SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. ___ [ ]
POST-EFFECTIVE AMENDMENT NO. 41 [x]
FILE NO. 2-21600
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 27 [x]
FILE NO. 811-1209
BRIDGES INVESTMENT FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 402-397-4700
EDSON L. BRIDGES II, 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NE 68114
(NAME AND ADDRESS OF AGENT FOR SERVICE)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING N/A
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK
APPROPRIATE BOX)
[x] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
[ ] ON (DATE) PURSUANT TO PARAGRAPH (B)
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A)(1)
[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A)(2) OF RULE 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
TITLE OF SECURITIES BEING REGISTERED: CAPITAL STOCK
<PAGE>
____________________________________________________________________________
PROSPECTUS Bridges Investment Fund, Inc. CAPITAL STOCK
April 19, 1999 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.
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.
TABLE OF CONTENTS
RISK/RETURN SUMMARY......................................... 3
The Fund's Investment Objective........................ 3
The Principal Investment Strategies of the Fund........ 3
Principal Risks of Investing in the Fund............... 3
PAST PERFORMANCE OF FUND.................................... 5
FEES AND EXPENSES OF THE FUND............................... 6
FINANCIAL HIGHLIGHTS........................................ 8
INVESTMENT OBJECTIVES AND POLICIES.......................... 9
Risks of Investing in the Fund..........................10
MANAGEMENT OF THE FUND.......................................11
Governance..............................................11
Investment Adviser......................................11
Portfolio Managers......................................12
Advisory Fees...........................................12
Custodian...............................................13
Dividend Disbursing and Transfer Agent..................13
FUND SHAREHOLDER INFORMATION.................................13
Capital Structure of Fund...............................13
Purchase of Fund Shares.................................14
Redemption of Fund Shares...............................17
Fund Dividend Policy....................................18
Year 2000...............................................18
Tax Consequences........................................19
BRIDGES INVESTMENT FUND, INC. 3 APRIL 19, 1999
PROSPECTUS -- PART A
RISK/RETURN SUMMARY
The following is a summary. You should read the rest of the Prospectus
along with this summary.
The Fund's Investment Objectives
The Fund is an open-end diversified investment company, which has operated
since July 1, 1963. The Fund's primary investment objective is long-term
capital growth, with a secondary objective of generation of a moderate amount of
investment income.
The Principal Investment Strategies of the Fund
The Fund seeks to achieve its investment objectives by investing primarily
in a diversified portfolio of common stocks and convertible securities which
Fund management believes offers the potential for increased earnings and
dividends over time. Normally, such equity securities will represent 60% or
more of the Fund's assets. On December 31, 1998, 83.4% of the Fund's assets
were invested in common stocks.
In addition, to generate current income, the Fund may acquire investment
grade corporate bonds, debentures, U.S. Treasury bonds and notes, and preferred
stocks. Normally, such fixed income securities will not constitute more than
40% of the Fund's portfolio. On December 31, 1998, 13.9% of the Fund's assets
were invested in debt securities. The Fund may purchase lower quality debt
securities (sometimes called "junk bonds") from time to time, provided that such
investments are limited to no more than 5% of Fund assets.
The allocation of Fund investments among common stocks and other equity
securities and bonds and other debt securities (including U.S. Treasury
securities) is based on the Fund adviser's judgments of the potential returns
and risks of each class. The adviser considers a number of factors when making
these allocations, including economic conditions and monetary factors, inflation
and interest levels and trends, and fundamental factors (such as price/earnings
ratios or growth rates) of individual companies in which the Fund invests.
Principal Risks and Returns from Investing in the Fund
There are risks associated with an investment in the Fund, and there is no
assurance the Fund will achieve its investment objectives. The risks of
investing in the Fund include:
BRIDGES INVESTMENT FUND, INC. 4 APRIL 19, 1999
PROSPECTUS -- PART A
Market Risk:
The value of the Fund's investments will vary from day to day, and will
reflect to some degree general market conditions, interest rates and national
and global political and economic conditions. The Fund's performance will also
be affected by the earnings of companies it invests in, as well as changes in
market expectations of such earnings. In the short-term, stock prices, and the
value of the Fund, can fluctuate significantly in response to these factors.
As with any stock investment, the value of your investment in the Fund will
fluctuate, meaning you could lose money.
Interest Rate Risk:
The Fund's investments in fixed income securities tend to reduce the Fund's
investment performance during periods of strong market price appreciation,
although bonds should tend to cushion Fund value losses during periods of
declining stock prices. However, you should also be aware that there is an
inverse relationship between bond prices and interest rates: higher interest
rates could cause lower bond prices, while lower interest rates could result in
higher bond prices, with the most significant impact of interest rate changes on
longer maturity issues.
Credit Risk:
The issuers of bonds and other debt securities held by the Fund may not be
able to make interest or principal payments. Even if these issuers are able to
make interest or principal payments, they may suffer adverse changes in
financial condition that would lower the credit quality of the security, leading
to greater volatility in the price of the security. High yield securities (or
"junk bonds") invested in by the Fund provide higher returns but entail greater
risk of loss of principal.
Asset Allocation Risk:
The Fund's performance will also be affected by the adviser's ability to
anticipate correctly the relative potential returns and risks of the types of
assets in which the Fund invests. As an example, the Fund's investment
performance would suffer if a major portion of its assets were allocated to
stocks during a market decline and its relative investment performance would
suffer to the extent that a smaller portion of the Fund's assets were allocated
to stocks during a period of rising stock market prices.
BRIDGES INVESTMENT FUND, INC. 5 APRIL 19, 1999
PROSPECTUS -- PART A
PAST PERFORMANCE OF FUND
The bar chart and table below show one measure of the risks of investing in
the Fund, by showing the Fund's performance from year to year for the past ten
calendar years and by showing how the average annual total returns of the Fund's
shares compare to those of a broad-based market index. The Fund's past
investment performance is not necessarily an indication of how the Fund will
perform in the future.
pERFORMANCE HISTORY DEPICTED IN A BAR GRAPH IS AS FOLLOWS:
Year % Return
1989 22.48%
1990 1.81%
1991 21.01%
1992 6.03%
1993 6.29%
1994 0.30%
1995 30.96%
1996 18.06%
1997 22.33%
1998 27.48%
The Fund's highest and lowest returns for a calendar quarter during the
past ten years are a return of 18.42% for the 4th Quarter 1998, and _8.83% for
the 3rd Quarter 1990.
<TABLE>
<CAPTION>
Average Annual Total Past One Past Past Ten
Returns Year Five Years
(for the periods ending Years
December 31, 1998)
<S> <C> <C> <C>
Bridges Investment Fund, Inc. 27.48% 19.32% 15.19%
S & P 500 28.52% 24.02% 19.16%
</TABLE>
Total Return is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A cumulative total
return reflects actual performance over a stated period of time. An average
annual total return is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns smooth out
variations in performance; they are not the same as the actual year-by-year
results.
BRIDGES INVESTMENT FUND, INC. 6 APRIL 19, 1999
PROSPECTUS -- PART A
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and other Distributions None
Redemption Fee 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
(expenses that are deducted from Fund assets)
Management Fees 0.50%
Other Expenses 0.27%
Audit and Custodian Services 0.09%
Bookkeeping, Dividend and Transfer Agent Services,
Computer Programming, Printing and Supplies 0.10%
Insurance, Licenses, Taxes and Other 0.08%
Total Fund Operating Expenses 0.77%
BRIDGES INVESTMENT FUND, INC. 7 APRIL 19, 1999
PROSPECTUS -- PART A
Example
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 year 3 years 5 years 10 years
$ 120 $ 380 $ 650 $1,400
You would pay the following expenses if you did not redeem your shares:
1 year 3 years 5 years 10 years
$ 120 $ 380 $ 650 $1,400
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 approximately $4 per year in transaction fees under the calculations shown
in the table above. You should not consider the estimates shown in the
hypothetical example above as a representation of past or future expenses.
Actual expenses may be greater or lesser than the amounts shown.
BRIDGES INVESTMENT FUND, INC. 8 APRIL 19, 1999
PROSPECTUS -- PART A
FINANCIAL HIGHLIGHTS*<F1>
For the Years Ended December 31
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 10 years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). The per
share income and capital changes for the year ended December 31, 1998 have been
audited by KPMG Peat Marwick LLP. The report of KPMG Peat Marwick LLP for the
year ended December 31, 1998, along with the Fund's financial statements, are
included in the Statement of Additional Information, which is available upon
request.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset
Value
Beginning of
Period $29.02 $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 %15.97 $14.07
Income from
Investment
Operations
Net Investment
Income $.44 $.51 $.55 $.58 $.59 $.61 $.63 $.66 $.67 $.67
Net Gains or
(Losses)
on Securities
(both realized
and
unrealized $7.36 $4.77 $3.28 $4.63 $(.52) $.46 $.37 $2.44 $(.39) $2.44
Total From
Invest.
Operations $7.80 $5.28 $3.83 $5.21 $.07 $1.07 $1.00 $3.10 $.28 $3.11
Less
Distributions
Dividends
from net
investment
income $(.44) $(.51) $(.55) $(.58) $(.59) $(.61) $(.63) $(.66 $(.67) $(.67)
Distributions
from
capital gains $(2.12) $(.31) $(.26) $(.19) $(.18) $(.17) $(.16) $(.29) $(.43) $(.54)
Total
Distributions $(2.56) $(.82) $(.81) $(.77) $(.77) $(.78) $(.79) $(.95 $(1.10) $(1.21)
Net Asset
Value, End
of Period
$34.26 $29.02 $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 $15.97
Total Return 27.48% 22.33% 18.06% 30.96% 0.30% 6.29% 6.03% 21.01% 1.81% 22.48%
Ratios/Supplemental
Data
Net Assets,
End of
Period (in
thousands) $48,433 $36,648 $29,249 $24,052 $18,096 $17,991 $17,007 $14,375 $11,283 $10,895
Ratio of
Expenses to
Average Net
Assets **<F2> 0.77% 0.81% 0.87% 0.89% 0.90% 0.90% 0.94% 0.98% 0.99% 0.99%
Ratio of Net
Inc. to Avg.
Net Assets 1.37% 2.64% 3.23% 3.80% 4.25% 4.32% 4.57% 4.91% 5.28% 4.29%
Portfolio
Turnover
Rate 24% 8% 8% 7% 10% 11% 7% 28% 26% 27%
<F1>*Per share income and capital change data is computed using the weighted
average number of shares outstanding method.
<F2>**Average net asset data is computed using monthly net asset value
figures.
</TABLE>
The total annual return from the investment policies and strategies
employed for the Fund's portfolio ranged from a high of 30.46% in 1995 to a low
of 0.39% in 1994. The Fund has achieved 21 straight years of positive total
annual returns from December 31, 1977 through December 31, 1998.
BRIDGES INVESTMENT FUND, INC. 9 APRIL 19, 1999
PROSPECTUS -- PART A
INVESTMENT OBJECTIVES AND POLICIES
The primary investment objective of the Fund is long-term capital
appreciation. In pursuit of such objective, the Fund invests primarily in
common stocks and securities convertible into common stocks, with the market
value of these securities normally representing 60% or more of the total value
of the Fund's assets. The selection of common 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 generation of a moderate amount of current income is a secondary
investment objective of the Fund. To help meet this objective, 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 Fund
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. The purchase of investment grade bonds,
debentures, and preferred stocks may also provide a source of funds for future
purchases of equity securities by the Fund.
The Fund may purchase investments in securities of foreign issuers,
provided that the market value of such securities will not exceed 10% of the
Fund's total assets, and such securities are traded as American Depository
Receipts.
For speculative capital gain purposes, the Fund may purchase bonds,
debentures, and preferred stocks that carry high yields and balance sheet risk
or which have one or more interest or dividend payments in arrears, provided
that the Fund intends to limit its investments in such lower quality debt
securities (sometimes called "junk bonds") to no more than 5% of its assets.
The Fund may purchase corporate bonds and preferred stocks with ratings below
Moody's Baa and Standard & Poor's Corporation BBB and some non-rated securities
in order to earn above average current income returns, provided the market value
of these assets at the time of purchase is included within the 5% total assets
limit for "junk bonds".
Convertible debentures and convertible preferred stocks are usually
classified below investment grade ratings for fixed income securities. For the
purpose of managing the Fund's portfolio within the investment policy
guidelines, these convertible securities are accorded the status of equities,
and not considered to be fixed income securities. Accordingly, these assets do
not fall within the 40% and 5% of total assets restrictions for fixed income
securities.
BRIDGES INVESTMENT FUND, INC. 10 APRIL 19, 1999
PROSPECTUS -- PART A
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 and as a result, may not achieve its
investment objectives. 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 from the limitation that not more
than 40% of Fund assets are to be invested in fixed income securities.
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 Fund 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.
Risks of Investing in the Fund
You should be aware that the value of the Fund's investments will vary
from day to day, based on various factors including earnings performance of
companies in which the Fund invests, as well as general market conditions,
interest rates and national and global political and economic conditions. The
Fund's investments in stocks are subject to changes in their value due to a
number of factors. Investments in stocks can be volatile, and are subject to
changes in general stock market movements, referred to as market risk. There
may be events or changes affecting particular industries included in the Fund's
portfolio, referred to as industry risk, or a change in value of a particular
stock because of an event affecting the issuer. Many factors can affect an
individual stock's price, including poor earnings, loss of major customers,
major litigation against the issuer, or changes in government regulations
affecting the issuer or its industry.
Since the Fund invests in bonds and other debt securities, you should also
recognize that there is an inverse relationship between bond prices and interest
rates: higher interest rates could cause lower bond prices, and lower interest
rates could result in higher bond prices, with the most significant impact of
interest rate changes on the very long maturity issues.
Fund investments in bonds and other debt securities also involve credit
risk, which is the risk that the issuers of such debt securities are not able to
make interest or principal payments, resulting in a loss to the Fund. In
addition, even if issuers of debt securities are able to make such interest or
principal payments, they may suffer adverse changes in financial condition
lowering their credit quality, and the value of the Fund's assets.
BRIDGES INVESTMENT FUND, INC. 11 APRIL 19, 1999
PROSPECTUS -- PART A
The Fund may also invest in high yield securities or "junk bonds", which
provide greater income opportunity but also entail greater risk of loss of
principal. Such high yield securities may be speculative with respect to the
issuer's ability to pay interest and repay principal in accordance with the
terms of the obligation. In addition, the market for high yield securities may
be less active, limiting the ability of the Fund to sell such securities in a
timely manner, increasing the risk of loss to the Fund.
With respect to the Fund's investment in U.S. Treasury securities for
temporary defensive purposes, you should anticipate that these defensive actions
may result in less than 60% of Fund assets to be held in common stocks and other
equity securities and that such temporary defensive actions may be taken prior
to the development of the expected adverse market circumstances. Subsequent
events in the market may or may not vindicate the judgment of the investment
manager to establish the temporary defensive positions in U.S. government
securities, and the failure of anticipated market conditions to occur may cause
temporary defensive positions to be held for unanticipated, long intervals of
time.
All of the above risks can affect the value of the Fund's investments, its
investment performance and price per share. These risks mean that you can lose
money by investing in the Fund. When you redeem your shares, they may be worth
more or less than what you paid for them.
MANAGEMENT OF THE FUND
Governance
The Board of Directors of the Fund is responsible for general governance
of the Fund. In particular, the Board establishes contractual relationships and
maintains oversight of the investment manager, the custodian bank and transfer
agent, insurance coverage, certified public accountants, and legal
representation for the Fund. In addition, the Board of Directors oversees
compliance with federal and state regulations, and maintaining the Fund's
position as a regulated open-end investment management company under tax laws.
The Board is also responsible for attracting interested and qualified
individuals to serve as representatives for the shareholders. Board members
carry broad perspectives beyond the fields of finance and investments, and
provide insight and guidance for the general business policy of the Fund through
the Audit Committee, Executive Committee, and regular quarterly Board of
Directors meetings.
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
BRIDGES INVESTMENT FUND, INC. 12 APRIL 19, 1999
PROSPECTUS -- PART A
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 and
applicable state securities laws.
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. The firm renders portfolio
investment securities advice to individuals, personal trusts, pension and profit
sharing accounts, IRA rollovers, charitable organizations and foundations,
corporations and other account classifications and, as of the last quarter of
1998, managed assets in excess of $1.07 billion. Bridges Investment Counsel,
Inc. also provides hourly consulting advice concerning alternative investment
matters on a limited basis, as well as consulting services 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, a Nebraska trust company
responsible for $488 million in trust customer assets at December 31, 1998.
Portfolio Managers
Mr. Edson L. Bridges III, President and Chief Investment Officer 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 14 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 35 years of experience in managing the Fund's
investment portfolio.
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.
Advisory Fees
Under its advisory agreement with the Fund, Bridges Investment Counsel,
Inc. furnishes continuous investment supervision to the Fund for 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 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
BRIDGES INVESTMENT FUND, INC. 13 APRIL 19, 1999
PROSPECTUS -- PART A
Fund paid $209,938 to Bridges Investment Counsel, Inc. for its services as
investment adviser during the fiscal year ending December 31, 1998.
The Fund pays the charges of the custodian, dividend disbursing and
transfer agent, fees of 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, and Bridges
Investment Counsel, Inc. agrees to reimburse the Fund for expenditures in excess
of such amount. During 1998, there were no reimbursed expenses paid under this
contract arrangement and expense limitation.
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. The Bank does
not exercise any supervisory function in management matters such as the purchase
and sale of portfolio securities.
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, and is responsible for issuing Form 1099 information to
shareholders each year.
FUND SHAREHOLDER INFORMATION
Capital Structure of Fund
The Fund's capital structure consists of 3,000,000 authorized shares (par
value of one dollar per share). Fund 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.
BRIDGES INVESTMENT FUND, INC. 14 APRIL 19, 1999
PROSPECTUS -- PART A
Purchase of Fund Shares
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
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 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.
You may purchase shares in the Fund under several plans designed to meet
the needs of various types of investors.
BRIDGES INVESTMENT FUND, INC. 15 APRIL 19, 1999
PROSPECTUS -- PART A
Unscheduled Investments _ As an investor, you may purchase shares of the
Fund at such times and in such amounts as you desire. 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. If you
wish to buy stock in this manner, you 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 you. However, if you desire to
reinvest your dividends or capital gains distributions, or both, you 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 will
be delivered to you at your direction or request. Fractional shares are held on
the books of the Transfer Agent. These fractional shares have full dividend and
redemption rights, but do not have voting rights.
Reinvestment of Cash Distributions Plan -- For the convenience of Fund
shareholders 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 Fund shareholder should fill in Part II of the Stock
Subscription and Plan Order Form and send it to the Fund.
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 you at your request. 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.
You may terminate this Plan at any time without penalty, and Bridges
Investor Services, Inc. will forward to you certificates for your shares and a
check for the redemption price of any fractional share. Dividends and capital
gains distributions, if any, will be paid thereafter to you in cash as an
unscheduled investor.
Bridges Investor Services, Inc. will deduct from your account a service
charge of $1.05 for each reinvestment of cash distribution. 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 _ If you wish to purchase shares of the Fund at
regular intervals, you may do so through the Fund's Scheduled Investments Plan.
BRIDGES INVESTMENT FUND, INC. 16 APRIL 19, 1999
PROSPECTUS -- PART A
Bridges Investor Services, Inc. will accept periodic payments from you and will
buy shares of the Fund on your behalf. The usefulness of this Scheduled
Investments Plan is to assist you in organizing regular payments of uniform
amounts to the Fund to build your position in the Fund over a long period of
time.
To start such a Plan, you should fill out Part III of the Stock
Subscription and Plan Order Form and mail it with your initial qualification
investment to the Fund. Your initial qualification investment must be at least
$500. However, if you already own shares of the Fund with a current minimum Net
Asset Value of at least $500, you may request a reclassification of these shares
to a Scheduled Investment Plan with the Order Form as your initial qualification
investment for the Plan.
You must specify on the Order Form whether you intend to make monthly, bi-
monthly, or quarterly payments and the amount of your payments. You may omit a
payment or send more or less than the specified amount so long as each of your
payments is at least $200. All of these payments should be sent directly to the
offices of the Fund. Under this Plan, you must invest a total of at least $800
within a period of twelve months after your qualification investment and in each
twelve-month period thereafter.
If a Scheduled Investments Plan payment is received by Bridges Investor
Services, Inc. prior to the close of the New York Stock Exchange on any day from
Monday through Friday on which the Exchange is open for trading, the payment
will be subscribed on the date it is received to purchase shares of the Fund at
the next determined price. If such payment is received after the close of the
New York Stock Exchange, the payment will be subscribed on the next succeeding
day on which the Exchange is open for trading.
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 you at your request. 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 to you acknowledging the purchase of
shares.
You may terminate this Plan at any time without penalty, and Bridges
Investor Services, Inc. will forward to you certificates for your shares and a
BRIDGES INVESTMENT FUND, INC. 17 APRIL 19, 1999
PROSPECTUS -- PART A
check for the redemption price of any fractional share. Dividends and capital
gains distributions, if any, will be paid thereafter to you in cash as an
unscheduled investment.
Accumulation of shares under the Fund's Scheduled Investments Plan does
not assure you a profit, nor does it protect you against any loss due to
declines in the market value of the Fund's investments.
Redemption of Fund Shares
As a shareholder of the Fund, you may at any time, except as specified
below, redeem your stock by delivering your properly endorsed stock certificates
to the Fund at 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska. If you
are a shareholder in a Plan Account, you must send the Fund a written
notification requesting that part or all of your stock be redeemed.
The redemption price is the next determined Net Asset Value. The
redemption price may be above or below your 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 it 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).
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
BRIDGES INVESTMENT FUND, INC. 18 APRIL 19, 1999
PROSPECTUS -- PART A
exists as a result of which (a) disposal by the Fund of securities owned by it
is not reasonably practicable, or (b) it is not reasonably practicable for the
Fund to fairly determine the value of its net assets, or for such other periods
as the Securities and Exchange Commission may by order permit for the protection
of the shareholders 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.
Inquiries -- Shareholder inquiries for information or 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 (extension 229), or at e-mail address [email protected].
Fund 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.
Year 2000
Like other mutual funds, financial and business organizations and
individuals, the Fund could be adversely affected if the computer systems used
by its investment adviser, the Fund's other service providers, or persons with
whom they deal, do not properly process and calculate date-related information
and data on and after January 1, 2000. This possibility is commonly known as
the "Year 2000 Problem". Virtually all operations of the Fund are computer
reliant. The investment adviser, administrator, transfer agent and custodian
have informed the Fund that they are actively taking steps to address the Year
2000 Problem with regard to their respective computer systems. The Fund
believes that it has made considerable progress concerning operational readiness
for the Year 2000, including development of new custom software which has been
completed and tested for transfer agency and dividend disbursing functions.
The Fund is also taking measures to obtain assurances that comparable
steps are being taken by the Fund's other significant service providers. While
there can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
BRIDGES INVESTMENT FUND, INC. 19 APRIL 19, 1999
PROSPECTUS -- PART A
will be achieved. There can, of course, be no assurance of success by the
Fund's service providers. The Fund's preparation activities for 1999 will focus
on development and refinement of contingency plans for failures from vendors for
usual and customary services to the investment manager and Fund. In addition,
because the Year 2000 Problem affects virtually all organizations, the companies
or entities in which the Fund invests also could be adversely impacted by the
Year 2000 Problem. The extent of such impact cannot be predicted. The Fund is
undertaking an assessment of the state of readiness for the Year 2000 by
companies in which the Fund invests.
Tax Consequences
The following discussion of taxes is for general information only. You
should consult with your own tax advisor about the particular federal, state and
local tax consequences to you of investing in the Fund.
The Fund has complied with special provisions of the Internal Revenue Code
pertaining to investment companies so that the Fund will not pay federal income
taxes on amounts it distributes to shareholders, although shareholders will be
taxed on distributions they receive. As a shareholder, you 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 you as long-
term capital gains irrespective of the length of time you have held your stock
in the Fund. You will generally be taxed on dividends you receive from the
Fund, regardless of whether they are paid to you in cash or are reinvested in
additional Fund shares.
As with all mutual funds, the Fund will be required to withhold 31% of
taxable distributions payable to you for payment of federal income taxes unless
the Fund receives from you 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. You
will be required to provide certain pertinent information on the Form W-9,
including your social security or tax identification number.
There may be tax consequences to you upon the redemption (sale) of your
Fund shares. You generally have a capital gain or loss from a disposition of
shares. The amount of gain or loss and the tax rate will depend primarily upon
how much you paid for your shares, the redemption (sale) price, and how long you
held the shares.
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. If you invest through a tax-deferred retirement
account, such as an IRA, you generally will not have to pay tax on dividends
BRIDGES INVESTMENT FUND, INC. 20 APRIL 19, 1999
PROSPECTUS -- PART A
until they are distributed from the account. These accounts are subject to
complex tax rules, and you should consult your tax advisor about investment
through a tax-deferred account.
The Fund, through an annual tax information letter and quarterly
shareholder reports, will inform you 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.
BRIDGES INVESTMENT FUND, INC. 21 APRIL 19, 1999
PROSPECTUS -- PART A
____________________________________________________________________________
PROSPECTUS Bridges Investment Fund, Inc.
CAPITAL STOCK
April 19, 1999 8401 West Dodge Road
Omaha, Nebraska 68114
402-397-4700
____________________________________________________________________________
The STATEMENT OF ADDITIONAL INFORMATION (SAI), designated as Part B,
discusses the following topics:
. General Information and History of the Fund
. 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
. Tax Status
. Underwriters
. Calculation of Performance Data
. Financial Statements
Additional information about the Fund's investments is available in
the annual and semi-annual reports to shareholders. In the Fund's Annual
Report, you will find a discussion of market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.
Further information about the fund (including the SAI) can also be reviewed
and copied at the SEC's Public Reference Room in Washington, D.C. You may call
1-800-SEC-0330 for information about the operations of the public reference
room. Reports and other information about the Fund are also available on the
SEC's Website (http://www.sec.gov) or copies can be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC, Washington,
D.C. 20549-6009.
The Fund does not employ a financial intermediary for you to purchase or
redeem shares or to issue publications, statements, or other information about
our operation or organizations.
Please refer to Bridges Investment Fund Inc.' s Investment Company Act File
No. 811-1209 when seeking information about the Fund from the Securities and
Exchange Commission.
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
__________________________________________________________________________
APRIL 19, 1999 BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK
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 19,
1999.
. OTHER INFORMATION, PART C, OF THE FILING DATED APRIL 19, 1999, 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 19, 1999.
TABLE OF CONTENTS
Location of Related Location
DISCLOSURE INFO. PAGE NO.
in Prospectus in This
Part A Information Required in Statement of Additional Information Part B
- COVER PAGE............................................1
- TABLE OF CONTENTS.....................................2
- FUND HISTORY..........................................3
9 DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS.3-6
9 INVESTMENT POLICIES, STRATEGIES AND RISKS.........3
- FUND POLICY RESTRICTIONS..........................3-5
- PORTFOLIO TURNOVER................................5
11 MANAGEMENT OF THE FUND................................6
- DIRECTORS AND OFFICERS............................6-11
- COMPENSATION........................................11-12
- CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..12-13
11-12 INVESTMENT ADVISORY AND OTHER SERVICES................13
- CONTROL PERSONS...................................13
- AFFILIATED PERSONS................................14
12 ADVISORY FEES.....................................14
- EXPENSE LIMITATION................................14
- SERVICES PERFORMED ON BEHALF OF FUND..............14
SUPPLIED OR PAID FOR SUBSTANTIALLY BY
INVESTMENT ADVISER
- OTHER SERVICES....................................15
INDEPENDENT AUDITORS...............................15
- BROKERAGE ALLOCATION AND OTHER PRACTICES.............16-17
13 CAPITAL STOCK AND OTHER SECURITIES....................17
CUMULATIVE VOTING.................................17
14-17 PURCHASE, REDEMPTION, AND PRICING OF SECURITIES.......18
BEING OFFERED
- GENERAL INFORMATION............................18
14 VALUATION......................................18
SPECIMEN PRICE MAKE UP SHEET...................18
- OTHER DISCLOSURES..............................18
DESCRIPTION OF FUND PLANS...,........................19-24
STANDARD RETIREMENT PLAN.........................19-20
INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNT PROTOTYPE.20-24
16 TAX STATUS.............................................24
- UNDERWRITERS...........................................24
- CALCULATION OF PERFORMANCE DATA........................24
- FINANCIAL STATEMENTS..................................26-41
REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.......26
SCHEDULE OF PORTFOLIO INVESTMENTS.................27-33
STATEMENT OF ASSETS AND LIABILITIES................34
STATEMENT OF OPERATIONS............................35
STATEMENTS OF CHANGES IN NET ASSETS................36
NOTES TO FINANCIAL STATEMENTS.....................37-41
BRIDGES INVESTMENT FUND, INC. 3 APRIL 19, 1999
STATEMENT - PART B
FUND HISTORY
THE FUND WAS ORGANIZED AS AN OPEN-END INVESTMENT COMPANY UNDER THE LAWS
OF NEBRASKA ON MARCH 20, 1963. tHE fUND COMMENCED INVESTMENT OPERATIONS ON
JULY 1, 1963, AND SHARES OF CAPITAL STOCK WERE FIRST SOLD TO THE GENERAL
PUBLIC ON DECEMBER 7, 1963. THE FUND HAS CONDUCTED ITS BUSINESS CONTINUOUSLY
SINCE SUCH TIME.
THE FUND WAS CREATED RIMARILY FOR THE PURPOSE OF EXTENDING THE SERVICES
OF THE INVESTMENT MANAGEMENT FIRM OF BRIDGES INVESTMENT COUNSEL, INC. TO
INVESTORS WHOSE FUNDS ARE TOO SMALL TO PERMIT ECONOMICAL ADMINISTRATION AS
SEPARATE ACCOUNTS. BY ACQUIRING SHARES OF THE FUND, INVESTORS WITH SMALLER
ACCOUNTS OBTAIN SECURITIES DIVERSIFICATION AND CONTINUOUS INVESTMENT
SUPERVISION, ALTHOUGH AN INVESTMENT IN THE FUND DOES NOT REMOVE THE MARKET
RISK INHERENTLY INVOLVED IN MAKING SECURITIES INVESTMENTS.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
INVESTMENT POLICIES, STRATEGIES AND RISKS -- THE PRIMARY INVESTMENT
OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL APPRECIATION. THE DEVELOPMENT OF A
MODERATE AMOUNT OF CURRENT INCOME IS A SECONDARY INVESTMENT OBJECTIVE OF THE
FUND. THE FUND WILL INVEST IN COMMON STOCKS AND SECURITIES CONVERTIBLE INTO
COMMON STOCKS TO ACHIEVE ITS CAPITAL GROWTH OBJECTIVE, BONDS, DEBENTURES, AND
PREFERRED STOCKS TO MEET ITS INCOME OBJECTIVE. REFER TO THE FUND PROSPECTUS FOR
A COMPLETE DISCUSSION OF THE INVESTMENT POLICY OBJECTIVES FOR THE FUND AND THE
STRATEGIES EMPLOYED TO ATTAIN THE FUND'S OBJECTIVES.
FUND POLICY RESTRICTIONS -- THE ACTIVITIES OF THE FUND AND ITS INVESTMENT
POLICIES ARE RESTRICTED AS SET FORTH IN THE FUND'S PROSPECTUS AND IN THE
FOLLOWING DISCUSSION. THE RESTRICTIONS DESCRIBED BELOW 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 FUND HAS NEVER EXERCISED THE OPTION TO BORROW
MONEY AS A TEMPORARY MEASURE. IN ADDITION, THE FUND MAY NOT PURCHASE SECURITIES
ON MARGIN OR MAKE SHORT SALES.
BRIDGES INVESTMENT FUND, INC. 4 APRIL 19, 1999
STATEMENT - PART B
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.
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 BY THE FUND ARE NOT PERMITTED IF IMMEDIATELY
AFTER SUCH PURCHASE OR ACQUISITION:
1. THE FUND OWNS IN THE AGGREGATE MORE THAN 3% OF THE OUTSTANDING VOTING
STOCK OF ANOTHER INVESTMENT COMPANY;
2. THE SHARES OF THE OTHER REGISTERED INVESTMENT COMPANY HAVE AN
AGGREGATE VALUE IN EXCESS OF 5% OF THE VALUE OF THE TOTAL ASSETS OF
THE FUND; OR
3. THE SHARES OF THE OTHER REGISTERED INVESTMENT COMPANY AND ALL OTHER
INVESTMENT COMPANIES HAVE AN AGGREGATE VALUE IN EXCESS OF 10% 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.
BRIDGES INVESTMENT FUND, INC. 5 APRIL 19, 1999
STATEMENT - PART B
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 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. AS OF DECEMBER
31, 1998, THE FUND HAS 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 U.S. TREASURY THAT ARE BACKED BY THE FULL
FAITH AND CREDIT OF THE UNITED STATES OF AMERICA. THE FUND MAY PURCHASE U.S.
TREASURY BILLS, SHORT TERM; U.S. TREASURY NOTES, INTERMEDIATE TERM; AND U.S.
TREASURY 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, 1998, THE
PORTFOLIO TURNOVER RATE FOR THE FUND RANGED FROM A HIGH OF 28% IN 1991 TO A LOW
OF 7% IN 1992 AND 1995. THE MEDIAN PORTFOLIO TURNOVER FOR THE PAST 10 YEARS WAS
10.5% AND THE AVERAGE PORTFOLIO TURNOVER RATE FOR SUCH PERIOD WAS 15.6%. THE
PORTFOLIO TURNOVER RATE IN 1998 WAS 24% WHILE IN 1997 WAS 8%. THE FUND DOES NOT
PLAN TO MATERIALLY CHANGE ITS PORTFOLIO TURNOVER RATE MORE THAN THE RANGES
EXPERIENCED IN THE PAST TEN YEARS; HOWEVER, PORTFOLIO RATES COULD INCREASE
SIGNIFICANTLY IN ORDER TO RESPOND TO TURBULENT CONDITIONS IN THE SECURITIES
MARKET. REFER TO FINANCIAL HIGHLIGHTS IN THE PROSPECTUS FOR DETAILED YEAR-TO-
YEAR INFORMATION ON THE PORTFOLIO TURNOVER RATE.
BRIDGES INVESTMENT FUND, INC. 6 APRIL 19, 1999
STATEMENT -- PART B
THE RATE OF PORTFOLIO TURNOVER IS CALCULATED BY DIVIDING (A) THE LESSER OF
PURCHASES OR SALES OF PORTFOLIO SECURITIES FOR THE REPORTING PERIOD BY (B) THE
MONTHLY AVERAGE OF THE VALUE OF THE PORTFOLIO SECURITIES OWNED BY THE FUND
DURING THE REPORTING PERIOD. SUCH MONTHLY AVERAGE IS 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 CALCULATION, THERE IS 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, ARE INCLUDED.
PURCHASES INCLUDE ANY CASH PAID UPON THE CONVERSION OF ONE PORTFOLIO SECURITY
INTO ANOTHER. PURCHASES ALSO INCLUDE THE COST OF RIGHTS OR WARRANTS PURCHASED.
SALES INCLUDE THE NET PROCEEDS FROM THE SALE OF RIGHTS OR WARRANTS AND THE NET
PROCEEDS OF PORTFOLIO SECURITIES WHICH HAVE BEEN CALLED OR FOR WHICH PAYMENT HAS
BEEN MADE THROUGH REDEMPTION OR MATURITY.
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 DESCRIBED BELOW. DIRECTORS WHO
ARE "INTERESTED PERSONS" OF THE FUND ARE INDICATED WITH AN ASTERISK (*) IN FRONT
OF THEIR NAME. AN INTERESTED PERSON OF THE BOARD OF DIRECTORS OF THE FUND IS
DEFINED IN SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 AND INCLUDES
SOMEONE WHO HAS A MATERIAL BUSINESS OR PROFESSIONAL RELATIONSHIP WITH THE FUND'S
INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. OR ITS PRINCIPAL OFFICERS.
*FREDERICK N. BACKER, AGE 66, DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE
FUND, 25720 WEST DODGE ROAD, WATERLOO, NEBRASKA 68069. MR. BACKER IS CURRENTLY
THE PRESIDENT OF JAT INVESTMENTS LIMITED, FORMERLY JAT CORP., A PRIVATE
INVESTMENT CONCERN THAT OPERATED A RESTAURANT FOR TWENTY-FIVE YEARS. HIS
RESPONSIBILITIES AS PRESIDENT OF JAT CORP. COMMENCED IN AUGUST, 1972.
BRIDGES INVESTMENT FUND, INC. 7 APRIL 19, 1999
STATEMENT -- PART B
*EDSON L. BRIDGES II, CFA, AGE 66, 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. MR.
BRIDGES BECAME CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF BRIDGES INVESTMENT FUND,
INC. ON APRIL 11, 1997, AFTER SERVING AS PRESIDENT FROM SEPTEMBER 28, 1970
THROUGH APRIL 11, 1997. IN SEPTEMBER, 1959, MR. BRIDGES BECAME ASSOCIATED WITH
THE PREDECESSOR FIRM TO BRIDGES INVESTMENT COUNSEL, INC. AND IS PRESENTLY THE
PRESIDENT AND DIRECTOR OF THAT CORPORATION. MR. BRIDGES IS ALSO PRESIDENT AND
DIRECTOR OF BRIDGES INVESTOR SERVICES, INC., A COMPANY THAT BECAME TRANSFER
AGENT AND DIVIDEND DISBURSING AGENT EFFECTIVE OCTOBER 1, 1987. MR. BRIDGES IS
ALSO PRESIDENT AND DIRECTOR OF PROVIDENT TRUST COMPANY, CHARTERED TO CONDUCT
BUSINESS ON MARCH 11, 1992.
*EDSON L. BRIDGES III, CFA, AGE 40, 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 HAS BEEN RESPONSIBLE FOR
SECURITIES RESEARCH AND THE INVESTMENT MANAGEMENT FOR AN EXPANDING BASE OF
DISCRETIONARY MANAGEMENT ACCOUNTS, INCLUDING THE FUND, FOR MORE THAN FIVE YEARS.
MR. BRIDGES WAS ELECTED PRESIDENT OF BRIDGES INVESTMENT FUND, INC. ON APRIL 11,
1997, AND HE ASSUMED THE POSITION OF PORTFOLIO MANAGER AT THE CLOSE OF BUSINESS
ON THAT DATE. MR. BRIDGES BECAME A DIRECTOR OF STRATUS FUND, INC. IN OCTOBER,
1990. STRATUS FUND, INC. IS AN OPEN-END, REGULATED INVESTMENT COMPANY LOCATED
IN LINCOLN, NEBRASKA. MR. BRIDGES HAS BEEN EXECUTIVE VICE PRESIDENT-INVESTMENTS
OF BRIDGES INVESTMENT COUNSEL, INC. SINCE FEBRUARY, 1993, AND HE IS A DIRECTOR
OF THAT FIRM. MR. BRIDGES IS ALSO AN OFFICER AND A DIRECTOR OF BRIDGES INVESTOR
SERVICES, INC. AND PROVIDENT TRUST COMPANY.
*N. PHILLIPS DODGE, JR., AGE 62, 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.
MR. DODGE BECAME A DIRECTOR OF SOUTHERN CALIFORNIA WATER COMPANY IN APRIL, 1990,
AND A DIRECTOR OF THE OMAHA PUBLIC POWER DISTRICT AS OF JANUARY 5, 1995, FOR A
SIX YEAR TERM.
*JOHN W. ESTABROOK, AGE 71, 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 AND ITS HOLDING COMPANY, NEBRASKA METHODIST HEALTH SYSTEM, IN
OMAHA, NEBRASKA, BEGINNING JUNE, 1959. EFFECTIVE JANUARY 1, 1987, MR. ESTABROOK
RELINQUISHED THE POSITION OF PRESIDENT OF NEBRASKA METHODIST HOSPITAL, ASSUMING
THE PRESIDENCY OF THE NEBRASKA METHODIST HEALTH SYSTEM UNTIL HIS RETIREMENT ON
AUGUST 31, 1992.
BRIDGES INVESTMENT FUND, INC. 8 APRIL 19, 1999
STATEMENT - PART B
*JON D. HOFFMASTER, AGE 51, 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 INFOUSA IN OMAHA, NEBRASKA. ON AUGUST
3, 1998, THE INFOUSA NAME WAS ADOPTED FOR AMERICAN BUSINESS INFORMATION, INC.
HE HAS PREVIOUSLY SERVED AS PRESIDENT AND CHIEF OPERATING OFFICER, CHIEF
FINANCIAL OFFICER OF THAT COMPANY, AND EXECUTIVE VICE PRESIDENT AND DIRECTOR
SINCE 1987. FROM 1980 TO 1987, MR. HOFFMASTER WAS PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF FIRST NATIONAL BANK OF BELLEVUE, NEBRASKA. INFOUSA IS A LEADING
PRODUCER OF BUSINESS-TO-BUSINESS MARKETING INFORMATION WHICH IT SUPPLIES FROM
ITS PROPRIETARY DATABASE CONTAINING INFORMATION ON APPROXIMATELY 10 MILLION
BUSINESSES IN THE UNITED STATES AND ONE MILLION ENTITIES IN CANADA.
JOHN J. KORALESKI, AGE 49, 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. MR. KORALESKI WAS
EMPLOYED BY UNION PACIFIC IN JUNE, 1972. HE HAS SERVED THE RAILROAD IN VARIOUS
CAPACITIES. HE WAS APPOINTED TO HIS PRESENT POSITION IN SEPTEMBER, 1991. AS
CHIEF FINANCIAL OFFICER OF THE RAILROAD, MR. KORALESKI IS A MEMBER OF THE
RAILROAD'S OPERATING COMMITTEE. HE HEADS AND MANAGES ALL FINANCIAL PLANNING AND
ANALYSIS, TAX PLANNING AND COMPLIANCE, AND FINANCIAL REPORTING FOR THE RAILROAD
AND ITS SUBSIDIARIES. HE IS ALSO RESPONSIBLE FOR THE RAILROAD'S REAL ESTATE
DEPARTMENT AND IS CONTROLLER OF UNION PACIFIC CORP. AND EXECUTIVE VICE PRESIDENT
OF THE UNION PACIFIC FOUNDATION. MR. KORALESKI IS ALSO A BOARD MEMBER OF
AUTOMATED MONITORING AND CONTROL INTERNATIONAL, INC. (AMCI), A WHOLLY-OWNED
TECHNOLOGY FIRM SITUATED IN OMAHA, NEBRASKA.
ROGER A. KUPKA, AGE 69, 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 WAS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF NEBRASKA
BUILDERS PRODUCTS CO. OF OMAHA, NEBRASKA. HE HELD THIS POSITION FROM 1969 UNTIL
NOVEMBER, 1986, WHEN HE RETIRED. DURING THE PAST FIVE YEARS, MR. KUPKA HAS BEEN
VICE CHAIRMAN OF THE BOARD OF DIRECTORS OF PSI GROUP, FORMERLY KNOWN AS DISCOUNT
MAIL INC., HEADQUARTERED IN OMAHA, NEBRASKA. MR. KUPKA IS CURRENTLY A MEMBER OF
THE BOARD OF DIRECTORS OF PSI GROUP. IN ADDITION, MR. KUPKA SERVES AS PRESIDENT
OF KUPKA, INC. AND PRESIDENT OF MICKLIN HOME IMPROVEMENT CO. ALL OF THESE
COMPANIES ARE LOCATED IN OMAHA, NEBRASKA.
*GARY L. PETERSEN, AGE 55, DIRECTOR OF THE FUND AND MEMBER OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, P.O. BOX 248, WALTON,
NEBRASKA 68461. MR. PETERSEN IS THE RETIRED PRESIDENT OF PETERSEN MANUFACTURING
CO. INC. OF DEWITT, NEBRASKA. MR. PETERSEN COMMENCED EMPLOYMENT WITH THE
COMPANY IN FEBRUARY, 1966. HE BECAME PRESIDENT IN MAY, 1979, AND RETIRED IN
JUNE, 1986. PETERSEN MANUFACTURING CO. INC. PRODUCED A BROAD LINE OF HAND TOOLS
FOR NATIONAL AND WORLDWIDE DISTRIBUTION UNDER THE BRAND NAMES VISE-GRIP, UNIBIT,
PROSNIP, AND PUNCH PULLER.
BRIDGES INVESTMENT FUND, INC. 9 APRIL 19, 1999
STATEMENT - PART B
John T. Reed, Age 55, Director of the Fund, 11336 Pine Street, Omaha,
Nebraska. Mr. Reed is Chairman of McCarthy & Co. of Omaha, Nebraska, and a
member of the Board of Directors of McCarthy Group, Inc., participating in the
management of the Firm's corporate finance and asset management business since
February, 1997. Mr. Reed was formerly with Arthur Andersen & Co. for 32 years
before retiring in August, 1996. Mr. Reed served as the managing partner of
Arthur Andersen & Co.' s Omaha office while also serving as partner in charge of
that office's tax and business consulting practices.
*ROY A. SMITH, AGE 65, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE
COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 601 NORTH 108TH CIRCLE, OMAHA,
NEBRASKA. MR. SMITH WAS PRESIDENT OF H. P. SMITH MOTORS, INC. FOR DECADES UNTIL
THE COMPANY WAS SOLD TO A NEW OWNER IN THE THIRD QUARTER OF 1997. MR. SMITH IS
CURRENTLY PRESIDENT OF OLD MILL TOYOTA OF OMAHA, NEBRASKA, AND IS A DIRECTOR OF
THE MID CITY BANK OF OMAHA.
Janice D. Stoney, Age 58, Director of the Fund, 8912 Farnam Court, Omaha,
Nebraska. Mrs. Stoney retired as Executive Vice President Total Quality System,
US WEST Communications in December, 1992. Mrs. Stoney began her career within
the telephone industry as a service representative with the Northwestern Bell
Telephone Company in August, 1959. Mrs. Stoney earned various officer positions
that culminated in becoming President of Northwestern Bell Telephone Company
from 1987 _ 1989 and President of the Consumer Division of US WEST from 1989 _
1991. During her distinguished business career, Mrs. Stoney has served on the
Board of Directors of the Federal Reserve Bank, Tenth District, Omaha Branch,
from 1984 to 1988; the Northwestern Bell Telephone Company, 1985 to 1990;
Tennant Company located in Minneapolis, Minnesota from 1986 to 1995; and US WEST
Communications Group, Inc., 1989 to 1992. Mrs. Stoney currently serves on the
Board of Directors of Guarantee Life Insurance Company of Omaha, Nebraska _ a
position she was elected to in 1987. She is also a Director of the Whirlpool
Corporation, headquartered in Benton Harbor, Michigan where she has served since
1987. The Premark International Corporation located in Deerfield, Illinois
elected her to its Board of Directors in 1989 where she continues to serve.
L.B. THOMAS, AGE 62, 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
1966; VICE PRESIDENT, FINANCE IN 1969; VICE PRESIDENT, FINANCE AND TREASURER IN
BRIDGES INVESTMENT FUND, INC. 10 APRIL 19, 1999
STATEMENT - PART B
1974; ADDED THE CORPORATE SECRETARY RESPONSIBILITY IN 1982; AND BECAME SENIOR
VICE PRESIDENT IN 1991. MR. THOMAS IS A DIRECTOR OF LOZIER CORP. LOCATED IN
OMAHA, NEBRASKA AND THE EXCHANGE BANK OF MOUND CITY, MISSOURI. HE ALSO IS A
DIRECTOR OF THE W. T. MUTUAL FUNDS OF WILMINGTON, DELAWARE.
John K. Wilson, Age 44, Director of the Fund, 15942 Burt Street, Omaha,
Nebraska. Mr. Wilson is President of Durham Resources, Inc. and President of
Great Plains Energy Corp. Durham Resources, Inc. is a privately held investment
company headquartered in Omaha, Nebraska. Great Plains Energy Corp. and its
wholly owned subsidiary, Great Plains Natural Gas Co., is a retail distributor
of natural gas to 19 communities in western Minnesota. Mr. Wilson commenced his
career with Durham Resources in February, 1983. Prior to becoming President in
May, 1994, Mr. Wilson served in the position of Secretary-Treasurer and Vice
President-Finance. Mr. Wilson currently serves on the Advisory Board _ U.S.
Bank National Association, Omaha, Nebraska.
Brian M. Kirkpatrick, Age 27, Vice President of the Fund, 8401 West
Dodge Road, Omaha, Nebraska. Mr. Kirkpatrick has been an employee of
Bridges Investment Counsel, Inc. since August, 1992. His career has been
mainly in the client accounting and security research areas. In 1998,
Brian's role with Bridges Investment Counsel, Inc. expanded significantly
into client counselling and portfolio management. Mr. Kirkpatrick was elected
Vice President of the Fund on April 13, 1999.
Mary Ann Mason, Age 47, Secretary of the Fund, 8401 West Dodge Road, Omaha
Nebraska. Mrs. Mason has been an employee of Bridges Investment Counsel, Inc.
from June, 1981. Her career has been mainly in the staff services area as a
secretary. Mrs. Mason is also Corporate Secretary for Bridges Investment
Counsel, Inc., Provident Trust Company, Bridges Investor Services, Inc. and a
Director of that Company.
Kathleen J. Stranik, Age 55, Assistant Secretary of the Fund, 8401 West
Dodge Road, Omaha, Nebraska. Mrs. Stranik has been an employee of Bridges
Investment Counsel, Inc. from January, 1986. Mrs. Stranik has served as
executive secretary to both Edson L. Bridges II and Edson L. Bridges III
throughout her career with the Firm. She currently holds the position of
Vice President of Administration for the Fund's investment manager.
Nancy K. Dodge, Age 36, Treasurer of the Fund, 8401 West Dodge Road, Omaha,
Nebraska. Mrs. Dodge has been an employee of Bridges Investment Counsel, Inc.
since January, 1980. Her career has progressed through the accounting
department of that Firm, to her present position as Vice President of Fund
Services. Mrs. Dodge is the person primarily responsible for day to day
operations for the Fund, and she is also the key person for handling relations
with shareholders, the custodian bank, and the auditor. Mrs. Dodge is an
officer and Director of Bridges Investor Services, Inc.
BRIDGES INVESTMENT FUND, INC. 11 APRIL 19, 1999
STATEMENT -- PART B
Linda J. Morris, Age 32, Assistant Treasurer of the Fund, 8401 West Dodge
Road, Omaha, Nebraska. Mrs. Morris has been an employee of Bridges Investment
Counsel, Inc. from August, 1992. Her career with Bridges Investment Counsel,
Inc. has been largely in the client accounting area. In recent years, Linda
has been the primary accounting person to determine the daily net asset value
for the shares of the Fund. Mrs. Morris was elected Assistant Treasurer of
the Fund on April 13, 1999.
THE BOARD OF DIRECTORS OF THE FUND HAS THREE COMMITTEES: AN AUDIT
COMMITTEE, AN EXECUTIVE COMMITTEE, AND A PLANNING COMMITTEE. THE MEMBERS
OF THESE COMMITTEES ARE APPOINTED ANNUALLY AT THE APRIL MEETING OF THE BOARD
OF DIRECTORS. THE MEMBERS OF THE AUDIT COMMITTEE FOR 1999 ARE: MR. FREDERICK
N. BACKER, JOHN W. ESTABROOK, ROGER A. KUPKA, AND JOHN T. REED. THE MEMBERS
OF THE EXECUTIVE COMMITTEE FOR 1999 ARE: MR. EDSON L. BRIDGES II, MR. N. P.
DODGE, JR., MRS. JANICE D. STONEY, AND MR. L.B. THOMAS. THE MEMBERS OF THE
PLANNING COMMITTEE FOR 1999 ARE: MR. EDSON L. BRIDGES III, MR. JON D.
HOFFMASTER, MR. JOHN J. KORALESKI, MR. ROY A SMITH, AND MR. JOHN K. WILSON.
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.
Compensation
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 1998, THE DIRECTORS AS A GROUP RECEIVED $9,900.00 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 COMPENSATION INFORMATION IS PROVIDED FOR ALL DIRECTORS OF THE
FUND AND FOR EACH OF THE EXECUTIVE OFFICERS OR ANY AFFILIATED PERSON OF THE FUND
(WITH ANNUAL COMPENSATION IN EXCESS OF $60,000) FOR THE MOST RECENTLY COMPLETED
FISCAL YEAR (1998):
BRIDGES INVESTMENT FUND, INC. 12 APRIL 19, 1999
STATEMENT - - PART B
<TABLE>
<CAPTION>
COMPENSATION TABLE
__________________________________________________________________________
(1) (2) (3) (4) (5)
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT ESTIMATED FROM REGISTRANT
<PAGE>
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>
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
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>
FUND DIRECTORS AND OFFICERS DO NOT RECEIVE ANY PENSION, RETIREMENT, OR OTHER
PLAN BENEFITS FROM THE FUND.
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.
NO PERSON OR SHAREHOLDER OWNED OF RECORD OR BENEFICIALLY MORE THAN 5% OF
THE FUND'S OUTSTANDING CAPITAL STOCK AS OF JANUARY 31, 1999, WHEN THE FUND HAD A
TOTAL OF 1,421,548 SHARES OUTSTANDING: HOWEVER, A GROUP CONSISTING OF THE
FAMILY MEMBERS OF EDSON L. BRIDGES II, BENEFICIALLY OWNED 4.88% AS OF JANUARY
31, 1999.
BRIDGES INVESTMENT FUND, INC. 13 APRIL 19, 1999
STATEMENT -- PART B
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. A COMPLETE DESCRIPTION OF OWNERSHIP OF FUND SHARES BY BRIDGES'
FAMILY MEMBERS MAY BE FOUND IN THE FUND'S 1999 PROXY STATEMENT.
THE OFFICERS AND DIRECTORS OF THE FUND OWNED BENEFICIALLY AND OF RECORD, OR
HAD THE POWER TO VOTE, 130,787 SHARES OF THE FUND'S STOCK. THE MEMBERS OF THE
IMMEDIATE FAMILIES OF OFFICERS AND DIRECTORS OWNED AN ADDITIONAL 110,060 SHARES
FOR A TOTAL BENEFICIAL OWNERSHIP OF THESE PERSONS OF 240,847 SHARES WHICH WAS
EQUAL TO 16.94% OF THE 1,421,548 SHARES OUTSTANDING AS OF JANUARY 31, 1999.
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 ALLOCATED TO THE ACCOUNTS OF PARTICIPANTS ARE ESTIMATES AS OF JANUARY
31, 1999. WHILE THE AGGREGATE SHAREHOLDING NUMBERS ARE ACCURATE, THE TRUSTEES
OF THE PENSION PLAN AND THE PROFIT SHARING TRUST WILL NOT REPORT THE ALLOCATIONS
TO PARTICIPANTS FOR DECEMBER 31, 1998, UNTIL MARCH 15, 1999, BECAUSE THE
FINANCIAL INFORMATION UPON WHICH THE ALLOCATIONS ARE MADE TO PARTICIPANTS WAS
NOT COMPLETE ON THE FEBRUARY 19, 1999, FILING DATE FOR THIS STATEMENT OF
ADDITIONAL INFORMATION, 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, 1997, AND
SEPTEMBER 30, 1998, PERCENTAGE INTERESTS FOR ALLOCATIONS OF THE JANUARY 31,
1999, 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 5,279 SHARES FOR THREE PARTICIPANTS WHO ARE OFFICERS OF THE FUND AND ITS
INVESTMENT ADVISERS: EDSON L. BRIDGES III, WHOSE OWNERSHIP INTEREST IS 3,379
SHARES, MARY ANN MASON, WHOSE OWNERSHIP INTEREST IS 1,722 SHARES, AND KATHLEEN
J. STRANIK, WHOSE OWNERSHIP INTEREST IS 178 SHARES.
UNLESS OTHERWISE NOTED, 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, 1999.
INVESTMENT ADVISORY AND OTHER SERVICES
CONTROL PERSONS -- TWO PERSONS, EDSON L. BRIDGES II AND EDSON L. BRIDGES
III, OF THE FOURTEEN MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND ARE ALSO
DIRECTORS AND OFFICERS OF THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL,
INC.
BRIDGES INVESTMENT FUND, INC. 14 APRIL 19, 1999
STATEMENT -- PART B
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: $135,586 IN 1996, $170,328 IN 1997 AND $209,938 IN
1998. 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 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
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.
BRIDGES INVESTMENT FUND, INC. 15 APRIL 19, 1999
STATEMENT -- PART B
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
KPMG PEAT MARWICK LLP, 1501 TWO CENTRAL PARK PLAZA, OMAHA, NEBRASKA 68102. THE
FUND ALSO PAYS THE FEES AND COSTS OF FIRST NATIONAL BANK OF OMAHA, NEBRASKA, THE
FUND CUSTODIAN. 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.
BRIDGES INVESTOR SERVICES, INC., 8401 WEST DODGE ROAD, OMAHA, NEBRASKA
68114, ACTS AS DIVIDEND DISBURSING AND TRANSFER AGENT FOR THE FUND. FOR ITS
SERVICES AS TRANSFER AGENT, SERVICES IS PAID A QUARTERLY FEE BY THE FUND OF $325
($1,300 ANNUALLY). THIS IS A FIXED FEE WHICH COVERS TRANSFER AGENT COSTS,
REGARDLESS OF THE NUMBER OF FUND SHARE TRANSACTIONS. FOR ITS SERVICES AS
DIVIDEND DISBURSING AGENT, SERVICES IS PAID BY THE FUND A FIXED FEE QUARTERLY OF
$300 ($1,200 ANNUALLY). THE FUND ALSO PAYS SERVICES A QUARTERLY FEE OF $225
($900 ANNUALLY) FOR ADMINISTRATIVE SERVICES PROVIDED TO THE FUND. IN ADDITION
TO THESE FIXED FEES, THE FUND PAYS TO SERVICES A $1.00 PER TRANSACTION FEE FOR
OPENING A NEW ACCOUNT AND TRANSFERS IN, AND A $1.50 PER TRANSACTION FEE FOR FUND
SHARE REDEMPTIONS AND TRANSFERS OUT. OTHER ADMINISTRATIVE AND OPERATIONAL
SERVICES PROVIDED TO THE FUND, INCLUDING PREPARATION AND MAILING OF TAX FORMS ON
BEHALF OF THE FUND, ARE BILLED ON A TIME BASIS OF $24 PER HOUR. THE FUND
REIMBURSES SERVICES FOR POSTAGE AND OTHER OUT-OF-POCKET DISBURSEMENT COSTS.
SERVICES ALSO CHARGES TRANSACTIONAL FEES TO SHAREHOLDERS OF THE FUND AS
DESCRIBED IN THE FUND'S PROSPECTUS. FOR THE YEAR ENDED DECEMBER 31, 1998, THE
FUND PAID A TOTAL OF $11,299.18 TO SERVICES FOR ALL SERVICES PROVIDED TO THE
FUND DURING 1998 (EXCLUDING REIMBURSEMENT FOR EXPENSE DISBURSEMENTS BY SERVICES
ON BEHALF OF THE FUND).
INDEPENDENT AUDITORS -- KPMG PEAT MARWICK 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 KPMG PEAT MARWICK
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 KPMG PEAT MARWICK LLP. LASTLY, KPMG PEAT MARWICK LLP PROVIDES
CONSENTS TO PERMIT THE FILING OF FINANCIAL STATEMENTS WITH APPROPRIATE DOCUMENTS
BRIDGES INVESTMENT FUND, INC. 16 APRIL 19, 1999
STATEMENT -- PART B
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.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
TRANSACTIONS IN THE FUND'S PORTFOLIO OF SECURITIES ARE EFFECTED THROUGH A
NUMBER OF 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: $16,091.31 IN 1996, $23,917.11 IN 1997 AND
$45,224.00 IN 1998. THE FUND'S MANAGEMENT HAS NO PLANS TO VARY THE BROKERAGE
COMMISSION ACTIVITY FROM THE PATTERN SHOWN DURING THE LAST THREE FISCAL YEARS.
DURING 1998, BROKERAGE COMMISSIONS ATTRIBUTED TO SECURITY RESEARCH INFORMATION
WERE $45,224.00 OR 100.00% OF THE TOTAL. THERE WERE NO COMMISSIONS ATTRIBUTED
TO SPECIAL BROKERAGE SERVICES OR TO GOOD WILL IN 1998.
THIRTEEN BROKERS WERE USED BY THE FUND DURING 1998, RESULTING IN AN AVERAGE
COMPENSATION PER BROKERAGE FIRM OF $3,478.77. THE LARGEST AMOUNT RECEIVED BY
ANY FIRM WAS $9,861.00. 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. IN 1998, THE
FUND PURCHASED SHARES OF MERRILL LYNCH & CO., INC., WHICH IS A BROKERAGE FIRM
USED BY THE FUND FROM TIME TO TIME. AS OF DECEMBER 31, 1998, THE FUND'S
HOLDINGS IN MERRILL LYNCH HAD A VALUE OF $200,250, REPRESENTING 0.4% OF FUND
ASSETS. THE FUND PAID MERRILL LYNCH $5,150 IN BROKERAGE COMMISSIONS IN 1998.
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.
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
BRIDGES INVESTMENT FUND, INC. 17 APRIL 19, 1999
STATEMENT -- PART B
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. 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, 1998.
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
The Fund's capital structure consists of 3,000,000 authorized shares of
capital stock (par value of one dollar per share) with 2,201,764 shares issued
as of December 31, 1998. Fund 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 number of shares redeemed.
At December 31, 1998, 788,033 shares of the Fund had been redeemed since
inception of the Fund in 1963. The Fund's net shares of capital stock
outstanding were 1,413,731 on December 31, 1998.
CUMULATIVE VOTING _ FUND SHARES ARE ENTITLED TO CUMULATIVE VOTING RIGHTS.
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 19, 1999
STATEMENT -- PART B
PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED
GENERAL INFORMATION -- SHARES OF THE FUND ARE OFFERED AND SOLD DIRECTLY TO
INVESTORS 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 FUND DOES
NOT HAVE ANY ARRANGEMENTS WITH UNDERWRITERS OR BROKER DEALERS WITH RESPECT TO
THE PURCHASE OR SALE OF FUND SHARES, NOR MAKE ANY PAYMENTS TO UNDERWRITERS OR
BROKER-DEALERS IN CONNECTION WITH THE PURCHASE OR SALE OF FUND SHARES.
THE FUND IS NOT PERMITTED TO REDEEM SHARES INVOLUNTARILY IN ACCOUNTS BELOW A
CERTAIN NUMBER OR VALUE OF SHARES. THE FUND WILL HONOR ALL PROPERLY
DOCUMENTED REQUESTS FOR REDEMPTION IRRESPECTIVE OF THE LENGTH OF TIME
INVESTORS HAVE MAINTAINED THEIR ACCOUNT WITH THE FUND. INFORMATION CONCERNING
THE METHODS OF PURCHASE AND REDEMPTION OF FUND SHARES ARE SET FORTH IN THE
FUND'S PROSPECTUS. THE FUND DOES NOT USE LETTERS OF INTENT, CONTRACTUAL
ACCUMULATION PLANS, WITHDRAWAL PLANS, OR EXCHANGE PRIVILEGES.
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 IN THE FUND'S
PROSPECTUS.
SPECIMEN PRICE MAKE UP -- PLEASE REFER TO APPENDIX A 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, 1998. 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 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 19, 1999
STATEMENT -- PART B
Description of Fund Plans
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.
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
PAYMENT WHEN THE PLAN IS ESTABLISHED. SUBSEQUENT FEES ARE DEDUCTED FROM
BRIDGES INVESTMENT FUND, INC. 20 APRIL 19, 1999
STATEMENT -- PART B
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.
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
BRIDGES INVESTMENT FUND, INC. 21 APRIL 19, 1999
STATEMENT -- PART B
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 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
BRIDGES INVESTMENT FUND, INC. 22 APRIL 19, 1999
STATEMENT -- PART B
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.
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
BRIDGES INVESTMENT FUND, INC. 23 APRIL 19, 1999
STATEMENT -- PART B
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 A QUALIFIED DISTRIBUTION FROM THE IRA, WHICH INCLUDES DISTRIBUTIONS
MADE AFTER THE DEPOSITOR REACHES AGE 59 1/2. THE ROTH INDIVIDUAL
RETIREMENT CUSTODIAL 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,
BRIDGES INVESTMENT FUND, INC. 24 APRIL 19, 1999
STATEMENT -- PART B
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.
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.
UNDERWRITERS: NONE
CALCULATION OF PERFORMANCE DATA: NONE.
__________________________________________________________________________
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.
__________________________________________________________________________
FINANCIAL STATEMENTS
THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998,
APPEAR AT PAGES 26 - 41 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 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.
THE PRICE MAKE UP SHEET, APPENDIX A, IS SHOWN ON PAGE 25; THEN THE
FINANCIAL STATEMENTS FOLLOW AS A UNIT TO COMPLETE THIS PART B.
BRIDGES INVESTMENT FUND, INC. 25 APRIL 19, 1999
STATEMENT - - PART B
<TABLE>
APPENDIX A(SPECIMEN)
PRICE MAKE UP SHEET
DECEMBER 31, 1998
<CAPTION>
JOURNAL FORM, ACTUAL BALANCE
LEDGER FORM, OR MARKET
SCHEDULE, OR ACCOUNT (COST FIGURES IN PARENTHESES) VALUE FIGURES
ACCOUNT NUMBER
<S> <C> <C>
ASSETS
01A-DR-C CASH-PRINCIPAL $ 41,045.58
01B-DR-C CASH-INCOME 115,400.23
02A-LF51 DIVIDENDS RECEIVABLE 39,463.44
02B-LF52 INTEREST RECEIVABLE 69,800.02
04A-CRDJ ACCTS. RECEIVABLE-SUBSCRIPTIONS TO CAPITAL STOCK 93,864.37
04B-CRDJ ACCTS. RECEIVABLE-SECURITIES SOLD _____________
07 _SCHEDULE 7 INV. IN SECURITIES (25,536,828.50) 48,306,839.78
CRS
______________ ______________________________________________________
______________ ______________________________________________________
TOTAL ASSETS $48,666,413.42
<PAGE>
LIABILITIES:
13A-CRDJ ACCTS. PAY.-REDEMPTIONS OF CAPITAL STOCK $ _____1,500.00
13B-CRDJ ACCTS. PAY.-PURCHASE OF SECURITIES _______________
14A-CRDJ ACCRUED LIAB.-OPERATING EXPENSES 83,358.75
14B-CRDJ ACCRUED LIAB.-TAXES _______________
14 -CRDJ DISTRIBUTIONS PAYABLE $148,441.75
______________ ______________________________________________________
______________ ______________________________________________________
TOTAL LIABILITIES $233,300.50
19 NET ASSETS APPLICABLE TO OUTSTANDING
CAPITAL SHARES (TOT. ASSETS MINUS TOT. LIAB.) $48,433,112.92
20 -CRDJ DR-TA CAPITAL STOCK-TOTAL SHARES OUTSTANDING 1,413,731.509
NET ASSET VALUE PER SHARE
PURCHASE PRICE PER SHARE $34.26 34.26
REDEMPTION PRICE PER SHARE $34.26 XDIV.@ .105
EQUALIZATION COMPUTATION NET INVESTMENT INCOME 0.00
(CURRENT QTR.) (CURRENT QTR.)
DIVIDEND INCOME $ 96,103.67 UNDISTRIBUTED NET INCOME 0.00
INTEREST INCOME 120,808.67 (PREVIOUS QTRS.)
TOTAL INCOME $216,912.34 TOTAL ACCT. 21B 0.00
EQUALIZATION/SHARE .00
TAXES PAID $__________ ORDERS /
EXPENSES UNPAID 86,100.00 NET SHARES PURCH., REDEMP. ,
, .
REIMBURSED EXPENSES (_________) BALANCE, EQUALIZATION 5,018.76
TOT.EXP.POST CLOSE __________ EQUALIZATION ENTRY
EQUALIZATION FORWARD
NET INVESTMENT INC. $130,812.34 CAPITAL SHARES FORWARD 1,413,731.509
</TABLE>
BRIDGES INVESTMENT FUND, INC. 26 APRIL 19, 1999
STATEMENT - - PART B
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, 1998, AND THE RELATED STATEMENT OF OPERATIONS, THE STATEMENT
OF CHANGES IN NET ASSETS, AND THE FINANCIAL HIGHLIGHTS FOR THE YEAR 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 AUDIT. THE
ACCOMPANYING FINANCIAL STATEMENT OF BRIDGES INVESTMENT FUND, INC. AS OF DECEMBER
31, 1997 INCLUDING THE STATEMENT OF CHANGES FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE FINANCIAL HIGHLIGHTS FOR EACH OF THE YEARS IN THE FOUR YEAR PERIOD THEN
ENDED WERE AUDITED BY OTHER AUDITORS WHOSE REPORT THEREON DATED JANUARY 16,
1998, EXPRESSED AN UNQUALIFIED OPINION ON THOSE STATEMENTS.
WE CONDUCTED OUR AUDIT 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, 1998, 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 AUDIT PROVIDES 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, 1998, THE RESULTS OF ITS
OPERATIONS, THE CHANGES IN ITS NET ASSETS AND THE FINANCIAL HIGHLIGHTS FOR THE
YEAR THEN ENDED, IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
KPMG PEAT MARWICK LLP
OMAHA, NEBRASKA
JANUARY 8, 1999
<PAGE>
Bridges Investment Fund, Inc. -27- April 19, 1999
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1998
<CAPTION>
Number Market
of Shares Cost Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS - (83.4%)
Advertising - 1.5%
Interpublic Group of Companies, Inc. (The) 2,000 $ 106,953 $ 159,500
Outdoor Systems, Inc.*<FN> 19,050 323,364 571,500
$ 430,317 $ 731,000
Aerospace/Defense _ 0.5%
Gulfstream Aerospace Corp.*<FN> 5,000 $ 216,088 $ 266,250
Aircraft - Manufacturing - 0.8%
The Boeing Company 12,000 $ 278,135 $ 392,250
Amusements - Recreation _ Sporting Goods - 0.5%
Nike, Inc. 6,000 $ 192,422 $ 243,375
Banking and Finance - 5.3%
Chase Manhattan Corporation (The) 2,000 $ 86,650 $ 142,000
First National of Nebraska, Inc. 230 346,835 775,100
MBNA Corporation 15,000 234,825 372,187
SLM Holding Corporation 3,500 130,100 168,000
State Street Corporation 8,000 66,525 561,000
U.S. Bancorp (New) 2,000 70,160 71,000
Wells Fargo & Co. (New) 12,000 164,810 479,250
$ 1,099,905 $ 2,568,537
Beverages - Soft Drinks - 2.2%
Coca-Cola Company (The) 1,000 $ 62,049 $ 67,000
PepsiCo, Inc. 24,000 307,470 981,000
$ 369,519 $ 1,048,000
Chemicals - 2.8%
The Dow Chemical Company 5,000 $ 288,887 $ 454,688
Du Pont (E.I.) De Nemours & Company 8,000 273,935 424,500
Monsanto Company 10,000 116,190 475,000
$ 679,012 $ 1,354,188
Consumer Services _ 0.4%
Quintilies Transnational Corp.*<FN> 4,000 $ 170,687 $ 213,500
Communications - Radio and Television _ 1.1%
Clear Channel Communications, Inc.*<FN> 10,000 $ 366,954 $ 545,000
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -28- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1998
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Computers - Hardware and Software - 11.0%
Cisco Systems, Inc.*<FN> 9,000 $ 290,726 $ 835,313
Compaq Computer Corporation 10,000 359,227 420,000
Dell Computer Corporation *<FN> 1,500 109,594 109,781
EMC Corporation*<FN> 8,000 358,855 680,000
HNC Software, Inc.*<FN> 13,000 414,471 525,688
Hewlett-Packard Co. 7,000 97,309 478,187
Microsoft Corporation*<FN> 10,000 93,361 1,386,875
Transaction Systems Architects, Inc.*<FN> 18,000 600,521 900,000
$ 2,324,064 $ 5,335,844
Data Processing and Management _ 0.5%
CSG Systems*<FN> 3,000 $ 165,750 $ 237,000
Diversified Operations _ 1.0%
Berkshire Hathaway Inc., Class B *<FN> 210 $ 150,375 $ 493,500
Drugs - Medicines _ Cosmetics - 8.9%
Abbott Laboratories 15,000 $ 169,395 $ 735,000
<PAGE>
Amgen, Inc.*<FN> 3,000 248,687 313,687
Bristol-Myers Squibb Co. 4,000 141,675 535,250
Elan Corporation PLC ADR*<FN> 10,000 419,005 699,375
Johnson & Johnson 10,000 109,396 838,750
Merck & Co., Inc. 8,000 274,266 1,180,000
$ 1,362,424 $ 4,302,062
Electrical Equipment and Supplies - 1.7%
General Electric Co. 8,000 $ 147,473 $ 816,000
Electronic Components _ Conductors _ 0.2%
Altera Corporation*<FN> 2,000 $ 96,625 $ 121,750
Electronics - 3.6%
Intel Corporation 10,000 $ 334,735 $ 1,185,625
Solectron Corporation *<FN> 6,000 230,974 557,625
$ 565,709 $ 1,743,250
Finance _ Credit Cards _ 0.4%
American Express Company 2,000 $ 165,255 $ 205,000
Finance _ Diversified _ 0.3%
Morgan Stanley, Dean Witter, Discover & Co. 2,000 $ 106,015 $ 142,000
Finance _ Investment Banks _ 0.4%
Merrill Lynch & Co, Inc. 3,000 $ 168,586 $ 200,250
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -29- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1998
<CAPTION>
Number
Title of Security of Shares Cost Valuet
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Finance - Real Estate - 4.0%
Freddie Mac 30,000 $ 470,320 $ 1,933,125
Finance - Services - 2.7%
Capital One Financial Corporation 10,000 $ 468,201 $ 1,150,000
FINOVA 2,000 80,535 107,875
Paychex, Inc. 1,000 43,438 51,438
$ 592,174 $ 1,309,313
Food - Miscellaneous Products - 2.2%
Philip Morris Companies, Inc. 20,000 $ 338,693 $ 1,070,000
Insurance - Mortgage _ 0.3%
MGIC Investment Corporation 4,000 $ 177,450 $ 159,250
Insurance - Multiline - 0.5%
American International Group, Inc. 2,500 $ 118,455 $ 241,563
Insurance - Municipal Bond - 1.3%
MBIA, Inc. 10,000 $ 422,688 $ 655,625
Linen Supply and Related Products - 0.6%
Cintas Corporation 4,000 $ 166,578 $ 281,750
Medical Sterilization Products _ 0.4%
Steris Corporation *<FN> 6,000 $ 169,500 $ 170,625
Metal Products _ Miscellaneous - 0.4%
Nucor Corporation 4,500 $ 68,056 $ 194,625
Motion Pictures and Theatres - 1.4%
The Walt Disney Company 22,000 $ 236,300 $ 660,000
Oil and Gas _ Drilling _ 0.2%
R & B Falcon Corporation *<FN> 15,000 $ 193,345 $ 113,437
Petroleum Producing - 5.4%
Amoco Corporation 10,000 $ 246,160 $ 590,000
Atlantic Richfield Company 4,000 211,835 261,500
Chevron Corporation 10,000 340,535 829,375
Exxon Corporation 8,000 198,750 585,000
Mobil Corporation 4,000 127,075 348,500
$ 1,124,355 $ 2,614,375
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -30- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1998
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Publishing - Newspapers - 1.1%
Gannett Co., Inc. 8,000 $ 179,310 $ 516,000
Publishing - Electronic - 0.7%
Reuters Group PLC, ADR Sponsored 5,199 $ 166,303 $ 329,487
Radio _ 0.2%
Chancellor Media Corporation *<FN> 2,000 $ 62,688 $ 95,750
Retail Stores - Apparel and Clothing - 3.5%
Gap, Inc. 30,000 $ 258,323 $ 1,683,750
Retail Stores _ Building Materials and Home
Improvement _ 2.3%
The Home Depot, Inc. 18,000 $ 455,080 $ 1,101,375
Retail Stores _ Department - 1.9%
Dayton Hudson Corporation 17,000 $ 164,690 $ 922,250
Retail Stores - Variety - 0.6%
Albertson's Inc. 5,000 $ 98,910 $ 318,437
Schools _ 0.5%
Sylvan Learning System *<FN> 7,500 $ 200,090 $ 228,750
Software Applications _ 0.1%
J. D. Edwards & Co. *<FN> 1,000 $ 40,250 $ 28,375
Software _ Network _ 0.6%
Network Associates, Inc. *<FN> 4,500 $ 188,076 $ 298,125
Telecommunications - 6.0%
AirTouch Communications, Inc.*<FN> 8,000 $ 345,725 $ 579,500
Level 3 Communications *<FN> 7,000 245,425 301,875
MCI WorldCom, Inc. *<FN> 13,000 466,187 932,750
Sprint Corporation 5,000 83,964 420,625
Sprint PCS Corporation *<FN> 2,500 10,082 57,812
Vodafone Group PLC 1,000 139,080 161,125
West Teleservices Corporation*<FN> 44,200 625,394 430,950
$ 1,915,857 $ 2,884,637
Telecommunications _ Equipment _ 1.5%
Nokia Corporation 6,000 $ 492,858 $ 722,625
Television _ Cable _ 0.4%
Comcast Corporation 3,000 $ 141,375 $ 176,063
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -31- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1998
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Transportation _ Airfreight _ 1.1%
Eagle USA Airfreight, Inc. *<FN> 22,000 $ 416,042 $ 539,000
Transportation _ Railroads - 0.4%
Union Pacific Corporation 4,000 $ 148,580 $ 180,250
TOTAL COMMON STOCKS (Cost - $18,061,661) $18,061,661 $40,387,318
PREFERRED STOCKS (2.4%)
Banking and Finance _ 1.3%
CFC Capital Trust 9.375% Preferred, Series B 5,000 $ 125,000 $ 129,375
CFB Capital II 8.20% Cumulative Preferred 5,000 125,000 126,875
Harris Preferred Capital Corp., 10,000 250,000 256,250
7.375%, Series A
Silicon Valley Bancshares Capital 5,000 125,000 115,000
8.25% Preferred Series I
$ 625,000 $ 627,500
Telecommunications - 0.6%
AirTouch Communications, Inc. 4.25% Series C 3,000 $ 137,925 $ 309,000
Convertible Preferred
Utilities _ Electric _ 0.5%
Tennessee Valley Authority 6.75% 10,000 $ 250,000 $ 263,125
Variable Preferred Series D
Total Preferred Stocks (Cost - $1,012,925) $ 1,012,925 $ 1,199,625
Total Stocks (Cost - $19,074,586) $19,074,586 $41,586,943
DEBT SECURITIES (13.9%)
Energy - Alternate Sources - 0.5%
CalEnergy Co., Inc., 7.63% Notes
due October 15, 2007 $200,000 $ 200,000 $ 214,025
Food - Miscellaneous Products - 0.2%
Super Valu Stores, Inc., 8.875%
Promissory Notes, due June 15, 1999 $100,000 $ 100,689 $ 101,444
Household Appliances and Utensils - 0.2%
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000 $ 102,200 $ 112,133
<FN>*Nonincome-producing security
Bridges Investment Fund, Inc. -32- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
DECEMBER 31, 1998
<CAPTION>
Principal Market
Title of Security Amount Cost Value
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
Office Equipment and Supplies - 0.2%
Xerox Corporation, 9.750% Notes
due March 15, 2000 $100,000 $ 100,025 $ 105,000
Retail Stores _ Department - 0.6%
Dillard Department Stores, Inc., 7.850%
Debentures, due October 1, 2012 $150,000 $ 151,348 $ 163,897
Sears Roebuck & Co., 9.375% Debentures
due November 1, 2011 100,000 $ 106,399 129,898
$ 257,747 $ 293,795
Telecommunications _ 0.5%
Level 3 Communications, Inc., 9.125% Senior $250,000 $ 241,937 $ 248,265
Notes due May 1, 2008
U.S. Government _ 6.6%
U.S. Treasury, 9.125% Notes,
due May 15, 1999 $200,000 $ 215,900 $ 203,187
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 211,900 212,813
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 199,052 214,875
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 214,098 217,250
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 219,525 244,531
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 303,245 337,641
U.S. Treasury, 7.500% Notes,
due February 15, 2005 300,000 305,871 343,641
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 256,223 255,094
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 307,910 325,172
U.S. Treasury, 8.750% Bonds,
due November 15, 2008 200,000 237,472 233,469
Bridges Investment Fund, Inc. -33- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1998
<CAPTION>
Principal Market
Title of Security Amount Cost Value
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 $ 234,910 $ 239,812
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 308,539 372,750
$ 3,014,645 $ 3,200,235
Commercial Paper - Short Term _ 5.1%
American Express Credit Corporation
Commercial Paper Note 6.00%
due January 5, 1999 $1,195,000 $ 1,195,000 $ 1,195,000
Ford Motor Credit Corporation
Commercial Paper Note 5.91%
due January 4, 1999 1,250,000 $ 1,250,000 1,250,000
$ 2,445,000 $ 2,445,000
TOTAL DEBT SECURITIES (Cost - $6,462,243) $ 6,462,243 $ 6,719,897
TOTAL INVESTMENTS IN SECURITIES
(Cost - $25,536,829) (99.7%) $25,536,829 $48,306,840
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.3%) 126,273
NET ASSETS, December 31, 1998 (100.0%) $48,433,113
</TABLE>
The accompanying notes to financial statements
are an integral part of this schedule.
<PAGE>
Bridges Investment Fund, Inc. -34- April 19, 1999
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<CAPTION>
<S>
ASSETS Amount
<C>
Investments, at market value
Common and preferred stocks
(cost $19,074,586) $41,586,943
Debt securities (cost $6,462,243) 6,719,897
Total Investments $48,306,840
Cash 156,446
Receivables
Dividends and interest 109,263
Subscriptions to capital stock 93,864
TOTAL ASSETS $48,666,413
LIABILITIES
Dividend distributions payable $ 148,442
Redemption of Capital stock 1,500
Investment advisor, management and
service fees payable 59,980
Accrued operating expenses 23,378
TOTAL LIABILITIES $ 233,300
NET ASSETS
Capital stock, $1 par value _ Authorized
3,000,000 shares,
1,413,731 shares outstanding $ 1,413,731
Paid-in surplus - 24,244,352
Net capital paid in on shares $25,658,083
Net unrealized appreciation on investments 22,770,011
Accumulated undistributed net
investment income 5,019
TOTAL NET ASSETS $48,433,113
NET ASSET VALUE PER SHARE $34.26
OFFERING PRICE PER SHARE $34.26
REDEMPTION PRICE PER SHARE $34.26
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
Bridges Investment Fund, Inc. -35- April 19, 1999
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Amount Amount
<S> <C> <C>
INVESTMENT INCOME
Interest $417,891
Dividends (Net of foreign withholding taxes
of $1,291) 476,508
Total Investment Income $ 894,399
EXPENSES
Management fees $ 209,938
Custodian fees 29,444
Insurance and Other Administrative Fees 23,358
Bookkeeping services 17,156
Printing and supplies 11,494
Professional services 10,800
Dividend disbursing and transfer
agent fees 11,745
Computer programming 6,000
Taxes and licenses 1,065
Total Expenses $ 321,000
NET INVESTMENT INCOME $ 573,399
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on transactions in
investment securities $2,816,870
Net increase in unrealized
appreciation of investments 6,973,448
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $ 9,790,318
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,363,717
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
Bridges Investment Fund, Inc. -36- April 19, 1999
Statement -- Part B
<TABLE>
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND 1997
<CAPTION>
1998 1997
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 573,399 $ 624,462
Net realized gain on transactions in
investment securities 2,816,870 380,365
Net increase in unrealized
appreciation of investments 6,973,448 5,456,770
Net increase in net assets
resulting from operations $ 10,363,717 $6,461,597
Net equalization credits 9,098 3,157
Distributions to shareholders from -
Net investment income (573,399) (624,462)
Net realized gain from investment
transactions (2,810,407) (383,918)
Return of Capital (9,316) (2,651)
Net capital share transactions 4,805,885 1,944,324
Total Increase in Net Assets $ 11,785,578 $7,398,047
NET ASSETS:
Beginning of year $ 36,647,535 $29,249,488
End of year $ 48,433,113 $36,647,535
<FN>The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
Bridges Investment Fund, Inc. -37- April 19, 1999
Statement -- Part B
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(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>
1998 1997 Net Change
<S> <C> <C> <C>
Net unrealized appreciation
(depreciation):
Aggregate gross unrealized
appreciation on
securities $23,102,283 $16,375,653
Aggregate gross unrealized
depreciation on
securities (332,272) (579,090)
Net $22,770,011 $15,796,563 $6,973,448
</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. -38- April 19, 1999
Statement -- Part B
B. Federal Taxes -
The Fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and not be
subject to federal income tax. Therefore, no income tax provision is
required. The Fund also intends to distribute its taxable net
investment income and realized gains, if any, to avoid the payment of
any federal excise taxes.
The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. In addition, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains or losses were recorded by the Fund.
C. Distribution To Shareholders -
The Fund accrues income dividends to shareholders on a quarterly
basis as of the ex-dividend date. Distributions of net realized gains
are made on an annual basis to shareholders as of 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
Addviser.
Bridges Investment Fund, Inc. -39- April 19, 1999
Statement -- Part B
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. There were no amounts
reimbursed in the year ended December 31, 1998.
(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>
1998 1997
<S> <C> <C>
United States government obligations $ -- $ --
Other Securities 9,631,883 6,360,243
Total Cost $9,631,883 $6,360,243
</TABLE>
Net proceeds from sales of long-term investments during the years
ended December 31, were:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
United States government obligations $ 200,000 $ 200,000
Other Securities 9,280,532 2,388,453
Total Net Proceeds $9,480,532 $2,588,453
Total Cost Basis of
Securities Sold $6,663,662 $2,208,087
</TABLE>
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
Bridges Investment Fund, Inc. -40- April 19, 1999
Statement -- Part B
(6) CAPITAL STOCK
Shares of capital stock issued and redeemed are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Shares sold 108,559 95,567
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 87,751 32,365
196,310 127,932
Shares redeemed 45,397 55,945
Net increase 150,913 71,987
Value of capital stock issued and redeemed is as follows:
<CAPTION>
1998 1997
<S> <C> <C>
Shares sold $3,444,495 $2,553,754
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 2,800,423 884,491
$6,244,918 $3,438,245
Shares redeemed 1,439,033 1,493,921
Net increase $4,805,885 $1,944,324
</TABLE>
(7) DISTRIBUTION TO SHAREHOLDERS
On December 1, 1998 a cash distribution was declared from net
investment income accrued through December 31, 1998. This distribution was
ultimately calculated as $.105 per share aggregating $148,442. The
dividend will be paid on January 25, 1999, to shareholders of record on
December 31, 1998.
Bridges Investment Fund, Inc. -41- April 19, 1999
Statement -- Part B
<TABLE>
FINANCIAL HIGHLIGHTS*
Per share income and capital changes for a share outstanding for each
of the last five years were:
<CAPTION>
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $29.02 $24.56 $21.54 $17.10 $17.80
Income From Investment Operations
Net Investment Income $ .44 $ .51 $ .55 $ .58 $ .59
Net Gains or (Losses) on Securities
(both realized and unrealized) 7.36 4.77 3.28 4.63 (.52)
Total From Investment Operations $ 7.80 $ 5.28 $ 3.83 $ 5.21 $ .07
Less Distributions
Dividends from net investment income $ (.44) $ (.51) $ (.55) $ (.58) $ (.59)
Distributions from capital gains (2.12) (.31) (.26) (.19) (.18)
Total Distributions $(2.56) $ (.82) $ (.81) $ (.77) $ (.77)
Net Asset Value, End of Period $34.26 $29.02 $24.56 $21.54 $17.10
Total Return 27.48% 22.33% 18.06% 30.96% 0.30%
Ratios/Supplemental Data
Net Assets, End of Period
(in thousands) $48,433 $36,648 $29,249 $24,052 $18,096
Ratio of Expenses to Average
Net Assets**<F1> .77% .81% .87% .89% .90%
Ratio of Net Investment Income to
Average Net Assets **<F1> 1.37% 2.64% 3.23% 3.80% 4.25%
Portfolio Turnover Rate 24% 8% 8% 7% 10%
<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.
</TABLE>
<PAGE>
PART C
OTHER INFORMATION
__________________________________________________________________________
OTHER INFORMATION Bridges Investment Fund, Inc. CAPITAL STOCK
April 19, 1999 8401 West Dodge Road
Omaha, Nebraska 68114
402-397-4700
__________________________________________________________________________
Contents Page No.
Item 23. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Item 24. Persons Controlled by or Under Common Control with the Fund .5
Item 25. Indemnification . . . . . . . . . . . . . . . . . . . . . . 5
Item 26. Business and Other Connections of Investment Adviser . . . .6-7
Item 27. Principal Underwriters . . . . . . . . . . . . . . . . . . . 7
Item 28. Location of Accounts and Records . . . . . . . . . . . . . . 8
Item 29. Management Services . . . . . . . . . . . . . . . . . . . . .8
Item 30. Undertakings . . . . . . . . . . . . . . . . . . . . . . . . 8
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9-10
Special Notices
. This Other Information is not a Prospectus.
. This Other Information should be read in conjunction with Part A, the
Prospectus of Bridges Investment Fund, Inc. dated February 19, 1999, and
Part B, Statement of Additional Information.
. Copies of the Part A and Part B filings of Bridges Investment Fund, Inc.
may be obtained from the office of the Fund at the address shown above.
. The date of this Other Information is February 19, 1999.
Bridges Investment Fund, Inc. 2 April 19, 1999
Other Information -- Part C
Item 23. Exhibits
(a) The Fund Articles of Incorporation, filed with the Form N-8B-1
and amendments thereto, in File No. 811-1209, are hereby
incorporated by reference.
(b) (i) The Fund By-Laws, filed with the Form N-8B-1 and amendments
thereto, in File No. 811-1209, are hereby incorporated
reference.
(ii) Amendment to Article III, Section 1 of Fund By-Laws increasing
the number of Fund Directors from 11 to 14 is filed herewith
as Exhibit 23 (b)(ii).
(c) (i) The Specimen Stock Certificate, filed with the Form S-5 in File
No. 2-21600, is hereby incorporated by reference.
(ii) Stock Subscription and Order Form (Revision 04-28-98) filed as
Exhibit 24C to Form N-1A, Amendment No. 25, April 28, 1998, is
hereby incorporated by reference.
(d) 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.
(e) Underwriting contracts: Not applicable.
(f) Bonus or profit sharing contracts: Not applicable.
(g) (i) 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.
(ii) Custody agreement between Bridges Investment Fund, Inc. and the
First National Bank of Omaha dated April 23, 1997, effective on
July 1, 1997, Exhibit 26 to Form N-1A, Amendment No. 25, filed
April 28, 1998, is hereby incorporated by reference.
Bridges Investment Fund, Inc. 3 April 19, 1999
Other Information -- Part C
Other Material Contracts
(h) Copies of the model plans used by the Fund to establish
retirement plans are hereby incorporated by reference as
subparagraphs (i) through (ix) as follows:
(i) 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.
(ii) Amended and Restated Standard Retirement Plan, including
Application Forms, Participant Request For Distribution Forms,
and Designation of Beneficiary Forms, and the Standard
Custodial Agreement, Exhibit 24(i) to Form N-1A, Amendment No.
21, filed February 24, 1994, is hereby incorporated by
reference.
(iii) Amended and Restated Standard Retirement Plan, corrected to
final text approval by the Internal Revenue Service on July 31,
1990, Exhibit 24(j) to Form N-1A Amendment No. 18, filed
February 22, 1991, is hereby incorporated by reference.
(iv) Amended and Restated Individual Retirement Account Custodial
Agreement corrected to final text approval the Internal Revenue
Service on June 11, 1993, Exhibit 24(k), to Form N-1A,
Amendment No. 21, filed February 24, 1994, is hereby
incorporated by reference.
(v) Amendment to Bridges Investment Fund, Inc. Standard Retirement
Plan effective January 1, 1994, as adopted on March 29, 1994,
Exhibit 24(l) to Form N-1A, Amendment No. 22, filed February
23, 1995, is hereby incorporated by reference.
(vi) 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,
Exhibit 14(m) to Form N-1A, Amendment No. 25, filed April 28,
1998, is hereby incorporated by reference.
Bridges Investment Fund, Inc. 4 April 19, 1999
Other Information -- Part C
(vii) 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,
Exhibit 14(n) to Form N-1A, Amendment No. 25, filed April 28,
1998, is hereby incorporated by reference.
(viii) Roth Individual Retirement Custodial Account (IRS Form 5305-
RA) with standardized text Attachment for Article IX, Exhibit
14(o) to Form N-1A, Amendment No. 25, filed April 28, 1998, is
hereby incorporated by reference.
(ix) Education Individual Retirement Custodial Account (IRS Form
5305-EA) with standardized text Attachment for Article XI,
Exhibit 14 (p) to Form N-1A, Amendment No. 25, filed April 28,
1998, is hereby incorporated by reference.
(x) Agreement dated July 14, 1987, to appoint Bridges Investor
Services, Inc. as Dividend Disbursing and Transfer Agent,
Exhibit 19 to Form N-1A, Amendment No. 15, filed February 25,
1988, is hereby incorporated by reference.
(xi) 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,
Exhibit 21 to Form N-1A, Amendment No. 15, filed February 25,
1988, is hereby incorporated by reference.
(i) (i) The opinion and consent of counsel dated July 12, 1963, as to
the legality of securities issued, Exhibit F of the original
Form S-5 in File No. 2-21600, are hereby incorporated by
reference.
(ii) The opinion and consent of legal counsel, February 25, 1988, as
to the legality of securities issued, Exhibit 22, to Form N-
1A, Amendment No. 16, filed February 24, 1989, is hereby
incorporated by reference.
Bridges Investment Fund, Inc. 5 April 19, 1999
Other Information -- Part C
(j) Consent of KPMG Peat Marwick LLP is filed herewith as Exhibit
23 (j).
(k) Omitted Financial Statements: Not applicable.
(l) Initial Capital Agreements: Not applicable.
(m) Rule 12b-1 Plan: Not applicable.
(n) Financial Data Schedule meeting requirements of SEC Rule 483 is
filed herewith as Exhibit 23 (n).
(o) Rule 18f-3 Plan: Not applicable.
Item 24. Persons Controlled by or under Common Control with Registrant
Not applicable
Item 25. Indemnification
Under the Nebraska Business Corporation Act, as enacted in 1995, a
Nebraska Corporation, such as the Fund, is required to indemnify a
director and officer who was wholly successful in the defense of any
proceeding to which such person was a party because of his or her
position as a director or officer against reasonable expenses,
including attorney's fees, incurred in connection with such
proceeding. A Nebraska Corporation, such as the Fund, is permitted,
but not required, to indemnify a director or officer against liability
if such person conducted himself or herself in good faith, and the
director or officer reasonably believed that his or her conduct was in
the best interests of the corporation. The Fund has never been
requested to provide indemnification by a director or officer, nor has
the Fund taken any action or made any offer to indemnify a director or
officer of the Fund.
Bridges Investment Fund, Inc. 6 April 19, 1999
Other Information -- Part C
Item 26. 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
JAT Investments Limited Director
25720 West Dodge Road
Waterloo, Nebraska 68069
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, a proprietorship which is
part of Mr. Bridges' principal profession. The other exception is
Provident Trust Company, discussed in more detail below.
Bridges Investment Fund, Inc. 7 April 19, 1999
Other Information -- Part C
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
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 1998
with assistance to Provident Trust Company for the conduct of its
operations and services. On December 31, 1998, Provident Trust
Company was responsible to 495 customer accounts with assets valued at
$488,258,000.
Item 27. Principal Underwriters
Not applicable
Bridges Investment Fund, Inc. 8 April 19, 1999
Other Information -- Part C
Item 28. 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 29. Management Services
Not applicable
Item 30. Undertakings
Not applicable
Bridges Investment Fund, Inc. 9 April 19, 1999
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 19th day of
February, 1999.
BRIDGES INVESTMENT FUND, INC.
/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 19, 1999
Edson L. Bridges II Date
/s/ Nancy K. Dodge Treasurer February 19, 1999
Nancy K. Dodge Date
________________________ Director ___________________
Frederick N. Backer Date
/s/ Edson L. Bridges II_ Director February 19, 1999
Edson L. Bridges II Date
/s/ Edson L. Bridges III President February 19, 1999
Edson L. Bridges III Director Date
/s/ N. P. Dodge, Jr. Director February 19, 1999
N. P. Dodge, Jr. Date
/s/ John W. Estabrook Director February 19, 1999
John W. Estabrook Date
_______________________ Director ___________________
Jon D. Hoffmaster Date
/s/ John J. Koraleski Director February 19,1999
John J. Koraleski Date
Bridges Investment Fund, Inc. 10 April 19, 1999
Other Information -- Part C
_______________________ Director ___________________
Roger A. Kupka Date
/s/ Gary L. Petersen Director February 19, 1999
Gary L. Petersen Date
_______________________ Director ___________________
John T. Reed Date
/s/ Roy A. Smith Director February 19, 1999
Roy A. Smith Date
_______________________ Director ____________________
Janice D. Stoney Date
/s/ L.B. Thomas Director February 19, 1999
L.B. Thomas Date
/s/ John K. Wilson Director February 19, 1999
John K. Wilson Date
<PAGE>
EXHIBIT 23 (B) (ii)
AT THE ANNUAL MEETING OF FUND SHAREHOLDERS HELD FEBRUARY 16, 1999, THE
SHAREHOLDERS APPROVED THE AMENDMENT TO THE FIRST SENTENCE OF ARTICLE III,
SECTION 1 OF THE FUND BY-LAWS TO READ AS FOLLOWS:
"THE NUMBER OF DIRECTORS OF THE CORPORATION SHALL BE FOURTEEN".
THE AMENDMENT CHANGED THE NUMBER OF FUND DIRECTORS FROM ELEVEN (11) TO
FOURTEEN (14).
<PAGE>
EXHIBIT 23 (J)
CONSENT OF INDEPENDENT AUDITORS'
WE CONSENT TO THE USE OF OUR REPORTS INCORPORATED HEREIN AND TO THE REFERENCE TO
OUR FIRM UNDER THE HEADINGS "FINANCIAL HIGHLIGHTS" IN THE PROSPECTUS AND
"INDEPENDENT AUDITORS" IN THE STATEMENT OF ADDITIONAL INFORMATION.
/S/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
FEBRUARY 19, 1999
OMAHA, NEBRASKA
Exhibit 23 (n)
The following Financial Data Schedule of the Fund is provided pursuant to SEC
Rule 483.
<TABLE>
FINANCIAL DATA SCHEDULE*<F1>
Per share income and capital changes for a share outstanding for each of
the last five years were:
<CAPTION>
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $29.02 $24.56 $21.54 $17.10 $17.80
Income From Investment Operations
Net Investment Income $ .44 $ .51 $ .55 $ .58 $ .59
Net Gains or (Losses) on Securities
(both realized and unrealized) 7.36 4.77 3.28 4.63 (.52)
Total From Investment Operations $ 7.80 $ 5.28 $ 3.83 $ 5.21 $ .07
Less Distributions
Dividends from net investment income $ (.44) $ (.51) $ (.55) $ (.58) $ (.59)
Distributions from capital gains (2.12) (.31) (.26) (.19) (.18)
Total Distributions $(2.56) $ (.82) $ (.81) $ (.77) $ (.77)
Net Asset Value, End of Period $34.26 $29.02 $24.56 $21.54 $17.10
Ratio of Expenses to Average Net
Assets**<F2> .77% .81% .87% .89% .90%
<F1>* Per share income and capital change data is computed using the weighted
average number of shares outstanding method.
<F2>** Average net asset data is computed using monthly net asset value figures.
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Thirty-Sixth Annual Shareholder Report 1998 and is qualified in its
entirety by reference to such report.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 25,536,829
<INVESTMENTS-AT-VALUE> 48,306,840
<RECEIVABLES> 203,127
<ASSETS-OTHER> 156,446
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48,666,413
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 233,300
<TOTAL-LIABILITIES> 233,300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,658,083
<SHARES-COMMON-STOCK> 1,413,731
<SHARES-COMMON-PRIOR> 1,262,818
<ACCUMULATED-NII-CURRENT> 5,019
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22,770,011
<NET-ASSETS> 48,433,113
<DIVIDEND-INCOME> 476,508
<INTEREST-INCOME> 417,891
<OTHER-INCOME> 0
<EXPENSES-NET> 321,000
<NET-INVESTMENT-INCOME> 573,399
<REALIZED-GAINS-CURRENT> 2,816,870
<APPREC-INCREASE-CURRENT> 6,973,448
<NET-CHANGE-FROM-OPS> 10,363,717
<EQUALIZATION> 9,098
<DISTRIBUTIONS-OF-INCOME> 573,399
<DISTRIBUTIONS-OF-GAINS> 2,810,407
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 108,559
<NUMBER-OF-SHARES-REDEEMED> 45,397
<SHARES-REINVESTED> 87,751
<NET-CHANGE-IN-ASSETS> 11,785,578
<ACCUMULATED-NII-PRIOR> 5,237
<ACCUMULATED-GAINS-PRIOR> (6,462)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 209,938
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 321,000
<AVERAGE-NET-ASSETS> 41,987,618
<PER-SHARE-NAV-BEGIN> 29.02
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 7.36
<PER-SHARE-DIVIDEND> 0.44
<PER-SHARE-DISTRIBUTIONS> 2.56
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 34.26
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
