SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 39 [x]
File No. 2-21600
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 25 [x]
File No. 811-1209
BRIDGES INVESTMENT FUND, INC.
(Exact Name of Registrant as Specified in Charter)
256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 402-397-4700
Edson L. Bridges II, 256 Durham Plaza, 8401 West Dodge Road, Omaha, NE 68114
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering N/A
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[x] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: CAPITAL STOCK
CONTENTS OF FORM N-1A
AND
CROSS REFERENCE SHEET
REQUIRED BY RULE 404
No. in
Part A
PART A INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover Page...............................................1
Item 2. Synopsis.................................................2
Item 2.
(a). Shareholder Transaction Expenses.........................4
Item 3. Condensed Financial Information..........................5
Item 4. General Description of Registrant........................6
Item 5. Management of the Fund...................................8
(a). Management's Discussion of Fund Performance.............10
Item 6. Capital Stock and Other Securities......................12
Item 7. Purchase of Securities Being Offered....................14
Item 8. Redemption of Shares (Repurchase).......................23
Item 9. Legal Proceedings.......................................25
No. in
Part B
PART B INFORMATION REQUIRED IN A STATEMENT OF ADDL. INFO.
Item 10. Cover Page...............................................1
Item 11. Table of Contents........................................2
Item 12. General Information and History..........................3
Item 13. Investment Objectives and Policies.......................3
Item 14. Management of the Fund (Registrant)......................6
Item 15. Control Persons and Principal Holders of Securities.....11
Item 16. Investment Advisory and Other Services..................14
Item 17. Brokerage Allocation....................................16
Item 18. Capital Stock and Other Securities......................17
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered..........................................18
Item 20. Tax Status..............................................19
Item 21. Underwriters............................................19
Item 22. Calculation of Performance Data.........................19
Item 23. Financial Statements....................................19
No. in
Part C
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits......................2-7
Item 25. Persons Controlled by or Under Common Control............7
Item 26. Number of Holders of Securities..........................8
Item 27. Indemnification..........................................8
Item 28. Business and Other Connections of Investment Adviser..8-10
Item 29 Principal Underwriters..................................10
Item 30. Location of Accounts and Records........................10
Item 31. Management Services.....................................10
Item 32. Undertakings............................................10
SIGNATURES........................................................11-12
SUMMARY PROSPECTUS.................................................None
Bridges Investment Fund, Inc. 1 February 27, 1998
Prospectus -- Part A
INFORMATION REQUIRED IN A PROSPECTUS
PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK
FEBRUARY 27, 1998 8401 WEST DODGE ROAD
OMAHA, NEBRASKA 68114
402-397-4700
INVESTMENT OBJECTIVES
THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL
APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A
SECONDARY INVESTMENT OBJECTIVE.
PORTFOLIO INVESTMENTS
THE FUND INTENDS TO ACHIEVE ITS INVESTMENT OBJECTIVES THROUGH THE
OWNERSHIP OF COMMON STOCKS, SECURITIES CONVERTIBLE INTO COMMON STOCKS, AND FIXED
INCOME SECURITIES. THE NON-CONVERTIBLE FIXED INCOME SECURITIES ISSUED BY
CORPORATIONS MAY NOT ACCOUNT FOR MORE THAN 40% OF THE MARKET VALUE OF THE FUND'S
PORTFOLIO.
PURCHASE PRICE
SHARES OF CAPITAL STOCK ARE OFFERED TO THE PUBLIC BY THE FUND AT THE NEXT
DETERMINED NET ASSET VALUE WHICH VARIES WITH THE CHANGES IN THE MARKET VALUE OF
THE FUND'S PORTFOLIO.
NO SELLING COMMISSIONS
THE FUND RECEIVES THE FULL AMOUNT PAID BY PURCHASERS OF THESE SHARES SINCE
THERE ARE NO UNDERWRITING DISCOUNTS OR SELLING CHARGES PAID TO ANYONE. HOWEVER,
SERVICE CHARGES ARE IMPOSED ON CERTAIN PLAN ACCOUNT OPERATIONS AS DESCRIBED ON
PAGES 18 AND 20.
PURCHASE PLANS
THE FUND REQUIRES A MINIMUM INITIAL INVESTMENT OF $800.00. SHARES CAN BE
PURCHASED FOR LESSER AMOUNTS UNDER THE REINVESTMENT OF CASH DISTRIBUTIONS PLAN
AND SCHEDULED INVESTMENTS PLAN AS DESCRIBED IN THIS PROSPECTUS. IN ADDITION,
INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNTS (IRA) AND STANDARD RETIREMENT PLANS ARE
AVAILABLE TO INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS. AS SET FORTH HEREIN,
THERE ARE CERTAIN TRANSACTION CHARGES BY FIRST BANK N.A. OMAHA, NEBRASKA AS
INVESTOR'S AGENT IN CONNECTION WITH INVESTMENTS AND REINVESTMENTS UNDER SUCH
PLANS.
REDEMPTION PRICE
SHARES OF CAPITAL STOCK OF THE FUND ARE REDEEMED AT CURRENT NET ASSET
VALUE NEXT DETERMINED, WHICH VARIES WITH THE CHANGES IN MARKET VALUE OF
SECURITIES OWNED.
Bridges Investment Fund, Inc. -2- February 27, 1998
Prospectus -- Part A
INVESTMENT ADVISER
THE INVESTMENT ADVISER TO AND THE MANAGER FOR THE FUND IS BRIDGES
INVESTMENT COUNSEL, INC., 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA,
NEBRASKA 68114.
SPECIAL NOTICES
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT BRIDGES
INVESTMENT FUND, INC. THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE
INVESTING. THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. ADDITIONAL
INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. 20549, IN TWO SEGMENTS: PART B--INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION AND PART C--OTHER INFORMATION. DESCRIPTIONS
OF THE TOPICS COVERED BY PART B AND PART C ARE FOUND ON PAGE 25 OF THIS
PROSPECTUS. COPIES OF PART B AND PART C ARE AVAILABLE UPON REQUEST AND WITHOUT
CHARGE. TO OBTAIN SUCH ADDITIONAL INFORMATION, WRITE OR CALL THE FUND'S OFFICE
AT THE ADDRESS OR NUMBER SHOWN ABOVE. NO INFORMATION IN THIS PROSPECTUS HAS
BEEN INCORPORATED BY REFERENCE FROM PART B OR PART C.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
(END OF COVER PAGE)
SYNOPSIS
THE FOLLOWING INFORMATION IS A SUMMARY OF IMPORTANT INFORMATION FOR A
PROSPECTIVE INVESTOR OR A PRESENT SHAREHOLDER IN BRIDGES INVESTMENT FUND, INC.:
a. THE TITLE OF THE SHARES OF THE FUND WHICH ARE OFFERED FOR SALE IN THIS
PROSPECTUS IS CAPITAL STOCK. THE FUND DOES NOT OFFER ANY OTHER SECURITIES
FOR SALE.
b. THE NAME OF THE INVESTMENT ADVISER TO THE FUND IS BRIDGES INVESTMENT
COUNSEL, INC. THE INVESTMENT ADVISER'S ADDRESS IS 256 DURHAM PLAZA, 8401
WEST DODGE ROAD, OMAHA, NEBRASKA 68114. THE PHONE NUMBER OF THE INVESTMENT
ADVISER IS 402-397-4700.
c. THERE IS NO SALES LOAD OR COMMISSION PAID AS A PERCENTAGE OF THE NET AMOUNT
INVESTED.
d. THE MINIMUM INITIAL INVESTMENT IN SHARES OF CAPITAL STOCK OF THE FUND IS
$800.
e. THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL
APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A
SECONDARY INVESTMENT OBJECTIVE. THERE CAN BE NO ASSURANCE THESE OBJECTIVES
CAN BE ACHIEVED. SEE PAGES 3-5 IN THE STATEMENT OF ADDITIONAL INFORMATION-
Bridges Investment Fund, Inc. -3- February 27, 1998
Prospectus -- Part A
-PART B FOR A FULL EXPLANATION OF INVESTMENT OBJECTIVES, POLICIES, AND
POLICY RESTRICTIONS.
f. THE FUND HAS OPERATED AS AN OPEN-END DIVERSIFIED INVESTMENT COMPANY SINCE
JULY 1, 1963, AND THE FUND INTENDS TO CONTINUE ON THIS SAME BASIS.
g. THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC., PROVIDES SECURITY
RESEARCH AND FINANCIAL ANALYSIS INFORMATION, DECISION-MAKING ASSISTANCE,
INVESTMENT MANAGEMENT, CONSULTING JUDGMENT AND OPINIONS, AND ADMINISTRATIVE
SERVICES TO A WIDE RANGE OF SECURITIES PORTFOLIOS REPRESENTING PERSONAL
INDIVIDUALS, TRUSTS, CHARITABLE FOUNDATIONS, AND FINANCIAL INSTITUTIONS.
THE FIRM MANAGES ONE NO-LOAD, OPEN-END INVESTMENT MANAGEMENT COMPANY,
BRIDGES INVESTMENT FUND, INC. BRIDGES INVESTMENT COUNSEL, INC. RECEIVES AN
ANNUAL FEE OF 1/2 OF 1% OF THE AVERAGE NET ASSET VALUE OF THE FUND,
DETERMINED ON THE BASIS OF TWELVE MONTH-END VALUATIONS TO DETERMINE THE
AVERAGE NET ASSET VALUE.
h. THE REDEMPTION PRICE OF THE FUND IS THE NEXT DETERMINED NET ASSET VALUE PER
SHARE. THE FUND REPURCHASES THE STOCKHOLDER'S SHARES. THERE IS NO
SECONDARY MARKET FOR THE SHARES OF CAPITAL STOCK OF BRIDGES INVESTMENT
FUND, INC.
i. THE RISK OR SPECULATIVE FACTORS PECULIAR TO BRIDGES INVESTMENT FUND, INC.
MAY BE THAT THE FUND IS A RELATIVELY SMALL INVESTMENT COMPANY WITH NET
ASSETS OF $36.6 MILLION DOLLARS AT YEAR-END 1997 , AND IT IS
SPONSORED BY BRIDGES INVESTMENT COUNSEL, INC., A MEDIUM SIZED INVESTMENT
COUNSEL FIRM WITH THREE PROFESSIONAL PERSONS AND MORE THAN FIFTEEN
STAFF INDIVIDUALS. WITH RESPECT TO THE MODERATE SIZE OF THE BRIDGES
INVESTMENT COUNSEL, INC. ORGANIZATION, SOME INVESTORS MAY CONSIDER THIS
STRUCTURE TO BE AN ADVANTAGE RATHER THAN A DETRIMENT TO LONG-TERM
SUCCESSFUL INVESTMENT RESULTS.
j. BRIDGES INVESTMENT FUND, INC. IS AN OPEN-END INVESTMENT MANAGEMENT COMPANY
DESIGNED TO PROVIDE INVESTORS IN SECURITIES WITH A DIVERSIFIED PORTFOLIO
CONSISTING OF COMMON STOCKS, SECURITIES CONVERTIBLE INTO COMMON STOCKS, AND
FIXED INCOME SECURITIES. THE NON-CONVERTIBLE U.S. TREASURY AND CORPORATE
FIXED INCOME SECURITIES MAY NOT ACCOUNT FOR MORE THAN 40% OF THE MARKET
VALUE OF THE FUND'S PORTFOLIO -- SEE PAGE 7.
k. THE FUND WAS CREATED PRIMARILY FOR THE PURPOSE OF EXTENDING THE SERVICES OF
THE INVESTMENT MANAGEMENT FIRM OF BRIDGES INVESTMENT COUNSEL, INC. TO
INVESTORS WHOSE FUNDS ARE INSUFFICIENT IN SIZE TO PERMIT ECONOMICAL
ADMINISTRATION AS SEPARATE ACCOUNTS. BY ACQUIRING SHARES OF THE FUND,
INVESTORS OBTAIN SECURITIES DIVERSIFICATION AND CONTINUOUS INVESTMENT
SUPERVISION. AN INVESTMENT IN THE FUND DOES NOT REMOVE THE MARKET RISK
INHERENTLY INVOLVED IN MAKING SECURITIES INVESTMENTS.
l. THE FUND MAY WRITE COVERED CALL OPTIONS AS DESCRIBED ON PAGES 4 AND 5 OF
THE STATEMENT OF ADDITIONAL INFORMATION--PART B. THE RISK IN WRITING A
COVERED CALL OPTION IS THAT THE PRICE OF THE UNDERLYING COMMON STOCK WILL
Bridges Investment Fund, Inc. -4- February 27, 1998
Prospectus -- Part A
RISE ABOVE ITS STRIKE OR SELLING PRICE OF THE OPTION CONTRACT.
PROSPECTUS FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
REDEMPTION FEE (AS A PERCENTAGE OF THE AMOUNT REDEEMED): NONE
REINVESTMENT OF CASH DISTRIBUTIONS TRANSACTION FEE; $1.05 PER
TRANSACTION, FOUR TRANSACTIONS PER YEAR FOR DIVIDEND PAYMENTS,
AND ONE TRANSACTION PER YEAR FOR CAPITAL GAINS DISTRIBUTIONS,
IF ANY.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
MANAGEMENT FEES 0.50%
OTHER EXPENSES 0.31%
AUDIT AND CUSTODIAN SERVICES 0.13%
BOOKKEEPING, DIVIDEND AND TRANSFER AGENT SERVICES,
COMPUTER PROGRAMMING, PRINTING AND SUPPLIES 0.12%
INSURANCE, LICENSES, TAXES AND OTHER 0.06%
TOTAL FUND OPERATING EXPENSES 0.81%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
YOU WOULD PAY THE FOLLOWING
EXPENSES ON A $1,000 INVESTMENT
ASSUMING (1) 5% ANNUAL RETURN AND
(2) REDEMPTION AT THE END OF EACH
TIME PERIOD: $13 $39 $67 $146
YOU WOULD PAY THE FOLLOWING
EXPENSES ON THE SAME INVESTMENT,
ASSUMING NO REDEMPTION: $13 $39 $67 $146
THE TABLE ABOVE IS DESIGNED TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A HYPOTHETICAL INVESTMENT OF $1,000 IN BRIDGES
INVESTMENT FUND, INC. WILL BEAR DIRECTLY OR INDIRECTLY FOR THE HOLDING PERIODS
SHOWN AND FOR THE ASSUMPTIONS SET FORTH THEREIN. THE REINVESTMENT OF CASH
DISTRIBUTIONS TRANSACTION FEE OF $1.05 IS DESCRIBED ON PAGE 13 OF THIS
Bridges Investment Fund, Inc. -5- February 27, 1998
Prospectus -- Part A
PROSPECTUS FOR FOUR QUARTERLY DIVIDEND PAYMENTS. THE TOTAL FUND OPERATING
EXPENSES ARE TABULATED ON PAGE 30 OF THE STATEMENT OF ADDITIONAL INFORMATION,
AND THEY ARE SUMMARIZED ON PAGE 11 OF THIS PROSPECTUS.
THE EXPENSES IN THE HYPOTHETICAL EXAMPLE ARE CALCULATED FOR THE MOST
RECENT FISCAL YEAR FOR THE FUND, EXCEPT WHERE AN EXPENSE HAS CHANGED FOR THE
CURRENT FISCAL YEAR IN WHICH CASE THE PRESENT COST IS REFLECTED IN THE ESTIMATED
COSTS. THE EXPENSES SHOW BOTH THE AMOUNTS PAID IN THE FUND'S FINANCIAL
STATEMENTS AND THE COSTS PAID BY THE SHAREHOLDER.
THIS HYPOTHETICAL EXAMPLE ASSUMES THAT ALL DIVIDENDS AND DISTRIBUTIONS
ARE REINVESTED. AN INVESTOR WHO DOES NOT REINVEST THESE DISTRIBUTIONS WOULD
SAVE $4 PER YEAR IN TRANSACTION FEES UNDER THE CALCULATIONS SHOWN IN THE TABLE
ABOVE. THE ESTIMATES SHOWN IN THE HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT BE
CONSIDERED AS A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THE AMOUNTS SHOWN.
CONDENSED FINANCIAL INFORMATION
THE FOLLOWING TABLE OF PER SHARE FINANCIAL HIGHLIGHTS HAS BEEN DERIVED
FROM RECORDS MAINTAINED BY THE FUND. THE PER SHARE INCOME AND CAPITAL CHANGES
FOR EACH OF THE MOST RECENT FIVE YEARS ENDED DECEMBER 31, 1997, HAVE BEEN
AUDITED BY ARTHUR ANDERSEN LLP. THEIR REPORT APPEARS IN THE STATEMENT OF
ADDITIONAL INFORMATION, AND THE ASSOCIATED FINANCIAL STATEMENTS AND NOTES
THERETO SHOULD BE READ IN CONJUNCTION WITH THIS TABLE.
[THIS SPACE IS LEFT BLANK INTENTIONALLY.]
Bridges Investment Fund, Inc. -6- February 27, 1998
Prospectus -- Part A
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS*
FOR THE YEARS ENDED DECEMBER 31
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 $15.97 $14.07 $15.00
INCOME FROM
INVESTMENT
OPERATIONS
NET INVESTMENT $.51 $.55 $.58 $.59 $.61 $.63 $.66 $.67 $.67 $.69
INCOME
NET GAINS OR
(LOSSES)
ON SECURITIES (BOTH
REALIZED AND
UNREALIZED) $4.77 $3.28 $4.63 $(.52) $.46 $.37 $2.44 $(.39) $2.44 $.34
TOTAL FROM INVEST.
OPERATIONS $5.28 $3.83 $5.21 $.07 $1.07 $1.00 $3.10 $.28 $3.11 $1.03
LESS DISTRIBUTIONS
DIVIDENDS FROM NET
INVESTMENT INCOME $(.51) $(.55) $(.58) $(.59) $(.61) $(.63) $(.66) $(.67) $(.67) $(.85)
DISTRIBUTIONS FROM
CAPITAL GAINS
$(.31) $(.26) $(.19) $(.18) $(.17) $(.16) $(.29) $(.43) $(.54)$(1.11)
TOTAL $(.82) $(.81) $(.77) $(.77) $(.78) $(.79) $(.95) $(1.10)$(1.21)$(1.96)
DISTRIBUTIONS
NET ASSET VALUE,
END OF PERIOD $29.02 $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 $15.97 $14.07
TOTAL RETURN 21.47% 17.78% 30.46% 0.39% 6.18% 5.94% 20.78% 1.89% 22.22% 6.96%
RATIOS/SUPPLEMENTAL
DATA
NET ASSETS, END OF
PERIOD (IN
$36,648 $29,249 $24,052 $18,096 $17,991 $17,007 $14,375 $11,283 $10,895 $8,593
THOUSANDS)
RATIO OF EXPENSES TO
AVERAGE NET
0.81% 0.87% 0.89% 0.90% 0.90% 0.94% 0.98% 0.99% 0.99% 1.01%
ASSETS**
RATIO OF NET INC.
TO AVG. NET ASSETS
2.64% 3.23% 3.80% 4.25% 4.32% 4.57% 4.91% 5.28% 4.29% 4.49%
PORTFOLIO TURNOVER
RATE 8% 8% 7% 10% 11% 7% 28% 26% 27% 31%
AVG. COMM. RATE 0.1003 0.1900 0.1222 0.1470 0.1253 0.1781 0.1195 0.1297 0.2095 0.1929
PD.***
*PER SHARE INCOME AND CAPITAL CHANGE DATA IS COMPUTED USING THE WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING METHOD.
**AVERAGE NET ASSET DATA IS COMPUTED USING MONTHLY NET ASSET VALUE FIGURES.
***CENTS PER SHARE
</TABLE>
GENERAL DESCRIPTION OF REGISTRANT
HISTORY -- THE FUND WAS ORGANIZED AS AN OPEN-END INVESTMENT COMPANY UNDER
THE LAWS OF NEBRASKA ON MARCH 20, 1963. INVESTMENT OPERATIONS COMMENCED ON JULY
1, 1963, AND THE SHARES OF CAPITAL STOCK WERE SOLD TO THE GENERAL PUBLIC ON
DECEMBER 7, 1963. THE FUND HAS CONDUCTED ITS BUSINESS CONTINUOUSLY SINCE THE
INITIATION OF THESE ACTIVITIES.
INVESTMENT OBJECTIVES AND POLICIES -- THE PRIMARY INVESTMENT OBJECTIVE OF
THE FUND IS LONG-TERM CAPITAL APPRECIATION. IN PURSUIT OF THAT OBJECTIVE, THE
FUND WILL INVEST PRIMARILY IN COMMON STOCKS AND SECURITIES CONVERTIBLE INTO
COMMON STOCKS, AND THE MARKET VALUE OF THESE SECURITIES WILL NORMALLY REPRESENT
60% OR MORE OF THE TOTAL VALUE OF THE FUND'S ASSETS. THE SELECTION OF COMMON
Bridges Investment Fund, Inc. -7- February 27, 1998
Prospectus -- Part A
STOCKS AND CONVERTIBLE SECURITIES WILL EMPHASIZE COMPANIES WHICH, IN THE OPINION
OF THE FUND'S MANAGEMENT, OFFER OPPORTUNITIES FOR INCREASED EARNINGS AND
DIVIDENDS. HOWEVER, THE FUND MAY ALSO INVEST IN COMMON STOCKS WHICH MAY BE
CYCLICALLY DEPRESSED OR UNDERVALUED, AND, THEREFORE, MAY OFFER POTENTIAL FOR
CAPITAL APPRECIATION.
THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A SECONDARY
INVESTMENT OBJECTIVE OF THE FUND. IN MOVING TOWARDS THAT GOAL, THE FUND MAY
ACQUIRE INVESTMENT GRADE CORPORATE BONDS, DEBENTURES, U.S. TREASURY BONDS AND
NOTES, AND PREFERRED STOCKS, PROVIDED NOT MORE THAN 40% OF THE VALUE OF ITS
ASSETS ARE MAINTAINED IN THESE TYPES OF FIXED INCOME SECURITIES. INVESTMENT
GRADE CORPORATE BONDS AND PREFERRED STOCKS MUST CARRY, AT THE TIME OF PURCHASE,
A MOODY'S INVESTOR SERVICE RATING OF BAA OR HIGHER OR A STANDARD & POOR'S
CORPORATION RATING OF BBB OR HIGHER. SOME SECURITIES RATED BAA OR BBB MAY HAVE
SPECULATIVE CHARACTERISTICS. THE INVESTMENT GRADE BONDS, DEBENTURES, AND
PREFERRED STOCKS MAY ALSO BE EMPLOYED TO PROVIDE A SOURCE OF FUNDS FOR FUTURE
PURCHASES OF EQUITY TYPE SECURITIES.
THE FUND MAY PURCHASE INVESTMENTS IN SECURITIES OF FOREIGN ISSUERS,
PROVIDED THAT THE MARKET VALUE OF SUCH SECURITIES WILL NOT EXCEED 10% OF TOTAL
ASSETS, AND A FURTHER LIMITATION WILL REQUIRE THAT THESE SECURITIES BE TRADED AS
AMERICAN DEPOSITORY RECEIPTS.
FOR SPECULATIVE CAPITAL GAIN PURPOSES, THE FUND MAY PURCHASE BONDS,
DEBENTURES, AND PREFERRED STOCKS THAT CARRY EXTRAORDINARILY HIGH YIELDS AND
BALANCE SHEET RISK OR WHICH HAVE ONE OR MORE INTEREST OR DIVIDEND PAYMENTS IN
ARREARS, PROVIDING THAT THE PURCHASE OF THIS TYPE OF SECURITIES WILL BE LIMITED
TO 5% OF THE VALUE OF THE ASSETS OF THE FUND. SOME OF THE SECURITIES OF THIS
GENERIC TYPE HAVE BEEN DESCRIBED IN THE CURRENT MARKET ENVIRONMENT AS JUNK
BONDS. HISTORICALLY, THE FUND'S SECURITY SELECTION POLICY PERMITTED THE
SELECTION OF ISSUES THAT HAD NOT BEEN PART OF A LEVERAGED BUY-OUT OR OTHER
RECAPITALIZATION TRANSACTION BUT THAT WERE OR COULD BE ATTRACTIVE FOR REASONS
RELATED TO A RECOVERY OF PREVIOUS FUNDAMENTAL VALUE THAT EXISTED AT THE TIME OF
THEIR ORIGINAL ISSUANCE. REFER TO PAGE 5 -- PART B OF THE STATEMENT OF
ADDITIONAL INFORMATION FOR AN EXPANDED DISCUSSION OF THIS POLICY.
UNDER UNUSUAL ECONOMIC OR FINANCIAL MARKET CIRCUMSTANCES, THE FUND MAY
MAINTAIN A SUBSTANTIAL PART OR ALL OF ITS ASSETS IN CASH OR U.S. GOVERNMENT
SECURITIES FOR TEMPORARY DEFENSIVE PURPOSES. THE FUND MAY MAINTAIN POSITIONS IN
U.S. GOVERNMENT SECURITIES FOR AS LONG AS SUCH UNUSUAL MARKET CONDITIONS EXIST,
AND THE AMOUNTS OF THESE TREASURY SECURITIES WILL BE EXCLUDED WHEN THE DAILY
CALCULATION IS MADE TO ALLOCATE SECURITIES VALUES UNDER THE 40% OF THE VALUE OF
Bridges Investment Fund, Inc. -8- February 27, 1998
Prospectus -- Part A
TOTAL ASSETS POLICY GUIDELINE FOR THE INVESTMENT GRADE BOND, DEBENTURES, AND
PREFERRED STOCKS.
THE FOREGOING POLICIES AS TO INVESTMENTS MAY BE ALTERED BY THE FUND'S
BOARD OF DIRECTORS; HOWEVER, THEY WILL NOT BE CHANGED WITHOUT PRIOR WRITTEN
NOTICE TO SHAREHOLDERS IN A SUPPLEMENT TO THE PROSPECTUS, OR AT SUCH TIME AS THE
NEXT ANNUAL REVISIONS TO THE PROSPECTUS BECOME EFFECTIVE.
IN ADDITION TO THE INVESTMENT OBJECTIVES AND POLICIES DISCLOSED ABOVE, THE
FUND ADHERES TO CERTAIN OTHER INVESTMENT POLICY AND SELECTION RESTRICTIONS WHICH
ARE SET FORTH IN THE STATEMENT OF ADDITIONAL INFORMATION.
AN INVESTOR SHOULD BE AWARE THAT THE OWNERSHIP OF COMMON STOCKS THROUGH AN
INVESTMENT IN THE FUND ENTAILS PRICE VOLATILITY RISKS ATTENDANT TO THE GENERAL
MARKET ACTION FOR ALL TYPES OF EQUITIES. INVESTORS SHOULD ALSO RECOGNIZE THAT
AN INVERSE RELATIONSHIP EXISTS BETWEEN BOND PRICES AND INTEREST RATES WHEREIN
HIGHER INTEREST RATES COULD CAUSE LOWER BOND PRICES, AND LOWER INTEREST RATES
COULD CREATE HIGHER BOND PRICES WITH THE IMPACT OF THESE INTEREST RATE CONDITION
CHANGES BEING THE GREATEST UPON THE VERY LONG MATURITY ISSUES.
WITH RESPECT TO THE UTILIZATION OF U.S. TREASURY SECURITIES FOR TEMPORARY
DEFENSIVE PURPOSES, INVESTORS SHOULD ANTICIPATE THAT THESE DEFENSIVE ACTIONS MAY
RESULT IN LESS THAN 60% OF THE ASSETS OF THE FUND TO BE HELD IN COMMON STOCKS
AND OTHER EQUITY TYPE SECURITIES AND THAT SUCH TEMPORARY DEFENSIVE ACTIONS MAY
BE TAKEN PRIOR TO THE DEVELOPMENT OF THE EXPECTED ADVERSE MARKET CIRCUMSTANCES.
FURTHER, SUBSEQUENT EVENTS IN THE MARKET PLACE MAY OR MAY NOT VINDICATE THE
JUDGMENT OF THE INVESTMENT MANAGER TO ESTABLISH THE TEMPORARY DEFENSIVE
POSITIONS IN U.S. GOVERNMENT SECURITIES, AND THE LACK OF THE ONSET OF THE
ADVERSE MARKET CONDITIONS MAY CAUSE TEMPORARY DEFENSIVE POSITIONS TO BE HELD FOR
UNANTICIPATED, LONG INTERVALS OF TIME.
MANAGEMENT OF THE FUND
GOVERNANCE -- THE BOARD OF DIRECTORS OF THE FUND IS RESPONSIBLE FOR THE
GENERAL GOVERNANCE OF THE AFFAIRS OF THE FUND. IN PARTICULAR, THE BOARD
ESTABLISHES CONTRACTUAL RELATIONSHIPS AND MAINTAINS SURVEILLANCE OF THE
INVESTMENT MANAGER, THE CUSTODIAN BANK AND TRANSFER AGENT, THE INSURANCE
COVERAGE, THE CERTIFIED PUBLIC ACCOUNTANTS, AND THE LEGAL REPRESENTATION FOR THE
FUND. IN ADDITION, THE BOARD OF DIRECTORS REVIEWS THE POSITION OF THE FUND WITH
RESPECT TO FEDERAL AND STATE REGULATIONS, AND THE BOARD OF DIRECTORS IS
CONCERNED ABOUT COMPLIANCE WITH TAX RULES TO MAINTAIN THE FUND'S POSITION AS A
REGULATED OPEN-END INVESTMENT MANAGEMENT COMPANY. LASTLY, THE BOARD IS
Bridges Investment Fund, Inc. -9- February 27, 1998
Prospectus -- Part A
RESPONSIBLE FOR ATTRACTING INTERESTED AND COMPETENT INDIVIDUALS TO SERVE AS
REPRESENTATIVES FOR THE SHAREHOLDERS. BOARD MEMBERS CARRY BROAD PERSPECTIVES
BEYOND THE FIELDS OF FINANCE AND INVESTMENTS, AND THESE INDIVIDUALS PROVIDE
INSIGHT AND GUIDANCE FOR THE GENERAL BUSINESS POLICY OF THE FUND THROUGH THE
STRUCTURE OF THE AUDIT COMMITTEE, THE EXECUTIVE COMMITTEE, AND THE REGULAR
QUARTERLY BOARD OF DIRECTORS MEETINGS. ADDITIONAL INFORMATION REGARDING THE
BOARD OF DIRECTORS CAN BE FOUND IN THE STATEMENT OF ADDITIONAL INFORMATION.
INVESTMENT ADVISER -- BRIDGES INVESTMENT COUNSEL, INC., 8401 WEST DODGE
ROAD, OMAHA, NEBRASKA 68114, ACTS AS MANAGER AND INVESTMENT ADVISER UNDER A
CONTRACT WITH THE FUND. IN ADDITION TO FURNISHING CONTINUING INVESTMENT
SUPERVISION FOR THE FUND, THE INVESTMENT ADVISER PROVIDES OFFICE SPACE,
FACILITIES, EQUIPMENT, AND PERSONNEL FOR MANAGING THE ASSETS OF THE FUND.
FURTHER, THE INVESTMENT ADVISER PAYS THE COSTS OF MAINTAINING THE REGISTRATION
OF SHARES OF THE FUND UNDER FEDERAL SECURITIES LAWS AND UNDER THE LAWS OF THE
STATE OF NEBRASKA AND IN ANY OTHER STATE IF SUCH REGISTRATIONS SHOULD BE MADE AT
A FUTURE DATE.
BRIDGES INVESTMENT COUNSEL, INC. IS REGISTERED AS AN INVESTMENT ADVISER
WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE INVESTMENT ADVISERS ACT OF
1940. THE FIRM AND ITS PREDECESSORS HAVE ACTED CONTINUOUSLY AS PROFESSIONAL
INVESTMENT ADVISERS AND MANAGERS SINCE EARLY 1945. PORTFOLIO INVESTMENT
SECURITIES ADVICE IS RENDERED TO INDIVIDUALS, PERSONAL TRUSTS, PENSION AND
PROFIT SHARING ACCOUNTS, IRA ROLLOVERS, CHARITABLE ORGANIZATIONS AND
FOUNDATIONS, CORPORATIONS AND OTHER ACCOUNT CLASSIFICATIONS. ASSETS UNDER
MANAGEMENT AS OF THE LAST QUARTER OF 1997 WERE IN EXCESS OF $800
MILLION. BRIDGES INVESTMENT COUNSEL, INC. ALSO PROVIDES HOURLY CONSULTING
ADVICE ABOUT A NUMBER OF ALTERNATIVE INVESTMENT MATTERS ON A LIMITED BASIS.
HOURLY CONSULTING SERVICES ARE ALSO AVAILABLE FOR NON-PORTFOLIO SECURITIES
MATTERS SUCH AS ESTATE AND FINANCIAL PLANNING AND GENERAL BUSINESS
ADMINISTRATION PROJECTS. BRIDGES INVESTMENT COUNSEL, INC. HAS A MANAGEMENT
AGREEMENT TO OPERATE PROVIDENT TRUST COMPANY, AN ENTERPRISE THAT WAS RESPONSIBLE
FOR $354 MILLION IN TRUST CUSTOMER ASSETS AT DECEMBER 31, 1997.
INVESTMENT SELECTIONS MADE BY BRIDGES INVESTMENT COUNSEL, INC. FOR THE
FUND ARE PREDICATED UPON RESEARCH INTO GENERAL ECONOMIC TRENDS, STUDIES OF
FINANCIAL MARKETS, AND INDUSTRY AND COMPANY ANALYSES. THE FIRM OBTAINS ITS
SECURITY ANALYSIS INFORMATION FROM SEVERAL FINANCIAL RESEARCH ORGANIZATIONS
WHICH RESTRICT THE RELEASE OF THEIR REPORTS PRIMARILY TO INSTITUTIONAL USERS
SUCH AS BANKS, INSURANCE COMPANIES, INVESTMENT COUNSELORS, AND TRUST COMPANIES.
UNDER A CONTRACT WITH THE FUND, BRIDGES INVESTMENT COUNSEL, INC. FURNISHES
CONTINUOUS INVESTMENT SUPERVISION TO THE FUND, AND, FOR ITS SERVICES, IS
ENTITLED TO RECEIVE A QUARTERLY FEE OF 1/8 OF 1% OF THE AVERAGE NET ASSET VALUE
OF THE FUND, AS DETERMINED BY APPRAISALS AT THE CLOSE OF EACH MONTH IN THE
Bridges Investment Fund, Inc. -10- February 27, 1998
Prospectus -- Part A
QUARTERLY PERIOD. THIS TOTAL ANNUAL FEE OF 1/2 OF 1% OF THE FUND'S NET ASSETS
AS DETERMINED ABOVE IS THE ONLY COMPENSATION RECEIVED BY BRIDGES INVESTMENT
COUNSEL, INC. FROM THE FUND. THE FUND PAID $170,328 TO BRIDGES
INVESTMENT COUNSEL, INC. FOR ITS SERVICES AS INVESTMENT ADVISER DURING THE
FISCAL YEAR ENDING DECEMBER 31, 1997.
THE ANNUAL REPORT OF THE FUND FOR 1997 INCLUDES ELEVEN PAGES OF
TEXT, TABULAR AND GRAPHIC INFORMATION THAT REPORTS THE NAMES, TITLES, YEARS OF
SERVICE, AND PRIMARY RESPONSIBILITIES OF THE PERSONS EMPLOYED BY BRIDGES
INVESTMENT COUNSEL, INC. WHO ARE PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY
MANAGEMENT OF THE FUND'S PORTFOLIO.
IN ADDITION, THE DISCLOSURE IN THE ANNUAL REPORT OF THE FUND FOR 1996
DISCUSSES FACTORS, INCLUDING RELEVANT MARKET CONDITIONS AND THE INVESTMENT
STRATEGIES AND TECHNIQUES PURSUED BY BRIDGES INVESTMENT COUNSEL, INC., THAT
MATERIALLY AFFECTED THE PERFORMANCE OF THE REGISTRANT DURING THE MOST RECENTLY
COMPLETED FISCAL YEAR.
A LINE GRAPH IS PROVIDED THAT COMPARES THE INITIAL ACCOUNT VALUE AND
SUBSEQUENT ACCOUNT VALUES AT THE END OF EACH OF THE MOST RECENTLY COMPLETED TEN
FISCAL YEARS OF THE REGISTRANT, 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.
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 ACCOMPANY THE LINE
GRAPH. THE PAST PERFORMANCE SHOWN THEREON IS NOT PREDICTIVE OF FUTURE
PERFORMANCE.
ALL OF THESE ITEMS OF INFORMATION ARE INCLUDED IN A SECTION OF THE ANNUAL
REPORT DESIGNATED AS A SHAREHOLDER COMMUNICATION WITH THE TITLE MANAGEMENT'S
DISCUSSION AND ANALYSIS. THIS DISCUSSION IS FOUND AT THE BACK OF THE ANNUAL
REPORT ON THE PAGES DESIGNATED AS MD&A 1-11. EACH PERSON WHO OBTAINS AN
EFFECTIVE PROSPECTUS OF THE FUND MUST RECEIVE FROM REPRESENTATIVES OF THE FUND
AN ANNUAL REPORT THAT INCLUDES THE MANAGEMENT DISCUSSION AND ANALYSIS FOR THE
MOST RECENTLY COMPLETED FISCAL YEAR. PLEASE REFER TO PAGES 24-25 FOR A
DESCRIPTION OF THE RESPONSIBILITIES AND EXPERIENCE OF THE FUND'S PORTFOLIO
MANAGERS.
CUSTODIAN -- FIRST NATIONAL BANK OF OMAHA , NEBRASKA, ONE FIRST
NATIONAL CENTER, 1620 DODGE STREET, OMAHA, NEBRASKA , ACTS AS CUSTODIAN FOR
THE FUND. THE BANK HOLDS ALL SECURITIES AND CASH OF THE FUND, RECEIVES AND PAYS
FOR SECURITIES PURCHASED UPON DELIVERY OF THE ASSETS, DELIVERS AGAINST PAYMENT
FROM BROKERS FOR SECURITIES SOLD, RECEIVES AND COLLECTS INCOME FROM INVESTMENTS.
Bridges Investment Fund -11- February 27, 1998
Prospectus -- Part A
THE BANK DOES NOT EXERCISE ANY SUPERVISORY FUNCTION IN MANAGEMENT MATTERS SUCH
AS THE PURCHASE AND SALE OF PORTFOLIO SECURITIES. PLEASE REFER TO PAGE
25.
DIVIDEND DISBURSING AND TRANSFER AGENT -- BRIDGES INVESTOR SERVICES, INC.,
8401 WEST DODGE ROAD, OMAHA, NEBRASKA, ACTS AS DIVIDEND DISBURSING AND TRANSFER
AGENT FOR THE FUND. SERVICES HANDLES THE TRANSACTIONS FOR ALL CAPITAL STOCK
ISSUED BY THE FUND AND FOR ALL REDEMPTIONS OF FUND SHARES. SERVICES PROCESSES
ALL REINVESTMENT AND SCHEDULED INVESTMENT TRANSACTIONS AS DESCRIBED LATER IN
THIS PROSPECTUS. SERVICES IS RESPONSIBLE FOR ISSUING FORM 1099 INFORMATION TO
SHAREHOLDERS EACH YEAR.
EXPENSES -- THE FUND PAYS THE CHARGES OF THE CUSTODIAN, DIVIDEND
DISBURSING AND TRANSFER AGENT, THE FEES OF THE AUDITORS AND LEGAL COUNSEL, AND
THE FEES OF THE INVESTMENT ADVISER AS DESCRIBED EARLIER. THE FUND ALSO INCURS
OTHER EXPENSES SUCH AS BOOKKEEPING, PUBLICATION OF NOTICES AND REPORTS TO
SHAREHOLDERS, PRINTING AND MAILING OF STOCK CERTIFICATES, AND MISCELLANEOUS
TAXES. HOWEVER, TOTAL ANNUAL EXPENSES OF THE FUND, EXCLUSIVE OF TAXES BUT
INCLUDING FEES PAID TO THE INVESTMENT ADVISER, ARE LIMITED TO 1 1/2% OF AVERAGE
NET ASSETS. BRIDGES INVESTMENT COUNSEL, INC. AGREES TO REIMBURSE THE FUND FOR
EXPENDITURES IN EXCESS OF SUCH AMOUNT. DURING 1997 , THERE WERE NO
REIMBURSED EXPENSES PAID UNDER THIS CONTRACT ARRANGEMENT AND EXPENSE LIMITATION.
COMPLETE INFORMATION ON EXPENSES OF THE FUND IN 1997 CAN BE FOUND IN THE
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997, SHOWN ON
PAGE 30 OF THE STATEMENT OF ADDITIONAL INFORMATION. THE RATIO OF OPERATING
EXPENSES TO AVERAGE NET ASSETS WAS 0.81% FOR THE FUND IN 1997.
THE EXPENSES PAID BY THE FUND, EXPRESSED IN TERMS OF A PERCENTAGE OF
AVERAGE NET ASSETS, CALCULATED MONTHLY, FOR 1997, ARE IDENTIFIED IN THE
TABLE BELOW:
EXPENSES PAID BY THE FUND
PERCENT OF AVG.
NET ASSETS
TYPE OF EXPENSES NAME OF PAYEE(S)
1. INVESTMENT ADVISORY FEES BRIDGES INV. COUNSEL, INC. 0.50%
2. DISTRIBUTION EXPENSES NONE 0.00%
3. SHAREHOLDER SERV. EXP. BRIDGES INV. SERVICES, INC. 0.03%
4. OTHER EXPENSES FIRST NATIONAL BANK OF 0.28%
OMAHA, OMAHA, NEBRASKA,
ARTHUR ANDERSEN LLP, ICI
MUTUAL INS. CO. AND OTHERS
5. TOTAL EXPENSES 0.81%
BROKERAGE --THE FUND DOES NOT FOLLOW A PRACTICE OF PAYING BROKERAGE
COMMISSIONS TO ANY BROKER (A) WHICH IS AN AFFILIATED PERSON OF THE FUND, OR (B)
Bridges Investment Fund, Inc. 12 February 27, 1998
Prospectus -- Part A
WHICH IS AN AFFILIATED PERSON OF SUCH PERSON, OR (C) AN AFFILIATED ENTITY WHICH
IS AN AFFILIATED PERSON OF THE FUND, ITS INVESTMENT ADVISER, OR OTHER PERSON.
THE FUND MAY PLACE BROKERAGE COMMISSIONS FOR GOODWILL, FROM TIME TO TIME, THAT
COULD RECOGNIZE APPRECIATION FOR REFERRING INVESTORS TO THE FUND AND OTHER
FACTORS OF AN INTANGIBLE BUT POSITIVE NATURE. DURING 1997, THERE WERE NO
BROKERAGE COMMISSIONS ATTRIBUTED TO THE GOODWILL FACTOR.
CAPITAL STOCK AND OTHER SECURITIES
STRUCTURE -- THE CAPITAL STRUCTURE OF THE FUND CONSISTED OF 3,000,000
AUTHORIZED SHARES WITH A PAR VALUE OF ONE DOLLAR PER SHARE AS OF DECEMBER 31,
1997, WITH 2,005,454 SHARES ISSUED TO THAT DATE. THE SHARES HAVE
EQUAL RIGHTS AS TO VOTING, REDEMPTION, DIVIDENDS, AND LIQUIDATION, WITH
CUMULATIVE VOTING FOR THE ELECTION OF DIRECTORS. THE SHARES ARE REDEEMABLE ON
WRITTEN DEMAND OF THE HOLDER AND ARE TRANSFERABLE. THE SHARES HAVE NO
PREEMPTIVE OR CONVERSION RIGHTS AND ARE NOT SUBJECT TO ASSESSMENT. FRACTIONAL
SHARES HAVE THE SAME RIGHTS PROPORTIONATELY AS FULL SHARES, EXCEPT THEY DO NOT
CARRY THE RIGHT TO VOTE.
SHARES REDEEMED BY THE FUND CANNOT BE REISSUED, AND THE FUND'S AUTHORIZED
CAPITAL STOCK SHALL BE DEEMED TO BE REDUCED BY THE AMOUNT OF THE SHARES
REDEEMED. AT DECEMBER 31, 1997, 742,636 SHARES OF THE FUND HAD BEEN
REDEEMED SINCE INCEPTION OF THE FUND IN 1963.
THE NET SHARES OF CAPITAL STOCK OUTSTANDING WERE 1,262,818 ON
DECEMBER 31, 1997.
CONTROL -- AS OF JANUARY 31, 1998 , NO INDIVIDUAL OR GROUP OF
INDIVIDUALS THROUGH BENEFICIAL OWNERSHIP OF SHARES IS IN CONTROL OF THE FUND.
FOR THE PURPOSE OF THIS DISCLOSURE, CONTROL IS DEFINED AS THE OWNERSHIP OF 25%
OF THE VOTING SECURITIES BY ONE OR MORE RELATED PARTIES.
RIGHTS -- THE RIGHTS OF HOLDERS OF CAPITAL STOCK MAY NOT BE MODIFIED EXCEPT
BY A VOTE OF A MAJORITY OF THE OWNERS OF THE OUTSTANDING SHARES OF SUCH STOCK.
OTHER CLASSES OF SECURITIES -- THE FUND DOES NOT HAVE ANY OTHER CLASSES OF
SECURITIES THAN CAPITAL STOCK.
Bridges Investment Fund, Inc. -13- February 27, 1998
Prospectus -- Part A
INQUIRIES -- SHAREHOLDER INQUIRIES FOR INFORMATION OF ASSISTANCE IN
HANDLING ADMINISTRATIVE MATTERS SHOULD BE DIRECTED TO MRS. NANCY K. DODGE,
TREASURER, BRIDGES INVESTMENT FUND, INC., 256 DURHAM PLAZA, 8401 WEST DODGE
ROAD, OMAHA, NEBRASKA 68114. MRS. DODGE MAY ALSO BE REACHED BY TELEPHONE AT
1-402-397-4701 X 229.
DIVIDEND POLICY -- THE FUND WILL DISTRIBUTE TO SHAREHOLDERS SUBSTANTIALLY
ALL OF THE NET INCOME AND NET CAPITAL GAINS, IF ANY, REALIZED FROM THE SALE OF
SECURITIES. DIVIDENDS WILL BE PAID ON OR ABOUT THE 25TH DAY OF JANUARY, APRIL,
JULY, AND OCTOBER. SHAREHOLDERS WILL BE ADVISED AS TO THE SOURCE OR SOURCES OF
EACH DISTRIBUTION. A YEAR-END PAYMENT OF CAPITAL GAINS, IF ANY AMOUNTS ARE
EARNED BETWEEN NOVEMBER 1 AND OCTOBER 31 IN ANY GIVEN YEAR, WILL BE PAID ON OR
BEFORE DECEMBER 31ST TO MEET A SPECIAL REQUIREMENT OF THE TAX REFORM ACT OF
1986. THE FUND MUST DECLARE A DIVIDEND AMOUNT PAYABLE BEFORE JANUARY 31 OF THE
NEXT YEAR ON DECEMBER 31 IN ORDER TO REMIT AT LEAST 98% OF THE NET INVESTMENT
INCOME FOR THE CALENDAR YEAR TO COMPLY WITH THE PROVISIONS OF THE 1986 ACT. THE
INVESTMENT RETURN WILL DEPEND UPON AND VARY WITH CHANGES IN INTEREST RATES,
DIVIDEND YIELDS, INVESTMENT SELECTIONS OF THE FUND, AND MANY OTHER UNPREDICTABLE
FACTORS.
FEDERAL TAXATION -- THE FUND HAS COMPLIED WITH THE SPECIAL PROVISION OF THE
INTERNAL REVENUE CODE WHICH PERTAIN TO INVESTMENT COMPANIES SO IT WILL BE
RELIEVED OF PAYMENT OF FEDERAL INCOME TAXES ON AMOUNTS DISTRIBUTED TO
SHAREHOLDERS. THE FUND INTENDS TO CONTINUE TO COMPLY WITH SUCH PROVISIONS OF
THE INTERNAL REVENUE CODE. SHAREHOLDERS ARE SUBJECT TO FEDERAL INCOME TAX ON
DISTRIBUTION OF INVESTMENT INCOME AND ON SHORT-TERM CAPITAL GAINS WHICH ARE
TREATED AS ORDINARY INCOME. HOWEVER, PAYMENTS DESIGNATED AS CAPITAL GAIN
DISTRIBUTIONS (DEFINED AS THE EXCESS OF NET LONG-TERM CAPITAL GAINS OVER NET
SHORT-TERM CAPITAL LOSSES) ARE TAXABLE TO THE SHAREHOLDERS AS LONG-TERM CAPITAL
GAINS IRRESPECTIVE OF THE LENGTH OF TIME A SHAREHOLDER HAS HELD HIS STOCK IN THE
FUND.
THE FUND WILL BE REQUIRED TO WITHHOLD 31% OF DIVIDEND DISTRIBUTIONS FOR
PAYMENT OF FEDERAL INCOME TAXES FOR A SHAREHOLDER, UNLESS THE FUND RECEIVES A
FORM W-9 ELECTION TO REQUEST THAT THE 31% AMOUNT NOT BE WITHHELD. THE FORM W-9,
ALSO KNOWN AS BACK-UP WITHHOLDING, WILL BE SUPPLIED IN A SEPARATE DOCUMENT TO
NEW SHAREHOLDERS BY BRIDGES INVESTOR SERVICES, INC. AT THE TIME OF INITIAL
SUBSCRIPTION TO SHARES OF THE FUND. THE SHAREHOLDER WILL BE REQUIRED TO PROVIDE
CERTAIN PERTINENT INFORMATION ON THE FORM W-9, INCLUDING THE APPROPRIATE SOCIAL
SECURITY OR TAX IDENTIFICATION NUMBER.
Bridges Investment Fund, Inc -14- February 27, 1998
Prospectus -- Part A
SHAREHOLDERS WHO ARE TAX-EXEMPT ENTITIES WITH RESPECT TO FEDERAL AND STATE
INCOME TAXES WILL NOT BE SUBJECT TO TAX ON THE INCOME AND CAPITAL GAINS
DISTRIBUTIONS FROM THE FUND.
THE FUND, THROUGH AN ANNUAL TAX INFORMATION LETTER AND QUARTERLY
SHAREHOLDER REPORTS, WILL INFORM THE INVESTORS OF THE AMOUNT AND GENERIC NATURE
OF SUCH INCOME AND CAPITAL GAINS. BRIDGES INVESTOR SERVICES, INC., THROUGH THE
ANNUAL FORM 1099 OR ITS SUBSTITUTE EQUIVALENT, WILL PROVIDE A REPORT FOR EACH
INDIVIDUAL ACCOUNT WITHIN AN APPROPRIATE TIME FRAME AFTER THE CLOSE OF THE
FUND'S FISCAL YEAR.
SECURITIES OFFERED -- THE FUND OFFERS ONLY SHARES OF CAPITAL STOCK. THERE
ARE NO OTHER SECURITIES TO BE DESCRIBED IN THIS PROSPECTUS.
PURCHASE OF SECURITIES BEING OFFERED
NET ASSET VALUE -- SHARES OF THE FUND ARE SOLD DIRECTLY TO INVESTORS BY THE
FUND AT THE NEXT DETERMINED NET ASSET VALUE.
THE NET ASSET VALUE OF A SHARE OF THE FUND AT ANY SPECIFIC TIME IS OBTAINED
BY DIVIDING THE VALUE OF THE NET ASSETS OF THE FUND BY THE TOTAL NUMBER OF
SHARES OUTSTANDING AT SUCH TIME. THE CALCULATION OF NET ASSET VALUE INCLUDES
THE DAILY ACCRUAL OF INCOME AND EXPENSES. EXPENSES ARE ESTIMATED AT A DAILY
ACCRUAL RATE, AND THIS DAILY ACCRUAL RATE IS ADJUSTED TO COSTS ON A MONTHLY OR
QUARTERLY BASIS IF THE DAILY ACCRUAL RATE IS ABOVE OR BELOW ACTUAL COSTS WHEN
SUCH COSTS BECOME KNOWN.
SECURITIES TRADED ON STOCK EXCHANGES WILL ORDINARILY BE VALUED ON THE BASIS
OF THE LAST SALES PRICE ON THE DATE OF VALUATION, OR LACKING ANY SALES, AT THE
CLOSING BID ON SUCH DAY ON THE PRINCIPAL TRADING EXCHANGE OR MARKET. OTHER
SECURITIES WILL BE VALUED AT THE CLOSING BID PRICE. SHORT-TERM SECURITIES SUCH
AS TREASURY BILLS WITH UNDER A 60-DAY MATURITY ARE VALUED AT THE PURCHASE PRICE,
AND THE INCOME FROM THE DISCOUNT IS REFLECTED AS ACCRUED INCOME ON A DAILY
BASIS. HOWEVER, IF THE BOARD OF DIRECTORS DETERMINES THAT SUCH METHODS OF
VALUATION DO NOT PROPERLY REFLECT THE TRUE MARKET VALUE AT SUCH TIME, IT MAY
SUBSTITUTE SUCH OTHER METHOD AS, IN ITS JUDGMENT, MORE NEARLY REFLECTS SUCH TRUE
MARKET VALUE, EXCEPT THAT IN NO CASE SHALL ITS ALTERNATE METHOD RESULT IN A
PRICE BELOW THE CLOSING BID PRICE OR IN EXCESS OF THE CLOSING ASKED PRICE.
SECURITIES AND OTHER ASSETS FOR WHICH NO MARKET QUOTATIONS ARE READILY AVAILABLE
WILL BE VALUED AT THEIR FAIR VALUE AS DETERMINED IN GOOD FAITH BY THE BOARD OF
DIRECTORS.
SUBSCRIPTION ORDER FORM -- THE STOCK SUBSCRIPTION AND PLAN ORDER FORM WILL
BE SENT WITH THIS PROSPECTUS, OR IT MAY BE OBTAINED FROM THE OFFICES OF THE FUND
AT 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114. THE COMPLETED
Bridges Investment Fund, Inc. -15- February 27, 1998
Prospectus -- Part A
ORDER FORM AND CHECK PAYABLE TO THE FUND SHOULD BE SENT TO THE ABOVE ADDRESS.
IF THE ORDER FORM IS RECEIVED PRIOR TO THE CLOSE OF THE NEW YORK STOCK
EXCHANGE ON ANY DAY FROM MONDAY THROUGH FRIDAY ON WHICH THE NEW YORK STOCK
EXCHANGE IS OPEN FOR TRADING, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE
OF TRADING ON THAT DAY. IF THE ORDER FORM IS RECEIVED AFTER THE CLOSE OF THE
NEW YORK STOCK EXCHANGE, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE OF
TRADING UPON THE NEW YORK STOCK EXCHANGE ON THE NEXT SUCCEEDING DAY ON WHICH
SUCH EXCHANGE IS OPEN FOR TRADING.
ALL ORDER FORMS ARE SUBJECT TO ACCEPTANCE BY AUTHORIZED OFFICERS OF THE
FUND IN OMAHA AND ARE NOT BINDING UNTIL SO ACCEPTED. IT IS THE POLICY OF THE
FUND NOT TO ACCEPT ORDERS FOR STOCK UNDER CIRCUMSTANCES OR IN AMOUNTS CONSIDERED
TO BE DISADVANTAGEOUS TO EXISTING SHAREHOLDERS.
SHARES IN THE FUND MAY BE PURCHASED UNDER SEVERAL PLANS DESIGNED TO MEET
THE NEEDS OF VARIOUS TYPES OF INVESTORS.
UNSCHEDULED INVESTMENTS -- AN INVESTOR MAY PURCHASE SHARES OF THE FUND AT
SUCH TIMES AND IN SUCH AMOUNTS AS HE DESIRES. HOWEVER, THE BOARD OF DIRECTORS
OF THE FUND HAS ESTABLISHED A MINIMUM OF $800 FOR EACH UNSCHEDULED INVESTMENT IN
SHARES OF THE FUND FOR INITIAL AND SUBSEQUENT COMMITMENTS. AN INVESTOR WHO
WISHES TO BUY STOCK UNDER THIS INVESTMENT ALTERNATIVE SHOULD FILL OUT PART I OF
THE STOCK SUBSCRIPTION AND PLAN ORDER FORM AND MAIL IT WITH A CHECK TO THE FUND.
THE DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS, IF ANY, ON CAPITAL STOCK
PURCHASED UNDER THIS PLAN WILL BE DISTRIBUTED TO THE INVESTOR. HOWEVER, IF THE
INVESTOR DESIRES TO REINVEST HIS DIVIDENDS OR CAPITAL GAINS DISTRIBUTIONS, OR
BOTH, HE SHOULD CONSIDER THE FUND'S REINVESTMENT OF CASH DISTRIBUTIONS PLAN.
SHARES PURCHASED UNDER THIS PLAN ARE ENTERED ON THE STOCK TRANSFER RECORDS
MAINTAINED BY BRIDGES INVESTOR SERVICES, INC. CERTIFICATES FOR FULL SHARES ARE
DELIVERED TO THE INVESTOR UPON HIS DIRECTION OR REQUEST. FRACTIONAL SHARES ARE
HELD ON THE BOOKS OF THE TRANSFER AGENT. THESE FRACTIONAL SHARES HAVE FULL
DIVIDEND AND REDEMPTION RIGHTS, BUT THE FRACTIONAL SHARES DO NOT HAVE VOTING
RIGHTS.
REINVESTMENT OF CASH DISTRIBUTIONS PLAN -- FOR THE CONVENIENCE OF
UNSCHEDULED INVESTORS WHO DESIRE TO HAVE THEIR DIVIDENDS OR CAPITAL GAINS
DISTRIBUTIONS, OR BOTH, REINVESTED IN ADDITIONAL SHARES, ARRANGEMENTS HAVE BEEN
MADE WITH BRIDGES INVESTOR SERVICES, INC. TO ACT AS THEIR AGENT TO MAKE SUCH
REINVESTMENTS. THE INVESTOR SHOULD FILL IN PART II OF THE STOCK SUBSCRIPTION
AND PLAN ORDER FORM AND SEND IT TO THE FUND.
Bridges Investment Fund, Inc. -16- February 27, 1998
Prospectus -- Part A
CERTIFICATES FOR SHARES PURCHASED UNDER THIS PLAN ARE NOT ISSUED, BUT ARE
ENTERED ON THE STOCK TRANSFER RECORDS KEPT BY BRIDGES INVESTOR SERVICES, INC.
THESE SHARES CARRY FULL RIGHTS AS TO VOTING, REDEMPTION, AND DIVIDENDS, EXCEPT
THAT FRACTIONAL SHARES CARRY NO VOTING RIGHTS. CERTIFICATES FOR FULL SHARES
WILL BE DELIVERED TO THE INVESTOR IF THEY ARE REQUESTED. AN INVESTOR STARTING A
REINVESTMENT OF CASH DISTRIBUTIONS PLAN MAY TURN IN CERTIFICATES FOR SHARES
ALREADY OWNED, AND, THEREAFTER, BRIDGES INVESTOR SERVICES, INC. WILL HOLD SUCH
SHARES IN THE PLAN ACCOUNT.
THE INVESTOR MAY TERMINATE THIS PLAN AT ANY TIME WITHOUT PENALTY, AND
BRIDGES INVESTOR SERVICES, INC. WILL FORWARD TO HIM CERTIFICATES FOR HIS SHARES
AND A CHECK FOR THE REDEMPTION PRICE OF ANY FRACTIONAL SHARE. DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS, IF ANY, WILL BE PAID THEREAFTER TO THE INVESTOR IN
CASH AS AN UNSCHEDULED INVESTOR.
FOR ACTING AS THE INVESTOR'S AGENT IN REINVESTING CASH DISTRIBUTIONS,
BRIDGES INVESTOR SERVICES, INC. DEDUCTS A SERVICE CHARGE OF $1.05 FOR EACH
REINVESTMENT, SUCH CHARGE BEING DEDUCTED BEFORE THE REINVESTMENT IS MADE. A
REINVESTMENT OF A COMBINED DIVIDEND AND CAPITAL GAINS DISTRIBUTION WILL BE
CONSIDERED AS ONE REINVESTMENT.
REINVESTMENT OF CASH DISTRIBUTIONS WILL BE MADE AT THE NET ASSET VALUE PER
SHARE WHICH IS IN EFFECT ON THE DIVIDEND PAYMENT DATE.
SCHEDULED INVESTMENTS PLAN -- INVESTORS WISHING TO PURCHASE SHARES OF THE
FUND AT REGULAR INTERVALS MAY DO SO THROUGH THE FUND'S SCHEDULED INVESTMENTS
PLAN. BRIDGES INVESTOR SERVICES, INC. WILL ACCEPT PERIODIC PAYMENTS FROM THE
INVESTOR AND WILL BUY SHARES OF THE FUND ON HIS BEHALF. THE USEFULNESS OF THIS
SCHEDULED INVESTMENTS PLAN IS TO ASSIST THE INVESTOR IN ORGANIZING REGULAR
PAYMENTS OF UNIFORM AMOUNTS TO THE FUND TO BUILD HIS POSITION IN THE FUND OVER A
LONG PERIOD OF TIME.
TO START SUCH A PLAN, THE INVESTOR FILLS OUT PART III OF THE STOCK
SUBSCRIPTION AND PLAN ORDER FORM AND MAILS IT WITH HIS INITIAL QUALIFICATION
INVESTMENT TO THE FUND. THE INVESTOR'S INITIAL QUALIFICATION INVESTMENT MUST BE
AT LEAST $800. HOWEVER, IF THE INVESTOR ALREADY OWNS SHARES OF THE FUND WITH A
CURRENT MINIMUM NET ASSET VALUE OF AT LEAST $800, HE MAY REQUEST A
RECLASSIFICATION OF THESE SHARES TO A SCHEDULED INVESTMENT PLAN WITH THE ORDER
FORM AS HIS INITIAL QUALIFICATION INVESTMENT FOR THE PLAN.
THE INVESTOR MUST SPECIFY ON THE ORDER FORM WHETHER HE INTENDS TO MAKE
MONTHLY, BI-MONTHLY, OR QUARTERLY PAYMENTS AND THE AMOUNT OF HIS PAYMENTS. HE
MAY OMIT A PAYMENT OR SEND MORE OR LESS THAN THE SPECIFIED AMOUNT SO LONG AS
Bridges Investment Fund, Inc. 17 February 27, 1998
Prospectus -- Part A
EACH OF HIS PAYMENTS IS AT LEAST $200. ALL OF THESE PAYMENTS SHOULD BE SENT
DIRECTLY TO THE OFFICES OF THE FUND. AN INVESTOR UNDER THIS PLAN MUST INVEST A
TOTAL OF AT LEAST $800 WITHIN A PERIOD OF TWELVE MONTHS AFTER HIS QUALIFICATION
INVESTMENT AND IN EACH TWELVE-MONTH PERIOD THEREAFTER.
PURCHASES UNDER THE SCHEDULED INVESTMENTS PLAN ARE MADE ON THE 5TH, 15TH,
OR 25TH DAY OF THE MONTH AT THE NET ASSET VALUE PER SHARE IN EFFECT ON THOSE
DATES. EACH PAYMENT IS APPLIED TO PURCHASE THE GREATEST NUMBER OF FULL AND
FRACTIONAL SHARES.
IF A SCHEDULED INVESTMENTS PLAN PAYMENT IS RECEIVED BY BRIDGES INVESTOR
SERVICES, INC. ON A DATE OTHER THAN THE 5TH, 15TH, OR 25TH DAY OF THE MONTH, THE
PAYMENT WILL BE SUBSCRIBED ON THE DATE IT IS RECEIVED TO PURCHASE SHARES OF THE
FUND AT THE PRICE NEXT DETERMINED.
SHARES PURCHASED UNDER THIS PLAN ARE ENTERED ON THE STOCK TRANSFER RECORDS
MAINTAINED BY BRIDGES INVESTOR SERVICES, INC. CERTIFICATES FOR FULL SHARES ARE
DELIVERED TO THE INVESTOR ONLY IF REQUESTED. SHARES HELD UNDER THE PLAN HAVE
FULL DIVIDEND, VOTING, AND REDEMPTION RIGHTS, EXCEPT THAT FRACTIONAL SHARES DO
NOT HAVE VOTING RIGHTS.
ALL DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS HELD IN A SCHEDULED
INVESTMENTS PLAN ACCOUNT ARE AUTOMATICALLY REINVESTED IN ADDITIONAL SHARES OF
THE FUND AT THE NET ASSET VALUE IN EFFECT ON THE DIVIDEND PAYMENT DATES.
BRIDGES INVESTOR SERVICES, INC., AS AGENT FOR THE INVESTOR, WILL DEDUCT A
SERVICE CHARGE OF $1.05 FROM EACH CASH DISTRIBUTION AFTER WHICH THE BALANCE IS
THEN REINVESTED IN SHARES OF THE FUND.
IN ADDITION, BRIDGES INVESTOR SERVICES, INC. WILL DEDUCT A SERVICE CHARGE
OF $1.05 FROM EACH PAYMENT MADE TO IT UNDER THIS PLAN OTHER THAN THE $800
QUALIFICATION PAYMENT. FOLLOWING EACH SCHEDULED PAYMENT, BRIDGES INVESTOR
SERVICES, INC. WILL MAIL AN ADVICE SLIP ACKNOWLEDGING THE PURCHASE OF SHARES.
THE INVESTOR MAY TERMINATE THIS PLAN AT ANY TIME WITHOUT PENALTY, AND
BRIDGES INVESTOR SERVICES, INC. WILL FORWARD TO HIM CERTIFICATES FOR HIS SHARES
AND A CHECK FOR THE REDEMPTION PRICE OF ANY FRACTIONAL SHARE. DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS, IF ANY, WILL BE PAID THEREAFTER TO THE INVESTOR IN
CASH AS AN UNSCHEDULED INVESTMENT.
ACCUMULATION OF SHARES UNDER THE FUND'S SCHEDULED INVESTMENTS PLAN DOES
NOT ASSURE A PROFIT, NOR DOES IT PROTECT AGAINST ANY LOSS DUE TO DECLINES IN THE
MARKET VALUE OF THE FUND'S INVESTMENTS.
STANDARD RETIREMENT PLAN -- BRIDGES INVESTMENT FUND, INC. OFFERS A MASTER
STANDARD RETIREMENT PLAN (AS AMENDED AND RESTATED AS OF JANUARY 1, 1989) FOR
CORPORATIONS, SELF-EMPLOYED INDIVIDUALS, AND PARTNERSHIPS AND THEIR EMPLOYEES.
Bridges Investment Fund, Inc. -18- February 27, 1998
Prospectus -- Part A
INVESTORS MAY CHOOSE A MONEY PURCHASE PENSION PLAN, A PROFIT SHARING PLAN WHICH
INCLUDES A SALARY REDUCTION ARRANGEMENT UNDER SECTION 401(K) OF THE CODE WITHIN
THE STANDARD RETIREMENT PLAN, INCLUDING A SIMPLE MODEL AMENDMENT FOR
EMPLOYERS WITH LESS THAN 100 EMPLOYEES. THE MASTER PLAN INCLUDES A STANDARD
CUSTODIAL AGREEMENT (AS AMENDED AND RESTATED AS OF JANUARY 1, 1989) UNDER WHICH
U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, WILL ACT AS CUSTODIAN.
BRIDGES INVESTOR SERVICES, INC. WILL INVEST ALL CONTRIBUTIONS TO THE PLAN IN THE
SHARES OF THE FUND AT NET ASSET VALUE, INVEST ALL DIVIDENDS AND CASH
DISTRIBUTIONS IN SHARES OF THE FUND AT NET ASSET VALUE (LESS A $1.05
REINVESTMENT FEE PER PAYMENT), AND RECEIVE ON BEHALF OF THE CUSTODIAN
SERVICE FEES CHARGEABLE TO THE PARTICIPANT ACCOUNTS IN THE PLAN OR THE EMPLOYER
SPONSORING THE PLAN AS FOLLOWS:
. ACCEPTANCE FEE: $5.00 FOR EACH PERSON PARTICIPATING IN THE PLAN;
. ANNUAL MAINTENANCE FEE: $8.00 PER YEAR FOR EACH PERSON WHO IS A
PARTICIPANT DURING ANY PART OF THE PLAN YEAR, INCLUDING PARTICIPANTS
RECEIVING PERIODIC DISTRIBUTIONS UNDER THE PLAN AND INCLUDING ANY OWNER-
EMPLOYEE WHOSE ACCOUNT IS BEING HELD BY THE CUSTODIAN AFTER TERMINATION
OF THE PLAN AND BEFORE DISTRIBUTION;
. TERMINATION FEE: $8.00 PER PARTICIPANT ON THE TERMINATION
OF THE PLAN OR ON THE INITIAL WITHDRAWAL FROM SUCH PARTICIPANT'S
ACCOUNT;
. PERIODIC CASH DISTRIBUTION: $1.75 FOR EACH PAYMENT;
. REINVESTMENT OF CASH DISTRIBUTIONS (DIVIDEND AND CAPITAL GAINS PAYMENTS
FROM THE SHARES OF THE FUND): $1.05 FOR EACH REINVESTMENT.
THE FOREGOING CHARGES MAY BE DEDUCTED BY THE CUSTODIAN FROM EMPLOYER
CONTRIBUTIONS, DIVIDENDS OR CAPITAL GAINS DISTRIBUTIONS, PERIODIC CASH
DISTRIBUTIONS, AND TERMINATION REMITTANCES BEFORE INVESTMENTS OR SEPARATION
PAYMENTS ARE MADE. EXTRAORDINARY SERVICES RESULTING FROM UNUSUAL ADMINISTRATIVE
RESPONSIBILITIES NOT CONTEMPLATED BY THE ABOVE SCHEDULE WILL BE SUBJECT TO SUCH
ADDITIONAL CHARGES AS WILL REASONABLY COMPENSATE THE CUSTODIAN FOR THE
ACTIONS AND RESPONSIBILITIES INVOLVED THAT WILL BE DESCRIBED ON A
SPECIFIC BILLING STATEMENT.
THE ACCEPTANCE FEE AND FIRST ANNUAL MAINTENANCE FEE FOR EACH PLAN
PARTICIPANT MAY BE DEDUCTED BY THE CUSTODIAN FROM THE INITIAL CONTRIBUTION
Bridges Investment Fund, Inc. -19- February 27, 1998
Prospectus -- Part A
PAYMENT WHEN THE PLAN IS ESTABLISHED. SUBSEQUENT FEES ARE DEDUCTED FROM
CONTRIBUTION PAYMENTS IN ANY GIVEN YEAR TO THE EXTENT CONTRIBUTIONS ARE MADE AND
OTHERWISE ARE PAID BY LIQUIDATION OF ASSETS FROM A PARTICIPANT'S ACCOUNT. TO
THE EXTENT ASSETS OF PARTICIPANT ACCOUNTS ARE INSUFFICIENT TO PAY FEES OF THE
CUSTODIAN OR OTHER EXPENSES OF THE PLAN, THE STANDARD CUSTODIAL AGREEMENT
PROVIDES THAT SUCH EXPENSES WILL BE CHARGED TO THE EMPLOYER.
THE FEES FOR THE FOREGOING ARE SUBJECT TO ADJUSTMENT FROM TIME TO TIME BY
WRITTEN AGREEMENT BETWEEN THE CUSTODIAN AND THE EMPLOYER. IN ADDITION, THE
CUSTODIAN IS ENTITLED TO REIMBURSEMENT FOR CERTAIN EXPENSES AND TAXES, INCLUDING
SECURITIES TRANSFER TAXES. THE CUSTODIAN MAY RESIGN OR BE REMOVED, AND A
SUCCESSOR CUSTODIAN MAY BE APPOINTED.
IF AN INVESTOR DESIRES TO APPOINT A DIFFERENT BANK AS CUSTODIAN, HE MAY
MAKE HIS OWN FEE ARRANGEMENTS WITH THE BANK OF HIS CHOICE. FOR FURTHER DETAILS,
SEE THE FORM OF STANDARD RETIREMENT PLAN NO. 001, PROFIT SHARING, AND NO. 002,
MONEY PURCHASE PENSION, AND THEIR RELATED STANDARD CUSTODIAL AGREEMENTS, COPIES
OF WHICH MAY BE OBTAINED FROM THE FUND'S OFFICE AT THE ADDRESS SHOWN ON THE
COVER OF THIS PROSPECTUS. THE AMENDED DOCUMENTS AS OF JANUARY 1, 1989, WERE
FILED WITH THE INTERNAL REVENUE SERVICE FOR APPROVAL AS PROTOTYPE MASTER PLANS
IN DECEMBER, 1989. THE IRS HAS ASSIGNED QUALIFIED SERIAL NUMBERS TO THESE
PLANS.
IN UNDERTAKING SUCH A RETIREMENT PLAN INVOLVING INVESTMENTS OVER A PERIOD
OF YEARS, IT IS IMPORTANT FOR THE INDIVIDUAL TO CONSIDER HIS NEEDS AND WHETHER
OR NOT THE INVESTMENT OBJECTIVES OF THE FUND, DESCRIBED IN THIS PROSPECTUS, ARE
LIKELY TO FULFILL THEM. AN INVESTOR WHO CONTEMPLATES ESTABLISHMENT OF SUCH A
PLAN SHOULD CONSULT WITH HIS ATTORNEY AND/OR HIS PUBLIC ACCOUNTANT.
THE PROTOTYPE STANDARDIZED PROFIT SHARING PLAN WITH CODA KNOWN IN OUR FUND
AS STANDARD RETIREMENT PLAN NO. 001 (AS AMENDED AND RESTATED AS OF JANUARY 1,
1989) PROFIT SHARING WITH A SALARY REDUCTION ARRANGEMENT UNDER SECTION 401(K) OF
THE INTERNAL REVENUE CODE RECEIVED APPROVAL FROM THE INTERNAL REVENUE SERVICE ON
JULY 31, 1990. THIS PLAN NO. 001 IS IDENTIFIED BY LETTER SERIAL NO: D249067A.
THE PROTOTYPE STANDARDIZED MONEY PURCHASE PENSION PLAN DESCRIBED BY OUR FUND AS
THE STANDARD RETIREMENT PLAN NO. 002 (AS AMENDED AND RESTATED AS OF JANUARY 1,
1989) MONEY PURCHASE PENSION RECEIVED APPROVAL FROM THE INTERNAL REVENUE SERVICE
ON JULY 31, 1990. THIS PLAN NO. 002 IS IDENTIFIED BY LETTER SERIAL NO:
D249068A. BOTH PLANS HAVE INCORPORATED MODEL AMENDMENTS PUBLISHED BY THE
INTERNAL REVENUE SERVICE WHICH ADOPT ALL CHANGES REQUIRED BY THE TAX LAWS SINCE
THE PLANS WERE RESTATED.
Bridges Investment Fund, Inc. -20- February 27, 1998
Prospectus -- Part A
INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNT PROTOTYPE
AN INVESTOR, REFERRED TO AS A DEPOSITOR IN THIS SECTION OF THE PROSPECTUS,
MAY WISH TO PURCHASE SHARES OF BRIDGES INVESTMENT FUND, INC. IN CONJUNCTION WITH
THE RETIREMENT BENEFITS PROVIDED BY THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974. THERE IS AVAILABLE THROUGH BRIDGES INVESTMENT FUND, INC. A PROTOTYPE
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT WITH APPLICATION FORM, CONTRIBUTION
FORM, AND DISCLOSURE STATEMENT.
THE CUSTODIAN AGREEMENT PROVIDES THAT U.S. BANK NATIONAL
ASSOCIATION, OMAHA, NEBRASKA, WILL FURNISH CUSTODIAL SERVICES AS REQUIRED BY
SUCH ACT FOR FEES CHARGEABLE TO THE DEPOSITOR AS FOLLOWS:
. ACCEPTANCE FEE $5.00 PAYABLE ON ESTABLISHMENT OF THE ACCOUNT.
. ANNUAL MAINTENANCE FEE $8.00 PER YEAR UNTIL WITHDRAWALS FROM THE ACCOUNT
ARE BEGUN BY THE DEPOSITOR OR HIS BENEFICIARY.
. TERMINATION FEE $8.00 , PAYABLE ON THE TERMINATION OF THE PLAN
OR ON THE INITIAL WITHDRAWAL FROM THE ACCOUNT.
. PERIODIC CASH DISTRIBUTION, $1.75 FOR EACH PAYMENT.
. INVESTMENT OF CASH DISTRIBUTIONS AS DEFINED IN THIS PROSPECTUS, $1.05
FOR EACH REINVESTMENT.
EXTRAORDINARY SERVICES RESULTING FROM UNUSUAL ADMINISTRATIVE RESPONSIBILITIES
NOT CONTEMPLATED BY THE ABOVE SCHEDULE WILL BE SUBJECT TO SUCH ADDITIONAL
CHARGES AS WILL REASONABLY COMPENSATE THE CUSTODIAN FOR THE SERVICES INVOLVED.
THE DEPOSITOR OR THE CUSTODIAN SHALL HAVE THE RIGHT TO TERMINATE THE ACCOUNT
UPON 60 DAYS' NOTICE TO THE OTHER PARTY. IN THE EVENT OF SUCH TERMINATION, THE
CUSTODIAN SHALL MAKE DISTRIBUTION OF THE ACCOUNT TO THE DEPOSITOR OR TO ANOTHER
QUALIFIED PLAN OR SUCCESSOR CUSTODIAN DESIGNATED BY THE DEPOSITOR.
THE FUND'S INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT PROTOTYPE PERMITS A
MAXIMUM ANNUAL CONTRIBUTION OF $2,000 OR 100% OF THE DEPOSITOR'S ANNUAL
COMPENSATION FOR PERSONAL SERVICES, WHICHEVER IS LESS. IF AN INVESTOR HAS A
NON-WORKING SPOUSE, AN ADDITIONAL ANNUAL CONTRIBUTION OF $2,000 IS
PERMITTED TO A SEPARATE IRA MAINTAINED BY SUCH NON-WORKING SPOUSE FOR A
TOTAL CONTRIBUTION OF $4,000. UNDER THE PROTOTYPE, THE ANNUAL
CONTRIBUTION MAY BE DEDUCTIBLE UNDER CERTAIN CONDITIONS, AND EARNINGS, IF ANY,
ACCUMULATE TAX-FREE UNTIL DISTRIBUTION AFTER AGE 59 1/2. NORMALLY,
DISTRIBUTIONS FROM THE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT PRIOR TO AGE 59
Bridges Investment Fund, Inc. -21- February 27, 1998
Prospectus -- Part A
1/2, UNLESS SPECIFICALLY EXEMPTED BY LAW, WILL RESULT IN TAX PENALTIES IN
ADDITION TO BEING INCLUDED IN TAXABLE INCOME. IN ADDITION, THERE IS A
PENALTY ON EXCESS CONTRIBUTIONS AND A PENALTY ON INSUFFICIENT PAYOUTS AFTER AGE
70 1/2.
TO ESTABLISH AN INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT, THE DEPOSITOR IS
PROVIDED A COPY OF THE FUND'S CURRENT PROSPECTUS, THREE COPIES OF THE INDIVIDUAL
RETIREMENT ACCOUNT CUSTODIAL AGREEMENT, THREE COPIES OF THE APPLICATION FORM,
THREE COPIES OF THE CONTRIBUTION FORM, AND THREE COPIES OF THE DISCLOSURE
STATEMENT. THE DEPOSITOR EXECUTES AND FORWARDS TO U.S. BANK NATIONAL
ASSOCIATION, OMAHA, NEBRASKA, THREE COPIES OF THE APPLICATION FORM AND
THREE COPIES OF THE CONTRIBUTION FORM. U.S. BANK NATIONAL ASSOCIATION,
OMAHA, NEBRASKA, WILL RETURN ONE ACKNOWLEDGED COPY OF EACH FORM TO THE
DEPOSITOR AND THE FUND FOR RETENTION BY EACH PARTY. THE DEPOSITOR WILL SIGN AND
SEND ONE COPY OF THE DISCLOSURE STATEMENT TO THE FUND AT ITS OFFICE. THE
DEPOSITOR SHOULD RETAIN THE OTHER EXECUTED COPY FOR A PERMANENT RECORD IN HIS
FILES.
THE CUSTODIAL AGREEMENT SETS FORTH PROVISIONS GOVERNING THE DEPOSITOR'S
ACCOUNT, EXPRESSES THE PROHIBITED ACTIONS UNDER THE LAW, SETS FORTH THE
PROVISIONS OF DISTRIBUTION OF PAYMENTS, PROVIDES THE RULES FOR REPORTS AND OTHER
INFORMATION, OUTLINES THE CUSTODIAN'S RESPONSIBILITIES, AND PROVIDES FOR
AMENDMENTS TO AND TERMINATION OF THE CUSTODIAL ACCOUNT.
THE APPLICATION FORM ESTABLISHES THE CUSTODIAL ACCOUNT, COLLECTS PERTINENT
INFORMATION TO GOVERN THE CUSTODIAL ACCOUNT, AND RECITES THE APPLICABLE FEES TO
BE CHARGED BY U.S. BANK NATIONAL ASSOCIATION , OMAHA, NEBRASKA. BY
EXECUTING THE APPLICATION FORM, THE DEPOSITOR ACKNOWLEDGES RECEIPT OF THE
PROSPECTUS. THE CONTRIBUTION FORM GOVERNS THE METHOD AND TYPE OF CONTRIBUTION
TO THE CUSTODIAL ACCOUNT. THE DISCLOSURE STATEMENT COVERS APPROPRIATE NOTICES
OF APPLICABLE PROVISIONS OF THE INTERNAL REVENUE CODE, THE FEES FOR THE ACCOUNT,
AND OTHER IMPORTANT INFORMATION CONCERNING THE OPERATION OF THE INDIVIDUAL
RETIREMENT CUSTODIAL ACCOUNT. PRIOR TO EXECUTING THESE DOCUMENTS, THE DEPOSITOR
SHOULD READ ALL THE DOCUMENTS CONSTITUTING THE PROTOTYPE.
THE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT SPONSORED BY THE FUND WAS
APPROVED AS A PROTOTYPE PLAN PURSUANT TO AN OPINION LETTER RECEIVED FROM THE
INTERNAL REVENUE SERVICE DATED JUNE 11, 1993. THE APPROVAL LETTER CARRIES THE
SERIAL NO: D111476C.
U.S. BANK NATIONAL ASSOCIATION , OMAHA, NEBRASKA, MEETS THE
APPLICABLE LEGAL REQUIREMENTS TO ACT AS THE CUSTODIAN UNDER THE PROTOTYPE.
Bridges Investment Fund, Inc. -22- February 27, 1998
Prospectus -- Part A
THE PROVISIONS TO REDEEM SHARES OF THE FUND, AS DESCRIBED IN THIS
PROSPECTUS, ARE NOT CHANGED BY THE TERMS OF THE PROTOTYPE.
THE DEPOSITOR MAY REVOKE HIS CUSTODIAN ACCOUNT WITHIN AT LEAST SEVEN DAYS
OF THE DATE OF ESTABLISHMENT AS PROVIDED IN ARTICLE VI C OF THE CUSTODIAN
AGREEMENT, PARAGRAPH 9 OF THE APPLICATION FORM, AND IN PARAGRAPH 3 (I) OF THE
DISCLOSURE STATEMENT. A SHAREHOLDER MAY WISH TO CONSIDER A REDEMPTION OF THE
FUND SHARES AS AN ALTERNATIVE TO REVOKING HIS CUSTODIAN ACCOUNT.
IN UNDERTAKING SUCH AN INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNT AS PROVIDED
BY THIS PROSPECTUS AND RELATED DOCUMENTS, INVOLVING INVESTMENTS OVER A PERIOD OF
YEARS, IT IS IMPORTANT FOR THE INDIVIDUAL TO CONSIDER HIS OR HER NEEDS
AND WHETHER OR NOT THE INVESTMENT OBJECTIVES OF THE FUND, DESCRIBED IN THIS
PROSPECTUS, ARE LIKELY TO FULFILL THEM. THE INDIVIDUAL WHO CONTEMPLATES THE
ESTABLISHMENT OF THE PROTOTYPE SHOULD CONSULT WITH HIS OR HER ATTORNEY OR
TAX ADVISER REGARDING APPROPRIATE ADVICE AS TO THE ACTIONS TO BE TAKEN.
PARTICULAR ATTENTION SHOULD BE DIRECTED TO CHANGES IN THE DEDUCTIBILITY OF
CONTRIBUTIONS TO IRAS FOR TAX YEARS COMMENCING JANUARY 1, 1987, OR LATER FOR
THOSE PERSONS WHO ARE COVERED BY EMPLOYER SPONSORED DEFERRED BENEFIT PLANS AND
OTHER FACTORS RELATED TO ANNUAL REPORTED TAX AMOUNTS OF SINGLE AND JOINT INCOME.
REFERENCE TO IRS ANNOUNCEMENT 86-121 SHOULD ALSO BE HELPFUL, COPIES OF WHICH MAY
BE OBTAINED FROM THE FUND'S OFFICE.
ADDITIONAL CONSIDERATION SHOULD BE GIVEN BY THE INDIVIDUAL WHO
CONTEMPLATES THE ESTABLISHMENT OF A PROTOTYPE TO NEW CHOICES AND OPPORTUNITIES
THAT WERE CREATED IN 1997.
1)THE SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT, AS DESCRIBED IN
SECTION 408(P) OF THE INTERNAL REVENUE CODE MAY BE ESTABLISHED IN
CONNECTION WITH A SALARY REDUCTION AGREEMENT. UNDER THIS FUNDING
CHOICE, IT IS POSSIBLE TO SET ASIDE MORE THAN THE $2,000 PER YEAR
CONTRIBUTION LIMIT FOR THE TRADITIONAL IRA ACCOUNT. DEPENDING UPON THE
CIRCUMSTANCES INVOLVED, IT MAY BE POSSIBLE TO RECEIVE EMPLOYER MATCHING
CONTRIBUTIONS IN THE ACCOUNT. THIS SIMPLE PLAN IS IDENTIFIED WITH THE
INTERNAL REVENUE SERVICE THROUGH LETTER SERIAL NO. D111476C.
THE ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT OPPORTUNITY FOR
INVESTMENT WAS CREATED BY THE TAXPAYER RELIEF ACT OF 1997. THE
LEGISLATION PROVIDES FOR A NON-DEDUCTIBLE ANNUAL CONTRIBUTION OF $2,000
FOR A WORKING SPOUSE AND A $2,000 CONTRIBUTION FOR A NON-WORKING SPOUSE.
BENEFITS PAID FROM THE ROTH IRA ARE TO BE NON-TAXABLE TO THE DEPOSITOR
UPON HIS OR HER RETIREMENT. THE ROTH INDIVIDUAL RETIREMENT CUSTODIAL
Bridges Investment Fund, Inc. -23- February 27, 1998
Prospectus -- Part A
ACCOUNT MAY BE ESTABLISHED THROUGH THE EXECUTION OF THE FORM 5305-RA
ISSUED UNDER SECTION 408A OF THE INTERNAL REVENUE CODE IN CONJUNCTION
WITH THE STANDARD, TRADITIONAL IRA CUSTODIAL ACCOUNT OF THE FUND AS
DESCRIBED ON PAGES 20 HEREIN. DEPOSITORS MAY ESTABLISH AND MAINTAIN
BOTH THE "TRADITIONAL" IRA AND THE "ROTH" IRA ACCOUNTS, PROVIDED THE
ASSETS ARE ALWAYS MAINTAINED IN SEPARATELY SEGREGATED ACCOUNTS AND
PROVIDED FURTHER THAT THE TITLES THEREIN ACCURATELY REFLECT THE
DISTINCTIONS BETWEEN THE TWO TYPES OF FUNDING PERMITTED BY STATUTE.
DEPOSITORS WILL STILL HAVE A $2,000 ANNUAL LIMIT PER WORKING SPOUSE AND
NON-WORKING SPOUSE, SO THAT A CHOICE MUST BE MADE BETWEEN THE
CONTRIBUTION AMOUNTS THAT WOULD REPRESENT AN INCOME EXCLUSION AND THE
CONTRIBUTION AMOUNTS THAT WOULD BE TAXABLE UNDERNEATH THE $2,000 ANNUAL
CEILING.
THE FUND'S OFFICE MAINTAINS A SUPPLY OF SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL
ACCOUNT FORMS AND AN INVENTORY FOR THE FORM 5305-RA FOR THE ROTH IRA TO ASSIST
DEPOSITORS TO ESTABLISH THESE TYPES OF ACCOUNTS.
OTHER DISCLOSURES -- THE FUND HAS NO PRINCIPAL OR OTHER UNDERWRITERS. THE
FUND HAS NO DISTRIBUTION EXPENSES. ALL SUCH COSTS ARE PAID FOR BY BRIDGES
INVESTMENT COUNSEL, INC. IF A SHAREHOLDER MAKES A MISCELLANEOUS PAYMENT TO
SUBSCRIBE FOR SHARES IN THE FUND, THE PAYMENT WILL BE TREATED AS AN UNSCHEDULED
INVESTMENT, EXCEPT THAT AMOUNTS LESS THAN $800 WILL HAVE A $1.05 FEE DEDUCTED
AND PAID TO BRIDGES INVESTOR SERVICES, INC.
NO SALES LOADS -- BRIDGES INVESTMENT FUND, INC. SHARES ARE PURCHASED
DIRECTLY FROM THE FUND AT THE NEXT DETERMINED NET ASSET VALUE WITHOUT THE
DEDUCTION OF ANY SALES LOAD OR SELLING COMMISSIONS. WITH THE EXCEPTION OF THE
SERVICE CHARGES OUTLINED ABOVE ON PLAN ACCOUNTS, EVERY DOLLAR INVESTED BY A
SHAREHOLDER IS ATTRIBUTED TO HIS PURCHASE OF SHARES.
REDEMPTION OF SHARES
A SHAREHOLDER MAY AT ANY TIME, EXCEPT AS SPECIFIED BELOW, REQUIRE THE FUND
TO REDEEM HIS STOCK BY DELIVERING HIS PROPERLY ENDORSED STOCK CERTIFICATES, AS
MORE FULLY DESCRIBED IN THE PARAGRAPH BELOW, TO THE FUND AT 256 DURHAM PLAZA,
8401 WEST DODGE ROAD, OMAHA, NEBRASKA. A SHAREHOLDER IN A PLAN ACCOUNT MUST
SEND THE FUND A WRITTEN NOTIFICATION WHICH REQUESTS THAT PART OR ALL OF HIS
STOCK BE REDEEMED.
THE REDEMPTION PRICE IS THE NEXT DETERMINED NET ASSET VALUE THEREOF. THE
REDEMPTION PRICE MAY BE ABOVE OR BELOW THE INVESTOR'S COST, DEPENDING ON THE
MARKET VALUE OF THE FUND'S PORTFOLIO SECURITIES AT THE TIME OF THE REDEMPTION.
Bridges Investment Fund, Inc. -24- February 27, 1998
Prospectus -- Part A
IF A CERTIFICATE OR A WRITTEN NOTIFICATION IS RECEIVED IN GOOD FORM PRIOR
TO THE CLOSE OF THE NEW YORK STOCK EXCHANGE ON ANY DAY FROM MONDAY THROUGH
FRIDAY ON WHICH THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, THE NET ASSET
VALUE IS DETERMINED AS OF THE CLOSE OF TRADING ON THAT DAY. IF A CERTIFICATE OR
A WRITTEN NOTIFICATION IS RECEIVED IN GOOD FORM AT ANY OTHER TIME, THE NET ASSET
VALUE IS DETERMINED AS OF THE CLOSE OF TRADING UPON THE NEW YORK STOCK EXCHANGE
ON THE NEXT SUCCEEDING DAY ON WHICH SUCH EXCHANGE IS OPEN FOR TRADING.
ALL CERTIFICATES PRESENTED FOR REDEMPTION OR REQUESTS FOR LIQUIDATION OF
UNCERTIFICATED SHARES HELD UNDER PLAN ACCOUNTS MUST BE DULY ENDORSED OR
ACCOMPANIED BY A DULY EXECUTED SEPARATE ASSIGNMENT, WITH SIGNATURE(S) GUARANTEED
BY EITHER A FINANCIAL OR BANKING INSTITUTION WHOSE DEPOSITS ARE INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR BY A BROKERAGE FIRM WHICH IS A MEMBER
OF ANY EXCHANGE AS DEFINED IN THE FIDELITY INSURING BOND CARRIED BY THE FUND
WITH ICI MUTUAL INSURANCE COMPANY. THE SIGNATURE(S) SHOULD BE IN THE NAME(S) OF
THE STOCKHOLDER AS SHOWN ON THE STOCK TRANSFER RECORDS WHICH ARE MAINTAINED FOR
THE FUND BY BRIDGES INVESTOR SERVICES, INC. THE SIGNATURE GUARANTEE MUST BE
OBTAINED IN EACH INSTANCE OF A REDEMPTION FOR BOTH CERTIFICATED AND
UNCERTIFICATED SHARES. THE FUND AND ITS TRANSFER AGENT WILL ALSO RECOGNIZE
GUARANTORS THAT PARTICIPATE IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM
(STAMP) THAT BEGAN AUGUST 24, 1992.
PAYMENT FOR SHARES REDEEMED WILL BE MADE WITHIN SEVEN DAYS AFTER REQUEST IN
GOOD ORDER FOR REDEMPTION AND TENDER OF SHARES HAS BEEN MADE. REDEMPTION
PRIVILEGES AND PAYMENTS MAY, HOWEVER, BE SUSPENDED DURING PERIODS WHEN THE NEW
YORK STOCK EXCHANGE IS CLOSED (OTHER THAN WEEKENDS AND HOLIDAY CLOSINGS) OR
TRADING THEREON IS RESTRICTED, OR FOR ANY PERIOD DURING WHICH AN EMERGENCY
EXISTS AS A RESULT OF WHICH (A) DISPOSAL BY THE FUND OF SECURITIES OWNED BY IT
IS NOT REASONABLY PRACTICABLE, OR (B) IT IS NOT REASONABLY PRACTICABLE FOR THE
FUND TO FAIRLY DETERMINE THE VALUE OF ITS NET ASSETS, OR FOR SUCH OTHER PERIODS
AS THE SECURITIES AND EXCHANGE COMMISSION MAY BY ORDER PERMIT FOR THE PROTECTION
OF THE SECURITY HOLDERS OF THE FUND. THE SECURITIES AND EXCHANGE COMMISSION
SHALL DETERMINE WHEN TRADING ON THE NEW YORK STOCK EXCHANGE IS RESTRICTED AND
WHEN AN EMERGENCY EXISTS.
THE FUND HAS NO PROCEDURE WHEREBY A SHAREHOLDER CAN SELL HIS SHARES TO THE
FUND THROUGH A BROKER DEALER. THE FUND IS NOT PERMITTED TO REDEEM SHARES
INVOLUNTARILY IN ACCOUNTS BELOW A CERTAIN NUMBER OR VALUE OF SHARES. THE FUND
WILL HONOR ALL REQUESTS FOR REDEMPTION PROPERLY DOCUMENTED IRRESPECTIVE OF THE
LENGTH OF TIME THE SHAREHOLDER HAS MAINTAINED HIS OR HER ACCOUNT WITH THE FUND.
Bridges Investment Fund, Inc. -25- February 27, 1998
Prospectus -- Part A
PORTFOLIO MANAGERS
THE FOLLOWING DISCLOSURES ARE MADE ABOUT 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 III, PRESIDENT OF THE FUND AND EXECUTIVE VICE
PRESIDENT-INVESTMENTS OF BRIDGES INVESTMENT COUNSEL, INC. IS THE PERSON
PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY MANAGEMENT OF THE FUND'S PORTFOLIO.
MR. BRIDGES III HAS MORE THAN 13 YEARS' EXPERIENCE WITH THE FUND'S
PORTFOLIO.
MR. EDSON L. BRIDGES II, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE FUND,
IS THE BACK-UP PERSON FOR THE DAY-TO-DAY OPERATION OF THE FUND'S PORTFOLIO. MR.
BRIDGES II HAS MORE THAN 34 YEARS OF EXPERIENCE IN MANAGING THE FUND'S
INVESTMENT PORTFOLIO.
PENDING LEGAL PROCEEDINGS: NONE:
NOTICE 1: PART B OF THIS FILING ENTITLED INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION CONTAINS SUPPLEMENTAL INFORMATION ON THE FUND ON THE
FOLLOWING SUBJECTS: GENERAL INFORMATION AND HISTORY; INVESTMENT OBJECTIVES AND
POLICIES; MANAGEMENT OF THE FUND; CONTROL PERSONS AND PRINCIPAL HOLDERS OF
SECURITIES; INVESTMENT ADVISORY AND OTHER SERVICES; BROKERAGE ALLOCATION AND
OTHER PRACTICES; CAPITAL STOCK AND OTHER SECURITIES; PURCHASE, REDEMPTION AND
PRICING OF SECURITIES BEING OFFERED; TAX STATUS; AND FINANCIAL STATEMENTS.
NOTICE 2: PART C OF THIS FILING ENTITLED OTHER INFORMATION EMBODIES OTHER
ITEMS FOR A PROPER FILING OF THIS FUND WITH THE SECURITIES AND EXCHANGE
COMMISSION, MANY OF WHICH ARE INCORPORATED BY REFERENCE BECAUSE THE SUBMISSION
OF THE MATERIAL WAS COMPLETED IN PREVIOUS YEARS TO THE CURRENT FILING OF
AMENDMENTS TO THE REQUIRED FORMS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940. NONETHELESS, PART C WILL CONTAIN: FINANCIAL
STATEMENTS AND EXHIBITS; PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT; NUMBER OF HOLDERS OF SECURITIES; INDEMNIFICATION; BUSINESS AND OTHER
CONNECTIONS OF INVESTMENT ADVISER; PRINCIPAL UNDERWRITERS; LOCATION OF ACCOUNTS
AND RECORDS; MANAGEMENT SERVICES; AND UNDERTAKINGS.
NOTICE 3: AS A PROSPECTIVE INVESTOR OR A SHAREHOLDER, YOU MAY BE INTERESTED IN
THIS INFORMATION. YOU MAY REQUEST PART B AND/OR PART C FROM THE FUND AT THE
ADDRESS SHOWN ON THE COVER OF THIS PROSPECTUS.
Bridges Investment Fund, Inc. 1 February 27, 1998
Statement -- Part B
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK
FEBRUARY 27, 1998 8401 WEST DODGE ROAD
OMAHA, NEBRASKA 68114
402-397-4700
SPECIAL NOTICES
. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION
WITH THE PROSPECTUS OF BRIDGES INVESTMENT FUND, INC. DATED FEBRUARY
27, 1998.
. OTHER INFORMATION, PART C, OF THE FILING DATED FEBRUARY 27, 1998 ,
BY BRIDGES INVESTMENT FUND, INC. WITH THE SECURITIES AND EXCHANGE
COMMISSION MAY CONTAIN USEFUL MATERIAL FOR PROSPECTIVE INVESTORS AND
SHAREHOLDERS.
. A COPY OF THE PROSPECTUS OF BRIDGES INVESTMENT FUND, INC. AND PART C MAY
BE OBTAINED FROM THE OFFICE OF THE FUND AT THE ADDRESS SHOWN ABOVE.
. THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS FEBRUARY 27,
1998.
Bridges Investment Fund, Inc. -2- February 27, 1998
Statement -- Part B
<TABLE>
<CAPTION>
TABLE OF CONTENTS
LOCATION OF RELATED
LOCATION
DISCLOSURE INFO.
PAGE NO.
IN PROSPECTUS
IN THIS
PART A INFORMATION REQUIRED IN STATEMENT OF ADDL. INFO.
PART B
<C> <S> <S>
- COVER PAGE................................................1
- TABLE OF CONTENTS.........................................2
6 GENERAL INFORMATION AND HISTORY...........................3
6 INVESTMENT OBJECTIVES AND POLICIES.......................3-6
6 PRIMARY AND SECONDARY.................................3
- INVESTMENT AND POLICY RESTRICTIONS...................3-5
5 PORTFOLIO TURNOVER....................................5
8 MANAGEMENT OF THE FUND....................................6
- DIRECTORS AND OFFICERS..............................6-10
12 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES....11-14
9-12 INVESTMENT ADVISORY AND OTHER SERVICES...................14
- CONTROL PERSONS......................................14
- AFFILIATED PERSONS............................. 14
9 ADVISORY ...................................... 14
11 EXPENSE LIMITATION........................... 14-15
- SERVICES PERFORMED ON BEHALF OF FUND.................15
SUPPLIED OR PAID FOR SUBSTANTIALLY BY
INVESTMENT ADVISER
11 OTHER SERVICES.....................................15-16
11 BROKERAGE ALLOCATION AND OTHER PRACTICES...............16-17
12 CAPITAL STOCK AND OTHER SECURITIES................. 17
12 CLASSES........................................ 17
CUMULATIVE VOTING.............................. 17
14 PURCHASE, REDEMPTION, AND PRICING OF SECURITIES..........18
BEING OFFERED
- GENERAL INFORMATION...............................18
14 VALUATION.........................................18
SPECIMEN PRICE MAKE UP SHEET....................18,20
22 OTHER DISCLOSURES........................... 18
13 TAX STATUS...............................................19
- UNDERWRITERS.............................................19
- CALCULATION OF PERFORMANCE DATA..........................19
- FINANCIAL STATEMENTS...................................21-36
REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.........21
SCHEDULE OF INVESTMENTS............................22-28
STATEMENT OF ASSETS AND LIABILITIES..................29
STATEMENT OF OPERATIONS..............................30
STATEMENTS OF CHANGES IN NET ASSETS..................31
NOTES TO FINANCIAL STATEMENTS......................32-36
Bridges Inestment Fund, Inc. -3- February 27, 1998
Statement -- Part B
GENERAL INFORMATION AND HISTORY
THE REGISTRANT HAS BEEN SOLELY IN THE BUSINESS OF AN OPEN-END, REGULATED
INVESTMENT MANAGEMENT COMPANY SINCE INCEPTION ON JULY 1, 1963. THE FUND'S NAME
HAS BEEN THE SAME THROUGHOUT ITS CORPORATE LIFE. FOR MORE INFORMATION, REFER TO
PAGE 6 OF THE PROSPECTUS.
INVESTMENT OBJECTIVES AND POLICIES
PRIMARY AND SECONDARY -- THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS
LONG-TERM CAPITAL APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT
INCOME IS A SECONDARY INVESTMENT OBJECTIVE OF THE FUND. COMMON STOCKS AND
SECURITIES CONVERTIBLE INTO COMMON STOCKS WILL BE UTILIZED TO REACH THE CAPITAL
GROWTH OBJECTIVE. BONDS, DEBENTURES, AND PREFERRED STOCKS ARE ACQUIRED OR HELD
TO FULFILL THE MODEST INCOME OBJECTIVE. REFER TO PAGES 6-8 OF THE PROSPECTUS
FOR A COMPLETE DISCUSSION OF THE INVESTMENT POLICY OBJECTIVES FOR THE FUND AND
THE PRACTICES EMPLOYED TO ATTAIN THE GOALS SET FORTH HEREIN.
INVESTMENT AND POLICY RESTRICTIONS -- THE ACTIVITIES OF THE FUND AND ITS
INVESTMENT POLICIES ARE RESTRICTED AS SET FORTH IN THE FOLLOWING DISCUSSION.
THESE RESTRICTIONS CANNOT BE CHANGED WITHOUT THE APPROVAL OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THE FUND.
THE FUND WILL NOT CONCENTRATE ITS INVESTMENTS IN A PARTICULAR INDUSTRY OR
GROUP OF INDUSTRIES BY COMMITTING MORE THAN 25% OF TOTAL ASSETS TO SECURITIES IN
ANY ONE INDUSTRY. WITH THE EXCEPTION OF INVESTMENTS IN U.S. GOVERNMENT
SECURITIES, THE FUND WILL NOT MAKE INVESTMENTS WHICH WILL CAUSE MORE THAN 5% OF
THE TOTAL VALUE OF ITS ASSETS (AT THE TIME OF PURCHASE) TO BE INVESTED IN THE
SECURITIES OF ANY ONE ISSUER. FURTHERMORE, IN INITIAL OR SUBSEQUENT
INVESTMENTS, THE FUND MAY NOT ACQUIRE MORE THAN 10% OF THE VOTING STOCK OF ANY
ONE ISSUER, AND THE FUND MAY NOT ACQUIRE MORE THAN 10% OF ANY ONE CLASS OF THE
OUTSTANDING SECURITIES OF ANY ONE ISSUER. FOR THE PURPOSES OF THIS RESTRICTION,
ALL KINDS OF SECURITIES OF A COMPANY REPRESENTING DEBT ARE CONSIDERED AS A
SINGLE CLASS IRRESPECTIVE OF THEIR DIFFERENCES, AND ALL KINDS OF PREFERRED STOCK
OF A COMPANY ARE CONSIDERED A SINGLE CLASS IRRESPECTIVE OF THEIR DIFFERENCES.
THE FUND WILL NOT BORROW MONEY OR PLEDGE OR MORTGAGE ITS ASSETS, EXCEPT AS
A TEMPORARY MEASURE, IN WHICH EVENT TOTAL BORROWINGS SHALL NOT EXCEED 10% OF THE
VALUE OF ITS TOTAL ASSETS. THE OPTION TO BORROW MONEY AS A TEMPORARY MEASURE
HAS NEVER BEEN EXERCISED. IN ADDITION, THE FUND MAY NOT PURCHASE SECURITIES ON
MARGIN OR MAKE SHORT SALES.
THE FUND WILL NOT MAKE INVESTMENTS WHICH WILL CAUSE MORE THAN 5% OF THE
VALUE OF ITS TOTAL ASSETS (AT THE TIME OF PURCHASE) TO BE INVESTED IN SECURITIES
OF ISSUERS WHICH HAVE A RECORD OF LESS THAN THREE YEARS' OPERATION.
Bridges Investment Fund, Inc. -4- February 27, 1998
Statement -- Part B
THE FUND WILL NOT INVEST IN COMPANIES FOR THE PURPOSE OF EXERCISING
CONTROL OR MANAGEMENT, AND THE FUND WILL NOT INVEST IN SECURITIES OF OTHER
INVESTMENT COMPANIES EXCEPT BY PURCHASE IN OPEN MARKET, WHERE NO COMMISSION OR
PROFIT TO A SPONSOR OR DEALER RESULTS FROM SUCH PURCHASE OTHER THAN THE
CUSTOMARY BROKER'S COMMISSION, OR WHERE THE ACQUISITION IS PART OF A PLAN OF
MERGER OR CONSOLIDATION. SUCH ACQUISITIONS, IF ANY, OF THE SECURITIES OF OTHER
REGISTERED INVESTMENT COMPANIES SHALL BE UNLAWFUL FOR THE ACQUIRING COMPANY IF
IMMEDIATELY AFTER SUCH PURCHASE OR ACQUISITION THE ACQUIRING COMPANY OWNS IN THE
AGGREGATE:
1. MORE THAN 3 PER CENTUM OF THE OUTSTANDING VOTING STOCK OF ANOTHER
INVESTMENT COMPANY;
2. SECURITIES ISSUED BY THE ACQUIRED COMPANY HAVING AN AGGREGATE VALUE IN
EXCESS OF 5 PER CENTUM OF THE VALUE OF THE TOTAL ASSETS OF THE FUND;
OR
3. SECURITIES ISSUED BY THE ACQUIRED COMPANY AND ALL OTHER INVESTMENT
COMPANIES (OTHER THAN TREASURY STOCK OF THE ACQUIRING COMPANY) HAVING
AN AGGREGATE VALUE IN EXCESS OF 10 PER CENTUM OF THE VALUE OF THE
TOTAL ASSETS OF THE FUND.
EACH INVESTMENT OF THE FUND WILL BE MADE WITH THE EXPECTATION THAT THE
SECURITY ACQUIRED WILL BE HELD FOR THE LONG TERM. THE FUND WILL NOT PURCHASE
SECURITIES WITH A VIEW TOWARDS RAPID TURNOVER FOR CAPITAL GAINS. HOWEVER, THE
MANAGEMENT MAY SELL SECURITIES FOR SHORT TERM GAINS OR LOSSES IF NEW INFORMATION
OR CHANGES IN MARKET CONDITIONS INDICATE SUCH SELLING ACTION IS ADVISABLE.
THE FUND WILL NOT INVEST OUTSIDE OF THE AREA OF SECURITIES. IT WILL NOT
PURCHASE OR SELL REAL ESTATE, COMMODITIES OR COMMODITY CONTRACTS. THE FUND WILL
NOT MAKE LOANS TO OTHER PERSONS. (THE ACQUISITION OF A PORTION OF AN ISSUE OF
PUBLICLY DISTRIBUTED BONDS, DEBENTURES, OR OTHER DEBT SECURITIES IS NOT TO BE
CONSIDERED THE MAKING OF A LOAN.)
THE FUND WILL NOT ENGAGE IN THE UNDERWRITING OF THE SECURITIES OF OTHER
ISSUERS.
THE FUND WILL NOT PURCHASE RESTRICTED OR NON-REGISTERED SECURITIES.
THE FUND WILL NOT PURCHASE OR SELL PUT OR CALL OPTIONS, EXCEPT THE FUND MAY
WRITE OR SELL CALL OPTIONS AGAINST SHARES HELD IN ITS SECURITIES PORTFOLIO ON
Bridges Investment Fund, Inc. -5- February 27, 1998
Statement -- Part B
THE AMERICAN STOCK EXCHANGE, INC., THE CHICAGO BOARD OPTIONS EXCHANGE,
INCORPORATED, THE PACIFIC STOCK EXCHANGE INCORPORATED, AND THE PBW STOCK
EXCHANGE, PROVIDED THAT ANY SUCH CALL OPTIONS WILL BE LIMITED TO SHARES OF
COMMON STOCKS WHICH HAVE AN AGGREGATE MARKET VALUE OF LESS THAN 10% OF THE TOTAL
VALUE OF THE FUND'S ASSETS AT THE TIME OF THE TRANSACTION, AND FURTHER PROVIDED
THAT NOT MORE THAN ONE-HALF OF THE SHARES HELD IN ANY ONE ISSUER WILL BE
ELIGIBLE FOR THE WRITING OF SUCH CALL OPTIONS. THE FUND MAY PURCHASE A CALL
OPTION WITH TERMS IDENTICAL TO A CALL OPTION WHICH HAS BEEN PREVIOUSLY WRITTEN
IN ORDER TO LIQUIDATE OR CLOSE AN EXISTING CALL OPTION POSITION. PRIOR TO
DECEMBER 31, 1997 , THE FUND HAD NOT EXERCISED ITS AUTHORITY TO WRITE A
COVERED CALL OPTION.
THE FUND MAY PURCHASE BONDS, DEBENTURES, AND PREFERRED STOCKS WHICH HAVE
ONE OR MORE INTEREST OR DIVIDEND PAYMENTS IN ARREARS, BUT, NEVERTHELESS, OFFER
PROSPECTS OF RESUMING THE PAYMENT OF THE ARREARAGE PLUS THE CURRENT INCOME RATE.
SUCH SECURITIES MAY OFFER A SIGNIFICANT PRICE IMPROVEMENT FROM A DEPRESSED
LEVEL, THEREBY CREATING A CAPITAL GAIN POTENTIAL SIMILAR TO THE ADVANCEMENT
POSSIBLE FOR COMMON STOCK SELECTIONS. THE RISK OF OWNING THIS TYPE OF SECURITY
IS THAT INCOME PAYMENTS WILL NOT BE RESUMED OR THAT THE PRINCIPAL WILL NEVER BE
REPAID. FURTHER, THE FUND MAY ACQUIRE ISSUES, SOMETIMES KNOWN AS JUNK BONDS,
WITH ABOVE AVERAGE YIELD AND BALANCE SHEET RISK. THE PURCHASE OF THIS LOWER
GRADE OF SECURITIES WILL BE LIMITED TO 5% OF THE VALUE OF THE TOTAL ASSETS OF
THE FUND. THIS PERMITTED INVESTMENT POLICY HAS SELDOM BEEN USED IN THE PAST
HISTORY OF THE FUND, AND IT WOULD ONLY BE EMPLOYED IN AN EXCEPTIONALLY
ATTRACTIVE CIRCUMSTANCE IN THE JUDGMENT OF THE INVESTMENT MANAGER.
WITH RESPECT TO THE OWNERSHIP OF U.S. GOVERNMENT SECURITIES, THE FUND WILL
INVEST PRIMARILY IN ISSUES OF THE TREASURY THAT ARE BACKED BY THE FULL FAITH AND
CREDIT OF THE UNITED STATES OF AMERICA. THE FUND MAY PURCHASE BILLS, SHORT
TERM; NOTES, INTERMEDIATE TERM; AND BONDS, LONG TERM INSTRUMENTS DEPENDING UPON
THE ATTRACTIVENESS OF INTEREST RATES AND THE EXPECTED TRENDS OF THESE YIELDS IN
THE FUTURE.
PORTFOLIO TURNOVER -- IN THE TEN YEARS ENDING DECEMBER 31, 1997 , THE
PORTFOLIO TURNOVER RATE FOR THE FUND RANGED FROM A HIGH OF 31% IN 1988 TO A LOW
OF 7% IN 1992 AND 1995. THE MEDIAN AVERAGE PORTFOLIO TURNOVER FOR THE
PAST 10 YEARS WAS 10.5% . THE PORTFOLIO TURNOVER RATE IN 1997 WAS
8%. THE REGISTRANT HAS NO PLANS TO MATERIALLY CHANGE THE PORTFOLIO TURNOVER
RATE FOR THE FUND FROM THE RANGE OF EXPERIENCE OF THE PAST AS JUST
DESCRIBED; HOWEVER, PORTFOLIO RATES COULD INCREASE SIGNIFICANTLY IN ORDER TO
RESPOND TO TURBULENT CONDITIONS IN THE SECURITIES MARKET. REFER TO PAGE 6 OF
THE PROSPECTUS FOR DETAILED YEAR-TO-YEAR INFORMATION ON THE PORTFOLIO TURNOVER
RATE.
THE RATE OF PORTFOLIO TURNOVER SHALL BE CALCULATED BY DIVIDING (A) THE
LESSER OF PURCHASES OR SALES OF PORTFOLIO SECURITIES FOR THE REPORTING PERIOD BY
Bridges Investment Fund, Inc. -6- February 27, 1998
Statement -- Part B
(B) THE MONTHLY AVERAGE OF THE VALUE OF THE PORTFOLIO SECURITIES OWNED BY THE
REGISTRANT DURING THE REPORTING PERIOD. SUCH MONTHLY AVERAGE SHALL BE
CALCULATED BY TOTALING THE MARKET VALUES OF THE PORTFOLIO SECURITIES AS OF THE
BEGINNING AND END OF THE FIRST MONTH OF THE REPORTING PERIOD AND AS OF THE END
OF EACH OF THE SUCCEEDING MONTHS IN THE PERIOD AND DIVIDING THE SUM BY THE
NUMBER OF MONTHS IN THE PERIOD PLUS ONE.
FOR PURPOSES OF THIS EXPLANATION, THERE SHALL BE EXCLUDED FROM BOTH THE
NUMERATOR AND DENOMINATOR ALL SECURITIES, INCLUDING OPTIONS, WHOSE MATURITY OR
EXPIRATION DATE AT THE TIME OF ACQUISITION WERE ONE YEAR OR LESS. ALL LONG-TERM
SECURITIES, INCLUDING LONG-TERM U.S. GOVERNMENT SECURITIES, SHOULD BE INCLUDED.
PURCHASES SHALL INCLUDE ANY CASH PAID UPON THE CONVERSION OF ONE PORTFOLIO
SECURITY INTO ANOTHER. PURCHASES SHALL ALSO INCLUDE THE COST OF RIGHTS OR
WARRANTS PURCHASED. SALES SHALL INCLUDE THE NET PROCEEDS FROM THE SALE OF
RIGHTS OR WARRANTS. SALES SHALL ALSO INCLUDE THE NET PROCEEDS OF PORTFOLIO
SECURITIES WHICH HAVE BEEN CALLED OR FOR WHICH PAYMENT HAS BEEN MADE THROUGH
REDEMPTION OR MATURITY.
THIS INFORMATION IS NOT GENERALLY AVAILABLE TO THE SHAREHOLDERS OR
INTERESTED PUBLIC, BUT THE EXPLANATION ABOVE DETAILS THE MANNER IN WHICH THE
PORTFOLIO TURNOVER RATE SHOWN ON PAGE 6 OF THE PROSPECTUS IS CALCULATED. IN
GENERAL, PORTFOLIO TURNOVER RISES WHEN SECURITIES HELD NEED TO BE REPOSITIONED
TO ADAPT THE FUND'S INVESTMENT POSITION TO NEW OPPORTUNITIES OR TO PROTECT
AGAINST UNFORESEEN, ADVERSE MARKET CIRCUMSTANCES.
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS -- THE BOARD OF DIRECTORS OF THE FUND IS RESPONSIBLE
FOR THE MANAGEMENT OF THE BUSINESS AFFAIRS OF THE FUND. THE DAY-TO-DAY
OPERATION OF THE FUND IS HANDLED BY THE OFFICERS WHO ARE CHOSEN BY, AND
ACCOUNTABLE TO, THE BOARD OF DIRECTORS. THE OFFICERS HAVE AT THEIR DISPOSAL THE
SERVICES OF THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. THIS FIRM
IS OBLIGATED UNDER ITS INVESTMENT ADVISORY CONTRACT WITH THE FUND TO PERFORM ALL
SERVICES NECESSARY IN CONNECTION WITH THE MANAGEMENT OF THE FUND. THE BUSINESS
EXPERIENCE OF EACH OF THE OFFICERS AND DIRECTORS OF THE FUND AND OF THE
INVESTMENT ADVISER DURING THE PAST FIVE YEARS IS AS FOLLOWS:
FREDERICK N. BACKER, AGE 65 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE
FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. MR. BACKER IS CURRENTLY THE
PRESIDENT OF JAT CORP., A PRIVATE INVESTMENT CONCERN THAT OPERATED A
RESTAURANT FOR TWENTY-FIVE YEARS . HIS RESPONSIBILITY TO THIS CONCERN
COMMENCED IN AUGUST, 1972. MR. BACKER IS AN INTERESTED PERSON MEMBER OF THE
Bridges Investment Fund, Inc. -7- February 27, 1998
Statement -- Part B
BOARD OF DIRECTORS OF THE FUND, WHICH IS DEFINED IN SECTION 2(A)(19) OF THE
INVESTMENT COMPANY ACT OF 1940. IN THE CONTEXT OF THIS PROSPECTUS, AN
INTERESTED PERSON IS SOMEONE WHO HAS A MATERIAL BUSINESS OR PROFESSIONAL
RELATIONSHIP WITH THE FUND'S INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL,
INC. OR ITS PRINCIPAL OFFICERS.
EDSON L. BRIDGES II, CFA, AGE 65 , CHAIRMAN AND CHIEF EXECUTIVE
OFFICER, DIRECTOR OF THE FUND, AND MEMBER OF THE EXECUTIVE COMMITTEE AND THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS, 8401 WEST DODGE ROAD, OMAHA,
NEBRASKA. IN SEPTEMBER, 1959, MR. BRIDGES BECAME ASSOCIATED WITH THE
PREDECESSOR FIRM TO BRIDGES INVESTMENT COUNSEL, INC., AND HE IS PRESENTLY THE
PRESIDENT AND A DIRECTOR OF THAT FIRM. MR. BRIDGES IS AN AFFILIATED PERSON
MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. MR. BRIDGES WAS ELECTED A VICE
PRESIDENT OF THE FUND ON APRIL 17, 1963, THEN PRESIDENT ON SEPTEMBER 28, 1970 --
A POSITION THAT HE HELD TO APRIL 11, 1997, WHEN HE WAS ELECTED TO HIS NEW
RESPONSIBILITIES.
EDSON L. BRIDGES III, CFA, AGE 39 , PRESIDENT AND DIRECTOR OF THE
FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE
FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. 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 WAS
ELECTED A VICE PRESIDENT OF THE FUND ON JUNE 28, 1985, EXECUTIVE VICE PRESIDENT
ON APRIL 13, 1995, AND PRESIDENT ON APRIL 11, 1997. MR. BRIDGES IS AN
AFFILIATED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND.
N. PHILLIPS DODGE, JR., AGE 61 , DIRECTOR OF THE FUND AND MEMBER OF
THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 8701 WEST DODGE
ROAD, OMAHA, NEBRASKA. 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,AND REAL ESTATE SYNDICATION, AND
HE IS A PUBLICLY ELECTED DIRECTOR OF THE OMAHA PUBLIC POWER DISTRICT. MR. DODGE
IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND.
JOHN W. ESTABROOK, AGE 70 , DIRECTOR OF THE FUND AND MEMBER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 10542 MULLEN ROAD, OMAHA,
NEBRASKA. MR. ESTABROOK WAS THE CHIEF ADMINISTRATIVE OFFICER OF THE NEBRASKA
METHODIST HOSPITAL IN OMAHA, NEBRASKA, FROM JUNE, 1959, TO DECEMBER, 1986. MR.
ESTABROOK CONTINUED AS THE CHIEF EXECUTIVE OFFICER OF THE NEBRASKA METHODIST
HEALTH SYSTEM, INC., WHICH OFFERS A VARIETY OF SERVICES TO OTHER HEALTH CARE
PROVIDERS IN THE MIDWEST REGION, UNTIL AUGUST, 1992, WHEN HE RETIRED. MR.
ESTABROOK IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS.
Bridges Investment Fund, Inc. -8- February 27, 1998
Statement -- Part B
JON D. HOFFMASTER, AGE 50 , DIRECTOR OF THE FUND AND MEMBER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 5711 SOUTH 86TH CIRCLE,
OMAHA, NEBRASKA. MR. HOFFMASTER IS A DIRECTOR OF AMERICAN BUSINESS INFORMATION
IN OMAHA, NEBRASKA. FROM 1987 TO SEPTEMBER, 1991, MR. HOFFMASTER SERVED AS
EXECUTIVE VICE PRESIDENT OF THE COMPANY. FROM SEPTEMBER, 1991, TO SEPTEMBER,
1993, MR. HOFFMASTER SERVED AS PRESIDENT AND CHIEF OPERATING OFFICER OF THE
COMPANY. HE BECAME CHIEF FINANCIAL OFFICER IN JUNE, 1992, AND ASSUMED THE
POSITION OF VICE CHAIRMAN OF THE BOARD IN SEPTEMBER, 1993. FROM 1980 TO 1987,
MR. HOFFMASTER WAS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF FIRST NATIONAL BANK
OF BELLEVUE, NEBRASKA. MR. HOFFMASTER IS AN INTERESTED PERSON MEMBER OF THE
BOARD OF DIRECTORS OF THE FUND.
JOHN J. KORALESKI, AGE 48 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 1416 DODGE STREET,
OMAHA, NEBRASKA. MR. KORALESKI IS EXECUTIVE VICE PRESIDENT-FINANCE OF THE UNION
PACIFIC RAILROAD COMPANY HEADQUARTERED IN OMAHA, NEBRASKA. AS CHIEF FINANCIAL
OFFICER OF THE RAILROAD, MR. KORALESKI HEADS AND MANAGES THE FINANCIAL PLANNING
AND MANAGEMENT FUNCTIONS FOR THE RAILROAD, AND HE IS RESPONSIBLE FOR THE
OPERATIONS OF THE COMPANY'S INFORMATION AND TELECOMMUNICATIONS TECHNOLOGIES. HE
WAS APPOINTED TO HIS PRESENT POSITION IN SEPTEMBER, 1991. HE HAS SERVED THE
UNION PACIFIC RAILROAD COMPANY IN VARIOUS CAPACITIES SINCE JUNE, 1972.
ROGER A. KUPKA, AGE 68 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 2305 SOUTH 103RD
STREET, OMAHA, NEBRASKA. MR. KUPKA IS THE RETIRED PRESIDENT AND CHIEF EXECUTIVE
OF NEBRASKA BUILDERS PRODUCTS CO. OF OMAHA, NEBRASKA. HE HELD THIS POSITION
FROM 1969 TO NOVEMBER, 1986. NEBRASKA BUILDERS PRODUCTS CO. SOLD OR DISTRIBUTED
ADHESIVES, BRICK, CAULKING, INSULATION, ROOFING, SEALANTS, AND SPECIALTY
PRODUCTS. SINCE AUGUST, 1992, MR. KUPKA HOLDS THE POSITION OF VICE CHAIRMAN OF
THE BOARD OF DIRECTORS OF PSI GROUP, FORMERLY KNOWN AS DISCOUNT MAIL, INC.,
HEADQUARTERED IN OMAHA, NEBRASKA. MR. KUPKA ALSO SERVES AS PRESIDENT OF
KUPKA, INC. AND PRESIDENT OF MICKLIN HOME IMPROVEMENT COMPANY. BOTH COMPANIES
ARE LOCATED IN OMAHA, NEBRASKA.
GARY L. PETERSEN, AGE 54 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE, 30 BISHOP SQUARE, LINCOLN, NEBRASKA. MR. PETERSEN IS THE
RETIRED PRESIDENT OF PETERSEN MANUFACTURING CO. INC. OF DEWITT, NEBRASKA. MR.
PETERSEN COMMENCED EMPLOYMENT WITH THAT COMPANY IN FEBRUARY, 1966, BECAME
PRESIDENT IN MAY, 1979, AND RETIRED IN JUNE, 1985. 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. MR.
PETERSEN IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND.
Bridges Investment Fund, Inc. -9- February 27, 1998
Statement -- Part B
ROY A. SMITH, AGE 64 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 5051 L STREET, OMAHA,
NEBRASKA. MR. SMITH WAS PRESIDENT OF H. P. SMITH MOTORS, INC., A LEADING
DEALERSHIP FOR THE FORD MOTOR CO., UNTIL ITS SALE IN 1997 , AND HE IS
CURRENTLY PRESIDENT OF OLD MILL TOYOTA INC. MR. SMITH IS A DIRECTOR OF
THE MID CITY BANK OF OMAHA.
L.B. THOMAS, AGE 61 , DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 7813 PIERCE CIRCLE,
OMAHA, NEBRASKA. MR. THOMAS RETIRED IN OCTOBER, 1996, FROM CONAGRA, INC. HE
WAS 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 WAS 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
1996; 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.
DOUGLAS P. PERSON, AGE 40 , VICE PRESIDENT OF THE FUND, 8401 WEST
DODGE ROAD, OMAHA, NEBRASKA. MR. PERSON HAS BEEN A FULL-TIME MEMBER OF THE
PROFESSIONAL STAFF OF BRIDGES INVESTMENT COUNSEL, INC. SINCE SEPTEMBER, 1985,
AND HE IS CURRENTLY A VICE PRESIDENT OF THAT FIRM. PRIOR TO THAT TIME, MR.
PERSON SERVED AS A LEGISLATIVE AIDE IN THE NEBRASKA STATE LEGISLATURE IN 1985.
DURING 1984, MR. PERSON HELD THE POSITION OF TRUST MARKETING REPRESENTATIVE FOR
THE FIRST NATIONAL BANK OF LINCOLN, LINCOLN, NEBRASKA. FROM JULY, 1982, THROUGH
MARCH, 1984, MR. PERSON WAS A REGISTERED REPRESENTATIVE FOR SHEARSON/AMERICAN
EXPRESS IN LINCOLN, NEBRASKA. MR. PERSON WAS ELECTED AN ASSISTANT VICE
PRESIDENT OF THE FUND ON JANUARY 12, 1988, WITH THE APPOINTMENT BECOMING
EFFECTIVE ON FEBRUARY 1, 1988.
MARY ANN MASON, AGE 46 , SECRETARY OF THE FUND, 8401 WEST DODGE ROAD,
OMAHA, NEBRASKA, WAS EMPLOYED AS A STAFF SECRETARY OF BRIDGES INVESTMENT
COUNSEL, INC. IN JUNE, 1981. SHE WAS APPOINTED CORPORATE SECRETARY FOR BRIDGES
INVESTMENT COUNSEL, INC. IN 1987, AND WAS ELECTED ASSISTANT SECRETARY OF THE
FUND ON APRIL 13, 1988. MRS. MASON BECAME SECRETARY OF THE FUND ON FEBRUARY 20,
1990.
NANCY K. DODGE, AGE 35 , TREASURER OF THE FUND, 8401 WEST DODGE ROAD,
OMAHA, NEBRASKA WAS EMPLOYED BY BRIDGES INVESTMENT COUNSEL, INC. IN JANUARY,
1980, AS AN ENTRY LEVEL PERSON IN STAFF SERVICES AND ACCOUNTING. MRS. DODGE
PROGRESSED THROUGH VARIOUS POSITIONS IN THE ACCOUNTING AREA TO BECOME MANAGER OF
THAT DEPARTMENT OF THE FIRM IN 1986. DURING 1988, SHE ADVANCED TO THE POSITION
OF EXECUTIVE ASSISTANT AND THEN ASSISTANT TO THE PRESIDENT IN 1992. MRS. DODGE
Bridges Investment Fund, Inc. -10- February 27, 1998
Statement -- Part B
WAS ELECTED ASSISTANT TREASURER OF THE FUND ON APRIL 11, 1986, AND SHE BECAME
TREASURER OF THE FUND ON APRIL 12, 1991.
KATHLEEN J. STRANIK, AGE 54 , ASSISTANT SECRETARY OF THE FUND, 8401
WEST DODGE ROAD, OMAHA, NEBRASKA WAS EMPLOYED BY BRIDGES INVESTMENT COUNSEL,
INC. AS A SECRETARY IN JANUARY, 1986. MRS. STRANIK HAS ASSUMED ADDITIONAL
ADMINISTRATIVE RESPONSIBILITIES DURING HER CAREER WITH THE INVESTMENT ADVISER
AND CURRENTLY HOLDS THE POSITION OF EXECUTIVE SECRETARY. MRS. STRANIK WAS
ELECTED ASSISTANT SECRETARY OF THE FUND ON APRIL 13, 1995.
ROSEMARY M. TECKMEYER, AGE 70 , VICE PRESIDENT OF THE FUND, 8401 WEST
DODGE ROAD, OMAHA, NEBRASKA. MRS. TECKMEYER WAS EMPLOYED BY BRIDGES INVESTMENT
COUNSEL, INC. AS A STATISTICIAN IN SEPTEMBER, 1967. MRS. TECKMEYER HAS SERVED
IN MANY CAPACITIES FOR BRIDGES INVESTMENT COUNSEL, INC. SINCE THAT DATE. SHE IS
PRESENTLY VICE PRESIDENT AND TREASURER OF THAT FIRM, AND SHE WAS ELECTED
TREASURER OF BRIDGES INVESTMENT FUND, INC. ON APRIL 13, 1973, AFTER HOLDING THE
POSITION OF ASSISTANT TREASURER FOR SEVERAL YEARS. MRS. TECKMEYER WAS ELECTED A
VICE PRESIDENT OF THE FUND ON APRIL 12, 1991.
THE BOARD OF DIRECTORS OF THE FUND HAS AN AUDIT COMMITTEE AND AN EXECUTIVE
COMMITTEE. THE MEMBERS OF THESE COMMITTEES ARE APPOINTED ANNUALLY AT THE APRIL
MEETING OF THE BOARD OF DIRECTORS. THE MEMBERS OF THE AUDIT COMMITTEE IN
1998 ARE: FREDERICK N. BACKER, JOHN W. ESTABROOK, JON D. HOFFMASTER, AND
EDSON L. BRIDGES II, EX-OFFICIO. THE MEMBERS OF THE EXECUTIVE COMMITTEE IN
1998 ARE: FREDERICK N. BACKER, EDSON L. BRIDGES II, EDSON L. BRIDGES
III, N. P. DODGE, JR., JOHN J. KORALESKI, ROGER A. KUPKA, GARY L. PETERSEN, ROY
A. SMITH, AND L.B. THOMAS. THE EXECUTIVE COMMITTEE REVIEWS ALL CONTRACTS AND
OTHER BUSINESS RELATIONSHIPS OF THE FUND. THE EXECUTIVE COMMITTEE WILL ACT ON
BEHALF OF THE FULL BOARD OF DIRECTORS ON ANY MATTER REQUIRING ACTION PRIOR TO
THE NEXT MEETING OF THE BOARD. THE EXECUTIVE COMMITTEE ALSO ACTS AS A
NOMINATING COMMITTEE FOR REPLACEMENT OF RETIRING DIRECTORS.
THE OFFICERS AND DIRECTORS OF THE FUND DO NOT RECEIVE ANY SALARIES OR FEES
FROM THE FUND FOR THEIR SERVICES TO THE FUND IN SUCH CAPACITIES. HOWEVER,
DURING 1997 , THE DIRECTORS AS A GROUP RECEIVED $9,275.00 FROM
BRIDGES INVESTMENT COUNSEL, INC. FOR COMPENSATION RELATED TO ATTENDANCE AT
MEETINGS OF THE BOARD OF DIRECTORS, THE AUDIT COMMITTEE, AND THE EXECUTIVE
COMMITTEE OF THE FUND.
THE FOLLOWING AGGREGATE COMPENSATION IN EXCESS OF $60,000 PER
COMPENSATED PERSON INFORMATION IS PROVIDED FOR ALL DIRECTORS OF THE FUND AND FOR
EACH OF THE THREE HIGHEST PAID EXECUTIVE OFFICERS OR ANY AFFILIATED PERSON OF
THE FUND FOR THE MOST RECENTLY COMPLETED FISCAL YEAR (1997) :
Bridges Investment Fund, Inc. -11- February 27, 1998
Statement -- Part B
</TABLE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
(1) (2) (3) (4) (5)
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT ESTIMATED FROM REGISTRANT
COMPENSATION BENEFITS ACCRUED ANNUAL AND FUND COMPLEX
NAME OF PERSON, FROM AS PART BENEFITS UPON PAID TO DIRECTORS
POSITION REGISTRANT OF FUND EXPENSES RETIREMENT
<S> <C> <C> <C> <C>
THREE HIGHEST PAID EXECUTIVE OFFICERS:
EDSON L. BRIDGES II NONE NONE NONE NONE
CHAIRMAN AND CEO,
AND DIRECTOR
EDSON L. BRIDGES III NONE NONE NONE NONE
PRESIDENT AND
DIRECTOR
DOUGLAS P. PERSON NONE NONE NONE NONE
VICE PRESIDENT
DIRECTORS OF THE FUND:
FREDERICK N. BACKER NONE NONE NONE NONE
N. P. DODGE, JR. NONE NONE NONE NONE
JOHN W. ESTABROOK NONE NONE NONE NONE
JON D. HOFFMASTER NONE NONE NONE NONE
JOHN J. KORALESKI NONE NONE NONE NONE
ROGER A. KUPKA NONE NONE NONE NONE
GARY L. PETERSEN NONE NONE NONE NONE
ROY A. SMITH NONE NONE NONE NONE
L.B. THOMAS NONE NONE NONE NONE
</TABLE>
THERE ARE NO MATERIAL PROVISIONS OF ANY PENSION, RETIREMENT, OR OTHER PLAN OR
ARRANGEMENT OTHER THAN THE DISCLOSURE ARRANGEMENTS MADE IN THE TABLE ABOVE THAT
REQUIRE DISCLOSURE HEREIN.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
NO PERSON OR SHAREHOLDER HAS CONTROL OF BRIDGES INVESTMENT FUND, INC.
CONTROL IS DEFINED TO MEAN THE BENEFICIAL OWNERSHIP, EITHER DIRECTLY OR
INDIRECTLY, OF MORE THAN 25% OF THE VOTING SECURITIES OF THE FUND.
THERE IS ONE GROUP OF FAMILY MEMBERS WHO OWNED OF RECORD OR
BENEFICIALLY MORE THAN 5% OF THE FUND'S OUTSTANDING CAPITAL STOCK AS OF JANUARY
31, 1998 , WHEN THE FUND HAD A TOTAL OF 1,271,910 SHARES
OUTSTANDING: THE FAMILY OF EDSON L. BRIDGES II.
THE FAMILY OF EDSON L. BRIDGES II IS COMPOSED OF THE FOLLOWING MEMBERS:
SALLY S. BRIDGES, WIFE; EDSON L. BRIDGES III, A MARRIED SON; JENNIFER B. HICKS,
A MARRIED DAUGHTER; ROBERT W. BRIDGES, A MARRIED SON; AND MARVIN W. BRIDGES,
JR., A BROTHER. THE EDSON L. BRIDGES II RESIDENCE ADDRESS IS 10725 CEDAR
Bridges Investment Fund, Inc. -12- February 27, 1998
Statement -- Part B
STREET, OMAHA, NEBRASKA 68124. THE EDSON L. BRIDGES III HOME ADDRESS IS 760
FAIRACRES ROAD, OMAHA, NEBRASKA 68132. THE ADDRESS FOR JENNIFER B. HICKS IS
1120 SOUTH 61ST STREET, OMAHA, NEBRASKA 68106. ROBERT W. BRIDGES LIVES AT 3200
PENDLETON AVENUE, CHARLOTTE, NORTH CAROLINA 28210. MARVIN W. BRIDGES, JR.
RESIDES AT 1425 SHIRE CIRCLE, INVERNESS, ILLINOIS 60067. EDSON L. BRIDGES III'S
WIFE IS TRACY T. BRIDGES. ROBERT W. BRIDGES' SPOUSE IS ELIZABETH H. BRIDGES.
THE BENEFICIAL OWNERSHIP IN THE EDSON L. BRIDGES II BRANCH OF FAMILY
MEMBERS IS AS FOLLOWS: EDSON L. BRIDGES II, 12,905 SHARES IN HIS OWN
NAME; 7,476 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING
TRUST; 3,116 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PENSION PLAN;
AND 2,344 SHARES IN THE MASTER PLAN INDIVIDUAL RETIREMENT ACT AND
SIMPLIFIED EMPLOYEE PENSION ACCOUNTS FOR A TOTAL OF 25,841 SHARES. SALLY
S. BRIDGES HOLDS 3,565 SHARES IN HER OWN NAME AND 1,252 SHARES IN THE
MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 4,817 SHARES.
EDSON AND SALLY HAVE A COMBINED BENEFICIAL OWNERSHIP OF 30,658 SHARES.
EDSON L. BRIDGES III HAS 734 SHARES THROUGH A ONE-THIRD BENEFICIAL
INTEREST IN THE EDSON L. BRIDGES II IRREVOCABLE TRUST; 2,008 SHARES IN
THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST PLUS 2,789
SHARES IN THE 401(K) FEATURE OF THAT TRUST; 908 SHARES IN THE BRIDGES
INVESTMENT COUNSEL, INC. PENSION PLAN AND 1,060 SHARES IN A MASTER PLAN
INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 7,499 SHARES. TRACY T.
BRIDGES OWNS 9,925 SHARES IN A 401(K) PLAN WITH THE FIRST NATIONAL BANK
OF OMAHA AS CUSTODIAN AND 265 SHARES IN A MASTER PLAN INDIVIDUAL
RETIREMENT ACT ACCOUNT FOR A TOTAL OF 10,190 SHARES. EDSON III AND TRACY
HAVE A COMBINED BENEFICIAL OWNERSHIP OF 17,689 SHARES. JENNIFER B. HICKS
HAS 734 SHARES THROUGH A ONE-THIRD BENEFICIAL INTEREST IN THE EDSON L.
BRIDGES II IRREVOCABLE TRUST; 161 SHARES IN THE BRIDGES INVESTMENT
COUNSEL, INC. PROFIT SHARING TRUST; 38 SHARES IN THE BRIDGES INVESTMENT
COUNSEL, INC. PENSION PLAN; AND 245 SHARES IN THE MASTER PLAN INDIVIDUAL
RETIREMENT ACT ACCOUNT FOR A TOTAL OF 1,178 SHARES. ROBERT W. BRIDGES
HAS 420 SHARES IN HIS OWN NAME; 734 SHARES THROUGH A ONE-THIRD
BENEFICIAL INTEREST IN THE EDSON L. BRIDGES II IRREVOCABLE TRUST; 265
SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST PLUS
328 SHARES IN THE 401(K) PLAN; 176 SHARES IN THE BRIDGES
INVESTMENT COUNSEL, INC. PENSION TRUST, AND 205 SHARES IN THE MASTER PLAN
INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 2,128 SHARES. ROBERT W.
BRIDGES AND ELIZABETH H. BRIDGES OWN JOINTLY 1,147 SHARES FOR A COMBINED
OWNERSHIP OF 3,275 SHARES. THE TOTAL FOR BENEFICIAL AMOUNTS ATTRIBUTABLE
TO THE FAMILY BRANCH OF EDSON L. BRIDGES II IS 52,799 SHARES OR 4.2% OF
THE TOTAL SHARES OUTSTANDING ON JANUARY 31, 1998.
MARVIN W. BRIDGES, JR. IS A BROTHER OF EDSON L. BRIDGES II. MR. BRIDGES
RESIDES AT 1425 SHIRE CIRCLE, INVERNESS, ILLINOIS 60067. MARVIN W. BRIDGES, JR.
HAS TWO MARRIED DAUGHTERS: ANN B. BRUCE, 10633 WEST KINGSTON ROAD, KINGSTON,
WASHINGTON 98346 AND AMY B. LAWRENCE, 8225 N.E. 159TH STREET, BOTHELL,
Bridges Investment Fund, Inc. -13- February 27, 1998
Statement -- Part B
WASHINGTON 98011. MR. EDSON L. BRIDGES II IS TRUSTEE OF THE MARVIN W. BRIDGES,
JR. CHARITABLE REMAINDER UNITRUST, OF WHICH MARVIN W. BRIDGES JR. IS A LIFE
INCOME BENEFICIARY, AND MULTIPLE CHARITIES ARE PRINCIPAL BENEFICIARIES, THAT
OWNS 10,026 SHARES. THE MARVIN W. BRIDGES, JR. IRREVOCABLE TRUST, PROVIDENT
TRUST COMPANY SUCCESSOR CO-TRUSTEE WITH EDSON L. BRIDGES II, CO-TRUSTEE, OWNS
1,310 SHARES, IN WHICH MRS. BRUCE AND MRS. LAWRENCE EACH HAVE A ONE-HALF
INTEREST IN THE TRUST AS PRINCIPAL BENEFICIARIES. MRS. LAWRENCE OWNS 263
SHARES IN A MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT. THE TOTAL SHARES
ATTRIBUTED DIRECTLY OR INDIRECTLY TO THE MEMBERS OF THE MARVIN W. BRIDGES, JR.
FAMILY ARE 11,599 OR 0.9% OF THE TOTAL SHARES OUTSTANDING.
TO SUMMARIZE THE TOTAL BENEFICIAL OWNERSHIP OF THE TWO FAMILY BRANCHES OF
THE BRIDGES FAMILY ( 52,799 FOR EDSON II AND 11,599 FOR MARVIN,
JR.) IS 64,398 SHARES, EQUAL TO 5.1% OF TOTAL SHARES OUTSTANDING.
NO ONE PERSON IN THIS FAMILY OWNS OF RECORD OR BENEFICIALLY MORE THAN 5% OF THE
TOTAL SHARES OUTSTANDING.
THE OFFICERS AND DIRECTORS OF THE FUND OWNED BENEFICIALLY AND OF RECORD, OR
HAD THE POWER TO VOTE, 118,359 SHARES OF THE FUND'S STOCK. THE MEMBERS
OF THE IMMEDIATE FAMILIES OF OFFICERS AND DIRECTORS OWNED AN ADDITIONAL
100,745 SHARES FOR A TOTAL BENEFICIAL OWNERSHIP OF THESE PERSONS OF
219,104 SHARES WHICH WAS EQUAL TO 17.23% OF THE 1,271,910
SHARES OUTSTANDING AS OF JANUARY 31, 1998.
WITH RESPECT TO THE ATTRIBUTED BENEFICIAL SHARE INTERESTS REPORTED FOR
OFFICERS OF THE FUND FOR HOLDINGS OF THE FUND BY THE BRIDGES INVESTMENT COUNSEL,
INC. PENSION PLAN AND THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST,
ALL SHARES REPORTED ARE ESTIMATES AS OF JANUARY 31, 1998. THE TRUSTEES
OF THE PENSION PLAN AND THE PROFIT SHARING TRUST WILL NOT REPORT THE ALLOCATIONS
TO PARTICIPANTS FOR DECEMBER 31, 1997 , UNTIL MARCH 15, 1998 ,
BECAUSE THE FINANCIAL INFORMATION UPON WHICH THE ALLOCATIONS ARE MADE TO
PARTICIPANTS WAS NOT COMPLETE ON THE FEBRUARY 27, 1998 , FILING DATE FOR
THIS PROSPECTUS AND STATEMENT, AND SUCH INFORMATION USUALLY IS NOT AVAILABLE FOR
A VARIETY OF REASONS AND FACTORS RELATED TO THE CALCULATION OF BONUSES FOR
EMPLOYEES AND THE FILING OF THE CORPORATE FEDERAL INCOME TAX FOR BRIDGES
INVESTMENT COUNSEL, INC. ACCORDINGLY, THE DISCLOSURE OF BENEFICIAL INTERESTS IN
THE PENSION PLAN AND PROFIT SHARING TRUST ARE BASED UPON DECEMBER 31,
1996, AND SEPTEMBER 30, 1997 , PERCENTAGE INTERESTS FOR ALLOCATIONS
OF THE JANUARY 22, 1998 , SHARES OWNED BY THESE TRUSTS.
BRIDGES INVESTMENT COUNSEL, INC. INITIATED A 401(K) ADDITIONAL FEATURE TO
THE FIRM'S PROFIT SHARING TRUST IN 1988. THE NATIONAL BANK OF COMMERCE TRUSTEE
HOLDS 6,099 SHARES FOR FIVE PARTICIPANTS, TWO OF WHOM ARE EDSON L.
BRIDGES III AND ROBERT W. BRIDGES, AS DISCLOSED EARLIER. THREE OF THE OTHER
PARTICIPANTS ARE OFFICERS OF THE FUND AND ITS INVESTMENT ADVISER: DOUGLAS P.
Bridges Investment Fund, Inc. -14- February 27, 1998
Statement -- Part B
PERSON, WHOSE OWNERSHIP INTEREST IS 1,566 SHARES, MARY ANN MASON, WHOSE
OWNERSHIP INTEREST IS 1,324 SHARES, AND KATHLEEN J. STRANIK, WHOSE
OWNERSHIP INTEREST IS 91 SHARES.
UNLESS NOTED TO THE CONTRARY, ALL DISCLOSURES OF SHAREHOLDER OWNERSHIP IN
THIS SECTION OF THE STATEMENT OF ADDITIONAL INFORMATION ARE MADE AS OF THE CLOSE
OF BUSINESS ON JANUARY 31, 1998.
INVESTMENT ADVISORY AND OTHER SERVICES
CONTROL PERSONS -- TWO PERSONS, EDSON L. BRIDGES II AND EDSON L. BRIDGES
III, OF THE ELEVEN MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND ARE ALSO
DIRECTORS AND OFFICERS OF THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL,
INC.
MR. BRIDGES IS PRESIDENT AND DIRECTOR OF BRIDGES INVESTMENT COUNSEL, INC.
AND CHAIRMAN AND CHIEF EXECUTIVE OFFICER AND DIRECTOR OF BRIDGES INVESTMENT
FUND, INC. THE TOTAL OF 600 SHARES OF CAPITAL STOCK OF THE INVESTMENT ADVISER
ARE OWNED AS FOLLOWS: EDSON L. BRIDGES II, 525 SHARES; EDSON L. BRIDGES III,
SIX SHARES; SALLY S. BRIDGES, WIFE OF EDSON L. BRIDGES II, THREE SHARES; AND
NATIONAL BANK OF COMMERCE, AS TRUSTEE FOR THE BRIDGES INVESTMENT COUNSEL, INC.
PROFIT SHARING TRUST, 66 SHARES.
SALLY S. BRIDGES, EDSON L. BRIDGES II, AND EDSON L. BRIDGES III ARE THE
THREE DIRECTORS OF BRIDGES INVESTMENT COUNSEL, INC. MR. AND MRS. EDSON L.
BRIDGES II HAVE BEEN DIRECTORS OF BRIDGES INVESTMENT COUNSEL, INC. SINCE JANUARY
2, 1963. MR. EDSON L. BRIDGES III WAS ELECTED A DIRECTOR ON DECEMBER 30, 1987.
AFFILIATED PERSONS -- AS DIRECTORS AND OFFICERS OF BOTH BRIDGES INVESTMENT
COUNSEL, INC. AND BRIDGES INVESTMENT FUND, INC., MR. EDSON L. BRIDGES II AND MR.
EDSON L. BRIDGES III ARE AFFILIATED PERSONS OF BOTH ORGANIZATIONS. THERE ARE NO
OTHER AFFILIATED PERSONS OF THE INVESTMENT ADVISER AND THE FUND.
ADVISORY FEES -- BRIDGES INVESTMENT FUND, INC. PAID BRIDGES INVESTMENT
COUNSEL, INC. THE FOLLOWING DOLLAR AMOUNTS FOR THE LAST THREE FISCAL YEARS AS AN
INVESTMENT ADVISORY FEE: $107,149 IN 1995, $135,586 IN 1996 AND $170,328 IN
1997. THESE FEES ARE BASED ON THE MONTH-ENDING NET ASSETS, AVERAGED FOR A
THREE-MONTH PERIOD, AND A 1/8 OF 1% FEE BASIS IS APPLIED TO THE RESULTING
NUMBER. THE ANNUAL FEE BASIS IS 1/2 OF 1%. THE ANNUAL FEE IS THE SUM OF THE
FOUR QUARTERLY FEES. THE ADVISORY FEE WAS NOT REDUCED BY ANY CREDITS DURING TWO
OF THE LAST THREE FISCAL YEARS.
EXPENSE LIMITATION -- BRIDGES INVESTMENT COUNSEL, INC. HAS AGREED WITH THE
FUND TO PAY ANY EXPENSES, PROPERLY OWED BY THE FUND, WHICH EXCEED 1 1/2% OF THE
Bridges Investment Fund, Inc. -15- February 27, 1998
Statement -- Part B
AVERAGE NET ASSETS FOR ANY YEAR. THERE HAVE BEEN NO EXPENSE REIMBURSEMENTS
DURING THE LAST THREE FISCAL YEARS.
SERVICES PERFORMED ON BEHALF OF FUND -- SERVICES WHICH ARE SUPPLIED OR PAID
FOR WHOLLY OR IN SUBSTANTIAL PART BY THE INVESTMENT ADVISER IN CONNECTION WITH
THE INVESTMENT ADVISORY CONTRACT ARE: OCCUPANCY AND OFFICE RENTAL; REGISTRATION
AND FILING FEES; SALARIES AND COMPENSATION OF THE FUND'S DIRECTORS AND OFFICERS;
TRADING DEPARTMENT FOR SECURITIES; AND PROSPECTUS PREPARATION AND
PRINTING. IN EFFECT, BRIDGES INVESTMENT COUNSEL, INC. SUPPLIES ALL PERSONNEL,
EQUIPMENT, FACILITIES, AND ADMINISTRATIVE SERVICES AT ITS EXPENSE THAT WOULD BE
PROVIDED FOR ALL INVESTMENT ADVISORY CLIENTS OF THE FIRM. IN ADDITION, BRIDGES
INVESTMENT COUNSEL, INC. PAYS FOR ALL EXPENSES OF MAINTAINING FEDERAL AND STATE
REGISTRATIONS AND THE MAJORITY OF LEGAL EXPENSES OF THE FUND INCLUDING
THE COSTS ASSOCIATED WITH MASTER PLANS FOR STANDARD RETIREMENT PLANS AND
INDIVIDUAL RETIREMENT ACT ACCOUNTS. LASTLY, THE INVESTMENT ADVISER PERFORMS ALL
SERVICES NOT SPECIFICALLY IDENTIFIED TO ENSURE AN ORDERLY BUSINESS OPERATION OF
THE FUND.
THE FUND PAYS BRIDGES INVESTMENT COUNSEL, INC. FOR ACCOUNTING, CLERICAL,
AND BOOKKEEPING SERVICES RELATED SOLELY TO SPECIAL FUNCTIONS FOR THE FUND AND
FOR POSTAGE, STATIONERY, FORMS, SUPPLIES AND PRINTING -- INCLUDING QUARTERLY
REPORTS TO SHAREHOLDERS. BRIDGES INVESTMENT COUNSEL, INC. PROVIDES THE STAFF
PERSONNEL AND SERVICES FOR THESE TASKS, AND THE ADVISORY FIRM IS REIMBURSED AT
ITS COST FOR THESE SERVICES.
OTHER SERVICES -- THE FUND PAYS FOR THE SERVICES OF THE INDEPENDENT
AUDITOR, ARTHUR ANDERSEN LLP, 1700 FARNAM STREET, OMAHA, NEBRASKA 68102. THE
FUND ALSO ABSORBS THE FEES AND COSTS OF THE CUSTODIAN AS DESCRIBED ON PAGES 10,
11, AND 24 OF THE PROSPECTUS -- PART A. BRIDGES INVESTOR SERVICES, INC., 8401
WEST DODGE ROAD, OMAHA, NEBRASKA 68114, ACTS AS DIVIDEND DISBURSING AND TRANSFER
AGENT. THE FUND PAYS COSTS AND FEES PER THE TERMS OF AN AGREEMENT BETWEEN THE
FUND AND SERVICES. THE FUND ALSO BEARS THE COST OF THE INSURANCE PREMIUMS TO
PROVIDE $500,000 IN FIDELITY AND ERRORS AND OMISSIONS COVERAGES UNDER AN
INVESTMENT COMPANY BLANKET BOND EFFECTIVE APRIL 1, 1988. ICI MUTUAL INSURANCE
COMPANY, P.O. BOX 730, BURLINGTON, VERMONT 05402-0730 IS THE CARRIER SUPPLYING
THE COVERAGE. THE PERSONS OR CORPORATIONS IDENTIFIED IN THIS PARAGRAPH ARE THE
ONLY PROVIDERS OF SERVICES TO THE FUND OTHER THAN BRIDGES INVESTMENT COUNSEL,
INC.
ARTHUR ANDERSEN LLP CONDUCTS THE ANNUAL AUDIT OF THE FUND'S OPERATION IN
ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, THE APPLICABLE
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, AND THE PROVISIONS OF THE
INTERNAL REVENUE CODE. REPRESENTATIVES OF ARTHUR ANDERSEN LLP MEET WITH THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS TO ESTABLISH THE SCOPE OF EACH AUDIT.
THE FEDERAL AND STATE INCOME TAX RETURNS ARE PREPARED BY THE STAFF OF ARTHUR
Bridges Investment Fund, Inc. -16- February 27, 1998
Statement -- Part B
ANDERSEN LLP. LASTLY, ARTHUR ANDERSEN LLP PROVIDES CONSENTS TO PERMIT THE
FILING OF FINANCIAL STATEMENTS WITH APPROPRIATE DOCUMENTS WITH THE SECURITIES
AND EXCHANGE COMMISSION AT VARIOUS TIMES THROUGHOUT THE YEAR, AND A PARTNER OF
THE FIRM OR HIS REPRESENTATIVE WILL BE IN ATTENDANCE AT THE ANNUAL MEETING OF
STOCKHOLDERS TO ANSWER ANY INQUIRIES AT THAT TIME.
THE SERVICES OF THE CUSTODIAN AND THE TRANSFER AGENT ARE DESCRIBED ON PAGES
10 AND 11 OF THE PROSPECTUS -- PART A.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
TRANSACTIONS IN THE FUND'S PORTFOLIO OF SECURITIES ARE EFFECTED THROUGH
MORE THAN A FEW BROKERS TO REFLECT THE AVAILABILITY OF SECURITY RESEARCH
INFORMATION, EXECUTION AND OTHER OPEN MARKET SERVICES, AND GOODWILL OR OTHER
FACTORS.
THE TOTAL BROKERAGE FEES PAID ON SECURITIES TRANSACTIONS FOR THE FUND FOR
THE LAST THREE FISCAL YEARS WERE: $4,668.50 IN 1995, $16,091.31 IN 1996, AND
$23,917.11 IN 1997. THE FUND'S MANAGEMENT HAS NO PLANS TO VARY THE
BROKERAGE COMMISSION ACTIVITY FROM THE PATTERN SHOWN DURING THE LAST THREE
FISCAL YEARS. DURING 1997 , THE BROKERAGE COMMISSIONS ATTRIBUTED TO
SECURITY RESEARCH INFORMATION WERE $23,917.11 OR 100.00% OF THE
TOTAL. THERE WERE NO COMMISSIONS ATTRIBUTED TO SPECIAL BROKERAGE SERVICES OR
TO GOOD WILL IN 1997.
FIFTEEN BROKERS WERE USED BY THE FUND DURING 1997,
RESULTING IN AN AVERAGE COMPENSATION PER BROKERAGE FIRM OF $1,594.48.
THE LARGEST AMOUNT RECEIVED BY ANY FIRM WAS $5,000.00. THE FUND HAS NO
PLANS TO CONCENTRATE SECURITIES TRANSACTION ORDERS WITH ANY SINGLE BROKER OR
GROUP OF BROKERS. THERE WERE NO BROKERAGE CONCERNS OR INDIVIDUALS ACTING AS
BROKERS WHO WERE AFFILIATED WITH THE FUND OR ITS INVESTMENT ADVISER, BRIDGES
INVESTMENT COUNSEL, INC.
THE RESEARCH INFORMATION PURCHASED WITH THE FUND'S BROKERAGE COMMISSIONS
WAS PROVIDED TO THE FUND'S INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC.,
AND THIS MATERIAL BENEFITED ALL CLIENTS OF THAT FIRM, INCLUDING THE FUND. MANY
CLIENTS OF BRIDGES INVESTMENT COUNSEL, INC. PARTICIPATE IN AN INFORMAL PROGRAM
OF PLACING BROKERAGE TRANSACTIONS TO OBTAIN SECURITY RESEARCH INFORMATION; THUS,
THE FUND AND ITS INVESTMENT ADVISER BENEFIT FROM THE BROKERAGE TRANSACTIONS OF
MANY CLIENTS OF THE INVESTMENT ADVISER. MOST BROKERAGE FIRMS DO NOT PRICE THEIR
RESEARCH SERVICES; THEREFORE, IT IS NOT POSSIBLE TO PLACE A MONETARY VALUE ON
SUCH SERVICES.
Bridges Investment Fund, Inc. 17 February 27, 1998
Statement -- Part B
THE ADVENT OF NEGOTIATED BROKERAGE COMMISSIONS ON MAY 1, 1975, ENDED THE
UNIFORM COMMISSION SCHEDULE OF NEW YORK STOCK EXCHANGE MEMBER FIRMS. AS A
RESULT, IT IS DIFFICULT TO CONSTRUCT STUDIES OF COMPARABLE COSTS AND SERVICES ON
EACH SECURITY TRANSACTION OF THE FUND. ACCORDINGLY, THE DISINTERESTED DIRECTORS
OF BRIDGES INVESTMENT FUND, INC. HAVE AGREED THAT BRIDGES INVESTMENT COUNSEL,
INC. MAY CAUSE THE FUND TO PAY A MEMBER OF AN EXCHANGE, BROKER, OR DEALER AN
AMOUNT OF COMMISSION FOR EFFECTING A SECURITIES TRANSACTION BY THE FUND IN
EXCESS OF THE AMOUNT OF COMMISSION WHICH WOULD HAVE BEEN CHARGED BY ANOTHER
PERSON FOR EFFECTING SUCH TRANSACTIONS, PROVIDING THAT BRIDGES INVESTMENT
COUNSEL, INC. DETERMINES IN GOOD FAITH THAT SUCH COMMISSION WAS REASONABLE IN
RELATION TO THE VALUE OF THE BROKERAGE AND RESEARCH SERVICES PROVIDED BY SUCH
EXCHANGE MEMBER, BROKER, OR DEALER SUBJECT ONLY TO THE LIMITATIONS AND
DEFINITIONS CONTAINED IN SECTION 28(E) OF THE SECURITIES EXCHANGE ACT OF 1934
AND TO A PERIODIC REVIEW BY THE DISINTERESTED DIRECTORS OF THE ACTIONS OF THE
INVESTMENT ADVISER IN DIRECTING THE BROKERAGE BUSINESS OF THE FUND. IN OTHER
WORDS, BECAUSE OF THE PRACTICE OF USING SECURITIES TRANSACTIONS TO PURCHASE
BROKERAGE SERVICES AND RESEARCH, THE FUND MAY NOT RECEIVE THE LOWEST POSSIBLE
AGGREGATE EXECUTION COST WITH RESPECT TO ANY GIVEN BROKERAGE TRANSACTION.
BRIDGES INVESTMENT COUNSEL, INC. IS ABLE TO SECURE DISCOUNTS FROM THE
UNIFORM BROKERAGE COMMISSION SCHEDULE WHICH WAS IN EFFECT ON APRIL 30, 1975, FOR
LISTED SECURITIES DURING THE PERIOD FROM MAY 1, 1975, THROUGH DECEMBER 31,
1997. THE BOARD OF DIRECTORS REVIEWS AND APPROVES THE LEVEL OF DISCOUNTS
AND THE ACTUAL BROKERAGE COSTS ON EACH TRANSACTION IN THE PORTFOLIO AT EACH
QUARTERLY MEETING. THE INVESTMENT ADVISER BELIEVES THESE DISCOUNTS TO BE
APPROPRIATE AND SIMILAR TO THOSE EARNED BY OTHER INSTITUTIONAL PORTFOLIOS OF THE
SIZE OF THE FUND. MR. EDSON L. BRIDGES III, PRESIDENT OF THE FUND, SELECTS THE
BROKERS TO BE EMPLOYED FOR SECURITIES TRANSACTIONS OF THE FUND, AND HE
DETERMINES THE ACCEPTABILITY OF THE DISCOUNT.
CAPITAL STOCK AND OTHER SECURITIES
CLASSES -- THE FUND OFFERS ONLY ONE CLASS OF SECURITY OUTSTANDING --
CAPITAL STOCK. THE TERMS OF THIS ISSUE ARE SET FORTH ON PAGE 12 OF THE
PROSPECTUS. THERE ARE NO OTHER CLASSES OF SECURITIES AUTHORIZED BY THE ARTICLES
OF INCORPORATION.
CUMULATIVE VOTING -- THE TERMS OF THE ISSUANCE OF CAPITAL STOCK OF THE FUND
PROVIDE FOR CUMULATIVE VOTING. THIS PROVISION PERMITS A SHAREHOLDER TO ALLOCATE
THE VOTES OF HIS SHARES TOWARDS ONE OR MORE DIRECTORS IN ORDER TO INCREASE THE
INFLUENCE OF HIS OWNERSHIP TOWARDS THE DIRECTOR OR DIRECTORS SELECTED FOR HIS
SUPPORT IN AN ELECTION OF DIRECTORS.
Bridges Investment Fund, Inc. -18- February 27, 1998
Statement -- Part B
PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED
GENERAL INFORMATION -- THE CAPITAL STOCK OF THE FUND IS OFFERED TO THE
PUBLIC AT NET ASSET VALUE PER SHARE THROUGH THE FUND'S OFFICE, WHICH IS THE ONLY
POINT OF DISTRIBUTION FOR THE PROSPECTUS, PART A, THE STATEMENT OF ADDITIONAL
INFORMATION, PART B, AND OTHER INFORMATION, PART C. THE PLANS FOR PURCHASE OF
SHARES OF THE FUND ARE SET FORTH IN THE PROSPECTUS ON PAGES 15-22. THE FUND
DOES NOT USE LETTERS OF INTENT, CONTRACTUAL ACCUMULATION PLANS, WITHDRAWAL
PLANS, OR EXCHANGE PRIVILEGES. THE FUND DOES OFFER SERVICES IN CONNECTION WITH
RETIREMENT PLANS -- PLEASE REFER TO PAGES 17-22 IN THE PROSPECTUS FOR A COMPLETE
DESCRIPTION OF THESE SERVICES.
SHAREHOLDERS WHO REQUIRE ASSISTANCE IN GATHERING COST HISTORY AND SHARE
INFORMATION REGARDING THEIR ACCOUNT WITH THE FUND SHOULD ANTICIPATE THAT BRIDGES
INVESTOR SERVICES, INC. AS TRANSFER AGENT, WILL BILL THE DIRECT COSTS OF SUCH
INVESTIGATIONS DIRECTLY TO THE SHAREHOLDER WITH AN EXPLANATION OF THE TYPE OF
WORK CONDUCTED, THE DATES AND TIME COMMITTED, AND THE EXPENSES INCURRED BY
SERVICES. IN THE NORMAL SITUATION, THE MAXIMUM CHARGE PER INQUIRY OF THIS TYPE
WILL BE $25.00.
VALUATION -- THE METHODS FOR DETERMINING THE NET ASSET VALUE PER SHARE OF
THE FUND FOR PURCHASE OF SHARES AND THE NET ASSET VALUE PER SHARE FOR THE
REDEMPTION OF OR SALES OF SHARES BACK TO THE FUND ARE DESCRIBED ON PAGES 14 AND
15 OF THE PROSPECTUS. PLEASE REFER TO THOSE PAGES FOR SPECIFIC INFORMATION ON
THESE MATTERS.
SPECIMEN PRICE MAKE UP -- PLEASE REFER TO APPENDIX A ON PAGE 20 FOR A COPY
OF THE PRICE MAKE UP FORM USED BY THE FUND. THE EXAMPLE OR ILLUSTRATION USES
THE ACTUAL DATA AND METHODS USED FOR THE FUND ON DECEMBER 31, 1997. THE
AUDITED BALANCE SHEET INFORMATION WILL PROVIDE THE SAME INFORMATION WITH A
DIFFERENT FORMAT AND CLASSIFICATION OF ITEMS FOR THE PURPOSE OF PROPER FINANCIAL
STATEMENT PRESENTATION.
OTHER DISCLOSURES -- THE FUND DOES NOT HAVE AN EXCESS OF THE OFFERING PRICE
TO DISTRIBUTE TO UNDERWRITERS. THE FUND PRICES ITS SHARES ONLY ONCE PER DAY
AFTER THE CLOSE OF THE NEW YORK STOCK EXCHANGE. THERE IS NO DIFFERENCE IN THE
NET OFFERING PRICE CHARGED TO THE GENERAL PUBLIC AND THAT PRICE WHICH IS CHARGED
TO OFFICERS, DIRECTORS, AND EMPLOYEES OF EITHER THE FUND OR ITS INVESTMENT
ADVISER. THE FUND DOES NOT USE RULE 2A-7 UNDER THE GENERAL RULES AND
REGULATIONS OF THE INVESTMENT COMPANY ACT OF 1940 FOR THE PURPOSE OF PRICING ITS
SHARES TO THE PUBLIC.
Bridges Investment Fund, Inc. -19- February 27, 1998
Statement -- Part B
TAX STATUS
THE FUND IS QUALIFIED OR INTENDS TO QUALIFY UNDER SUBCHAPTER M OF THE
INTERNAL REVENUE CODE (26 U.S.C. 851-856). THE FUND HAS NO SPECIAL OR UNUSUAL
TAX ASPECTS SUCH AS TAXATION RESULTING FROM FOREIGN INVESTMENT, OR FROM STATES
AS A PERSONAL HOLDING COMPANY, OR FROM ANY TAX LOSS CARRYFORWARD. REFER TO PAGE
13 OF THE PROSPECTUS FOR A MORE COMPLETE DISCUSSION OF FEDERAL TAXATION OF THE
FUND.
UNDERWRITERS: NONE. CALCULATION OF PERFORMANCE DATA: NONE.
NOTICE 1: AS A PROSPECTIVE INVESTOR OR SHAREHOLDER, YOU MAY BE INTERESTED IN
SECURING PART C OF THIS FILING, AND YOU MUST RECEIVE PART A, THE PROSPECTUS, IN
ORDER TO MAKE AN INVESTMENT IN THE FUND. YOU MAY REQUEST COPIES OF PARTS A, B,
AND C FROM THE FUND'S OFFICE AT THE ADDRESS SHOWN ON THE COVER OF PART B.
NOTICE 2: THE FUND'S MANAGEMENT AND BOARD OF DIRECTORS ENCOURAGES PROSPECTIVE
INVESTORS AND SHAREHOLDERS TO REVIEW THE AUDITED FINANCIAL STATEMENTS,
PARTICULARLY THE SCHEDULE OF INVESTMENTS, TO OBTAIN A USEFUL PERSPECTIVE ABOUT
SECURITIES OWNED BY THE FUND.
FINANCIAL STATEMENTS
THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,
1997 , APPEAR AT PAGES 21-36 IN THIS PART B. AS A UNIT, THESE STATEMENTS
INCLUDE: THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS, THE SCHEDULE OF
PORTFOLIO INVESTMENTS, THE STATEMENT OF ASSETS AND LIABILITIES, THE STATEMENT OF
OPERATIONS, STATEMENTS OF CHANGES IN NET ASSETS, AND NOTES TO FINANCIAL
STATEMENTS.
THE PRICE MAKE UP SHEET, APPENDIX A, IS SHOWN ON PAGE 20; THEN THE
FINANCIAL STATEMENTS FOLLOW AS A UNIT TO COMPLETE THIS PART B.
Bridges Investment Fund, Inc. -20- February 27, 1998
Statement -- Part B
<TABLE>
<CAPTION>
APPENDIX A(SPECIMEN)
PRICE MAKE UP SHEET
DECEMBER 31, 1997
JOURNAL FORM,
LEDGER FORM, ACTUAL BALANCE
SCHEDULE, OR OR MARKET
ACCOUNT NUMBER VALUE FIGURES
ACCOUNT (COST FIGURES IN PARENTHESES)
<S> <C> <C>
ASSETS
01A-DR-C CASH-PRINCIPAL $ 18,214.64
01B-DR-C CASH-INCOME 83,706.71
02A-LF51 DIVIDENDS RECEIVABLE 50,501.25
02B-LF52 INTEREST RECEIVABLE 69,608.18
04A-CRDJ ACCTS. RECEIVABLE-SUBSCRIPTIONS TO CAPITAL STOCK 30,916.98
04B-CRDJ ACCTS. RECEIVABLE-SECURITIES SOLD
07 -SCHEDULE 7 INV. IN SECURITIES (20,808,607.01) 36,605,170.17
CRS
TOTAL ASSETS 36,858,117.93
LIABILITIES:
13A-CRDJ ACCTS. PAY.-REDEMPTIONS OF CAPITAL STOCK $
13B-CRDJ ACCTS. PAY.-PURCHASE OF SECURITIES
14A-CRDJ ACCRUED LIAB.-OPERATING EXPENSES 65,358.75
14B-CRDJ ACCRUED LIAB.-TAXES
14 -CRDJ DISTRIBUTIONS PAYABLE $145,224.05
TOTAL LIABILITIES $210,582.80
19 NET ASSETS APPLICABLE TO OUTSTANDING
CAPITAL SHARES (TOT. ASSETS MINUS TOT. LIAB.) $36,647,535.13
20 -CRDJ DR-TA CAPITAL STOCK-TOTAL SHARES OUTSTANDING 1,262,818.371
NET ASSET VALUE PER SHARE
PURCHASE PRICE PER SHARE $29.02 $29.02
REDEMPTION PRICE PER SHARE $29.02 X DIV. @ .115
EQUALIZATION COMPUTATION NET INVESTMENT INCOME 0.00
(CURRENT QTR.) (CURRENT QTR.)
DIVIDEND INCOME $105,613.08 UNDISTRIBUTED NET INCOME 0.00
INTEREST INCOME 100,567.37 (PREVIOUS QTRS.)
TOTAL INCOME 206,180.45 TOTAL ACCT. 21B 0.00
EQUALIZATION/SHARE .00
TAXES PAID $ ORDERS /
EXPENSES UNPAID $ 68,100.00 NET SHARES PURCH., REDEMP. ,
, .
REIMBURSED EXPENSES ( ) BALANCE, EQUALIZATION 5,236.90
TOT.EXP.POST CLOSE EQUALIZATION ENTRY
EQUALIZATION FORWARD
NET INVESTMENT INC. $138,080.45 CAPITAL SHARES FORWARD 1,262,818.371
</TABLE>
Bridges Investment Fund, Inc. -21- February 27, 1998
Statement -- Part B
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS OF
BRIDGES INVESTMENT FUND, INC.:
WE HAVE AUDITED THE ACCOMPANYING STATEMENT OF ASSETS AND LIABILITIES OF
BRIDGES INVESTMENT FUND, INC., INCLUDING THE SCHEDULE OF PORTFOLIO INVESTMENTS,
AS OF DECEMBER 31, 1997, 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 THE 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 AND FINANCIAL HIGHLIGHTS. OUR PROCEDURES INCLUDED CONFIRMATION OF
SECURITIES OWNED AS OF DECEMBER 31, 1997, 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, 1997, THE RESULTS OF ITS
OPERATIONS FOR THE YEAR THEN ENDED, THE CHANGES IN ITS 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 16, 1998
Bridges Investment Fund, Inc. -22- February 27, 1998
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
<CAPTION>
Number Market
Title of Security of Shares Value
<S> <C> <C>
COMMON STOCKS - (85.1%)
Advertising - 0.3%
Outdoor Systems, Inc.*<FN> 3,000 $ 115,500
Aircraft - Manufacturing - 1.6%
The Boeing Company 12,000 $ 587,250
Amusements - Recreation - Sporting Goods 0.6%
Nike, Inc. 6,000 $ 234,375
Banking and Finance - 7.5%
First National of Nebraska, Inc. 230 $ 851,000
MBNA Corporation 10,000 273,125
NationsBank Corporation 6,000 364,875
Norwest Corporation 12,000 465,000
The Charles Schwab Corporation 1,000 41,938
SLM Holding Corporation 2,000 278,250
State Street Corporation 8,000 465,500
-----------
$ 2,739,688
-----------
Beverages - Soft Drinks - 2.4%
PepsiCo, Inc. 24,000 $ 870,000
Building Materials - Forest Products - 0.7%
Georgia-Pacific Corporation 3,000 $ 182,250
Georgia-Pacific (Timber Group)*<FN> 3,000 68,062
-----------
$ 250,312
-----------
Chemicals - 4.6%
The Dow Chemical Company 7,000 $ 710,500
Du Pont (E.I.) De Nemours & Company 8,000 480,500
Monsanto Company 12,000 504,000
-----------
$ 1,695,000
-----------
Communications - Radio and Television - 0.5%
Clear Channel Communications, Inc.*<FN> 2,500 $ 198,594
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -23- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Number Market
Title of Security of Shares Value
<S> <C> <C>
COMMON STOCKS (Continued)
Computers - Hardware and Software - 8.7%
Cisco Systems, Inc.*<FN> 3,000 $ 167,250
Compaq Computer Corporation 1,000 56,500
Dell Computer Corporation *<FN> 1,000 84,000
EMC Corporation*<FN> 2,000 54,875
HNC Software, Inc.*<FN> 6,000 258,000
Hewlett-Packard Co. 12,000 748,500
International Business Machines Corporation 2,000 209,250
Microsoft Corporation*<FN> 7,500 969,375
Sun Microsystems, Inc.*<FN> 4,000 159,500
Transaction Systems Architects, Inc.*<FN> 13,000 494,000
-----------
$ 3,201,250
------------
Drugs - Medicines - Cosmetics - 8.8%
Abbott Laboratories 8,000 $ 524,000
Amgen, Inc.*<FN> 2,000 108,250
Bristol-Myers Squibb Co. 6,000 567,750
Elan Corporation PLC ADR*<FN> 6,000 307,125
Johnson & Johnson 10,000 658,750
Merck & Co., Inc. 10,000 1,060,000
-----------
$ 3,225,875
-----------
Electrical Equipment and Supplies - 2.4%
General Electric Co. 12,000 $ 880,500
Electronics - 3.3%
Intel Corporation 8,000 $ 562,000
Motorola, Inc. 8,000 457,500
Solectron Corporation *<FN> 5,000 207,812
-----------
$ 1,227,312
-----------
Energy - Alternate Sources - 0.5%
CalEnergy Co., Inc. *<FN> 6,000 $ 172,500
Finance - Real Estate - 3.4%
Freddie Mac 30,000 $ 1,258,125
Finance - Services - 2.4%
Capital One Financial Corporation 10,000 $ 541,875
First Data Corporation 8,000 234,000
Paymentech, Inc. *<FN> 7,000 103,250
-----------
$ 879,125
-----------
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -24- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Number Market
Title of Security of Shares Value
<S> <C> <C>
COMMON STOCKS (Continued)
Food - Miscellaneous Products - 3.7%
Philip Morris Companies, Inc. 30,000 $ 1,357,500
Forest Products & Paper - 0.8%
Kimberly-Clark Corporation 6,000 $ 295,875
Insurance - Mortgage - 0.9%
MGIC Investment Corporation 5,000 $ 332,500
Insurance - Multiline - 1.6%
American International Group, Inc. 1,500 $ 163,125
General Re Corp. 2,000 424,000
-----------
$ 587,125
-----------
Insurance - Municipal Bond - 1.8%
MBIA, Inc. 10,000 $ 668,125
Lumber and Wood Products - 0.7%
Weyerhaeuser Company 5,000 $ 245,313
Machinery - Construction & Mining - 0.8%
Caterpillar Inc. 6,000 $ 291,000
Medical - Services - 0.4%
HealthSouth Corporation *<FN> 5,000 $ 138,750
Metal Products - Miscellaneous - 0.7%
Nucor Corporation 5,500 $ 265,719
Motion Pictures and Theatres - 1.9%
The Walt Disney Company 7,000 $ 693,000
Oil Services - 0.2%
Schlumberger, Ltd. 1,000 $ 80,500
Petroleum Producing - 6.3%
Amoco Corporation 5,000 $ 425,625
Atlantic Richfield Company 4,000 320,500
Chevron Corporation 10,000 770,000
Exxon Corporation 8,000 489,500
Mobil Corporation 4,000 288,750
-----------
$ 2,294,375
-----------
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -25- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Number Market
Title of Security of Shares Value
<S> <C> <C>
COMMON STOCKS (Continued)
Publishing - Newspapers - 1.4%
Gannett Co., Inc. 8,000 $ 494,500
Publishing - Electronic - 1.1%
Reuters Holdings PLC 6,000 $ 397,500
Restaurants - Retail - 0.2%
Tricon Global Restaurants*<FN> 2,400 $ 69,750
Retail Stores - Apparel and Clothing - 2.2%
Gap, Inc. 22,500 $ 797,344
Retail Stores - Building Materials and Home
Improvement - 0.9%
The Home Depot, Inc. 5,500 $ 323,812
Retail Stores - Department - 1.9%
Dayton Hudson Corporation 10,500 $ 708,750
Retail Stores - Variety - 0.8%
Albertson's Inc. 6,500 $ 307,125
Telecommunications - 5.8%
AirTouch Communications, Inc.*<FN> 5,000 $ 207,812
GTE Corporation 10,000 522,500
Sprint Corporation 8,000 469,000
West Teleservices Corporation*<FN> 43,000 516,000
WorldCom, Inc.*<FN> 13,000 393,250
-----------
$ 2,108,562
-----------
Transportation - Airfreight - 2.6%
Eagle USA Airfreight, Inc. *<FN> 20,000 $ 570,000
Federal Express Corporation *<FN> 6,000 366,375
-----------
$ 936,375
-----------
Transportation - Railroads - 0.7%
Union Pacific Corporation 4,000 $ 250,500
-----------
TOTAL COMMON STOCKS (Cost - $15,608,641) $31,179,406
-----------
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -26- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Number of
Shares or
Principal Market
Title of Security Amount Value
<S> <C> <C>
PREFERRED STOCKS (1.2%)
Banking and Finance - 0.7%
CFC Capital Trust 9.375% Preferred, Series B 5,000 $ 132,500
CFB Capital II 8.20% Cumulative Preferred 5,000 128,125
-----------
$ 260,625
-----------
Telecommunications - 0.5%
AirTouch Communications, Inc. 4.25% Series C 3,000 $ 186,938
Convertible Preferred
------------
Total Preferred Stocks (Cost - $387,925) $ 447,563
-----------
Total Stocks (Cost - $15,996,566) $31,626,969
-----------
DEBT SECURITIES (13.6%)
Energy - Alternate Sources - 0.6%
CalEnergy Co., Inc., 7.63% Notes
due October 15, 2007 $200,000 $ 202,049
Food - Miscellaneous Products - 0.3%
Super Valu Stores, Inc., 8.875%
Promissory Notes, due June 15, 1999 $100,000 $ 103,756
Household Appliances and Utensils - 0.3%
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000 $ 113,000
Office Equipment and Supplies - 0.3%
Xerox Corporation, 9.750% Notes
due March 15, 2000 $100,000 $ 107,417
Retail Stores - Department - 0.8%
Dillard Department Stores, Inc., 7.850%
Debentures, due October 1, 2012 $150,000 $ 168,665
Sears Roebuck & Co., 9.375% Debentures
due November 1, 2011 100,000 124,930
-----------
$ 293,595
-----------
Bridges Investment Fund, Inc. -27- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Principal Market
Title of Security Amount Value
<S> <C> <C>
DEBT SECURITIES (Continued)
Transportation - Railroads - 0.4%
Union Pacific Corporation 6.00%
Notes, due September 1, 2003 $150,000 $ 146,134
U.S. Government - 9.1%
U.S. Treasury, 9.000% Notes,
due May 15, 1998 $200,000 $ 202,468
U.S. Treasury, 9.125% Notes,
due May 15, 1999 200,000 209,000
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 214,719
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 213,875
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 213,500
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 243,813
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 323,719
U.S. Treasury, 7.500% Notes,
due February 15, 2005 300,000 329,765
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 246,094
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 318,516
U.S. Treasury, 8.750% Bonds,
due November 15, 2008 200,000 227,781
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 233,750
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 350,250
-----------
$ 3,327,250
-----------
Bridges Investment Fund, Inc. -28- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1997
<CAPTION>
Principal Market
Title of Security Amount Value
<S> <C> <C>
DEBT SECURITIES (Continued)
Commercial Paper - Short Term - 1.8%
Ford Motor Credit Corp.
Commercial Paper Note 6.10%
due January 2, 1998 $ 425,000 $ 425,000
Prudential Funding Corp.
Commercial Paper Note 5.77%
due January 6, 1998 260,000 260,000
-----------
$ 685,000
-----------
TOTAL DEBT SECURITIES (Cost - $4,812,041) $ 4,978,201
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost - $20,420,682) (99.9%) $36,605,170
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.1%) 42,365
-----------
NET ASSETS, December 31, 1997 (100.0%) $36,647,535
===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this schedule.
Bridges Investment Fund, Inc. -29- February 27, 1998
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<CAPTION>
<S> Amount
ASSETS <C>
Investments, at market value
Common and preferred stocks
(cost $15,996,566) $31,626,969
Debt securities (cost $4,812,041) 4,978,201
-----------
Total Investments $36,605,170
Cash 101,921
Receivables
Dividends and interest 120,110
Subscriptions to capital stock 30,917
----------
TOTAL ASSETS $36,858,118
===========
LIABILITIES
Dividend distributions payable $ 145,224
Investment advisor, management and
service fees 47,978
Accrued operating expenses 17,381
----------
TOTAL LIABILITIES $ 210,583
-----------
NET ASSETS
Capital stock, $1 par value - Authorized
3,000,000 shares,less 742,636 shares
redeemed; 2,005,454 shares issued;
1,262,818 shares outstanding $ 1,262,818
Paid-in surplus -
Excess over par value of amounts
received from sale of 2,005,454 shares,
less amounts paid out in redeeming
742,636 shares 19,589,379
-----------
Net capital paid in on shares $20,852,197
Accumulated net realized loss on investment
transactions (6,462)
Net unrealized appreciation on investments 15,796,563
Accumulated undistributed net investment
income 5,237
-----------
TOTAL NET ASSETS $36,647,535
===========
NET ASSET VALUE PER SHARE $29.02
======
OFFERING PRICE PER SHARE $29.02
======
REDEMPTION PRICE PER SHARE $29.02
======
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
Bridges Investment Fund, Inc. -30- February 27, 1998
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<CAPTION>
Amount Amount
<S> <C> <C>
INVESTMENT INCOME
Interest $463,448
Dividends 435,355
--------
Total Investment Income $898,803
EXPENSES
Management fees $170,328
Custodian fees 33,712
Insurance 15,656
Bookkeeping services 15,166
Printing and supplies 10,925
Professional services 10,900
Dividend disbursing and transfer
agent fees 10,073
Computer programming 5,200
Foreign taxes paid on dividends 1,316
Taxes and licenses 1,065
--------
Total Expenses $ 274,341
---------
NET INVESTMENT INCOME $ 624,462
---------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on transactions in
investment securities $ 380,365
Net increase in unrealized
appreciation of investments 5,456,770
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $5,837,135
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,461,597
==========
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
Bridges Investment Fund, Inc. -31- February 27, 1998
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND 1996
<CAPTION>
1997 1996
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 624,462 $ 639,251
Net realized gain on transactions
in investment securities 380,365 310,925
------------ ----------
Net increase in unrealized
appreciation of investments 5,456,770 3,502,945
Net increase in net assets
resulting from operations $ 6,461,597 $4,453,121
Net equalization credits 3,157 4,640
Distributions to shareholders from -
Net investment income (624,462) (639,251)
Net realized gain from investment
transactions (383,918) (304,773)
Equalization (2,651) (4,109)
Net capital share transactions 1,944,324 1,687,114
----------- -----------
Total Increase in Net Assets $ 7,398,047 $5,196,742
NET ASSETS:
Beginning of year 29,249,488 24,052,746
----------- -----------
End of year (including accumulated
undistributed net investment income
of $5,237 and $4,732, respectively) $ 36,647,535 $29,249,488
============ ===========
<FN>The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
Bridges Investment Fund, Inc. -32- February 27, 1998
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(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>
Net
1997 1996 Change
<S> <C> <C> <C>
Net unrealized appreciation
(depreciation):
Aggregate gross unrealized
appreciation on
securities $16,375,653 $10,462,757
Aggregate gross unrealized
depreciation on
securities (579,090) (122,964)
----------- -----------
Net $15,796,563 $10,339,793 $5,456,770
=========== =========== ==========
</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. The gain computed on the basis of average cost
would have been substantially the same as that reflected in the
accompanying statement of operations.
Bridges Investment Fund, Inc. -33- February 27, 1998
Statement -- Part B
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.
E. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(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 of 1/8 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.
Bridges Investment Fund, Inc. -34- February 27, 1998
Statement -- Part B
(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>
1997 1996
<S> <C> <C>
United States government obligations $ -- $ 915,945
Other Securities 6,360,243 1,597,324
---------- ----------
Total Cost $6,360,243 $2,513,269
========== ==========
</TABLE>
Net proceeds from sales of long-term investments during the years
ended December 31, were:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
United States government obligations $ 200,000 $ 423,528
Other Securities 2,388,453 1,567,634
---------- ----------
Total Net Proceeds $2,588,453 $1,991,162
========== ==========
Total Cost Basis of
Securities Sold $2,208,087 $1,680,237
========== ==========
</TABLE>
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
Bridges Investment Fund, Inc. -35- February 27, 1998
Statement -- Part B
(6) CAPITAL STOCK
Shares of capital stock issued and redeemed are as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Shares sold 95,567 88,405
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 32,365 34,880
------- --------
127,932 123,285
Shares redeemed 55,945 49,074
------- -------
Net increase 71,987 74,211
====== ======
Value of capital stock issued and redeemed is as follows:
<CAPTION>
1997 1996
<S> <C> <C>
Shares sold 2,553,754 $1,992,810
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 884,491 832,894
--------- ----------
3,438,245 $2,825,704
Shares redeemed 1,493,921 1,138,590
--------- ----------
Net increase $1,944,324 $1,687,114
========== ==========
(7) DISTRIBUTION TO SHAREHOLDERS
On December 2, 1997 a cash distribution was declared from net
investment income accrued through December 31, 1997. This distribution was
ultimately calculated as $.115 per share aggregating $145,224. (This
dividend includes $2,651 that represents a return of capital distribution
to shareholders for Federal income tax purposes.) The dividend will be
paid on January 22, 1998, to shareholders of record on December 31, 1997.
(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.
Bridges Investment Fund, Inc. -36- February 27, 1998
Statement -- Part B
FINANCIAL HIGHLIGHTS*
Per share income and capital changes for a share outstanding for each
of the last five years were:
</TABLE>
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $24.56 $21.54 $17.10 $17.80 $17.51
Income From Investment Operations
Net Investment Income $ .51 $ .55 $ .58 $ .59 $ .61
Net Gains or (Losses) on Securities
(both realized and unrealized)
4.77 3.28 4.63 (.52) .46
---- ---- ---- ----- ----
Total From Investment Operations $ 5.28 $ 3.83 $ 5.21 $ .07 $ 1.07
Less Distributions
Dividends from net investment income $ (.51) $ (.55) $ (.58) $ (.59) $(.61)
Distributions from capital gains (.31) (.26) (.19) (.18) (.17)
------- ------- ------ ------ ------
Total Distributions $ (.82) $ (.81) $ (.77) $ (.77) $ (.78)
------- ------- ------- ------- -------
Net Asset Value, End of Period $29.02 $24.56 $21.54 $17.10 $17.80
====== ====== ====== ====== ======
Total Return 21.47% 17.78% 30.46% .39% 6.18%
Ratios/Supplemental Data
Net Assets, End of Period
(in thousands)
$36,648 $29,249 $24,052 $18,096 $17,991
Ratio of Expenses to Average
Net Assets**<F1>
.81% .87% .89% .90% .90%
Ratio of Net Income to
Average Net Assets **<F1>
2.64% 3.23% 3.80% 4.25% 4.32%
Portfolio Turnover Rate 8% 8% 7% 10% 11%
Avg. Commission Rate Paid ***<F2> .1003 .1900 .1222 .1470 .1253
<FN>* Per share income and capital change data is computed using the
weighted average number of shares outstanding method.
<F1>** Average net asset data is computed using monthly net asset value
figures.
<F2> *** Cents Per Share.
</TABLE>
Bridges Investment Fund, Inc. 1 February 27, 1998
Other Information -- Part C
PART C
OTHER INFORMATION
OTHER INFORMATION Bridges Investment Fund, Inc.
CAPITAL STOCK
February 27, 1998 8401 West Dodge Road
Omaha, Nebraska 68114
402-397-4700
Contents Page No.
Item 24. Financial Statements and Exhibits...............................2-7
Item 25. Persons Controlled by or Under Common Control....................7
Item 26. Number of Holders of Securities..................................8
Item 27. Indemnification................................................. 8
Item 28. Business and Other Connections of Investment Adviser...........8-10
Item 29. Principal Underwriters ...,,....................................10
Item 30. Location of Accounts and Records................................10
Item 31. Management Services.............................................10
Item 32. Undertakings....................................................10
SIGNATURES 11
SUMMARY PROSPECTUS None
Bridges Investment Fund, Inc. -2- February 27, 1998
Other Information -- Part C
Special Notices
. This Other Information is not a Prospectus.
. This Other Information should be read in conjunction with Part A, the
Prospectus of Bridges Investment Fund, Inc. dated February 27,
1998, and Part B, Statement of Additional Information.
. Copies of the Part A and Part B filings of Bridges Investment Fund, Inc.
may be obtained from the office of the Fund at the address shown above.
. The date of this Other Information is February 27, 1998 .
Item 24. Financial Statements and Exhibits Page
(a) Financial Statements Part C
Consent of Independent Public Accountants 3
Part B
Report of Independent Public Accountants 21
Schedule of Portfolio Investments 22-28
Statement of Assets and Liabilities 29
Statement of Operations 30
Statements of Changes in Net Assets 31
Notes to Financial Statements 32-36
(Item 24 continues after the Consent of Independent Public
Accountants)
Bridges Investment Fund, Inc. -3- February 27, 1998
Other Information -- Part C
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of
this Registration Statement.
ARTHUR ANDERSEN LLP
Omaha, Nebraska,
February 27, 1998
Bridges Investment Fund, Inc. -4- February 27, 1998
Other Information -- Part C
Item 24. Financial Statements and Exhibits (continued)
(b) Exhibits:
1.The Articles of Incorporation, filed with the Form N-8B-1 and
amendments thereto, in File No. 811-1209, are hereby incorporated
by reference.
2.The By-Laws, filed with the Form N-8B-1 and amendments thereto, in
File No. 811-1209, are hereby incorporated by reference.
3.Item 1 (b)(3) Not applicable
4.The Specimen Stock Certificate, filed with the Form S-5, in File
No. 2-21600, is hereby incorporated by reference.
5.The Investment Advisory Agreement and Amendatory Advisory Agreement
filed with Amendment No. 2 to the Form N-8B-1 in File No. 811-1209
are hereby incorporated by reference.
6.Item 1(b)(6) Not applicable
7.Item 1(b)(7) Not applicable
8.The Custodian Agreement and Amendatory Custodian Agreement filed
with Amendment No. 1 to the Form N-8B-1 in File No. 811-1209 are
hereby incorporated by reference.
9.Item 1(b)(9) Not applicable
10.The opinion and consent of counsel dated July 12, 1963, as to the
legality of securities issued, filed as Exhibit F of the original
Form S-5 in File No. 2-21600, are hereby incorporated by
reference.
11.Item 1(b)(11) Not applicable
12.Item 1(b)(12) Not applicable
13.Written Assurance, specimen copy, by initial investors in the Fund
is incorporated by reference to Post-Effective Amendment No. 21 to
File No. 2-21600 and Amendment No. 7 to File No. 811-1209.
Bridges Investment Fund, Inc. -5- February 27, 1998
Other Information -- Part C
14.Copies of the model plans used to establish retirement plans are
hereby incorporated by reference as follows:
a) Exhibit SE-1 filed with Post-Effective Amendment No. 1 to the
Form S-5, File No. 2-21600, is hereby incorporated by
Reference, including Amendments thereto with Post-Effective
Amendments No. 2, 3 and 13. These materials relate to the
Self-Employed Retirement Keogh Plans.
b) Amendment No. 5 to Exhibit SE-1, Second Amendment to Bridges
Investment Fund, Inc. Standard Profit Sharing and Retirement
Plan is hereby incorporated by reference.
c) Amendment No. 6 to Exhibit SE-1, Revised Bridges Investment
Fund, Inc. Standard Profit Sharing and Retirement Plan, is
hereby incorporated by reference.
d) Amendment No. 7 to Exhibit SE-1, Standard Self-Employed
Retirement Act Plan (as Amended and Restated as of January 1,
1982) is hereby incorporated by reference.
e) Exhibit IDA-1, Bridges Investment Fund, Inc. Individual
Retirement Act Custodian Agreement, is hereby incorporated by
reference.
f) Amendment No. 2 to Exhibit IDA-1, Individual Retirement Act
Custodial Agreement, as Amended and Restated effective the 1st
day of January, 1982, is hereby incorporated by reference.
g) Amended and Restated Standard Retirement Plan as of January 1,
1984, is hereby incorporated by reference.
h) Amendment No. 3 to Exhibit IDA-1, Individual Retirement Act
Custodial Agreement, as Amended and Restated effective January
1, 1985, is hereby incorporated by reference.
i) Amended and Restated Standard Retirement Plan, including
Application Forms, Participant Request For Distribution Forms,
and Designation of Beneficiary Forms, and the Standard
Custodial Agreement.
Bridges Investment Fund, Inc. -6- February 27, 1998
Other Information -- Part C
j) Amended and Restated Standard Retirement Plan as described in
(i) above, corrected to final text approval by the Internal
Revenue Service on July 31, 1990.
k) Amended and Restated Individual Retirement Account Custodial
Agreement as described in (h) above corrected to final text
approval by the Internal Revenue Service on June 11, 1993.
l) Amendment to Bridges Investment Fund, Inc. Standard Retirement
Plan effective January 1, 1994, as adopted on March 29, 1994.
m) Model Amendment for Qualified Military Service, Model
Amendment for SIMPLE 401(k) Provisions, and a new Profit
Sharing Plan Application Form reflecting the SIMPLE 401(k)
Provisions at Part III all related to the Standard Retirement
Plan -- No. 001.
n) Bridges Investment Fund, Inc. SIMPLE Individual Retirement
Custodial Account Master Plan, including Application Form,
Custodial Agreement, Disclosure Statement, Notice to Eligible
Employees, Summary Description, Salary Reduction Agreement,
Beneficiary Designation, and Request for Distribution
Form.
15.Item 24(b)(15) Not applicable
16.Item 24(b)(16) Not applicable
17.Exhibit 17, Reference Item 24(b)(1) and Original Filing Exhibit 1,
Articles of Amendment to The Articles of Incorporation of Bridges
Investment Fund, Inc. hereby incorporated by reference.
18.Exhibit 18, Reference to Item 24(b)(8) and Original Filing Exhibit
5, Amendatory Agreement to Custodian Agreement dated October 13,
1987, is hereby incorporated by reference.
19.Exhibit 19, Reference to Item 24(b)(9)(i) Agreement dated July 14,
1987, to appoint Bridges Investor Services, Inc. as Dividend
Disbursing and Transfer Agent, is hereby incorporated by reference.
Bridges Investment Fund, Inc. -7- February 27, 1998
Other Information -- Part C
20.Exhibit 20, Reference to Item 24(b)(a)(ii) Agreement dated October
13, 1987, to establish jointly insured status for Bridges
Investment Fund, Inc. and Bridges Investor Services, Inc. under the
Federal Insurance Company registered investment management company
bond, is hereby incorporated by reference.
21.Exhibit 21, Reference to Item 24(b)(9)(iii) Agreement dated October
13, 1987, to establish jointly insured status under ICI Mutual
Insurance Company fidelity blanket bond between Bridges Investment
Fund, Inc.; Bridges Investor Services, Inc.; Bridges Investment
Counsel, Inc.; and Edson Bridges II Investment Counsel in
California, a proprietorship, is hereby incorporated by reference.
22.Exhibit 22, Reference to Item 24(b)(10), and Original Filing
Exhibit F, the opinion and consent of legal counsel, February 25,
1988, as to the legality of securities issued, is hereby
incorporated by reference.
23.Exhibit 23-A, Stock Subscription and Order Form (Revision 02-24-
1989) to be used by new investors on effective date of this filing.
24.Exhibit 24B, Stock Subscription and Order Form (Revision 02-26-
1990) to be used by investors on the effective date for this
filing.
25.Exhibit 25, Articles of Amendment To The Articles of Incorporation
of Bridges Investment Fund, Inc. Reference Item 24(b)(1) and
Original Filing of The Articles of Incorporation as Exhibit 1, the
terms of which and all other amendments are hereby incorporated by
reference.
26.Exhibit 26, Custody Agreement between Bridges Investment Fund, Inc.
and the First National Bank of Omaha dated April 23, 1997, to be
placed electronically in File No. 811-1209. This Custody Agreement
becomes effective on July 1, 1997, wherein the First National Bank
of Omaha becomes Successor Custodian to First Bank N.A., Omaha,
Nebraska.
Item 25. Persons Controlled by or under Common Control with Registrant
Not applicable
Bridges Investment Fund, Inc. -8- February 27, 1998
Other Information -- Part C
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders*
Capital Stock 501
* Holders as of January 31, 1998
Item 27. Indemnification
Not applicable
Item 28. Business and Other Connections of Investment Adviser
Edson L. Bridges II is the President and a Director of Bridges
Investment Counsel, Inc., as well as being Chairman and Chief
Executive Officer and a Director of Bridges Investment Fund, Inc. Mr.
Bridges II is President and a Director of Bridges Investor Services,
Inc. Mr. Bridges II has a principal profession in investment
counselling. During the last two fiscal years for the Fund, Mr.
Bridges II acted for his own account in the capacity of director,
officer, employee, partner or trustee in the following businesses or
activities:
Name and Principal Position with
Business Address Business or Activity
Edson L. Bridges II Proprietor
Investment Counsel in California
8401 West Dodge Road
Omaha, Nebraska 68114
N. P. Dodge Company Director
Real Estate Brokers and Management
8701 West Dodge Road
Omaha, Nebraska 68114
JAT Corporation Director
8401 West Dodge Road
Omaha, Nebraska 68114
Bridges Investment Fund, Inc. -9- February 27, 1998
Other Information -- Part C
Provident Trust Company President and
256 Durham Plaza Director
8401 West Dodge Road
Omaha, Nebraska 68114
Store Kraft Manufacturing Company Director
Beatrice, Nebraska 68310
West Omaha Land & Cattle Company A Partner
8401 West Dodge Road
Omaha, Nebraska 68114
The question in this item uses the terms substantial nature in
requiring a response. None of the foregoing relationships are
substantial in terms of time commitment or compensation received as
they may require only several hours per month or per calendar quarter
of Mr. Bridges' time. One exception to this statement would be Edson
L. Bridges II, Investment Counsel in California, which is part of Mr.
Bridges' principal profession. The other exception would be Provident
Trust Company. Refer to page 10 for additional comments.
Mr. Bridges II acts as a Trustee or Co-Trustee, primarily for
revocable and testamentary trusts which have investment advisory
client relationships with either Bridges Investment Counsel, Inc. or
Investment Counsel in California.
Mr. Edson L. Bridges III is Executive Vice President-Investments of
Bridges Investment Counsel, Inc. and a Director of that Company. Mr.
Bridges III is President and Director of Bridges Investment Fund, Inc.
and Vice President and Director of Bridges Investor Services, Inc.
Mr. Bridges III has a principal profession of investment counselling.
During the last two fiscal years for the Fund, Mr. Bridges III acted
for his own account in the capacity of director, officer, employee,
partner, or trustee in the following businesses or activities:
Name and Principal Position with
Business Address Business or Activity
Provident Trust Company Vice President
256 Durham Plaza and Director
8401 West Dodge Road
Omaha, Nebraska 68114
Bridges Investment Fund, Inc. -10- February 27, 1998
Other Information -- Part C
Stratus Fund, Inc. Director
500 Centre Terrace
1225 "L" Street
Lincoln, Nebraska 68508
Provident Trust Company was granted a charter by the State of Nebraska
Department of Banking on March 11, 1992. Trust business activities
commenced on March 14, 1992. Provident has a Management Agreement
with Bridges Investment Counsel, Inc. that was entered into on March
26, 1991. Mr. Bridges II and Mr. Bridges III were active during
1997 with assistance to Provident Trust Company for the conduct
of its operations and services. On December 31, 1997,
Provident Trust Company was responsible to 441 customer
accounts with assets valued at $354,116,000.
Item 29. Principal Underwriters
Not applicable
Item 30. Location of Accounts and Records
The principal records for the Fund to maintain under Rule 31a-3 of The
Investment Company Act of 1940 are maintained by the Fund and its
investment adviser at the offices of the Fund, Suite 256, Durham
Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114. The persons in
charge of the corporate records are Mrs. Mary Ann Mason, Secretary,
and Mrs. Nancy K. Dodge, Treasurer. Documents of original entry
regarding the safekeeping of securities, disbursing of dividends and
transfer agency work are maintained by Bridges Investor Services, Inc.
Item 31. Management Services
Not applicable
Item 32. Undertakings
Not applicable
Bridges Investment Fund, Inc. -11- February 27, 1998
Other Information -- Part C
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485a under the Securities Act of 1933, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, and State of Nebraska, on the 27th day of
February, 1998.
BRIDGES INVESTMENT FUND, IN
BY /s/ Edson L. Bridges II
Edson L. Bridges II, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Edson L. Bridges II Chairman February 27, 1998
Edson L. Bridges II Date
/s/ Nancy K. Dodge Treasurer February 27, 1998
Nancy K. Dodge Date
Director
Frederick N. Backer Date
/s/ Edson L. Bridges II Director February 27, 1998
Edson L. Bridges II Date
/s/ Edson L. Bridges III Director February 27, 1998
Edson L. Bridges III Date
/s/ N. P. Dodge, Jr. Director February 27, 1998
N. P. Dodge, Jr. Date
/s/ John W. Estabrook Director February 27, 1998
John W. Estabrook Date
Director
Jon D. Hoffmaster Date
Bridges Investment Fund, Inc. -12- February 27, 1998
Other Information -- Part C
/s/ John J. Koraleski Director February 27, 1998
John J. Koraleski Date
Director
Roger A. Kupka Date
Director
Gary L. Petersen Date
/s/ Roy A. Smith Director February 27, 1998
Roy A. Smith Date
/s/ L.B. Thomas Director February 27, 1998
L.B. Thomas Date
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Thirty-Fifth Annual Shareholder Report 1997 and is qualified in its entirety by
reference to such report.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 20,420,682
<INVESTMENTS-AT-VALUE> 36,605,170
<RECEIVABLES> 151,027
<ASSETS-OTHER> 101,921
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,858,118
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 210,583
<TOTAL-LIABILITIES> 210,583
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,852,197
<SHARES-COMMON-STOCK> 1,262,818
<SHARES-COMMON-PRIOR> 1,190,831
<ACCUMULATED-NII-CURRENT> 5,237
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6,462)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,796,563
<NET-ASSETS> 36,647,535
<DIVIDEND-INCOME> 435,355
<INTEREST-INCOME> 463,448
<OTHER-INCOME> 0
<EXPENSES-NET> 274,341
<NET-INVESTMENT-INCOME> 624,462
<REALIZED-GAINS-CURRENT> 380,365
<APPREC-INCREASE-CURRENT> 5,456,770
<NET-CHANGE-FROM-OPS> 6,461,597
<EQUALIZATION> 3,157
<DISTRIBUTIONS-OF-INCOME> 624,462
<DISTRIBUTIONS-OF-GAINS> 383,918
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 127,932
<NUMBER-OF-SHARES-REDEEMED> 55,945
<SHARES-REINVESTED> 32,365
<NET-CHANGE-IN-ASSETS> 7,398,047
<ACCUMULATED-NII-PRIOR> 4,732
<ACCUMULATED-GAINS-PRIOR> (2,910)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 170,328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 274,341
<AVERAGE-NET-ASSETS> 34,065,520
<PER-SHARE-NAV-BEGIN> 24.56
<PER-SHARE-NII> 0.51
<PER-SHARE-GAIN-APPREC> 4.77
<PER-SHARE-DIVIDEND> 0.51
<PER-SHARE-DISTRIBUTIONS> 0.82
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 29.02
<EXPENSE-RATIO> 0.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
MODEL AMENDMENT FOR QUALIFIED MILITARY SERVICE
TO BRIDGES INVESTMENT FUND, INC.
STANDARD RETIREMENT PLAN
The Bridges Investment Fund, Inc. Standard Retirement Plan, as amended
and restated on January 1, 1989, is hereby further amended, effective October
13, 1994, as follows:
I.
Section 10 of Basic Plan Document No. 1 of the Standard Retirement
Plan is hereby amended by the addition of a new Section 10.14 as follows:
"10.14 Qualified Military Service. Notwithstanding any
provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in
accordance with S 414(u) of the Code. Loan repayments will be suspended
under this Plan as permitted under S 414(u)(4) of the Code."
IN WITNESS WHEREOF, Bridges Investment Fund, Inc., as Sponsor of the
Standard Retirement Plan, has adopted this Model Amendment for Qualified
Military Service this day of , 1997.
BRIDGES INVESTMENT FUND, INC.
By
-------------------------------
Its
---------------------------
CERTIFICATE OF RESOLUTIONS
The undersigned certifies that he is the President of Bridges
Investment Fund, Inc., and that the following is a true and correct copy of the
resolutions adopted by the Board of Directors at a duly called meeting thereof
at which a quorum was present on the day of , 1997.
Upon motion duly made, seconded, and unanimously passed, it was:
"RESOLVED, that the Bridges Investment Fund, Inc. Standard Retirement
Plan be amended in the form of the Model Amendment documents attached
hereto and by this reference fully incorporated herein.
FURTHER RESOLVED, that the appropriate officers of the Corporation
shall be, and they hereby are, authorized to do any and all things
necessary, including execution of the attached Model Amendments and
any other documents or amendments, which may be required to achieve
continued qualification of the Standard Retirement Plan, as amended,
as an approved prototype plan under Section 401(a) of the Internal
Revenue Code.
Executed at Omaha, Nebraska, this day of , 1997.
----------------------------
Title: President
MODEL AMENDMENT FOR SIMPLE 401(K) PROVISIONS{PRIVATE }
TO BRIDGES INVESTMENT FUND, INC.
STANDARD RETIREMENT PLAN
The Bridges Investment Fund, Inc. Standard Retirement Plan, as amended and
restated on January 1, 1989, is hereby further amended, effective January 1,
1997, as follows:
I.
The Standard Retirement Plan is hereby amended, effective January 1, 1997,
by the addition of the following model amendment as a new Section 11 to Basic
Plan Document No. 1:
--------------------
MODEL AMENDMENT UNDER SECTIONS 401(k)(11) AND 401(m)(10)
MODEL AMENDMENT TO ADOPT SIMPLE 401(k) PROVISIONS
SECTION I. SIMPLE 401(K) PROVISIONS
1.1 This amendment adds to the Plan SIMPLE 401(k) provisions that are
intended to satisfy the requirements of sections 401(k)(11) and 401(m)(10) of
the Internal Revenue Code.
1.2 The provisions of sections 3.3, IV, VI, and VII of this amendment apply
for a year only if the following conditions are met:
(a) The employer adopting this amendment is an eligible employer. An
eligible employer means, with respect to any year, an employer that had no more
than 100 employees who received at least $5,000 of compensation from the
employer for the preceding year. In applying the preceding sentence, all
employees of controlled groups of corporations under section 414(b), all
employees of trades or businesses (whether incorporated or not) under common
control under section 414(c), all employees of affiliated service groups under
section 414(m), and leased employees required to be treated as the employer's
employees under section 414(n), are taken into account.
An eligible employer that adopts this amendment and that fails to be an
eligible employer for any subsequent year, is treated as an eligible employer
for the 2 years following the last year the employer was an eligible employer.
If the failure is due to any acquisition, disposition, or similar transaction
involving an eligible employer, the preceding sentence applies only if the
provisions of section 410(b)(6)(C)(i) are satisfied.
(b) No contributions are made, or benefits accrued for services during the
year, on behalf of any eligible employee under any other plan, contract,
pension, or trust described in section 219(g)(5)(A) or (B), maintained by the
employer.
1.3 To the extent that any other provision of the plan is inconsistent with
the provisions of this amendment, the provisions of this amendment govern.
SECTION II. DEFINITIONS
2.1 "Compensation" means, for purposes of sections 1.2(a), 3.1 and 3.2, the
sum of the wages, tips, and other compensation from the employer subject to
federal income tax withholding (as described in section 6051(a)(3)) and the
employee's salary reduction contributions made under this or any other 401(k)
plan, and, if applicable, elective deferrals under a section 408(p) SIMPLE plan,
a SARSEP, or a section 403(b) annuity contract and compensation deferred under a
section 457 plan, required to be reported by the employer on Form W-2 (as
described in section 6051(a)(8)). For self-employed individuals, compensation
means net earnings from self-employment determined under section 1402(a) prior
to subtracting any contributions made under this plan on behalf of the
individual. The provisions of the plan implementing the limit on compensation
under section 401(a)(17) apply to the compensation under Section III.
2.2 "Eligible employee" means, for purposes of this amendment, any employee
who is entitled to make elective deferrals described in section 402(g) under the
terms of the plan.
2.3 "Year" means the calendar year.
SECTION III. CONTRIBUTIONS
3.1 Salary Reduction Contributions
(a) Each eligible employee may make a salary reduction election to have his
or her compensation reduced for the year in any amount selected by the employee
subject to the limitation in section 3.1(b). The employer will make a salary
reduction contribution to the plan, as an elective deferral, in the amount by
which the employee's compensation has been reduced.
(b) The total salary reduction contribution for the year cannot exceed
$6,000 for any employee. To the extent permitted by law, this amount will be
adjusted to reflect any annual cost-of-living increases announced by the IRS.
3.2 Other Contributions
(a) Matching Contributions -- Each year, the employer will contribute a
matching contribution to the plan on behalf of each employee who makes a salary
reduction election under section 3.1. The amount of the matching contribution
will be equal to the employee's salary reduction contribution up to a limit of
3% of the employee's compensation for the full calendar year.
(b) Nonelective Contribution -- For any year, instead of a matching
contribution, the employer may elect to contribute a nonelective contribution of
2% of compensation for the full calendar year for each eligible employee who
received at least $5,000 of compensation from the employer for the year. By
inserting a number less than $5,000 here , the employer agrees to substitute
this lesser amount for the $5,000 amount in the preceding sentence.
3.3 Limitation on Other Contributions
(a) General rule -- No employer or employee contributions may be made to
this plan for the year other than salary reduction contributions described in
section 3.1, matching or nonelective contributions described in section 3.2 and
rollover contributions described in section 1.402(c)-2, Q&A-1(a) of the Income
Tax Regulations.
(b) 1997 Transition Rule -- If the employer has maintained this plan during
1997 prior to adopting this amendment, then contributions made prior to the
amendment are treated as made under sections 3.1 and 3.2 provided that: (i) the
employer adopts the 401(k) SIMPLE provisions by July 1, 1997, effective as of
January 1, 1997; (ii) the salary reduction contributions for the year made prior
to adoption of the amendment do not total more than $6,000 for any employee;
(iii) the other contributions set forth in section 3.2 are of inherently equal
or greater value than the contributions required under the plan prior to the
amendment; and (iv) for 1997, the 60-day election period requirement described
in sections 4.1(a) and (b) is deemed satisfied if the employee may make or
modify a salary reduction election during a 60-day election period that begins
no later than 30 days after the amendment is adopted but in no event later than
July 1, 1997.
3.4 The provisions of the plan implementing the limitations of section 415
apply to contributions made pursuant to sections 3.1 and 3.2.
SECTION IV. ELECTION AND NOTICE REQUIREMENTS
4.1 Election Period
(a) In addition to any other election periods provided under the plan, each
eligible employee may make or modify a salary reduction election during the 60-
day period immediately preceding each January 1.
(b) For the year an employee becomes eligible to make salary reduction
contributions under this amendment, the 60-day election period requirement of
section 4.1(a) is deemed satisfied if the employee may make or modify a salary
reduction election during a 60-day period that includes either the date the
employee becomes eligible or the day before.
(c) Each employee may terminate a salary reduction election at any time
during the year.
4.2 Notice Requirements
(a) The employer will notify each eligible employee prior to the 60-day
election period described in section 4.1 or 3.3(b)(iv) that he or she can make a
salary reduction election or to modify a prior election during that period.
(b) The notification described in section 4.2(a) will indicate whether the
employer will provide a 3% matching contribution described in section 3.2(a) or
a 2% nonelective contribution described in section 3.2(b).
SECTION V. VESTING REQUIREMENTS
All benefits attributable to contributions made pursuant to this amendment
are nonforfeitable at all times.
SECTION VI. TOP-HEAVY RULES
The plan is not treated as a top-heavy plan under section 416 for any year
for which the provisions of this amendment are effective and satisfied.
SECTION VII. NONDISCRIMINATION TESTS
The plan is treated as meeting the requirements of sections
401(k)(3)(A)(ii) and 401(m)(2) for any year for which the provisions of this
amendment are effective and satisfied.
SECTION VIII. EFFECTIVE DATE
This amendment is effective on .
----------------------------------------
By:
-------------------- --------------------------------------
Employer Name Signature
-----------------------------------------
Name and Title
-----------------------------------------
Date
MODEL REVOCATION CLAUSE
This amendment is revoked effective as of the first day of the calendar
year following (enter the date the revocation is adopted).
----------------
By:
--------------------- ------------------------------------
Employer Name Signature
----------------------------------------
Name and Title
----------------------------------------
Date
--------------------
IN WITNESS WHEREOF, Bridges Investment Fund, Inc., as the Sponsor of
the Standard Retirement Plan, has adopted this Model Amendment for SIMPLE 401(k)
Provisions this day of , 1997.
BRIDGES INVESTMENT FUND, INC.
By
--------------------------------------
Its
----------------------------------
No. 001
Name of Employer Establish/Amend/Restate Date
No. 001
Name of Employer
BRIDGES INVESTMENT FUND, INC.{PRIVATE }
STANDARD RETIREMENT PLAN - No. 001
(As Amended and Restated as of January 1, 1989)
PROFIT SHARING
APPLICATION FORM
(Complete in duplicate and sign all copies)
(Name of Employer)
hereby:
A. / / establishes on , 19 , a Retirement Plan, to be
known as
Retirement Plan, in the form of the Bridges Investment Fund,
Inc. Standard Retirement Plan and Standard Custodial Agreement
(as amended and restated as of January 1, 1989), effective
, 19 (the "Effective Date");
B. / / amends, restates and continues
Retirement Plan,
1
No. 001
Name of Employer Establish/Amend/Restate Date
originally established on , 19 in the form of
the Bridges Investment Fund, Inc. Standard Retirement Plan and
Standard Custodial Agreement (as amended and restated as of
January 1, 1989) by substituting the following new Application
Form for the Application Form previously executed, said amendment
and substitution to be effective , 19 (the
"Effective Date");
C. / / amends, restates and continues
originally established on
, 19 in the form of
to be amended, restated and
continued in the form of the Bridges Investment Fund, Inc.,
Standard Retirement Plan and Standard Custodial Agreement (as
amended and restated as of January 1, 1989), effective
, 19 (the "Effective Date");
in accordance with all the terms of the Bridges Investment Fund, Inc. Standard
Retirement Plan and Standard Custodial Agreement (Basic Plan Document No. 01),
which the Employer has read, accepts and specifically incorporates herein by
reference, with the following additional terms and conditions:
INFORMATION CONCERNING EMPLOYER:
1. Name
2
No. 001
Name of Employer Establish/Amend/Restate Date
Address
Birth Date (if single Owner-Employee Plan)
Employer's Federal Tax Identification Number
Employer's Limitation Year (please choose one - the period
selected will be the compensation period for applying the limitations of
Section 3.8 of the Plan):
/ / Calendar year / / Other 12-month period:
Name of Plan Administrator:
Custodian: Employer hereby appoints First Bank, N.A., Omaha, Nebraska to
serve as Custodian and, until otherwise directed, such Custodian shall
invest all contributions under the Plan in shares of Bridges Investment
Fund, Inc. The Custodian shall serve in accordance with the Bridges
Investment Fund, Inc. Standard Custodial Agreement, which Agreement shall
be effective upon acceptance by the Custodian in writing.
Compensation for a common law Employee shall, except as provided below, be
the Employee's W-2 earnings actually paid during the taxable year ending
with or within the Plan Year. For all purposes of the Plan, Compensation
shall: (select if applicable)
3
No. 001
Name of Employer Establish/Amend/Restate Date
/ / include compensation which is not currently includable in the
Employee's gross income by reason of the application of Sections 125,
402(a)(8), 402(h)(1)(B), or 403(b) of the Code.
In making allocations of the Employer's contributions, Compensation paid to
an Employee during any part of the Plan Year in which he was not a
Participant: (select one only)
/ / shall be taken into account
/ / shall not be taken into account
NOTE: If a salary reduction arrangement is established under Section
401(k) of the Code pursuant to Part II of the Application Form,
Compensation for purposes of the actual deferral percentage tests shall,
beginning with the Plan Year beginning on or after January 1, 1992,
include Compensation paid for the full Plan Year, regardless of whether the
Employee was a Participant for the entire Plan Year.
2. Eligibility Requirements for participation in the Plan are:
A. Years of Service required for eligibility to participate:
(two (2) or less for Plan Years which commence after December 31,
1988, and no more than one (1) if a 401(k) salary reduction
4
No. 001
Name of Employer Establish/Amend/Restate Date
arrangement is established pursuant to Part II of this Application
Form). If a fractional Year of Service is selected or included, an
Employee will not be required to complete any specified number of
Hours of Service to receive credit for such fractional year.
B. Employee has attained age (not greater than age twenty-one
(21)).
C. Employee must not be a member of the following class or classes:
(check if exclusion is desired)
/ / Employees who are members of a unit of Employees covered by a
collective bargaining agreement between employee representatives
and the Employer if retirement benefits were the subject of good
faith bargaining. For this purpose, the term "employee represen-
tatives" does not include any organization more than half of
whose members are employees who are owners, officers, or
executives of the Employer.
/ / Employees who are nonresident aliens and who receive no earned
income from the Employer that constitutes income from sources
within the United States.
3. Subject to the limitations of the Plan, the Employer's contribution to the
Plan for each Plan Year shall be:
5
No. 001
Name of Employer Establish/Amend/Restate Date
A. / / % of the Employer's Net Profit for the Plan Year in excess of
$ .
B. / / % (but not more than 15%) of the Compensation of the
Participants for the Plan Year.
C. / / Such other amount (but not more than 15% of the total
Compensation of the Participants for the Plan Year) as may be
determined by the Employer by proper resolution adopted and
communicated to the Participants for such year.
D. For purposes of B. and C. above, the Employer's contribution:
/ / shall be limited to the extent of the Employer's Net Profit for
the Plan Year.
/ / shall not be subject to any limitations on the basis of the
Employer's Net Profits.
E. All Employer contributions pursuant to the election made under this
Paragraph 3 shall be allocated to the Employer Accounts of each
Participant in the manner provided in Section 3.5 of the Plan.
6
No. 001
Name of Employer Establish/Amend/Restate Date
4. The initial contribution enclosed herewith is to be credited to the
Accounts of the following Participants in the amounts set forth opposite
their names:
Social Security Amount Contributed By
Number and
Name Birth Date Employer Participant
If additional space is required, continue this list on a separate sheet
attached to each copy of this application, which sheet shall be deemed a
part hereof.
NOTE: The Employer shall provide Bridges Investment Fund, Inc. a current
list of the home address of all Participants, and shall promptly update
such list to reflect any changes or the entry of new Participants.
7
No. 001
Name of Employer Establish/Amend/Restate Date
5. Until otherwise changed in accordance with the terms of the Custodial
Agreement, the Custodian shall receive fees for its services in respect to
each Participant's account as follows:
A. Acceptance fee: $5.00 for each person participating in the Plan;
B. Annual maintenance fee: $8.00 per year for each person who is a
Participant during any part of the Plan Year, including Participants
receiving periodic distributions under the Plan and including any
Employee whose account is being held by the Custodian after
termination of the Plan and before distribution; and
C. Termination fee: $6.00 per Participant on termination of the Plan or
on the initial withdrawal from such Participant's Account.
D. Periodic cash distribution: $1.75 for each payment.
E. Reinvestment of Cash Distributions (dividend and capital gains
payments from the shares of the Fund): $1.05 for each reinvestment.
The foregoing charges will be deducted by the Custodian from Employer
contributions, dividends or capital gain distributions, periodic cash
distributions, and termination remittances before investments or
separation payments are made.
NOTE: Extraordinary services resulting from unusual administrative
responsibilities not contemplated by the above schedule, will be
subject to such additional charges as will reasonably compensate the
Custodian for the services involved.
8
No. 001
Name of Employer Establish/Amend/Restate Date
6. Voluntary Contributions by Participants are: (select one only)
/ / not permitted.
/ / permitted. Voluntary Contributions can be permitted only if the
Employer establishes a 401(k) salary reduction arrangement pursuant to
Part II of the Application Form.
7. Hours of Service shall be determined on the basis of the method selected
below (only one method may be selected); and the method selected shall be
applied to all Employees, including Owner-Employees or 10%-or-Less Partners
covered under the Plan:
A. / / on the basis of actual hours for which an Employee is paid or
entitled to payment;
B. / / on the basis of days worked; an Employee shall be credited with
ten (10) Hours of Service if under Section 1.9 of the Plan such
Employee would be credited with at least one (1) Hour of Service
during the day;
9
No. 001
Name of Employer Establish/Amend/Restate Date
C. / / on the basis of weeks worked; an Employee shall be credited with
forty-five (45) Hours of Service if under Section 1.9 of the Plan
such Employee would be credited with at least one (1) Hour of
Service during the week;
D. / / on the basis of semi-monthly payroll periods; an Employee shall
be credited with ninety-five (95) Hours of Service if under
Section 1.9 of the Plan such Employee would be credited with at
least one (1) Hour of Service during the semi-monthly payroll
period;
E. / / on the basis of months worked; an Employee shall be credited with
one hundred ninety (190) Hours of Service if under Section 1.9 of
the Plan such Employee would be credited with at least one (1)
Hour of Service during the month.
8. Check the following if integration with F.I.C.A. (Social Security)
contributions is desired:
/ / The Plan is integrated with Social Security. The "Integration Base"
shall be: (select one)
A. / / The Contribution and Benefit Base in effect under Section 230 of
the Social Security Act, as in effect on the first day of the
10
No. 001
Name of Employer Establish/Amend/Restate Date
Plan Year for which Participant Compensation is determined for
purposes of computing or allocating Employer contributions for
such Plan Year.
B. / / $ (May not be greater than the maximum Contribution
and Benefit Base in effect under Section 230 of the Social
Security Act, as in effect on the first day of the Plan Year for
which Participant Compensation is determined for purposes of
computing or allocating Employer contributions for such Plan
Year.)
Unless a smaller percentage is selected below, the integration
percentage for the Plan shall be the greater of 5.7 percent or
the percentage rate of tax under Section 3111(a) of the Code (at
the beginning of a Plan Year) which is attributable to the old
age insurance portion of the Old Age, Survivors and Disability
Insurance provisions of the Social Security Act.
If a smaller integration percentage is desired, please state such
percentage here: %
NOTE: The maximum 5.7 integration percentage referred to herein may
be subject to adjustment as provided in Section 3.5(b)(3) of the Plan
if the integration base selected at subparagraph B is less than
certain prescribed levels.
9.A Complete this section only if you maintain or ever maintained another plan
which is a qualified defined contribution plan (other than Paired Plan No.
11
No. 001
Name of Employer Establish/Amend/Restate Date
002) in which any Participant in this Plan is (or was) a Participant or
could become a Participant. This Section must also be completed if you
maintain a welfare benefit fund, as defined in Section 419(e) of the Code,
or an individual medical account, as defined in Section 415(l)(2) of the
Code, under which amounts are treated as Annual Additions with respect to
any Participant in this Plan. If you maintain such a plan, failure to
complete this section may adversely affect the qualification of the plans
you maintain. (It should be noted that the requirements of Section 415 of
the Code are satisfied if you include the limitations of subsections (e)
through (j) of Section 3.8 of this Plan in all such plans.) If you do not
complete this section, the provisions of subsections (e) through (j) of
Section 3.8 will automatically apply to this Plan. The amount of Annual
Addition allocated to any Participant's account under this Plan shall be
limited as follows:
(Insert Provisions)
12
No. 001
Name of Employer Establish/Amend/Restate Date
9.B Complete this Section only if you maintain, or have maintained, one or more
qualified plans which are defined benefit plans. If you maintain such a
plan or plans, failure to complete this Section may adversely affect the
qualifications of the plans you maintain. If the Employer maintains, or at
any time maintained, one or more qualified defined benefit plans, the sum
of the defined contribution fraction (as defined in Section 3.8(u)) and the
defined benefit fraction (as defined in Section 3.8(t)) with respect to any
Participant for a Limitation Year may not exceed 1.0. If the Employer
maintains or maintained such plans, the 1.0 limitation will be met as
follows:
/ / By limiting the Annual Additions to this plan for the Limitation Year
so that the sum of the defined contribution fraction and the defined
benefit fraction does not exceed 1.0.
/ / By limiting the Annual Additions to this and/or another qualified
defined contribution plan for the Limitation Year, or reducing the
projected annual benefit (as defined in Section 3.8(v)) in one or more
of the qualified defined benefit plans so that the sum of the defined
contribution fraction and the defined benefit fraction does not exceed
1.0.
(Insert Provisions.)
13
No. 001
Name of Employer Establish/Amend/Restate Date
10. This Paragraph may be completed if you maintain one or more qualified plans
other than this Plan that are to be aggregated and the minimum contribution
or benefit requirements of Section 416(c) of the Code for Top-Heavy Plans
are to be met, in whole or in part, under such other plan or plans.
(Select one and complete if applicable.)
(1) / / With respect to any Participant in this Plan who is a participant
in another plan of the Employer which satisfies the minimum
contribution or benefit requirements of Section 416(c) of the
Code for Non-Key Employees (if the aggregated plans are Top-
Heavy), the minimum guaranteed contribution requirements of
Section 3.5(d) shall not apply to this Plan.
Name of Other Plan
(2) / / By providing a minimum guaranteed contribution equal to %
under this Plan for NonKey Employees pursuant to Section 3.5(d),
and the balance of the minimum contribution or benefit
requirements of Section 416(c) of the Code being provided under
the plan or plans specified below:
14
No. 001
Name of Employer Establish/Amend/Restate Date
Name of Plan or Plans
(3) / / By limiting contributions to this Plan as follows: (Insert
provisions and designate the manner in which the minimum
contribution or benefit requirements of Section 416(c) of the
Code will be met.)
11. Vesting Provisions
A. The following vesting schedule shall apply in determining the
percentage of a Participant's Employer Account for reasons other than
death, Disability or attainment of age 65 while an Employee of the
Employer: (Select one - option (1) must be selected if more than one
(1) Year of Service has been selected as an eligibility requirement
under paragraph 2.A)
(1) / / 100% immediate vesting
(2) / / 100% after the completion of (not more than 3) Years
of Service
15
No. 001
Name of Employer Establish/Amend/Restate Date
(2) / / A percentage determined in accordance with the following
vesting schedule:
Years of Service Percentage
Less than one
One but less than two
Two but less than three (at least 20%)
Three but less than four (at least 40%)
Four but less than five (at least 60%)
Five but less than six (at least 80%)
Six or more 100%
B. In computing a Participant's Years of Service for purposes of
subparagraph A above, any Years of Service with the Employer: (select
if desired)
(1) / / Prior to the Effective Date of the Plan or a predecessor
plan shall be disregarded.
(2) / / Prior to the Participant's attainment of age (18 years
of less) shall be disregarded.
C. The forfeited portion of a terminated Participant's Employer Account
shall (not)* be used to reduce Employer contributions to the Plan.
16
No. 001
Name of Employer Establish/Amend/Restate Date
*Delete "not" if a reduction of Employer contributions is desired in
lieu of having such forfeitures allocated to the Employer Accounts of
the remaining Participants.
12. Present Value for Top-Heavy Ratio. Complete this paragraph if one or more
defined benefit plans are to be aggregated with this Plan for purposes of
the Top-Heavy rules. In the case it is necessary to establish present
values under a defined benefit plan for purposes of the top-heavy ratio
under Section 6.1, any benefit shall be discounted for mortality and
interest based on the following: (select one only and complete)
(1) / / The mortality and interest rate assumptions which are stated in
the defined benefit plan for purposes of determining benefit
equivalencies under the plan. (This option may be selected only
if a single defined benefit plan is to be aggregated with this
Plan.)
(2) / / Interest rate % Mortality table
13. Employer represents that the Employer and every Participant who has made a
contribution to the Plan included in the initial contribution specified
above have received copies of the current Prospectus of Bridges Investment
Fund, Inc. Employer also represents that it will provide a current
prospectus of Bridges Investment Fund, Inc. to all future Participants
immediately prior to their participation in the Plan and to distribute all
subsequent disclosure materials received from Bridges Investment Fund, Inc.
to all Participants in the Plan.
17
No. 001
Name of Employer Establish/Amend/Restate Date
14. Paired Plans. This Plan: (select one)
/ / is a Paired Plan.* Name of the Plan with which this Plan is paired:
/ / is not a Paired Plan.
*Special provisions set forth in Section 8 apply when paired plans are
established under the Bridges Investment Fund, Inc. Standard Retirement
Plan.
15. The completion of this Application Form creates new legal relationships and
responsibilities, and the failure to properly complete the Application Form
may result in the disqualification of the Plan established hereunder.
Accordingly, your legal counsel should review the Plan prior to the
execution of this document.
16. IF A SALARY REDUCTION ARRANGEMENT IS TO BE ESTABLISHED PURSUANT TO
SECTION 401(K) OF THE CODE, COMPLETE PART II OF THIS APPLICATION FORM.
IF SIMPLE 401(K) PROVISIONS ARE TO BE ESTABLISHED, COMPLETE PART III OF
THIS APPLICATION FORM.
18
No. 001
Name of Employer Establish/Amend/Restate Date
PART II
ESTABLISHMENT OF SALARY REDUCTION
ARRANGEMENT UNDER SECTION 401(K) OF THE CODE
This Part II is to be completed by any Employer desiring to establish
a salary reduction arrangement under Section 401(k) for its profit sharing plan.
SPECIAL RULES AND DEFINITIONS WHICH APPLY TO SECTION 401(K) ARRANGEMENTS ARE SET
FORTH IN SECTION 7 OF THE STANDARD RETIREMENT PLAN.
17. Salary Reduction Contributions. A Participant may file with the Plan
Administrator a salary reduction agreement, pursuant to such form as may be
prescribed by the Plan Administrator, which shall provide the amount of
Compensation the Employer shall reduce and contribute to the Plan on behalf
of the Participant.
A. The salary reduction agreement (select one or more and complete):
(1) / / may specify a percentage by which the Participant is to
reduce his Compensation, which reduction shall not be less
than percent nor greater than percent.
The Participant's percentage reduction must be in increments
of percentage points.
19
No. 001
Name of Employer Establish/Amend/Restate Date
(2) / / may specify a dollar amount by which Compensation is to be
reduced for each payroll period of the Employer. The total
dollar amount of salary reduction each payroll period shall
not exceed $ or percent of Compensation.
(3) / / shall not apply to bonuses. NOTE: The failure to select
this option will have the effect of automatically subjecting
bonus payments to the salary reduction election.
B. A salary reduction agreement shall not be effective earlier than its
execution date, and in no event earlier than the Participant's first
day of participation under the Plan. The salary reduction agreement
shall apply to Compensation (including increases in Compensation) paid
after the effective date of the salary reduction agreement, and shall
remain in effect until modified or terminated. The following rules
shall apply with respect to the salary reduction agreement: (complete
all subparagraphs)
(1) A Participant may elect to commence Salary Reduction
Contributions as of (enter at least one date
or period during the Plan Year). Such election shall become
effective as of the (first, second, etc.) payroll period
following the pay period during which the election was made.
(2) A Participant may amend, on a prospective basis, a salary
reduction agreement:
20
No. 001
Name of Employer Establish/Amend/Restate Date
/ / Once during the Plan Year, but not later than
of the Plan Year.
/ / As of the first day of any payroll period.
/ / Other: (must be at least
once per year).
(3) A salary reduction agreement may be revoked on a prospective
basis:
/ / at any time.
/ / at the same times selected in subparagraph (2) above for
amendments to the salary reduction agreement.
/ / Other: (must be at least
once per year)
Upon the revocation of a salary reduction agreement, a new
agreement may be filed having an effective date:
21
No. 001
Name of Employer Establish/Amend/Restate Date
/ / the first day of the next Plan Year.
/ / other:
(4) Separate salary reduction elections for bonus payments:
/ / may be entered into at any time before the bonus is paid or
made available.
/ / shall not be allowed.
(5) A separate agreement on the frequency of the Participant's salary
reduction:
/ / may be entered into between the Employer and the
Participant.*
/ / may not be entered into between the Employer and the
Participant.
*A copy of any such agreement shall be submitted to the Custodian
and Bridges Investment Fund, Inc.
22
No. 001
Name of Employer Establish/Amend/Restate Date
18. Matching Contributions. The Plan:
A. / / shall / / shall not provide for Matching Contributions by the
Employer. The Employer's Matching Contribution shall
be determined as follows: (select one only if Matching
Contributions are allowed)
(1) / / an amount equal to percent of an eligible
Participant's Salary Reduction Contributions for the Plan
Year based on a percentage not exceeding percent of
the Participant's Compensation for the Plan Year.
(2) / / an amount equal to percent of the first $
of the Participant's Salary Reduction Contributions for the
Plan Year, not to exceed $ .
(3) / / a percentage the Employer may, from time to time declare, in
its sole discretion, of
(a) / / each Participant's Salary Reduction
Contributions for the Plan Year based on a
percentage not exceeding percent of the
Participant's Compensation for the Plan Year.
23
No. 001
Name of Employer Establish/Amend/Restate Date
(b) / / the first $ of each Participant's Salary
Reduction Contributions for the Plan Year.
(c) / / the Participant's Salary Reduction Contributions
for the Plan Year.
(4) / / Other: (Please complete)
.
B. Matching Contributions shall be made:
(1) / / each period for which Salary Reduction Contributions are
contributed to the Plan. NOTE: If this option is selected,
a Participant who makes Salary Reduction Contributions will
be entitled to receive a Matching Contribution even if he
should fail to complete a Year of Service during the Plan
Year.
(2) / / as of the end of the Plan Year, and then only for
Participants who are eligible to share in the allocation of
other Employer contributions pursuant to Section 3.5 of the
Plan.
24
No. 001
Name of Employer Establish/Amend/Restate Date
C. Matching Contributions shall be made to special subaccounts
established under the Employer Accounts of Participants who are
eligible to share in such Matching Contributions. The allocation of
such Matching Contributions shall be in accordance with and made in
the same manner as the formula selected under subparagraph A. of this
Paragraph 18.
D. Qualified Matching Contributions: (Select one only)
/ / shall / / shall not be made. If such Qualified Matching
Contributions are to be made, percent of the Employer's
Matching Contribution shall be deemed a Qualified Matching
Contribution which shall be allocated to a special subaccount of
each Participant's Employer Account. Such Qualified Matching
Contributions shall be made (select one):
(a) / / on behalf of all Participants who are eligible to share in
the allocation of Matching Contributions.
(b) / / only on behalf of Participants who are not Highly
Compensated Participants (as defined in Section 7.9) and who
are eligible to share in the allocation of Matching
Contributions.
25
No. 001
Name of Employer Establish/Amend/Restate Date
All Qualified Matching Contributions, and allocations thereto, shall
be fully vested and nonforfeitable in such Participants.
19. Hardship Distributions. Hardship distributions (as described at Section
7.11 of the Plan (select one):
/ / shall be permitted
/ / shall not be permitted
20. Qualified Nonelective Contributions. The Employer:
A. / / may / / may not make Qualified Nonelective Contributions to the
Plan. If Qualified Nonelective Contributions are made
to the Plan in any Plan Year, they shall consist of
such portion of the Employer contribution for the year
as may be declared by the Employer at the time the
Employer contribution is made to the Plan.
B. Such Qualified Nonelective Contributions shall be made:
(1) / / on behalf of all Participants who are eligible to share in
the allocation of Employer contributions for that year.
26
No. 001
Name of Employer Establish/Amend/Restate Date
(2) / / only on behalf of Participants who are not Highly
Compensated Participants (as defined in Section 7.9) and who
are eligible to share in the allocation of Employer
contributions for that year.
Any amount designated as a Qualified Nonelective Contribution shall be
allocated to a special account of each Participant's Employer Account
and be fully vested and nonforfeitable in such Participant.
21. Special Distributions. In addition to the other events of distribution
provided for in the Plan or this Application Form, Salary Reduction
Contributions (including any Nonelective Contributions and Qualified
Matching Contributions) and income allocable to such amounts may be
distributed to the Participants: (Select one or more)
A. / / Upon termination of the Plan without the establishment of a
successor defined contribution plan.
B. / / As soon as administratively feasible after the sale or
disposition of substantially all of the Employer's assets used in
the trade or business in which the Participant is employed to an
entity which is not affiliated with the Employer (within the
meaning of Sections 414(b), (c), (m), or (o) of the Code), if
such entity continues to maintain this Plan after the sale or
27
No. 001
Name of Employer Establish/Amend/Restate Date
disposition, but only with respect to employees who continue
employment with such acquiring entity.
C. / / As soon as administratively feasible after the sale of a
Participating Employer to an entity which is not affiliated with
the Employer (within the meaning of Sections 414(b), (c), (m), or
(o) of the Code), if such entity continues to maintain this Plan
after the sale or disposition, but only with respect to employees
who continue employment with such acquiring entity.
All distributions that may be made pursuant to the foregoing events
are subject to the applicable spousal and Participant consent
requirements of Section 4 of the Plan.
28
No. 001
Name of Employer Establish/Amend/Restate Date
PART III
ADOPTION OF SIMPLE 401(K) PROVISIONS
This Part III is to be completed and separately signed by any
Employer desiring to establish SIMPLE 401(k) provisions for its Profit Sharing
Plan. This Part III is also to be completed and separately signed by any
Employer desiring to revoke a previous amendment to its Plan that established
SIMPLE 401(k) provisions. SPECIAL RULES AND DEFINITIONS WHICH APPLY TO SIMPLE
401(K) PLANS ARE SET FORTH IN THE MODEL AMENDMENT FOR THE SIMPLE 401(K)
PROVISIONS TO THE PLAN.
A. ADOPTION OF SIMPLE 401(K) PROVISIONS
(1) / / The Employer hereby amends the Plan to adopt the SIMPLE
401(k) provisions of the Model Amendment for SIMPLE 401(k)
Provisions to the Plan.
(2) / / In adopting the SIMPLE 401(k) provisions, instead of a
matching contribution the Employer elects to contribute a
nonelective contribution of 2% of compensation for the full
calendar year for each eligible employee who received at
least $ (must be $5,000 or less) of compensation
form the Employer for the year.
29
No. 001
Name of Employer Establish/Amend/Restate Date
(A compensation minimum of $5,000 will be used unless the
Company elects a lesser compensation amount in the preceding
sentence.)
(3) / / This amendment is effective on
[date].
By:
Employer Name Signature
Name and Title
Date
B. MODEL REVOCATION CLAUSE
(1) / / This amendment is revoked effective as of the first day of
the calendar year following
[enter the date the revocation is adopted].
30
No. 001
Name of Employer Establish/Amend/Restate Date
By:
Employer Name Signature
Name and Title
Date
ACKNOWLEDGMENT AND EXECUTION
An Employer who maintains or who later adopts any plan (including a welfare
benefit fund as described in Section 419(e) of the Code which provides post-
retirement medical benefits allocated to separate accounts of Key Employees, as
defined in Section 419A(d)(3) of the Code, or an individual medical account, as
defined in Section 415(l)(2) of the Code) in addition to this Plan, other than
Paired Plan No. 002, may not rely upon the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is qualified
under Section 401 of the Code. If an Employer who adopts or maintains multiple
plans wishes to obtain reliance that such plans are qualified under Section 401
of the Code, application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Application Form may be used only in conjunction with the plan document for
Bridges Investment Fund, Inc. Standard Retirement Plan (Basic Plan Document No.
01).
31
No. 001
Name of Employer Establish/Amend/Restate Date
Signed this day of , 19 .
Appointment as Custodian is accepted this day of , 19 .
For First Bank, N.A.,
Estate and Trust Division,
Omaha, Nebraska
Employer
By:
Its:
(Proprietor, Partner,
or Title)
Mail both copies of the application and the initial contribution to First Bank,
N.A., Estate and Trust Division, 1700 Farnam Street, Omaha, Nebraska. Telephone
number of Custodian: (402) 348-6000
Participation by Other Employers.
32
No. 001
Name of Employer Establish/Amend/Restate Date
The undersigned Employer(s), by executing this document, elect(s) to
become a Participating Employer in the (Name of
Plan) and, by such acknowledgment, delegate(s) to the Employer which has
executed the preceding page of the Application Form, exclusive authority to
exercise all rights and powers reserved to sponsoring employers under the Plan.
Dated this day of , 19 .
By:
Its:
By:
Its:
Bridges Investment Fund, Inc., will inform the sponsoring Employer of any
amendments to the Bridges Investment Fund, Inc. Standard Retirement Plan or of
the discontinuance or abandonment of the Standard Retirement Plan. Any
inquiries regarding the Standard Retirement Plan may be directed to:
Bridges Investment Fund, Inc.
8401 West Dodge Road
Omaha, Nebraska 68114
33
No. 001
Name of Employer Establish/Amend/Restate Date
Telephone: (402) 397-4700
34
BRIDGES INVESTMENT FUND, INC.{PRIVATE }
SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
APPLICATION FORM
The undersigned, by completing this Application Form as the
Participant, hereby establishes an Individual Retirement Custodial Account and
SIMPLE IRA with the U.S. Bank National Association, pursuant to the Bridges
Investment Fund, Inc. SIMPLE Individual Retirement Account Custodial Agreement,
the terms of which are incorporated herein by this reference. The undersigned
acknowledges receipt of a copy of said Custodial Agreement and a Disclosure
Statement regarding said Custodial Agreement.
I. ACCOUNT INFORMATION
(THIS SECTION IS TO BE COMPLETED IN ALL CASES.)
A. Name and Address of Participant:
B. Social Security Number:
C. Birth Date:
D. Taxable Year (if other than calendar year):
E. Name of Spouse:
F. Name of Beneficiary or Beneficiaries and addresses if other than spouse:
II. FEES
Until otherwise changed in accordance with the terms of the Custodial
Agreement, the Custodian shall receive fees for its services with respect to
each Account established hereunder as follows:
A. Acceptance Fee: $5.00, payable upon establishment of the Account.
B. Annual Maintenance Fee: $8.00 per year for each year until
withdrawals from the Account are begun by the Participant or his
Beneficiary.
C. Termination Fee: $8.00, payable on the termination and closure of the
Account by the Participant or his Beneficiary.
D. Periodic Cash Distribution: $1.75 for each payment.
E. Reinvestment of Cash Distributions (dividend and capital gains
payments from the share of Bridges Investment Fund, Inc.): $1.05 for
each reinvestment.
Extraordinary services resulting from unusual administrative
responsibilities not contemplated by the above schedule will be subject to such
additional charges as will reasonably compensate the Custodian for the services
involved.
The foregoing charges will be deducted by the Custodian from the
Participant's contributions, dividends, or capital gain distributions, periodic
cash distributions, and termination remittances before investments or separation
payments are made.
III. PROSPECTUS
Participant represents that he has received copies of the current
Prospectus of Bridges Investment Fund, Inc.
IV. PARTICIPANT'S RIGHT TO REVOKE
Notwithstanding any provision hereof, or any provision of the
Custodial Agreement, the Participant shall have the right to revoke this
Application Form and the Custodial Account at any time within seven (7) days
after the date of execution of this Application Form.
V. INSTRUCTIONS TO PARTICIPANT
Participant shall mail both copies of the Application Form, and
executed Contribution Form and the initial contribution to U.S. Bank National
Association, 1700 Farnam Street, Omaha, Nebraska 68102.
Date: .
_________________________
Signature of Participant
ACCEPTED for U.S. Bank National Association,
Omaha, Nebraska
By:
----------------------------
BRIDGES INVESTMENT FUND, INC.{PRIVATE }
SIMPLE INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
This Custodial Agreement is made and entered into as of the 1st day of
January, 1998, by and between BRIDGES INVESTMENT FUND, INC. (hereinafter
referred to as the "Sponsor") and U.S. BANK NATIONAL ASSOCIATION (hereinafter
referred to as the "Custodian"),
WITNESSETH:
ARTICLE I.
Participant's Account
A. Upon completion and execution of the Application Form by an
individual (hereinafter the "Participant") and upon acceptance thereof by the
Custodian, the Custodian shall establish and maintain a SIMPLE Individual
Retirement Custodial Account (hereinafter the "Account"), in the name of the
Participant, pursuant to the terms and conditions of this Agreement. The
Account established for the Participant shall be a SIMPLE IRA as described in
Section 408(p) of the Internal Revenue Code. The contributions to the SIMPLE
IRA on behalf of the Participant and any accumulations and earnings thereon
shall be credited to the Account. The Account shall be established and
maintained for the exclusive benefit of the Participant and his Beneficiary or
Beneficiaries.
B. The amount of each contribution on behalf of the Participant
shall be applied to the purchase of shares of Bridges Investment Fund, Inc.
(hereinafter referred to as "Investment Company Shares"). Such purchases shall
be made on the first business day following the day said contribution is
received; provided, however, if the contribution received is less than $500
then, in such event, the purchase of Investment Company Shares shall be made not
later than the next following 5th, 15th or 25th day of the month after receipt
of the contribution.
All cash dividends and capital gain distributions received in respect
of Investment Company Shares held in the Participant's Account shall be
reinvested in shares of the Investment Company from which they were received and
such shares shall be credited to such Account. Such reinvestment shall be made
on the last bank business day of the month in which the distribution is received
by the Custodian and on which such shares are offered for sale. The amount of
each such distribution, unless received in additional shares of such Company,
and the amount of each contribution credited to such Account shall be applied to
the purchase of as many full Investment Company Shares as can be purchased with
the amount of such contribution or distribution plus any uninvested, unexpended
balance of any prior such amount credited to such Account, and the Custodian, in
its discretion may, but need not, purchase fractional shares of such Company.
Any uninvested, unexpended balance of such contribution or distribution shall
remain credited to such Account. If any distribution may be received at the
election of the shareholder in additional Investment Company Shares or in cash
or other property, the Custodian shall elect to receive such distribution in
additional Investment Company Shares. All Investment Company Shares acquired by
the Custodian shall be registered in the name of the Custodian or its nominee,
but ownership thereof shall be deemed vested in the Participant subject to the
terms and provisions of this Agreement.
C. No portion of the amount held in the Account shall be used for
the purchase of a life insurance contract. The assets of the Account shall not
be commingled with other property except in a common trust fund or common
investment fund as defined in Section 408 of the Internal Revenue Code
(hereinafter the "Code") and appurtenant regulations.
D. The value of the Participant's interest in his Account shall be
one hundred percent (100%) vested in such Participant at all times but the
Participant shall not have any right to pledge any part of his Account as
security for a loan or to assign, transfer, encumber, or anticipate his interest
in his Account, or any payments to be made thereunder, and no benefit, right or
interest of any Participant shall be in any way subject to any legal process of
execution, garnishment or attachment.
ARTICLE II
Contributions
A. This SIMPLE IRA will accept only cash contributions made on
behalf of the Participant pursuant to the terms of a SIMPLE IRA Plan described
in Section 408(p) of the Code. A rollover contribution or a transfer of assets
from another SIMPLE IRA of the Participant will also be accepted. No other
contributions will be accepted.
B. The interest of the Participant in the balance of the Account
shall at all times be nonforfeitable.
ARTICLE III
Distribution
A. The entire interest of the Participant in the Account must be, or
commence to be, distributed no later than the April 1 following the calendar
year in which the Participant attains the age of 70-1/2 years (the "Required
Beginning Date"). For each succeeding year (including the year of the Required
Beginning Date), a distribution must be made on or before December 31. Not
later than the Required Beginning Date the Participant may elect, in a form and
at such time as may be acceptable to the Custodian, to have the balance of his
Account distributed in one or more of the following forms:
(1) A single sum payment; or
(2) Equal or substantially equal monthly, quarterly or annual
payments, over a period certain not longer than the life expectancy of
the Participant; or
(3) Equal or substantially equal monthly, quarterly or annual
payments over a period certain not longer than the life expectancy of
the Participant, or the joint life and last survivor expectancy of the
Participant and his designated Beneficiary.
Payments made in accordance with the preceding options will continue
only so long as amounts remain in the Account. Once the Account is exhausted,
the Custodian will be relieved of any and all liability to make payments to the
Participant or his Beneficiary. Notwithstanding that distributions may have
commenced to a Participant, the Participant may elect to receive the
undistributed portion of the Account in another form provided herein. If the
Participant fails to elect a method of distribution on or before the Required
Beginning Date, distribution to the Participant will be made on the Required
Beginning Date by a single sum payment.
If the Participant elects a mode of distribution under (2) or (3)
above, the minimum payments that must be made each year (commencing with the
Required Beginning Date and each year thereafter) shall not be less than the
amount which results when the entire interest of the Participant in the Account
is divided by the life expectancy of such Participant (or the joint life and
last survivor expectancy of the Participant and his designated Beneficiary);
provided, however, if the Participant's Beneficiary is not the Participant's
spouse, the minimum payments shall be determined by dividing the interest in the
Account by the applicable divisor determined from the table set forth in Q&A-4
or Q&A-5, as applicable, of Section 1.401(a) (9)-2 of the Proposed Income Tax
Regulations. In this case, distributions after the death of the Participant
shall be distributed using the applicable life expectancy as the relevant
divisor without regard to Proposed Income Tax Regulation Section 1.401(a)(9)-2.
Payments for each subsequent year, including the year of the Participant's
Required Beginning Date, shall be made by December 31 of each such year. Life
expectancies and joint and last survivor expectancies shall be computed under
the return multiples set forth in Tables V and VI of Section 1.72-9 of the
Income Tax Regulations. Unless otherwise elected, the life expectancy of a
Participant and his or her spouse shall be recalculated annually. The life
expectancy of a nonspouse Beneficiary shall be calculated using the attained age
of such Beneficiary during the calendar year in which distributions are required
to begin pursuant to this Article III, and payments for any subsequent calendar
year shall be calculated based on such life expectancy reduced by one for each
calendar year which has elapsed since the calendar year life expectancy was
first calculated.
Notwithstanding any provision of this Article III to the contrary, the
distribution of a recipient's interest hereunder shall be made in accordance
with the minimum distribution requirements of Sections 408(a)(6) or 408(b)(3) of
the Code and the Income Tax Regulations thereunder, including the incidental
death benefit provisions of Section 1.401(a)(9)-2 of the Proposed Income Tax
Regulations, all of which are hereby incorporated by reference.
B. Upon the death of the Participant before the entire balance of
his Account has been distributed, the undistributed portion of the Account shall
be distributed to the Beneficiary (if any) designated by the Participant, if
living, or, if not, to the Participant's spouse, if living, or, if not, to the
Participant's estate, as follows:
(1) Except as provided in Article III B (2) and (3), the entire
balance of the Account shall be completely distributed by the December
31 of the year containing the fifth (5th) anniversary of the death of
the Participant, in any manner mutually satisfactory to the recipient
and the Custodian.
(2) If, prior to the death of the Participant, distribution of
the Account had commenced pursuant to Article III A(2) or (3) and, in
either case, distribution of the Account is to continue to a
designated Beneficiary of the Participant, distribution of the Account
shall continue to the Beneficiary in a manner, described in Article
III A(2) or (3), whichever is applicable, which is at least as rapid
as under the manner of distribution elected prior to the Participant's
death. Upon the death of such designated Beneficiary, the remaining
undistributed portion of the Account shall be distributed to the
beneficiary (if any) designated by such Beneficiary, if living, or, if
not, to such Beneficiary's estate, in any manner mutually satisfactory
to the recipient and the Custodian.
(3) If the Participant should die before distribution of the
Account had commenced, and if the Participant is survived by a
Beneficiary designated by the Participant, the Account shall, no later
than the December 31 of the calendar year following the year of the
Participant's death, commence to be distributed to the designated
Beneficiary in equal monthly, quarterly or annual payments over a
period certain not longer than the life expectancy of such
Beneficiary; provided, however, if the designated Beneficiary is the
Participant's surviving spouse, such spouse may elect within five (5)
years after the Participant's death for the Account to commence to be
distributed on any date prior to the later of (a) December 31 of the
calendar year following the year of the Participant's death or (b)
December 31 of the year in which the deceased Participant would have
attained age 70-1/2, had he lived, over a period not to exceed such
spouse's life expectancy.
In all cases under this Section B of Article III, the Beneficiary
may elect at any time to accelerate or increase the payments otherwise
provided for hereunder unless the Participant, on a form prescribed by
the Custodian, has elected a specific payment term or a method which
will apply to the Beneficiary, including a surviving spouse.
All elections under this Article III B(3) must be made by the
December 31 of the year following the calendar year of the
Participant's death. In the event a timely election is not made,
distribution of the Account shall be made pursuant to Article III
B(1).
Life expectancies for purposes of this Section B of Article III
shall be computed under the return multiples set forth in Tables V
and VI of Section 1.72-9 of the Income Tax Regulations at the time the
first payment commences, and payments for any subsequent calendar year
will be based on such life expectancy less the number of whole years
passed since distributions first commenced.
Unless otherwise elected by the Participant prior to the
commencement of distributions or, if applicable, by the surviving
spouse where the Participant dies before distributions have commenced,
life expectancies of a Participant or spouse Beneficiary shall be
recalculated annually for purposes of distributions under Article III.
An election not to recalculate shall be irrevocable and shall apply to
all subsequent years. The life expectancy of a nonspouse Beneficiary
shall not be recalculated.
(4) An individual may satisfy the minimum distribution
requirements under sections 408(a)(6) and 408 (b) (3) of the Code by
receiving a distribution from one individual retirement account that
is equal to the amount required to satisfy the minimum distribution
requirements for two or more individual retirement accounts. For this
purpose, the owner of two or more individual retirement accounts may
use the "alternative method" described in Notice 88-38, 1988-1, C.B.
524, to satisfy the minimum distribution requirements described above.
(5) For all purposes of this Article III, a Participant's
"Beneficiary" shall be the person or persons designated as such in the
Participant's Application Form or such other person or persons who
from time to time may be designated by the Participant on a
beneficiary designation form prescribed by the Sponsor and filed with
the Sponsor before the Participant's death. In the absence of a valid
Beneficiary designation, the Participant's Beneficiary shall be the
Participant's spouse, if living, otherwise the Participant's estate.
(6) For all purposes of this Article III, distributions are
considered to have begun if the distributions are made on account of
the Participant reaching his or her Required Beginning Date. If the
Participant receives distributions prior to the Required Beginning
Date and the Participant dies, distributions will not be considered to
have begun.
C. Subject to Article III D below, the Participant shall have the
right to withdraw all or any part of his Account upon written notice to the
Custodian. If a distribution is made to a Participant before such Participant
attains the age of 59-1/2 years for any reason other than death or Disability of
the Participant, the Participant may be subject to a ten percent (10%) federal
penalty tax on the amount of the premature distribution in addition to the
ordinary federal and state income taxes for the distribution. "Disability"
means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or to be of long-continued and indefinite duration. If the
Participant uses all or any portion of his Account as security for a loan, or if
all or any portion of the Account is invested in collectibles (within the
meaning of Section 408(m) of the Code) then such portion of his Account shall be
treated as being distributed to the Participant and shall be subject to the tax
and penalty discussed above. A payment that is to be a rollover contribution to
another SIMPLE IRA or the setting aside of all or any portion of the Account to
the spouse of the Participant under a divorce decree or a written instrument
incident to such divorce, shall not be deemed to be a distribution. Except in
the case of Participant's death or Disability (as defined in Section 72(m)(7) of
the Code) or attainment of age 59-1/2, before distributing an amount from the
Account, the Custodian may require from the Participant a declaration of the
Participant's intention as to the disposition of the amount distributed.
D. Prior to the expiration of the 2-year period beginning on the
date the Participant first participated in any SIMPLE IRA Plan maintained by the
Participant's employer, any rollover or transfer by the Participant of funds
from this SIMPLE IRA must be made to another SIMPLE IRA of the Participant. Any
distribution of funds to the Participant during this 2-year period may be
subject to a twenty-five percent (25%) additional tax if the Participant does
not roll over the amount distributed into a SIMPLE IRA. After the expiration of
this 2-year period, the Participant may roll over or transfer funds to any IRA
of the Participant that is qualified under Section 408(a) or (b) of the Code.
ARTICLE IV
Reports and Information
A. The Participant agrees to provide such information to the
Custodian at such time and in such manner as may be necessary for the Custodian
to prepare any reports required pursuant to Section 408 of the Code and the
regulations thereunder, as well as any other information returns as may be
required by the Custodian under federal or state tax laws.
B. The Custodian agrees to submit reports to the Internal Revenue
Service and the Participant at such time and in such manner and containing such
information as is prescribed by the Internal Revenue Service.
C. If contributions made on behalf of the Participant pursuant to a
SIMPLE IRA Plan maintained by the Participant's employer are received directly
by the Custodian from the employer, the Custodian will provide the employer with
the summary description required by Section 408(l)(2) of the Code.
ARTICLE V
Custodian's Responsibility
A. The Custodian shall make payments from the Participant's Account
from time to time in accordance with written instructions, in form acceptable to
the Custodian, received from the Participant. The Custodian shall be fully
protected in acting on written instructions of the Participant and shall not be
liable with respect to such payment. The Participant shall be solely
responsible for determining his eligibility to participate in the Account and
the timeliness and tax consequences of distributions from the Account. The
Custodian shall be entitled to rely absolutely on the representations of the
Participant with respect to all such matters. The Custodian shall only be held
responsible for a failure to use ordinary diligence in safekeeping all funds
deposited hereunder or making payments as required by the Participant.
B. The Custodian shall not engage in any prohibited transactions as
defined in Section 4975 of the Code.
C. The Custodian may, pursuant to such procedures as may be
established from time to time, receive direct transfers of amounts from other
individual retirement accounts of the Participant to the Participant's Account
established hereunder.
ARTICLE VI
Amendments and Termination
A. The Sponsor, with the consent of the Custodian, may amend any or
all provisions of this Custodial Agreement or the Application Form at any time.
Any such amendment may be retroactive and shall be effective as of the date
specified therein. By executing the Application Form, the Participant shall be
deemed to have delegated to the Sponsor the power to make such amendments and to
have consented thereto. The Sponsor shall notify the Participant of any such
amendment within thirty (30) days after the date of adoption of such amendment
or its effective date, whichever is later. No such amendment shall authorize or
permit any part of the Participant's Account to be used for or diverted to
purposes other than for the exclusive benefit of the Participant and his
Beneficiary or Beneficiaries.
B. The Participant or the Custodian shall have the right to
terminate the Account upon 60 days written notice to the other party. In the
event of such termination, the Custodian shall make distribution of the Account
to the Participant or to another SIMPLE IRA or successor Custodian designated by
the Participant. If this SIMPLE IRA is maintained by a designated financial
institution (within the meaning of Section 408(p)(7) of the Code) under the
terms of a SIMPLE IRA Plan of the Participant's employer, the Participant must
be permitted to transfer the Participant's balance without cost or penalty
(within the meaning of Section 408(p)(7) of the Code) to another IRA.
Notwithstanding any other provision hereof, the Participant may revoke
the Account at any time within seven (7) days after the date of execution of the
Application form by mailing or delivering a written notice of revocation to the
Custodian as provided in Section 1 of the Disclosure Statement which is
furnished to the Participant upon the establishment of this Account.
C. The Sponsor and Custodian shall at all times administer the
Account in accordance with the applicable federal tax laws which govern
individual retirement accounts and such Participant and Beneficiary of the
Account shall be deemed to have consented to any such action taken pursuant to
this standard notwithstanding any provision in this Custodial Agreement to the
contrary.
EXECUTED this day of , 1997.
BRIDGES INVESTMENT FUND, INC.,
Sponsor
By:
--------------------------------
President
U.S. BANK NATIONAL ASSOCIATION,
Custodian
By:
----------------------------------
Its:
-----------------------------
DISCLOSURE STATEMENT{PRIVATE }
BRIDGES INVESTMENT FUND, INC.
SIMPLE INDIVIDUAL RETIREMENT ACCOUNT CUSTODIAL AGREEMENT
NOTE: A prospective Participant should read and acknowledge receipt
of this statement prior to executing his or her Application Agreement.
As a prospective Participant under the Bridges Investment Fund,
Inc., SIMPLE Individual Retirement Account Custodial Agreement, you are advised
of the following:
RIGHT TO REVOKE. After executing the Application Agreement, you may
revoke your SIMPLE Individual Retirement Account (the "Account") by mailing or
delivering written notice of such revocation to the Custodian at any time within
seven (7) days after date of execution of the Application Agreement. Such
notice of revocation shall be delivered or addressed to the Custodian, U.S. Bank
National Association, 1700 Farnam Street, Omaha, Nebraska 68102, telephone (402)
348-6000. A notice of revocation shall be deemed mailed on the date of the
postmark (or if sent by certified or registered mail, the date of the
certification or registration) if it is deposited in the mail in the United
States in an envelope or other appropriate wrapper, first class postage prepaid,
properly addressed. If you revoke your Account, you shall be returned your
entire original contribution, sales commissions and administrative expenses
incurred in establishing the Account.
The Internal Revenue Code requires that the Custodial Agreement
contain the following provisions:
ALLOWABLE CONTRIBUTIONS. Except in the case of a "rollover
contribution," no contribution will be accepted unless it is in cash, and
contributions will not be accepted in excess of the amounts described under
Section 408(p)(2) (relating to maximum allowable contributions to SIMPLE IRAs).
If a rollover contribution is involved, the same property received from another
SIMPLE IRA may be contributed to this Account. In general, a "rollover
contribution" is a tax-free transfer of funds from one SIMPLE IRA to this
Account.
You may make a tax-free rollover from your Account to another SIMPLE
IRA if you do so during the two-year period beginning on the date in which you
first participated in any SIMPLE IRA plan maintained by an employer.
Additionally, during such two-year period you may transfer all or a part of your
Account to another SIMPLE IRA in a tax-free trustee-to-trustee transfer.
However, if you transfer any part of this Account to the trustee of a
traditional IRA (not a SIMPLE IRA) within this two-year period, the payment is
neither a tax-free trustee-to-trustee transfer nor a rollover contribution.
Instead, the payment is a distribution from the SIMPLE IRA and a contribution to
the traditional IRA which will not be a rollover contribution. At the end of
this two-year period, you may transfer any part of this Account to a traditional
IRA as a tax-free trustee-to-trustee transfer.
A. CUSTODIAN. The Custodian (or Trustee) of the Account must
be a bank or other organization approved by the Commissioner of Internal
Revenue.
B. NO INVESTMENT IN LIFE INSURANCE CONTRACTS. No portion of
the Account may be invested in life insurance contracts.
C. ACCOUNT NONFORFEITABLE. Your rights to any Participant
contributions made to your Account are nonforfeitable.
D. NO COMMINGLING OF ACCOUNT ASSETS. The assets of the Account
will not be commingled with other property except in a common trust fund or
common investment fund.
E. MINIMUM REQUIRED DISTRIBUTIONS. The entire balance of your
Account must begin to be distributed to you on or prior to April 1 following the
calendar year in which you reach age 70-1/2 (the "Required Beginning Date"). If
distributions are to be made in a form other than a lump sum payment on the
Required Beginning Date, the distributions must be made over a period which is
no longer than your life, or the joint lives of you and your Beneficiary, or a
certain period of years not exceeding your life expectancy, or the joint life
expectancies of you and your Beneficiary. In addition, distributions from the
Account may be subject to a more rapid distribution schedule than indicated
above if the designated beneficiary used as a measuring life is not your spouse.
F. DISTRIBUTION OF ACCOUNT UPON YOUR DEATH. Upon your death,
your Account may be distributed as follows: (1) over the remaining period
selected by you if distributions had commenced prior to your death, but on or
after the Required Beginning Date; (2) if distributions from the Account had not
commenced prior to death, over a period, commencing no later than December 31 of
the year following your death, which does not exceed the Beneficiary's life
expectancy; or (3) in all other cases, including the failure to designate a
Beneficiary or the selection of a nonqualifying trust or estate as Beneficiary,
by December 31 of the fifth year following the year of your death.
3. Information regarding SIMPLE Individual Retirement Accounts:
(a) There are three types of contributions which can be made to
your Account: (i) Salary Reduction Contributions; (ii) Employer Matching
Contributions; and (iii) Nonelective Contributions. These types of
contributions are discussed in more detail below.
(i) SALARY REDUCTION CONTRIBUTIONS. To fund your Account, you
must make a written election to have your employer reduce your compensation by
the amount that you want contributed to your Account. Your salary reduction
contributions must be expressed as a dollar amount or as percentage of your
compensation and may not exceed $6,000 per year.
(ii) EMPLOYER MATCHING CONTRIBUTIONS. Your employer must make a
matching contribution to your Account equal to your salary reduction
contributions up to a maximum of 3% of your compensation for the year. Your
employer may make a matching contribution of less than 3% of your compensation
only if the following conditions are met: (A) The matching contribution limit
is not reduced below 1%; (B) the matching contribution limit is not reduced to
less than 3% of your compensation for more than two calendar years during the
five-year period ending with the calendar year in which the reduction is
effective; and (C) You are notified of the reduced limit within a reasonable
period of time before your sixty-day election period for the calendar year. The
sixty-day election period is discussed in more detail below in Section 3(g)
below.
(iii) NONELECTIVE CONTRIBUTIONS. As an alternative to making
employer matching contributions, your employer may make nonelective
contributions equal to 2% of your compensation each year, taking into account a
maximum compensation limit of $160,000 (as adjusted to reflect any annual cost-
of living increases announced by the Internal Revenue Service). However, if
your employer decides to make nonelective contributions, you must be notified of
this fact within a reasonable period of time before your sixty-day election
period for the calendar year.
(b) VESTING. All contribution to your Account are non-forfeitable.
(c) WITHDRAWALS. Although there may be tax consequences to making
a withdrawal from your Account, your employer may not impose any prohibition on
your ability to make withdrawals. Furthermore, your employer's contributions
made to your Account on your behalf cannot be conditioned on your employer's
retaining any portion of the amount contributed.
(d) PARTICIPATION REQUIREMENTS. Your employer must cover you under
the SIMPLE IRA plan if you received at least $5,000 in compensation from the
employer during any two preceding years, and you are reasonably expected to
receive at least $5,000 in compensation for this year. The employer may
establish lower dollar and service conditions for participation in the documents
establishing the SIMPLE IRA plan.
(e) ADMINISTRATIVE REQUIREMENTS. Depending on the type of
contribution made to your Account on your behalf, your employer has different
time-frames in which to make these contributions. With respect to your salary
reduction contributions, the employer must make these contributions no later
than thirty days following the last day of the month to which the contributions
are to be made. Employer matching contributions or nonelective contributions
made by your employer must be made no later than the time prescribed by law for
filing the return for the taxable year (including extensions thereof).
(f) TERMINATING YOUR PARTICIPATION IN ACCOUNT. You may terminate
your participation in this Account at any time during the year, except that if
you do so, you may not resume participating in the Account until the beginning
of the next year. If you terminate your participation in this Account, then
your employer will also stop making any matching contributions.
(g) TIME OF ELECTION. You may elect to participate and have salary
reduction contributions made to your Account during the sixty-day period before
the beginning of any calendar year. Your participation will begin on the first
day of the calendar year following your election. After you begin
participating, you may change your salary reduction contributions only during
the sixty-day period before the beginning of any calendar year.
(h) TAX TREATMENT OF DISTRIBUTIONS. Except for qualifying rollover
distributions, distributions made to you from the Account will be taxable to you
as ordinary income.
(i) ENGAGING IN PROHIBITED TRANSACTIONS. If you or your
Beneficiary engages in a prohibited transaction described in Section 4975(c) of
the Internal Revenue Code with respect to your Account, the Account will lose
its exemption from tax by reason of Section 408(e)(2)(A) of the Internal Revenue
Code, and you must include in your gross income the fair market value of the
Account.
(j) PLEDGING ACCOUNT AS COLLATERAL. If you pledge your Account
as security for a loan, then, under Section 408(e)(4) of the Internal Revenue
Code, the portion so pledged is treated as distributed to you. This deemed
distribution would subject you to current income taxation for the taxable year
during which your Account is so used.
(k) PREMATURE DISTRIBUTIONS. A penalty tax of 10% is imposed by
Section 72(t) of the Internal Revenue Code on the amount of certain
distributions made before you have attained age 59-1/2 (with the exception of a
distribution that is to be a "rollover contribution," or distributions allowable
under the Internal Revenue Code for higher education expenses, certain medical
expenses, a first home purchase, or a distribution on account of your death or
disability). Non-exempt distributions from your Account within two years of the
date you first participated in any SIMPLE IRA will be subject to a 25% penalty
tax in lieu of the 10% penalty tax discussed above. Amounts constructively
distributed as a result of use of the Account as security for a loan will be
considered an early distribution and be subject to the 10% penalty tax (or 25%
penalty tax, if applicable). These penalty taxes are in addition to regular
federal and state income taxes; distributions from the Account (except a
distribution that is a "rollover contribution") are always taxed as ordinary
income to you or your Beneficiary.
(l) ESTATE TAXES/GIFT TAXES. The balance in your Account at the
time of your death is includable in your gross estate for federal estate tax
purposes. Naming a beneficiary to receive a distribution from the Account upon
death will not, however, be treated as a gift by you subject to gift tax.
(m) EXCESS ACCUMULATIONS. If distributions from the Account are
not made in the minimum amounts required by law by April 1 of the year following
the year in which you reach age 70-1/2, a tax equal to 50% of the difference
between the amount distributed and the minimum amount required to be distributed
under Section 401(a)(9) of the Internal Revenue Code will be imposed. (n)
REQUIREMENT TO FILE FORM 5329. Form 5329 (Return for Additional
Taxes Attributable to Qualified Retirement Plans-Including IRAs-Annuities, and
Modified Endowment Contracts) must accompany your tax return if any penalty
taxes described in this Disclosure Statement are owed.
4. METHOD FOR COMPUTING AND ALLOCATING ANNUAL EARNINGS. Each year,
substantially all of the net income of Bridges Investment Fund, Inc. (earnings
on investments less the expenses of operating the Fund) and net capital gains,
if any, realized from the sale of securities by the Fund, are distributed in the
form of dividends to shareholders. Such dividends are paid on a per share
basis. Your Account will receive dividends from Bridges Investment Fund, Inc.,
based on the number of shares held in your Account as of the date a dividend is
declared. However, since dividends are contingent upon the Fund's having net
income and/or net capital gains, no dividends can be guaranteed or projected for
any year.
A more complete explanation of the management and operation of
Bridges Investment Fund, Inc., is contained in the Prospectus for the Fund. You
will receive quarterly and annual reports so long as any portion of your Account
is invested in shares of Bridges Investment Fund, Inc.
5. IRS APPROVAL. The Bridges Investment Fund, Inc., SIMPLE
Individual Retirement Custodial Agreement has been approved as to form by the
National Office of the Internal Revenue Service in Washington, D.C. on February
2, 1998. However, the approval that has been issued by the Internal Revenue
Service is a determination only as to the form of the Account and does not
represent a determination of the merits of the Account.
7. ADDITIONAL INFORMATION. Further information concerning SIMPLE
Individual Retirement Accounts can be obtained from any district office of the
Internal Revenue Service. Also, additional tax information regarding Individual
Retirement Accounts is available in Revenue Service Publication 590 which can be
obtained from any IRS district office.
NOTICE TO PARTICIPANT
This Disclosure Statement is not intended as a complete or
definitive explanation or interpretation of the law regarding Individual
Retirement Accounts or SIMPLE IRAs. You should consult with your attorney or
other tax adviser regarding the legal and financial consequences of establishing
an Account. You have the sole responsibility for determining your eligibility
to establish an Account and the tax consequences of any contribution to the
Account.
TAX STATUS OF ACCOUNT. Contributions to a SIMPLE IRA are excludable
from federal income tax and not subject to federal income tax withholding. You
salary reduction contributions to your Account are subject to Federal Insurance
Contributions Act and the Federal Unemployment Tax Act taxes.
The undersigned acknowledges receipt of this Disclosure Statement
the day of , .
-------------------------
Signature of Participant
SIMPLE INDIVIDUAL RETIREMENT ACCOUNT{PRIVATE }
NOTICE TO ELIGIBLE EMPLOYEES
OPPORTUNITY TO PARTICIPATE IN SIMPLE PLAN
You are eligible to make salary reduction contributions to the
SIMPLE Plan. This notice and the attached
summary description provide you with information that you should consider before
you decide whether to start, continue, or change your salary reduction
agreement.
EMPLOYER CONTRIBUTION ELECTION
For the calendar year, the employer elects to make one of the
following types of contributions to your SIMPLE IRA:
o A matching contribution equal to your salary reduction contributions
up to a limit of 3% of your compensation for the year;
o A matching contribution equal to your salary reduction contributions
up to a limit of % (employer must insert a number from 1 to 3 and
is subject to certain restrictions) of your compensation for the year;
or
o A non-elective contribution equal to 2% of your compensation for the
year (limited to $160,000, as adjusted to reflect any annual cost-of-
living increases announced by the IRS) if you are an employee who
makes at least $ ($5,000 or less) in compensation for the
year.
ADMINISTRATIVE PROCEDURES
If you decide to start or change your salary reduction agreement, you
must complete the attached Salary Reduction Agreement and return it to
no later than .
- ------------------------------ -----------------
BRIDGES INVESTMENT FUND, INC.{PRIVATE }
SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
SUMMARY DESCRIPTION
The following is a Summary Description of your employer's SIMPLE
Individual Retirement Account (IRA) Plan. This Summary Description is not
intended as a complete or definitive explanation or interpretation of the law
regarding your SIMPLE IRA Plan. You should consult with your attorney or other
tax adviser regarding the legal and financial consequences of participating in
this Plan. You have the sole responsibility for determining your eligibility to
participate in the Plan and the propriety and tax consequences of any
contribution to or distribution from your SIMPLE IRA Account.
EMPLOYER'S NAME AND ADDRESS
The employer's name and address is:
CUSTODIAN'S NAME AND ADDRESS
The custodian's name and address is:
U.S. Bank National Association
1700 Farnam Street
Omaha, Nebraska 68102
SALARY REDUCTION AGREEMENT OVERVIEW
In order to participate in this Plan, you must enter into a salary
reduction agreement with your employer. Under the agreement, you may make a
salary reduction election to have your compensation for each pay period reduced
by a percentage and contributed by your employer to a SIMPLE Individual
Retirement Account established by your employer on your behalf. The total
amount of the reduction in your compensation cannot exceed $6,000 (to be
adjusted to reflect any cost-of-living increases determined by the Internal
Revenue Service) for any calendar year. Your SIMPLE IRA is a retirement savings
vehicle and, therefore, is subject to special tax rules under the Internal
Revenue Code. The most important of these tax rules are summarized below.
For purposes of this Plan, "compensation" means the sum of the wages,
tips, and other compensation from your employer subject to federal income tax
withholding (as described in Section 6051(a)(3) of the Internal Revenue Code)
and your salary reduction contributions made under this Plan, and if applicable,
elective deferrals under a Section 401(k) plan, a SARSEP, or a Section 403(b)
annuity contract and compensation deferred under a Section 457 plan required to
be reported by your employer on a Form W-2 (as described in Section 6058(a)(8)
of the Internal Revenue Code). "Compensation for Self-Employed Individuals"
compensation means the net earnings from self-employment determined under
Section 1402(a) of the Internal Revenue Code prior to subtracting any
contributions made pursuant to this Plan on behalf of the individual.
ELIGIBILITY REQUIREMENTS
All employees who received at least $ (must be $5,000 or
less) in compensation from the employer during any (may not exceed two)
preceding year(s), and who are expected to receive at least $5,000 in
compensation during this year, are eligible to participate in the SIMPLE IRA
Plan.
CONTRIBUTIONS
Three types of contributions may be made to your SIMPLE IRA Account:
(1) Salary reduction contributions; (2) Employer matching contributions; and (3)
Employer non-elective contributions. These contributions are discussed in more
detail below.
SALARY REDUCTION CONTRIBUTIONS: As an eligible employee, you may
elect to have your employer make payments as salary reduction contributions to
your SIMPLE IRA on your behalf. If you elect to have the employer make salary
reduction contributions to your SIMPLE IRA on your behalf, your salary will be
reduced accordingly. Your salary reduction contribution must be expressed as a
percentage of your compensation or as a dollar amount. The total amount of your
salary reduction contribution may not exceed $6,000 (to be adjusted to reflect
any annual cost-of-living adjustments announced by the Internal Revenue Service)
for any calendar year. For example, if you make $30,000 per year, you may elect
to have a maximum of $6,000 per year contributed to your SIMPLE IRA as a salary
reduction contribution. In this example, you would only receive $24,000 in
taxable compensation. Your employer would contribute the remaining $6,000 of
your compensation to the SIMPLE IRA on your behalf. For income tax purposes,
only $24,000 of your salary would be included in your gross income for the year.
The contributed $6,000 will be subject to income taxes when it is withdrawn from
your SIMPLE IRA. However, the entire $30,000 of compensation will be subject to
Federal Insurance Contributions Act and the Federal Unemployment Tax Act taxes.
EMPLOYER'S CONTRIBUTION: If you make an salary reduction contribution
as described above, then your employer must make either a matching contribution,
or a non-elective contribution to your SIMPLE IRA Account.
EMPLOYER'S MATCHING CONTRIBUTION: For each calendar year, your
employer may make a matching contribution to your SIMPLE IRA in an amount equal
to your salary reduction contribution for the year, up to a limit of 3% of your
compensation for the year. Your employer may reduce the 3% limit for the
calendar year only if: (1) the limit is not reduced below 1%; (2) the matching
contribution limit is not reduced to less than 3% for more than two calendar
years during the five-year period ending with the calendar year in which the
reduction is effective; and (3) you are notified of the reduced limit within a
reasonable period of time before your sixty-day election period for the calendar
year. The sixty-day election period is discussed in more detail below. The
following example helps illustrate these concepts.
An employee who earns $30,000 per year elects to have the employer
contribute $6,000 of his salary to the employee's SIMPLE IRA. The
employer then may elect to make a matching contribution of 1% to 3% of
compensation. The employer's matching contribution must accordingly
be between $300 (1% of $30,000 compensation) and $900 (3% of $30,000
compensation). If the employer makes a matching contribution of less
than 3% of your compensation, the employer must notify the employee of
such decision before November 1 of the year in which the reduced
matching contribution will take effect. For example, if the employer
decides to make a matching contribution of less than 3% for 1999, the
employer will notify the eligible employees of this decision within a
reasonable period of time before November 1, 1998.
EMPLOYER'S NON-ELECTIVE CONTRIBUTION: As an alternative to the
elective matching contribution described above, your employer may make a 2% non-
elective contribution equal to 2% of your compensation for the calendar year.
Your employer may make the 2% non-elective contribution only if you are notified
within a reasonable period of time before the sixty-day election period that the
employer is making 2% non-elective contributions rather than matching
contributions. No more than $160,000 of an employee's compensation (to be
adjusted to reflect any cost-of-living increases determined by the Internal
Revenue Service) may be taken into account in determining the amount of the non-
elective contribution.
TIME AND METHOD OF MAKING ELECTIONS
You must make your election to participate in this SIMPLE IRA Plan, or
modify your salary reduction contribution amount, during the 60-day period
before the beginning of any calendar year (or the 60-day period before the first
day you are eligible to participate). If you decide to make a salary reduction
agreement, you must provide written notice to your employer that you are
electing to participate in the agreement, as well as notify your employer of the
dollar amount or percentage of your salary reduction contribution to be made to
your SIMPLE IRA.
TERMINATING THE SALARY REDUCTION AGREEMENT
You may terminate your salary reduction agreement at any time by
providing written notice to your employer. However, if you do terminate the
agreement, you may not elect to resume participation until the beginning of the
next calendar year.
VESTING
All contributions made to your SIMPLE IRA, including your employer's
contributions, are fully vested and non-forfeitable.
NO WITHDRAWAL RESTRICTIONS
You have the right to withdraw all or any part of the monies in your
SIMPLE IRA upon written notice to the Custodian, U.S. Bank National Association.
Contact the Custodian at the above address and ask that a withdrawal form be
sent to you. Your employer may not require you to retain any portion of the
contributions in your SIMPLE IRA.
FEDERAL INCOME TAX
A distribution from your SIMPLE IRA is taxed as ordinary income in the
year you receive the distribution.
EARLY DISTRIBUTION TAX
A 10% tax will be imposed on distributions from your SIMPLE IRA unless
you are age 59 1/2 or older or you can claim an exemption from the early
distribution tax as described in Internal Revenue Code Section 72(t)(6).
Exemptions from this early distribution tax include, but are not limited to,
distributions made as a result of a death, a disability, or made as a part of a
series of substantially equal payments, and certain distributions allowed under
the Internal Revenue Code for higher education expenses, medical expenses and a
first-time home purchase.
This 10% early distribution tax is increased to 25% if you receive a
distribution from your SIMPLE IRA within a two-year period beginning on the date
on which you first participated in any SIMPLE IRA.
The early distribution tax is in addition to regular federal and state
income taxes.
ROLLOVER CONTRIBUTION
A taxable distribution does not include any payment that is a
"rollover contribution." Basically, a "rollover contribution" is a tax-free
transfer of funds from another SIMPLE IRA to this SIMPLE IRA, or from this
SIMPLE IRA to another IRA.
A distribution made from this SIMPLE IRA during a two-year period
beginning on the date on which you first participated in any SIMPLE IRA will be
a tax-free distribution only if the distribution is paid into another SIMPLE
IRA.
After the two-year period described above, a distribution from this
SIMPLE IRA will be a tax-free distribution if the distribution is paid into
another SIMPLE IRA or an IRA that is not a SIMPLE IRA.
Any rollover or transfer must comply with the requirements of Section
408 of the Internal Revenue Code.
USE OF DESIGNATED FINANCIAL INSTITUTION
You may choose the financial institution to which contributions under
this Plan will be made. As an exception to this rule, your employer may require
that all contributions on behalf of all eligible employees under this Plan be
made to SIMPLE IRAs established at a particular financial institution if the
following requirements are met: (1) the employer and the financial institution
agree that the financial institution will be a designated financial institution
under Section 408(p)(7) of the Internal Revenue Code; (2) the financial
institution agrees that, if you so request, your balance will be transferred
without cost or penalty to another SIMPLE IRA (or, after the above-described
two-year period, to any IRA) maintained by a different financial institution
selected by you; and (3) you are given written notification describing the
procedures under which your balance will be transferred without cost or penalty
to the other SIMPLE IRA or regular IRA at the financial institution you
selected.
SIMPLE INDIVIDUAL RETIREMENT ACCOUNT
SALARY REDUCTION AGREEMENT
SALARY REDUCTION AGREEMENT
Subject to the requirements of the SIMPLE Plan of my employer, I
authorize %, or $ (which equals % of my current rate of pay)
to be withheld from my compensation for each payroll period and contributed to
my SIMPLE IRA as a salary reduction contribution.
MAXIMUM SALARY REDUCTION
I understand that the total amount of my salary reduction
contributions in any calendar year cannot exceed $6,000 (as such limit may be
adjusted to reflect any annual cost-of-living increases announced by the IRS).
DATE SALARY REDUCTION BEGINS
I understand that my salary reduction contributions will start as soon
as permitted under the SIMPLE Plan and as soon as administratively feasible or,
if later, (insert date on which salary reduction
contributions are to begin. If inserting a date, the date must be after
employee signs this agreement).
DURATION OF ELECTION
This salary reduction agreement replaces any earlier agreement and
will remain in effect as long as I remain an eligible employee under the SIMPLE
Plan or until I provide my employer with a request to end my salary reduction
contributions or provide a new salary reduction agreement as permitted under
this SIMPLE Plan.
Name of Employee
Signature of Employee
Date
SIMPLE IRA BENEFICIARY DESIGNATION{PRIVATE }
PARTICIPANT:
ACCOUNT NUMBER:
TO: Bridges Investment Fund, Inc., as Sponsor of the above-referenced account
established under the Bridges Investment Fund, Inc. SIMPLE Individual
Retirement Custodial Agreement.
Designation of Beneficiary
The undersigned Participant hereby revokes all previous designations of
beneficiary(ies) and, pursuant to the provisions of the SIMPLE IRA Custodial
Agreement, the above-named Participant hereby directs that, upon his/her death,
the amount credited to the Participant's SIMPLE IRA Account shall be paid to the
person(s) named below as the Participant's PRIMARY BENEFICIARY(IES). (If the
Participant names a trust as Beneficiary, the name and address of the trustee
and the date of the trust's establishment must be indicated.) If such Primary
Beneficiary or Beneficiaries do not survive the Participant, the Account shall
be distributed to the Contingent Beneficiary named below.
If the Custodian receives satisfactory proof that all Beneficiaries named below
are then deceased, distribution shall be made to the Participant's estate.
The undersigned Participant hereby reserves the right to change or revoke this
Beneficiary Designation without notice to any Beneficiary; provided, however,
any such change or revocation shall be effective only upon the execution of a
new Beneficiary Designation form and delivery thereof to the Sponsor of this
SIMPLE IRA.
Pay to the following Primary Beneficiary or Beneficiaries:*
(i)
NAME RELATIONSHIP AGE %
ADDRESS
(ii)
NAME RELATIONSHIP AGE %
ADDRESS
Participant's Primary Beneficiary or Beneficiaries continued:
(iii)
NAME RELATIONSHIP AGE %
ADDRESS
Contingent Beneficiary:
NAME RELATIONSHIP AGE %
ADDRESS
NOTE: If more than one Beneficiary is named above and no percentage is
indicated, all sums payable from the SIMPLE IRA Account shall be paid equally to
all living Beneficiaries. Upon the death of a Beneficiary before the
distribution of all amounts that such Beneficiary is entitled to from the SIMPLE
IRA Account, such undistributed amount shall be distributed to the person or
persons designated in writing by the Beneficiary which is filed with the Sponsor
before the Beneficiary's death or, in the absence of an effective designation,
to the Beneficiary's estate.
DATE:
SIGNATURE OF PARTICIPANT
PRINTED NAME OF PARTICIPANT
REQUEST FOR DISTRIBUTION{PRIVATE }
BRIDGES INVESTMENT FUND, INC.
SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The undersigned Participant under the Bridges Investment Fund, Inc.
SIMPLE Individual Retirement Custodial Agreement hereby requests, that the
balance in his/her account be paid to him/her, commencing on
(must not be later than the April 1 following the calendar
year in which the Participant attains the age of 70-1/2 years) in the form of:
A. A single sum payment in the amount of $
(if entire interest, insert "Balance of Account").
B. Equal [MONTHLY, QUARTERLY, ANNUAL]
payments in the amount of $ per payment. (Payment
pursuant to this option is subject to the minimum payment provisions
of the Custodial Agreement for taxable years beginning with the
taxable year in which the Participant attains age 70-1/2.)
C. Equal or substantially equal AAU[MONTHLY,
QUARTERLY, ANNUAL] payments, for a period of years (cannot
exceed the life expectancy of the Participant of the joint life and
last survivor expectancy of the Participant and Participant's
designated Beneficiary).
*The Participant's life expectancy and the life expectancy of the
Participant's spouse (if the designated Beneficiary) will be
recalculated annually if the payment is based on such life
expectancies unless a written election against such recalculation is
filed with the Custodian.
Participant represents that (check applicable box):
Participant will be at least 59-1/2 years of age on the
date that payments are to commence hereunder;
Participant has suffered a Disability, as defined in
the Custodial Agreement (attach physician's certification of
disability);
The payment is to be a "rollover contribution" as defined
in Section 408(d)(3) of the Internal Revenue Code and appurtenant
regulations;
The payment is to be made for the following purposes:
(please complete)
* Participant is aware that he/she will be subject to a non-deductible
federal penalty tax equal to ten percent (10%) or twenty-five percent
(25%), if applicable, of the entire amount of the payment in addition
to ordinary federal and state income taxes on the payment if the
distribution is made before age 59-1/2 and does not qualify for one of
the exceptions of Section 72(t) of the Internal Revenue Code.
NOTICE TO PARTICIPANT: Prior to submitting this Request for Payment,
you should consult with your attorney or other tax adviser to familiarize
yourself with the tax consequences of a payment from your account. The
Participant has sole responsibility for determining the tax and financial
consequences of any payment from his/her account. Nothing contained in this
form should be construed as an opinion as to the tax consequences of any payment
from the Participant's account.
Date: -------------------------
Signature of Participant
ACCEPTED for U.S. Bank National Association, Omaha, Nebraska
By:
---------------------------------
