SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
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 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Solicitation Material Pursuant to 240.14a-11(c) or 240.14a-12
Focus Trust, Inc.
(Name of Registrant as Specified in Its
Charter)
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules
14a-6(i)(4) 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 (set forth the amount on which the filing
fee is calculated and state how it was determined):
...............................................................
4) Proposed maximum aggregate value of transaction:
...............................................................
5) Total fee paid:
...............................................................
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
FOCUS TRUST, INC.
IMPORTANT PROXY STATEMENT AND PROXY VOTE CARD
THEY CONCERN THE PENDING CHANGE OF INVESTMENT ADVISER
FOR YOUR FOCUS TRUST, INC. FUND
PLEASE REVIEW AND CAST YOUR VOTE TODAY!
Dear Shareholder:
We are pleased to enclose a proxy statement and notice
for the Special Meeting of Shareholders of your Fund to be held
on June 27, 1997. Shareholders who cannot attend this meeting
are strongly encouraged to vote by proxy.
Your Board of Directors, Portfolio Manager, and Lloyd,
Leith & Sawin (the Focus Trust, Inc. registered investment
adviser) have mutually agreed to appoint Focus Capital
Advisory, L.P.
as the next investment adviser for Focus Trust, Inc.
Focus Capital Advisory, L.P. is a new investment advisory
firm principally owned by Robert G. Hagstrom, Jr., Portfolio
Manager of Focus Trust, Inc.
We have attached a Proxy Summary which will answer many
of your questions regarding this change. It is important to
note the portfolio management and fees of Focus Trust, Inc.,
will not be changed. The only effect to you as shareholders
will be the appointment of a new investment advisory company
for Focus Trust, Inc.
IF YOU HOLD SHARES OF FOCUS TRUST, INC. IN MORE THAN ONE
ACCOUNT, YOU WILL RECEIVE A SEPARATE PROXY PACKAGE FOR EACH
ACCOUNT. PLEASE SIGN AND RETURN EACH PROXY CARD FOR EACH OF
YOUR ACCOUNTS.
Please vote by signing and returning the card marked with
your decision in the enclosed postage paid return envelope as
soon as possible.
If you have any questions, please call the Client
Services Department at 1-800-665-2550. We appreciate your
prompt attention.
Sincerely,
Robert G. Hagstrom, Jr.
Chairman
<PAGE>
PROXY SUMMARY
Q. WHY IS A SHAREHOLDER VOTE NECESSARY?
A. The Investment Company Act of 1940, as amended (the "1940
Act") requires a shareholder vote on a new investment
advisory agreement. Lloyd, Leith & Sawin is resigning as
investment adviser to Focus Trust, Inc. thereby
terminating the current investment advisory agreement.
As a result, Focus Trust, Inc. must engage a new
investment adviser and enter into a new investment
advisory agreement. It is proposed that Focus Trust,
Inc. engage Focus Capital Advisory, L.P. as the new
investment adviser pursuant to a new investment advisory
agreement. (A copy of the proposed new investment
advisory agreement is attached as Exhibit A to this proxy
statement.)
Q. WILL THE INVESTMENT ADVISORY FEES BE THE SAME?
A. Yes, under the terms of the proposed new investment
advisory agreement, the investment advisory fees paid by
Focus Trust, Inc. will remain the same. The terms,
conditions and fee of the new investment advisory
agreement are identical to the existing investment
advisory agreement except for the identity of the
adviser.
Q. WILL THE NEW INVESTMENT ADVISORY AGREEMENT AFFECT FOCUS
TRUST, INC. OR ME AS A SHAREHOLDER?
A. No, Focus Trust, Inc. and your investment will not
change. You will still own the same shares of Focus
Trust, Inc. Robert G. Hagstrom, Jr. will continue to act
as portfolio manager of the Focus Trust, Inc.
Q. WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND
THIS PROXY SOLICITATION?
A. Focus Capital Advisory, L.P.,
not Focus Trust, Inc., are paying all costs of the Fund's
Special Meeting of Shareholders and proxy solicitation.
Q. HOW DO THE MEMBERS OF THE BOARD OF DIRECTORS SUGGEST THAT
I VOTE?
A. After careful consideration, the Board of Directors,
including the independent members, recommend that you
vote "FOR" the new investment advisory agreement on the
enclosed proxy card.
PLEASE VOTE THE ENCLOSED PROXY CARD.
YOUR VOTE IS IMPORTANT.<PAGE>
Focus Trust, Inc.
230 Sugartown Road
Wayne, Pennsylvania 19087-3029
(800) 665-2550
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
FOCUS TRUST, INC.
To be held June 27, 1997
TO THE SHAREHOLDERS OF FOCUS TRUST, INC.:
NOTICE IS HEREBY GIVEN that a SPECIAL MEETING OF
SHAREHOLDERS (the "Meeting") of Focus Trust, Inc. (the "Fund"),
will be held on June 27, 1997 at 10:00 a.m. Eastern time, at
the offices of the Fund's administrator, FPS Services, Inc.,
3200 Horizon Drive, King of Prussia, Pennsylvania 19406-0903,
for the purpose of considering and acting upon the following
matters:
1. To consider a new investment advisory agreement
(the "New Agreement") between the Fund and Focus
Capital Advisory, L.P. (the "New Adviser"), P.O.
Box 407, Wayne, Pennsylvania 19087. The terms,
conditions and fee of the New Agreement are
identical to the existing investment advisory
agreement except for the identity of the adviser;
and
2. To transact such other business as may properly
come before the Meeting, or any adjournment
thereof.
Shareholders of record of the Fund at the close of
business on April 1, 1997 are entitled to notice of, and to
vote on, the proposals at the Meeting, or any adjournment
thereof.
Shareholders are invited to attend in person. If you
plan to attend the Meeting, so indicate on the enclosed proxy
card and return it promptly in the enclosed envelope. No
postage is required if mailed in the United States. Whether
you will be able to attend or not, PLEASE VOTE, SIGN AND DATE
THE PROXY AND RETURN IT PROMPTLY.
By Order of the Board of Directors
/s/ Robert G. Hagstrom, Jr.
May 28, 1997 Robert G. Hagstrom, Jr.
President
PLEASE RETURN YOUR PROXY IMMEDIATELY<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by or on behalf of the Board of
Directors of Focus Trust, Inc. (the "Fund") for use at its
Special Meeting of Shareholders (the "Meeting") to be held on
June 27, 1997, at 10:00 a.m. Eastern time at the offices of FPS
Services, Inc., 3200 Horizon Drive, King of Prussia, PA 19406-0903,
and at any adjournment thereof. This Proxy Statement and
the accompanying form of proxy were first mailed to
shareholders on or about May 28, 1997.
All proxies solicited by the Board of Directors, which
are properly executed and received by the Secretary prior to
the Meeting will be voted at the Meeting, in accordance with
the shareholders' instructions thereon. If no instruction is
given on a proxy, it will be voted FOR the New Agreement unless
authority to vote is withheld. Shareholders who execute
proxies retain the right to revoke them at any time before they
are voted by notifying the Fund or by voting at the Meeting.
In the absence of such direction, proxies will be voted in
favor of the applicable proposal.
The solicitation of proxies is being made primarily
through mailing this Proxy Statement and the accompanying
Proxy. Additional solicitations may be made by the officers or
directors of the Fund or regular employees of the Adviser by
mail, telephone, fax or telegraph, or in person. Such persons
will receive no compensation for such solicitation. It is not
anticipated that any solicitations will be made by specially
engaged employees or paid proxy solicitors. The cost of the
preparation of this Proxy Statement and Proxy and the costs of
solicitation will be borne by the New Adviser.
Shareholders of record of the Fund at the close of
business on April 1, 1997 (the "Record Date") are entitled to
notice of, and to vote on, the proposal at the Meeting and any
adjournment thereof. At the close of business on April 1,
1997, there were 566,885 shares ("Shares") of the Fund
outstanding, each Share being entitled to one vote and each
fractional Share being entitled to a proportionate fractional
vote.
An affirmative vote of a majority of the Fund's aggregate
outstanding Shares defined in the Investment Company Act of
1940, as amended (the "1940 Act"), as the lesser of (i) 67% of
the Shares of the Fund present at the Meeting, if holders of
more than 50% of the outstanding Shares are present in person
or by proxy or (ii) more than 50% of the outstanding Shares of
the Fund is necessary to approve the New Agreement (Proposal
No. 1).
One third of the Shares issued and outstanding and
entitled to vote, present in person or represented by proxy,
constitute a quorum for the transaction of business at the
Meeting. If a quorum is not present or represented at the
Meeting, the holders of a majority of the shares present in
person or by proxy shall have the power to adjourn the Meeting
to a later date, without notice other than announcement at the
Meeting, until a quorum shall be present or represented. Votes
cast by proxy or in person at the Meeting will be counted by
persons appointed by the Fund to act as election inspectors for
the Meeting.
In the event that a quorum is present, but sufficient
votes in favor of the proposals are not received by the time
scheduled for the Meeting, the persons named as proxies may
propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of the shares
present in person or by proxy at the session of the Meeting
adjourned. The persons named as proxies will vote in favor of
or against any such adjournment in direct proportion to the
proxies received for or against the proposed amendments.
Abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present at the
Meeting, but will be treated as votes not cast and, therefore,
will not be counted for purposes of determining whether matters
to be voted upon at the Meeting have been approved.
The Board of Directors knows of no business other than
that specifically mentioned in the Notice of Special Meeting
which will be presented for consideration at the Meeting. If
any matters are properly presented, it is the intention of the
persons named in the enclosed proxy to vote in accordance with
their best judgment.
As of the Record Date, the officers and Directors of the
Fund, together as a group, owned beneficially 12,184.038 shares
(2.15 %) of the Fund. As of the Record Date, the following
persons owned of record or beneficially more than 5% of the
outstanding voting shares of the Fund:
Name & Address Percentage of the Fund
George H. Nofer 8.88%
Philadelphia, PA
Charles Schwab & Company, Inc. 7.77%
San Francisco, CA
Audited financial statements of the Fund in the form of
an Annual Report dated December 31, 1996, were mailed prior to
this proxy mailing. The Annual Report is not to be regarded as
proxy soliciting material. The Fund will furnish, without
charge, a copy of the Fund's Annual Report to any shareholder
who requests one. Shareholders may obtain the Annual Report by
calling the Fund at (800) 665-2550.
PROPOSAL NO. 1
APPROVAL OF THE NEW AGREEMENT FOR THE FUND
General
At the Meeting, shareholders will be asked to approve the
New Agreement between the Fund and the New Adviser (Focus
Capital Advisory, L.P.). Effective at the close of business on
June 29, 1997, Lloyd Leith & Sawin, Inc. (the "Current
Adviser") is resigning as the Fund's investment adviser,
thereby terminating the current investment advisory agreement
(the "Current Agreement"). Robert G. Hagstrom, Jr., a principal
of the Current Adviser, and founder and portfolio manager of
the Fund, established Focus Capital Advisory, L.P., a limited
partnership, to provide investment advisory services to the
Fund. There will be no changes in the portfolio management of
the Fund or its fees.
On May 27, 1997 the Directors, including a majority of
the Directors deemed not "interested persons" as that term is
defined in the 1940 Act ("Independent Directors"), met and
unanimously approved the New Agreement pursuant to which the
New Adviser will serve as the Fund's investment adviser. The
Board of Directors determined that the New Agreement is in the
best interests of the Fund and its shareholders. The factors
considered by the Board of Directors in determining the
reasonableness and fairness of the proposed New Agreement are
described below under "Evaluation of the New Adviser and New
Agreement by the Board of Directors." In the event the New
Agreement is not approved by the shareholders of the Fund, the
Directors of the Fund will consider what other action is
appropriate based upon the best interests of the shareholders
of the Fund.
Evaluation of the New Adviser and New Agreement by the Board of
Directors
The Board of Directors of the Fund met on May 27, 1997 to
consider the New Agreement and its anticipated effects to the
Fund. The proposal was considered by the full Board of
Directors. After full consideration of the proposal, the
Directors, including all of the Independent Directors,
unanimously approved the New Agreement and voted to recommend
the New Agreement to shareholders for their approval.
At the meeting, the Board considered the effect of the
resignation of the Current Adviser to the Fund and possible
future arrangements, including: (i) engaging a new investment
adviser pursuant to a new investment advisory agreement between
a new investment adviser and the Fund; (ii) liquidating the
Fund; or (iii) merging the Fund with another investment
company. The Directors considered the alternative arrangements
and after careful evaluation of all relevant factors the Board
determined that it would be in the best interests of the Fund
and its shareholders to enter into a new investment advisory
agreement with a new investment adviser.
In determining whether or not it was appropriate to
approve the New Agreement and to recommend approval to
shareholders, the Board considered written material and
information presented orally at the Meeting by the New Adviser.
The Board of Directors considered various factors, including
the experience and financial viability of the New Adviser, the
advantage of continuity of management and the nature and
quality of the services to be provided. The Board evaluated
the Fund's expenses compared to investment companies with
similar investment objectives and asset size. The Directors
have reviewed the terms of the New Agreement and determined
there will be no changes in the advisory fee paid by the Fund,
expense ratios, the Fund's investment objectives or policies or
persons currently responsible for providing daily investment
advice to the Fund.
In considering approval of the New Agreement, the Board
placed special emphasis on the fact that Mr. Robert Hagstrom,
Jr. will continue as portfolio manager of the Fund if the New
Agreement is approved. The Board took note of the fact that
Mr. Hagstrom will be the controlling shareholder of the New
Adviser and will retain the day-to-day investment
responsibility for the Fund. The Board was informed by Mr.
Hagstrom that he intends to continue, without interruption, the
investment strategy referred to as "Focus Investing", on behalf
of the Fund. The Board also took into consideration the fact
that the New Adviser has voluntarily agreed to limit the Fund's
total operating expenses to the same extent as the Current
Adviser, for the Fund's current fiscal year.
As a result of its careful consideration of each of the
above-referenced factors, the Board of Directors concluded that
the terms of the New Agreement are fair and reasonable and that
the approval of the New Agreement would be in the best
interests of the Fund and its shareholders.
The following summary provides information about the
Fund's Current Adviser, Current Agreement and the New Adviser
and the terms and conditions of the proposed New Agreement.
Information Concerning the Fund's Current Adviser and Current
Agreement
The Current Agreement between the Fund and the Current
Adviser was initially approved by the Board of Directors of the
Fund and by the initial shareholder of the Fund on March 31,
1995, and was most recently reapproved in its current form at a
Board Meeting held on April 10, 1997. The Current Agreement
will remain in effect until the close of business on June 29,
1997. The New Adviser has entered into an agreement with the
Current Adviser pursuant to which the New Adviser will pay the
Current Adviser an amount for the use of the Signature Mark
"Focus Trust, Inc." The Current Adviser resigned as the Fund's
investment adviser because it has determined that it will limit
its investment advisory services to private clients only. The
Current Adviser recommends that Focus Capital Advisory, L.P.
assume the investment adviser position to the Fund.
Pursuant to the terms and conditions of the Current
Agreement, the Current Adviser invests the Fund's assets and
provides advice on the buying and selling of the Fund's
securities in accordance with the Fund's investment policies,
limitations and restrictions. The Current Adviser also manages
the business affairs of the Fund and supervises the overall
daily operations of the Fund. In addition, the Current Adviser
provides the Fund with administrative services and facilities.
Pursuant to the Current Agreement, the Current Adviser is
entitled to an annual fee, payable monthly, of 0.70% of the
average daily net assets of the Fund. For the fiscal year
ended December 31, 1996, the Current Adviser was entitled to
receive advisory fees of $216,602, of which it retained $43,364
and reimbursed the Fund $173,238.
Information Concerning the Fund's Proposed New Adviser and the
New Agreement
If the New Agreement is approved Mr. Hagstrom would
continue to serve as the Fund's portfolio manager and there
would be no changes in the services provided. In addition, the
terms of the Current Agreement and the New Agreement are
identical except for the identity of the investment adviser. A
copy of the New Agreement is attached to this Proxy Statement
as Exhibit A.
The New Adviser is a newly formed entity and does not
perform advisory services for any other investment company.
However, the New Adviser provides advisory services to
individuals, trust accounts, individual retirement accounts,
pension and profit sharing plans and currently has $15
million under management. The New
Adviser was established by Robert G. Hagstrom, Jr., the Fund's
founder and portfolio manager. Mr. Hagstrom serves as the
General Partner of the New Adviser. The following sets forth
information with respect to Mr. Hagstrom's address and
principal occupation.
Robert G. Hagstrom, Jr., CFA, P.O. Box 407, Wayne,
Pennsylvania 19087, will continue to be responsible for
overseeing all of the investments made by the Fund. Mr.
Hagstrom is President and Director of the Board of Directors of
the Fund. Previously he was Principal with Lloyd, Leith & Sawin
from 1992 through June,1997 and Vice President from 1991 to
1992. Prior thereto he was portfolio manager with First
Fidelity Bank, Philadelphia, PA from 1989 through 1991 and
investment broker for Legg Mason Wood Walker from 1984 through
1989. Mr. Hagstrom received his B.A. and M.A. from Villanova
University. He is a member of the Association of Investment
Management and Research and the Financial Analysts of
Philadelphia. Mr. Hagstrom is a Chartered Financial Analyst
and the author of the book entitled The Warren Buffett Way:
Investment Strategies of the World's Greatest Investor (John
Wiley & Sons, November, 1994).
Expenses paid by the Fund will remain the same under the
New Agreement. Expenses paid by the Fund are as follows: (1)
the fees and expenses of the Fund's independent Directors; (2)
the salaries and expenses of the Fund's officers or employees
who are not affiliated with the New Adviser; (3) interest
expenses; (4) taxes and governmental fees; (5) brokerage
commissions and other expenses incurred in acquiring or
disposing of portfolio securities; (6) the expenses of
registering and qualifying shares for sale with the U.S.
Securities and Exchange Commission and with various state
securities commissions; (7) accounting and legal costs; (8)
insurance premiums; (9) fees and expenses of the Fund's
custodian, administrator and transfer agent and any related
services; (10) expenses of obtaining quotations of the Fund's
portfolio securities and of pricing the Fund's shares; (11)
expenses of maintaining the Fund's legal existence and of
shareholders' meetings; (12) expenses of preparation and
distribution to existing shareholders of reports, proxies and
prospectuses; and (13) fees and expenses of membership in
industry organizations. The New Adviser has voluntarily agreed
to maintain the current operating expense limitation for the
Fund which limits the Fund's total operating expenses on an
annual basis to 2.00% of the Fund's average daily net assets.
If approved by shareholders, the New Agreement will
become effective June 30, 1997 and will continue in effect for
an initial term of two years, and may continue thereafter from
year to year if specifically approved at least annually by vote
of a majority of the outstanding voting securities of the Fund,
as defined under the 1940 Act, or by the Board of Directors
and, in either event, by the vote of a majority of the
Independent Directors, cast in person at a meeting called for
such purpose.
Portfolio Allocation
The New Agreement provides that decisions regarding the
placement of portfolio brokerage will be made by the New
Adviser. The New Adviser will select the brokers or dealers
that will execute the purchases and sales of securities for the
Fund and is directed to use its best efforts to ensure that the
best available price and most favorable execution of securities
transactions for the Fund are obtained.
Information Concerning the Fund's Underwriter and
Administrator.
FPS Broker Services, Inc. (formerly, Fund/Plan Broker
Services, Inc.)(the "Underwriter" or "FPSB") is the underwriter
and distributor of the Fund pursuant to an underwriting
agreement dated April 4, 1995. The Underwriter is a
Pennsylvania corporation formed on April 19, 1989, and is a
broker-dealer registered with the U.S. Securities and Exchange
Commission and a member of the National Association of
Securities Dealers, Inc. The Underwriter, located at 3200
Horizon Drive, King of Prussia, Pennsylvania 19406-0903, is a
wholly-owned subsidiary of FPS Services, Inc. (the servicing
agent, administrator, transfer agent and accounting/pricing
agent for the Fund). FPS Services, Inc. is located at the same
address as the Underwriter. At the present time, the
Underwriter serves as distributor for seventeen other
non-affiliated fund groups.
Recommendation:
The Board of Directors recommends that you vote FOR
approval of the New Agreement. Unless a contrary
specification is made, any executed but unmarked
proxies will be voted FOR this Proposal No. 1.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund is not required, nor does it intend, to hold
regular annual meetings of its shareholders. Any shareholder
who wishes to submit a proposal for consideration at the next
meeting of shareholders, when and if such a meeting is called,
should submit such proposal promptly.
<PAGE>
Attachment A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 30th day of June, 1997 by and between
Focus Trust, Inc. (the "Corporation"), a Maryland corporation
and Focus Capital Advisory, L.P. (the "Adviser"), a
Pennsylvania limited partnership.
1. Duties of Adviser. The Corporation hereby appoints
the Adviser to act as investment adviser to Focus Trust, Inc.
for the period and on such terms set forth in this Agreement.
The Corporation employs the Adviser to manage the investment
and reinvestment of the assets of the Corporation, to determine
in it discretion the assets to be held uninvested, to provide
the Corporation with records concerning the Adviser's
activities which the Corporation is required to maintain, and
to render regular reports to the Corporation's officers and
Board of Directors concerning the Adviser's discharge of the
foregoing responsibilities. The Adviser shall discharge the
foregoing responsibilities subject to the control of the
officers and the Board of Directors of the Corporation, and in
compliance with the objectives, policies and limitations set
forth in the Corporation's Prospectus and Statement of
Additional Information then in effect. The Adviser accepts
such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings,
equipment and the personnel required by it to perform the
services on the terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser shall provide
the Corporation with a trading department. The Adviser shall
select the brokers or dealers that will execute the purchases
and sales of securities for the Corporation and is directed to
use its best efforts to ensure that the best available price
and most favorable execution of securities transactions for the
Corporation are obtained. The Corporation will bear all
expenses associated with its investment activities, including,
without limitation, brokerage commissions and custody expenses.
Subject to policies established by the Board of Directors of
the Corporation and communicated to the Adviser, it is
understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the
Corporation or in respect of the Corporation, or be in breach
of any obligation owing to the Corporation or in respect of the
Corporation under this Agreement, or otherwise, solely by
reason of its having caused the Corporation to pay a member of
a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Corporation in
excess of the amount of commission another member of an
exchange, broker or dealer would have charged if the Adviser
determines in good faith that the commission paid was
reasonable in relation to the brokerage or research services
provided by such member, broker or dealer, viewed in terms of
that particular transaction or the Adviser's overall
responsibilities with respect to the accounts, including the
Corporation, as to which it exercises investment discretion.
The Adviser will communicate on a quarterly to the officers and
directors of the Corporation such information relating to
Corporation transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to
be rendered by the Adviser as provided in Section 1 and 2 of
this Agreement, the Corporation shall pay to the Adviser within
five business days after the end of each calendar month, a
monthly fee of one twelfth of 0.70% of the Corporation's
average daily net assets for the month. The net asset value
shall be calculated in the manner as provided in the
Corporation's Prospectus and Statement of Additional
Information then in effect.
In the event of termination of this Agreement, the fee
provided in this Section 3 shall be paid on a pro rate basis,
based on the number of days when this Agreement was in effect.
4. Reports. The Corporation and the Adviser agree to
furnish to each other such information regarding their
operations with regard to their affairs as each may reasonably
request.
5. Status of Adviser. The services of the Adviser to
the Corporation are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others so long as
its services to the Corporation are not impaired thereby.
6. Liability of Adviser. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard
by the Adviser of its obligations and duties hereunder, the
Adviser shall not be subject to any liability whatsoever to the
Corporation, or to any shareholder of the Corporation, for any
error of judgment, mistake of law or any other act or omission
in the course of, or connected with, rendering services
hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the
Corporation.
7. Duration and Termination. This Agreement shall
become effective on the date which the U.S. Securities and
Exchange Commission declares effective, the Corporation's
registration statement provided that first it is approved by
the Board of Directors of the Corporation, including a majority
of those directors who are not parties to this Agreement or
interested persons of any party hereto, in the manner provided
in section 15(c) of the Investment Company Act of 1940, and by
the holders of a majority of the outstanding voting securities
of the Corporation; and shall continue in effect for two years.
Thereafter, this Agreement may continue in effect only if such
continuance is approved at least annually by: (i) the
Corporation's Board of Directors or, (ii) by the vote of a
majority of the outstanding voting securities of the
Corporation; and in either event by a vote of a majority of
those directors of the Corporation who are not parties to this
Agreement or interested persons of any such party in the manner
provided in section 15(c) of the Investment Company Act of
1940. This Agreement may be terminated by the Corporation at
any time, without the payment of any penalty, by the Board of
Directors of the Corporation or by vote of the holders of a
majority of the outstanding voting securities of the
Corporation on 60 days' written notice to the Adviser. This
Agreement may be terminated by the Adviser at any time, without
the payment of any penalty, upon 60 days' written notice to the
Corporation. This Agreement will automatically terminate in
the event of its assignment. Any notice under this Agreement
shall be given in writing, addressed and delivered or mailed
postpaid, to the other party at the principal office of such
party.
As used in this Section 8, the terms "assignment"
"interested person", and "a vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
8. Name of Adviser. The parties agree that the
Adviser has a proprietary interest in the name "Focus Trust,
Inc." and the Corporation agrees to promptly take such action
as may be necessary to delete from its corporate name and/or
the name of the Corporation any reference to the name of the
Adviser on the name "Focus Trust, Inc." promptly after receipt
from the Adviser of a written request therefore.
9. Severability. If any provisions of this Agreement
shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
10. Governing Law. This agreement shall be governed by
and construed and interpreted in accordance with the laws of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date hereinabove set forth.
ATTEST: FOCUS TRUST, INC.
____________________________ _________________________________
, Secretary Robert G. Hagstrom, Jr., President
ATTEST: FOCUS CAPITAL ADVISORY, L.P.
__________________________ __________________________________
, Secretary Robert G. Hagstrom, Jr., General Partner<PAGE>
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
PROXY
OF FOCUS TRUST, INC. (the "Fund")
SPECIAL MEETING JUNE 27, 1997 AT 10:00 A.M. EASTERN TIME
The undersigned hereby appoints Carolyn F. Mead, Esq. and
Gretchen B. Zepernick, and each of them, with the power of
substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if
personally present, all the shares of the FUND held of record by
the undersigned on April 1, 1997, at the Special Meeting of
Shareholders, or any adjournment thereof, to be held at 10:00
a.m. Eastern time on June 27, 1997 at the offices of the Fund's
administrator, FPS Services, Inc., 3200 Horizon Drive, King of
Prussia, Pennsylvania 19406-0903.
1. APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE
FUND AND FOCUS CAPITAL ADVISORY, L.P.
FOR AGAINST
ABSTAIN
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING, OR ANY ADJOURNMENT THEREOF.
FOR AGAINST ABSTAIN
(Continued and to be signed on reverse.)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors and
when properly executed will be voted as specified. If no
specification is made, the undersigned's vote, as a shareholder
of the Fund, will be cast for Proposal (1). If any other matters
properly come before the meeting about which the proxy holders
were not aware prior to the time of the solicitation,
authorization is given to the proxy holders to vote in accordance
with the views of management thereon. The management is not
aware of any such matters. The undersigned acknowledges receipt
of the Notice of Meeting and Proxy Statement dated May 28, 1997.
Please sign exactly as your name appears below. When shares are
held by joint tenants, both should sign.
Signature*
Dated: , 1997
* Please sign exactly as your name appears on this Proxy. If
signing for an estate, trust or
corporation, title or capacity should be stated.
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING. (
PERSON(S) WILL ATTEND.)
