SIT GROWTH & INCOME FUND INC, DEF 14A, 1996-09-09

SIT GROWTH & INCOME FUND INC
DEF 14A, 1996-09-09

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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

SIT SMALL CAP GROWTH FUND
SIT INTERNATIONAL GROWTH FUND
SIT GROWTH FUND, INC.
SIT GROWTH & INCOME FUND, INC.
SIT BALANCED FUND
SIT BOND FUND
SIT MINNESOTA TAX-FREE INCOME FUND
SIT TAX-FREE INCOME FUND
SIT U.S. GOVERNMENT SECURITIES FUND, INC.
SIT MONEY MARKET FUND, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Items 22(a)(2) of Schedule A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

[X] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing party:

(4) Date filed:

[DEFINITIVE COPY]

SIT DEVELOPING MARKETS GROWTH FUND
SIT SMALL CAP GROWTH FUND
SIT INTERNATIONAL GROWTH FUND
SIT GROWTH FUND, INC.
SIT GROWTH & INCOME FUND, INC.
SIT BALANCED FUND
SIT BOND FUND
SIT MINNESOTA TAX-FREE INCOME FUND
SIT TAX-FREE INCOME FUND
SIT U.S. GOVERNMENT SECURITIES FUND, INC.
SIT MONEY MARKET FUND, INC.

4600 Norwest Center
Minneapolis, Minnesota 55402

---------------------------------------

NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 23, 1996
---------------------------------------

September 6, 1996

Dear Shareholders:

Notice is hereby given that the joint annual meeting of the
shareholders of Sit Developing Markets Growth Fund ("Developing Markets Fund"),
Sit Small Cap Growth Fund ("Small Cap Fund"), Sit International Growth Fund
("International Fund"), Sit Growth Fund, Inc. ("Growth Fund"), Sit Growth &
Income Fund, Inc. ("Growth & Income Fund"), Sit Balanced Fund ("Balanced Fund"),
(collectively the "Stock" Funds), Sit Bond Fund ("Bond Fund"), Sit Minnesota
Tax-Free Income Fund ("Minnesota Fund"), Sit Tax-Free Income Fund ("Tax-Free
Income Fund"), Sit U.S. Government Securities Fund ("U.S. Government Fund"), and
Sit Money Market Fund, Inc. ("Money Market Fund") (collectively the "Bond"
Funds), (the Stock and Bond Funds, collectively, the "Funds"), will be held at
11:30 a.m. (Minneapolis time) on Wednesday, October 23, 1996 at the Edina
Country Club, 5100 Wooddale Avenue, Edina, Minnesota, for the following
purposes:

1. To re-elect the Board of Directors for each Fund;

2. To ratify or reject the Board's selection of KPMG Peat Marwick LLP
to serve as each Fund's independent auditor for the fiscal years
ending March 31, 1997 or June 30, 1997;

3. To approve or reject a proposal to amend the Growth Fund's and the
Growth & Income Fund's Articles of Incorporation to change the name
of the Growth Fund to the Sit Mid Cap Growth Fund and the Growth &
Income Fund's name to Sit Large Cap Growth Fund;

4. To approve or reject a proposal to amend the Investment Management
Agreement for the Growth Fund and Growth & Income Fund to provide
that Sit Investment Associates, Inc. (the "Adviser") will bear all
Fund expenses (except for extraordinary expenses, interest,
brokerage commissions and transaction charges) for a fixed
percentage fee (1.25% of net assets for the Growth Fund and 1.00% of
net assets for the Growth & Income Fund). HOWEVER, THE ADVISER HAS
AGREED TO WAIVE ITS FEES TO LIMIT EXPENSES OF THE GROWTH FUND TO
1.00% UNTIL JUNE 30, 1998. For the fiscal year ended June 30, 1996
the expense ratios of the Growth Fund and Growth & Income Fund were
.77% and 1.23% respectively before any fee waivers and expense
reimbursements;

5. To transact such other business as may properly come before the
meeting.

Shareholders of record on September 3, 1996 are the only persons entitled
to notice of and to vote at the meeting. We hope you can attend. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION, WE RESPECTFULLY ASK FOR YOUR COOPERATION IN
MAILING IN YOUR PROXY MATERIAL. If you are present at the meeting, you may then
revoke your proxy and vote in person, as explained in the accompanying Proxy
Statement.

By Order of the Board of Directors,

/s/ Eugene C. Sit
---------------------------------------
Eugene C. Sit
Chairman

PROXY STATEMENT

4600 Norwest Center
Minneapolis, Minnesota 55402

JOINT ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 23, 1996

The enclosed Proxy is solicited by the Boards of Directors of Sit
Developing Markets Growth Fund ("Developing Markets Fund"), Sit Small Cap Growth
Fund ("Small Cap Fund"), Sit International Growth Fund ("International Fund"),
Sit Growth Fund, Inc. ("Growth Fund"), Sit Growth & Income Fund, Inc. ("Growth &
Income Fund"), Sit Balanced Fund ("Balanced Fund"), (collectively the "Stock"
Funds), Sit Bond Fund ("Bond Fund"), Sit Minnesota Tax-Free Income Fund
("Minnesota Fund"), Sit Tax-Free Income Fund ("Tax-Free Income Fund"), Sit U.S.
Government Securities Fund, Inc. ("U.S. Government Fund"), and Sit Money Market
Fund ("Money Market Fund") (collectively the "Bond" Funds) (the Stock and Bond
Funds, collectively, the "Funds"), in connection with the joint annual meeting
of shareholders of the Funds to be held at 11:30 a.m. (Minneapolis time) on
Wednesday, October 23, 1996 at the Edina Country Club, 5100 Wooddale Avenue,
Edina, Minnesota, and at any adjournments thereof. The cost of solicitation,
including the cost of preparing and mailing the Notice of the Joint Annual
Meeting of Shareholders and this Proxy Statement, will be paid by the Funds, and
such mailing will take place on approximately September 6, 1996. Representatives
of the Funds may, without cost to the Funds, solicit Proxies for the management
of the Funds by means of mail, telephone or personal calls.

A Proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the applicable Fund, or at the meeting, prior to
voting. Unless revoked, properly executed Proxies will be voted as indicated in
this Proxy Statement. In instances where choices are specified by the
shareholders in properly executed Proxies, these Proxies will be voted or the
vote will be withheld in accordance with each shareholder's choice. In instances
where no choices are specified by the shareholder in properly executed Proxies,
those Proxies will be voted "for" each item for which no choice is specified in
accordance with the recommendations of the Funds' Boards of Directors. Should
any other matters properly come before the meeting, it is the intention of the
proxies named in the enclosed Proxy to act upon such matters according to their
best judgment.

Each shareholder is entitled to one vote for each share held. None of the
matters to be presented at the meeting will entitle any shareholder of any Fund
to cumulative voting or appraisal rights. In the event that sufficient Proxy
votes in favor of the proposals set forth in the Notice of Joint Annual Meeting
of Shareholders are not received by October 23, 1996, the persons named as
proxies may propose one or more adjournments of the meeting with respect to one
or more of the Funds to permit further solicitation of Proxies. With respect to
any Fund, an adjournment will require the affirmative vote of the holders of a
majority of the shares present in person or by Proxy at the meeting. The persons
named as proxies will vote in favor of such adjournments with respect to any of
said proposals if the proxies are instructed, by more than a majority of the
shares represented in person or by proxy, to vote "for" the proposal(s) for
which the adjournment is being proposed. The persons named as proxies will vote
against such adjournment if they are instructed (by a majority of the shares
represented in person or by proxy) to vote "against" the proposal(s) for which
the adjournment is being proposed.

An "abstention" on any proposal will be counted as present for purposes of
determining whether a quorum of shares is present at the meeting with respect to
the proposal on which the abstention is noted, but will be counted as a vote
"against" such proposal. Under the rules of the New York Stock Exchange, each of
Proposals 1, and 2 for all Funds and Proposal 3 for the Growth Fund and Growth
and Income Fund is considered a "discretionary" proposal, which means that
brokers who hold Fund shares in street name for customers are authorized to vote
on such proposals on behalf of their customers with or without specific voting
instructions from such customers. Proposal #4 for the Growth Fund and Growth &
Fund is not a discretionary proposal.

Only shareholders of record on September 3, 1996 may vote at the meeting
or any adjournment thereof. As of August 26, 1996, the Funds had the following
number of issued and outstanding common shares, the only class of securities of
each Fund:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Developing Markets Fund 815,980 Bond Fund 549,389
Small Cap Fund 2,892,484 Minnesota Fund 6,700,563
International Fund 5,399,936 Tax-Free Income Fund 28,905,924
Growth Fund 23,007,624 U.S. Government Fund 5,087,198
Growth & Income Fund 1,610,971 Money Market Fund 32,234,876
Balanced Fund 326,163
</TABLE>

SHARE OWNERSHIP

Except as set forth below, no person or entity, to the knowledge of Fund
management, beneficially owned more than 5% of the outstanding shares of any
Fund as of August 26, 1996. The following table sets forth certain share
ownership information (including the number of shares owned and the percentage
of total outstanding shares of the Funds such shares represented) with respect
to directors of the Funds, all officers and directors as a group, and persons
and entities known by the Funds to beneficially own more than 5% of any of the
Fund's outstanding shares as of August 26, 1996:

<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY OWNED
-----------------------------------------------------------------------------------------
DEVELOPING SMALL GROWTH &
MARKETS CAP INTERNATIONAL GROWTH INCOME BALANCED
BENEFICIAL OWNERS FUND FUND FUND FUND FUND FUND
- ---------------------- ------------ -------------- ------------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Directors # % # % # % # % # % # %
Eugene C. Sit 41,486 5.08 243,659 8.42 195,666 3.62 699,011 3.04 43,840 2.72 1,062 (a)
William E. Frenzel 1,048 n/a 10,359 (a) 14,802 (a) 66,922 (a) 0 n/a 0 n/a
John E. Hulse 0 n/a 0 n/a 0 n/a 0 n/a 0 n/a 0 n/a
Sidney L. Jones 0 n/a 1,041 (a) 1,092 (a) 7,613 (a) 0 n/a 0 n/a
Peter L. Mitchelson 0 n/a 8,605 (a) 6,613 (a) 14,510 (a) 2,548 (a) 0 n/a
Donald W. Phillips 0 n/a 0 n/a 10,476 (a) 15,861 (a) 0 n/a 0 n/a
All Officers/Directors 59,361 7.27 295,212 10.21 477,961 8.85 1,823,992 7.93 180,422 11.20 1,062 (a)
</TABLE>

Other 5% Shareholders:
The Danforth Foundation 112,689 6.99
c/o Melvin C. Bahle
231 Bemiston Ave., #1080
St. Louis, MO

Robert Gendron, Trustee 350,173 12.11
University of California
Berkeley Foundation
2440 Bancroft Way, Ste. 308
Berkeley, CA

Richard & Marlys Lynch, Trustee 42,402 13.00
El-Tronic Precision, Inc.
Profit Sharing and 401k Plan
7345 NE Baker St.
Minneapolis, MN

Dennis W. Gartner, Trustee 33,392 10.24
Electric Component Sales, Inc.
Profit Sharing Plan & Trust
4974 Lincoln Drive
Minneapolis, MN

Robert Vokes & 20,108 6.17
Kraig Lungstrom, Trustees
Northstar Matrix Services
401(k) Plan, 7101 31st Ave. N.
Minneapolis, MN

James Olson, Trustee 16,526 5.06
Cote Family Corporation
Salary Savings Plan
110 S. Woodward
Nisswa, MN

</TABLE>

NUMBER OF SHARES BENEFICIALLY OWNED
--------------------------------------------------------------------------------
TAX-FREE MONEY
BOND MINNESOTA INCOME GOVERNMENT MARKET
BENEFICIAL OWNERS FUND FUND FUND FUND FUND
- ----------------- ------------- -------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
DIRECTORS: # % # % # % # % # %
Eugene C. Sit 1,175 (a) 60,093 (a) 460,714 1.59 12,533 (a) 6,996 (a)
Michael C. Brilley 0 n/a 10,501 (a) 0 n/a 48 (a) 24,201 (a)
William E. Frenzel 0 n/a 0 n/a 65,002 (a) 0 n/a 0 n/a
John E. Hulse 0 n/a 0 n/a 0 n/a 0 n/a 0 n/a
Sidney L. Jones 0 n/a 0 n/a 1,532 (a) 0 n/a 0 n/a
Peter L. Mitchelson 0 n/a 85,197 1.27 31,038 (a) 0 n/a 0 n/a
Donald W. Phillips 0 n/a 0 n/a 0 n/a 0 n/a 0 n/a
All Officers/Directors 1,175 (a) 185,132 2.76 655,515 2.26 196,700 3.86 1,572,869 4.88
Sit Investment 58,389 10.63 130,257 1.94 804,594 2.78 294,746 5.79 3,938,648 12.22
Associates, Inc.& affiliates
(various accounts)
(a) Less than 1%

Other 5% Shareholders:
Victor C. Wallestad 272,727 49.64
Foundation
733 Marquette Ave. MS 0036
Minneapolis, MN

S. Walter Richey 70,603 12.85
900 2nd Ave. S., Ste. 1600
Minneapolis, MN

W. John Driscoll 487,907 7.28
332 Minnesota St., Ste. 2100
St. Paul, MN

Bongards Creameries Cooperative 1,812,566 5.62
13200 County Road 51
Norwood, MN

Hazelden Foundation II 303,428 5.94
733 Marquette Ave. MS 0047
Minneapolis, MN

Steven and Jung Ja Malandris 4,763,338 14.78
800 Oakhurst Drive
Cheyenne, WY

</TABLE>

ANNUAL REPORTS OF THE FUNDS

The combined Annual Report of the Bond Funds, containing financial
statements for the fiscal year ended March 31, 1996 was mailed to shareholders
of the Bond Funds on approximately May 27, 1996. The combined Annual Report of
the Stock Funds, containing financial statements for the fiscal year ended June
30, 1996 was mailed to shareholders of the Stock Funds on approximately August
29, 1996. If you have not received a report for your Fund or would like to
receive another copy, please contact the Funds at 800-332-5580 or 612-334-5888
and one will be sent, without charge, by first class mail, within three business
days.

PROPOSAL 1
ELECTION OF DIRECTORS

It is intended that the enclosed Proxies will be voted for the election of
the persons named below as directors for the applicable Funds unless such
authority has been withheld in the respective Proxy. The term of office of each
person elected to be a Fund Director will be until the next regular or special
meeting of the shareholders at which election of directors is an agenda item and
until his successor is duly elected and shall qualify. Pertinent information
regarding each nominee is set forth below.

NAME (AGE) AND PRINCIPAL OCCUPATION DURING PAST 5 YEARS
BUSINESS ADDRESS (IN ADDITION TO SERVING AS A DIRECTOR OF THE FUNDS)
<S> <C>
DIRECTORS OF ALL FUNDS
Eugene C. Sit (58) * Chairman, CEO and CIO (Chief Investment Officer) of Sit Investment
4600 Norwest Center Associates, Inc., (the "Adviser"); Chairman and CEO of Sit/Kim International
Minneapolis, MN Investment Associates, Inc. (the "Sub-Adviser") sub-adviser for Developing
Markets Fund and International Fund; Chairman of each Fund.

William E. Frenzel (67) ** Senior Visiting Scholar at The Brookings Institution; formerly a Senior
1775 Massachusetts Ave. NW Republican member of Congress and a ranking Republican on the House Ways
Washington, D.C. and Means Committee and Vice Chairman of the House Budget Committee;
Advisory Director of the Adviser; Director of the Sub-Adviser for Developing
Markets Fund and International Fund.

John E. Hulse (63) Director, Vice Chairman and Chief Financial Officer at Pacific Telesis Group
4303 Quail Run Lane until June 1992; Trustee, Benild Religious & Charitable Trust; Trustee, Pacific
Danville, CA 94506 Gas & Electric Nuclear Decommissioning Trust.

Sidney L. Jones (61) Adjunct Faculty, Center for Public Policy Education, The Brookings Institution
8505 Parliament Drive and Visiting Professor, Carleton College; Former Assistant Secretary
Potomac, MD for Economic Policy, United States Department of the Treasury.

Peter L. Mitchelson (54) * President and Director of the Adviser; Executive Vice President & Director
4600 Norwest Center of Sub-Adviser for Developing Markets Fund and International Fund; Vice
Minneapolis, MN Chairman of each Fund.

Donald W. Phillips (48) Executive Vice President of Equity Financial and Management Company;
Two North Riverside Plaza Chairman of Equity Institutional Investors, Inc.; Chief Investment Officer
Chicago, IL 60606 of Ameritech, Inc., Chicago, IL until 1990.

DIRECTOR OF BOND FUNDS ONLY:
Michael C. Brilley (50) * Senior Vice President of all Bond Funds; Senior Vice President and Senior
4600 Norwest Center Fixed Income Officer of Adviser.
Minneapolis, MN

DIRECTOR EMERITUS (not standing for election)
Melvin C. Bahle (77) Financial consultant; director and/or officer of several companies, foundations
#1 Muirfield Lane and religious organizations; Vice President and Assistant to the Chairman of
St. Louis, MO the Board of Ralston Purina Company until February 1984.
</TABLE>

* Directors who are "interested persons" of the Funds, as defined under the
Investment Company Act of 1940, as amended. Each of said individuals are
interested persons because they are officers, and in certain instances
directors, of the Adviser and/or certain affiliates thereof.
** Director who may be deemed an "interested person" of the Funds (and who,
therefore, is treated by the Funds as an interested person) because of his
role as advisory director of the Adviser and a director of the sub-adviser
for the Developing Markets Fund and International Fund.

Mr. Phillips has been a director of the Growth Fund, Growth & Income Fund,
U.S. Government Fund, Tax-Free Income Fund, and Money Market Fund since 1990,
the International Fund since 1993, and since inception for all other Funds. Mr.
Frenzel has been a director of the Small Cap Fund, Balanced Fund, Developing
Markets Fund, International Fund, Bond Fund, and Minnesota Fund since inception
and since 1992 for all other Funds. Dr. Jones was a director of the Growth Fund,
Growth & Income Fund, U.S. Government Fund, Tax-Free Income Fund, and Money
Market Fund from October, 1988 to July, 1989, and effective January 20, 1993 was
reappointed to each Board, and has been a director of all other Funds since
inception. Mr. Hulse has been a director of each Fund since July 28, 1995. All
other directors have been directors since the inception of each applicable Fund.

None of the persons named as nominees are directors of reporting companies
except for the Funds. "Reporting companies" include companies with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934 or subject to the requirements of Section 15(d) of such Act, or any company
registered as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act").

The Funds do not have standing audit or nominating committees of the Board
of Directors, or committees performing similar functions. There were four joint
meetings of the Funds' Boards of Directors during their fiscal years ended March
31, 1996 for the Bond Funds and June 30, 1996 for the Stock Funds. Each of the
nominees attended all meetings. The following table sets forth the aggregate
compensation received by each Director for services provided to each Fund during
the most recently ended fiscal year of each Fund, as well as the total
compensation received by each Director for services provided to the eleven funds
of the Sit Mutual Funds (the "Fund Complex") during such periods. Directors who
are officers of the Adviser or any of its affiliates did not receive any such
compensation and are not included in the table.

<TABLE>
<CAPTION>
Aggregate Pension or
Compensation For Retirement Benefits Estimated Total
Services Rendered Accrued As Part Annual Benefits Compensation From
Director to Each Fund of Fund Expenses Upon Retirement Fund Complex
- -------- ------------ ---------------- --------------- ------------
<S> <C> <C> <C> <C>
Melvin C. Bahle $1,454.55 None None $16,000
John E. Hulse 1,090.91 None None 12,000
William E. Frenzel 1,454.55 None None 16,000
Sidney L. Jones 1,454.55 None None 16,000
Donald W. Phillips 1,454.55 None None 16,000
</TABLE>

Pursuant to the advisory agreement with each Fund except the Growth Fund
and the Growth & Income Fund, the Adviser pays all of the Funds' expenses
including the compensation and expenses of the Directors (but excluding
extraordinary expenses, interest, brokerage commissions, and other transaction
charges relating to investing activities). The Growth Fund and the Growth &
Income Fund bear certain expenses including Directors' fees, however, the
Adviser is obligated to pay all expenses (but excluding interest, brokerage
commissions and other transaction charges) in any fiscal year which exceed
certain limitations.

In voting for directors, you must vote all of your shares noncumulatively.
This means that the owners of a majority of each Fund's outstanding shares have
the power to elect that Fund's entire Board of Directors. The vote of a majority
of shares of each Fund represented at the meeting, provided at least a quorum
(at least ten percent of the outstanding shares of Developing Markets Fund,
Small Cap Fund, International Fund, Balanced Fund, Tax-Free Income Fund,
Minnesota Fund, Bond Fund and at least a majority of the outstanding shares of
each of the other Funds) is represented in person or by proxy, is sufficient for
the election of the above nominees to each Fund's Board of Directors. By
completing the Proxy, you give the proxy the right to vote for the persons named
in the table above. If you elect to withhold authority for any individual
nominee, you may do so by making an "X" in the box marked "FOR", and by striking
a line through such nominee's name on the Proxy, as further explained on the
Proxy itself.

All of the nominees have agreed to serve as Directors of the applicable
Funds. If any unforeseen event prevents one or more of the nominees from serving
as a director, your votes will be cast for the election of a substitute or
substitutes selected by the Board. In no event, however, can the Proxies be
voted for a greater number of persons than the number of nominees named. Unless
otherwise instructed, the proxies will vote for the election of each nominee to
serve as a director of the applicable Fund or Funds.

EACH FUND'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF THE PERSONS NAMED ABOVE AS DIRECTORS FOR THE APPLICABLE FUNDS.

PROPOSAL 2
RATIFICATION OR REJECTION OF INDEPENDENT AUDITOR

The 1940 Act provides that every registered investment company shall be
audited at least once each year by independent auditors selected by a majority
of the directors of the investment company who are not interested persons of the
investment company. The 1940 Act requires that such selection be submitted for
ratification or rejection by the shareholders at their next meeting following
such selection.

At a meeting held on July 26, 1996, the directors of the Funds selected
KPMG Peat Marwick LLP to be each Fund's independent auditor for the fiscal year
ending March 31, 1997 for the Bond Funds and June 30, 1997 for the Stock Funds.
Such firm has served as each Fund's independent auditor since each such Fund's
inception. KPMG Peat Marwick LLP has no material direct or indirect financial
interest in any of the Funds, other than the receipt of fees for services to the
Funds.

Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting. Such representatives will be given the opportunity to make statements
to shareholders if they so desire, and are expected to be available to respond
to any questions which may arise at the meeting.

The vote of a majority of the shares of each Fund represented at the
meeting, provided at least a quorum (at least ten percent of the outstanding
shares of International Fund, Balanced Fund, Developing Markets Fund, Small Cap
Fund, Tax-Free Income Fund, Minnesota Fund, Bond Fund, and at least a majority
of the outstanding shares of each of the other Funds) is represented in person
or by proxy, is sufficient for the ratification of the selection of the
independent auditor of each Fund. Unless otherwise instructed, the proxies will
vote for the ratification of the selection of KPMG Peat Marwick LLP as each Bond
Fund's independent auditor for the fiscal year ending March 31, 1997 and each
Stock Fund's independent auditor for the fiscal year ending June 30, 1997.

EACH FUND'S BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE FOR
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS EACH FUND'S
INDEPENDENT AUDITOR.

PROPOSAL 3
GROWTH FUND AND GROWTH & INCOME FUND ONLY
NAME CHANGE

The Amended Articles, if approved by the shareholders, will effect a
change in the name of the Sit Growth Fund, Inc. to the Sit Mid Cap Growth Fund,
Inc., and a change in the name of the Sit Growth & Income Fund, Inc. to the Sit
Large Cap Growth Fund, Inc. Fund management believes the name change will
enhance each Fund's identity within the Sit Mutual Funds and assist in the
distribution of the Funds. Each Fund's investment objective and investment
policies will not change.

SHAREHOLDER APPROVAL

The favorable vote of a majority of each Growth Fund's and Growth & Income
Fund's shares present or represented at the meeting, provided at least a
"quorum" (at least a majority of the outstanding shares of each such Funds) is
present or represented at the meeting, is required for the approval of each such
Fund's Amended Articles. Unless otherwise instructed, the proxies will vote for
the approval of the Amended Articles for each Fund. If the Amended Articles are
not approved by the shareholders of either Fund, the Fund's Board of Directors
will promptly consider what action to take and may decide to resubmit the
Amended Articles for shareholder approval. The Amended Articles will become
effective upon their filing in the office of the Minnesota Secretary of State,
which is expected to occur shortly after their approval by Fund shareholders.

EACH FUND'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS APPROVE THE
AMENDED ARTICLES.

PROPOSAL 4
GROWTH FUND AND GROWTH & INCOME FUND ONLY
AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENT

SUMMARY

Sit Investment Associates, Inc. (the "Adviser"), whose address is that of
the Funds, acts as the investment adviser to the Growth Fund and Growth & Income
Fund pursuant to Investment Management Agreements (the "Current Agreements")
dated November 1, 1992. The Board of Directors last approved the Current
Agreements at their meeting of October 24, 1995. The Current Agreements were
last approved by Growth Fund and Growth & Income Fund shareholders on October
13, 1992; such Agreements were submitted to shareholders at that time to seek
their approval of certain non-substantive stylistic changes.

At the present time the Investment Management Agreements for all of the
Sit Mutual Funds except the Growth Fund and Growth & Income Fund provide that
the Adviser will pay all of the Funds' expenses except for extraordinary
expenses (as so designated by a majority of the directors of the Fund, including
a majority who are not "interested persons" of the Fund or the Adviser),
interest, brokerage commissions and other transaction charges relating to
investing activities. The Adviser has proposed, and the Board of Directors has
approved, resolutions recommending the adoption by Growth Fund and Growth &
Income Fund shareholders of an amended Investment Management Agreement (the
"Proposed Agreements"). Under the Proposed Agreements the Adviser will be
responsible for all expenses of Growth Fund and Growth & Income Fund, except for
the limited category of expenses referred to above. In this way, the "allocation
of expenses" section of the Investment Management Agreements for all of the Sit
Mutual Funds will be the same.

It is also proposed that the management fees payable under the Investment
Management Agreements be modified. Under the Current Agreements for the Growth
Fund and the Growth & Income Fund the annual management fee equals 1.00% of the
first $30 million of average daily net assets, .75% of the next $70 million of
average daily net assets, and .50% of average daily net assets in excess of $100
million. Under the Current Agreements, each Fund pays all of its operating
expenses, however, the Adviser is obligated to reimburse such Funds for certain
expenses if, and to the extent such expenses exceed an amount equal to 1.50% of
the first $30 million of the Fund's average daily net assets and 1.00% of the
Fund's average daily net assets in excess of $30 million. For the period October
1, 1993 through December 31, 1996 the Adviser voluntarily agreed to absorb
expenses that are otherwise payable by the Growth & Income Fund which exceed
1.00% of the Fund's average daily net assets.

As of June 30, 1996, the Growth Fund had net assets of $356,316,997. The
effective management fee for the Growth Fund for the fiscal year ended June 30,
1996 was .59% and the aggregate fees and expenses (including the management fee)
for the fiscal year ended June 30, 1996 was .77%. As of June 30, 1996, the
Growth & Income Fund had net assets of $53,016,527. The effective management fee
for the Growth & Income Fund for the fiscal year ended June 30, 1996 was .91%
and the aggregate fees and expenses (including the management fee) for the
fiscal year ended June 30, 1996 was 1.00%. Under the Proposed Agreements the
aggregate fees and expenses, including the management fee will be 1.25% at all
levels of Fund assets for the Growth Fund, and will be 1.00% at all levels of
Fund assets for the Growth & Income Fund. HOWEVER, THE ADVISER HAS AGREED TO
WAIVE ITS FEES TO LIMIT EXPENSES OF THE GROWTH FUND TO 1.00% UNTIL JUNE 30,
1998.

The following table sets forth each Fund's aggregate fees and expenses for
the fiscal year ended June 30, 1996, the aggregate fees and expenses had the new
all-inclusive fee been in effect, and the difference between the two (without
and with any fee waiver or expense reimbursement):

<TABLE>
<CAPTION>
Growth Fund Aggregate Fees Growth & Income Fund Aggregate Fees
-------------------------- -------------------------------------
Change From Change From
Current Proposed Current Current Proposed Current
Agreement Agreement Agreement Agreement Agreement Agreement
---------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Without fee waiver $2,835,518 $4,574,636 $1,739,118 $587,527 $477,428 $(110,099)
With fee waiver 2,835,518 3,659,709 824,191 477,428 477,428 0
</TABLE>

The following table shows the fees and expenses paid by each Fund under
the Current Agreements before any fee waiver during the most recent fiscal year
ended June 30, 1996 and the fees and expenses each Fund would have paid during
such year had the Proposed Agreements been in effect. Annual expenses are
expressed as a percentage of average daily net assets.

SHAREHOLDER TRANSACTION EXPENSES - BOTH FUNDS
Under Current Agreements Under Proposed Agreements
------------------------ -------------------------
<S> <C> <C>
Sales Load Imposed on Purchases None None
Sales Load Imposed on Reinvested Dividends None None
Redemption Fees None None
Exchange Fees None None

ANNUAL EXPENSES Growth Fund Growth & Income Fund
Current/Proposed Current/Proposed
---------------- --------------------
<S> <C> <C> <C> <C>
Management Fee .59% 1.25% .91% 1.00%
Rule 12b-1 Fee None None None None
Other Expenses .18% None .32% None
---- ---- ---- ----
Total Fund Operating Expenses .77% 1.25% 1.23% 1.00%
</TABLE>

The following example illustrates a shareholder's total expenses on a
$1,000 investment in each Fund, assuming a five percent annual return and
redemption at the end of each period, under both the Current Agreements (without
voluntary fee waiver and/or expense reimbursement) and the Proposed Agreements
(without voluntary fee waiver and/or expense reimbursement). THE EXAMPLES SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.

<TABLE>
<CAPTION>
1 Year 3 Year 5 Year 10 Year
Current/Proposed Current/Proposed Current/Proposed Current/Proposed
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Fund $ 8 $13 $25 $40 $43 $69 $ 95 $151
Growth & Income Fund $13 $10 $39 $32 $68 $55 $149 $122
</TABLE>

REASONS FOR THE APPROVAL OF THE PROPOSED AGREEMENTS BY THE FUNDS' BOARD OF
DIRECTORS

In approving the Proposed Agreements, the Board of Directors considered a
variety of factors, including, among others, (1) the nature, quality and extent
of the services furnished by the Adviser as investment adviser to these Funds;
(2) the comparative data provided to the Board concerning advisory fee rates,
performance and expense ratios of other comparable mutual funds; (3) the
desirability of having a uniform "all inclusive fee" for all of the Sit Mutual
Funds; (4) the desirability of providing the Adviser with appropriate incentives
to continue providing quality investment advisory services to the affected Funds
as well as to the other Sit funds; (5) the need for the Adviser to attract and
retain capable personnel to provide investment advisory services to these Funds;
(6) the potential economic benefits to the Adviser from the proposed increases
in advisory fees; (7) the Adviser's agreement to waive fees of the Growth Fund
to the extent described above, and (8) the impact on Growth Fund shareholders of
the proposed increases in light of the agreed-upon fee waivers by the Adviser.
Based on these factors, among others, the Board of Directors unanimously
approved the Proposed Agreements and recommends their approval by shareholders
of the affected Funds.

VOTING INFORMATION

Approval of the Proposed Agreements requires the affirmative vote of
holders of a majority of the outstanding shares of each Fund. For this purpose,
the term "majority of outstanding shares" means the vote of (i) 67% or more of
the shares of a fund present at the meeting, so long as the holders of more than
50% of a Fund's outstanding shares are present or represented by proxy; or (ii)
more than 50% of the outstanding voting securities of a Fund, whichever is less.
If the shareholders of either Fund fail to approve the proposed agreement, the
Board of Directors will promptly consider alternative courses of action and
could request the shareholders of either Fund to reconsider approval of the
proposed agreement. If approved by shareholders, it is anticipated that the
proposed agreements will become effective on November 1, 1996.

EACH FUND'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS APPROVE THE
PROPOSED AGREEMENTS.

SUPPLEMENTAL INFORMATION

SUPPLEMENTAL INFORMATION REGARDING THE ADVISER

The Adviser was organized in 1981 as a Minnesota corporation and is
registered with the Securities and Exchange Commission as an investment adviser.
The Adviser, together with its subsidiaries, currently provides investment
management services to public and private accounts with combined assets of
approximately $4.7 billion. The address of the Adviser is 4600 Norwest Center,
Minneapolis, MN 55402. Approximately 57% of the outstanding voting securities of
the Adviser are owned by Eugene C. Sit either directly or indirectly. Set forth
below is the name of each director and executive officer of the Adviser and a
listing of other principal business occupations of each such person:

Name Position(s) with the Adviser Other Principal Occupation
- ---- ---------------------------- --------------------------
<S> <C> <C>
Eugene C. Sit, CFA Chairman, CEO and CIO See biographical information on page 5
Peter L. Mitchelson, CFA President and Director See biographical information on page 5
Frederick R. Adler Director Venture Capitalist, Managing Partner,
1520 South Ocean Blvd. Venad Management, Inc.
Palm Beach, FL
Norman Bud Grossman Director President of Cogel Management
4670 Norwest Center
Minneapolis, MN
Erik S. Anderson Vice President - Equity Research None
& Portfolio Management
Michael C. Brilley Senior Vice President See biographical information on page 6
Paul E. Rasmussen Vice President, Secretary and Vice President, Secretary and Controller of the
Controller Sub-Adviser; Vice President and Treasurer
of all Funds
Mary K. Stern Vice President - Mutual Funds President of all Funds
Debra A. Sit, CFA Vice President - Bond Investments Assistant Treasurer of the Sub-Adviser; Vice
President - Investments of U.S. Government
Fund and Tax-Free Income Fund
Ronald D. Sit, CFA Vice President - Equity Research Vice President - Investments Growth &
& Portfolio Management Income Fund
John K. Butler, CFA Vice President - Equity Research None
Gary T. Dvorchak, CFA Vice President - Equity Research None
John T. Groton, Jr., CFA Vice President - Equity Research None
</TABLE>

BROKERAGE

In selecting a broker, the Adviser may consider whether such broker
provides brokerage and research services (as defined in the Securities Exchange
Act of 1934). The Adviser may direct Fund transactions to brokers who furnish
research services (including advice as to the value of securities, reports
concerning industries, securities and economic factors and trends). To the
extent such commissions are directed to brokers who furnish research services to
the Adviser, the Adviser receives a benefit, not capable of evaluation in dollar
amounts, without providing direct monetary benefit to a Fund from these
commissions. Generally a Fund pays higher than the lowest commission rates
available. Some investment companies enter into arrangements under which a
broker-dealer agrees to pay the cost of certain products or services (not
including research services) in exchange for fund brokerage ("brokerage/services
arrangements"). Under a typical brokerage/service arrangement, a broker agrees
to pay a fund's custodian fees or transfer agent fees and, in exchange, the fund
agrees to direct a minimum amount of brokerage to the broker. The Adviser does
not intend to enter into such brokerage/service arrangements on behalf of the
Funds. Some investment companies enter into arrangements that provide for
specified or reasonably ascertainable fee reductions in exchange for the use of
fund assets ("expense offset arrangements"). Under such expense offset
agreements, expenses are reduced by foregoing income rather than by
re-characterizing them as capital items. For example, a fund may have a
"compensating balance" agreement with its custodian under which the custodian
reduces its fee if the fund maintains cash or deposits with the custodian in
non-interest bearing accounts. The Adviser does not intend to enter into expense
offset agreements involving assets of the Funds.

SHAREHOLDER PROPOSALS FOR 1997 MEETING

No proposals were received from shareholders this year. Any shareholder
proposal for consideration at the 1997 annual meeting, which will be held in
October, 1997, must be received by the Funds in writing on or before June 1,
1997.

September 6, 1996

By Order of the Board of Directors,

/s/ Eugene C. Sit
-------------------------------------
Eugene C. Sit
Chairman

PROXY
SIT GROWTH FUND, INC.
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT GROWTH
FUND, INC.

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul
E. Rasmussen and Michael J. Radmer, and each of them, with power to act without
the other and with the right of substitution in each, as proxies of the
undersigned and hereby authorizes each of them to represent and to vote, as
designated below, all the shares of common stock of SIT Growth Fund, Inc. (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. Proposal to change the name of the Fund from SIT Growth Fund, Inc. to Sit
Mid Cap Growth Fund, Inc.

|_| FOR |_| AGAINST |_| ABSTAIN

4. Proposal to approve an amended investment management agreement increasing
fees and establishing an all inclusive fee.

|_| FOR |_| AGAINST |_| ABSTAIN

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1, 2, 3, AND 4 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE
PROXY STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF
THIS PROXY.

PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES ARE HELD
BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT GROWTH & INCOME FUND, INC.
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT GROWTH
& INCOME FUND, INC.

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Growth & Income Fund, Inc. (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. Proposal to change the name of the Fund from SIT Growth & Income Fund, Inc.
to Sit Large Cap Growth Fund, Inc.

|_| FOR |_| AGAINST |_| ABSTAIN

4. Proposal to approve an amended investment management agreement increasing
fees and establishing an all inclusive fee.

|_| FOR |_| AGAINST |_| ABSTAIN

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT INTERNATIONAL GROWTH FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT
INTERNATIONAL GROWTH FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT International Growth Fund (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT BALANCED FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT
BALANCED FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Balanced Fund (the "Fund"), held of
record by the undersigned on September 3, 1996, at the annual meeting of
shareholders of the Fund to be held on October 23, 1996 or any adjournment or
postponements thereof, with all powers the undersigned would possess if present
in person. All previous proxies given with respect to the meeting hereby are
revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT SMALL CAP GROWTH FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT SMALL
CAP GROWTH FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Small Cap Growth Fund (the "Fund"),
held of record by the undersigned on September 3, 1996, at the annual meeting of
shareholders of the Fund to be held on October 23, 1996, or any adjournment or
postponements thereof, with all powers the undersigned would possess if present
in person. All previous proxies given with respect to the meeting hereby are
revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT DEVELOPING MARKETS GROWTH FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT
DEVELOPING MARKETS GROWTH FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Developing Markets Growth Fund (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit William E. Frenzel John E. Hulse
Sidney L. Jones Peter L. Mitchelson Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMIENES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending June 30, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT U.S. GOVERNMENT SECURITIES FUND, INC.
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT U.S.
GOVERNMENT SECURITIES FUND, INC.

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT U.S. Government Securities Fund,
Inc. (the "Fund"), held of record by the undersigned on September 3, 1996, at
the annual meeting of shareholders of the Fund to be held on October 23, 1996,
or any adjournment or postponements thereof, with all powers the undersigned
would possess if present in person. All previous proxies given with respect to
the meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit Michael C. Brilley William E. Frenzel
John E. Hulse Sidney L. Jones Peter L. Mitchelson
Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending March 31, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT BOND FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT BOND
FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Bond Fund (the "Fund"), held of
record by the undersigned on September 3, 1996, at the annual meeting of
shareholders of the Fund to be held on October 23, 1996, or any adjournment or
postponements thereof, with all powers the undersigned would possess if present
in person. All previous proxies given with respect to the meeting hereby are
revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit Michael C. Brilley William E. Frenzel
John E. Hulse Sidney L. Jones Peter L. Mitchelson
Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending March 31, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT TAX-FREE INCOME FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT
TAX-FREE INCOME FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Tax-Free Income Fund (the "Fund"),
held of record by the undersigned on September 3, 1996, at the annual meeting of
shareholders of the Fund to be held on October 23, 1996, or any adjournment or
postponements thereof, with all powers the undersigned would possess if present
in person. All previous proxies given with respect to the meeting hereby are
revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit Michael C. Brilley William E. Frenzel
John E. Hulse Sidney L. Jones Peter L. Mitchelson
Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending Marach 31, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT MINNESOTA TAX-FREE INCOME FUND
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT
MINNEOSTA TAX-FREE INCOME FUND

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Minnesota Tax-Free Income Fund (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW

Eugene C. Sit Michael C. Brilley William E. Frenzel
John E. Hulse Sidney L. Jones Peter L. Mitchelson
Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending March 31, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PROXY
SIT MONEY MARKET FUND, INC.
4600 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-5888; (800) 332-5580

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SIT MONEY
MARKET FUND, INC.

The undersigned hereby appoints Eugene C. Sit, Peter L. Mitchelson, Paul E.
Rasmussen and Michael J. Radmer, and each of them, with power to act without the
other and with the right of substitution in each, as proxies of the undersigned
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of SIT Money Market Fund, Inc. (the
"Fund"), held of record by the undersigned on September 3, 1996, at the annual
meeting of shareholders of the Fund to be held on October 23, 1996, or any
adjournment or postponements thereof, with all powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting hereby are revoked.

THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1. ELECTION OF DIRECTORS:

|_| FOR ALL OF THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY
BELOW)

Eugene C. Sit Michael C. Brilley William E. Frenzel
John E. Hulse Sidney L. Jones Peter L. Mitchelson
Donald W. Phillips

|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME BELOW:

--------------------------------------------------------------------------

2. SELECTION OF KPMG PEAT MARWICK to serve as the Fund's independent auditors
for the fiscal year ending March 31, 1997.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF NOTICE OF MEETING AND THE PROXY
STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY.

Dated: __________________________, 1996

------------------------------------------
Signature (and title if applicable)

------------------------------------------
Signature if held jointly

TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.