PRELIMINARY Crescent Fund
COPY 1999 Avenue of the Stars, Ste.1950
Los Angeles, CA 90067
Notice of Special Meeting
To the Shareholders of Crescent Fund, a portfolio of Professionally
Managed Portfolios, for a Special Meeting of the Fund to be held February 29,
1996:
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of Crescent Fund (the "Fund"), a separate series of Professionally
Managed Portfolios (the "Trust"), will be held February 29, 1996 at 10:00 a.m.,
Pacific Time, at the offices of the Fund set forth above. At the Meeting, you
and the other shareholders of the Fund will be asked to consider and vote:
1. To approve or disapprove a new investment advisory agreement between
the Fund and First Pacific Advisors, Inc., ("FPA") pursuant to which
FPA will act as adviser with respect to the assets of the Fund, to
become effective upon FPA's planned employment of Mr. Steven Romick,
currently co-owner of Crescent Management ("Crescent"), the Adviser to
the Fund.
2. 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 31, 1996 are
entitled to notice of, and to vote at, the Meeting. Your attention is called to
the accompanying Proxy Statement. Regardless of whether you plan to attend the
Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that a quorum will be present and a maximum number of shares may be voted. If
you are present at the Meeting, you may change your vote, if desired, at that
time.
By Order of the Board of Trustees
Robin Berger
Secretary
February 15, 1996
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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 [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for use of the Commission [ ]
Definitive Proxy Statement only (as permitted by Rule 14a-6(e)(2) [ ] Definitive
Additional Materials [ ] Soliciting Material Pursuant to Sec. 240-14a-11(C) or
240.14a-12
Professionally Managed Portfolios
(Name of Registrant as Specified In Its Charter)
Professionally Managed Portfolios
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(1), 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
Shares of beneficial interest, no par value, Crescent Fund series
2) Aggregate number of securities to which transaction applies
1,673,906.265
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): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total Fee Paid: N/A
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
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[ ] 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 date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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Crescent Fund
1999 Avenue of the Stars, Ste.1950
Los Angeles, CA 90067
PROXY STATEMENT
To the Shareholders of Crescent Fund, a portfolio of Professionally
Managed Portfolios, for a Special Meeting of the Fund to be held February 29,
1996:
This Proxy Statement is furnished by Crescent Fund (the "Fund") to its
shareholders and on behalf of the Board of Trustees of Professionally Managed
Portfolios (the "Trust") of which the Fund is a portfolio, in connection with
the Fund's solicitation of voting instructions for use at a Special Meeting of
Shareholders(the "Meeting") to be held on February 29, 1996, at 10:00 a.m.,
Pacific Time, at the offices of the Fund listed above for the purposes set forth
below and in the accompanying Notice of Special Meeting. The approximate mailing
date of this Proxy Statement is February 15, 1996. At the Meeting the
shareholders of the Fund will be asked:
(1) To approve or disapprove a new investment advisory
agreement between the Fund and First Pacific Advisors,
Inc. ("FPA") pursuant to which FPA will act as adviser
with respect to the assets of the Fund, to become
effective upon FPA's planned employment of Mr. Steven
Romick, currently Chairman, Chief Financial Officer and
co-owner of Crescent Management, the Fund's current
investment adviser (the "Adviser"); and
(2) To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The Fund will request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of shares of the
Fund held of record by such persons. The Adviser may reimburse such
broker-dealer firms, custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with such proxy solicitation. In addition to the
solicitation of proxies by mail, officers and employees of the Fund or the
Trust, without additional compensation, may solicit proxies in person or by
telephone. The costs associated with this solicitation and the Meeting will be
borne by the Adviser and not by the Fund or the Trust.
Shareholders of the Fund at the close of business on January 31, 1996
will be entitled to be present and vote at the Meeting. As of that date, there
were 1,673,906.265 shares of the Fund
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outstanding and entitled to vote, representing total net assets
of approximately $21,169,891.73.
To the knowledge of the Fund's management, as of January 31, 1996 the
officers and trustees of the Trust and the Adviser own, as a group, less than 1%
of the shares of the Fund. Principals of the Adviser, however, have the ability
to direct the voting of shares in the Crescent Multi-Advisor Fund, L.P., which
constitute 14.31% of the Fund's outstanding shares as of the record date, and it
is expected that such shares will be voted in favor of the proposal. Except for
shares held by this partnership, to the knowledge of Fund management, the
officers and trustees of the Trust and Adviser own less than 1% of the shares of
the Fund.
To the knowledge of the Fund's management, as of January 31, 1996, the
only other persons owning beneficially more than 5% of the outstanding shares of
the Fund were as follows:
D.I. Sofro, Trustee, D. Sofro Trust 14.31%
Maple Group, A. Kallis, Gen Partner 6.22%
The Fund is a portfolio or "series" of Professionally Managed
Portfolios (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts. The Trust is registered, as an open-end
management investment company under the Investment Company Act of 1940. The
Fund's investment adviser is Crescent Management, 1999 Avenue of the Stars, Ste.
1950, Los Angeles, CA 90067. The Fund's principal underwriter is First Fund
Distributors, Inc., and its administrator is Southampton Investment Management
Company, Inc. both with offices at 4455 East Camelback, Suite 261E, Phoenix,
Arizona 85018.
The persons named in the accompanying proxy will vote in each case as
directed in the proxy, but in the absence of such direction, they intend to vote
FOR the proposal and may vote in their discretion with respect to other matters
not now known to the Board of Trustees that may be presented to the Meeting.
APPROVAL OR DISAPPROVAL OF INVESTMENT
ADVISORY AGREEMENT BETWEEN
THE FUND AND FIRST PACIFIC ADVISORS, INC.
Background
General. The Meeting has been called for the purpose of
considering a new advisory agreement for the Fund as a result of
a proposed transaction (the "Proposed Transaction") whereby First
Pacific Advisors, Inc., ("FPA"), will become investment adviser
to the Fund upon the employment by FPA of Mr. Steven Romick,
currently Chairman, Chief Financial Officer and co-owner of
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Crescent Management, (the "Adviser"), which has served as investment adviser to
the Fund since its inception on June 2, 1993. Shareholders are being asked to
approve a new advisory agreement (the "New Advisory Agreement") embodying the
same terms and fees with FPA as exist under the current investment advisory
agreement with the Adviser. The Trust's Board of Trustees at an in-person
meeting held on January 19, 1996 approved the New Advisory Agreement, subject to
approval by the shareholders of the Fund, to become effective on the date of
such approval.
Existing Advisory Agreement
The Adviser currently serves as adviser for the Portfolio under an
investment advisory agreement (the "Existing Advisory Agreement") dated June 2,
1993. The Board of Trustees of the Fund, including a majority of the
"non-interested" Trustees, most recently approved continuation of the Existing
Advisory Agreement on May 19, 1995. Under the Existing Advisory Agreement, the
Adviser is entitled to receive from the Fund a monthly advisory fee based upon
the average daily net assets of the Fund at the annual rate of 1.00%. During the
fiscal year ended March 31, 1995, the Fund paid investment advisory fees of
$132,616 to the Adviser.
New Advisory Agreement
Except for different effective and termination dates, the terms of the
New Advisory Agreement with FPA are identical in all respects to the terms of
the Existing Advisory Agreement. A form of the New Advisory Agreement is
attached to this Proxy Statement as Exhibit A, and the description set forth in
this Proxy Statement of the New Advisory Agreement is qualified in its entirety
by reference to Exhibit A.
Under the New Advisory Agreement, FPA will provide certain investment
advisory services to the Fund, including deciding what securities will be
purchased and sold by the Portfolio, when such purchases and sales are to be
made, and arranging for such purchases and sales, all in accordance with the
provisions of the Investment Company Act of 1940, as amended (the "Investment
Company Act") and any rules thereunder, the governing documents of the Trust,
the fundamental policies of the Fund, as reflected in its registration
statement, and any policies and determinations of the Board of Trustees of the
Trust.
As compensation for its services to the Fund under the New Advisory
Agreement, FPA will be entitled to receive from the Fund fees calculated at the
same rate as those charged under the Existing Advisory Agreement described
above. The New Advisory Agreement will continue in effect for two years from its
effective date, and will continue in effect thereafter for successive annual
periods, provided its continuance is
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specifically approved at least annually by (1) a majority vote, cast in person
at a meeting called for that purpose, of the Trust's Board of Trustees or (2) a
vote of the holders of a majority of the outstanding voting securities (as
defined in the Investment Company Act and the rules thereunder) of the Fund, and
(3) in either event by a majority of the Trustees who are not parties to the New
Advisory Agreement or interested persons of the Trust or of any such party. The
New Advisory Agreement provides that it may be terminated at any time, without
penalty, by either party upon 60 days' written notice, provided that such
termination by the Fund shall be directed or approved by a vote of the Trustees
of the Trust, or by a vote of holders of a majority of the shares of the Fund.
FPA will provide, at its expense, personnel to serve as officers of the
Fund who are affiliated persons of the Adviser, and office space, facilities and
equipment for carrying out its duties under the New Advisory Agreement. All
other expenses incurred in the operation of the Fund will be borne by the Fund.
Expenses incurred by the Fund include brokerage commissions on portfolio
transactions, fees and expenses of trustees not affiliated with FPA, taxes,
transfer agent fees, dividend disbursement and reinvestment and custodian fees,
auditing and legal fees, the cost of printing and mailing reports and proxy
materials to shareholders, expense of trade association memberships, and fees of
the Fund's Administrator.
The New Advisory Agreement includes a provision for a reduction in the
fee paid to FPA in the amount by which certain defined operating expenses of the
Fund (including such advisory fee) for any fiscal year exceed the limits set by
applicable regulations in states where the Fund's shares are registered or
qualified for sale. Operating expenses, as defined in the New Advisory
Agreement, exclude (I) interest, (ii) taxes, (iii) expenditures for brokerage
services, (iv) any extraordinary expenses and (v) sales charges and any
distribution fees.
The New Advisory Agreement provides that FPA shall have no liability to
the Fund or any shareholders of the Fund for any act or omission in the course
of or in connection with rendering services under the Agreement, including any
error of judgment, mistake of law or any loss arising out of any investment,
except for liability resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of FPA of its duties under the New
Advisory Agreement ("Disabling Conduct"), and except to the extent specified in
Section 36(b) of the Investment Company Act with respect to loss resulting from
the breach of fiduciary duty with respect to receipt of compensation for
services. The New Advisory Agreement provides that the Fund shall indemnify FPA
and its employees, officers and directors from any liability arising from the
Fund's conduct under the New
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Advisory Agreement, except for Disabling Conduct, to the extent permitted by the
Fund's governing documents and applicable law.
Background of the Transaction
The Adviser has been in the investment advisory business since 1990,
and currently provides investment advisory services to individual and
institutional accounts with a value in excess of $90,000,000. The Adviser was
founded and is co-owned by Mr. Steven Romick and Mr. Matthew Kallis. Messrs.
Romick and Kallis recently determined not to continue the business of the
Adviser and it is contemplated that in the near future, the Adviser will cease
business operations. As a consequence of the decision not to continue the
Advisor's business, Mr. Romick and FPA reached an agreement where by FPA would
employ Mr. Romick and FPA also agreed to become investment adviser to the Fund
under the New Agreement. It is contemplated that Mr. Romick will continue to be
responsible for management of the Fund's portfolio. No payment or other
compensation was provided to the Adviser or Mr. Romick in consideration of FPA's
agreement to become investment adviser to the Fund.
Information about FPA
FPA, together with its predecessors, has been in the investment
advisory business since 1954. Presently, FPA manages assets of approximately
$4.0 billion for five investment companies, including one closed-end investment
company, and more than 50 institutional accounts. FPA is an indirect wholly
owned subsidiary of United Asset Management Corporation ("UAM"), a New York
Stock Exchange listed holding company principally engaged, through affiliated
firms, in providing institutional investment management and acquiring
institutional investment management firms.
FPA's principal executive officers are shown below. The address of
each, as it relates to his duties at FPA, is 11400 West Olympic Boulevard, Los
Angeles, CA 90064.
George H. Michaelis Chairman, Chief Executive Officer
and Chief Investment Officer
Christopher Linden President
William M. Sams Executive Vice President
Julio J. dePuzo, Jr. Executive Vice President,
Chief Financial Officer,
Treasurer and Chief
Administrative Officer
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Trustees' Considerations
The Board of Trustees of the Trust believe that the terms of the New Advisory
Agreement are fair to, and in the best interest of, the Fund and its
shareholders. The Board of Trustees, including all of the non-interested
Trustees, recommend approval by the shareholders of the New Agreement between
FPA and the Fund. In making this recommendation, the Trustees carefully
evaluated the experience of FPA in providing investment advisory services to
investment companies, the quality of services FPA is expected to provide to the
Fund, and have given careful consideration to all factors deemed to be relevant
to the Fund, including, but not limited to: (1) the desire of FPA to retain the
services of Mr. Romick and provide continuity of management for the Fund; (2)
the performance of the Fund since commencement of operations; (3) the nature and
quality of the services expected to be rendered to the Fund by FPA; (4) that the
compensation payable to FPA by the Fund under the proposed New Advisory
Agreement will be at the same rate as the compensation now payable by the Fund
to the Adviser under the Existing Advisory Agreement; (5) that the terms of the
Existing Advisory Agreement will be unchanged under the New Advisory Agreement
except for different effective and termination dates; (6) the history,
reputation, qualification and background of FPA, as well as the qualifications
of their senior personnel and the firm's financial condition; (7) the Fund's
investment performance record; (8) the benefits expected to be realized as a
result of the Fund's association with FPA, including the resources of FPA that
would be available to the Fund; and (9) other factors deemed relevant.
The Adviser has advised the Board of Trustees that it expects that
there will be no diminution in the scope and quality of advisory services
provided to the Fund as a result of the New Agreement. Accordingly, the Board of
Trustees believes that the Fund should receive investment advisory services
under the New Advisory Agreement equal or superior to those it currently
receives under the Existing Advisory Agreement, at the same fee levels.
Recommendation and Required Vote
At the Meeting, Shareholders of the Fund will vote on the proposed New
Advisory Agreement. The Board of Trustees of the Fund recommend that the
shareholders approve the New Advisory Agreement. The affirmative vote of the
holders of a majority of the outstanding shares of each of the Fund is required
to approve the New Advisory Agreement. "Majority" for this purpose under the
Investment Company Act means the lesser of (I) 67% of the shares represented at
the meeting if more than 50% of such outstanding shares are represented, or (ii)
more than 50% of such outstanding shares. Abstentions will count as votes
present at
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the Meeting. Broker non-votes, however, will not count as votes
present.
THE BOARD OF TRUSTEES OF THE FUND RECOMMEND THAT SHAREHOLDERS APPROVE
THE NEW ADVISORY AGREEMENT WITH THE ADVISER.
Additional Information on the Fund and the Adviser
Mr. Steven J. Paggioli, President and Trustee of the Trust, Mr.
Robert H. Wadsworth, Vice President of the Trust, and Mr. Eric
Banhazl, Treasurer of the Trust are co-owners of Southampton
Investment Management Company, is the administrator of the Fund.
Under its administration agreement, the Fund pays ICAC a fee at
the following annual rates based on the average net assets of the
Fund:
average net assets fee or fee rate
Under $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 million to $150 million 0.15%
Over $150 million 0.05%
No other officer or Trustee of the Trust has had any direct or indirect interest
in any transaction with the Fund, FPA or the Adviser. In addition, no officer or
Trustee has had such an interest in any proposed transaction with any of the
above entities. No officer or Trustee of the Trust holds any position with the
Adviser or has any direct or indirect interest in FPA or its affiliates.
GENERAL INFORMATION
Other Matters to Come Before the Meeting
The Fund's management knows of no matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
Shareholder Proposals
The Meeting is a special meeting of shareholders. The Fund is not
required to, nor does either intend to, hold regular annual meetings of its
shareholders. If such a meeting is called, any shareholder who wishes to submit
a proposal for consideration at the meeting should submit the proposal promptly
to the Fund.
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Reports to Shareholders
The Fund will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the Fund, and the most recent Semi-Annual Report
succeeding such Annual Report, if any, on request. Requests for such reports
should be directed to the Fund at the address and telephone shown on the first
page of this proxy statement or to the Fund's Administrator at (818) 852-1033
or(212) 633-9700.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Robin Berger
Secretary
February , 1996
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Exhibit A
PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of March, 1996 by and between
PROFESSIONALLY MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust
and FIRST PACIFIC ADVISORS, INC., a California corporation (the "Adviser").
WITNESSETH:
WHEREAS, a series of the Trust having separate assets and liabilities
has been created entitled the CRESCENT FUND (the "Fund"); and
WHEREAS, it is therefore desirable to have an investment Advisory
agreement (i.e., this Agreement) relating to the Fund, which agreement will
apply only to this Fund;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and among the parties hereto as
follows:
l. In General
The Adviser agrees, all as more fully set forth herein, to act as investment
adviser to the Trust with respect to the investment of the assets of the Fund
and to supervise and arrange the purchase and sale of securities held in the
portfolio of the Fund.
2. Duties and Obligations of the Adviser with respect to
Investment of Assets of the Fund.
(a) Subject to the succeeding provisions of this section and subject to
the direction and control of the Board of Trustees of the Trust, the Adviser
shall:
(I) Decide what securities shall be purchased or sold by the
Trust with respect to the Fund and when; and
(ii) Arrange for the purchase and the sale of securities held
in the portfolio of the Fund by placing purchase and sale orders for the Trust
with respect to the Fund.
(b) Any investment purchases or sales made by the Adviser
shall at all times conform to, and be in accordance with, any
requirements imposed by: (l) the provisions of the 1940 Act and
of any rules or regulations in force thereunder; (2) any other
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applicable provisions of law; (3) the provisions of the Declaration of Trust and
By-Laws of the Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the fundamental
policies of the Trust relating to the Fund, as reflected in the Trust's
registration statement under the 1940 Act (including by reference the Statement
of Additional Information) as such registration statement is amended from time
to time, or as amended by the shareholders of the Fund.
(C) The Adviser shall give the Trust the benefit of its best judgment
and effort in rendering services hereunder, but the Adviser shall not be liable
for any loss sustained by reason of the purchase, sale or retention of any
security whether or not such purchase, sale or retention shall have been based
on its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, if such purchase, sale or retention
shall have been made and such other individual, firm or corporation shall have
been selected in good faith. Nothing herein contained shall, however, be
construed to protect the Adviser against any liability to the Trust or its
security holders by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Adviser or any
affiliated person (as defined in the 1940 Act) of the Adviser from acting as
investment adviser or manager and/or principal underwriter for any other person,
firm or corporation and shall not in any way limit or restrict the Adviser or
any such affiliated person from buying, selling or trading any securities for
its or their own accounts or the accounts of others for whom it or they may be
acting, provided, however, that the Adviser expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(e) It is agreed that the Adviser shall have no responsibility or
liability for the accuracy or completeness of the Trust's Registration Statement
under the 1940 Act or the Securities Act of 1933 except for information supplied
by the Adviser for inclusion therein. The Trust may indemnify the Adviser to the
full extent permitted by the Trust's Declaration of Trust.
3. Broker-Dealer Relationships
The Adviser is responsible for decisions to buy and sell securities for the
Fund, broker-dealer selection, and negotiation of brokerage commission rates.
The Adviser's primary consideration in effecting a securities transaction will
be
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execution at the most favorable price. In selecting a broker-dealer to execute
each particular transaction, the Adviser will take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less favorable than
that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered. Subject
to such policies as the Board of Trustees of the Trust may determine, 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 that provides brokerage or research
services to the Adviser an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Trust. The Adviser is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers or
dealers who also provide research or statistical material, or other services, to
the Trust, the Adviser, or any affiliate of either. Such allocation shall be in
such amounts and proportions as the Adviser shall determine, and the Adviser
shall report on such allocations regularly to the Trust, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
The Adviser is also authorized to consider sales of shares as a factor in the
selection of brokers or dealers to execute portfolio transactions, subject to
the requirements of best execution, i.e., that such brokers or dealers are able
to execute the order promptly and at the best obtainable securities price.
4. Allocation of Expenses
The Adviser agrees that it will furnish the Trust, at the Adviser's expense,
with office space and facilities, equipment and clerical personnel necessary for
carrying out its duties under this Agreement. The Adviser will also pay all
compensation of any Trustees, officers and employees of the Trust who are
affiliated persons of the Adviser. All operating costs and expenses relating to
the Fund not expressly assumed by the Adviser under this Agreement shall be paid
by the Trust from the assets of the Fund, including, but not limited to (I)
interest and taxes; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Trust's Trustees other than those affiliated
with the Adviser or the Manager; (v) legal
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and audit expenses; (vi) fees and expenses of the Trust's custodian, shareholder
servicing or transfer agent and accounting services agent; (vii) expenses
incident to the issuance of the Fund's shares, including issuance on the payment
of, or reinvestment of, dividends; (viii) fees and expenses incident to the
registration under Federal or state securities laws of the Trust or the shares
of the Fund; (ix) expenses of preparing, printing and mailing reports and
notices and proxy material to shareholders of the Trust; (x) all other expenses
incidental to holding meetings of the Trust's shareholders; (xi) dues or
assessments of or contributions to the Investment Company Institute or any
successor; (xii) such non-recurring expenses as may arise, including litigation
affecting the Trust and the legal obligations which the Trust may have to
indemnify its officers and Trustees with respect thereto; and (xiii) all
expenses which the Trust or the Fund agrees to bear in any distribution
agreement or in any plan adopted by the Trust and/or a Fund pursuant to Rule
12b-1 under the Act.
5. Compensation of the Adviser
(a) The Trust agrees to pay the Adviser and the Adviser agrees to accept as
full compensation for all services rendered by the Adviser hereunder, an annual
management fee, payable monthly and computed on the value of the net assets of
the Fund as of the close of business each business day at the annual rate of
1.00% of such net assets.
(b) In the event the expenses of the Fund (including the fees of the
Adviser and amortization of organization expenses but excluding interest, taxes,
brokerage commissions, extraordinary expenses and sales charges and any
distribution fees) for any fiscal year exceed the limits set by applicable
regulations of state securities commissions where the Fund is registered or
qualified for sale, the Adviser will reduce its fees by the amount of such
excess. Any such reductions are subject to readjustment during the year. The
payment of the advisory fee at the end of any month will be reduced or postponed
or, if necessary, a refund will be made to the Fund so that at no time will
there be any accrued but unpaid liability under this expense limitation.
6. Duration and Termination
(a) This Agreement shall go into effect on the effective date of the
Post-Effective Amendment of the Registration Statement of the Trust covering the
shares of the Fund and shall, unless terminated as hereinafter provided,
continue in effect for a period of two years from that date, and thereafter from
year to year, but only so long as such continuance is specifically approved at
least annually by the Trust's Board of Trustees, including the vote of a
majority of the Trustees who are not
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parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party cast in person at a meeting called for the purpose of voting
on such approval, or by the vote of the holders of a "majority" (as so defined)
of the outstanding voting securities of the Fund and by such a vote of the
Trustees.
(b) This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Trust sixty (60) days' written notice (which notice may
be waived by the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Adviser sixty (60) days' written notice (which notice
may be waived by the Adviser), provided that such termination by the Trust shall
be directed or approved by the vote of a majority of all of its Trustees in
office at the time or by the vote of the holders of a majority (as defined in
the 1940 Act) of the voting securities of the Trust at the time outstanding and
entitled to vote. This Agreement shall automatically terminate in the event of
its assignment (as so defined).
7. Agreement Binding Only on Fund Property
The Adviser understands that the obligations of this Agreement are not binding
upon any shareholder of the Trust personally, but bind only the Trust's
property; the Adviser represents that it has notice of the provisions of the
Trust's Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust. This agreement has been executed by or with reference
to any Trustee in such person's capacity as a Trustee, and the Trustees shall
not be personally liable hereon.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
be executed by duly authorized persons and their seals to be hereunto affixed,
all as of the day and year first above written.
PROFESSIONALLY MANAGED PORTFOLIOS
By
ATTEST:_____________________
FIRST PACIFIC ADVISORS, INC.
By
13
<PAGE>
ATTEST:__________________________
ATTEST:
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14
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PROXY
CRESCENT FUND
SERIES OF PROFESSIONALLY MANAGED PORTFOLIOS
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 29, 1996
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Steven Romick, Eric Banhazl
and George Sapp, and each of them, as proxies of the undersigned, each with the
power to appoint his substitute, for the Special Meeting of Shareholders of
Crescent Fund (the "Fund"), a separate series of Professionally Managed
Portfolios (the "Trust"), to be held on February 29, 1996 at the offices of the
Fund, 1999 Avenue of the Start, Suite 950, Los Angeles, CA 90067 10:00 a.m., or
at any and all adjournments thereof (the "Meeting"), to vote, as designated
below, all shares of the Fund, held by the undersigned at the close of business
on January 31, 1996. Capitalized terms used without definition have the meanings
given to them in the accompanying Proxy Statement.
A SIGNED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL LISTED
BELOW UNLESS YOU HAVE SPECIFIED OTHERWISE. PLEASE SIGN, DATE AND RETURN THIS
PROXY PROMPTLY. YOU MAY VOTE ONLY IF YOU HELD SHARES IN THE FUND AT THE CLOSE OF
BUSINESS ON JANUARY 31, 1996. YOUR SIGNATURE AUTHORIZES THE PROXIES TO VOTE IN
THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING, INCLUDING WITHOUT LIMITATION ALL MATTERS INCIDENT TO THE CONDUCT OF THE
MEETING.
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<PAGE>
1. Approval of the New Advisory Agreement between the First
Pacific Advisors, Inc. and the Fund:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Dated: ______________, 1996
-----------------------------------
Signature
-----------------------------------
Title (if applicable)
-----------------------------------
Signature (if held jointly)
-----------------------------------
Title (if applicable)
Please sign exactly as name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder should sign.
A1-2
