BRIDGES INVESTMENT FUND, INC.
256 Durham Plaza
8401 West Dodge Road
Omaha, Nebraska 68114
402-397-4700
January 22, 1996
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND
PROXY STATEMENT
To the Shareholders of
Bridges Investment Fund, Inc.
The Annual Meeting of the shareholders of Bridges Investment Fund, Inc., a
Nebraska corporation, will be held at the office of the corporation in the City
of Omaha, State of Nebraska, at 256 Durham Plaza, 8401 West Dodge Road, on
February 20, 1996, at 11:00 a.m., Omaha Time, for the following purposes:
1. To elect a Board of eleven (11) Directors, refer to Section 1 below:
2. To approve or reject the continuance of the investment advisory
contract, continuing the employment of Bridges Investment Counsel,
Inc. as investment adviser to the Fund for the year ending April 17,
1997, as more fully described in Section 2 below;
3. To approve or reject the ratification of the selection of Arthur
Andersen LLP as independent auditors for the Fund for the year
ending December 31, 1996, see Section 3 below;
4. To transact such other business as may properly come before the
meeting.
This proxy is solicited by the Board of Directors, to be voted at the Annual
Meeting or any adjournment thereto. The cost of the Proxy solicitations will be
paid by the investment adviser for the Fund. Additional solicitation may be
made by mail, personal interview, or telephone and telegraph by Fund personnel,
who will not be compensated therefore. The cost of any such additional
solicitation will also be paid by the Fund's investment adviser.
If you do not expect to be present, please sign the enclosed Proxy and mail
it to Bridges Investment Fund, Inc., 256 Durham Plaza, 8401 West Dodge Road,
Omaha, Nebraska 68114. All valid Proxies obtained will be voted in favor of the
election of directors, unless specified to the contrary. With respect to the
continuance of the investment advisory contract (Item 2 above), and the
ratification of the selection of accountants (Item 3 above), all valid Proxies
will be voted in accordance with the designation on the Proxies. If no
designation is made, Proxies will be voted in favor of the proposals. Any
shareholder has the power to revoke his Proxy at any time prior to the voting
thereof by sending a letter to the Fund's office, or by executing a new Proxy.
The giving of a Proxy will not affect your right to vote in person if you find
it convenient to attend the Meeting. At the beginning of the Meeting, all
shareholders in attendance will be given an opportunity to revoke said Proxy
and to vote personally on each matter described herein.
The Board of Directors has fixed the close of business on January 15, 1996,
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Meeting. The transfer books of the Fund will not be closed.
On January 15, 1996, the Fund had outstanding 1,127,873.067 shares of capital
stock, par value $1 per share. After the elimination of fractional shares which
are not entitled to be voted, there were 1,127,663 full shares outstanding on
January 15, 1996, which are entitled to vote. In the election of directors,
each share is entitled to as many votes as there are directors to be elected.
Such votes may all be cast for one nominee or distributed among as many nominees
and in such proportions as the holder sees fit. In other matters, each share is
entitled to one vote, except that fractional shares are not entitled to vote.
No person owns of record, and, so far as the management knows, no person owns
beneficially more than 10% of the outstanding capital stock of the Fund.
The Annual Report for the year ended December 31, 1995, mailed simultaneously
with this Proxy Statement to the shareholders, includes a statement of assets
and liabilities as of December 31, 1995, and a statement of income and expenses
for the year ended that date. Any shareholder who desires additional copies may
obtain them upon request at the office of the Fund, 256 Durham Plaza, 8401 West
Dodge Road, Omaha, Nebraska 68114.
1. By-Law Amendment and Election of Directors
------------------------------------------
It is proposed to elect eleven (11) directors who will serve until the next
Annual Meeting of the shareholders and until their successors are elected and
qualified.
The persons named in the enclosed Proxy intend to nominate and vote in favor
of the election of the nominees listed below, all of whom have consented to
serve the term for which they are standing for election. If for any reason any
of the nominees shall become unavailable for election, the Proxy will be voted
for nominees selected by the management.
The following information is furnished as to the proposed nominees whose
terms of office will run from February 20, 1996, to February 19, 1997:
Frederick N. Backer, Age 63 -- First Became Director in 1979
- ------------------------------------------------------------
*2,116 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Director of the Fund, member of the Executive Committee and Audit Committee,
and Chairman of the Board of Directors of the Fund. Mr. Backer is currently the
President of JAT Corp., an investment holding company with activities in
Nebraska and Missouri. His responsibilities to this concern commenced in
August, 1972. During 1995, Mr. Backer had a 100% attendance record at the five
regularly scheduled meetings of the Board of Directors and a 100% attendance for
the one meeting of the Executive Committee.
*2,116 shares are held by FirsTier Bank, N.A. as Custodian for a master plan
Individual Retirement Act account for Mr. Backer. Mr. Backer's wife, Marcia S.
Backer, has a beneficial interest in 172 shares of an Individual Retirement Act
account held by FirsTier Bank, N.A. as Custodian. Mr. Backer's three children,
James S. Backer, Ann B. Davids, and Thomas F. Backer hold 2,173, 1,216, and 886
shares, respectively, in Individual Retirement Act accounts at FirsTier Bank,
N.A. as Custodian. In addition, James, Ann, and Thomas Backer hold 597, 35, and
597 shares, respectively, in their own names. Thus, the total ownership by the
Frederick N. Backer family is 7,792 shares. Mr. Backer is an interested
person member of the Board of Directors, as defined on page 14.
Edson L. Bridges II, Age 63 -- First Became Director and Officer in 1963
- ------------------------------------------------------------------------
*25,437 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
President and Director of the Fund and member of the Executive Committee and
Audit Committee of the Board of Directors of the Fund. In September, 1959, Mr.
Bridges became associated with the predecessor firm to Bridges Investment
Counsel, Inc. and is presently the President and Director of that Corporation.
Mr. Bridges is also President and Director of Bridges Investor Services, Inc., a
company that became Transfer Agent and Dividend Disbursing Agent effective
October 1, 1987. Mr. Bridges is also President and Director of Provident Trust
Company, chartered to conduct business on March 11, 1992. During 1995, Mr.
Bridges had a 100% attendance record at the five regularly scheduled meetings of
the Board of Directors. Mr. Bridges also had a 100% attendance record at the
Audit Committee and Executive Committee Meetings.
*12,729 shares are owned in Mr. Bridges' name; 7,483 shares are held by a
corporate trustee for the Bridges Investment Counsel, Inc. Profit Sharing Trust,
and 3,266 shares represent a beneficial interest in Bridges Investment Counsel,
Inc. Pension Trust. These shares represent estimated interests in the Trusts'
holding of the Fund's shares; 1,959 shares are held by FirsTier Bank, N.A. as
Custodian for master plan Individual Retirement Act and Simplified Employee
Pension accounts. In sum, Mr. Bridges has a beneficial interest in 25,437
shares of the Fund. The beneficial ownership interest of Sally S. Bridges,
wife; Jennifer B. Hicks, daughter; Robert W. Bridges, son; Edson L. Bridges III,
son; and Tracy T. Bridges, daughter-in-law, are set forth on pages 12 and 13.
Mr. Bridges is an affiliated person member of the Board of Directors because he
is an officer and director of the Fund and its investment adviser.
Edson L. Bridges III, Age 37 -- First Became Officer in 1985 and Director
- -------------------------------------------------------------------------
in 1991
- -------
*7,554 Shares of Corporation owned beneficially, directly or
indirectly, or of record on December 31, 1995
Director and Vice President of the Fund and member of the Executive Committee
of the Board of Directors of the Fund. Mr. Bridges has been a full-time member
of the professional staff of Bridges Investment Counsel, Inc. since August,
1983, and a part-time member from January 1, 1983. Mr. Bridges has been
responsible for securities research and the investment management for an
expanding base for discretionary accounts for more than five years. Mr. Bridges
became a Director of Stratus Fund, Inc. in October, 1990. Stratus Fund, Inc. is
an open-end, regulated investment company located in Lincoln, Nebraska. Mr.
Bridges has been Executive Vice President-Investments of Bridges Investment
Counsel, Inc. since February, 1993, and he is a Director of that Firm. Mr.
Bridges is also an officer and a Director of Bridges Investor Services, Inc. and
Provident Trust Company. During 1995, Mr. Bridges had a 100% attendance record
at the five regularly scheduled meetings of the Board of Directors and a 100%
attendance at the one meeting of the Executive Committee.
*Mr. Bridges' ownership is represented by 103 shares in his own name; 1,824
shares held in the Profit Sharing Trust; 623 shares held in the Pension Trust of
Bridges Investment Counsel, Inc. by the Trustees of these plans; 3,296 shares
held in a 401(k) Plan and Trust for employees of Bridges Investment Counsel,
Inc. and 989 shares in an IRA Custodial Account held by FirsTier Bank, N.A. Mr.
Bridges also has a 718 share interest in a family trust described on page 12.
Tracy Taylor Bridges, Mr. Bridges' wife, holds 249 shares in an IRA Custodial
Account and 6,804 shares in a 401(k) Plan. The total family ownership for Mr.
Edson L. Bridges III is 14,606 shares. Mr. Bridges is an affiliated person
member of the Board of Directors because he is an officer and Director of the
Fund and its investment adviser.
N. Phillips Dodge, Jr., Age 59 -- First Became Director in 1983
- ---------------------------------------------------------------
*2,021 Shares of Corporation owned beneficially, directly or indirectly,
or of record on December 31, 1995
Director of the Fund and member of the Executive Committee of the Board of
Directors of the Fund. Mr. Dodge is President of N. P. Dodge Company, a leading
commercial and residential real estate brokerage concern in the area of Omaha,
Nebraska. Mr. Dodge has held this position since July, 1978. Mr. Dodge is also
a principal officer and director of a number of subsidiary and affiliated
companies in the property management, insurance, real estate syndication, and
cemetery businesses. Mr. Dodge became a Director of Southern California Water
Company in April, 1990, and a Director of the Omaha Public Power District as of
January 5, 1995, for a six year term. During 1995, Mr. Dodge had a 100%
attendance record at the five regularly scheduled meetings of the Board of
Directors and a 100% attendance at the one meeting of the Executive Committee.
*Mr. Dodge's 2,021 shares are held in an Individual Retirement Act account by
FirsTier Bank, N.A. as Custodian. His wife, Kathleen C. Dodge, has a similar
account with the identical 2,021 shares. Mr. Dodge's father, N. P. Dodge, owns
500 shares, and his wife, Virginia L. Dodge, owns 1,694 shares. Therefore, the
total Dodge family ownership is 6,236 shares. Mr. Dodge is an interested
person member of the Board of Directors, as defined on page 14.
John W. Estabrook, Age 68, First Became Director in 1979
- --------------------------------------------------------
*696 Shares of Corporation owned beneficially, directly or indirectly,
of record on December 31, 1995
Director of the Fund and member of the Audit Committee of the Board of
Directors of the Fund. Mr. Estabrook was the Chief Administrative Officer of
the Nebraska Methodist Hospital and its holding company, Nebraska Methodist
Health System, in Omaha, Nebraska, beginning June, 1959. Effective January 1,
1987, Mr. Estabrook relinquished the position of President of Nebraska Methodist
Hospital, assuming the Presidency of the Nebraska Methodist Health System until
his retirement on August 31, 1992. During 1995, Mr. Estabrook had an 80%
attendance record at the five regularly scheduled meetings of the Board of
Directors, and a 100% attendance at the one meeting of the Audit Committee.
*696 shares are held by FirsTier Bank, N.A. as Custodian for a master plan
Individual Retirement Act account. Mr. Estabrook's wife, Nancy C. Estabrook,
owns 32,462 shares in her own name, and she owns 2,463 shares in an Individual
Retirement Act account at FirsTier Bank, N.A. Mr. Estabrook's son, John C.
Estabrook, owns 2,295 shares jointly with his wife, Sharon K. Estabrook; in
addition, 1,263 shares each are held in Trusts for John Adam Estabrook and
Matthew David Estabrook, grandchildren of John W. Estabrook, for a total of
2,526 shares; 441 shares are held by FIRNBANK Co. which were previously held by
Mrs. Leona Cameron, Nancy Estabrook's mother, now deceased. Thus, 40,883 total
shares are owned by the Estabrook family. Mr. Estabrook is an interested
person member of the Board of Directors, as defined on page 14.
Jon D. Hoffmaster, Age 48, First Became Director in 1993
- --------------------------------------------------------
*2,312 Shares of Corporation owned beneficially, directly or indirectly,
or of record on December 31, 1995
Director of the Fund and member of the Audit Committee of the Board of
Directors of the Fund. Mr. Hoffmaster serves as Vice Chairman of American
Business Information, Inc. in Omaha, Nebraska. He has previously served as
President and Chief Operating Officer, Chief Financial Officer of that Company,
and Executive Vice President and director since 1987. From 1980 to 1987, Mr.
Hoffmaster was President and Chief Executive Officer of First National Bank of
Bellevue, Nebraska. American Business Information, Inc. is a leading producer
of business-to-business marketing information which it supplies from its
proprietary database containing information on approximately 10 million
businesses in the United States and one million entities in Canada. During
1995, Mr. Hoffmaster had a 60% attendance record at five regularly scheduled
meetings of the Board of Directors and a 100% attendance at the one meeting of
the Audit Committee.
*2,312 shares were held in Mr. Hoffmaster's own name on December 31, 1995.
Mr. Hoffmaster's daughter, Margaret S. Hoffmaster, holds 426 shares in her own
name, and 547 shares are held by Elizabeth O. Hoffmaster, another daughter of
Mr. Hoffmaster. Thus, the total Hoffmaster family ownership of the Fund is
3,285 shares. Mr. Hoffmaster is an interested person member of the Board of
Directors, as defined on page 14.
John J. Koraleski, Age 45, First Became Director in 1995
- --------------------------------------------------------
*322 Shares of Corporation owned beneficially, directly or indirectly,
or of record on December 31, 1995
Director of the Fund and member of the Executive Committee of the Board of
Directors of the Fund. Mr. Koraleski is Executive Vice President-Finance &
Information Technologies of the Union Pacific Railroad Company headquartered in
Omaha, Nebraska. Mr. Koraleski was employed by Union Pacific in June, 1972. He
has served the railroad in various capacities. He was appointed to his present
position in September, 1991. As Chief Financial Officer of the Railroad, Mr.
Koraleski heads and manages the financial planning and management functions, and
he is responsible for the operations of the company's information and
telecommunications technologies. The Railroad's Contracts & Real Estate
Department is also under his responsibility. Mr. Koraleski is also a member of
the Railroad's Operating Committee and is Chairman of the Board of Directors of
Automated Monitoring and Control International, Inc.(AMCI), a privately-held
technology firm situated in Omaha, Nebraska. During 1995, Mr. Koraleski had a
100% attendance record for the four regularly scheduled meetings (after being
elected to the Board of Directors in February of 1995), and a 100% attendance at
the one meeting of the Executive Committee.
*322 shares are held in The Koraleski Living Trust (dated 01-18-1991), John
J. Koraleski and Stephanie F. Koraleski, Trustees.
Roger A. Kupka, Age 66, First Became a Director in 1982
- -------------------------------------------------------
*4,691 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Director of the Fund and member of the Executive Committee of the Board of
Directors of the Fund. Mr. Kupka was the President and Chief Executive Officer
of Nebraska Builders Products Co. of Omaha, Nebraska. He held this position
from 1969 until November, 1986, when he retired. During the past five years,
Mr. Kupka has been Vice Chairman of the Board of Directors of PSI Group,
formerly known as Discount Mail Inc., headquartered in Omaha, Nebraska. Mr.
Kupka is currently a member of the Board of Directors of PSI Group. In
addition, Mr. Kupka serves as President of Kupka, Inc. and President of Micklin
Home Improvement Co. Mr. Kupka is also a Vice President of PSI Leasing. All of
these companies are located in Omaha, Nebraska. During 1995, Mr. Kupka had a
100% attendance record for the five regularly scheduled meetings of the Board of
Directors, and a 100% attendance of the one meeting of the Executive Committee.
*112 shares were held in Mr. Kupka's own name on December 31, 1995; 3,661
shares are held in a Rollover Individual Retirement Act account at the
FirsTier Bank, N.A. as Custodian for Mr. Kupka's beneficial interest. In
addition, Mr. Kupka owns a regular IRA account with FirsTier Bank, N.A. as
Custodian that holds 918 shares. Mr. Kupka's wife, Dorothy J. Kupka, has a
beneficial interest of 1,456 shares in an IRA account at FirsTier Bank, N.A.
Consequently, the entire Kupka family ownership of the Fund is 6,147 shares.
Gary L. Petersen, Age 52, First Became Director in 1987
- -------------------------------------------------------
*34,999 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Director of the Fund and member of the Executive Committee. Mr. Petersen is
the Retired President of Petersen Manufacturing Co. Inc. of DeWitt, Nebraska.
Mr. Petersen commenced employment with the Company in February, 1966. He became
President in May, 1979, and retired in June, 1986. Petersen Manufacturing Co.
Inc. produced a broad line of hand tools for national and worldwide distribution
under the brand names Vise-Grip, Unibit, Prosnip, and Punch Puller. During
1995, Mr. Petersen had an 80% attendance record at the five regularly scheduled
meetings of the Board of Directors and a 100% attendance record for the one
meeting of the Executive Committee.
*33,510 and 1,490 shares are held in two separate Rollover Individual
Retirement Act accounts by the FirsTier Bank, N.A. and National Bank of Commerce
as Custodian for Mr. Petersen's beneficial interest. In addition, Mr.
Petersen's wife, Allison D. Petersen, holds 1,206 shares in an IRA Rollover
account at FirsTier Bank, N.A., and their son, Daniel L. Petersen, also holds
929 shares in an IRA Rollover account at FirsTier Bank, N.A. Mr. Petersen
is a co-trustee of the Ralph W. Petersen GST Exempt Trust, which holds 1,290
shares. Mr. Petersen's son, Daniel, and his daughter, Megan, each had a
beneficial interest of 322.5 shares of the Fund. The 645 balance of these
shares is owned for the benefit of Mr. Petersen's three nephews: Cleland
Johnson, Kenneth Totman, and Richard Lee Totman. Thus, the total Petersen
family ownership is 38,425 shares. Mr. Petersen is an interested person
member of the Board of Directors, as defined on page 14.
Roy A. Smith, Age 62, First Became Director in 1976
- ---------------------------------------------------
*2,982 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Director of the Fund and member of the Executive Committee of the Board of
Directors of the Fund. Mr. Smith is President of H. P. Smith Motors, Inc. and
Old Mill Toyota, both of Omaha, and is a director of the Mid City Bank of Omaha.
During 1995, Mr. Smith had a 60% attendance record at the five regularly
scheduled meetings of the Board of Directors and a 100% attendance at the one
meeting of the Executive Committee.
*1,508 shares are held in Mr. Smith's name, and 1,474 shares are held by
FirsTier Bank, N.A. as Custodian for a master plan Individual Retirement Act
account. Mr. Smith's wife, Macaela J. Smith, holds 559 shares in an Individual
Retirement Act account held by FirsTier Bank, N.A. Homer A. Smith, brother to
Roy A. Smith, also owns 12,409 shares jointly with his wife, Kathryn H. Smith.
In addition, 6,631 shares are held as Custodian for Mr. Smith's niece and
nephew, Courtney Lynn and Gregory Thomas Asplund. Thus, the total Smith family
ownership is 22,581 shares.
L.B. Thomas, Age 59, First Became Director in 1992
- --------------------------------------------------
*684 Shares of Corporation owned beneficially, directly or indirectly
or of record on December 31, 1995
Director of the Fund and member of the Executive Committee. Mr. Thomas is
Senior Vice President, Risk Officer and Corporate Secretary for ConAgra, Inc.,
with world-wide operations and the second largest major processor of food
products in the United States, headquartered in Omaha, Nebraska. He is also a
member of ConAgra's Management Executive Committee. Mr. Thomas joined ConAgra
as assistant to the Treasurer in 1960. He was named Assistant Treasurer in
1966; Vice President, Finance in 1969; Vice President, Finance and Treasurer in
1974; added the Corporate Secretary responsibility in 1982; and became Senior
Vice President in 1991. Mr. Thomas is also an officer and director of numerous
ConAgra subsidiaries. Mr. Thomas is a director of the Exchange Bank of Mound
City, Missouri, and he is a director of the Kiewit Investment Fund of Omaha,
Nebraska. During 1995, Mr. Thomas had a 40% attendance record at five regularly
scheduled meetings of the Board of Directors and a 0% attendance record for one
meeting of the Executive Committee.
*684 shares are held in Mr. Thomas' name.
Rosemary M. Teckmeyer, Age 68, First Became Officer in 1969
- -----------------------------------------------------------
*2,991 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Vice President of the Fund. Mrs. Teckmeyer has been an accounting,
administrative, and client contact person for Bridges Investment Counsel, Inc.
since September, 1967. Mrs. Teckmeyer has progressed through all phases of
securities portfolio accounting and Fund administration, including shareholder
relations and preparation of the content for reports to regulatory bodies for
the Fund and its investment adviser, to the position of Vice President and
Treasurer of Bridges Investment Counsel, Inc. Mrs. Teckmeyer is an officer and
Director of Bridges Investor Services, Inc., and she is an officer of Provident
Trust Company.
*301 shares are held jointly with Henry J. Teckmeyer, her husband; and 2,316
shares represent a beneficial interest in the Pension Trust of Bridges
Investment Counsel, Inc. held by the Trustees of these plans; 374 shares are
held in a master plan Individual Retirement Act account by FirsTier Bank, N.A.
as Custodian; 101 shares are held by Timothy W. Schulz as Custodian for Caleb
and Kathryn Schulz, and 50 shares are held by Thomas N. Teckmeyer as Custodian
for Grant Stephen Teckmeyer, grandchildren of Mrs. Teckmeyer under the Nebraska
UGTMA. The total ownership for Rosemary M. Teckmeyer is 3,142 shares.
Nancy K. Dodge, Age 33, First Became Officer in 1986
- ----------------------------------------------------
*1,483 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Treasurer of the Fund. Mrs. Dodge has been an employee of Bridges Investment
Counsel, Inc. since January, 1980. Her career has progressed through the
accounting department of that Firm, to her present position as Assistant to the
President. Mrs. Dodge is the person primarily responsible for day to day
accounting entries for the Fund, and she is also the key person for handling
relations with shareholders, the custodian bank, and the auditor. Mrs. Dodge is
an officer and Director of Bridges Investor Services, Inc.
*1,250 shares represent a beneficial interest in the Profit Sharing Trust,
and 233 shares represent a beneficial interest in the Bridges Investment
Counsel, Inc. Pension Trust held by the Trustees of these plans. The total
ownership for Nancy K. Dodge is 1,483 shares.
Mary Ann Mason, Age 44, First Became Officer in 1987
- ----------------------------------------------------
*2,970 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Secretary of the Fund. Mrs. Mason has been an employee of Bridges Investment
Counsel, Inc. from June, 1981. Her career has been mainly in the staff services
area as a secretary. Mrs. Mason is also Corporate Secretary for Bridges
Investment Counsel, Inc., Provident Trust Company, Bridges Investor Services,
Inc. and a Director of that Company.
*Mrs. Mason and her husband, Gerald L. Mason, own 1,280 shares jointly. In
addition, Mrs. Mason holds 800 shares in a master plan Individual Retirement Act
account with FirsTier Bank, N.A. as Custodian. Mrs. Mason has a beneficial
interest in 667 shares in the Bridges Investment Counsel, Inc. Profit Sharing
Trust and 223 shares in the Bridges Investment Counsel, Inc. Pension Plan.
Gerald L. Mason has a master plan Individual Retirement Act account with
FirsTier Bank, N.A. as Custodian, which owns 801 shares. Thus, the total family
ownership for Mary Ann Mason is 3,771 shares.
Douglas P. Person, Age 38, First Became Officer in 1988
- -------------------------------------------------------
*1,331 Shares of Corporation owned beneficially, directly or indirectly, or
of record on December 31, 1995
Assistant Vice President of the Fund. Mr. Person has been a member of the
professional staff of Bridges Investment Counsel, Inc., functioning as an
analyst and counselor, since September, 1985. Mr. Person has been a Vice
President of Bridges Investment Counsel, Inc. since February, 1992. His prior
employment experience was with the Nebraska State Legislature as a Legislative
Aide, First National Bank of Lincoln as Trust Marketing Representative, and
Shearson/American Express as a Registered Representative. In his position with
Bridges Investment Counsel, Inc., Mr. Person has been active in securities
research and counseling investment advisory clients. Mr. Person is an officer
and Director of Bridges Investor Services and an officer of Provident Trust
Company.
*Mr. Person has a beneficial interest in 614 shares of the Fund held in the
Bridges Investment Counsel, Inc. Profit Sharing Plan, 227 shares in the Bridges
Investment Counsel, Inc. Pension Plan, and 490 shares in a 401(k) Plan and
Trust. The total ownership for Douglas P. Person is 1,331 shares.
Kathleen J. Stranik, Age 52, First Became Officer in 1995
- ---------------------------------------------------------
*735 Shares of Corporation owned beneficially, directly or indirectly,
or of record on December 31, 1995
Assistant Secretary of the Fund. Mrs. Stranik has been an employee of
Bridges Investment Counsel, Inc. from January, 1986. Mrs. Stranik has
functioned as an executive secretary to both Edson L. Bridges II and Edson L.
Bridges III throughout her career with the Firm.
*Mrs. Stranik and her husband, Thomas J. Stranik, own 128 shares jointly. In
addition, Mrs. Stranik holds 53 shares in a master plan Individual Retirement
Act account with FirsTier Bank, N.A. as Custodian. Mrs. Stranik has a
beneficial interest in 350 shares in the Bridges Investment Counsel, Inc. Profit
Sharing Trust and 184 shares in the Bridges Investment Counsel, Inc. Pension
Plan, and 20 shares in a 401(k) Plan and Trust. The total ownership for
Kathleen J. Stranik is 735 shares.
The officers of the Fund as disclosed herein have been elected by the Board
of Directors on April 13, 1995, and their terms of office run from April 13,
1995, to April 13, 1996.
With respect to shares reported for beneficial interests held in profit
sharing and pension trusts of Bridges Investment Counsel, Inc., the shares shown
are based upon September 30, 1995, and December 31, 1994, allocations of
percentage interests in the retirement plans with appropriate adjustments to
reflect changes since that time. However, actual ownership at December 31,
1995, will vary from the reported shares based upon new entrants to the plans,
changes in compensation levels for existing participants, and other factors that
determine a participant's percentage interest in each plan. These
determinations may not be finalized before March 15, 1996; thus, the disclosures
of beneficial interests in this proxy statement as of December 31, 1995, are the
best estimates possible from the available information at this time.
No shareholder owns of record, or beneficially of record, more than 10% of
the outstanding capital stock of the Fund, which totaled 1,116,620 shares as of
December 31, 1995.
The family of Edson L. Bridges II has the following beneficial ownership in
shares of the Fund: Edson L. Bridges II, 12,729 shares in his own name; 1,549
shares in the master plan Individual Retirement Act account; 7,483 shares
through a beneficial interest in the Bridges Investment Counsel, Inc. Profit
Sharing Trust; 3,266 shares represent a beneficial interest in the Bridges
Investment Counsel, Inc. Pension Trust; and 410 shares in a SEP IRA account with
FirsTier Bank as Custodian, for a total of 25,437 shares. Sally S. Bridges, in
her name, owns 3,565 shares, and she also holds 1,169 shares in a master plan
Individual Retirement Act account. Mrs. Bridges' beneficial and of record
ownership of Fund shares is 4,734 shares.
Edson L. Bridges III owns 103 shares in his own name and 1,824 shares through
a beneficial interest in the Bridges Investment Counsel, Inc. Profit Sharing
Trust; 623 shares represent a beneficial interest in the Bridges Investment
Counsel, Inc. Pension Trust; 3,296 shares represent a beneficial interest in the
401(k) Plan and Trust for employees of Bridges Investment Counsel, Inc.; and 989
shares and 249 shares, respectively, are held in a master plan Individual
Retirement Act account for both Edson L. Bridges III and Tracy T. Bridges, his
wife. Mr. Bridges is a principal beneficiary of the Edson L. Bridges II
Irrevocable Trust, and his one-third interest in the Trust's ownership of the
Fund was 718 shares. Tracy Bridges further holds 6,804 shares through the First
National Bank of Omaha as custodian for Kutak Rock 401(k) Profit Sharing Plan &
Trust. The total beneficial ownership of this family component group is 14,606.
Jennifer B. Hicks, daughter of Edson L. Bridges II, owns 230 shares in a
master plan Individual Retirement Act account. In addition, Mrs. Hicks is
entitled to 167 shares through a beneficial interest in the Bridges Investment
Counsel, Inc. Profit Sharing Trust, and 45 shares are attributed to her through
a beneficial interest in the Bridges Investment Counsel, Inc. Pension Trust.
Mrs. Hicks is a principal beneficiary of the Edson L. Bridges II Irrevocable
Trust, and her one-third interest in the Trust's ownership of the Fund was 718
shares. Thus, Mrs. Hicks has a beneficial interest in 1,160 shares of the
Fund.
Robert W. Bridges, son of Edson L. Bridges II, owns in his own name 412
shares, and he has a one-third beneficial interest in the Edson L. Bridges II
Irrevocable Trust for 718 shares, 192 shares in a master plan Individual
Retirement Act account, 178 shares through a beneficial interest in the Bridges
Investment Counsel, Inc. Profit Sharing Trust, and 90 shares are attributed
through a beneficial interest in the Bridges Investment Counsel, Inc. Pension
Trust. In addition, 342 shares represent a beneficial interest in the 401(k)
Plan and Trust for employees of Bridges Investment Counsel, Inc. In addition,
1,069 shares are held jointly with his wife, Elizabeth Bridges. Thus, Robert W.
Bridges' beneficial ownership in the Fund totals 3,001 shares.
The combined beneficial ownership for members of the family of Edson L.
Bridges II is 48,939 shares or 4.38% of the total shares outstanding. Marvin W.
Bridges, Jr., brother of Edson L. Bridges II, holds 10,026 shares in a trust
with Provident Trust Company. Ann B. Bruce, daughter of Marvin W. Bridges, Jr.,
has a one-half beneficial interest in the Marvin W. Bridges, Jr., Irrevocable
Trust, and there are 642 shares attributable to her in that trust. Amy Bridges
Lawrence, daughter of Marvin W. Bridges, has a one-half beneficial interest in
the Marvin W. Bridges, Jr. Irrevocable Trust, and there are 642 shares
attributable to her in that trust. In addition, Mrs. Lawrence holds 245 shares
in a separate master plan Individual Retirement Act account at FirsTier Bank,
N.A. The total beneficial ownership for the Marvin W. Bridges, Jr. family is
11,555 shares or 1.0% of the total shares outstanding.
When the branches of Edson and Marvin are combined, the various members of
the Bridges family own beneficially 60,494 shares, which are equal to 5.4% of
the total shares outstanding.
The share ownership disclosures reported herein are as of December 31, 1995.
To summarize the foregoing information, the Directors and officers of the Fund
own beneficially or of record 108,465 shares, and their family members
own an additional 89,899 shares for a total ownership of these persons of
198,364 shares, which are equal to 17.8% of the 1,116,620 shares outstanding on
December 31, 1995.
Bridges Investment Counsel, Inc., investment adviser to the Fund, has a
Profit Sharing Trust and a Pension Trust for its employees, and both include
some persons who are not officers or Directors of the Fund. The National Bank
of Commerce, Lincoln, Nebraska, as Trustee of the Profit Sharing Trust, owned
15,621 shares for the benefit of all employees. The National Bank of Commerce
owned an additional 6,545 shares as Trustee of the 401(k) Plan and Trust for
the employees of Bridges Investment Counsel, Inc. Four employees, acting as
Trustees, held 6,488 shares of the Fund on behalf of the Pension Plan
participants. The beneficial interests of the officers and employees of Bridges
Investment Counsel, Inc. who are also officers and employees of the Fund have
been set forth in the foregoing statements of stock ownership. The amounts of
shares reported are estimates based upon the relative percentage interest each
employee carried in the deferred benefit plan or trust as of September 30, 1995.
The actual percentage position for each employee for the plan year ending
December 31, 1995, may not be determined until March 15, 1996.
Edson L. Bridges II acts as a sole trustee for three irrevocable trusts that
are registered with the Fund's transfer agent in the name of the grantor or the
principal beneficiary of the trust. These trusts have a combined ownership of
10,748 shares of capital stock of the Fund outstanding as of December 31, 1995.
Mr. Bridges also serves as a co-trustee of six other trusts with individual
trustees and corporate trustees that held 10,770 shares of capital stock of the
Fund as of December 31, 1995. These shares are reported in the beneficial
ownership interests of each trust, and they are not reflected in the totals for
Bridges family interests.
Edson L. Bridges III is named as co-trustee with Edson L. Bridges II for two
trusts with a consolidated total of 2,524 shares of capital stock of the Fund as
of December 31, 1995. The capital stock owned is registered with the Fund's
transfer agent in the name of the trusts, and these shares are not recorded with
the total interests of the Bridges family.
No direct compensation or other remuneration is paid to the Directors or
officers by the Fund. However, the Directors as a group were paid a total of
$8,583.95 by Bridges Investment Counsel, Inc. for their attendance at Audit
Committee, Executive Committee, and Board of Directors meetings during 1995.
The following Directors were interested persons members of the Board of
Directors during 1995: Mr. Frederick N. Backer, Mr. Edson L. Bridges II, Mr.
Edson L. Bridges III, Mr. N. Phillips Dodge, Jr., Mr. John W. Estabrook, Mr. Jon
D. Hoffmaster, and Mr. Gary L. Petersen. An interested person is defined in
Section 2(a)(19) of The Investment Company Act of 1940 as amended in 1970. This
definition is lengthy; however, for the purpose of this explanation, an
interested person shall mean a director or officer of the Fund who has a
significant or material business or professional relationship with the Fund's
investment adviser, Bridges Investment Counsel, Inc.
Provident Trust Company of Omaha, Nebraska, had 192 shareholders as of
December 31, 1995, no one of whom owned more than 2.6% of the total outstanding
voting shares of common stock. Provident Trust Company is managed by personnel
of Bridges Investment Counsel, Inc. under a perpetual Management Agreement. At
December 31, 1995, Provident Trust Company maintained accounts that held shares
of Bridges Investment Fund, Inc. for its customers in the following capacities:
41,345 as sole trustee, 3,438 as co-trustee with an individual, 15,103 as agent,
and 41,586 shares as custodian or in safekeeping service. The records of the
transfer agent for the Fund maintain the ownership of the shares in the name of
the trust account or the beneficial owner. Ownership interests are reported in
this proxy statement in the name of the trust account or the beneficial owners.
Provident Trust Company's practice with respect to voting shares of the Fund
will be to deliver proxies to the beneficial owners or other representatives for
the customer accounts in all situations where such policy is administratively
feasible and legally possible. Provident Trust Company has officers who are not
employees of Bridges Investment Counsel, Inc. or officers of Bridges Investment
Fund, Inc. who may vote proxies for trust customers in those instances where
independence and the avoidance of a conflict of interest are important
considerations.
With respect to the disclosures of the trusteeships of Edson L. Bridges II,
Edson L. Bridges III, and Provident Trust Company, some of the account
ownerships disclosed represent duplicate or triplicate information in order to
report the various classifications of record ownership. The share ownership
interests declared on a primary basis are the units that are utilized to report
percentages for voting purposes.
2. Approval or Rejection of the Continuance
----------------------------------------
of the Investment Advisory Contract
-----------------------------------
On April 17, 1963, the Board of Directors of the Fund approved an investment
advisory contract to be entered into between the Fund and Bridges Investment
Counsel, Inc., the investment adviser, located at 256 Durham Plaza, 8401 West
Dodge Road, Omaha, Nebraska. The management contract continues in effect only
so long as such continuance is specifically approved at least annually by the
Board of Directors, or by vote of a majority of the outstanding voting
securities of the Fund; in either case, the terms of this Agreement and any
renewal thereof must have been approved by the vote of a majority of Directors
who are not parties to such contract or Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. The contract may be terminated by either party on sixty days' written
notice and terminates automatically if assigned. The contract was last
submitted to the Fund's shareholders for their approval on February 21, 1995,
and the purpose of that submission was to secure a continuation of the
employment of Bridges Investment Counsel, Inc. for the period from April 17,
1995, through April 17, 1996.
The recommendation to continue the contract past April 17, 1996, was first
made by the non-interested person members of the Board of Directors at an
Executive Meeting called for that purpose on December 5, 1995. This
recommendation was then favorably acted upon at the Regular Quarterly
Meeting of the Board of Directors on January 9, 1996, for submission to the
shareholders for action on February 20, 1996.
Under its contract with the Fund, the investment adviser furnishes continuing
investment supervision for the Fund and provides office space, facilities,
equipment, and personnel for managing the assets of the Fund. In addition, the
investment adviser pays all of the expenses of registering the Fund with the
Securities and Exchange Commission under The Investment Company Act of 1940 and
the Securities Act of 1933 and has agreed to pay all expenses of maintaining
those registrations. Further, under this contract, the investment adviser has
agreed to pay all expenses of initially qualifying and maintaining the
qualification of shares of the Fund in whole or in part under the Securities
Laws of such states as the Fund may from time to time designate.
For these services, the Fund agrees to pay the investment adviser a quarterly
fee of one-eighth (1/8) of one percent (1%) of the average net asset value of
the Fund, which approximates 1/2 of 1% on an annual basis, as determined by
appraisals made as of the close of each month of the applicable quarter.
However, in the contract, the investment adviser has guaranteed the Fund that
the Fund's total expenses, exclusive of stamp and other taxes but including fees
paid to the investment adviser, shall not in any year exceed in the aggregate a
maximum of one and one-half percent (1 1/2%) of the average net asset value of
the Fund for such year as determined by appraisals made as of the close of each
month thereof. If such expenses exceed the one and one-half per cent (1 1/2%)
maximum, the investment adviser has agreed to reimburse the Fund for the amount
of the excess.
The investment adviser's fees for the last three fiscal years were as
follows: $89,492.00 in 1993, $91,599.93 in 1994, and $107,149.30 in 1995.
There have been no reimbursed expenses under the 1 1/2% of net assets expense
limitation during the last three fiscal years.
Edson L. Bridges II, President of the Fund, is also President of Bridges
Investment Counsel, Inc., the Firm which is investment adviser to the Fund. The
total of 600 shares of capital stock of the investment adviser are owned as
follows: Edson L. Bridges II, 525 shares; Sally S. Bridges, wife of Edson L.
Bridges II, three shares; Edson L. Bridges III, six shares; and National Bank
of Commerce as Trustee for the Bridges Investment Counsel, Inc. Profit Sharing
Trust, 66 shares. The officers of Bridges Investment Counsel, Inc. hold a
beneficial interest of 78.03% of shares held in the Profit Sharing Trust,
including a 47.90% allocation for Mr. Edson L. Bridges II that translates
to a 31.61 share indirect ownership for him. Thus, Mr. Bridges' beneficial
interest in the stock ownership of Bridges Investment Counsel, Inc. is 556.61
shares when his attributed shares from the Profit Sharing Trust are included
with shares owned personally.
Mr. Edson L. Bridges II, Mrs. Sally S. Bridges, and Mr. Edson L. Bridges III
are the three Directors of Bridges Investment Counsel, Inc.
The foregoing statements of stock ownership are disclosed as of December 31,
1995.
The investment adviser does not advise any other investment companies.
In order for the contract to be continued, approval by the holders of the
majority of the outstanding shares of the Fund is necessary. If the contract is
not adopted by the shareholders, the Board of Directors would take an
appropriate alternative action.
Prior to recommending approval of the investment adviser contract, the
members of the Board of Directors reviewed the financial resources of the
investment adviser, the investment performance record of the Fund in comparison
with funds of similar size and comparable investment objectives, the operating
costs relative to other funds, and other factors including the quality of
service to shareholders and matters set forth in a special study prepared
annually for the Board members by the investment manager. At each Board of
Directors meeting, except the December session, the Board reviews each
securities transaction undertaken for the Fund's portfolio during the prior
three-month period for the cost efficiency of the service provided by the
brokerage concerns involved -- all of whom are non-affiliated to the Fund and
its investment adviser. The Fund's Board of Directors has not formally reviewed
the soft dollar commission arrangements of the investment adviser or the
benefits that the investment adviser and its clients may receive from the Fund's
portfolio transactions. However, such reviews will commence with the Board's
analysis of the First Quarter, 1995, transactions and continue quarterly
thereafter.
During the most recent fiscal year ended December 31, 1995, the Fund paid
Bridges Investor Services, Inc. $7,786.59 in fees for dividend disbursement,
transfer agency, and certain report filings for deferred employee benefit plans
and individual retirement accounts. These services are provided under a
separate contract, not subject to a vote by the shareholders of the Corporation,
between the Fund and Bridges Investor Services, Inc. -- a company owned by the
employees of Bridges Investment Counsel, Inc. The Fund's Board of Directors
reviews the appropriateness of the cost to the Fund and to its shareholders,
and the Board approves all changes in scheduled charges for compensation under
the contract arrangement between the two companies. Bridges Investor Services,
Inc. will continue to be a vendor to the Fund for the business activities
described in this paragraph.
Rule 30d-1 of the General Rules and Regulations promulgated under the
Investment Company Act of 1940 requires, as of November 23, 1994, that a brief
description of each matter voted upon at a meeting of shareholders be made in
the Annual Shareholder Report and/or in a semi-annual report following the
shareholder meeting. This description shall include the number of votes cast
for, against, or withheld as well as the number of abstentions including an
apparent tabulation with respect to each matter or nominee for office. Please
consult the Annual Shareholder Report for 1995 that accompanies this Notice of
Annual Meeting of Shareholders and Proxy Statement for the matters and the
results acted upon at the February 20, 1995, Annual Meeting of Shareholders.
3. Ratification or Rejection of Selection of Accountants
-----------------------------------------------------
The Investment Company Act of 1940 provides that the accountants of an
investment company shall be selected by a majority of those members of the Board
of Directors who are not affiliated with the investment adviser of the Fund,
that such selection shall be submitted for ratification or rejection at the
Annual Meeting of the shareholders, and that the employment of such accountants
shall be conditioned upon the right of the Fund, by vote of a majority of its
outstanding shares, to terminate such employment. Arthur Andersen LLP has
served as accountants for the Fund since its organization. On January 9, 1996,
the non-interested members of the Board of Directors unanimously recommended the
selection of Arthur Andersen LLP as auditors for the Fund for the year ending
December 31, 1996, and the Board directed submission of this recommendation to
the shareholders for ratification or rejection.
The Board of Directors of the Fund has an Audit Committee. The Director
members of the Audit Committee are: Mr. Backer, Mr. Bridges II, Mr. Estabrook,
and Mr. Hoffmaster. A representative of Arthur Andersen LLP will be in
attendance at the Annual Meeting of Shareholders on February 20, 1996.
4. Other Matters Which May Come Before the Meeting
-----------------------------------------------
It is not anticipated that any action will be asked of the shareholders other
than the ones previously indicated, but if other matters are properly brought
before the Meeting, it is intended that the persons named in the Proxy will vote
in accordance with their best judgment.
Supplementary Comments and Information
--------------------------------------
Special matters deserving emphasis are set forth under appropriate headings
in the text below:
Cumulative Voting of Directors
------------------------------
Attention is drawn to the second paragraph on page 2 of this Proxy Statement
which describes the option a shareholder has to cumulate votes for the election
of directors. The Board of Directors does not solicit cumulative voting with
this Proxy Statement.
Disclosure of Election Results
------------------------------
In the event any nominee for election to the Board of Directors receives at
the forthcoming election of Board members a total of negative votes which would
equal five percent or more of the total shares voted, a post-meeting disclosure
of the name(s) of the nominee(s) shall be made thereof indicating a list of all
directors by name, the number of shares voted for and against, and the total
number of shares voted at the meeting for directors. Such report will be made
in the next quarterly shareholder letter following the shareholder meeting at
which a vote is taken. This information will be provided in addition to the
results to be disclosed under Rule 30d-1 under the Investment Company Act of
1940.
Limitation of Exemption from the Proxy Rules for Certain Non-Issuer
-------------------------------------------------------------------
Solicitations
-------------
The issuer is the Fund. The Board of Directors of the Fund is not aware
of solicitations for Proxies by persons other than the Board of Directors. In
the event non-issuer solicitations for Proxies do occur, any false and
misleading statements contained therein will be the responsibility of the
solicitors that have made such filing. Such a filing of non-issuer solicitation
material with the Securities and Exchange Commission does not mean that a
finding by the Commission has been that the solicitation material is accurate or
complete.
Deadline for Proposals for Next Annual Meeting
----------------------------------------------
Shareholders who wish to have a proposal included in the business agenda for
the next Annual Meeting of Shareholders to be held February 18, 1997, must have
their proposal filed at the office of the Fund by November 16, 1996, which date
is estimated to be within the 90 days prior to the printing and mailing of the
Proxy Statement to shareholders eligible to vote at that meeting.
Board of Directors Meetings
---------------------------
The By-Laws of the Fund provide for an eleven member Board of Directors. The
Board of Directors currently has eleven members. The Board meets five times per
year. The scheduled dates for 1996 are January 9, April 12, July 9, October 8,
and December 3. Board meetings are normally held at 4:00 p.m. at the offices of
the Fund, with the exception of the December meeting, which will begin at 5:40
p.m. The Board addresses all policy matters in relation to the operation of the
Fund, and it reviews and acts upon subjects involving Federal and State law and
regulation governing the Fund.
Vacancies on the Board of Directors
-----------------------------------
There are no vacancies on the Board of Directors at this time.
Attendance
----------
Attendance at Board and Committee meetings was disclosed earlier for each
Director in the text describing their personal background and stock ownership.
Relationships
-------------
The relationships between Directors or nominees for the Board of Directors
have been fully disclosed with respect to employment, family relationships,
control persons, and certain economic relationships in the main text of the
Proxy.
Associations
------------
There is no nominee or Director who is a member or employee or associated
with a law firm which the Fund has used during the last two fiscal years or
proposes to retain in the current year.
There is no nominee or Director who is a partner, officer, or director of any
investment banking firm.
Committees
----------
The Fund has an Executive Committee and an Audit Committee. The Director
members on each committee have been previously identified. The Executive
Committee reviews investment policies for the Fund, and members of this
Committee take action on any matters which the Board should review at its next
meeting for appropriate action. The Audit Committee establishes the scope of
review for the annual audit by Arthur Andersen LLP, and its members work with
representatives of Arthur Andersen LLP to establish such guidelines and tests
for the audit which are deemed appropriate and necessary.
Disagreements
-------------
No Director has requested that a description be made of any disagreement he
has with the management of the Fund with respect to operations, policies, or
practices of the Fund, nor has any Director declined to stand for reelection
because of any such disagreement.
Contests
--------
There have been no costs or terms of settlement of proxy contests for
election to the Board of Directors.
Professional Appointments and Fees
----------------------------------
With respect to the retention of Arthur Andersen LLP as certified public
accountants for the Fund, the Fund receives audit-related and tax preparation
services.
The Fund paid Arthur Andersen LLP $10,400 during 1995. The breakdown of this
fee was as follows:
% of
Amount Total
------ -----
Audit related Services $9,650 92.8
Preparation of Tax Returns 750 7.2
--- ---
Total Fee $10,400 100.0
======= =====
The appointment of Arthur Andersen LLP as certified public accountants for
the Fund is reviewed by the Audit Committee pursuant to an annual written
proposal for engagement by Arthur Andersen LLP; the Audit Committee then
recommends to the Board of Directors which in turn has recommended the
appointment to the shareholders. Arthur Andersen LLP has agreed to provide
services in 1996 for $10,900.
All legal fees performed on behalf of the Fund from its inception have been
paid by the investment adviser.
The appointment of attorneys for the Fund is a matter that is reviewed
annually by the Board of Directors at its January meeting.
ALL SHAREHOLDERS ARE REQUESTED TO SIGN AND MAIL PROXIES PROMPTLY.
Your attendance at the Annual Meeting is desired whether your holdings are
large or small. We encourage shareholders to take an active interest in the
Fund, and we would appreciate a phone call or letter to indicate that you expect
to be in attendance on February 20, 1996.
By Order of the Board of Directors.
Mary Ann Mason
Secretary
*********************************************************************
BRIDGES INVESTMENT FUND, INC.
PROXY - Annual Meeting of February 20, 1996
The undersigned hereby appoints Edson L. Bridges II, John W. Estabrook, and
Edson L. Bridges III, and each or any of them, with power of substitution,
attorneys and proxies, for and in the name and place of the undersigned, to vote
at the Annual Meeting of Shareholders of Bridges Investment Fund, Inc. to be
held at the office of the corporation in the City of Omaha, State of Nebraska,
at Room 256, Durham Plaza, 8401 West Dodge Road, on February 20, 1996, at 11:00
o'clock a.m. Omaha time, or at any adjournment thereof, upon the matters as set
forth in the Notice of such Meeting and the Proxy Statement as follows:
1.For the Election of Eleven Directors: Frederick N. Backer, Edson L.
Bridges II, Edson L. Bridges III, N. P. Dodge, Jr., John W. Estabrook,
Jon D. Hoffmaster, John J. Koraleski, Roger A. Kupka, Gary L. Petersen,
Roy A. Smith and L. B. Thomas
-----
[ ] For All Nominees.
-----
-----
[ ] For All Nominees except for person(s) whose name(s) is
-----
written on lines at right or below:
===================================
-----
[ ] Withhold authority to vote for all Nominees.
-----
2. For a proposed investment advisory contract which continues the
employment of Bridges Investment Counsel, Inc. as investment adviser to
the Fund for the period from April 17, 1996, through April 17, 1997.
----- ----- -----
For [ ] Against [ ] Abstain [ ]
----- ----- -----
3. For the ratification of the selection of Arthur Andersen, LLP as
independent auditors of the Fund for Fiscal Year ending December 31,
1996.
----- ----- -----
For [ ] Against [ ] Abstain [ ]
----- ----- -----
4. On any other business which may properly come before the Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, 3, and 4.
DATED , 1996
-----------------------
NOTE: Please sign name or names as
imprinted hereon. Where stock
is registered in joint tenancy,
all tenants should sign. Persons
signing as Executors, Administrators,
Trustees, etc. should so indicate.
SIGNATURE(S)
===========================
ALL SHAREHOLDERS ARE REQUESTED TO SIGN AND MAIL PROXIES PROMPTLY. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. DISCRETIONARY AUTHORITY TO
**********************************************************************
BRIDGES INVESTMENT FUND, INC.
THIRTY-THIRD
ANNUAL SHAREHOLDER REPORT
1995
CONTENTS OF REPORT
Pages 1 - 4 Shareholder Letter
Exhibit 1 Statement of Income and Expenses by
Page 5 Calendar Quarter for the Year Ended
December 31, 1995
Exhibit 2 Historical Financial Information
Pages 6 - 8
Exhibit 3 Portfolio Transactions During the Period From
Page 9 October 1, 1995, through December 31, 1995
Exhibit 4 Reports to Stockholders of Management
Page 10 Companies
Page 11 Report of Independent Public Accountants
Pages 12 - 26 Audited Financial Statements for the
Year Ended December 31, 1995
MD&A 1 - 12 Management Discussion and Analysis
This report has been prepared for the information of the shareholders
of Bridges Investment Fund, Inc. and is under no circumstances to be
construed as an offering of shares of the Fund. Such offering is made only
by Prospectus, a copy of which may be obtained by inquiry to the Fund's
January 22, 1996
Dear Shareholder:
Review of 1995
- --------------
The net asset value per share of the Fund was $21.54 on December 31, 1995,
ex-dividend $.15 per share. This price was 26.0% higher than the $17.10 net
asset value per share at year-end 1994. The cash amounts distributed and made
payable to shareholders during 1995 summed up to $.76789 per share, consisting
of $.575 in dividends and $.19289 in realized capital gains. Thus, the Fund's
total return components for 1995 were $4.44 in price appreciation ($21.54-$17.10
= $4.44) and $.76789 in cash distributions for a combined value improvement of
$5.20789 per share. This $5.20789 per share increase in value, when compared to
the beginning net asset value of $17.10, resulted in a 30.46% total return for
the Fund during 1995.
This 30.46% total return for 1995 extended to 18 the number of consecutive
years in which the Fund earned a positive total return. The 30.46% total return
was the second highest annual achievement in the 33 year history of the Fund.
The popular stock market averages, as measured by the Dow Jones Industrials
and the Standard & Poor's 500 Composite, were up 33.4% and 34.1% respectively
during 1995. This upward stock price momentum was driven by rising corporate
earnings and falling interest rates. The common stock trading experience in
1995 was unique in the respect that there were few if any pullbacks to lower
levels or corrections of the rising price trend. The investor appetite for
common stocks was very strong in 1995.
Fund Operations
- ---------------
The net assets of the Fund were $24,052,746 on December 31, 1995,
representing the highest level for any calendar quarter reporting date. During
1995, net assets grew $5,956,449 or 32.9% from the $18,096,297 on December 31,
1994.
There were 1,116,620 shares outstanding on December 31, 1995. This
position was the highest level for shares outstanding for any financial
statement reporting period for the Fund. The net gain for shares outstanding
during 1995 was 58,193 units, constituting a 5.5% increase compared to the
1,058,427 shares extant at December 31, 1994.
In 1995, the ratio of net investment income to average net assets was
3.80%, the ratio of operating expenses to average net assets was 0.89%, and the
portfolio turnover rate was 7%. The net investment income ratio of 3.80% was at
the lowest level in the past five years. The declining income reflects falling
interest rates and rising prices for securities held in the Fund's portfolio
during 1995. The 0.89% ratio of operating expenses to average net assets was
the lowest in the 33 year history of the Fund as fixed expenses were spread out
on an expanded asset base. The 7% portfolio turnover rate for 1995 matched a
similar low point set for the Fund in 1992. The low turnover rate reflects a
satisfaction by the Fund's management with the securities held in the portfolio.
Historically, the normal annual portfolio turnover rate for the Fund's portfolio
is in the range of 20%-30% of average net assets for a ten-year or longer period
of time.
Please refer to Exhibits 1 through 3, the Report of Independent Public
Accountants, and the accompanying Financial Statement, pages 12 through 26, to
locate the supporting detail and supplementary information about the Fund's
operations during 1995.
The text for the Management's Discussion and Analysis of the results for
the year of 1995 and the investment returns for the previous one year, five
year, and ten year periods are located immediately following page 26 at the end
of the audited financial statements. The text for Management's Discussion and
Analysis is provided herein as an integral part of the Fund's annual Prospectus
disclosures. This information is intended to be extensive for a complete
understanding of the Fund's investment position and performance.
Dividend
- --------
On December 5, 1995, the Board of Directors declared a regular quarterly
dividend and a year-end extra dividend from the net investment income earned
during the October-December Quarter of 1995 and from any undistributed net
investment income earned earlier in 1995. This dividend was made payable on
January 22, 1996, from net income accrued through December 31, 1995, to
shareholders of record on December 29, 1995. The determination of the exact
amount per share of this dividend was delegated to the President and Treasurer
of the Fund after the precise net income of the Fund was established on the
record date. These two officers were given authority to classify income
payments between a regular quarterly amount and the year-end extra amount. The
President and Treasurer determined the ordinary income regular dividend to be
$.14 per share and the year-end extra amount to be $.01 per share for a total of
$.15 per share to be paid out under the dividend resolution adopted by the Board
of Directors on December 5, 1995. This payment, in addition to the $.145 per
share previously paid and declared in October, 1995, brought the total cash
distributions payable from ordinary income during the Fourth Quarter of 1995 to
$.295 per share. The $.14 per share regular and $.01 extra amounts determined
by the President and Treasurer were confirmed and ratified by the Board of
Directors at their most recent regular meeting held on January 9, 1996.
Tax Information
- ---------------
A letter of explanation regarding the taxability of the dividend and
capital gains payments made by the Fund during 1995 will accompany this letter
to you. You should provide a copy of this letter dated January 22, 1996, which
addresses the preparation of information for Federal income tax returns, to your
tax preparer or consultant.
Form 1099-DIV
- -------------
Bridges Investor Services, Inc. has prepared and will issue a Form 1099-DIV
for 1995 for your shareholder account on or about January 31, 1996.
Market Value Information
- ------------------------
Investors who own Individual Retirement Act and Standard Retirement Plan
accounts in the Fund will receive a special message on the enclosed dividend
reinvestment confirmation statement to disclose the market value of your account
as of December 31, 1995. This information will be utilized in the filing of the
Form 5498 and the Form 5500EZ reports with the appropriate Federal authorities
by our personnel later on in 1996.
Annual Meeting
- --------------
The Proxy and Proxy Statement for the Thirty-Third Annual Meeting of the
Shareholders of the Fund, to be held on Tuesday, February 20, 1996, at 11:00
a.m., will accompany this report. Shareholders are encouraged to attend the
Annual Meeting at the offices of the Fund. If you plan to be present, please
notify the Fund's Corporate Secretary, Mrs. Mary Ann Mason, or our Treasurer,
Mrs. Nancy K. Dodge by phone, by letter, or by comment on your Proxy form.
Under Federal regulations that become effective on November 23, 1994, the
Fund must report the results or tabulation of the votes on each matter and
director nominees in the next shareholder semi-annual and annual communication
following the shareholder meeting. The results for the last Annual Meeting of
the Shareholders of the Fund were published in a letter dated April 24, 1995.
This same report appears in Exhibit 4, attached hereto, to fulfill the annual
communication requirement.
Revised Format
- --------------
Effective November 6, 1995, the Fund came under a new set of regulations
promulgated by the Securities and Exchange Commission that require our company
to file all documents with the Commission in an electronic format. The acronym
for this new procedure is EDGAR. You may note that the size of the printing in
this letter and the Proxy Statement has increased from our former publications,
and the layout of certain information has been altered. The changes were made
to qualify and prepare the material for the protocols for electronic filing.
The Outlook
- ----------
The Fund's management anticipates a continued expansion for the U.S.
economy in 1996 compared to 1995 in spite of a slowing of general business
activity in the late Fall of 1995 and in the early Winter of 1996. Interest
rates may decline somewhat from present levels to reflect a slow economy. Price
inflation will show pockets of strength and may be the surprise investment
factor for 1996, although keen domestic and worldwide competition will restrain
excessive gains in inflation. Earnings growth for corporations will be mixed
and less dynamic than in 1995 over 1994 results. Nevertheless, an overall
positive trend for corporate earnings should continue in 1996.
While interest rates are at levels below 6%, prospective future returns on
new bonds may seem relatively unattractive to potential price gains for common
stocks. Thus, except for normal price dips to reduce speculative excesses,
common stocks may continue to be the dominant asset of choice to investors in
securities. The Fund's asset allocation response will be to add to common
stocks as a percent of total market value, and net investment income available
for dividends may decline in this expected environment.
Appreciation
- ------------
The Board of Directors and the officers of the Fund join me in an
expression of our appreciation for your investment in the Fund.
Sincerely yours,
Edson L. Bridges II
President
ELBII:kjs
<TABLE>
Exhibit 1
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENT OF INCOME AND EXPENSES
BY CALENDAR QUARTER
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
March 31, June 30, September 30, December 31, Annual
1995 1995 1995 1995 Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Income:
Interest $101,623 $108,806 $109,831 $108,562 $428,822
Dividends 96,204 93,577 97,886 97,015 384,682
-------- -------- -------- -------- --------
Total Income $197,827 $202,383 $207,717 $205,577 $813,504
-------- -------- -------- -------- --------
Expenses:
Management fees $ 24,110 $ 26,020 $ 27,601 $ 29,418 $107,149
Custodian fees 6,453 6,929 7,326 7,779 28,487
Professional services 2,600 2,600 2,600 2,725 10,525
Insurance 2,349 2,349 2,348 2,349 9,395
Bookkeeping services 2,208 2,317 2,456 2,387 9,368
Printing and supplies 4,245 1,667 1,453 1,980 9,345
Dividend disbursing and
transfer agent fees 2,569 1,829 1,624 1,765 7,787
Computer programming 1,125 1,125 3,125 1,931 7,306
Taxes and licenses 266 266 267 266 1,065
Foreign taxes paid on
dividends - 663 240 - 903
Total Expense $ 45,925 $ 45,765 $ 49,040 $ 50,600 $191,330
-------- -------- -------- -------- --------
NET INVESTMENT INCOME $151,902 $156,618 $158,677 $154,977 $622,174
======== ======== ======== ======== ========
<FN>
Sources: Unaudited Quarterly Reports to the Shareholders of Bridges
Investment Fund, Inc. for the March 31, June 30, and September 30
periods. Audited information for the Annual Total.
</TABLE>
<TABLE>
Exhibit 2
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
HISTORICAL FINANCIAL INFORMATION
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
---- ------ ----------- ----------- ----- -----------
<S> <C> <C> <C> <C> <C>
07-01-63 $ 109,000 10,900 $10.00 $ - $ -
09-30-63 109,764 10,900 10.07 - -
12-31-63 159,187 15,510 10.13 .07 -
03-31-64 202,354 19,105 10.59 .07 -
06-30-64 253,932 23,438 10.83 .07 -
09-30-64 310,307 28,286 10.97 .07 -
12-31-64 369,149 33,643 10.97 .07 -
03-31-65 434,523 38,531 11.28 .075 .028
06-30-65 491,068 44,667 10.99 .07 -
09-30-65 558,913 47,710 11.71 .07 -
12-31-65 621,241 51,607 12.04 .07 -
03-31-66 661,711 55,652 11.89 .085 -
06-30-66 643,920 57,716 11.16 .07 -
09-30-66 592,628 58,610 10.11 .07 -
12-31-66 651,282 59,365 10.97 .07 -
03-31-67 728,115 60,181 12.10 .085 -
06-30-67 753,075 61,364 12.27 .07 -
09-30-67 823,967 62,810 13.12 .07 -
12-31-67 850,119 64,427 13.20 .07 -
03-31-68 812,416 65,607 12.38 .105 -
06-30-68 1,013,629 72,214 14.04 .07 -
09-30-68 1,046,852 72,633 14.41 .07 -
12-31-68 1,103,734 74,502 14.81 .07 -
03-31-69 1,083,278 77,393 14.00 .15 -
06-30-69 1,030,784 79,169 13.02 .07 -
09-30-69 1,063,290 83,291 12.77 .07 -
12-31-69 1,085,186 84,807 12.80 .07 -
03-31-70 1,061,534 87,349 12.15 .16 -
06-30-70 843,133 88,367 9.54 .07 -
09-30-70 959,114 89,417 10.73 .07 -
12-31-70 1,054,162 90,941 11.59 .07 -
03-31-71 1,168,919 91,819 12.73 .16 -
06-30-71 1,198,777 92,573 12.94 .07 -
09-30-71 1,200,753 92,723 12.95 .07 -
12-31-71 1,236,601 93,285 13.26 .07 -
03-31-72 1,285,684 93,661 13.73 .14 .08
06-30-72 1,228,951 93,834 13.10 .07 -
09-30-72 1,208,454 92,258 13.10 .07 -
12-31-72 1,272,570 93,673 13.59 .07 -
03-31-73 1,152,089 96,695 11.91 .13 .07
06-30-73 1,073,939 97,943 10.96 .07 -
09-30-73 1,131,789 99,353 11.39 .07 -
12-31-73 1,025,521 100,282 10.23 .07 -
03-31-74 988,697 101,763 9.72 .14 -
06-30-74 863,820 101,578 8.50 .07 -
09-30-74 667,051 101,292 6.59 .07 -
12-31-74 757,545 106,909 7.09 .07 -
03-31-75 909,125 106,162 8.56 .14 -
06-30-75 1,028,687 106,517 9.66 .07 -
09-30-75 954,187 107,651 8.86 .07 -
12-31-75 1,056,439 111,619 9.46 .07 -
03-31-76 1,230,953 115,167 10.69 .16 -
06-30-76 1,265,767 117,506 10.77 .07 -
09-30-76 1,313,363 121,229 10.83 .07 -
12-31-76 1,402,661 124,264 11.29 .08 -
03-31-77 1,335,592 126,714 10.54 .188 .062
06-30-77 1,456,451 134,575 10.82 .08 -
09-30-77 1,450,573 139,402 10.41 .08 -
12-31-77 1,505,147 145,252 10.36 .08 -
03-31-78 1,418,417 146,380 9.69 .211 .049
06-30-78 1,523,758 145,470 10.47 .09 -
09-30-78 1,672,364 150,729 11.10 .09 -
12-31-78 1,574,097 153,728 10.24 .09 -
03-31-79 1,724,695 162,627 10.61 .204 .051
06-30-79 1,773,427 163,640 10.84 .09 -
09-30-79 1,913,242 167,426 11.43 .09 -
12-31-79 1,872,059 165,806 11.29 .09 -
03-31-80 1,769,935 170,882 10.36 .25 .0525
06-30-80 1,974,288 169,675 11.64 .10 -
09-30-80 2,204,689 173,549 12.70 .10 -
12-31-80 2,416,997 177,025 13.65 .10 -
03-31-81 2,424,976 184,148 13.17 .29 .0868
06-30-81 2,356,007 186,307 12.65 .11 -
09-30-81 2,128,956 183,447 11.61 .11 -
12-31-81 2,315,441 185,009 12.52 .12 -
03-31-82 2,165,531 194,140 11.15 .39 .19123
06-30-82 2,074,816 190,067 10.92 .13 -
09-30-82 2,262,073 189,837 11.92 .13 -
12-31-82 2,593,411 195,469 13.27 .13 -
03-31-83 2,815,081 209,390 13.44 .40 .2500
06-30-83 3,030,744 212,068 14.29 .15 -
09-30-83 3,210,564 223,059 14.39 .15 -
12-31-83 3,345,988 229,238 14.60 .15 -
03-31-84 3,279,542 247,700 13.24 .32 .5000
06-30-84 3,322,155 262,695 12.65 .16 -
09-30-84 3,554,876 263,783 13.48 .16 -
12-31-84 3,727,899 278,241 13.40 .16 -
03-31-85 4,058,327 300,068 13.52 .22 .6800
06-30-85 4,351,707 305,496 14.24 .16 -
09-30-85 4,260,686 310,379 13.73 .16 -
12-31-85 4,962,325 318,589 15.58 .16 -
03-31-86 5,663,449 347,479 16.30 .208 .86227
06-30-86 6,174,120 365,531 16.89 .16 -
09-30-86 6,392,215 399,871 15.99 .16 -
12-31-86 6,701,786 407,265 16.46 .16 -
03-31-87 8,766,205 491,228 17.85 .196 .79447
06-30-87 9,214,305 509,569 18.08 .16 -
09-30-87 9,921,139 530,566 18.70 .16 -
12-31-87 7,876,275 525,238 15.00 .14 .24513
03-31-88 8,649,901 565,608 15.29 .16 -
06-30-88 9,027,829 574,563 15.71 .15 -
09-30-88 8,986,977 575,956 15.60 .16 -
12-31-88 8,592,807 610,504 14.07 .38 1.10967
03-31-89 9,103,009 618,331 14.72 - -
06-30-89 9,531,124 614,861 15.50 .16 -
09-30-89 10,815,006 652,207 16.58 .16 -
12-31-89 10,895,182 682,321 15.97 .35 0.53769
03-31-90 11,000,740 695,558 15.82 - -
06-30-90 11,521,748 696,414 16.54 .16 0.02646
09-30-90 10,534,037 706,268 14.92 .16 -
12-31-90 11,283,448 744,734 15.15 .35 0.40297
03-31-91 12,685,391 759,477 16.70 - -
06-30-91 12,485,281 766,387 16.29 .16 -
09-30-91 13,225,379 780,213 16.95 .16 -
12-31-91 14,374,679 831,027 17.30 .34 0.29292
03-31-92 14,428,305 851,349 16.95 - -
06-30-92 14,691,191 863,019 17.02 .15 -
09-30-92 15,940,013 910,936 17.50 .16 -
12-31-92 17,006,789 971,502 17.51 .325 0.15944
03-31-93 18,071,613 1,008,275 17.92 - -
06-30-93 17,621,101 992,755 17.75 .15 -
09-30-93 17,949,559 999,163 17.96 .15 -
12-31-93 17,990,556 1,010,692 17.80 .3125 0.17075
03-31-94 17,777,177 1,021,219 17.41 - -
06-30-94 17,953,364 1,033,984 17.36 .14 -
09-30-94 18,472,176 1,036,473 17.82 .15 -
12-31-94 18,096,297 1,058,427 17.10 .30 0.17874
03-31-95 19,835,494 1,072,309 18.50 - -
06-30-95 21,416,325 1,076,463 19.90 .14 -
09-30-95 22,527,409 1,082,829 20.80 .14 -
12-31-95 24,052,746 1,116,620 21.54 .295 0.19289
</TABLE>
<TABLE>
Exhibit 3
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
OCTOBER 1, 1995 THROUGH DECEMBER 31, 1995
<CAPTION>
Bought or Held After
Item Received Transaction
---- -------- -----------
(Shares) (Shares)
<S> <C> <C>
A T & T Corporation 5,000 10,000
(1) Burlington Northern Santa Fe<F1> 3,191 3,191
(2) Nike<F2> 1,000 2,000
(3) Schweitzer Maudit<F3> 300 300
International
Various issues of Commercial
Paper Notes Purchased
during 4th Qtr., 1995 21,925M<F4> 1,845M<F4>
Weyerhaeuser 1,000 5,000
<CAPTION>
Sold or Held After
Item Exchanged Transaction
---- --------- -----------
(Shares) (Shares)
<S> <C> <C>
A T & T Corporation 5,000 5,000
(1) Burlington Northern Santa Fe
6.25% Conv. Preferred<F1> 3,000 -
Various issues of Commercial
Paper Notes maturing during
4th Quarter, 1995 21,640M<F4> -
Werner Enterprises 2,000 -
(1)<F1> Preferred Stock Converted to Common Stock on 12/27/95
(2)<F2> Received 1,000 shares from a 2-for-1 stock split on 10/30/95
(3)<F3> Received as a 1-for-10 spin-off from Kimberly Clark on 12/01/95
M<F4> - Units of $1,000 par value.
</TABLE>
<TABLE>
Exhibit 4
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
REPORTS TO STOCKHOLDERS OF MANAGEMENT COMPANIES
In Accordance With
Rule 30d-1(b) of the General Rules and Regulations Promulgated Under
The Investment Company Act of 1940 as Amended
`If any matter was submitted during the period covered by the shareholder report to a vote of the shareholders, through the
solicitation of proxies or otherwise, furnish the following information:''
(1) Annual Meeting held on February 21, 1995, at 11:00 a.m.
(2) Election of Directors for one year terms (All Directors Stand for
Annual Election):
<CAPTION>
Votes Cast
Withhold Authority
Names of Directors For All Nominees To Vote For
Elected at Meeting For Except All Nominees
- ------------------ --- ------ ------------
<S> <C> <C> <C>
Frederick N. Backer 947,578 None None
Edson L. Bridges II 947,578 None None
Edson L. Bridges III 947,578 None None
N. P. Dodge, Jr. 947,578 None None
John W. Estabrook 946,961 617 None
Jon D. Hoffmaster 947,578 None None
John J. Koraleski 947,578 None None
Roger D. Kupka 947,578 None None
Gary L. Petersen 947,578 None None
Roy A. Smith 947,578 None None
L.B. Thomas 947,578 None None
</TABLE>
(3) A brief description for each matter voted upon at the meeting:
<TABLE>
<CAPTION>
Matters Voted Upon For Against Abstain
------------------ --- ------- -------
<S> <C> <C> <C>
(a) For a proposed investment 947,578 None None
advisory contract which continues
the employment of Bridges
Investment Counsel, Inc. as
investment adviser to the Fund
for the period from April 17,
1995 through April 17, 1996
(b) For the ratification of the 943,315 1,137 3,126
selection of Arthur Andersen
LLP as independent auditors
of the Fund for the Fiscal
Year ending December 31, 1995
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors and the Shareholders of
Bridges Investment Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Bridges Investment Fund, Inc. (a Nebraska Corporation), including the schedule
of portfolio investments, as of December 31, 1995 and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Bridges Investment Fund, Inc. as of December 31, 1995, the results of its
operations for the year then ended, the changes in the net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Omaha, Nebraska
January 17, 1996
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Number Market
Title of Security of Shares Value
- --------------------------------------- --------- ------------
(Note 1)
<S> <C> <C>
COMMON STOCKS (70.7%)
Aircraft - Manufacturing (2.0%) -
- ---------------------------------
The Boeing Co. 6,000 $ 470,250
-----------
Amusements - Recreation - Sporting Goods (0.6%)
- -----------------------------------------------
NIKE, Inc. 2,000 $ 139,250
-----------
Banking and Finance (5.7%) -
- ----------------------------
First National of Nebraska, Inc. 220 $ 803,000
NationsBank Corporation 3,000 208,875
Norwest Corporation 5,486 181,038
State Street Boston Corp. 4,000 180,000
-----------
$ 1,372,913
-----------
Beverages - Soft Drinks (2.8%) -
- --------------------------------
PepsiCo, Inc. 12,000 $ 670,500
-----------
Building Matrial - Forest Products (0.9%) -
- -------------------------------------------
Georgia Pacific Corp. 3,000 $ 205,875
-----------
Chemicals (7.7%) -
- ------------------
The Dow Chemical Company 7,000 $ 491,750
Du Pont (E.I.) De Nemours & Company 4,000 279,500
Eastman Kodak Company 7,000 469,000
Monsanto Company 3,500 428,750
Morton International, Inc. 5,000 179,375
-----------
$ 1,848,375
-----------
Computers - Hardware and Software (3.9%) -
- ------------------------------------------
Hewlett-Packard Co. 6,000 $ 502,500
International Business Machines Corporation 1,000 91,375
Microsoft Corporation*<F5> 4,000 351,000
-----------
$ 944,875
-----------
Drugs - Medicines - Cosmetics (7.5%) -
- --------------------------------------
Abbott Laboratories 8,000 $ 333,000
Bristol-Myers Squibb Co. 3,000 257,625
Elan Corporation PLC ADR*<F5> 2,000 97,250
Johnson & Johnson 5,000 427,500
Merck & Co., Inc. 10,000 656,250
Perrico Company*<F5> 3,000 35,625
-----------
$ 1,807,250
-----------
Electrical Equipment and Supplies (1.8%) -
- ------------------------------------------
General Electric Co. 6,000 $ 432,000
-----------
Electronics (2.8%) -
- --------------------
Intel Corporation 4,000 $ 227,000
Motorola, Inc. 8,000 456,000
-----------
$ 683,000
-----------
Finance - Real Estate (2.1%) -
- ------------------------------
Federal Home Loan Mortgage Corporation 6,000 $ 501,000
-----------
Food - Miscellaneous Products (3.7%) -
- --------------------------------------
Philip Morris Companies, Inc. 10,000 $ 902,500
-----------
Forest Products & Paper (1.0%)
- ------------------------------
Kimberly-Clark Corporation 3,000 $ 248,250
-----------
Insurance - Property, Casulaty,
- -------------------------------
& Reinsurance (1.3%) -
- ----------------------
General Re Corp. 2,000 $ 310,000
-----------
Insurance - Municipal Bond (0.9%) -
- -----------------------------------
MBIA, Inc. 3,000 $ 225,000
-----------
Lumber and Wood Products (0.9%) -
- ---------------------------------
Weyerhaeuser Company 5,000 $ 216,250
-----------
Machinery - Construction & Mining (0.5%) -
- ------------------------------------------
Caterpillar, Inc. 2,000 $ 117,500
-----------
Metal Products - Miscellaneous (1.1%) -
- ---------------------------------------
Nucor Corporation 4,500 $ 257,062
-----------
Motion Pictures and Theatres (1.7%) -
- -------------------------------------
Walt Disney Co. 7,000 $ 412,125
-----------
Petroleum Producing (6.9%) -
- ----------------------------
Amoco Corporation 5,000 $ 357,500
Atlantic Richfield Company 2,000 221,500
Chevron Corporation 10,000 523,750
Exxon Corporation 4,000 324,500
Mobil Corporation 2,000 223,500
-----------
$ 1,650,750
-----------
Printing and Engraving (0.6%) -
- -------------------------------
Deluxe Corp. 5,000 $ 145,000
-----------
Publishing - Newspapers (1.0%) -
- --------------------------------
Gannett Co., Inc. 4,000 $ 245,500
-----------
Publishing - Electronic (1.4%) -
- --------------------------------
Reuters Holdings PLC 6,000 $ 330,750
-----------
Restaurants - Food Service (0.5%) -
- -----------------------------------
Apple South, Inc. 3,500 $ 75,250
Brinker International, Inc.*<F5> 3,000 45,375
-----------
$ 120,625
-----------
Retail Stores - Apparel and Clothing (1.2%) -
- ---------------------------------------------
Gap, Inc. 7,000 $ 294,000
-----------
Retail Stores - Department (2.0%) -
- -----------------------------------
Dayton Hudson Corporation 3,500 $ 262,500
Wal-Mart Stores, Inc. 10,000 222,500
-----------
$ 485,000
-----------
Retail Stores - Variety (0.7%) -
- --------------------------------
Albertson's Inc. 5,000 $ 164,375
-----------
Telecommunications (4.7%) -
- ---------------------------
A T & T Corp. 5,000 $ 323,750
GTE Corporation 10,000 438,750
Sprint Corporation 8,000 317,000
Telephonos de Mexico SA CL L ADR 1,500 47,813
-----------
(One ADR represents 20 Series L shares)
$ 1,127,313
-----------
Tobacco (0.0%) -
- ----------------
Schweitzer-Mauduit International, Inc. 300 $ 6,938
-----------
Transportation - Railroads (2.1%) -
- -----------------------------------
Burlington Northern Santa Fe 3,191 $ 248,898
Union Pacific Corporation 4,000 264,000
-----------
$ 512,898
-----------
Waste Management (0.7%) -
- -------------------------
WMX Technologies, Inc. 5,500 $ 163,625
-----------
TOTAL COMMON STOCKS (Cost - $10,527,101) $17,010,749
-----------
PREFERRED STOCKS (1.6%)
Automobiles (0.9%) -
- --------------------
General Motors Corp. $3.25 Series C
Convertible Preferred 3,000
$ 219,750
-----------
Transportation - Aircraft (0.7%) -
- ----------------------------------
Delta Air Lines $3.50 Series C
Convertible Preferred 3,000
$ 178,125
-----------
TOTAL PREFERRED STOCKS (Cost - $322,355) $ 397,875
-----------
TOTAL STOCKS (Cost - $10,849,456) $17,408,624
-----------
<CAPTION>
Principal Market
Title of Security Amount Value
- --------------------------------------------- -------- ------------
<S> <C> <C>
DEBT SECURITIES (26.7%)
Electric Utilities (0.7%) -
- ---------------------------
Southern California Edison Company, 8.625%
First and Refunding Mortgage Series 86C,
due April 15, 2019 $150,000
$ 158,531
-----------
Entertainment (0.3%) -
- ----------------------
Time Warner, Inc. Convertible Subordinated
Debentures 8.75% due April 1, 2015 $ 78,100
$ 80,931
-----------
Food - Miscellaneous Products (0.5%) -
- --------------------------------------
Super Valu Stores, Inc. 8.875%
Promissory Notes, due June 15, 1999 $100,000
$ 107,938
-----------
U.S. Government (13.1%) -
- -------------------------
U.S. Treasury, 9.375% Notes,
due April 15, 1996 $200,000 $ 202,375
U.S. Treasury, 8.875% Notes,
due November 15, 1997 200,000 212,813
U.S. Treasury, 9.000% Notes,
due May 15, 1998 200,000 216,563
U.S. Treasury, 9.125% Notes,
due May 15, 1999 200,000 223,187
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 227,125
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 223,750
U.S. Treasury, 7.875% Notes,
due August 15, 2001 200,000 223,375
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 221,875
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 260,750
U.S. Treasury, 7.250% Notes,
due May 15, 2004 200,000 222,000
U.S. Treasury, 7.50% Notes,
due February 15, 2005 200,000 226,750
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 200,000 219,875
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 244,625
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 200,000
234,312
-----------
$ 3,159,375
-----------
Household Appliances and Utensils (0.5%) -
- ------------------------------------------
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000
$ 118,243
-----------
Office Equipment and Supplies (0.5%) -
- --------------------------------------
Xerox Corporation, 9.750%
Notes, due March 15, 2000 $100,000
$ 114,406
-----------
Retail Stores - Broad Line Chains (0.6%) -
- ------------------------------------------
Costco Wholesale Corporation 5.750%
Convertible Subordinated Debentures,
due May 15, 2002 $150,000
$ 141,750
-----------
Retail Stores - Department (1.2%) -
- -----------------------------------
Dillard Department Stores, Inc. 7.850%
Debentures, due October 1, 2012 $150,000 $ 169,398
Sears Reobuck & Co.
9.375% Debentures, due
November 1, 2011 100,000
125,042
-----------
$ 294,440
-----------
Textiles - Miscellaneous (0.4%) -
- ---------------------------------
Guilford Mills, Inc. 6.000%
Convertible Subordinated Debentures
due September 15, 2012 $100,000
$ 94,500
-----------
Transportation - Railroads (0.6%) -
- -----------------------------------
Union Pacific Corporation 6.00%
Notes, due September 1, 2003 $150,000
$ 146,906
-----------
Waste Management (0.6%) -
- -------------------------
Browning Ferris Industries, Inc.
Convertible Subordinated Debentures
6.250% due August 15, 2012 $150,000
$ 149,625
-----------
Commerical Paper - Short Term (7.7%) -
- --------------------------------------
Ford Motor Credit Corp.
Commercial Paper Note 5.800%
due January 2, 1996 $1,000,000 $ 1,000,000
Prudential Funding Corp.
Commercial Paper Note 5.500%
due January 2, 1996 $ 845,000
$ 845,000
-----------
$ 1,845,000
-----------
TOTAL DEBT SECURITIES (Cost - $6,133,965) $ 6,411,645
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost - $16,983,421) (99.0%) $23,820,269
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (1.0%)
232,477
-----------
NET ASSETS, December 31, 1995 (100.0%) $24,052,746
===========
*<F5> Nonincome-producing security
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Amount
-------
<S> <C>
ASSETS
Investments, at market value (Note 1)
Common and preferred stocks (cost $10,849,456) $17,408,624
Debt securities (cost $6,133,965) 6,411,645
----------
Total Investments $23,820,269
Cash 169,356
Receivables
Dividends and interest 130,536
Subscriptions to capital stock 150,848
Securities sold 40,465
-----------
TOTAL ASSETS $24,311,474
===========
LIABILITIES
Accounts payable - purchase of securities $ 43,376
Dividend distributions payable (Notes 1 and 7) 167,493
Accrued operating expenses 47,859
-----------
TOTAL LIABILITIES $ 258,728
-----------
NET ASSETS
Capital stock, $1 par value - Authorized 3,000,000 shares,
less 637,617 shares redeemed; 1,754,237 shares issued;
1,116,620 shares outstanding (Note 6) $ 1,116,620
Paid-in surplus -
Excess over par value of amounts received from sale
of 1,754,237 shares, less amounts paid out in redeeming
637,617 shares (Note 6) 16,104,141
----------
Net capital paid in on shares $17,220,761
Accumulated net realized loss on investment
transactions (9,062)
Net unrealized appreciation on investments
(Note 1) 6,836,848
Accumulated undistributed net investment income (Note 1) 4,199
-----------
TOTAL NET ASSETS $24,052,746
===========
NET ASSET VALUE PER SHARE (Note 5) $21.54
======
OFFERING PRICE PER SHARE (Note 5) $21.54
======
REDEMPTION PRICE PER SHARE (Note 5) $21.54
======
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENT OF OPERATIONS
-----------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Amount Amount
------- -------
<S> <C> <C>
INVESTMENT INCOME (Note 1)
Interest $428,822
Dividends 384,682
-------
Total Investment Income $813,504
EXPENSES
Management fees (Note 2) $107,149
Custodian fees 28,487
Professional services 10,525
Insurance 9,395
Bookkeeping services 9,368
Printing and supplies 9,345
Dividend disbursing and transfer
agent fees (Note 3) 7,787
Computer programming 7,306
Taxes and licenses 1,065
Foreign taxes paid on dividends 903
--------
Total Expenses $ 191,330
---------
NET INVESTMENT INCOME $ 622,174
---------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS, NET (Note 1)
Net realized gain on transactions in
investment securities $ 243,759
Net increase in unrealized
appreciation of investments 4,750,041
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $4,993,800
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,615,974
==========
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995 AND 1994
---------------------------------------------
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 622,174 $ 611,464
Net realized gain on transactions in
investment securities (Note 1) 243,759 151,482
Net increase (decrease) in unrealized
appreciation of investments (Note 1) 4,750,041 (697,147)
----------- ---------
Net increase in net assets
resulting from operations $ 5,615,974 $ 65,799
Net equalization credits (Note 1) 1,028 3,270
Distributions to shareholders from -
Net investment income (Note 7) (622,174) (611,464)
Net realized gain from investment
transactions (211,269) (188,120)
Equalization (Note 1) (64) (1,726)
Net capital share transactions
(Note 6) 1,172,954 837,982
------------ ---------
Total Increase in Net Assets $ 5,956,449 $ 105,741
NET ASSETS:
Beginning of year 18,096,297 17,990,556
---------- ----------
End of year (including accumulated
undistributed net investment income
of $4,199 and $3,235, respectively) $24,052,746 $18,096,297
=======================
<FN>The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1995
-----------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Bridges Investment Fund, Inc. (Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The primary investment objective of the Fund is long
term capital appreciation. In pursuit of that objective, the Fund invests
primarily in common stocks. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements. The policies are in conformity with generally
accepted accounting principles.
A. Investments -
-----------
Security transactions are recorded on the trade date at purchase
cost or sales proceeds. Dividend income is recognized on the ex-
dividend date, and interest income is recognized on an accrual basis.
Securities owned are reflected in the accompanying statement of
assets and liabilities and the schedule of portfolio investments at
quoted market value. Quoted market value represents the last recorded
sales price on the last business day of the calendar year for
securities traded on a national securities exchange. If no sales were
reported on that day, quoted market value represents the closing bid
price. The cost of investments reflected in the statement of assets
and liabilities and the schedule of portfolio investments is the same
as the basis used for Federal income tax purposes. The difference
between cost and quoted market value of securities is reflected
separately as unrealized appreciation (depreciation) as applicable.
<TABLE>
<CAPTION>
1995 1994 Net Change
---- ---- ----------
<S> <C> <C> <C>
Net Unrealized appreciation (depreciation):
Aggregate gross unrealized appreciation on $7,035,300 $2,812,331
securities
Aggregate gross unrealized depreciation on (198,452) (725,524)
----------- -----------
securities
Net $6,836,848 $2,086,807 $4,750,041
========== ========== ==========
</TABLE>
The net realized gain (loss) from the sales of securities is
determined for income tax and accounting purposes on the basis of the cost
of specific securities.
B. Federal Income Taxes -
--------------------
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code of 1986, as amended, applicable to
regulated investment companies, including the distribution of
substantially all taxable income including net realized gains
on sales of investments. Therefore, no provision is made for
Federal income taxes.
C. Distribution To Shareholders -
----------------------------
The Fund accrues dividends to shareholders on the ex-dividend
date.
D. Equalization -
------------
The Fund uses the accounting practice of equalization by which a
portion of the proceeds from sales and costs of redemption of
capital shares, equivalent on a per share basis to the amount of
undistributed net investment income on the date of the
transactions, is credited or charged to undistributed income.
As a result, undistributed net investment income per share is
unaffected by sales or redemption of capital shares.
(2) INVESTMENT ADVISORY CONTRACT
----------------------------
Under an Investment Advisory Contract, Bridges Investment Counsel,
Inc. (Investment Adviser) furnishes investment advisory services and
performs certain administrative functions for the Fund. In return,
the Fund has agreed to pay the Investment Adviser a fee computed on a
quarterly basis at the rate of1/8 of 1% of the average net asset
value of the Fund during the quarter, equivalent to 1/2 of 1% per
annum. Certain officers and directors of the Fund are also officers
and directors of the Investment Adviser. These officers do not
receive any compensation from the Fund other than that which is
received indirectly through the Investment Adviser.
The contract between the Fund and the Investment Adviser provides that
total expenses of the Fund in any year, exclusive of stamp and other
taxes, but including fees paid to the Investment Adviser, shall not
exceed, in total, a maximum of 1 and 1/2% of the average month end
net asset value of the Fund for the year. Amounts, if any, expended
in excess of this limitation are reimbursed by the Investment Adviser
as specifically identified in the Investment Advisory Contract.
(3) DIVIDEND DISBURSING AND TRANSFER AGENT
--------------------------------------
Effective October 1, 1987, dividend disbursing and transfer agent
services are provided by Bridges Investor Services, Inc. (Transfer
Agent). The fees paid to the Transfer Agent are intended to
approximate the cost to the Transfer Agent for providing such
services. Certain officers and directors of the Fund are also
officers and directors of the Transfer Agent.
(4) SECURITY TRANSACTIONS
---------------------
The cost of long term investment purchases during the years ended
December 31, was:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
United States government obligations $ 199,498 $ 198,495
Other Securities 1,181,022 1,698,536
--------- ---------
Total Cost $1,380,520 $1,897,031
========== ==========
</TABLE>
Net proceeds from sales of long term investments during the years
ended December 31, were:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
United States government obligations $ 200,000 $ 200,000
Other Securities 1,503,775 1,528,893
--------- ---------
Total Net Proceeds $1,703,775 $1,728,893
========== ==========
Total Cost Basis of
Securities Sold $1,460,016 $1,577,411
========== ==========
</TABLE>
(5) NET ASSET VALUE
---------------
The net asset value per share represents the effective price for all
subscriptions and redemptions.
(6) CAPITAL STOCK
-------------
Shares of capital stock issued and redeemed are as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Shares sold 83,027 52,107
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 36,926 40,466
------ ------
119,953 92,573
Shares redeemed 61,760 44,838
------ ------
Net increase 58,193 47,735
====== ======
Value of capital stock issued and redeemed is as follows:
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Shares sold $1,627,894 $ 919,163
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 725,065 708,904
---------- ----------
$2,352,959 $1,628,067
Shares redeemed 1,180,005 790,085
--------- ----------
Net increase $1,172,954 $ 837,982
========== ==========
</TABLE>
- --------
(7) DISTRIBUTION TO SHAREHOLDERS
----------------------------
On December 5, 1995 a cash distribution was declared from net
investment income accrued through December 31, 1995. This distribution
was ultimately calculated as $.15 per share aggregating $167,493. (This
dividend includes $65 that represents a return of capital distribution to
shareholders for Federal income tax purposes.) The dividend will be paid
on January 22, 1996, to shareholders of record on December 29, 1995.
(8) DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------
In October, 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 119, Disclosure about
Derivative Financial Investments and Fair Value of Financial Instruments.
The Fund has not entered into any such investment or investment contracts.
A covered call option contract is a form of a financial derivative
instrument. The Fund's investment and policy restrictions do permit the
Fund to sell or write covered call option contracts under certain
circumstances and limitations as set forth in the Fund's prospectus.
FINANCIAL HIGHLIGHTS*
- ---------------------
Per share income and capital changes for a share outstanding for
each of the last five years were:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $17.10 $17.80 $17.51 $17.30 $15.15
------ ------ ------ ------ ------
Income From Investment Operations
- ---------------------------------
Net Investment Income $ .58 $ .59 $ .61 $ .63 $ .66
Net Gains or (Losses) on Securities
(both realized and unrealized)
4.63 (.52) .46 .37 2.44
------ ------- ------ ------ ------
Total From Investment Operations $ 5.21 $ .07 $ 1.07 $ 1.00 $ 3.10
Less Distributions
- ------------------
Dividends from net investment income (.58) (.59) (.61) (.63) (.66)
Distributions from capital gains (.19) (.18) (.17) (.16) (.29)
------- ------- ------- ------- -------
Total Distributions $ (.77) $ (.77) $ (.78) $ (.79) $ (.95)
------- ------- ------- ------- -------
Net Asset Value, End of Period $21.54 $17.10 $17.80 $17.51 $17.30
====== ====== ====== ====== ======
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(in thousands)
$24,052 $18,096 $17,991 $17,007 $14,375
------- ------- ------- ------- -------
Ratio of Expenses to Average
Net Assets**<F6>
.89% .90% .90% .94% .98%
-------- -------- -------- -------- --------
Ratio of Net Income to
Average Net Assets **<F6>
3.80% 4.25% 4.32% 4.57% 4.91%
-------- -------- -------- -------- --------
Portfolio Turnover Rate 7% 10% 11% 7% 28%
-------- -------- -------- -------- --------
<FN> * Per share income and capital change data is computed using the weighted average
number of shares outstanding method.
<F6> ** Average net asset data is computed using monthly net asset value figures.
Bridges Investment Fund, Inc. January 22, 1996
Shareholder Communication
Annual Report for 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS
Introduction
- ------------
The following information is provided in response to Item 5 and Item 5A in
the Form N-1A to be filed annually under the Investment Company Act of 1940 with
the Securities and Exchange Commission in Washington, D.C. The Form N-1A
prescribes certain information that is to be included in the Prospectus for the
Fund.
Item 5(c)
- ---------
Item 5(c) requires the disclosure of the name and title of the person or
persons employed by or associated with the Fund's investment adviser, Bridges
Investment Counsel, Inc., who are primarily responsible for the day-to-day
management of the Fund's portfolio as well as the length of their service and
business experience during the past five years.
Mr. Edson L. Bridges II, President of the Fund and President of Bridges
Investment Counsel, Inc., is primarily responsible for the day-to-day management
of the Firm's portfolio. Mr. Bridges II has conducted this responsibility for
the past five years, and, in fact, for the entire span of the Fund's more than
32 years of operation.
Mr. Edson L. Bridges III, Vice President of the Fund and Executive Vice
President - Investments, of Bridges Investment Counsel, Inc., is the back-up
person for the day-to-day operation of the Fund's portfolio. Mr. Bridges III
has dedicated the last five years as a research person and portfolio manager for
Bridges Investment Counsel, Inc. Mr. Bridges III has been employed in these
areas of responsibility for all clients, including Bridges Investment Fund,
Inc., for more than 12 years.
Item 5A.(a)
- -----------
The first response under this disclosure is Item 5A.(a) that requests the
management to briefly discuss those factors, including relevant market
conditions and the investment strategies and techniques pursued by the Fund's
investment adviser, that materially affected the performance of the Registrant
during the most recently completed fiscal year. The investment performance for
1995, the most recently completed fiscal year, was a 30.66% total return for a
$10,000 investment with cash distributions reinvested in shares of capital stock
in the Fund. This number differs from the 30.46% total return reported on page
one because that earlier calculation did not reinvest dividends and capital
gains distribution and did not include the cost of five reinvestment transaction
fees.
The statistical information shown in Table 1 is taken from quarterly
appraisal reports prepared by Bridges Investment Counsel, Inc. for the
management and Directors of Bridges Investment Fund, Inc. These reports state
the investment position of the Fund's portfolio as of December 31, 1994, and
December 31, 1995. The changes in asset allocations by classes of securities
should be of assistance in identifying the factors that materially affected the
Fund's investment performance during 1995. Refer to Table 1, on pages 9 and 10:
As shown on Table, 1, the total market value of the Fund's portfolio grew
32.96% during 1995 to a new all-time high of $24,057,687. The book value or
investment cost basis paid for securities increased 7.62% to $17,229,748 for an
increase of 7.62% for the twelve months ended December 31, 1995. At year-end
1995, the estimated annual income for the Fund's portfolio securities was
$835,164 up 7.2% from the $779,104 forecast made one year earlier.
During 1995, cash reserves were allowed to build up as securities prices
advanced for fixed income securities and future returns became less attractive.
The reductions in investment costs by security class were: U.S. Treasury
securities, $24,062; Corporate Bonds, Debentures, and Notes, $102,776;
Convertible Debentures, $66,948; and Convertible Preferred Stock, $344,640. The
total reduction in investment positions at cost for fixed income securities
called, exchanged, or sold was $538,426 during 1995.
New investment commitments to common stock were $465,082 at cost for a 4.62%
advance in dollars allocated to equities. The basic inventory of common stocks
at the end of 1994 acquired in prior years produced significant price
improvements during 1995. The companies with above-average market positions
that contributed to the successful portfolio performance for 1995 were: Philip
Morris, First National of Nebraska, Inc., PepsiCo, Merck & Co., Hewlett-Packard,
and Microsoft. Common stocks, as a group, ended 1995 with 70.7% of the total
market value of the portfolio -- up from 68.8% at December 31, 1994.
At year-end, the key characteristics of the Fund's common stock portfolio
that are indicators for future higher values for the next one-to-five years are
set forth below. The data is based on the dollar-weighted representation of
companies at market value in the portfolio:
</TABLE>
<TABLE>
<CAPTION>
Sales Price/ Mean Est.
Indicator: 5 Yr. Earnings EPS EPS Historical LTD %
Growth Ratio Change Growth EPS 1994 of Total
Rate 1996 EPS `95-'96 Next 5 Yrs. Stability ROE Capital
---- -------- ------- ----------- --------- --- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Indicator 7.7% 14.3x 12.2% 12.6% 8.8% 21.5% 25.1%
Value
<FN>
Definitions: EPS -- Earnings per share
ROE -- Net after-tax income return as a percent of common equity
LTD -- Long-term debt as a percent of total shareholder equity and
long-term liabilities
Stability -- Consistency of earnings per share on growth trend line
</TABLE>
The recent price/earnings ratio of 14.3x estimated earnings per share for
1996 is slightly above the normal long-term average of 13 times for the general
market. The potential earnings per share gain of 12.2% for 1996 represents
potential for a good improvement over 1994. The forecast for earnings per share
for the next five years represents a small decrease over 1995 expectations at
the same point in time.
The Fund holds commercial paper and U.S. Treasury securities for a potential
reserve for securities purchases and for the development of investment income to
pay operating expenses and a modest dividend. The Fund owns corporate bonds to
achieve the highest internal income available in support of its dividend policy.
Until 1994, interest rates have been declining since the early 1980's in a
secular trend. New two-decade low rates were reached in 1993, thereby reducing
the realized actual and potential interest income for the portfolio. The Fund's
quarterly and year-end extra dividends declined slightly in response to the
long-term downtrend in interest rates. A record of the Fund's past five-year
dividend payments can be found on page 26 of the audited financial statements.
Convertible debentures and preferred stocks were selected over straight
preferred stocks, bonds, and debentures to protect the market value of the
instruments against large unrealized losses in the event interest rates reversed
in 1994 and later years. Convertible securities were also selected to provide
an annual income return on investment of 5%-6% compared to the 2%-3% current
return available from common stocks.
In conclusion, the Fund's management maintained a consistent course with the
past in terms of the continue employment of traditional growth stocks for the
predominant objective for the common stock segment of the total portfolio. Some
yield common stocks, convertible securities, corporate bonds, and U.S. Treasury
securities were utilized to develop predictable income streams to cover
operating expenses and to make dividend payments that were $.58 per share on a
beginning net asset value per share of $17.10 for a current return of 3.39% for
a one-year investment in the Fund.
Item 5A.(b)
- -----------
The Fund is required to provide a line graph comparing the initial account
value and subsequent account values at the end of each of the most recently
completed ten fiscal years of the Fund, assuming a $10,000 investment in the
Fund at the beginning of the first fiscal year to the same investment over the
same periods in an appropriate broad-based securities market index. In a table
placed within or contiguous to the graph, the Fund's average annual total
returns for the one, five, and ten-year periods ended on the last day of the
most recent fiscal year, computed in accordance with applicable SEC regulations
and guidelines, are provided.
This line graph appears on page MD&A 11. The information on the line graph
is set forth without amplifying commentary. However, the interpretative
discussion that precedes and follows in this section of the Annual Shareholder
Report for 1995 is an integral part of the overall presentation concerning
investment performance.
The assumptions for the preparation of data to compute performance for the
Standard & Poor's 500 Composite Index and for Bridges Investment Fund, Inc.,
along with other items of information and analysis appear at pages MD&A 12.
The Standard & Poor's 500 Composite Stock Index was chosen as the appropriate
broad-based market index for comparison with our Fund for the purpose of
benchmarking the results of a 100% common stock investment as an alternative to
an investment in our Fund. Common stocks would average about 68% of total
market value in the Fund's portfolio over the last decade. This observation
means that our Fund's investment record cannot be expected to match the results
of a securities investment in the Standard & Poor's 500 Composite Index because
the same degree of risk/reward has not been assumed by the Fund. Nevertheless,
the S&P 500 has the best data for tracking the general price trends for large
capitalization, widely owned stocks, a representative list of which is held by
our Fund.
Item 5A.(c)
- -----------
This response addresses the impact that any policy or practice as to the
maintenance of a specified level of distributions to shareholders had on
investment strategies of the Fund and the per share net asset value during the
Fund's last fiscal year -- 1995.
The management of the Fund has generally tried to maintain a $.14-$.16 per
share quarterly dividend payment to the shareholders since 1983. The impact of
this policy in 1995 was to restrain the total dollars allocated to common stocks
and thereby to limit, to the degree that more than 70% of total asset
allocations to stocks were not made, the upside price appreciation potential for
the net asset value per share. The choice of acquiring convertible debentures
and convertible preferred stocks was also influenced by this policy to develop
significant streams of income.
Shareholders should be aware that the income return component on certain
stocks and bonds may provide a modicum of protection against downward moves in
comparison to low and non-dividend paying common stocks in bear market
situations when they arise from time to time. The Fund's management believed a
significant price correction for common stocks was possible during 1995 due to
the advanced, high level for the popular stock market averages that are in long
uptrends dating back to lows in 1990, 1987, 1982, and 1974. Therefore, yield
bearing securities are regularly acquired and held for defensive purposes.
There will be one dividend payment taxable to 1995 and payable on January 22,
1996, that included a return of capital of $.0001 per share. Please refer to
the accompanying letter entitled Information for your Federal Income tax Return
- - 1995 dated January 22, 1996, for complete details. The return of capital
resulted from the utilization of amounts reserved in the Fund's equalization
account that protects existing shareholders from a dilution of their
proportionate allocation of income from new shares being subscribed less amounts
of accumulated income allocated to shares redeemed.
The disclosures required for Item 5(c) and Item 5A.(a), (b), and (c) conclude
at this point in this text.
Further Observations by Management
- ----------------------------------
The Portfolio Manager's Views -- At no time has the senior portfolio manager
-----------------------------
represented to the Board of Directors, the management of Bridges Investment
Counsel, Inc., or the shareholders of the Fund that our portfolio of securities
will be operated to match or exceed the investment results for any particular
securities price index or group of indices. The portfolio manager attempts to
be well invested in quality securities selected to achieve the long-term growth
of common stock values and the development of a modest amount of current income.
Direction of Disclosures -- The direction of disclosures by mutual funds will
------------------------
be to provide a greater amount of information on investment results. Those
requirements placed upon fund management will intensify the need to develop
competitive returns to confirm management's ability and skill, or the search
will deepen to find or create a composite index that justifies the funds'
results as they unfold. Our Firm's disclosure for the 1995 Annual Report was
made on a fail safe, least favorable basis to the Fund's record in the
anticipation that the investment results of our Fund are well known to its
investors with or without the graphic presentations, and that a 10.82% per ten
year long-term annual return has been acceptable to our shareholders.
Board of Director Views -- The Fund's Board of Directors has discussed and
-----------------------
will continue to address the establishment of reasonable investment objectives
that should be reached regularly by management over a number of years. Those
targets may or may not be communicated to shareholders, as expectations should
not be raised to unrealistic levels, nor can such figures be used as a means of
encouraging or influencing a prospective investment in the Fund. The Board may
conclude that the Fund as operated should be classified as a balanced fund
rather than a growth and income fund, as total return comparisons are made for
the Board between our Fund and other small growth and income funds. There were
no resolutions adopted by the Fund's Board of Directors with respect to a change
in the classification of the Fund during 1995.
The Board has heard reports from the management of the Fund that Bridges
Investment Counsel, Inc. or a new affiliate organization may sponsor several new
mutual funds to provide a range of choices for investment objectives, one of
which would be a fixed income alternative and the other a capital appreciation
common stock fund. In this possible environment, Bridges Investment Fund, Inc.
could be positioned in between the other two choices for prospective investors.
No decisions have been made regarding any of these matters other than to conduct
research into these matters.
The Determinants of Investment Returns -- Investment returns are a function
--------------------------------------
of many variables. The governing factors are the beginning date for the
calculation, the ending date for the calculation, and the securities owned in
the portfolio in the intervening periods. The long-term investment returns in
our Fund were achieved without assuming a maximum risk/reward position.
Midstream in the 1984 to 1995 time frame, there was the most significant market
crash in October, 1987, since the famous October, 1929, crash that was
associated with the Great Depression of the 1930's. The Board of Directors of
the Fund requested the management of the Fund to invest more conservatively in
1988 than in prior years. The result was a reduction of about 10% in the total
assets committed to equities. The value of $10,000 invested in our Fund versus
the S&P 500
investment begins to trail the Composite Index by a wider margin after 1988 than
in earlier years.
History of Calculations for MD&A Page 11 -- The table that appears on page 11
----------------------------------------
sets forth the dollars reported for a $10,000 investment in Bridges Investment
Fund, Inc. and the Standard & Poor's 500 Composite Stock Index in the one year,
five year, and ten year illustrations. One purpose for this presentation is to
demonstrate the dynamics that result from dropping off the base year and
starting with a new one. The data for each Annual Shareholder Report
Management's Discussion and Analysis will be published to portray the volatility
and consistency of the returns as they develop over the years. The level of
prices at the opening of the investment and at the time of the last calculation
carry the dominant forces in the determination of the final results:
<TABLE>
Value of a $10,000 Investment
-----------------------------
<CAPTION>
- ---------
%Chg. % Chg. % Chg.
Annual Prior Prior Prior
Report Yr. Yr. Yr.
Year Investment 1 Yr. Disclo. 5 Yr. Disclo. 10 Yr. Disclo.
- ---- ---------- ---- ------ ---- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1993 BIF, Inc. 10,618 N.C. 17,154 N.C. 27,656 N.C.
1994 BIF, Inc. 10,033 -5.5 13,882 -19.1 27,502 -0.6
1995 BIF, Inc. 13,066 +30.2 18,031 +29.9 27,949 +1.6
1993 S&P 500 11,010 N.C. 19,703 N.C. 39,656 N.C.
1994 S&P 500 10,122 -8.1 15,153 -23.1 37,800 -4.7
1995 S&P 500 13,661 +35.0 21,334 +40.8 39,519 +4.6
<FN>
Source: MD&A, Page 6
N.C. Not Calculated
</TABLE>
The change in the base year for the five year calculations was particularly
dramatic for the 1994 disclosure. With respect to the calculation for the
$10,000 investments in the S&P 500 Composite Index, the values calculated do not
have deductions for operating expenses and brokerage expenses that are reflected
in the values shown for an investment in the Fund. The values shown for the S&P
500 Composite Index may not be similar to data prepared by other issuers of this
type of information due to the methodology and timing for the reinvestment of
dividends received by S&P companies. Please refer to MD&A, page 12, for further
information.
Integrity and Trust -- In the final analysis, investors make judgments about
-------------------
organizations and the persons who manage and operate them. There can and should
be a strong faith and trust factor that develops over time. Our investment
record is based upon extensive research efforts and conservative judgments. The
process to improve efforts is a continuing one, particularly with respect to
addressing the implementation of what we know to the investment selection
process. The results of the changes in this direction will probably be an
increase in the portfolio turnover to adjust better to rapidly changing market
conditions. The management believes that its organization and people are at the
highest level of proficiency now than at any time in our entire relationship
with the Fund.
Respectfully submitted,
Edson L. Bridges II
President
<TABLE>
Table 1: Comparative Investment Positions of Bridges Investment Fund, Inc.
on December 31, 1994, and December 31, 1995
<CAPTION>
Numeric %
12/31/94 12/31/95 Change Change
-------- -------- ------ ------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Asset
- -----
Cash Reserves:
- --------------
Market Value $791,573 $2,085,168 $1,293,595 +163.42
Book Value 791,573 2,085,168 1,293,595 +163.42
------- --------- ---------
Unrealized Gain or (Loss) 0 0 0 --
Market Value/Book Value 100.00 100.00 0.00 0.00
Annual Income - Estimated $41,713 $104,475 $62,762 +150.46
U.S. Treasury Securities:
- -------------------------
Market Value $2,859,986 $3,159,375 $299,384 +10.47
Book Value 2,965,319 2,941,257 (24,062) -0.81
--------- --------- -------
Unrealized Gain or (Loss) $(105,333) $218,118 $323,451 N.M.<F71>
Market Value/Book Value 96.45 107.42 10.97 +11.37
Annual Income-Estimated $244,000 $236,500 $(7,500) -3.17
Corp. Bonds, Debentures & Notes:
- --------------------------------
Market Value $929,815 $940,464 $10,649 +1.15
Book Value 969,520 866,744 (102,776) -10.60
------- ------- ---------
Unrealized Gain or (Loss) $(39,705) $73,720 $(92,127) N.M.<F71>
Market Value/Book Value 95.90 108.51 12.61 +13.15
Annual Income-Estimated $81,163 $71,462 $(9,701) -11.95
Convertible Debentures:
- -----------------------
Market Value $478,315 $466,806 $(11,509) -2.41
Book Value 547,911 480,963 (66,948) -12.22
------- ------- -------
Unrealized Gain or (Loss) $(69,596) $(14,157) $55,439 N.M.<F71>
Market Value/Book Value 87.30 97.06 9.76 +11.18
Annual Income-Estimated $36,425 $30,834 $(5,591) -15.35
Convertible Preferred Stock:
- ----------------------------
Market Value $592,625 $397,875 $(194,750) -32.86
Book Value 666,995 322,355 (344,640) -51.67
------- ------- ---------
Unrealized Gain or (Loss) $(74,370) $75,520 $149,890 N.M.<F71>
Market Value/Book Value 88.85 123.43 34.58 +38.92
Annual Income-Estimated $36,640 $20,250 $(16,390) -44.73
Common Stock:
- -------------
Market Value $12,441,751 $17,007,998 $4,566,247 +36.70
Book Value 10,068,178 10,533,260 465,082 +4.62
---------- ---------- -------
Unrealized Gain or (Loss) $2,373,573 $6,474,738 $4,101,165 +172.78
Market Value/Book Value 123.58 161.47 37.89 +30.66
Annual Income-Estimated $339,163 $371,643 $32,480 +9.58
Total Portfolio:
- ----------------
Market Value $18,094,063 $24,057,687 $5,963,622 +32.96
Book Value 16,009,491 17,229,748 1,220,257 +7.62
---------- ---------- ---------
Unrealized Gain or (Loss) $2,084,574 $6,827,939 $4,743,364 +227.55
Market Value/Book Value 113.02 140.21 27.19 +24.06
Annual Income-Estimated $779,104 $835,164 $56,060 +7.20
<FN>
N.M.-Calculation Not Statistically Meaningful<F71>
Note: The statistics shown above are obtained from internal management reports that
may or may not precisely agree with audited financial data.
</TABLE>
<TABLE>
<CAPTION>
12/31/94 12/31/95
Portfolio Diversification % of Mkt. Val. % of Mkt. Val.
- ------------------------- ------------- -------------
<S> <C> <C>
Cash Reserves 4.4 8.7
U.S. Treasury Securities 15.8 13.1
Corp. Bonds, Deb. & Notes 5.1 3.9
Convertible Debentures 2.6 1.9
Convertible Preferred Stocks 3.3 1.7
Common Stocks 68.8 70.7
---- ----
Total 100.0 100.0
===== =====
</TABLE>
- --------
<TABLE>
GRAPH TO DEMONSTRATE THE
`COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
BRIDGES INVESTMENT FUND, INC. AND THE STANDARD AND POORS 500 INDEX'
<CAPTION>
YEAR BIF S&P 500
- ---- ----------- ------------
<S> <C> <C>
1985 10,000.00 10,000.00
1986 11,689.32 11,763.57
1987 11,780.72 12,378.92
1988 12,421.42 14,412.02
1989 15,212.59 18,955.94
1990 15,489.70 18,357.60
1991 18,746.10 23,957.28
1992 19,877.64 25,779.68
1993 21,129.37 28,376.59
1994 21,193.96 28,723.81
1995 27,949.47 39,519.22
<FN>
(Amounts in table above represent year-end market values, and are plotted as
data-points on a line graph in the actual annual shareholder report.)
<FN>
Average Annual Total Return for Bridges Investment Fund, Inc.:
1 Year 30.66%
5 Year 12.51%
10 Year 10.82%
<FN>
Past Performance is not predictive of future performance.
INFORMATION SUPPORTING AND SETTING QUALIFICATIONS
FOR INVESTMENT RETURNS
Assumptions
- -----------
1.The initial investment was made at the public offering price last
calculated on the business day before the first day of the first fiscal
year.
2.The subsequent account values are based on the net asset values of the
Fund last calculated on the last business day of the first and each
subsequent fiscal year.
3.The calculation for the final account value assumes the account was closed
and the redemption was at the price last calculated on the last business
day of the most recent fiscal year.
4.All dividends and capital gains distributions by the Fund were reinvested
at the price on the reinvestment dates. The dividend for the Standard &
Poor's 500 Composite Index for the previous quarter was invested at the
month-end price closest to the reinvestment date for the Fund.
5.Reinvestment fees for dividend and capital gains distributions were
deducted before reinvestment in shares of the Fund. The Standard & Poor's
500 Composite Index was not charged with any brokerage commissions,
reinvestment fees, or operating expenses.
Appropriate Index
- -----------------
The Fund is to select an appropriate broad-based securities market
index that is administered by an organization that is not an affiliated person
of the Fund or its investment adviser. The securities index chosen must be
adjusted to reflect reinvestment of dividends on securities in the index, but
not the expenses of the Fund.
Use of Additional Indexes
- -------------------------
In addition to the required comparison to a broadly-based index, mutual
fund registrants with the Securities and Exchange Commission are urged to
compare their performances to other more narrowly-based indexes that reflect the
market sectors in which they invest. Management has investigated commercial
paper, Treasury Bill, Treasury Note, Treasury Bond, and Corporate Bond indexes
to cover those portfolio segments not invested in the common stock market. Some
problems with comparable information have been encountered. Therefore, at this
point in time, the Fund management has decided not to present the comparisons to
the more narrow indices.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Thirty-Third Annual Shareholder Report 1995 and is qualified in its entirety by
reference to such report.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 16,983,421
<INVESTMENTS-AT-VALUE> 23,820,269
<RECEIVABLES> 321,849
<ASSETS-OTHER> 169,356
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24,311,474
<PAYABLE-FOR-SECURITIES> 43,376
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 215,352
<TOTAL-LIABILITIES> 258,728
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,220,761
<SHARES-COMMON-STOCK> 1,116,620
<SHARES-COMMON-PRIOR> 1,058,427
<ACCUMULATED-NII-CURRENT> 4,199
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9,062)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,836,848
<NET-ASSETS> 24,052,746
<DIVIDEND-INCOME> 384,682
<INTEREST-INCOME> 428,822
<OTHER-INCOME> 0
<EXPENSES-NET> 191,330
<NET-INVESTMENT-INCOME> 622,174
<REALIZED-GAINS-CURRENT> 243,759
<APPREC-INCREASE-CURRENT> 4,750,041
<NET-CHANGE-FROM-OPS> 5,615,974
<EQUALIZATION> 1,028
<DISTRIBUTIONS-OF-INCOME> 622,174
<DISTRIBUTIONS-OF-GAINS> 211,269
<DISTRIBUTIONS-OTHER> 64
<NUMBER-OF-SHARES-SOLD> 119,953
<NUMBER-OF-SHARES-REDEEMED> 61,760
<SHARES-REINVESTED> 36,926
<NET-CHANGE-IN-ASSETS> 5,956,449
<ACCUMULATED-NII-PRIOR> 3,235
<ACCUMULATED-GAINS-PRIOR> (41,552)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 107,149
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 191,330
<AVERAGE-NET-ASSETS> 21,429,860
<PER-SHARE-NAV-BEGIN> 17.10
<PER-SHARE-NII> 0.58
<PER-SHARE-GAIN-APPREC> 4.63
<PER-SHARE-DIVIDEND> 0.58
<PER-SHARE-DISTRIBUTIONS> 0.77
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.54
<EXPENSE-RATIO> 0.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
