SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-12
THE JENSEN PORTFOLIO, INC.
--------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
The Jensen Portfolio, Inc.
2130 Pacwest Center
1211 SW Fifth Avenue
Portland, OR 97204-3721
Proxy Statement
For
Special Meeting of Shareholders
March 24, 2004
Enclosed in this package you will find:
Shareholder Letter.............................................................2
Notice of Special Meeting......................................................3
Shareholder Q&A................................................................4
Proxy Statement................................................................7
Proposal No. 1.................................................................8
To approve the Election of a New Board Member
Proposal No. 2................................................................10
To approve the new Investment Advisory Agreement
Appendix A...................................................Appendix A - Page 1
New Investment Advisory Agreement
Proxy Card..............................................................Enclosed
The Jensen Portfolio, Inc.
2130 Pacwest Center
1211 SW Fifth Avenue
Portland, OR 97204-3721
January 30, 2004
Dear Jensen Portfolio Shareholder:
The attached Proxy Statement describes two proposals. The first is to
approve a new board member to the Board of Directors and the second proposal
relates to a change in control of the ownership of Jensen Investment Management,
Inc., the investment advisory firm responsible for managing the assets of The
Jensen Portfolio, Inc. On January 29, 2004, Val E. Jensen, Chairman and one of
six owners of Jensen Investment Management, Inc. retired and sold his shares
back to Jensen Investment Management, Inc. Mr. Jensen will continue to act in a
consulting capacity to the firm, and remain on the Board of Directors for The
Jensen Portfolio, Inc. as the chairman and a director. The change in control of
the investment adviser is not expected to affect the management of the Fund, as
the Fund has been managed by a team since its inception.
As a result of the change of control, the Investment Advisory Agreement
under which Jensen Investment Management, Inc. served as the Fund's investment
adviser automatically terminated as required by federal law. Jensen Investment
Management, Inc. (the "Adviser") is currently continuing to advise the Fund
under an interim agreement as permitted by federal law.
The Fund's Board of Directors has scheduled a Special Meeting of
Shareholders to be held on March 24, 2004. At this meeting, shareholders will be
asked to approve a new Investment Advisory Agreement for the Fund with the
Adviser, as well as to elect a new member to the Board of Directors for the
Fund. Other than the fact that Val E. Jensen will no longer be an equity owner
of the Adviser, the proposed new Investment Advisory Agreement is identical to
the original Investment Advisory Agreement, except for the effective and
termination dates. We hope that you will take the time to review the attached
Proxy Statement and provide us with your vote on these important issues.
This Proxy Statement provides information that addresses various questions
that you may have regarding the change in ownership, the new Investment Advisory
Agreement, the nominee to serve on the Board of Directors, the voting process
and the shareholder meeting generally. We urge you to confirm the Board of
Directors' recommendations by promptly voting using any one of the following
methods:
o By Mail: Please complete, date and sign your proxy card before mailing
it in the enclosed postage-paid envelope.
o By Telephone: Have your proxy card available. Call the toll free
number on the proxy card. Enter your control number from your proxy
card. Follow the simple instructions.
o By Internet: Have your proxy card available. Go to the website shown
on the proxy card. Follow the simple instructions found on the
website.
Your prompt response will help avoid the cost of additional solicitation.
If you have any questions regarding the proxy, please call 1-866-800-4889.
Sincerely,
- ----------------------- -------------------------
Val E. Jensen, Chairman Gary W. Hibler, President
The Jensen Portfolio, Inc.
2130 Pacwest Center
1211 SW Fifth Avenue
Portland, OR 97204-3721
Notice of Special Meeting of Shareholders
To Be Held March 24, 2004
To the Shareholders:
Notice is given that a Special Meeting of Shareholders of The Jensen Portfolio,
Inc. will be held at the Multnomah Athletic Club, 1849 SW Salmon Street,
Portland, Oregon 97207-0390 on Wednesday, March 24, 2004, at 5:00 p.m., Pacific
Time, for the following purposes:
o To approve the election of a new board member;
o To approve a new Investment Advisory Agreement between the Fund and
Jensen Investment Management, Inc.; and
o To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Shareholders of record at the close of business on January 8, 2004 are entitled
to receive notice of and vote at the Fund's Special Meeting and any adjournment
thereof. You are entitled to cast one vote for each share and a fractional vote
for each fractional share that you own on the record date.
----------------
Robert G. Millen
Secretary
Portland, Oregon
January 30, 2004
Your vote is important. Whether or not you intend to attend the Special
Meeting, please fill in, date, sign and promptly return the enclosed proxy card
in the postage paid return envelope provided or vote by telephone or by
Internet. Your prompt response will help avoid the cost of additional
solicitation and ensure that a quorum will be present at the meeting. If you
have any questions regarding the proxy, please call 1-866-800-4889. Your proxy
is revocable at any time before Wednesday, March 24, 2004 at 5:00 p.m., Pacific
Time by advising the Secretary of the Fund in writing (by subsequent proxy or
otherwise), or by attending the Special Meeting and voting in person. Attendance
by a shareholder at the Special Meeting does not, in itself, revoke a proxy. If
not so revoked, the shares represented by the proxy will be voted at the Special
Meeting and any adjournments thereof, as instructed.
Shareholder Questions and Answers
Voting the Proposals under the Jensen Portfolio, Inc. Proxy Solicitation
Jensen Investment Management, Inc. (the "Adviser") manages The Jensen
Portfolio, Inc., an Oregon corporation and open-end investment management
company (the "Fund"). The following Questions and Answers are intended to
provide an overview of the information provided in this Proxy Statement and to
summarize the proposals affecting the Fund to be considered at the shareholder
meeting, or at any adjournment thereof (the "Meeting"). If you have any
questions regarding the Proxy Statement, please do not hesitate to call us at
1-866-800-4889.
When and where will the Shareholder Meeting be held?
The Shareholder Meeting will be held on Wednesday, March 24, 2004 at
Multnomah Athletic Club, 1849 SW Salmon Street, Portland, Oregon
97207-0390, at 5:00 p.m., Pacific Time. At this meeting, final votes are
cast and ballots are officially tabulated. Shareholders do not need to
attend the meeting in person, because the proxies named on your ballot will
cast your vote on your behalf. In order for your ballots to be counted at
this meeting please return your proxy card promptly.
On what proposals am I being asked to vote?
You are being asked to:
(1) Elect a new person to the Board of Directors of the Fund as an
independent director to replace a retiring independent director. The Board
will then continue to be comprised of four independent members and two
interested members.
(2) Approve a new Investment Advisory Agreement between the Adviser and the
Fund that will allow the Adviser to continue providing advisory services to
the Fund following the sale of a 27.72% interest in Jensen Investment
Management, Inc. by Val E. Jensen. There are no changes in the investment
advisory fees to be paid by the Fund or the services to be provided by
Jensen Investment Management, Inc. under the new Investment Advisory
Agreement. Following the sale transaction, the existing Jensen Investment
Management, Inc. investment professionals will continue to own the firm,
and the team responsible for managing the Fund is not expected to change.
Has the Board approved the proposals?
Yes. The Board of Directors unanimously approved these proposals on January
6, 2004 and recommends that you vote to approve each proposal.
Why am I being asked to elect a director?
The Fund is devoted to serving the needs of its shareholders, and the Board
of Directors is responsible for supervising the management of the Fund's
business affairs to meet those needs. The Investment Company Act of 1940,
as amended (the "Investment Company Act") and related SEC rules contain
provisions requiring that certain percentages of a mutual fund's board of
directors be made up of members who are independent of the fund's
investment adviser. The current law requires that a majority of the Fund's
Board must be made up of independent members.
The Fund's Board of Directors consists of six persons, four of whom are
independent of the Adviser. One of the Board's independent members, Louis
B. Perry has chosen to resign, creating a vacancy on the Board of
Directors. Thomas L. Thomsen, Jr. was nominated by the Nominating Committee
and approved by the Board of Directors to fill the vacancy as an
independent director. You are being asked to ratify the Board of Directors'
selection.
Directors are selected on the basis of their professional experience,
education, and their interest in, and capacity for understanding the
complexities of, the operation of a mutual fund. These individuals can
bring considerable experience to the impartial oversight of a fund's
operations. This Proxy Statement includes a description of Mr. Thomsen's
background and business experience.
Why am I being asked to approve a new Investment Advisory Agreement?
The Fund is registered under the Investment Company Act, which requires
that any investment advisory agreement for a mutual fund terminate
automatically if the investment adviser experiences a significant change in
ownership. (A person is considered to be a "control" person if that person
beneficially owns 25% or more of the outstanding securities of a company.)
This provision has the effect of requiring that shareholders vote on a new
investment advisory agreement and is designed to ensure that shareholders
have a say in the company or persons that manage their fund.
Since Val E. Jensen's retirement and subsequent sale of his 27.72% interest
in the Adviser on January 29, 2004, Jensen Investment Management, Inc. has
been providing investment advisory services to the Fund under an interim
Investment Advisory Agreement that was approved by the Fund's Board of
Directors, as permitted by SEC rules. In order for Jensen Investment
Management, Inc. to continue to provide advisory services to the Fund on an
ongoing basis, shareholders of the Fund must approve the new Investment
Advisory Agreement. Your vote to approve the new Agreement will also have
the effect of an approval of the interim Investment Advisory Agreement and
the advisory fees to be charged to the Fund thereunder.
How will the change in ownership of Jensen Investment Management, Inc. affect
the management of the Fund?
With the exception of Mr. Jensen, the persons responsible for operating the
Adviser and managing the assets of the Fund are not expected to change as a
result of Mr. Jensen's retirement and sale of his controlling interest in
the Adviser. Mr. Jensen will continue to serve the Adviser in a consulting
capacity. The investment management fees and the Fund's overall operating
expenses will not change.
Are there any differences between the original Investment Advisory Agreement and
the proposed new Investment Advisory Agreement?
The proposed new Investment Advisory Agreement is identical to the original
Investment Advisory Agreement, except for the effective and termination
dates. Your approval of the new Agreement will not increase the management
fees or overall expenses of the Fund, or change the level, nature or
quality of services provided to the Fund.
Who is eligible to vote?
The Board of Directors has fixed the close of business on January 8, 2004
as the record date for the determination of the shareholders entitled to
notice of and to vote at the Meeting. On the record date, the Fund had
82,887,289.082 outstanding shares of common stock. Shareholders of record
at the close of business on the record date will be entitled to cast one
vote for each full share and a fractional vote for each fractional share
they hold on each matter presented at the Meeting. This Proxy Statement and
the enclosed proxy card are expected to be mailed on or about January 30,
2004 to shareholders of record.
How can I vote my shares?
For your convenience, you may vote your ballot in three ways:
o By Mail: Please complete, date and sign your proxy card before mailing
it in the enclosed postage-paid envelope.
o By Telephone: Have your proxy card available. Call the toll free
number on the proxy card. Enter your control number from your proxy
card. Follow the simple instructions.
o By Internet: Have your proxy card available. Go to the website shown
on the proxy card. Follow the simple instructions found on the
website.
What will happen if there are not enough votes to approve the new Investment
Advisory Agreement or the election of the new director?
It is important that shareholders respond to ensure that there is a quorum
for the Meeting. If we do not receive your response after several weeks,
you may be contacted by officers or agents of the Fund or the Adviser who
will remind you to vote your shares and help you return your proxy. If we
do not receive sufficient votes to approve the new Investment Advisory
Agreement and the election of the new director by the date of the Meeting,
we may adjourn the Meeting to a later date so that we can continue to seek
more votes. In addition, if enough votes are not obtained to approve the
new Investment Advisory Agreement, Jensen Investment Management, Inc. may
only be able to receive advisory fees for its service during the interim
period equal to its costs of advising the Fund during that period plus
interest.
The Jensen Portfolio, Inc.
2130 Pacwest Center
1211 SW Fifth Avenue
Portland, OR 97204-3721
Proxy Statement
GENERAL INFORMATION:
This Proxy Statement and form of proxy enclosed are furnished in connection
with a solicitation of proxies by the Board of The Jensen Portfolio, Inc., to be
held at the Multnomah Athletic Club, 1849 SW Salmon Street, Portland, Oregon
97207-0390 on Wednesday, March 24, 2004, at 5:00 p.m., Pacific Time, for the
purposes described in the accompanying Notice of Special Meetings of
Shareholders. For your convenience, we have divided this proxy statement into
four parts:
Part 1 -- An Overview
Part 2 -- The Proposals
Part 3 -- More on Proxy Voting
Part 4 -- Additional Information
Your vote is important! You should read the entire proxy statement before
voting. If you have any questions regarding the proxy statement, please call
1-866-800-4889. If you sign and return the accompanying proxy card, you may
revoke it by giving written notice of such revocation to the Secretary of the
Fund prior to the Special Meeting or by delivering a subsequently dated proxy
card or by attending and voting at the Special Meeting in person. Proxies voted
by telephone or Internet may be revoked at any time before they are voted in the
same manner that proxies voted by mail may be revoked.
Management of the Fund ("Management") expects to solicit proxies
principally by mail, but Management, or agents appointed by Management, may also
solicit proxies by telephone or personal interview. Georgeson Shareholder
Communications, Inc. has been retained to serve as the Fund's proxy solicitor.
If solicitation is required, Georgeson Shareholder Communications, Inc. will be
paid proxy solicitation fees, between $20,000 and $200,000. The costs of
solicitation, including the costs of printing and mailing proxy materials and
the costs of holding the Special Meeting, will be borne equally by the Fund and
the Fund's investment adviser, Jensen Investment Management, Inc. If the Fund
records votes by telephone or Internet, it will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that their instructions have been properly recorded. We began mailing this
Notice of Special Meeting, Proxy Statement and Proxy Card to shareholders of
record on or about January 30, 2004.
The Fund is required by federal law to file reports, proxy statements and
other information with the Securities and Exchange Commission (SEC). The SEC
maintains a website that contains information about the Fund (www.sec.gov). Any
such proxy material, reports and other information can be inspected and copied
at the public reference facilities of the SEC, 450 Fifth Street, N.W.,
Washington DC 20549. Copies of such materials can be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services of the SEC
at 450 Fifth Street, N.W., Washington DC 20549, at prescribed rates.
Copies of the Fund's Annual Report for the fiscal year ended May 31, 2003
and the Fund's Semi-Annual Report for the six months ended November 30, 2003 are
available upon request, free of charge, by calling (800) 992-4144 or writing to
The Jensen Portfolio c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701,
Milwaukee, Wisconsin, 53201-0701. These reports are also available on the SEC's
website, www.sec.gov.
PART 1 - AN OVERVIEW
This Proxy Statement is being furnished by the Board in connection with the
solicitation of proxies by the Board for use at the Special Meeting, or any
adjournment thereof, to be held at the Multnomah Athletic Club, 1849 SW Salmon
Street, Portland, Oregon 97207-0390 on Wednesday, March 24, 2004, at 5:00 p.m.,
Pacific Time.
The Board has fixed the close of business on January 8, 2004 as the record
date (the "Record Date") for determining the shareholders who are entitled to
notice of the Meeting and to vote their shares at the Meeting or any
adjournments or postponements thereof. Shareholders are entitled to cast one
vote for each full share and a fractional vote for each fractional share they
own on the Record Date.
The Fund is a registered investment company organized as an Oregon
corporation. The Fund's mailing address is The Jensen Portfolio c/o U.S. Bancorp
Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin, 53201-0701. The Fund
commenced operations on August 3, 1992.
PART 2 - THE PROPOSALS
PROPOSAL ONE: To Approve the Election of a New Director
Shareholders are being asked to elect Thomas L. Thomsen, Jr. as a new
independent director to the Board of Directors for the Fund. Mr. Thomsen has
indicated his willingness to serve if elected.
If Mr. Thomsen should withdraw or otherwise become unavailable for
election, the persons named as proxies will vote for such other nominees as the
Fund's Board of Directors may recommend. The Board has no reason to believe that
Mr. Thomsen will become unavailable for election as a director. The following
table provides more information about Mr. Thomsen such as his address, age and
principal occupations during the past five years.
- -------------------------- ----------- ----------- ---------------------- ------------ -------------
Name, Address and Age Position(s) Term of Principal Occupation # of Other
Held with Office and During Past Five Portfolios Directorships
the Fund Length of Years in Fund Held by
Time Served Complex Director
Overseen
by Director
- -------------------------- ----------- ----------- ---------------------- ------------ -------------
Thomas L. Thomsen, Jr. Independent Indefinite Private rancher and 1 None
Age: 59 Director Term; since real estate investor
The Jensen Portfolio, Inc. December (2002 -Present); Chief
2130 Pacwest Center 2003 Executive Officer
1211 SW Fifth Ave. (2000 - 2002) and
Portland, OR 97204 President Columbia
Management Company,
investment adviser to
the Columbia Funds
family of mutual funds
and to institutional
and individual
investors.
- -------------------------- ----------- ----------- ---------------------- ------------ -------------
The Fund's Bylaws provide that each director shall serve during the
continued lifetime of the Fund until he dies, resigns, is declared bankrupt or
incompetent by the court, or is removed. In addition, any director may resign,
or any director may be removed at a meeting of shareholders by a vote of
two-thirds of the outstanding shares of the Fund. In case a vacancy shall exist
for any reason, the remaining directors will fill such vacancy by appointment of
another director. The directors will not fill any vacancy by appointment if,
immediately after filling such vacancy, less than two-thirds of the directors
then holding office would have been elected by the shareholders. If, at any
time, less than a majority of the directors holding office have been elected by
the shareholders, the directors then in office will call a shareholders' meeting
for the purpose of electing directors to fill vacancies. Otherwise, there will
normally be no meeting of shareholders called for the purpose of electing
directors.
Director Compensation. The Fund does not compensate directors who are
officers or employees of Jensen Investment Management, Inc. During the fiscal
year ending May 31, 2004, the independent directors are expected to receive an
annual retainer of $14,000 from the Fund, plus a fee of $2,000 for each meeting
attended in person. They are also reimbursed for travel and other out-of-pocket
expenses in connection with attendance at Board meetings. The Fund does not
offer any retirement benefits for the directors. The Board holds regular
quarterly meetings. During the fiscal year ended May 31, 2003, there were 6
meetings of the Board of Directors, and the then current directors received the
following compensation from the Fund:
- ------------------------------ -------------- ------------------- --------------
Name of Person Total Pension or Estimated
Compensation Retirement Benefits Annual Benefit
From Accrued as Part of Upon
Fund Fund Expenses Retirement
- ------------------------------ -------------- ------------------- --------------
Norman W. Achen $13,200 None None
Roger A. Cooke $12,700 None None
Robert E. Harold $12,700 None None
Louis B. Perry(1) $3,017 None None
Thomas L. Thomsen, Jr.(2) None None None
Gary W. Hibler None None None
Val E. Jensen None None None
Robert F. Zagunis None None None
Robert G. Millen None None None
- ------------------------------ -------------- ------------------- --------------
(1) Dr. Louis B. Perry served as a director emeritus of the Fund from June 1,
2002 to May 12, 2003 and received no fees for his service during that time. He
was appointed as a director of the Fund on May 12, 2003 and served in such
capacity until his retirement in December 2003, at which time he resumed serving
as director emeritus of the Fund.
(2) Mr. Thomas L. Thomsen, Jr. was appointed director of the Fund in December
2003.
Audit Committee. The Fund has an Audit Committee, which is comprised of all
of the independent directors - Norman W. Achen, Roger A. Cooke, Robert E. Harold
and Thomas L. Thomsen, Jr. The Audit Committee reviews financial statements and
other audit-related matters for the Fund. The Audit Committee also holds
discussions with management and with the independent auditors concerning the
scope of the audit and the auditor's independence. The Audit Committee meets
once a year, and if necessary, more frequently. The Audit Committee last met
during the Board meeting in September 2003.
Nominating Committee. The Nominating Committee is responsible for seeking
and reviewing candidates for consideration as nominees for the directors as is
considered necessary from time to time and meets only as necessary. The
Nominating Committee met twice during the fiscal year ended May 31, 2003, once
in February 2003 and another time in May 2003, to consider the nomination of two
new directors to fill a vacancy on the Fund's Board of Directors, at which time
Louis B. Perry was elected. In December 2003, the Nominating Committee met to
consider the nomination of a new director, at which time Thomas L. Thomsen, Jr.
was elected and Louis B. Perry resigned his position as an independent director
and was named a director emeritus (a non-voting director).
The Nominating Committee is comprised of all the independent directors as
follows: Norman W. Achen, Roger A. Cooke, Robert E. Harold and Thomas L.
Thomsen, Jr. The Nominating Committee does not have a charter and currently
there are no policies in place regarding nominees recommended by shareholders.
The Board of Directors believes that in the event nominees are ever recommended
by shareholders, the Board can review such nominations on a case-by-case basis.
The Nominating Committee has general guidelines and specific minimum
qualifications for the nomination of any director nominee. The Nominating
Committee gathers nominee recommendations from a variety of resources--other
mutual funds, the Adviser, colleagues, etc. Once the nominee has been contacted
and accepts to be considered as a nominee, the Nominating Committee reviews the
nominee's resume and other credentials and analyzes the expertise the nominee
would offer the Board of Directors and the Fund. Directors are selected on the
basis of their professional experience, education, and their interest in, and
capacity for understanding the complexities of, the operation of a mutual fund.
These individuals can bring considerable experience to the impartial oversight
of the Fund's operations. Upon completion of the evaluation, the Nominating
Committee takes a vote as to whether to recommend the nominee to the full Board
of Directors for election to the Board. Thomas L. Thomsen, Jr. was initially
recommended to the Nominating Committee by the president of the Fund. All of the
independent directors recommended that Mr. Thomsen be included in this proxy
statement for shareholder approval.
Share Ownership of the Directors. As of January 8, 2004, the officers and
directors of the Fund owned beneficially less than 1% of the Fund's outstanding
shares. The following table shows the dollar range of shares beneficially owned
by each director in the Fund as of December 31, 2003:
Interested Directors:
- ---------------------------------------- -------------------------------------
Name of Director Aggregate Dollar Range of
Equity Securities in the Fund
- ---------------------------------------- -------------------------------------
Gary W. Hibler Over $100,000
Val Jensen Over $100,000
- ---------------------------------------- -------------------------------------
Independent Directors/Director Emeritus:
- ---------------------------------------- -------------------------------------
Name of Director Aggregate Dollar Range of
Equity Securities in the Fund
- ---------------------------------------- -------------------------------------
Norman W. Achen Over $100,000
Roger A. Cooke Over $100,000
Robert E. Harold Over $100,000
Thomas L. Thomsen, Jr. Over $100,000
Louis B. Perry (director emeritus) Over $100,000
- ---------------------------------------- -------------------------------------
As of December 31, 2003, none of the independent directors, director
emeritus or members of their immediate families owned any securities of Jensen
Investment Management, Inc. (the "Adviser"), the Fund's distributor, Quasar
Distributors, LLC (the "Distributor") or any other entity directly or indirectly
controlling, controlled by, or under common control with the Adviser or
Distributor. During the two most recently completed calendar years, none of the
independent directors, director emeritus or members of their immediate families
conducted any transactions (or series of transactions) with the Adviser,
Distributor or any affiliate of the Adviser or Distributor in which the amount
involved exceeded $60,000.
Required Vote. Provided that a quorum is present, approval of the election
of the new director requires the affirmative vote of the plurality of the shares
entitled to vote, which means that if the nominee receives more votes for than
against, he will be elected.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE TO APPROVE THE NEW DIRECTOR.
PROPOSAL TWO: To approve a new Investment Management Agreement between
The Jensen Portfolio, Inc. and Jensen Investment Management, Inc.
The Board of Directors of the Fund is recommending that shareholders
approve a proposed new Investment Advisory Agreement (the "New Agreement"),
between Jensen Investment Management, Inc. and the Fund, which would become
effective immediately following shareholder approval. The New Agreement is
identical to the Fund's original Investment Advisory Agreement with Jensen
Investment Management, Inc. (the "Original Agreement") and differs only in its
effective and termination dates. A copy of the New Agreement is attached to this
Proxy Statement as Exhibit A.
As described in this Proxy Statement, the New Agreement is necessary
because the Original Agreement terminated as a result of a change in control of
Jensen Investment Management, Inc., the Fund's investment adviser. The
termination and resulting shareholder vote is required under the Investment
Company Act. Jensen Investment Management, Inc. is currently continuing to
manage the Fund under an Interim Investment Management Agreement (the "Interim
Agreement") as permitted by Securities and Exchange Commission rules.
This proposal sets forth information about Jensen Investment Management,
Inc., a description of the recent changes in ownership of the Adviser, a summary
of the relevant Investment Advisory Agreements, and a discussion of the factors
considered by the Board when it approved the New Agreement.
Investment Adviser. Jensen Investment Management, Inc. is an SEC-registered
investment adviser with offices located at 2130 Pacwest Center, 1211 SW Fifth
Avenue, Portland, Oregon, 97204-3721. Jensen Investment Management, Inc. was
founded in 1988 and currently manages approximately $2.1 billion in client
assets. The firm has approximately 150 client relationships, including families,
individuals, foundations and other organizations or entities. Jensen Investment
Management, Inc. has served as the Fund's manager since the Fund's inception on
August 3, 1992. The Original Agreement requires Jensen Investment Management,
Inc. to manage the investment and reinvestment of the Fund's assets and to
provide administration of the Fund not otherwise provided by third party service
providers, subject to the direction of the Board of Directors.
Description of Ownership Changes. Until January 29, 2004, the stockholders
of Jensen Investment Management, Inc. consisted of the senior officers of the
firm with a controlling interest held by founder and Chairman Val E. Jensen. Mr.
Jensen tendered his resignation effective January 29, 2004 and simultaneously
sold his shares of the Adviser back to the Adviser. As a result of Mr. Jensen's
sale transaction, the number of shares outstanding of the Adviser decreased.
Accordingly, the percentage of shares of the Adviser owned by each of the
principals correspondingly increased. The percentage of shares held by Gary W.
Hibler and Robert F. Zagunis, two of the Adviser's principals, increased to more
than 25% each, and as a result, each of them is presumed to be a control person
of the Adviser.
Jensen Investment Management, Inc. intends to adhere to the applicable
provisions of Section 15(f) of the Investment Company Act. Section 15(f) of the
Investment Company Act provides that when a change in control of a mutual fund
investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith as long as no
"unfair burden" is imposed on the fund as a result of the transaction relating
to the change of control, or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden," as defined in the
Investment Company Act, includes any arrangement during the two-year period
after the change in control whereby the investment adviser (or predecessor or
successor adviser), or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly from the fund or
its shareholders (other than fees for bona fide investment advisory or other
services) or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the fund (other than fees
for bona fide principal underwriting services). No such compensation
arrangements are contemplated with respect to the change in control transaction.
Interim Agreement. As noted, a new advisory agreement is needed for the
Fund because the Original Agreement under which the Adviser managed the Fund
terminated as a result of the sale transaction by Mr. Jensen. Generally,
shareholders of a fund must approve an advisory agreement before it takes
effect. In this case, the Board, including the independent directors, relied on
Rule 15a-4 under the Investment Company Act, which enabled the Board to approve
the Interim Agreement under which the Adviser can continue managing the Fund
after the Mr. Jensen's sale transaction, until shareholders can approve the New
Agreement. Under Rule 15a-4, an adviser can serve pursuant to an interim
advisory agreement for up to 150 days while the fund seeks shareholder approval
of a new investment advisory agreement. Rule 15a-4 imposes the following
conditions, all of which were met in the case of the Interim Agreement relating
to the Fund:
(i) the compensation under the interim contract may be no greater than
under the previous contract;
(ii) the fund's board of directors, including a majority of the independent
directors, has voted in person to approve the interim contract before
the previous contract is terminated;
(iii)the fund's board of directors, including a majority of the
independent directors, determines that the scope and quality of
services to be provided to the fund under the interim contract will be
at least equivalent to the scope and quality of services provided
under the previous contract;
(iv) the interim contract provides that the fund's board of directors or a
majority of the fund's outstanding voting securities may terminate the
contract at any time, without the payment of any penalty, on not more
than 10 calendar days written notice to the investment adviser;
(v) the interim contract contains the same provisions as the previous
contract with the exception of effective and termination dates,
provisions required by Rule 15a-4 and other differences determined to
be immaterial by the board of the fund; and
(vi) the interim contract provides in accordance with the specific
provisions of Rule 15a-4 for the establishment of an escrow account
for fees received under the interim contract pending approval of a new
contract by shareholders.
The advisory fees earned by the Adviser during the interim period are being
held in an escrow account until the shareholder meeting. If the New Agreement is
approved, that approval will be viewed as an implicit approval of the Interim
Agreement by shareholders, and Jensen Investment Management, Inc. will receive
the escrowed fees plus interest. If the New Agreement is not approved, Jensen
Investment Management, Inc. will only receive fees for the interim period equal
to the costs it incurred in advising the Fund for that period of the funds in
the escrowed account, whichever is less.
Original and New Agreements. The Original Agreement under which Jensen
Investment Management, Inc. provided advisory services to the Fund was
originally dated as of July 31, 1992 and amended in 1993 and 2001. The Original
Agreement, with all amendments, was approved by the Fund's Board of Directors,
including all of the independent directors, as well as by the Fund's
shareholders in July 2003. The New Agreement is identical to the Original
Agreement except for the effective and termination dates. The New Agreement will
take effect immediately after it is approved by shareholders and will have an
initial term until August 1, 2005. The New Agreement can be renewed for
successive one-year periods, provided its renewal is approved by the Board or by
a majority of the outstanding voting securities (as defined in the Investment
Company Act) of the Fund and, in either event, by the vote cast in person of a
majority of the independent directors.
The terms of the Original and New Agreements are identical. There is no
change in the advisory fees paid to Jensen Investment Management, Inc., which
total 0.50% of average daily net assets annually. The Original Agreement and the
New Agreement both provide that Jensen Investment Management, Inc. will provide
research, analysis, advice and recommendations with respect to the purchase or
sale of securities and the making of investment commitments for the Fund. Both
Agreements also provide that, in the absence of willful misfeasance, bad faith
or gross negligence in the performance of its duties, Jensen Investment
Management, Inc. shall not be liable for errors of judgment or losses related to
its advisory services to the Fund. The Agreements also each provide that they
may be terminated without penalty upon 60 days written notice by the Fund or by
Jensen Investment Management, Inc. The foregoing description of the New
Agreement is qualified in its entirety by reference to Exhibit A.
Board of Directors Deliberations. On January 6, 2004, the Board of
Directors of the Fund held a special board meeting, at which it reviewed the
proposed sale of the controlling interest of Mr. Jensen's shares of Jensen
Investment Management, Inc. back to the firm and considered the proposed Interim
and New Agreements with Jensen Investment Management, Inc. to take effect
following the sale transaction. At the meeting, the Board reviewed materials
furnished by Jensen Investment Management, Inc. and discussed the proposed sale
with Mr. Jensen of Jensen Investment Management, Inc. Mr. Jensen explained that
he was retiring from the day-to-day activities with the Adviser and was selling
his interest in the Adviser back to the Adviser in accordance with the terms of
the a shareholders agreement among the Adviser and all of the Adviser's
shareholders. The Adviser requested that Mr. Jensen be available from time to
time to provide consulting services as necessary. At the Board's request,
including the request of the majority of the Independent Directors, Mr. Jensen
indicated that he would remain on the Fund's Board of Directors as the Chairman
and a director. Under the Investment Company Act, Mr. Jensen will still be
considered an interested director of the Fund. The Board considered and
discussed with Mr. Jensen and other representatives of the Adviser the reasons
why the retirement of Mr. Jensen as an officer of the Fund and the sale of Mr.
Jensen's interest in the Adviser would not have an adverse impact on the Fund.
Mr. Jensen explained that the Fund's existing portfolio management team and
supporting investment professionals were expected to remain with the firm and
will continue to manage the Fund.
In determining the reasonableness of the advisory fees under each of the
Interim Agreement and the New Agreement, the directors considered several
factors, including:
o The nature and quality of services provided to the Fund's
shareholders,
o A comparison of the fee structures of other mutual funds,
o The profitability of the advisory contract for the Adviser,
o Fall-out benefits realized by the Adviser from service as adviser to
the Fund, and
o The existence of economies of scale with respect to the provision of
investment advice to the Fund.
In reviewing the nature and quality of services provided by the Adviser,
the directors examined the performance of the Fund compared to other mutual
funds of the same asset size and with similar investment objectives and against
the appropriate securities indices. Performance over one-, three-, five- and
ten-year periods for the Fund were analyzed. The directors also assessed the
day-to-day management of the Fund, reviewing information provided to them before
the special meeting and at earlier meetings during the past year.
The directors reviewed the overall expense ratio of the Fund, including the
aggregate expenses of the Fund to its net assets, as well as to the Fund's
management fee. The directors reviewed and considered the information from
Lipper Inc. detailing the expense ratios of comparable funds with similar
investment objectives, strategy and size that showed the Fund's overall expenses
and management fee to be among the lowest of its peer group. The directors also
considered the appropriateness of fee breakpoints for the Fund if the assets of
the Fund continued to grow rapidly.
The directors reviewed data related to the profitability of the Adviser and
considered any additional benefits to the Adviser resulting from its
relationship with the Fund. The directors also considered the benefits to
affiliates of the Adviser as the result of its management of the Fund, noting
that the Adviser has no affiliates.
In addition, after reviewing the terms of the Original Agreement and the
Interim Agreement and discussing with the Adviser any potential changes that
might result to the Fund's investment strategy, management and overall
performance due to the retirement of Mr. Jensen the Board, determined that the
Interim Agreement: (1) provided for the same compensation to the Adviser as the
Original Agreement; (2) contained satisfactory terms and conditions in view of
Section 15 of the Investment Company Act and Rule 15a-4 thereunder; and (3)
provided for services of at least equivalent scope and quality as the Original
Agreement.
After considering these and other factors, the directors concluded that
each of the Interim and New Agreements with the Adviser was reasonable for the
Fund and in the best interests of its shareholders. During their deliberations,
the directors requested from the Adviser all information reasonably necessary
for the directors to evaluate the advisory contracts. The independent directors
also met separately outside of the presence of the interested directors to
consider the Interim and New Agreements.
Based on these and other considerations, the Board, including the
independent directors, unanimously approved the Interim Agreement and the New
Agreement, and recommended that shareholders approve the New Agreement.
Required Vote. Provided that a quorum is present, the approval of the New
Agreement requires the affirmative vote of the lesser of: (i) more than 50% of
the outstanding voting securities of the Fund; or (ii) 67% or more of the voting
securities of the Fund present at the Meeting, if the holders of more than 50%
of the Fund's outstanding voting securities are present or represented by proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE TO APPROVE THE NEW AGREEMENT.
OTHER MATTERS:
The Board knows of no other matters to be presented at the Meeting other
than those set forth in this Proxy Statement. If, however, any other business
should properly come before the Meeting, the persons named on the accompanying
proxy card will vote on such matters in accordance with their best judgment.
PART 3 - MORE ON PROXY VOTING:
Record Date
Only shareholders of record of the Fund at the close of business on the
Record Date, January 8, 2004, are entitled to receive notice of the Meeting and
may vote at the Meeting. As of the close of business on January 8, 2004,
82,887,289.082 shares of common stock of the Fund were issued and outstanding.
Each share is entitled to one vote at the Meeting and each fractional share is
entitled to a fractional vote. To the knowledge of the Fund, no person is the
beneficial owner of more than 5% of the Fund's outstanding shares, except as
follows:
Class J Shares
- ---------------------------------- ------------------- ------------------------
Fund Name and No. of Shares Owned Percent of Outstanding
Shareholder Name and Address Shares Owned
- ---------------------------------- ------------------- ------------------------
Charles Schwab & Co., Inc. 37,063,390.881 49.48%
Reinvest Account
Special Custody Account for
the Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
- ---------------------------------- ------------------- ------------------------
National Financial Services LLC 13,260,059.762 17.70%
Custody for the benefit of its
Customers
Attn: Mutual Funds Department,
5th Floor
One World Financial Center
200 Liberty Street
New York, NY 10281-1003
- ---------------------------------- ------------------- ------------------------
Pershing LLC 7,190,623.443 9.60%
Attn: Wing Liang
Mutual Fund Trading Manager
P.O. Box 2052
Jersey City, NJ 07303-2052
- ---------------------------------- ------------------- ------------------------
Class I Shares
- ---------------------------------- ------------------- ------------------------
Fund Name and No. of Shares Owned Percent of Outstanding
Shareholder Name and Address Shares Owned
- ---------------------------------- ------------------- ------------------------
JP Morgan Chase Trust 5,889,000.914 73.78%
For the Benefit of Federal
Reserve Employee
Benefit System Thrift Plan
Attn: Claudette Anthony
3 Chase Metrolich Center,
5th Floor
Brooklyn, NY 11245-0001
- ---------------------------------- ------------------- ------------------------
Charles Schwab & Co., Inc. 1,291,374.160 16.18%
Reinvest Account
Special Custody Account
for the Benefit of
Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA
94104-4122
- ---------------------------------- ------------------- ------------------------
Class R Shares
- ---------------------------------- ------------------- ------------------------
Fund Name and No. of Shares Owned Percent of Outstanding
Shareholder Name and Address Shares Owned
- ---------------------------------- ------------------- ------------------------
Nationwide Trust Company, FSB 204.718 81.03%
& IPO Portfolio Accounting
P.O. Box 182029 Columbus, OH
43218-2029
- ---------------------------------- ------------------- ------------------------
Jensen Investment Management, Inc. 47.912 18.97%
2130 Pacwest Center
1211 SW Fifth Avenue
Portland, OR 97204-3713
- ---------------------------------- ------------------- ------------------------
Voting of Proxies
Whether you expect to be personally present at the Special Meeting or not,
please vote your proxy. You may submit the proxy: (1) by mail, by marking,
signing, dating and returning the enclosed proxy card in the enclosed
postage-paid envelope; (2) by telephone; or (3) by Internet. Properly executed
proxies will be voted as you instruct. If no choice is indicated, proxies will
be voted "FOR" Proposals 1 and 2 as set forth in the Notice and in the
discretion of the persons named as proxies on such matters that may properly
come before the Special Meeting on Wednesday, March 24, 2004 at 5:00 p.m.,
Pacific Time. Any shareholder giving a proxy has the power to revoke it at any
time before the Special Meeting by advising the Secretary of the Fund in writing
(by subsequent proxy or otherwise) of such revocation at any time before it is
voted, or by attending the Special Meeting and voting in person. Attendance by a
shareholder at the Special Meeting does not, in itself, revoke a proxy. If not
so revoked, the shares represented by the proxy will be voted at the Special
Meeting and any adjournments thereof, as instructed.
Quorum
Under the Fund's Bylaws, a quorum of shares will be present at the Special
Meeting if more than 50% of the outstanding shares of the Fund are present in
person or by proxy. All proxies that are duly signed by a shareholder will be
counted towards establishing a quorum, regardless of whether the shareholder has
instructed the proxy as to how to vote, including proxies returned by brokers
for shares held by brokers as to which no voting instructions are indicated
("Broker non-votes"). Broker non-votes and abstentions will have the effect of a
"No" vote on each of the proposals presented in this Proxy Statement because the
required vote is a percentage of the Fund's shares present or outstanding.
If a quorum is not present at the Special Meeting for the Fund, or if a
quorum is present at the Special Meeting but sufficient votes to approve one or
more of the proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose one or more
adjournments of the Special Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares present at the Special Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxy agents will vote FOR the
proposed adjournment all shares that they are entitled to vote with respect to
each item, unless directed to vote AGAINST the item, in which case such shares
will be voted AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this Proxy
Statement prior to such adjournment if sufficient votes have been received and
it is otherwise appropriate.
If you do not expect to attend the Special Meeting,
please sign your Proxy Card promptly and return it in the
enclosed envelope to avoid unnecessary expense and delay.
No postage is necessary.
PART 4 - ADDITIONAL INFORMATION
Service Providers of the Fund
Jensen Investment Management, Inc., 2130 Pacwest Center, 1211 SW Fifth
Avenue, Portland, Oregon, 97204-3721 serves as the Fund's investment adviser.
Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, Wisconsin,
53202 is principal underwriter for the Fund and is authorized to distribute the
Fund's shares pursuant to a Distributor Agreement.
U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee,
Wisconsin 53202 is the Fund's administrator, transfer agent and dividend
disbursing agent.
U.S. Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202 serves as
custodian of the Fund's cash and securities.
Submission of Certain Shareholder Proposals
The Fund is not required to hold annual shareholder meetings. Because the
Fund is not required to hold a regular meeting of shareholders, the anticipated
date of the next shareholders meeting cannot be provided. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to Robert G. Millen,
Secretary of the Fund, c/o U.S. Bancorp Fund Services, LLC, 615 East Michigan
Avenue, Milwaukee, Wisconsin 53202.
Notice to Banks, Broker-Dealers and Voting Trustees and Their Nominees
Please advise the Fund, in care of Robert G. Millen, Secretary of the Fund,
c/o U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the Proxy
Statement you wish to receive in order to supply copies to the beneficial owners
of the respective shares.
Your vote is important. Whether or not you intend to attend the Special
Meeting, please fill in, date, sign and promptly return the enclosed proxy card
in the postage paid return envelope provided or vote by telephone or by
Internet. Your prompt response will help avoid the cost of additional
solicitation. If you have any questions regarding the proxy statement, please
call 1-866-800-4889. Your proxy is revocable at any time before Wednesday, March
24, 2004 at 5:00 p.m., Pacific Time by advising the Secretary of the Fund in
writing (by subsequent proxy or otherwise), or by attending the Special Meeting
and voting in person. Attendance by a shareholder at the Special Meeting does
not, in itself, revoke a proxy. If not so revoked, the shares represented by the
proxy will be voted at the Special Meeting and any adjournments thereof, as
instructed.
By Order of the Board,
---------------------------
Robert G. Millen, Secretary
January 30, 2004
Appendix A
INVESTMENT ADVISORY AGREEMENT
between
THE JENSEN PORTFOLIO, INC.
and
JENSEN INVESTMENT MANAGEMENT, INC.
This Agreement, effective March 24, 2004, is entered into by and between
THE JENSEN PORTFOLIO, INC., an Oregon corporation (the "Fund"), and JENSEN
INVESTMENT MANAGEMENT, INC., an Oregon corporation (the "Adviser").
In consideration of the mutual covenants contained in this Agreement, it is
hereby agreed as follows:
1. The Fund hereby employs the Adviser to act as its investment adviser
and, as such, to manage the investment and reinvestment of the assets of the
Fund in accordance with the Fund's investment objectives, policies and
limitations, and to administer the Fund's affairs to the extent requested by the
Fund, subject to the supervision of the Board of Directors of the Fund, for the
period and upon the terms set forth in this Agreement. Investment of funds shall
be subject to all applicable restrictions of the Articles of Incorporation and
Bylaws of the Fund as may, from time to time, be in force and all applicable
provisions of the Investment Company Act of 1940, or any successor statute, as
amended from time to time (the "1940 Act").
The Adviser agrees to: (a) furnish the investment advisory services
specified above; (b) furnish, for the use of the Fund, office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Fund; and (c) permit any of its officers and employees to
serve, without compensation, as directors or officers of the Fund if elected to
such positions. The Adviser shall pay the salaries and fees, if any, of all
officers of the Fund and of all directors of the Fund who are "interested
persons" (as defined in the 1940 Act) of the Fund or of the Adviser and of all
personnel of the Fund or Adviser performing services relating to research,
statistical and investment activities.
The Adviser shall, on behalf of the Fund, maintain the Fund's records and
books of account (other than those maintained by the Fund's transfer agent,
registrar, custodian and shareholder servicing agent). All books and records so
maintained shall be the property of the Fund and, upon request, the Adviser
shall surrender to the Fund any of such books and records requested.
The investment policies and all other actions of the Fund are, and shall at
all times be, subject to the control and direction of the Board of Directors of
the Fund. In acting under this Agreement, the Adviser shall be an independent
contractor and shall not be an agent of the Fund.
With respect to services performed in connection with the purchase and sale
of portfolio securities on behalf of the Fund, the Adviser may place transaction
orders for the Fund's account with brokers or dealers selected by the Adviser.
In connection with the selection of such brokers or dealers and the placing of
such orders, the Adviser shall not be deemed to have acted unlawfully or to have
breached any duty, created by this Agreement or otherwise, solely by reason of
its having caused the Fund to pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Adviser has determined in good faith that the net price to the Fund of such
transaction was reasonable in relation to the net price for comparable
transactions engaged in by similarly situated investors.
2. For the services and facilities to be furnished, the Fund shall pay to
the Adviser monthly compensation equal to an annual rate of 0.50 percent of the
Fund's average daily net assets. The daily net asset value of the Fund shall be
computed in the manner and at the times set forth in the Fund's Articles of
Incorporation. On any day that the Fund's net asset value is not calculated, the
net asset value for such day shall be deemed to be the net asset value as of the
close of business on the last day on which such calculation was made for the
purposes of the foregoing computations. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued daily, and the
amounts of the daily accruals shall be paid monthly. Such calculations shall be
made by applying 1/365th of the annual rate to the Fund's net asset value each
day determined as of the close of business on that day.
For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year, respectively.
The services of the Adviser under this Agreement are not to be deemed
exclusive, and the Adviser shall be free to render similar services or other
services to others, including other investment companies, so long as its
services under this Agreement are not impaired by the delivery of such services.
3. The Fund shall pay all of its expenses other than those expressly stated
to be payable by the Adviser. The expenses payable by the Fund shall include,
without limitation: (a) interest and taxes; (b) brokerage fees and commissions
and other costs in connection with the purchase or sale of portfolio securities;
(c) fees and expenses of its directors other than those who are "interested
persons" (as defined in the 1940 Act) of the Fund or the Adviser; (d) legal and
audit expenses; (e) transfer agent expenses and expenses for servicing
shareholder accounts; (f) expenses of computing the net asset value of the
shares of the Fund and the amount of its dividends; (g) custodian fees and
expenses; (h) administrative fees and expenses; (i) fees and expenses related to
the registration and qualification of the Fund and its shares for distribution
under state and federal securities laws; (j) expenses of printing and mailing
reports, notices and proxy materials to shareholders of the Fund; (k) the cost
of issuing share certificates, if certificates are issued; (l) expenses for
reports, membership dues and other dues in the Investment Company Institute or
any similar trade organization; (m) expenses of preparing and typesetting
prospectuses; (n) expenses of printing and mailing prospectuses sent to existing
shareholders; (o) such nonrecurring expenses as may arise, including expenses
incurred in actions, suits or proceedings to which the Fund is a party and the
legal obligation that the Fund may have to indemnify its officers and directors
in respect thereto; (p) the organizational costs of the Fund and other Fund
expenses that are capitalized; (q) insurance premiums; (r) expenses of
maintaining the Fund's corporate existence, providing investor services and
corporate reports, and holding corporate meetings; and (s) such other expenses
as the directors of the Fund may, from time to time, determine to be properly
payable by the Fund.
The Adviser may, but has no obligation to, pay any or all of the expenses
of the Fund that are payable by the Fund. In such event, the Fund shall promptly
reimburse the Adviser for all such expenses so paid by the Adviser.
4. In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser, the Adviser shall not be subject to liability to the Fund or to any
shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services under this Agreement or for any losses that may be
sustained by the Fund or its shareholders in the purchase, holding or sale of
any security.
5. Subject to all applicable statutes and regulations, it is understood
that directors, officers or agents of the Fund are or may be interested in the
Adviser as officers, directors, agents, shareholders or otherwise and that the
officers, directors, shareholders and agents of the Adviser may be interested in
the Fund as officers, directors, agents, shareholders or otherwise.
6. The Adviser shall have the right to grant the use of a name similar to
the Fund's name to another investment company or business enterprise without the
approval of the Fund's shareholders and shall have the right to withdraw from
the Fund the use of the Fund's name. However, the Adviser may not withdraw from
the Fund the use of the Fund's name without submitting to the Fund's
shareholders the question of whether the shareholders wish the Fund to continue
this Agreement.
7. This Agreement became effective on March 24, 2004 and shall continue in
full force and effect until August 1, 2005 unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved at
least annually in the manner required by the 1940 Act.
This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time without payment of any penalty by
the Fund or by the Adviser on 60 days' written notice to the other party. The
Fund may effect termination by action of its Board of Directors or by vote of a
majority of the outstanding shares of the common stock of the Fund (as defined
in the 1940 Act), accompanied by the appropriate notice. In the event of the
death or disability of any of the principal officers of the Adviser, or if, for
any other reason, there is a material change in the management or ownership of
the Adviser, the Board of Directors of the Fund shall be required to meet as
soon as practicable after such event to consider whether another investment
adviser should be selected for the Fund. If the Fund's Board determines, at such
meeting, that this Agreement should be terminated, this Agreement may be
terminated without the payment of any penalty and without any required prior
notice; provided, however, that any change in the ownership of the Adviser that
constitutes an assignment (within the meaning of the 1940 Act) shall require the
automatic termination of this Agreement.
This Agreement may be terminated at any time by the Board of Directors of
the Fund or by vote of a majority of the outstanding shares of common stock of
the Fund, and such termination shall be without the payment of any penalty and
without any required prior notice, if it shall have been established by a court
of competent jurisdiction that the Adviser or any officer or director of the
Adviser has taken any action that results in a breach of the covenants of the
Adviser set forth in this Agreement. In addition, the Adviser agrees to inform
the Board of Directors of the Fund if the Adviser learns that it or any of its
officers or directors has taken any action that results in a breach of the
Adviser's covenants set forth in this Agreement. The Board of Directors of the
Fund shall meet as soon as practicable after it receives such notification to
consider whether another investment adviser should be selected for the Fund. If
the Fund's Board determines, at such meeting, that this Agreement should be
terminated, this Agreement may be terminated without the payment of any penalty
and without any required prior notice.
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation described in Section
2 earned prior to such termination.
8. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not thereby be affected.
9. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
10. If any action or suit is instituted to enforce or interpret this
Agreement, the prevailing party shall be entitled to recover from the other
party, in addition to all other rights and remedies, the prevailing party's
reasonable attorney fees at trial and on appeal.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed as of the date first written above.
THE JENSEN PORTFOLIO, INC. JENSEN INVESTMENT MANAGEMENT, INC.
By ___________________________ By ________________________________
President President
- --------------------------------------------------------------------------------
[FRONT OF CARD] THREE EASY WAYS TO VOTE YOUR PROXY
------------------------ -------------------------- ---------------------
To vote by Telephone To vote by Internet To vote by Mail
1) Read the Proxy 1) Read the Proxy 1) Read the Proxy
Statement and Statement and Statement.
have this Proxy have this Proxy
card at hand. card at hand. 2) Check the
appropriate
2) Call 1-800-690-6903. 2) Go to: www.proxyweb.com boxes on the
reverse side.
3) Enter the 14-digit 3) Enter the 14-digit 3) Sign and date the
number at left number at left Proxy card.
and follow the simple and follow the simple
instructions. instructions. 4) Return the Proxy
card in the
envelope provided.
------------------------ -------------------------- ---------------------
IF YOU VOTE BY TELEPHOOR INTERNET, DO NOT MAIL YOUR CARD.
**** CONTROL NUMBER: 999 999 999 999 99****
THE JENSEN PORTFOLIO, INC.. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF THE JENSEN PORTFOLIO, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS -- March 24, 2004
The undersigned hereby appoints as proxies Gary W. Hibler and Robert F. Zagunis,
and each of them (with power of substitution), to vote all shares of the
undersigned in the Fund at the Special Meeting of Shareholders to be held at
5:00 p.m. Pacific Time, on March 24, 2004, at the Multnomah Athletic Club, 1849
SW Salmon Street, Portland, Oregon 97207-0390 and any adjournment(s) thereof
("Meeting"), with all the power the undersigned would have if personally
present.
Date ______________________________, 2004
------------------------------------------------------------
| |
------------------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
(Sign in the Box)
Please sign exactly as name appears at left. If shares are
held in the name of joint owners, each should sign.
Attorneys-in-fact, executors, administrators, etc., should
give full title. If shareholder is a corporation or
partnership, please sign in full corporate or partnership
name by authorized person.
If you have any questions regarding this proxy, please call 1-866-800-4889.
- --------------------------------------------------------------------------------
[BACK OF CARD]
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals, and to grant discretionary power to vote upon such other
business as may properly come before the Meeting.
Please fill in box(es) as shown using black
or blue ink or number 2 pencil. |X|
PLEASE DO NOT USE FINE POINT PENS.
1. To approve the election of a new director, FOR AGAINST ABSTAIN
Thomas L.Thomsen, Jr., as an independent [ ] [ ] [ ]
director.
2. To approve the Proposed Investment Advisory FOR AGAINST ABSTAIN
Agreement. [ ] [ ] [ ]
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING
BY PHONE OR INTERNET, PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
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