Bridges Investment Fund, Inc. 1 APRIL 28, 1998
Prospectus -- Part A
INFORMATION REQUIRED IN A PROSPECTUS
PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK
APRIL 28, 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 $500.00. 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 U.S. BANK NATIONAL ASSOCIATION, 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- April 28, 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
$500.
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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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 1997
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- April 28, 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 April 28, 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- April 28, 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- April 28, 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- April 28, 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 $500 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- April 28, 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 $500. HOWEVER, IF THE INVESTOR ALREADY OWNS SHARES OF THE FUND WITH A
CURRENT MINIMUM NET ASSET VALUE OF AT LEAST $500, 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 April 28, 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 $500
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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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.
2) 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- April 28, 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.
3) AN INDIVIDUAL MAY DEPOSIT UP TO $500 A YEAR INTO AN EDUCATION INDIVIDUAL
RETIREMENT CUSTODIAL ACCOUNT (INTERNAL REVENUE SERVICE FORM 5305-EA)
FOR A CHILD UNDER AGE 18, PROVIDED THE TOTAL CONTRIBUTIONS FOR THE
CHILD DURING THE YEAR DO NOT EXCEED $500. THE CONTRIBUTOR MAY BE A
PARENT, RELATIVE, FRIEND, OR OTHER PERSON, INCLUDING THE CHILD
HIM/HERSELF. tHE ABILITY TO CONTRIBUTE TO AN EDUCATION IRA PHASES
OUT AT MODIFIED ADJUSTED GROSS INCOME LEVELS BETWEEN $95,000 AND
$110,000 FOR UNMARRIED INDIVIDUALS AND BETWEEN $150,000 AND $160,000
FOR JOINT RETURN FILERS. DISTRIBUTIONS FROM AN EDUCATION IRA ARE
TAX-FREE UP TO THE AMOUNT OF QUALIFIED HIGHER EDUCATION EXPENSES FOR
A YEAR. QUALIFIED HIGHER EDUCATION EXPENSES INCLUDE TUITION, FEES,
BOOKS, SUPPLIES, AND, IF THE BENEFICIARY IS AT LEAST A HALF-TIME
STUDENT, ROOM AND BOARD.
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, AND
FORM 5305-EA FOR THE EDUCATION 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 $500 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.
Bridges Investment Fund, Inc. -24- Aprkl 28, 1998
Prospectus -- Part A
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.
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
Bridges Investment Fund, Inc. -25- April 28, 1998
Prospectus -- Part A
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.
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
Bridges Investment Fund, Inc. -26- April 28, 1998
Prospectus -- Part A
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 April 28, 1998
Statement -- Part B
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK
April 28, 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 APRIL 28,
1998.
. OTHER INFORMATION, PART C, OF THE FILING DATED APRIL 28, 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 APRIL 28, 1998.
Bridges Investment Fund, Inc. -2- April 28, 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
23 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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.
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- April 28, 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- April 28, 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- April 28, 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, 116,060 SHARES OF THE FUND'S STOCK. THE MEMBERS
OF THE IMMEDIATE FAMILIES OF OFFICERS AND DIRECTORS OWNED AN ADDITIONAL
99,586 SHARES FOR A TOTAL BENEFICIAL OWNERSHIP OF THESE PERSONS OF
215,646 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- April 28, 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- April 28, 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- April 28, 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 April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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 April 28, 1998
Other Information -- Part C
PART C
OTHER INFORMATION
OTHER INFORMATION Bridges Investment Fund, Inc.
CAPITAL STOCK
April 28, 1998 8401 West Dodge Road
Omaha, Nebraska 68114
402-397-4700
Contents Page No.
Item 24. Financial Statements and Exhibits...............................2-8
Item 25. Persons Controlled by or Under Common Control....................8
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. -2- April 28, 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 April 28,
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 April 28, 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- April 28, 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- April 28, 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- April 28, 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- April 28, 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.
o) Roth Individual Retirement Custodial Account (IRS Form
5305-RA) with standardized text Attachment for Article IX.
p) Education Individual Retirement Custodial Account (IRS Form
5305-EA) with standardized text Attachment for Article XI.
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.
Bridges Investment Fund, Inc. -7- April 28, 1998
Other Information -- Part C
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.
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.
Bridges Investment Fund, Inc. -8- April 28, 1998
Other Information -- Part C
27.Exhibit 24C, Stock Subscription and Order Form (Revision 04-28-98)
to be used by investors on the effective date of the filing of
this Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant
Not applicable
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
Bridges Investment Advisers
8401 West Dodge Road
Omaha, Nebraska 68114
N. P. Dodge Company Director
Real Estate Brokers and Management
8701 West Dodge Road
Omaha, Nebraska 68114
Bridges Investment Fund, Inc. -9- April 28, 1998
Other Information -- Part C
JAT Corporation Director
8401 West Dodge Road
Omaha, Nebraska 68114
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, Bridges Investment Advisers, 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
Bridges Investment Advisers.
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- April 28, 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- April 28, 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, Chairman
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 President 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- April 28, 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
STOCK SUBSCRIPTION AND PLAN ORDER FORM
Bridges Investment Fund, Inc.
_________________________________________
256 Durham Plaza (Date form in executed)
8401 West Dodge Road
Omaha, Nebraska 68114
__________________________Time________:_______
(Date form is received by Fund)
Gentlemen:
The undersigned acknowledges receipt of a copy of your current
Prospectus and hereby purchases shares of capital stock of Bridges
Investment Fund, Inc., according to the instructions indicated below.
Checks submitted with this form should be drawn payable to Bridges
Investment Fund, Inc.
===========================================================================
===================
(Mark X in appropriate boxes and fill in blanks to indicate your
choices)
I. Unscheduled Investments Plan
($500 Minimum Investment)
A. o Purchase full and fractional shares with enclosed
payment of $________________.
B. o Purchase exactly ________ shares with enclosed
payment of $_____________. Cash in excess of purchase cost
will be refunded. If amount submitted is less than purchase
cost, I shall send check for net amount due to Bridges
Investment Fund, Inc. in an envelope supplied by the Fund,
immediately upon receipt of the Fund's invoice.
C. o Send dividends and capital gains distributions to
address shown in Part IV.
II. Reinvestment of Cash Distributions
D. o In conjunction with the purchase shown in Part I,
Box A or Box B, please reinvest:
(a) o dividends only; (b) o capital gains only;
(c) o dividends, and capital gains.
E. o The undersigned acknowledges that he has examined
the terms of this Reinvestment of Cash Distributions Plan as
set forth on the reverse side of this form and hereby
authorizes the deduction of $1.05 from each reinvested
payment.
III. Scheduled Investment Plan
($500 Minimum Investment)
F. o Purchase full and fractional shares with enclosed
payment of $ _______________.
G. o The undersigned intends to invest under the Plan
$__________ (not less than $200) every (a) o month; (b) o
two months; (c) o quarter, beginning on the o 5th; o 15th;
o 25th of ______________________, ______.
H. o The undersigned hereby empowers the Transfer Agent
to deduct a $1.05 service charge from each scheduled
investment payment under $500.
IV. Registration of Shares
In Name(s) of: Social Security
No. __________________________
(Street Address) (City) (State)
(Zip Code)
V. Signatures
The purchase price of these shares of Bridges Investment Fund, Inc.
capital stock will be an amount equal to the Net Asset Value thereof in
effect at the time this subscription is received by the Fund, as more fully
set forth in the Prospectus.
The undersigned agrees that this Order Form shall become effective
only upon acceptance by the Fund in Nebraska. The passing of title to and
delivery of the shares shall be deemed to take place in Nebraska, and the
purchase and sale thereof shall be governed solely by the laws of Nebraska.
The terms of the Prospectus are incorporated herein by reference.
ACCEPTED:
Officers of Bridges Investment Fund, Inc. Signature(s) of Subscriber
The Fund cannot accept applications in the name of a minor, but it can
accept Custodian Accounts registered under the Uniform Gifts to Minors Act.
Terms of Reinvestment of Cash Distributions Plan
1. An unscheduled investor in Bridges Investment Fund, Inc. may have all
dividends and capital gains distributions automatically reinvested in
additional shares of the Fund by executing Part II of this Form.
2. All cash distributions will be reinvested in full and fractional
shares (carried to three decimal places) on each dividend payment date at
the Net Asset Value in effect on that day. Shares so purchased will be
credited to the participant's Plan Account, the records of which are
maintained by Bridges Investor Services, Inc. Advices will be forwarded to
the participant showing the balance of shares in the Plan Account before a
given purchase, the dollar amount of dividend reinvested, the Not Asset
Value in effect for the purchase, the number of shares purchased, and the
balance of shares in the Plan Account following the purchase.
3. Shares credited to a Plan Account will entitle the participant to the
full rights of a shareholder in regard to dividends, redemption privileges,
and voting, except that fractional shares carry no voting rights. Although
no certificates will be issued automatically for shares purchased under the
Reinvestment of Cash Distributions Plan, a participant may require the Fund
to issue to him a certificate for all or part of the full shares credited
to his Plan Account.
4. Upon authorization from the participant, signed by both tenants in the
case of joint tenancy, any or all of the shares held in a Plan Account will
be redeemed at the Net Asset Value in effect at the time of the receipt of
the authorization as provided in the Prospectus.
5. A shareholder starting a Reinvestment of Cash Distribution Plan may
forward certificates for shares already owned to the Fund, and thereafter
the Bank will hold such shares in his Plan Account and include them in the
share balance of the Advice slips.
6. The Fund reserves the right to modify or terminate the Plan on thirty
days' notice to participants.
7. Bridges Investor Services, Inc., as Transfer Agent, will deduct a
service charge of $1.05 from each distribution before the cash is submitted
to purchase capital stock in the Fund.
Terms of Scheduled Investments Plan
1. An investor should complete Part III of this Plan Order Form and send
his initial payment directly to the Fund at 256 Durham Plaza, 8401 West
Dodge Road, Omaha, Nebraska 68114. Subsequent payments should be directed
to Bridges Investment Fund, Inc. Each payment is invested at the Net Asset
Value on the date the check is received by the Fund or on the following
business day, if such payment is received after 3:00 p.m. or on the
weekend.
2. To open a Plan Account, the qualification payment must be at least
$500 in cash and/or shares (based on the current Net Asset Value). Each
subsequent payment must be at least $200, and total subsequent payments
during the twelve-month period after the qualification investment and in
each twelve-month period thereafter must be at least $800. If the investor
does not invest this minimum amount, he will be reclassified as an
unscheduled investor. Participants may vary the amount and interval of
payments subject to the above minimums.
3. The Fund will apply the entire amount of each payment received to the
purchase of full and fractional shares (carried to three decimal places).
Shares so purchased will be credited to the participant's Plan Account, the
records of which are maintained by Bridges Investor Services, Inc. Advices
showing the balance of shares held in the Plan Account before a given
purchase, the dollar amount invested, the Net Asset Value in effect for the
purchase, the number of shares purchased, and the balance of shares held in
the Plan Account following the purchase will be forwarded to the
participant.
4. All cash distributions on all shares owned by the participant will be
used to purchase additional full and fractional shares at the Net Asset
Value in effect on the payment date. Shares so purchased will be credited
to the participant's Plan Account and confirmed to him in the same manner
as other shares purchased under the Scheduled Investments Plan.
5. Shares credited to a Plan Account entitle the participant to the full
rights of a shareholder in regard to dividends, redemption privileges, and
voting, except that fractional shares carry no voting rights. A
certificate for the full shares in the Account will be issued upon request.
6. Upon request from the participant (signed by both tenants in the case
of joint tenancy), any or all of the shares held in a Plan Account will be
redeemed at the Net Asset Value in effect at the time of the receipt of
written notification as provided in the Prospectus. In the case of partial
redemptions, shares will be redeemed on a first in-first out basis unless
otherwise requested by the shareholder.
7. A shareholder starting a Scheduled Investments Plan may forward to the
Fund certificates for shares already owned, and thereafter, Bridges
Investor Services, Inc. will hold such shares in his Plan Account and
include them in the share balances on the Advice slips.
8. The Fund reserves the right to modify or terminate the Plan on thirty
days' notice to participants.
9. Bridges Investor Services, Inc. will deduct a $1.05 per distribution
service charge for the reinvestment of dividends and capital gains.
Bridges Investor Services, Inc. acting as Transfer Agent, is authorized to
deduct a service charge of $1.05 from each payment under $500 to cover the
cost of handling the Scheduled Investments Plan.
Special Requirement for Redemption or Transfer of Shares
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 a national bank or member firm of a national stock exchange.
The transfer of shares to another beneficial owner will also require a
signature guarantee, as outlined in the previous sentence.
Form 5305-RA Roth Individual Retirement Custodial Account
(January 1998) (Under section 408A of the Internal Revenue DO NOT File
Department of Code) With the Inte
the Treasury rnal
Internal Revenue Servi
Revenue Service ce
Name of depositor Date of birth of Social security number
depositor
Address of depositor Check if Roth Conversion IRA "
Check if Amendment "
Name of custodian Address or principal
place of business of
U.S. Bank National custodian
Association 1700 Farnam Street
Omaha, NE 68102
The depositor whose name appears above is establishing a Roth individual
retirement account (Roth IRA) under section 408A to provide for his or her
retirement and for the support of his or her beneficiaries after death.
The custodian named above has given the depositor the disclosure statement
required under Regulations section 1.408-6.
The depositor assigned the custodial account $
The depositor and the custodian make the following agreement:
Article I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
custodian will accept only cash contributions and only up to a maximum amount
of $2,000 for any tax year of the depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made
during the same tax year will be accepted.
Article II
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single depositor, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married depositor who files jointly, between AGI of $150,000 and
$160,000; and for a married depositor who files separately, between $0 and
$10,000. In the case of a conversion, the custodian will not accept IRA
Conversion Contributions in a tax year if the depositor's AGI for that tax year
exceeds $100,000 or if the depositor is married and files a separate return.
Adjusted gross income is defined in section 408A(c)(3) and does not include IRA
Conversion Contributions.
Article III
The depositor's interest in the balance in the custodial account is
nonforfeitable.
Article IV
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold, silver, and platinum
coins, coins issued under the laws of any state, and certain bullion.
Article V
1. If the depositor dies before his or her entire interest is distributed
to him or her and the depositor's surviving spouse is not the sole beneficiary,
the entire remaining interest will, at the election of the depositor or, if the
depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the depositor's death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of the
depositor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2.In the case of distribution method 1 (b) above, to determine the minimum
annual payment for each year, divide the depositor's entire interest in the
custodial account as of the close of business on December 31 of the preceding
year by the life expectancy of the designated beneficiary using the attained
age of the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3.If the depositor's spouse is the sole beneficiary on the depositor's
date of death, such spouse will then be treated as the depositor.
Article VI
1. The depositor agrees to provide the custodian with information
necessary for the custodian to prepare any reports required under sections
408(i) and 408A(d)(3)(E), Regulations sections 1.408-5 and 1.408-6, and under
guidance published by the Internal Revenue Service.
2. The custodian agrees to submit reports to the Internal Revenue Service
and the depositor prescribed by the Internal Revenue Service.
ISA
STF FED9036F.1 Form 5305-RA (1-98)
Form 5305-RA (1-98) Page 2
Article VII
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
Article VIII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance.
Other amendments may be made with the consent of the persons whose signatures
appear below.
Note: The following space (Article IX) may be used for any other provisions
you want to add. ff you do not want to add any other provisions, draw a
line through this space. If you do add provisions, they must comply with
applicable requirements of state law and the Internal Revenue Code.
Article IX
SEE ATTACHED
Depositor's signature
________________________________________________________________
Date_____________________________________
Custodian's signature
_______________________________________________________________
Date_____________________________________
Witness' signature
__________________________________________________________________
Date_____________________________________
(Use only if signature of the depositor or the custodian is required to be wit
nessed.)
General Instructions Contributions, amounts Specific Instructions
rolled over or
Section references are transferred from another Article I. The depositor
to the Internal Revenue Roth IRA, and annual may be subject to a 6
Code unless otherwise cash contributions of up percent tax on excess
noted. to $2,000 from the contributions if (1)
depositor; or (2) if contributions to other
Purpose of Form designated as a Roth individual retirement
Conversion IRA (by arrangements of the
Form 5305-RA is a model checking the box on page depositor have been made
custodial account 1), only IRA Conversion for the same tax year,
agreement that meets the Contributions for the (2) the depositor's
requirements of section same tax year. adjusted gross income
408A and has been exceeds the applicable
automatically approved To simplify the limits in Article II for
by the IRS. A Roth identification of funds the tax year, or (3) the
individual retirement distributed from Roth depositor's and spouse's
account (Roth IRA) is IRAs, depositors are compensation does not
established after the encouraged to maintain exceed the amount
form is fully executed IRA Conversion contributed for them for
by both the individual Contributions for each the tax year. The
(depositor) and the tax year in a separate depositor should see the
custodian. This account Roth IRA. disclosure statement or
must be created in the Pub. 590 for more
United States for the Definitions information.
exclusive benefit of the
depositor or his or her Roth Conversion IRA. A Article IX. Article IX
beneficiaries. Roth Conversion IRA is a and any that follow it
Roth IRA that accepts may incorporate
Do not file Form only IRA Conversion additional provisions
5305-RA with the IRS. Contributions made that are agreed to by
Instead, keep it for during the same tax the depositor and
your records. year. custodian to complete
the agreement. They may
Unlike IRA Conversion include, for example,
contributions to Contributions. IRA definitions, investment
traditional individual Conversion Contributions powers, voting rights,
retirement arrangements, are amounts rolled over, exculpatory provisions,
contributions to a Roth transferred, or amendment and
IRA are not deductible considered transferred termination, removal of
from the depositor's from a nonRoth IRA to a the custodian,
gross income; and Roth IRA. A nonRoth IRA custodian's fees, state
distributions after 5 is an individual law requirements,
years that are made when retirement account or beginning date of
the depositor is 59(1/2) annuity described in distributions, accepting
years of age or older or section 408(a) or only cash, treatment of
on account of death, 408(b), other than a excess contributions,
disability, or the Roth IRA. prohibited transactions
purchase of a home by a with the depositor, etc.
first-time homebuyer Custodian. The Use additional pages if
(limited to $10,000), custodian must be a bank necessary and attach
are not includible in or savings and loan them to this form.
gross income. For more association, as defined
information on Roth in section 408(n), or Note: Form 5305-RA
IRAs, including the any person who has the may be reproduced and
required disclosure the approval of the IRS to reduced in size for
depositor can get from act as custodian. adaption to passbook
the custodian, see Pub. purposes.
590, Individual Depositor. The
Retirement Arrangements depositor is the person
(IRAs). who establishes the
custodial account.
This Roth IRA can
be used by a depositor
to hold: (1) IRA
Conversion
STF FED9036F.2
ARTICLE IX
Form 5305-RA Roth Individual Retirement Custodial Account
1. Upon completion and execution of the Form 5305-RA
by the Depositor, and upon acceptance thereof by U.S. Bank
National Association (hereinafter the "Custodian"), the Custodian
shall establish and maintain a Roth Individual Retirement
Custodial Account (hereinafter the "Account"), in the name of the
Depositor. The Account established for the Depositor shall be a
Roth IRA as described in Section 408A of the Internal Revenue
Code. The contributions to the Roth IRA on behalf of the
Depositor and any accumulations and earnings thereon shall be
credited to the Account.
2. The amount of each contribution on behalf of the
Depositor 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 busi
ness 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.
3. All cash dividends and capital gain distributions
received in respect of Investment Company Shares held in the
Depositor'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 from Bridges
Investment Fund, Inc., 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 Depositor subject
to the terms and provisions of this Article IX.
4. The Custodian shall make payments from the
Depositor's Account from time to time in accordance with written
instructions, in form acceptable to the Custodian, received from
the Depositor. The Custodian shall be fully protected in acting
on written instructions of the Depositor and shall not be liable
with respect to such payment. The Depositor shall be solely
responsible for determining his or her 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 Depositor 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 Depositor.
5. Subject to applicable federal and state penalty
taxes for early distribution, the Depositor shall always have the
right to withdraw all or any part of his Account upon written
notice to the Custodian.
6. Payments made in accordance with this Agreement
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 Depositor or his or
her Beneficiary.
7. If distributions from the Account had commenced to
the designated Beneficiary of the Depositor, upon the death of
such designated Beneficiary, the remaining undistributed portion
of the Account shall be distributed to the surviving beneficiary
(if any) designated by such Beneficiary or, if not, to the
Beneficiary's spouse, if living, or, if not, to such
Beneficiary's estate, in any manner mutually satisfactory to the
recipient and the Custodian.
8. The Custodian shall not engage in any prohibited
transactions as defined in Section 4975 of the Internal Revenue
Code.
9. The Depositor 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 Depositor or to
another qualified plan or successor Custodian designated by the
Depositor.
Form 5305-EA Education Individual Retirement Custodial Ac
count
(January 1998) DO NOT File
Department of (Under section 530 of the Internal Revenue C With the Inte
the Treasury ode) rnal
Internal Revenue Servi
Revenue Service ce
Name of depositor Depositor's
identification number
Check if Amendment "
Name of designated beneficiary Designated beneficiary's
identification number
Address of designated beneficiary Date of birth of designated
beneficiary
Name of responsible individual
(generally the parent or guardian of
the designated beneficiary)
Address of responsible individual
Name of Custodian Address or principal place of
U. S. Bank National Association business of custodian
1700 Farnam Street, Omaha, Nebraska
68102
The depositor whose name appears above is establishing an education
individual retirement custodial account under section 530 for the benefit of
the designated beneficiary whose name appears above exclusively to pay for the
qualified higher education expenses, within the meaning of section 530(b)(2),
of such designated beneficiary.
The custodian named above has provided the depositor with a concise
statement disclosing the provisions governing section 530. This disclosure
statement must include an explanation of the statutory requirements applicable
to, and the income tax consequences of establishing and maintaining an account
under section 530. Providing the depositor with a copy of Notice 97-60, 1997-
46 I.R.B. 8 (November 17, 1997) is considered a sufficient disclosure
statement. The custodian also will provide a copy of this form and the
disclosure statement to the responsible individual, as defined in Article VI
below, if the responsible individual is not the same person as the depositor.
The depositor assigned the custodial account
_________________________________________________________ dollars
($__________________________) in cash.
The depositor and the custodian make the following agreement:
_______________________________________________________________________________
___________________________________________________________________
Article I
The custodian may accept additional cash contributions. These
contributions may be from the depositor, or from any other individual, for the
benefit of the designated beneficiary, provided the designated beneficiary has
not attained the age of 18 as of the date such contributions are made. Total
contributions that are not rollover contributions described in section
530(d)(5) are limited to a maximum amount of $500 for the taxable year.
Article II
The maximum aggregate contribution that an individual may make to the
custodial account in any year may not exceed the $500 in total contributions
that the custodial account can receive. In addition, the maximum aggregate
contribution that an individual may make to the custodial account in any year
is phased out for unmarried individuals who have modified adjusted gross income
(AGI) between $95,000 and $110,000 for the year of the contribution and for
married individuals who file joint returns with modified AGI between $150,000
and $160,000 for the year of the contribution. Unmarried individuals with
modified AGI above $110,000 for the year and married individuals who file joint
returns and have modified AGI above $160,000 for the year may not make a
contribution for that year. Modified AGI is defined in section 530(c)(2).
Article III
No part of the custodial account funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common investment fund (within the meaning of section
530(b)(1)(D)).
Article IV
1. Any balance to the credit of the designated beneficiary on the date on
which such designated beneficiary attains age 30 shall be distributed to the
designated beneficiary within 30 days of such date.
2. Any balance to the credit of the designated beneficiary shall be
distributed to the estate of the designated beneficiary within 30 days of the
date of such designated beneficiary's death.
Article V
The depositor shall have the power to direct the custodian regarding the
investment of the above-listed amount assigned to the custodial account
(including earnings thereon) in the investment choices offered by the
custodian. The responsible individual, however, shall have the power to
redirect the custodian regarding the investment of such amounts, as well as the
power to direct the custodian regarding the investment of all additional
contributions (including earnings thereon) to the custodial account. In the
event that the responsible individual does not direct the custodian regarding
the investment of additional contributions (including earnings thereon), the
initial investment direction of the depositor also will govern all additional
contributions made to the custodial account until such time as the responsible
individual otherwise directs the custodian. Unless otherwise provided in this
agreement, the responsible individual also shall have the power to direct the
custodian regarding the administration, management, and distribution of the
account.
Article VI
The "responsible individual" named by the depositor shall be a parent or
guardian of the designated beneficiary. The custodial account shall have only
one responsible individual at any time. If the responsible individual becomes
incapacitated or dies while the designated beneficiary is a minor under state
law, the successor responsible individual shall be the person named to succeed
in that capacity by the preceding responsible individual in a witnessed writing
or, if no successor is so named, the successor responsible individual shall be
the designated beneficiary's other parent or successor guardian. Unless
otherwise directed by checking the option below, at the time that the
designated beneficiary attains the age of majority under state law, the
designated beneficiary becomes the responsible individual.
_____ Option (This provision is effective only if checked): The
responsible individual shall continue to serve as the responsible individual
for the custodial account after the designated beneficiary attains the age of
majority under state law and until such time as all assets have been
distributed from the custodial account and the custodial account terminates.
If the responsible individual becomes incapacitated or dies after the
designated beneficiary reaches the age of majority under state law, the
responsible individual shall be the designated beneficiary.
ISA
STF FED 9038F.1 Form 5305-EA (1-98)
Form 5305-EA (1-98) Page 2
Article VII
The responsible individual _____ may or _____ may not change the
beneficiary designated under this agreement to another member of the designated
beneficiary's family described in section 529(e)(2) in accordance with the
custodian's procedures.
Article VIII
1. The depositor agrees to provide the custodian with the information
necessary for the custodian to prepare any reports required under section
530(h).
2. The custodian agrees to submit reports to the Internal Revenue Service
and the responsible individual as prescribed by the Internal Revenue Service.
Article IX
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV will be controlling. Any additional
articles that are not consistent with section 530 and related regulations will
be invalid.
Article X
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the depositor and the custodian whose signatures appear
below.
_______________________________________________________________________________
_____________________________________________________________________
Note: The following space (Article XI) may be used for any other provisions
you want to add. If you do not want to add any other provisions, draw a line
through this space. If you do add provisions, they must comply with applicable
requirements of state law and the Internal Revenue Code.
_______________________________________________________________________________
_____________________________________________________________________
SEE ATTACHED
_______________________________________________________________________________
Depositor's signature
_______________________________________________________________________________
Date_______________________________________
Custodian's signature
_______________________________________________________________________________
Date_______________________________________
Witness' signature
_______________________________________________________________________________
Date_______________________________________
(Use only if signature of the depositor or the custodian is required to be wit
nessed.)
_______________________________________________________________________________
_____________________________________________________________________
General Instructions section 408(n), or any only for an Ed IRA for
person who has the which a return is filed
Section references are approval of the IRS to to report unrelated
to the Internal Revenue act as custodian. Any business income. An EIN
Code unless otherwise person who may serve as is required for a common
noted. a custodian of a fund created for Ed
traditional IRA may IRAs.
Purpose of Form serve as the custodian
of an Ed IRA. Specific Instructions
Form 5305-EA is a model
custodial account Depositor. The Article XI. Article XI
agreement that meets the depositor is the person and any that follow may
requirements of section who incorporate additional
530(a) and has been establishes the provisions that are
automatically approved custodial account. agreed to by the
by the IRS. An depositor and custodian
education individual Designated beneficiary. to complete the
retirement account (Ed The designated agreement. They may
IRA) is established beneficiary is the include, for example,
after the form is fully person on whose behalf provisions relating to:
executed by both the the custodial account definitions, investment
depositor and the has been established. powers, voting rights,
custodian. This account exculpatory provisions,
must be created in the Responsible individual. amendment and
United States for the The responsible termination, removal of
exclusive purpose of individual, generally, the custodian,
paying the qualified is a parent or guardian custodian's fees, state
higher education of the designated law requirements,
expenses of the beneficiary. However, treatment of excess
designated beneficiary. under certain contributions, and
circumstances, the prohibited transactions
Do not file Form 5305- responsible individual with the depositor,
EA with the IRS. may be the designated designated beneficiary,
Instead, keep it for beneficiary. or responsible
your records. individual, etc. Use
Identification Numbers additional pages as
For more information, necessary and attach
including information The depositor's and them to this form.
about the required designated beneficiary's
disclosure you must get social security numbers Optional provisions in
from your custodian, see will serve as their Article VI and Article
Notice 97-60, 1997-46 identification numbers. VII. Form 5305-EA may be
I.R.B. 8 (November 17, If the depositor is a reproduced in a manner
1997). nonresident alien and that provides only those
does not have an optional provisions
Definitions identification number, offered by the
write "Foreign" in the custodian.
Custodian. The block where the number
custodian must be a bank is requested. The Note: Form 5305-EA may
or savings and loan designated beneficiary's be reproduced and
association, as defined social security number reduced in size for
in is the identification adaption to passbook
number of his or her Ed purposes.
IRA. An employer
identification number
(EIN) is required
STF FED 9038F.1
ARTICLE XI
Form 5305-EA Education Individual Retirement Custodial Account
1. Upon completion and execution of the Form 5305-EA
by the Depositor, and upon acceptance thereof by U.S. Bank
National Association (hereinafter the "Custodian"), the Custodian
shall establish and maintain an Education Individual Retirement
Custodial Account (hereinafter the "Account"), in the name of the
Designated Beneficiary. The Account established for the
Designated Beneficiary shall be an Education IRA as described in
Section 530 of the Internal Revenue Code. The contributions to
the Education IRA on behalf of the Designated Beneficiary and any
accumulations and earnings thereon shall be credited to the
Account.
2. The amount of each contribution on behalf of the
Designated Beneficiary 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.
3. All cash dividends and capital gain distributions
received in respect of Investment Company Shares held in the
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 from Bridges Investment Fund, Inc., 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
Designated Beneficiary subject to the terms and provisions of
this Article XI.
4. The Custodian shall make payments from the Account
from time to time in accordance with written instructions, in
form acceptable to the Custodian, received from the Depositor, or
"Responsible Individual" (as that term is defined in Article VI).
The Custodian shall be fully protected in acting on written
instructions of the Depositor or Responsible Individual and shall
not be liable with respect to such payment. The Depositor shall
be solely responsible for determining his or her eligibility to
establish the Account, and the Depositor and/or Responsible
Individual shall be solely responsible for the tax consequences
of contributions to and distributions from the Account. The
Custodian shall be entitled to rely absolutely on the
representations of the Depositor and/or Responsible Individual
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 Depositor or Responsible Individual.
5. Subject to applicable federal and state penalty
taxes for distributions not used for qualified education
expenses, or distributions in excess of such expenses, the
Responsible Individual shall always have the right to withdraw
all or any part of this Account upon written notice to the
Custodian.
6. Payments made in accordance with this Agreement
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 Depositor or his or
her Beneficiary.
7. The Custodian shall not engage in any prohibited
transactions as defined in Section 4975 of the Internal Revenue
Code.
8. The Depositor 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 Depositor or to
another education IRA designated by the Depositor.