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))
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: 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.
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
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. and Lloyd, Leith & Sawin, 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.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 IMMEDIATELYPROXY 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 and Current
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 b usiness 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.
The Board of Directors determined that the terms of the New
Agreement are fair and reasonable and 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 and
currently has $10 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 27,1997 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.
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., Managing PartnerPROXYTHIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORSPROXY
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.)
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.),
