acquired an interest equal to approximately eighty-four
percent (84%) in Valley Forge Capital Holdings, Inc. (the "Parent"), the parent
of the Advisor and other affiliated subsidiaries, including Valley Forge
Distributors, Inc., (now known as Rupay-Barrington Securities Corporation,
herein, the "Distributor"). The name of the Parent was thereafter changed to The
Rupay-Barrington Financial Group, Inc. Under the Investment Company Act of 1940,
as amended (the "1940 Act"), and rules and regulations promulgated thereunder,
this acquisition of a controlling interest in the Parent constituted a deemed
change in control of the Advisor, and, because the change in control operated as
an "assignment" (as defined in the 1940 Act) of the Old Advisory Agreement,
resulted in the automatic termination of the original Investment Advisory
Agreement dated as of February 24, 1995 between the Company and the Advisor (the
"Old Advisory Agreement"). The Advisor has continued to provide investment
advisory services to the Company under the terms and conditions of the Old
Advisory Agreement subject to the supervision of, and annual review by, the
Board (as described in Item 1 below, the terms and conditions under which the
Advisor has provided services since January 4, 1997 are referred to herein as
the "Interim Advisory Agreement"). Because the Company does not have substantial
assets, the Advisor has provided such services at less than its cost of
providing the services insofar as fees received under the Old Advisory Agreement
and the Interim Advisory Agreement (equal to an annual rate of 0.80% of the
Company's average net assets) have been insufficient to cover said costs. As the
New Advisory Agreement includes substantially the same terms and conditions as
the Old Advisory Agreement and the Interim Advisory Agreement, until or unless
the Company increases significantly in size, it is anticipated that the
Advisor's costs of providing services will continue to exceed fees received.
The Board is proposing that the stockholders of the Company ratify the
Company's payment of such fees to the Advisor since January 4, 1997 pursuant to
and in accordance with the
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Interim Advisory Agreement. Details of the proposal are set forth below under
"Item 1--Ratification of Interim Advisory Agreement."
The Board has approved a new investment advisory agreement between the
Company and the Advisor (the "New Advisory Agreement") on substantially the same
terms and conditions as the Old Advisory Agreement and the Interim Advisory
Agreement and has recommended that the stockholders of the Company approve the
Company's New Advisory Agreement. The New Advisory Agreement will go into effect
upon or shortly after its approval by the stockholders and will take the place
of the Interim Advisory Agreement.
ITEM 1--RATIFICATION OF INTERIM ADVISORY AGREEMENT
INTRODUCTION. As discussed above, under the 1940 Act and rules and
regulations promulgated thereunder, the consummation of the Stock Purchase
Agreement constituted a deemed change in control of the Advisor, and, because
such change in control operated as an "assignment" (as defined in the 1940 Act)
of the Old Advisory Agreement, resulted in the automatic termination of the Old
Advisory Agreement, effective as of January 4, 1997. Since such termination, the
Advisor has continued to provide services in accordance with the terms and
conditions of the Old Advisory Agreement. The Board is proposing that the
stockholders of the Company ratify the continued provision of services by the
Advisor after termination of the Old Advisory Agreement (the terms and
conditions under which the Advisor has been providing services since January 4,
1997, are referred to herein as the "Interim Advisory Agreement") as well as the
payment of fees to the Advisor since January 4, 1997. The continued provision of
services under the Interim Advisory Agreement was not approved by the
stockholders when the Old Advisory Agreement was deemed to have terminated and,
accordingly, ratification of the Interim Advisory Agreement is being sought as
described herein. If ratified, the Interim Advisory Agreement will continue in
effect only until the New Advisory Agreement (discussed below under "Item
2--Approval of New Advisory Agreement") is approved by stockholders. In the
event that the Interim Advisory Agreement is not ratified, the Advisor has
informed the Company that it would consider its options, including a possible
right of action to recover the cost of providing services to the Company, which
amount could exceed the amount of fees earned under the Interim Advisory
Agreement, and whether it would continue as the Advisor to the Company if the
New Advisory Agreement is approved but the Interim Advisory Agreement is not
ratified. The outcome of any such action cannot be determined at this time. From
termination of the Old Advisory Agreement through the date of this Proxy
Statement, the Advisor has accrued fees equal to approximately $27,342.95, all
of which fees have been offset against Company expenses reimbursements due from
the Advisor. The Advisor may not agree to continue providing services to the
Company if the Interim Advisory Agreement is not ratified. Because the Company
is a small mutual fund, the Board believes that it is unlikely that another
investment advisor could be engaged on the terms and conditions under which the
Advisor provides services. The Board would need to consider how the Company
could continue operations in the event the Advisor were not to continue and a
new advisor could not be found to serve on terms acceptable to the Company.
TERMS OF THE INTERIM ADVISORY AGREEMENT. The terms of the Interim
Advisory Agreement, which are more fully described below, are substantially
identical to the
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terms of the Old Advisory Agreement, except for (i) the effective date and, (ii)
the termination date. The advisory fee rates payable under the Interim Advisory
Agreement are identical to those payable under the Old Advisory Agreement. A
copy of the Old Advisory Agreement pursuant to which the Advisor has been
providing services is attached to this Proxy Statement as Exhibit A. The
following summary of the Interim Advisory Agreement is qualified in its entirety
by reference to this exhibit.
Pursuant to the Interim Advisory Agreement, the Advisor has been, subject
to the supervision of, and review by, the Board, furnishing the Company with
investment advice and has been supervising the management and investment program
of the Company. Under such Interim Advisory Agreement, the Advisor has furnished
at its own expense all necessary services, office space, equipment and clerical
personnel for servicing the investments of the Company. The Advisor also
provides investment advisory facilities and executive and supervisory personnel
for managing the investments and effecting the portfolio transactions of the
Company. In addition, the Advisor, directly or through its Parent, has been
paying the salaries and fees of all officers and directors of the Company who
are affiliated with the Advisor.
The terms of the Old Advisory Agreement and the provision of services
thereunder were reviewed by the Board, including all of the Directors who are
not "interested persons" (as that term is defined in the 1940 Act) of the
Advisor (the "Non-Interested Directors"), however, because of the deemed change
in control which resulted in a termination of the Old Advisory Agreement, the
Interim Advisory Agreement must be ratified by the majority vote of the
stockholders of the Company in order for the fees to be paid under such Interim
Advisory Agreement.
BOARD DELIBERATIONS: As described above, the Old Advisory Agreement that
was previously in effect for the Company automatically terminated on January 4,
1997, as a result of the consummation of the Stock Purchase Agreement. The Board
has continued to supervise the provision of services by the Advisor. However,
because of the deemed changes in control of the Advisor, the stockholders are
being asked to ratify the Interim Advisory Agreement. If approved by the
stockholders at the Annual Meeting, the Interim Advisory Agreement will continue
in effect only until stockholder approval of the New Advisory Agreement between
the Company and Advisor, as described below under "Item 2--Approval of New
Advisory Agreement."
In considering whether to ratify the continued provision of services by
the Advisor and payment therefor under the terms of the Interim Advisory
Agreement and, thereafter, to submit it to the stockholders for their
ratification, the Board considered the following factors: (i) the representation
of the Advisor that it would continue under the terms of the New Advisory
Agreement to provide investment advisory and other services to the Company of at
least the scope and quality previously provided by it to the Company under the
Old Advisory Agreement; (ii) the substantially identical terms and conditions
contained in the Interim Advisory Agreement and the New Advisory Agreement as
compared to the Old Advisory Agreement; and (iii) the representation of the
Advisor that in the event of any material change in the Advisor, the Board would
be consulted for the purpose of assuring itself that the services provided would
not be diminished in scope or quality. The Board also considered the benefits
that would be obtained by the Company in maintaining continuity of investment
advisory services for the Company and believed such continuity was advantageous
to the Company as it would minimize any potential
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interruption in the advisory services provided to the Company. The Board further
concluded that ratification of the Interim Advisory Agreement would be
appropriate and fair considering that (i) the fees paid, the services to be
provided therefor, were unchanged from the Old Advisory Agreement; (ii) given
the present size of the Company, and that the fees paid to the Advisor as a
result were insufficient to cover its costs of providing such services and that
accordingly, it would be unlikely that another advisor could be engaged on such
terms; and (iii) the non-payment of investment advisory fees would be an unduly
harsh result to the Advisor in view of the services provided by the Advisor
under the Interim Advisory Agreement. Because the Company is a small mutual
fund, the Board believes that it is unlikely that another investment advisor
could be engaged on the terms and conditions under which the Advisor provides
services. The Board would need to consider how the Company could continue
operations in the event the Advisor were not to continue and a new advisor could
not be found to serve on terms acceptable to the Company.
Based on the foregoing factors, the Board has concluded that ratification
of the Interim Advisory Agreement is in the best interest of the Company and its
stockholders. The Board considered the confluence of all the factors mentioned
above in arriving at its decision to approve the Interim Advisory Agreement and
no one factor was given any greater weight than any of the others.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY RATIFY THE COMPANY'S INTERIM ADVISORY AGREEMENT AND
THE RECEIPT OF INVESTMENT ADVISORY FEES BY THE ADVISOR FOR THE PERIOD FROM
JANUARY 4, 1997, UNTIL THE NEW ADVISORY AGREEMENT IS APPROVED. Ratification of
this Item 1, requires the favorablevote of a majority of the outstanding shares
of the Company, as defined in the 1940 Act, which means the lesser of the vote
of (a) 67% of the shares of the Company present at a meeting where more that 50%
of the outstanding shares are present in person or by proxy, or (b) more than
50% of the outstanding shares of the Company. Unless otherwise instructed, the
proxies will vote for the approval of the Interim Advisory Agreement and the
receipt of advisory fees by the Advisor.
ITEM 2--APPROVAL OF NEW ADVISORY AGREEMENT
As discussed above, the Board has approved a New Advisory Agreement
between the Company and the Advisor (the "New Advisory Agreement") and has
recommended that the stockholders of the Company approve the Company's New
Advisory Agreement. If the New Advisory Agreement is approved by the
stockholders, it will go into effect upon or shortly after such approval, and
will take the place of the Interim Advisory Agreement.
THE NEW ADVISORY AGREEMENT. The terms of the New Advisory Agreement are
identical to the terms of the Old Advisory Agreement and Interim Advisory
Agreement, except for (i) the effective date, and (ii) the termination date. The
advisory fee rates payable under the New Advisory Agreement are identical to
those payable under the Old Advisory Agreement and the Interim Advisory
Agreement. Because the Company is a small mutual fund, the Board believes that
it is unlikely that another investment advisor could be engaged on the terms and
conditions under which the Advisor provides services. The Board would need to
consider how
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the Company could continue operations in the event the Advisor were not to
continue and a new advisor could not be found to serve on terms acceptable to
the Company. For a description of the terms of the New Advisory Agreement, see
the description of the Old Advisory Agreement discussed above under "Item
1--Approval of the Interim Advisory Agreement" and below in "Investment
Management Services" and the form of New Advisory Agreement attached to this
Proxy Statement as Exhibit B.
BOARD DELIBERATIONS. In considering whether to approve the New Advisory
Agreement and submit it to stockholders for their approval, the Board reviewed,
among other things: (i) the investment management capabilities of the Advisor;
(ii) the systems capabilities of the Advisor to provide stockholder services,
reporting and systems integration with related programs for Company
stockholders; (iii) the level, scope and quality of the advisor services to be
provided by the Advisor, and (iv) the substantially identical terms and
conditions contained in the New Advisory Agreement as compared to the Interim
Advisory Agreement and the Old Advisory Agreement. The Board also noted that the
Company's current portfolio manager, Mr. Bensler, who has served as the
Company's President since September 1997 and has served as a Company director
since March 1998 (see "Item 3 - Election of Directors" below) will continue to
act as the Company's portfolio manager under the New Advisory Agreement. The
Board further concluded that approval of the New Advisory Agreement would be
appropriate and fair considering that (i) the fees paid, the services to be
provided therefor, were unchanged from the Old Advisory Agreement and the
Interim Advisory Agreement; and (ii) until and unless the size of the Company
increases significantly, the fees paid to the Advisor will be insufficient to
cover its costs of providing such services and that accordingly, it would be
unlikely that another advisor could be engaged on terms more favorable to the
Company.
Based upon the foregoing factors, the Board concluded that approval of the
New Advisory Agreement was in the best interests of the Company and its
stockholders. The Board considered the confluence of all the factors mentioned
above in arriving at its decision to approve the New Advisory Agreement and no
one factor was given any greater weight than any of the others.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY APPROVE THE COMPANY'S NEW ADVISORY AGREEMENT.
Approval of the item requires the favorable vote of a majority of the
outstanding shares of the Company, as defined in the 1940 Act, which means the
lesser of the vote of (a) 67% of the shares of the Company present at a meeting
where more than 50% of the outstanding shares are present in person or by proxy,
or (b) more than 50% of the outstanding shares of the Company. Unless otherwise
instructed, the proxies will vote for the approval of the New Advisory
Agreement.
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ITEM 3--ELECTION OF DIRECTORS
At the Annual Meeting, four (4) Directors are to be elected to hold office
until the next annual meeting or until their successors are elected and shall
have been qualified. All of the nominees have been members of the Board since
being appointed to fill vacancies on September 27, 1997, and re-elected at the
Company's 1997 annual meeting held on November 21, 1997, with the exception of
Mr. Bensler who was appointed on March 21, 1998 to fill a vacancy created by the
resignation of Mr. Wolf. Each nominee has consented to serve if elected. If any
nominee for any reason becomes unable to serve, the persons named as proxies
will vote for the election of such other persons as they believe will carry on
the present policies of the Company and as they deem to be qualified. The ages,
principal occupations during the past five years and certain other affiliations
of the nominees, the amount of stock owned beneficially, directly or indirectly,
in the Company and the years they first became Directors of the Company are as
follows:
Shares Owned
Beneficially,
Age ( ), Principal First Directly or Percent of
Occupation and Other Became Indirectly at Class
Affiliations Director 07/24/98 07/24/98
Name and Address
- ----------------------------------------------------------------------------
Fritz Bensler+ (41) President and 3/21/98 0 0
3551 S. Monaco Parkway,Treasurer of the Company
Denver, CO 80237 and President and
Portfolio Manager of
the Advisor from
January 1997 to
present; Director of
the Company from
March 1998 to present;
From November 1995
until joining the
Company and the Advisor
in January 1997, Mr.
Bensler was an equity
securities analyst and
portfolio manager for
JPJ; from 1993 until
joining JPJ, Mr.
Bensler was a self-
employed consultant.
Bradley D. Newman * (38) Property Tax Age 9/27/97 402.643 * *
5429 Dana Point Drive for Union Pacific
Arlington, TX 76017 Resources Group, Fort
Worth, TX, 1986-present;
certified public
accountant; member of
Council of Petroleum
Accountant's Society and
Institute of Professionals
in Taxation.
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Glen Wilkerson * (59)Various sales and 9/27/97 99.458 * *
5518 Oak Branch Drive management positions with
Arlington, TX 76016 Hormel Food
Corporation, Austin,
MN for 33 years.
Judy A. Champine * (51)Vice President an 9/27/97 100.472 * *
3516 Beagle Drive Owner -- Town Center
Commerce, MI 48382 Gallery, Novi, MI, 1992
to present; Graphic Services
Manager -- National Board
for Professional Teaching
Standards, Detroit, MI,
1991 to 1992.
- ---------------------------------------
+ Designates "interested director" * Designates member of the Audit Committee **
Represents less than 1%
All directors are elected to terms of one year or until their successors
are duly elected and qualified. All directors also may be reached S The
Rupay-Barrington Financial Group, Inc., 1000 Ballpark Way, Suite 302, Arlington,
Texas 76011. The Board held four regular meetings in fiscal year 1997. No
director standing for re-election attended less than 75% of the meetings held
while he or she was a director.
Unless instructed by the stockholders to refrain from so voting, it is the
intention of the persons named as proxies to vote for election of the four
nominees listed above as Directors. Provided that a quorum is present, a
plurality of votes validly cast at the meeting is required to elect the
Directors. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR ALL NOMINEES.
Other Remuneration and Affiliations of Officers and Directors
Directors of the Company who are not considered "interested persons" (as
defined in the 1940 Act) of the Company currently do not receive any
compensation for their attendance at meetings of the Board, but may in the
future receive a fee for their services. Executive officers of the Company and
directors of the Company who are considered "interested persons" (presently,
only Mr. Bensler, President and a Director) do not receive compensation from the
Company.
ITEM 4--APPROVAL OF NAME CHANGE
The Board has approved Articles of Amendment to the Amended Articles of
Incorporation of the Company (the "Amendment") which would change the Company's
name
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from "Rupay-Barrington Total Return Fund, Inc." to "Rupay-Barrington Funds,
Inc." To be effective, Maryland Corporate law requires that the Amendment be
approved by a majority of the outstanding shares of the Company.
The proposed change of name reflects the Board's determination to
reclassify the Company's shares into three series including a reclassification
of the Company's outstanding shares into a new Total Return Fund Series. A
post-effective amendment to the Company's registration statement (the
"Registration Statement") covering two other new series, the Growth Fund Series
and the Value Equity Fund Series, was filed with the SEC on May 5, 1998 and has
been declared effective. Prior to the Company's Annual Meeting, the Company will
file, with the State Department of Assessments and Taxation of the State of
Maryland, Articles Supplementary to its Articles, which Articles Supplementary
will designate each of the three series of the Company. Immediately following
the Company's Annual meeting, subject to the stockholders' approval of the
proposed name change, the Company also will amend its Articles of Incorporation
to change its name to Rupay-Barrington Funds, Inc. in accordance with the
Amendment. If and when that occurs, the Company also will supplement its
prospectus to reflect the name change and the reclassification of its
outstanding shares into the Total Return Fund series shares. Such
reclassification of the Company's shares into series is permitted under the
Company's Articles with Board approval and without any action being required by
the stockholders. The Board believes that by changing the name to
"Rupay-Barrington Funds, Inc." investors will be able to better distinguish the
Company from its Total Return Fund Series, the Growth Fund Series and Value
Equity Fund Series.
For the reasons set forth above, the Board believes that it is in the
interest of the Company to change its corporate name to Rupay-Barrington Funds,
Inc. and THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT OF THE
ARTICLES TO CHANGE THE NAME OF THE COMPANY.
ITEM 5--RATIFICATION OF APPOINTMENT OF AUDITORS
At a meeting held on March 21, 1998, the Board, including a majority of
those Directors who are not interested persons of the Company, selected Tait,
Weller & Baker as auditors to examine the Company's books and securities and to
certify from time to time the Company's financial statements for the period
January 1, 1998, to December 31, 1998, subject to ratification of such selection
by the stockholders of the Company. That firm has no direct or indirect material
interest in the Company. Representatives of Tait, Weller & Baker are not
expected to be present at the Annual Meeting. Tait, Weller & Baker also served
as independent auditors for the Company for the fiscal year ending December 31,
1997. Deloitte & Touche LLP served as independent auditors for the Company for
the fiscal years ending December 31, 1995 and 1996.
The Board has established an Audit Committee to evaluate financial
management, meet with the auditors, and deal with other matters of a financial
nature that they deem appropriate. Members of the Audit Committee are Ms.
Champine and Messrs. Newman and Wilkerson.
10
<PAGE>
The favorable vote of a majority of the voting securities represented at the
Annual Meeting is necessary for the ratification of the selection of Tait,
Weller & Baker as the Company's independent accountant for the year ending
December 31, 1998.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE SELECTION OF TAIT,
WELLER & BAKER.
INVESTMENT MANAGEMENT SERVICES
Rupay-Barrington Advisors, Inc. (the "Advisor;" the Advisor was formerly
known as Valley Forge Advisors, Inc.), 3551 S. Monaco Parkway, #116, Denver, CO
80237, a wholly owned subsidiary of The Rupay-Barrington Financial Group, Inc.
("Rupay-Barrington" or the "Parent;" the Parent was formerly known as Valley
Forge Capital Holdings, Inc.), has managed the investments of the Company since
its inception under a management agreement (the "Old Advisory Agreement")
originally entered into as of February 24, 1995, which was approved by the
stockholders on that date for a period of two years. Although the Board
subsequently approved continuation of the Old Advisory Agreement, as previously
indicated, the acquisition by JPJ of a controlling interest in the Advisor's
Parent as of January 4, 1997, constituted a deemed change in control of the
Advisor which resulted in an automatic termination of the Old Advisory Agreement
because the deemed change in control operated as an "assignment" (as defined in
the 1940 Act) of the Old Advisory Agreement. Although the Advisor has continued
since then to provide the same services on the same terms as under the Old
Advisory Agreement under the supervision of the Company's Board, it has done so
without a written contract between the Company and the Advisor being effective.
The term "Advisory Agreement" when used in this discussion, refers equally to
the Old Advisory Agreement, the Interim Advisory Agreement and the New Advisory
Agreement.
The Advisory Agreement provides that the Advisor shall supervise and
manage the Company's investments and shall determine the Company's portfolio
transactions, subject to periodic review and ratification by the Board. The
Advisor is also responsible for effecting all securities transactions with
respect to the Company's portfolio on behalf of the Company, including the
negotiation of commissions and the allocation of principal business and
portfolio brokerage.
Pursuant to the Advisory Agreement, the Advisor manages the assets of the
Company in accordance with its stated objective, policies and restrictions
(subject to the supervision of the Company's Board and officers). The Advisor
will also keep certain books and records in connection with its services to the
Company, and furnish facilities required by the Company for investment
activities. The Advisor has also authorized any of its directors, officers and
employees who have been elected as directors or officers of the Company to serve
in the capacities in which they have been elected or appointed without
consideration. Services furnished by the Advisor under the Advisory Agreement
may be furnished through any such directors, officers and employees.
The Advisor also administers the Company's general business affairs subject
to the supervision of the Company's Board and its officers. The Advisor, through
Commonwealth
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<PAGE>
Shareholder Services, Inc. ("CSS") and certain of CSS's affiliates will
furnish the Company with ordinary clerical, administrative, accounting and
bookkeeping services, including facilities for the completion of these
activities.
As compensation for its services the Advisor receives a management fee,
computed daily and payable monthly, at the annualized rate of .80% of the
Company's average daily net assets (the "Management Fee"). For the fiscal year
ended December 31, 1997, the Advisor had accrued but had not yet received
$26,828 in Management Fees from the Company. See, however, the discussion of the
expense reimbursement due from the Advisor, below.
The Advisory Agreement between the Company and the Advisor provides that
the Company will bear all expenses of its operations not specifically assumed by
the Advisor. In the interest of limiting the expenses of the Company during its
initial period of operation, the Parent has agreed to bear any expenses for the
Company's first five years of operations, which would cause the Company's ratio
of operating expenses to average net assets to exceed 1.95%. In any year
following such five-year period, the Company's expenses will not be subject to
limitation. For the purpose of determining whether the Company is entitled to
reimbursement, the expenses of the Company are calculated on a monthly basis. If
the Company is entitled to reimbursement, that month's Management Fee will be
reduced or postponed, with any adjustment made after the end of the year. An
expense reimbursement of $71,381 was required for the fiscal year ended December
31, 1997.
The New Advisory Agreement will be effective for an initial period of two
years if approved by the Company's stockholders and thereafter will continue in
effect from year to year only if such continuance is approved annually by a
majority vote of (i) the Company's Board or (ii) by a vote of a majority of the
outstanding voting securities of the Company; provided that in order to give
effect to such continuance the New Advisory Agreement, in either case, must also
be approved by the vote of a majority of the directors who are not parties to
the New Advisory Agreement or "interested persons" (as such term is defined in
the 1940 Act) of any party to the New Advisory Agreement, voting in person at a
meeting called for the purpose of voting on such approval. The New Advisory
Agreement may be terminated at any time without penalty by the Company's Board
or by a majority vote of the outstanding shares of the Company, or by the
Advisor, in each instance on not less than 60 days written notice and shall
automatically terminate in the event of its assignment.
DISTRIBUTION AND BROKERAGE
Rupay-Barrington also owns 100% of Rupay-Barrington Securities Corporation
(f/k/a Valley Forge Distributors, Inc.), which serves as the Company's
distributor (the "Distributor"). The Distributor began effecting portfolio
transactions for the Company in February 1998 and, through May 31, 1998, had
received aggregate brokerage commissions of $2,115.46. For the Company's fiscal
year ended December 31, 1997, none of the Company's aggregate dollar amount of
portfolio transactions involving the payment of brokerage commissions were
effected by Rupay-Barrington Securities Corporation.
12
<PAGE>
Portfolio transactions will be placed with a view to receiving best price and
execution. In addition, the Advisor seeks to pay commission rates which are
reasonable in relation to those paid by other similar institutional investors.
The Advisor periodically checks the rates of commission being paid by the
Company to brokers to ascertain that they are competitive with those charged by
other brokers for similar services and to similar institutional accounts.
Transactions may also be placed with brokers, other than Rupay-Barrington
Securities, who provide research and brokerage services. Research and brokerage
services may include (a) advice, furnished either directly or through
publications or writings in other media, as to the value of securities, the
advisability of investing in securities, or the availability of securities or
purchasers or sellers of securities; (b) analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio
strategy, or the performance of accounts; or (c) effecting securities
transactions or performing related functions (such as clearance, settlement and
custody). The Advisory Agreement authorizes the Advisor to place portfolio
transactions for the Company and permits the Advisor to cause the Company to pay
commissions on such transactions, when executed through non-affiliated brokers,
which are greater than another broker or dealer might charge if the Advisor, in
good faith, determines that the commissions paid are reasonable in relation to
the research or brokerage services provided by the broker, when viewed in terms
of either a particular transaction or the Advisor's overall responsibilities to
the Company and other investment accounts over which the Advisor exercises
investment discretion.
13
<PAGE>
PROXY
RUPAY-BARRINGTON
TOTAL RETURN FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
THE UNDERSIGNED HEREBY APPOINTS FRITZ BENSLER AND DIXON HOLMAN AS PROXIES, EACH
WITH THE POWER TO APPOINT HIS SUBSTITUTE; AND HEREBY AUTHORIZES THEM, OR ANY OF
THEM, TO REPRESENT AND VOTE ALL THE SHARES OF COMMON STOCK OF RUPAY-BARRINGTON
TOTAL RETURN FUND, INC. HELD OF RECORD BY THE UNDERSIGNED ON JULY 24, 1998, AT
AN ANNUAL MEETING OF STOCKHOLDERS ON AUGUST 14, 1998, OR ANY ADJOURNMENT
THEREOF:
Please check this box if you plan to attend
the meeting
1 On ratification of the Interim Advisory Agreement:
FOR AGAINST ABSTAIN
2 On approval of the New Advisory Agreement:
FOR AGAINST ABSTAIN
3 On the Election of Directors: FOR all nominees listed (except
as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all
nominees listed below
ABSTAIN
Fritz Bensler Bradley D. Newman Glen Wilkerson Judy Champine
(Instruction: to withhold authority to vote for any individual nominees,
place a line through nominee's name.)
4 On approval of the change of name to Rupay-Barrington Funds, Inc.
FOR AGAINST ABSTAIN
5 On ratification of the selection of Tait, Weller & Baker as auditors
for the period January 1, 1998 through December 31, 1998.
FOR AGAINST ABSTAIN
6 In their discretion, upon the transaction of any other matters which
may properly come before the meeting or any adjournment thereof.
<PAGE>
The shares represented by this proxy, when properly executed, will be voted as
specified in the foregoing items 1, 2, 3, 4 and 5 by the undersigned
stockholder(s). If no direction is made, this proxy will be voted (i) FOR
ratification of the Interim Advisory Agreement; (ii) FOR approval of the New
Advisory Agreement; (iii) FOR the election of the four (4) nominees for
directors named in the proxy statement; (iv) FOR the approval of the name
change; and (v) FOR the ratification of the selection of Tait, Weller & Baker,
and is the discretion of the management as to any other matter which may come
before the meeting.
------------------------------------
[ ] ------------------------------------
Name (Signature(s) of Stockholder(s)
[ ] Dated: ______________________________
Please sign exactly as the name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please
sign the corporate name by the President or other
authorized officer. If a partnership, please
sign in the partnership name by an authorized
person.
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 24th day of February 1995, by and between Valley Forge
Capital Holdings Total Return Fund, Inc. a Maryland corporation (the "Fund"),
and Valley Forge Advisors, Inc., a Nevada corporation (the "Advisor").
W I T N E S S E T H:
WHEREAS, the Fund was formed to engage in business as a diversified
open-end management investment company and is registered as such under the
Investment Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Advisor will engage principally in rendering advisory
services and is registered as an investment advisor under the Investment
Advisers Act of 1940;
WHEREAS, The Fund desires to retain the Advisor to render investment
supervisory and corporate administrative services to the Fund in the manner and
on the terms hereinafter set forth; and
WHEREAS, the Fund has also retained the Marshall Plan L.P., a Delaware
limited partnership (the "Marshall Plan") to render investment supervisory
services in the manner and on the terms described in the investment advisory
agreement by and between the Fund and the Marshall Plan, dated February 24th,
1995 (the "Marshall Plan Investment Advisory Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Advisor hereby agree as follows:
ARTICLE 1.
Duties of the Advisor
The fund hereby employs the Advisor to act as the investment adviser to
and manager of the Fund and to manage the investment and reinvestment of the
assets of the Fund and to administer its affairs, subject to the supervision of
the Board of Directors of the Fund, on the terms and conditions set forth in
this Agreement and the statements relating to the Fund's investment objectives,
investment policies and investment restrictions as the same are set forth in the
currently effective prospectus of the Fund under the Securities Act of 1933 (the
"Prospectus"). The Advisor hereby accepts such employment and agrees during such
period, at its own expense, to render the services and to assume the obligations
herein set forth for the compensation provided for herein.
1
<PAGE>
The Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
(a) Investment Advisory Services. In acting as investment adviser to the
Fund, the Advisor shall regularly provide the Fund with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the Fund and shall furnish continuously
an investment program and shall determine from time to time what securities
shall be purchased, sold or exchanged and what portion of the assets of the Fund
shall be held in various securities in which it may invest, subject always to
the restrictions set forth in the Fund's Articles of Incorporation and By-Laws,
as amended from time to time, the provisions of the Investment Company Act, and
the statements relating to the Fund's investment objectives, investment policies
and investment restrictions as the same are set forth in the Prospectus. Should
the Board of Directors of the Fund at any time, however, make any definite
determinations as to investment policy and notify the Advisor thereof, the
Advisor shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination has been
revoked. The Advisor shall take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies, as such policies relate to
the Advisor, determined as provided above, and in particular to place all orders
for the purchase or sale of securities for the Fund with brokers or dealers
selected by it. In connection with the selection of such brokers or dealers and
the placing of such orders, the Advisor is directed at all times to seek to
obtain for the Fund the most favorable net results for the Fund as determined by
the Board of Directors and set forth in the Prospectus. Subject to this
requirement and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934 (the "1934 Act"), and other applicable provisions of law,
nothing shall prohibit the Advisor from selecting brokers or dealers with which
it or the Fund is affiliated. The Advisor is authorized to recommend placement
of, and the Fund is authorized to place, brokerage and principal business with
brokers or dealers who have provided brokerage and research services, as such
services are defined in Section 28(e) of the 1934 Act, for the Fund and/or other
accounts, if any, for which the Advisor exercised investment discretion. The
Advisor is authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting the transactions if the Advisor determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction or
the overall responsibilities which the Advisor and its affiliates have with
respect to accounts over which they exercise investment discretion. The Board of
Directors of the Fund shall periodically review the commissions paid by the Fund
to determine if the commissions paid over representatives periods of time were
reasonable in relation to the benefits to the Fund.
(b) Other Advisors. The Advisor acknowledges that the Marshall Plan will
also be acting as an investment advisor the Fund, and that statements in the
Prospectus relating to that portion of the Fund's assets to be managed by the
Marshall Plan are separate and independent
2
<PAGE>
from and do not have any effect upon that portion of the Fund's assets to be
managed by the Advisor. The Advisor further acknowledges that it is responsible
for effecting all securities transactions with respect to the portion of the
Fund's assets it is authorized to manage and the Marshall Plan is responsible
for effecting all securities transactions with respect to the portion of the
Fund's assets it is authorized to manage.
(c) Administrative Services. In addition to the performance of investment
advisory services, the Advisor shall perform, or supervise the performance of,
administrative services in connection with the management of the Fund. In this
connection, the Advisor agrees to: (i) assist in supervising all aspects of the
Fund's operations, including the co-ordination of all matters relating to the
functions of the custodian, transfer agent, administrative and accounting
servicer, other shareholder service agents, accountants, attorneys and other
parties performing services or operational functions for the Fund; (ii) maintain
the Fund's corporate existence and records; (iii) provide the Fund, at the
Advisor's expense, with services of persons competent to perform such
administrative and clerical functions as are necessary in order to provide
effective administration of the Fund, including duties in connection with
shareholder relations, redemption requests and account adjustments and the
maintenance of certain books and records of the Fund; (iv) prepare all general
shareholder communications, including shareholder reports; (v) during such times
as shares are publicly offered, maintain the registration and qualification of
the Fund's shares under federal and state law; (vi) provide the Fund, at the
Advisor's expense, with adequate office space and related services necessary for
its operations as contemplated in this Agreement; (vii) investigate the
development of and develop and implement, if appropriate, management and
shareholder services designed to enhance the value or convenience of the
Portfolios as an investment vehicle; (viii) permit the Advisor's employees to
serve as officers, directors and committee members of the Fund, without cost to
the Fund; and (ix) reimburse the Fund for any loss incurred as a result of the
Fund's receipt of NSF checks from investors if said funds cannot be recovered
from the investors.
ARTICLE 2.
Compensation of the Advisor
(a) Investment Advisory Fee. For the services rendered hereunder, the Fund
shall pay to the Advisor and the Marshall Plan monthly on the first business day
of the next succeeding calendar month a fee based upon the average daily value
of the aggregate net assets of the Fund, as determined and computed in
accordance with the description of the method of determination of net asset
value contained in the Prospectus, at the annual rate of 0.80% of the average
daily value of the aggregate net assets of the Fund, less the amounts described
below.
The Advisor and the Marshall Plan shall pay, from the investment
advisory fee as calculated in the manner described above, certain expenses, the
amount of which expenses shall be determined in accordance with the provisions
set forth in paragraphs (b) and (c) below. The investment advisory fee, net of
said expenses, shall then be split equally between the Advisor and the Marshall
Plan without reference to that portion of the Fund's assets managed by the
Advisor and the Marshall Plan, respectively.
3
<PAGE>
(b) Expenses. The Fund assumes and shall pay all expenses of the operation
of the Fund, unless any of such expenses are specifically assumed by Valley
Forge Capital Holdings Inc. (Valley Forge Capital) pursuant to that certain
agreement between the Fund and Valley Forge Capital or assumed jointly by the
Advisors, including, without limitation: costs relating to the organization of
the Fund, insurance, taxes, expenses for legal and auditing services, costs of
printing proxies, stock certificates, shareholder reports and prospectuses
(except to the extent paid by the Distributor, Valley Forge Brokerage, Inc.),
charges of the Custodian, Transfer Agent and the Administrative and Accounting
Services, expenses of and fees associated with registering the shares under
Federal and state securities laws, fees and expenses of directors who are not
affiliated persons of Valley Forge Capital Holdings, Inc. or its subsidiaries,
accounting and pricing costs (including the daily calculation of net asset
value), interest, brokerage costs, litigation and other extraordinary or
non-recurring expenses, and any other expenses properly payable by the Fund.
(c) Expense Limitations. In the event the operating expenses of the Fund,
including the investment advisory fee payable to the Advisor and the Marshall
Plan, for any fiscal year ending on a date on which this Agreement is in effect
exceed, after payment to Valley Forge Capital of amounts due under that certain
agreement referenced in paragraph (b) hereof, the expense limitations under
state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, the Advisors shall reduce their investment
advisory fee by the extent of such excess and, if required under any such laws
or regulations, will reimburse the Fund in the amount of such excess; provided,
however, to the extent permitted by law, the Advisor and the Marshall Plan shall
be reimbursed for any such excess payments made to the Fund in subsequent years.
For purposes of determining whether the Fund is entitled to reimbursement, the
expenses of the Fund are calculated on a monthly basis, and the Fund's
distribution plan expenses are excluded. Whenever the expenses of the Fund
exceed the applicable annual expense limitations, the estimated amounts of
reimbursement under such limitations shall be applicable as an offset against
the monthly payment of the advisory fee due to the Advisor and the Marshall
Plan.
ARTICLE 3.
Limitation of Liability of the Advisor
The Advisor and its directors, officers or employees shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with any investment policy or the purchase, sale or redemption of
any securities on the recommendation of the Advisor. Nothing herein contained
shall be construed to protect the Advisor against any liability to the Fund or
its security holders to which the Advisor shall otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence in the performance of its
duties on behalf of the Fund, reckless disregard of the Advisor's obligations
and duties under this Agreement or the violation of any applicable law.
4
<PAGE>
ARTICLE 4.
Activities of the Advisor
The services of the Advisor under this Agreement are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others so
long as its services hereunder are not impaired thereby. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Advisor, as directors, officers, employees or shareholders or
otherwise and that directors, officers, employees or shareholders of the Advisor
are or may become similarly interested in the Fund, and that the Advisor is or
may become interested in the Fund as shareholder or otherwise.
ARTICLE 5.
Duration and Termination of This Agreement
This Agreement shall become effective as of the date first above written
and shall remain in force until two years from the date of its execution and
thereafter, but only so long as such continuance is specifically approved at
least annually by: (i) the Board of Directors of the Fund, or by the vote of a
majority of the outstanding shares of the Fund; and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of the
outstanding shares of the Fund, or by the Advisor, on sixty days' written notice
to the other party. This Agreement shall automatically terminate in the event of
its assignment.
ARTICLE 6.
Definitions
The terms "assignment," "affiliated person" and "interested person," when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act. As used with respect to the Fund or any of its
Portfolios, the term "majority of the outstanding shares" means the lesser of:
(i) 67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented; or (ii) more than 50% of the outstanding
shares.
ARTICLE 7.
Amendments of This Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by: (i) the Board of Directors of the Fund, or by the vote
of a majority of outstanding shares of the Fund; and (ii) a majority of those
directors of the Fund who are not parties to this
5
<PAGE>
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
ARTICLE 8.
Notices
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given: (i) when mailed by
registered or certified mail, return receipt requested, postage prepaid; (ii)
when telecopies, provided that a copy of such notice is mailed by registered or
certified mail, return receipt requested, postage prepaid, within one business
day following transmission of the telecopy; or (iii) when hand delivered to the
party to whom it is to be given at the address of such party set forth below, as
follows:
If to the Fund: Valley Forge Capital Holdings Total Return Fund, Inc.
595 Market Street
Suite 1980
San Francisco, California 94105
If to the Advisor:Valley Forge Advisors, Inc.
595 Market Street
Suite 1980
San Francisco, California 94105
ARTICLE 9.
Governing Law
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of California as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of California or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
VALLEY FORGE CAPITAL HOLDINGS
TOTAL RETURN FUND, INC.
By: /s/ Victoria S. Gong
--------------------------------
Authorized Signatory
Attest:
/s/ Larry S. Mao
- -----------------------------
Secretary
VALLEY FORGE ADVISORS, INC.
By: /s/ Deborah Mello
--------------------------------
Authorized Signatory
Attest:
/s/ Larry S. Mao
- -----------------------------
Secretary
<PAGE> 7
INVESTMENT ADVISORY AGREEMENT
This AGREEMENT made this ___ day of_____ 1998, by and between
Rupay-Barrington Total Return Fund, Inc. a Maryland corporation (the
"Corporation"), and Rupay-Barrington Advisors, Inc., a Nevada corporation (the
"Advisor").
W I T N E S S E T H:
WHEREAS, the Corporation was formed to engage in business as a diversified
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act");
WHEREAS, the Corporation is authorized to issue shares of capital stock
(the "Shares") in the Rupay-Barrington Total Return Fund (the "Fund"), a
separate series of the Corporation, the Shares of which represent interests in a
separate portfolio of securities and other assets ("Fund Shares");
WHEREAS, the Advisor is engaged principally in the business of rendering
advisory services and is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended;
WHEREAS, the Corporation desires to retain the Advisor to render
investment supervisory and corporate administrative services to the Fund in the
manner and on the terms hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the parties hereby agree as follows:
ARTICLE 1.
Duties of the Advisor
The Corporation hereby employs the Advisor to act as the investment
advisor to, and manager of, the Fund and to manage the investment and
reinvestment of the assets of the Fund and to administer its affairs, subject to
the supervision of the Board of Directors of the Corporation, on the terms and
conditions set forth in this Agreement and the statements relating to the Fund's
investment objective, investment policies and investment restrictions as the
same are set forth in the currently effective prospectus of the Fund (the
"Prospectus"). The Advisor hereby accepts such employment and agrees during such
period, at its own expense, to render the services and to assume the obligations
herein set forth for the compensation provided for herein.
1
<PAGE>
The Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
(a) Investment Advisory Services. In acting as investment advisor to the
Fund, the Advisor shall regularly provide the Fund with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the Fund and shall furnish continuously
an investment program and shall determine from time to time what securities
shall be purchased, sold or exchanged and what portion of the assets of the Fund
shall be held in the various securities in which it may invest, subject to the
restrictions set forth in the Corporation's Articles of Incorporation and
By-Laws, as amended from time to time, the Articles Supplementary, the
provisions of the Investment Company Act, and the statements relating to the
Fund's investment objectives, investment policies and investment restrictions as
the same are set forth in the Prospectus. Should the Board of Directors of the
Corporation at any time, however, make any definite determinations as to
investment policy and notify the Advisor thereof, the Advisor shall be bound by
such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Advisor shall
take, on behalf of the Fund, all actions which it deems necessary to implement
the investment policies, as such policies relate to the Advisor, determined as
provided above, and in particular to place all orders for the purchase or sale
of securities for the Fund with brokers or dealers selected by it. In connection
with the selection of such brokers or dealers and the placing of such orders,
except as otherwise expressly set forth herein, the Advisor is directed at all
times to seek to obtain for the Fund the most favorable net results for the Fund
as determined by the Board of Directors and set forth in the Prospectus. Subject
to this requirement and the provisions of the Investment Company Act, the
Securities Exchange Act of 1934 (the "1934 Act"), and other applicable
provisions of law, nothing shall prohibit the Advisor from selecting brokers or
dealers with which it or the Fund is affiliated, including, without limitation,
Rupay-Barrington Securities, Inc. This determination may be viewed in terms of
either that particular transaction or the overall responsibilities which the
Advisor and its affiliates have with respect to accounts over which they
exercise investment discretion. The Board of Directors of the Corporation shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
(b) Brokerage. Subject to the approval of the Board of Directors, the
Advisor, in carrying out its duties under Paragraph 1(a), may cause the
Corporation, with respect to the Fund, to pay a broker-dealer which furnishes
brokerage or research services (as such services are defined under Section 28(e)
of the 1934 Act, a higher commission than that which might be charged by another
broker-dealer which does not furnish brokerage or research services or which
furnishes brokerage or research services deemed to be of lesser value, if such
commission is deemed reasonable in relation to the brokerage and research
services provided by the broker-dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the Advisor with
respect to the accounts as to which it exercises investment discretion (as such
term is defined under Section 3(a)(35) of the 1934 Act). This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Advisor and its affiliates have with respect to
accounts over which they exercise investment discretion.
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(c) Advisor's Use of the Services of Others. The Advisor may (at its cost)
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Advisor or the
Corporation or the Fund, as appropriate, with such statistical and other factual
information, such advice regarding economic factors and trends, such advice as
to occasional transactions in specific securities or such other information,
advice or assistance as the Advisor may deem necessary, appropriate or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Corporation or the Fund, as appropriate, or in the discharge of the
Advisor's overall responsibilities with respect to the other accounts which it
serves as investment advisor.
(d) Ownership of Records. All records required to be maintained and
preserved by the Corporation or the Fund pursuant to the provisions of rules or
regulations of the Securities and Exchange Commission under Section 31(a) of the
Securities Act of 1933 and maintained and preserved by the Advisor on behalf of
the Corporation or the Fund, as appropriate, are the property of the Corporation
or the Fund, as appropriate, and will be surrendered by the Advisor promptly on
request by the Corporation or the Fund, as appropriate.
(e) Reports to the Advisor. The Corporation or the Fund, as appropriate,
shall furnish or otherwise make available to the Advisor such prospectuses,
financial statements, proxy statements, reports, and other information relating
to the business and affairs of the Corporation or the Fund, as appropriate, as
the Advisor may, at any time or from time to time, reasonably require in order
to discharge its obligations under this Agreement.
(f) Administrative Services. In addition to the performance of investment
advisory services, the Advisor shall perform, or supervise the performance of,
administrative services in connection with the management of the Fund. In this
connection, the Advisor agrees to: (i) assist in supervising all aspects of the
Fund's operations, including the co-ordination of all matters relating to the
functions of the Corporation's custodian, transfer agent, administrative and
accounting servicer, other shareholder service agents, accountants, attorneys
and other parties performing services or operational functions for the Fund or
the Corporation; (ii) maintain the corporate existence and records of the
Corporation; (iii) provide the Fund, at the Advisor's expense, with services of
persons competent to perform such administrative and clerical functions as are
necessary in order to provide effective administration of the Fund, including
duties in connection with shareholder relations, redemption requests and account
adjustments and the maintenance of certain books and records of the Fund; (iv)
prepare all general shareholder communications, including shareholder reports
for the Fund; (v) during such times as shares are publicly offered, maintain the
registration and qualification of the Fund Shares under federal and state law;
(vi) provide the Fund, at the Advisor's expense, with adequate office space and
related services necessary for its operations as contemplated in this Agreement;
(vii) investigate the development of and develop and implement, if appropriate,
management and shareholder services designed to enhance the value or convenience
of the Fund as an investment vehicle; (viii) permit the Advisor's employees to
serve as officers, directors and committee members of the Corporation, without
cost to the Corporation; and (ix) reimburse the Fund for any loss incurred as a
result of the Fund's receipt of NSF checks from investors if said funds cannot
be recovered from the investors.
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ARTICLE 2.
Compensation of the Advisor
(a) Investment Advisory Fee. For the services rendered hereunder, the Fund
shall pay to the Advisor monthly on the first business day of the next
succeeding calendar month a fee based upon the average daily value of the
aggregate net assets of the Fund, as determined and computed in accordance with
the description of the method of determination of net asset value contained in
the Prospectus, at the annual rate of 0.80% of the average daily value of the
aggregate net assets of the Fund, less the amounts described below.
The Advisor shall pay, from the investment advisory fee as calculated
in the manner described above, certain expenses, the amount of which expenses
shall be determined in accordance with the provisions set forth in paragraphs
(b) and (c) below.
(b) Expenses. The Fund assumes and shall pay all expenses of the operation
of the Fund, unless any of such expenses are specifically assumed by The
Rupay-Barrington Financial Group, Inc. ("RPFG") pursuant to that certain
agreement between the Fund and RPFG or assumed by the Advisor, including,
without limitation: costs relating to the organization of the Fund, insurance,
taxes, expenses for legal and auditing services, costs of printing proxies,
stock certificates, shareholder reports and prospectuses (except to the extent
paid by the Distributor, Rupay-Barrington Securities Corporation), charges of
the Custodian, Transfer Agent and the Administrative and Accounting Services,
expenses of redemption of shares, expenses and fees associated with registering
the shares under Federal and state securities laws, fees and expenses of
directors who are not affiliated persons of RPFG or its subsidiaries, accounting
and pricing costs (including the daily calculation of net asset value),
interest, brokerage costs, litigation and other extraordinary or non-recurring
expenses, and any other expenses properly payable by the Fund or the
Corporation.
(c) Expense Limitations. In the event the operating expenses of the Fund,
including the investment advisory fee payable to the Advisor for any fiscal year
ending on a date on which this Agreement is in effect exceed, after payment to
RPFG of amounts due under that certain agreement referenced in paragraph (b)
hereof, the expense limitations under state securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time, the
Advisor shall reduce its investment advisory fee by the extent of such excess
and, if required under any such laws or regulations, will reimburse the Fund in
the amount of such excess; provided, however, to the extent permitted by law,
the Advisor shall be reimbursed for any such excess payments made to the Fund in
subsequent years. For purposes of determining whether the Fund is entitled to
reimbursement, the expenses of the Fund are calculated on a monthly basis, and
the Fund's distribution plan expenses are excluded. Whenever the expenses of the
Fund exceed the applicable annual expense limitations, the estimated amounts of
reimbursement under such limitations shall be applicable as an offset against
the monthly payment of the advisory fee due to the Advisor.
4
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ARTICLE 3.
Limitation of Liability of the Advisor
The Advisor and its directors, officers or employees shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with any investment policy or the purchase, sale or redemption of
any securities on the recommendation of the Advisor. Nothing herein contained
shall be construed to protect the Advisor against any liability to the Fund or
its security holders to which the Advisor shall otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence in the performance of its
duties on behalf of the Fund, reckless disregard of the Advisor's obligations
and duties under this Agreement or the violation of any applicable law.
ARTICLE 4.
Activities of the Advisor
The services of the Advisor under this Agreement are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others so
long as its services hereunder are not impaired thereby. It is understood that
directors, officers, employees and shareholders of the Fund have, or may
acquire, interests in the Advisor, as directors, officers, employees or
shareholders or otherwise and that directors, officers, employees or
shareholders of the Advisor have, or may acquire, similar interests in the Fund,
and that the Advisor has, or may acquire, interests in the Fund as a shareholder
or otherwise.
ARTICLE 5.
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written
and, unless sooner terminated as hereinafter provided, shall remain in force
until December 31, 1999 and thereafter shall continue in effect from year to
year, but only so long as such continuance is specifically approved at least
annually by: (a) the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities of the Fund and, concurrently with
such approval by the Board of Directors or prior to such approval by the holders
of the outstanding voting securities of the Fund, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the directors of the Corporation, with respect to the
Fund, who are not parties to this Agreement or interested persons of any such
party; and (b) the Advisor shall not have notified the Corporation, in writing,
at least 60 days prior to December 31, 1999 or prior to December 31st of any
year thereafter, that it does not desire such continuation. The Advisor shall
furnish to the Corporation, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, on sixty days' prior written notice to the other party;
provided, that in the case of termination by the Corporation, with respect to
the Fund, such action shall have been authorized
5
<PAGE>
by resolution of a majority of the directors of the Corporation who are not
parties to this Agreement or interested persons of any such party, or by a vote
of a majority of the outstanding voting securities of the Fund. This Agreement
shall automatically terminate in the event of its assignment.
ARTICLE 6.
Definitions
The terms "assignment," "affiliated person" and "interested person," when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act. As used with respect to the Corporation or any of its
Funds, the term "majority of the outstanding voting securities" means the lesser
of: (i) 67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented; or (ii) more than 50% of the outstanding
voting securities.
ARTICLE 7.
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by: (i) the Board of Directors of the Corporation, or by
the vote of a majority of outstanding shares of the Fund; and (ii) a majority of
those directors of the Corporation who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
ARTICLE 8.
Notices
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given: (i) when mailed by
registered or certified mail, return receipt requested, postage prepaid; (ii)
when telecopied, provided that a copy of such notice is mailed by registered or
certified mail, return receipt requested, postage prepaid, within one business
day following transmission of the telecopy; or (iii) when hand delivered to the
party to whom it is to be given at the address of such party set forth below, as
follows:
If to the Fund: Rupay-Barrington Total Return Fund, Inc.
1000 Ballpark Way
Suite 302
Arlington, TX 76011
If to the Advisor:Rupay-Barrington Advisors, Inc.
3551 S. Monaco Parkway, #116
Denver, CO 80237
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ARTICLE 9.
Governing Law
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Texas as at the time in effect and the
applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of Texas or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act, the latter shall
control.
ARTICLE 10.
Miscellaneous
(a) Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
(b) Interpretation. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, as amended from time to time, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Board of Directors of the Corporation of its responsibility for and
control of the conduct of the affairs of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
RUPAY-BARRINGTON TOTAL RETURN
FUND, INC.
By:
--------------------------------
Attest: Authorized Signatory
- -----------------------------
Secretary
RUPAY-BARRINGTON ADVISORS, INC.
By:
--------------------------------
Attest: Authorized Signatory
- -----------------------------
Secretary
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SACHNOFF & WEAVER, Ltd.
Attorneys at Law
30 Wacker Drive, 29th Floor, Chicago, Illinois 60606-7484
Telephone (312) 207-1000 * Fax (312) 207-6400
Direct Tel (312) 207-6423
July 31, 1998
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W., Mail Stop 4-8
Washington, D.C. 20549
RE: Rupay-Barrington Total Return Fund, Inc. (the "Company")
Definitive Proxy
Ladies and Gentlemen:
On behalf of the Company, we have transmitted via EDGAR for filing with the
Securitities and Exchange Commission, a Definitive Proxy Statement.
Please contact Misty S. Gruber, (312)-207-6463, or the undersigned at
the direct dial number referenced above with any questions or comments.
Very truly yours,
Kristine A. Hemlock
Legal Assistant for
SACHNOFF & WEAVER LTD.
KAH/tfk
cc: Kevin Rupert/SEC
