<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH
FILE NO. 2-15893
..............................................................................
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
POST EFFECTIVE AMENDMENT NO. 62
And
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 62
.................................
STONEBRIDGE GROWTH FUND, INC.
(Exact name of registrant as specified in its charter)
5990 Greenwood Plaza Blvd.
Englewood, Colorado 80111
(303)220-8500
(Address of principal executive offices)
Debra L. Newman, President
Stonebridge Growth Fund, Inc.
1801 Century Park East
Los Angeles, California 90067
(Name and address of agent for service)
..................................................................
Copy to:
Michael Glazer
Paul, Hastings, Janofsky & Walken
555 S. Flower St. 23rd Fl.
Los Angeles, California 90071
........................................................
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
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)
/ / 60days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a) (ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
registered an indefinite number of shares by the Registrant Statement.
Registrant filed a Notice under such Rule for its fiscal year ended November 30
1996 on February 28, 1997.
<PAGE>
STONEBRIDGE GROWTH FUND, INC.
CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS AND IN STATEMENT OF
ADDITIONAL INFORMATION REQUIRED BY ITEMS OF FORM N-1A
<TABLE>
<CAPTION>
FORM N-1A PROSPECTUS CAPTION
...................... ............................................
<S> <C> <C>
PART A
Item:
1. Cover Page....................................Cover Page
2. Synopsis......................................Summary of Expenses
3. Condensed Financial Information...............Financial Highlights
4. General Description of Registrant.............What is the fund; Objectives and Investment
Policy
5. Management of the Fund......................Board of Directors; Investment Adviser; the Fund
Manager; The Custodian; The Transfer Agent
6. Capital Stock and Other Securities............Capital Stock; Taxes On Dividends and Capital
Gains Distributions; Systematic Cash Withdrawal
Plan; Reinvestment of Income Dividends and
Capital Gains Distributions
7. Purchases of Securities Being Offered.........Cover Page; The Distributor; Systematic Cash
Withdrawl Plan; Pricing; How to Buy and Redeem
Fund Shares; Group Investment Plan
8. Redemption or Repurchase.......................Systematic Cash Withdrawl Plan; How to Buy and
Redeem Fund Shares
9. Pending Legal Proceedings......................Inapplicable
PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
................................................................
Item:
10. Cover Page....................................Cover Page
11. Table of Contents.............................Table of Contents
12. General Information and History...............Inapplicable
13. Investment Objectives and Policies............Investment Objectives, Policies and Restrictions;
Brokerage Transactions
14. Management of the Fund........................Management of the Registrant
15. Control Persons and Principal Holders of
Securities...................Management of the Registrant
16. Investment Advisory and Other Services........Investment Advisory and Other Services
17. Brokerage Allocation..........................Brokerage Transactions
18. Capital Stock and Other Securities............Inapplicable
19. Purchases, Redemption and Pricing of
Securities Being Offered..................Purchase, Redemption and Pricing of Securities
Being Offered
20. Tax Status....................................Inapplicable
21. Underwriters..................................Inapplicable
22. Calculation of Yield Quotations of
Money Market Funds........................Inapplicable
23. Financial Statements..........................Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate item, so numbered, in
Part C to this Registration Statement.
</TABLE>
<PAGE>
STONEBRIDGE GROWTH FUND, INC.
5990 GREENWOOD PLAZA BOULEVARD
ENGLEWOOD, COLORADO 80111
(303)220-8500
PROSPECTUS
Stonebridge Growth Fund, Inc. (the "Fund") is a no-load, diversified, open-end
investment company. Its investment objective is long-term growth of capital
and increased future income through investment primarily in common stocks.
The Fund uses certain other investment techniques in an effort to enhance
income and reduce market risks. Shares may be purchased directly from the
Fund without a sales charge or underwriting commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INVESTOR IS ADVISED TO READ THIS PROSPECTUS
AND TO RETAIN IT FOR FUTURE REFERENCE.
THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT INVESTORS SHOULD KNOW
ABOUT THE FUND PRIOR TO INVESTING AND SHOULD BE RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 30, 1997 HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY
INCORPORATED BY REFERENCE. A COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION IS AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY WRITING OR
CALLING THE FUND.
THIS PROSPECTUS IS DATED MARCH 30, 1997
<PAGE>
SUMMARY OF EXPENSES
This table is designed to assist stockholders in understanding the various fees
and expenses associated with investing in the Fund. The Example shown below
should not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown.
STOCKHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases ( as a
Percentage of offering price)............................................none
Maximum Sales Load Imposed on Reinvested
Dividends ( as a percentage of Offering price)...........................none
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as
applicable.................................................................none
Redemption Fees (as a percentage of amount redeemed, if applicable).............none
Exchange Fee....................................................................none
ANNUAL FUND OPERATING EXPENSES (FOR THE YEAR ENDED NOVEMBER 30, 1996)
(as a percentage of averg net assets)
Management Fees.................................................................0.64%
12b-1 Fees......................................................................none
Other Expenses (audit, legal, stockholder services,
transfer agent, custodian, and miscellaneous)...............................0.83%
Total Fund Operating Expenses...................................................1.47%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEAR 5 YEAR 10 YEAR
------------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
You would pay the following
total fees and expenses on a
$1,000 investment, assuming
(1) 5% annual return* and
(2) redemption at the end of
each time period: $15 $48 $85 $200**
</TABLE>
- -----------------------
* Use of this assumed annual return is mandated by the Securities and Exchange
Commission and is not intended to be an illustration of past or future
investment results.
** These are cumulative totals; the average fees and expensees paid over a 10
year period ould be approximately $20 per year.
<PAGE>
FINANCIAL HIGHLIGHTS
The information in the following table for the years ended November 30,
1996, 1995, 1994 and 1993 has been audited by Hein + Associates LLP,
independent auditors, whose report thereon and on the financial statements and
the related notes is included in the Fund's 37th Annual Report to Stockholders
incorporated by reference into the Statement of Additional Information. The
per share date and ratios for each of the six years in the period ended
November 30, 1991, were audited by other auditors whose report dated December
20, 1991, expressed an unqualified opinion on those selected per share data
and ratios. Further information about the performance of the Fund is
contained in the Fund's Annual Report to Stockholders which may be obtained
from the Fund without charge.
(FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
...... ...... ...... ...... ...... ...... ...... ...... ...... ....
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year...... $14.36 $12.61 $12.62 $14.78 $14.94 $12.55 $14.16 $11.70 11.04 $13.08
INCOME FROM INVESTMENT OPERATIONS.......
Net Investment Income................... .10 .17 .07 .06 .15 .20 .22 .20 .12 .09
Net Gains or Losses on Securities
(both realized and unrealized)....... 2.83 2.34 .29 (.19) 1.10 2.64 (.16) 2.91 1.79 (.58)
Total From Investment Operations........ 2.93 2.51 .36 (.13) 1.25 2.84 .05 3.11 1.91 (.69)
LESS DISTRIBUTIONS
Dividend (from net investment income)... (.17) (.07) (.07) (.10) (.21) (.22) (.21) (.18) (.10) (.13)
Distribution (from capital gains)....... (.56) (.69) (.30) (1.11) (1.10) (.33) (1.48) (.50) (1.15) (1.32)
Net Asset Value, End of Year............ $16.56 $14.36 $12.61 $12.62 $14.78 $14.84 $12.55 $14.18 $11.70 $11.04
Total Return............................ 21.46% 23.50% 2.61% (1.22)% 8.29% 23.53% 0.46% 27.69% 18.37% (5.22)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in 100's)......$39,602 34,775 30,775 32,448 34,560 33,710 29,491 31,617 26,829 24,294
Ratio of Expenses to Average Net Assets. 1.47% 1.49% 1.64% 1.60% 1.50% 1.46% 1.70% 1.69% 1.70% 1.65%
Ratio of Net Income to Average Net
Assets............................... 0.67% 1.27% .53% .50% .99% 1.46% 1.69% 1.52% 1.04% .64%
Portfolio Turnover Rate................. 45% 38% 36% 56% 45% 22% 64% 83% 32% 66%
</TABLE>
WHAT IS THE FUND
Stonebridge Growth Fund, Inc., (The "Fund") is an investment company which
was organized in the State of Delaware. Purchasers of the Fund's shares invest
in a company that itself invests in securities. The Fund is an open-end
investment company because, upon demand of an investor, the Fund has a legal
duty to redeem its shares held by the investor and to pay the investor the net
asset value of the shares. See "Pricing" and "How to Buy and Redeem Fund
Shares." The Fund makes investments in various securities and is a type of
management company commonly known as a mutual fund.
The purpose of the Fund is to provide investors with an opportunity to
acquire an interest in a comprehensive common stock program under the
continuous supervision of impartial and experienced professional investment
management. Investment companies operate in accordance with their objectives
and policies. The Fund's investment objectives and policies are set forth
below under "Objectives and Investment Policies."
With respect to the purchase and sale of investments, the Fund receives
investment advice and other services from Stonebridge Capital Management,
Incorporated (the "Adviser"), which is paid a fee pursuant to its contract with
the Fund's manager, NIF Management Co., Inc. (the " Fund Manager"). See
"Investment Adviser" for a discussion of the Adviser and its contract with the
Fund Manager. The Fund pays costs including custodian, management, and transfer
agency fees, audit and legal fees, brokerage fees and fees for certain
administrative services.
<PAGE>
The value of the Fund's shares, which are priced daily, fluctuates with
the value of the securities in which the Fund invests. When the Fund sells
portfolio securities it may realize a gain or a loss, depending on whether it
sells them for more or less than their cost. The Fund will earn dividend or
interest income to the extent that it receives dividends and interest from its
investments.
The Fund offers its shares to the public at net asset value on a
continuous basis. Such shares have been qualified for sale in 43 states of the
United States.
OBJECTIVES AND INVESTMENT POLICIES
The Fund principally seeks long term growth of capital and increased
future income through investment primarily in common stocks. Immediate
income return is a secondary consideration. In order to achieve its
investment objectives, the Fund invests primarily in the common stocks of
those companies that, based upon in-depth fundamental research, appear to
have the potential to achieve growth in sales, earnings per share, and
ultimately in dividends at a rate greater than that of the overall economy
and the rate of inflation. The Fund's Adviser believes that companies that
are able to achieve above average records of growth will eventually be
rewarded by higher prices for their stocks. These companies may be large or
small and there are no restrictions on the market capitalization of a company
in which the Fund may invest. However, investors should be aware that during
periods of poor economic performance or adverse market conditions, common stocks
and hence the per share value of the Fund may not reflect favorable earnings
trends. In addition, the securities of smaller companies may be subject to
more volatile market movements and greater risk than the securities of more
well-established companies.
The Fund's Adviser selects securities by studying macro-economic and
industry trends to determine where the best opportunities for growth might be
found. Companies operating within these high growth areas of the economy are
carefully analyzed to determine their particular strengths and weaknesses,
as well as their global competitive position. Generally, a company that has
the ability to achieve superior growth will have the following characteristics:
it will be a leader in its industry; have a proprietary product or service;
spend heavily on research and development; have a strong balance sheet with
little or no debt; and have a superior return on equity. Fundamental valuation
measures are used to determine the best relative values given present market
prices of stocks being considered for the Fund.
The Funds investment policy is based upon the conviction of the
management that the long-term growth and prosperity of American business will
continue. Management seeks to attain the objectives of the Fund primarily
through the ownership of securities of companies which possess potential
growth in the years ahead or appear to have good prospects for increased
earnings and dividends and through the use of certain other investment
techniques in an effort to enhance income and reduce market risks. There can
be no assurance that these objectives will be achieved since all investments
are subject to risk in varying degrees. Such objectives can be changed by the
Board of Directors of the Fund.
It is the policy of the Fund, which may not be changed without approval of
a majority of the outstanding voting securities of the Fund, to diversify its
investments and not to concentrate its assets in any one industry.
Diversification and non-concentration tend to reduce, though they do not
eliminate, the market risk inherent in all securities. At the same time they
broaden investment opportunities.
<PAGE>
While it is the general policy of the Fund to be fully invested in common
stocks, under certain circumstances, investments may be made in other types of
securities such as convertible and non-convertible bonds, preferred stocks,
stock index and foreign currency futures, options, American Depository Receipts
and securities of investment companies and foreign issuers. The Fund may also
make short sales of securities or maintain a short position as discussed in
"Short Sales Against the Box" below. The policy of the Fund is that investments
in neither bonds nor preferred stock will exceed 5% of the Fund's total assets
each. For a discussion of the Fund's investments in stock index and foreign
currency futures, options, American Depository Receipts and securities of
foreign issuers, see "Foreign Investments" and "Hedging and Income Enhancement
Strategies" below.
In addition, during adverse or transition periods in the stock market,
reserves may be held without percentage limitation in order to protect and
preserve the assets of the Fund. These temporary defensive reserves will be
invested in money market instruments, including U.S. Government Treasury Bills,
repurchase agreements secured by U.S. Government securities, certificates of
deposit, high grade bankers' acceptances, and high grade commercial paper with
a maximum maturity of not more than one year.
The Fund may not invest an amount which exceeds 5% of the value of the
Fund's total assets in the securities of any one issuer. This restriction does
not apply to holdings of government securities. The Fund does not trade
actively for a quick profit which is derived in a short period of time between
the purchase and sale of a security. However, changes are made in the portfolio
whenever such action appears advisable. During periods of broad economic
growth, emphasis is placed on seeking investments in leading companies in those
industries that are expected to lead the expansion. During periods when the
economy is sluggish, emphasis is placed on seeking to invest in companies
selected because of their individual prospects for improved earnings. In
recent years, companies that have provided unusual investment opportunities
notwithstanding a sluggish economy have often been found to be among the
leaders in the development of new technology in their respective industries.
Management approaches these decisions with essentially the point of view of
long-term investing but securities may occasionally be sold for investment
reasons even though they have been held for short periods. Therefore, there
may be a limited number of short-term transactions. This flexibility gives
management freedom to adjust the portfolio to changing business conditions.
Because of this policy, it is anticipated that the annual portfolio turnover
will normally be in the range of 25% to 75%. A 50% turnover rate would
occur, for example, if one-half of the Fund's portfolio was replaced in a
period of one year. The rate of portfolio turnover for the fiscal years
ended November 30, 1994 through 1996 was 56.4%, 36.4% and 38.3%,
respectively. Brokerage cost to the Fund is commensurate with the rate of
portfolio activity and may affect taxes paid by the stockholder
(see discussion of "Taxes on Dividends and Capital Gains Distributions").
Investments in common stocks have over the long term provided returns
superior to those achieved through investment in bonds or money market
instruments. However in the short to intermediate term returns can vary
substantially from year to year, it is probable that there will be periods when
the net asset value of the Fund will actually decline. Diversification and
temporary reserves can be expected to reduce the risks inherent in investing
in common stocks but will not eliminate such risk. Accordingly, investors
should be prepared and able to maintain their investment in the Fund during
periods when the market declines. In addition, while maintaining the
purchasing power of the capital of the Fund is an important consideration of
the management in the determination of the investment policy, there can be
no assurance that investors in the Fund will be protected from the effects
of inflation.
An additional risk factor peculiar to investment in the Fund arises from
the fact that ling term growth is sought by the Fund at the possible expense
of short term profits.
FOREIGN INVESTMENTS. The Fund may invest up to 20% of its total assets,
either directly or indirectly through investments in American Depository
Receipts ("ADRs") and closed-end investment companies, in securities issued
by foreign companies wherever organized. ADRs are receipts issued by an
American bank or trust company evidencing ownership of underlying securities
issued by a foreign issuer. ADRs may be listed on a national securities
exchange or may trade in the over-the-counter market. ADR prices are
denominated in United Stated dollars; the underlying security may be
denominated in a foreign currency. The underlying security may be subject
to foreign government taxes which would reduce the yield in such securities.
ADR's may be sponsored by a foreign issuer or may be unsponsored (organized
independently from the foreign issuer).
<PAGE>
Although the Fund is authorized to invest in any kind of investment
company, it intends to limit its investments to securities of closed-end
investment companies within the limits prescribed by the Investment Company Act
of 1940. The Fund currently intends to limit such investments so that,
immediately after such investment: (a) not more than 5% of the value of its
total assets will be invested in the securities of any one investment company;
(b) not more than 10% of the value of its total assets will be invested in the
aggregate in securities of investment companies as a group; and (c) not more
than 3% of the outstanding voting stock of any one investment company will be
owned by the Fund. The Fund will invest in closed-end investment companies
only in furtherance of its investment objective. Growth in appreciation and
dividends in foreign markets sometimes occurs at a faster rate than in domestic
markets. The ability of the Fund to invest in closed-end investment companies
that invest in foreign securities would provide, indirectly greater variety and
added expertise with respect to investments in foreign markets than if the Fund
invested directly in such markets. Such companies, themselves, however, may
have policies that are different from those of the Fund and will bear
management and other expenses that are similar to those paid by the Fund
and which may be greater or lesser in amount than those paid by the Fund.
No adjustments will be made to the advisory fee with respect to assets of
the Fund invested in such investment companies.
Investing in securities issued by companies whose principal business
activities are outside the United States will involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject
to the disclosure and reporting requirements of the United States securities
laws. Foreign issuers are generally not bound by uniform accounting,
auditing and financial reporting requirements comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the
risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, political or financial
instability or diplomatic and other developments which could effect such
investments. Further, economies of particular countries or areas of the
world may differ favorably or unfavorably from the economy of the United
States. The extent to which the Fund will be invested in foreign companies
will fluctuate from time to time within the 20% limitation stated above
depending on the Adviser's assessment of prevailing market, economic and
other conditions.
SHORT SALES AGAINST THE BOX. The Fund may from time to time make short
sales of securities if at the time of the short sale it owns or has the right
to acquire, at no additional cost,an equal amount of the securities sold
short. This investment technique is known as a "short sale against the box."
While the short position is maintained, the Fund will collateralize its
obligation to deliver the securities sold short in an amount equal to the
proceeds of the short sale plus an additional margin amount established by
the Board of Directors of the Federal Reserve (presently 10% of the market
value of the securities sold short). If the Fund engages in a short sale
the collateral account will be maintained by the Fund's custodian or a
duly qualified subcustodian. While the short sale is open the Fund will
maintain in a segregated custodial account an amount of securities equal
in kind and amount to the securities sold short or securities convertible
into or exchangeable for such equivalent securities at no additional cost.
The Fund's Adviser currently anticipates that no more than 25% of the
Fund's total assets would be invested in short sales against the box, but
this limitation is a nonfundamental policy which could be changes by the
Board of Directors of the Fund.
The Fund may make a short sale against the box when it believes that the
price of a security may decline, causing a decline in the value of a security
owned by the Fund (or a security convertible into or exchangeable for such
security), or when the Fund wants to sell the security it wants at a current
attractive price, but also wishes to defer recognition of gain or loss for
federal income tax purposes and for purposes of satisfying certain tests
applicable to regulated investment companies under the Internal Revenue Code.
In such a case, any future losses in the Fund's long position should be reduced
by a gain in the short position. The extent to which such gains or losses are
reduced would depend upon the amount of the security sold short relative to the
amount the Fund owns. There will be certain additional transaction costs
associated with short sales against the box, but the Fund will endeavor to
offset these costs with income from the investment of the cash proceeds of
short sales.
<PAGE>
HEDGING AND INCOME ENHANCEMENT STRATEGIES. In addition to its investments
in securities, the Fund may buy and sell stock index and foreign currency
futures contracts, options and options on futures with respect to all or a
portion of its assets. Transactions in such options and futures contracts may
afford the Fund the opportunity to hedge against a decline in the value of
securities it owns, may provide a means for the Fund to generate additional
income on its investments or may provide opportunities for capital
appreciation. The Fund may also purchase and sell stock index futures
contracts and options to manage cash flow and to attempt to remain fully
invested in the stock market. Although the Fund has no specific fundamental
limitations on its ability to engage in options and futures contracts, it
does not use options or futures contracts for speculative purposes. The
Fund may engage in additional hedging techniques as new techniques become
available.
OPTIONS TRANSACTIONS. The Fund may write covered put and call options on
securities to attempt to increase the return on its investments through the
receipt of premium income. The Fund also may write put options and purchase
call options to increase its exposure to the stock market when the Fund
has cash from new investments of holds a portion of its assets in money market
instruments or to protect against an increase in prices of securities it
intends to purchase. When the Fund wishes to sell securities because of
stockholder redemptions or to otherwise protect the value of a security it
owns against a decline in market value, it may write call options and
purchase put options.
A call option gives the purchaser, in return for payment of the option
premium (the option's current market price), the right to buy the option's
underlying security at a specified exercise price at any time during the term
of the option. The writer of a call option, who receives the premium, assumes
the obligation to deliver the underlying security against payment of the
exercise price at any time the option is exercised. A put option is a similar
contract that gives the purchaser of the option, in return for the premium
paid, the right to sell the underlying security at a specified exercise
price at any time during the term of the option. The writer of the put
receives the premium and assumes the obligation to buy the underlying
security at the exercise price whenever the option is exercised. The
premium paid for purchasing an option reflects, among other things, the
relationship of the exercise price to the market price and volatility of
the underlying security, the remaining term of the option, supply and
demand and interest rates. The Fund intends to limit the aggregate value of
the securities underlying the calls or obligations underlying the put
options to no more than 25% of the net assets of the Fund taken at market
value, determined as of the date the options are written. All options,
whether written or purchased, would be listed on a national securities
exchange and issued by the Options Clearing Corporation.
A call option written by the Fund is "covered" if the Fund owns the call
option's underlying security or has an absolute and immediate right to acquire
that security without the payment of additional consideration (or upon payment
of additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities it owns. A call option written
by the Fund is also covered if the Fund owns, on a share-for-share basis, a
call option on the same security whose exercise price is equal to or less
than the call written, or greater than the exercise price of the call
written if the difference is maintained by the Fund in cash or liquid
high-grade short-term debt securities in a segregated account with its
custodian. A put option written by the Fund is "covered" if the Fund
maintains cash or liquid high-grade short-term debt securities with a value
equal to the put option's exercise price in a segregated account with its
custodian, or else owns, on a share-for-share basis, a put option on the
same security whose exercise price is equal to or greater than the put
written. Securities held to cover an option may not be sold so long as the
Fund remains obligated under the option, unless they are replaced by other
appropriate securities.
<PAGE>
STOCK INDEX AND FOREIGN CURRENCY FUTURES AND OPTIONS ON SUCH
FUTURES. The Fund may purchase and sell stock index and foreign currency
futures contracts (as well as purchase and sell related options on such futures
contracts) as a hedge against changes resulting from market conditions and
exchange rates in the values of the domestic and foreign securities held in
the Fund or which it intends to purchase and where the transactions are
economically appropriate for the reduction of risks inherent in the ongoing
management of the Fund.
A stock index assigns relative value to the common stocks included in the
index (for example, the Standard & Poor's 500 or the New York Stock Exchange
Composite Index), and the stock index fluctuates with changes in the market
value of such stocks. A stock index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the stock
index value at the close of the last trading day of the contract and the price
at which the futures contract is originally struck. No physical delivery of
the underlying stocks in the index is made. A foreign currency futures
contract creates an obligation on one party to deliver, and a corresponding
obligation on another party to accept delivery of, a stated quantity of a
foreign currency, for an amount fixed in United States dollars. The Fund may
purchase and sell foreign currency futures contracts as a hedge against
changes in currency exchange rates when the Fund is invested in the
securities of foreign issuers.
The Fund may not purchase or sell futures contracts and related options
unless immediately after any such transaction, the aggregate initial margin
that is required to be posted by the Fund under the rules of the exchange on
which the futures contract ( or futures option) is traded, plus any premium
paid by the Fund on its open futures options positions, does not exceed 5% of
the Fund's total assets, after taking into account any unrealized profits and
losses on the Fund's open contracts and excluding the amount that a futures
option is "in the money" at the time of purchase. (An option to buy a
futures contract is "in the money" if the then current purchase price of the
contract that is subject to the option exceeds the exercise of strike price;
an option to sell a futures contract is "in the money" if the exercise or
strike price exceeds the then current purchase price of the contract that is
the subject of the option.)
RISKS INHERENT IN TRANSACTIONS IN OPTIONS AND FUTURES CONTRACTS. In
selecting futures contracts and options for the Fund, the Adviser will assess
such factors as current and anticipated stock prices and interest rates, the
relative liquidity and price levels in the options and futures markets compared
to the securities markets, and the Fund's cash flow and cash management needs.
If the Adviser judges these factors incorrectly, or if price changes in the
Fund's futures or options positions are not well correlated with its other
investments, use of the futures contracts and options may leave the Fund in a
worse position than if it had not used these strategies. Other risks inherent
in the use of options, foreign currency and stock index futures contracts and
options on futures contracts include the fact that skills needed to use these
strategies are different from those needed to select portfolio securities, the
imperfect correlation between movements in the price of the options and futures
contracts and movements in the price of the securities or currencies which are
the subject of the hedge, the possible absence of a liquid secondary market for
any particular instrument at any time and the possible need to defer closing out
certain hedged positions to avoid adverse tax consequences.
BOARD OF DIRECTORS
The overall management of the business and affairs of the Fund is vested
with the Board of Directors. The Board of Directors approves all significant
agreements between the Fund and persons or companies furnishing services to the
Fund, including the Fund's agreements with its investment adviser, manager,
transfer agent, custodian and dividend disbursing agent. The day-to-day
operations of the Fund are delegated to the Fund Manager, subject always to the
objectives and policies of the Fund and the general supervision of the Fund's
Board of Directors.
<PAGE>
INVESTMENT ADVISER
Stonebridge Capital Management, Incorporated, 1801 Century Park East, Los
Angeles, California 90067, is retained as the Adviser to the Fund pursuant to a
written Investment Advisory Agreement with the Fund Manager, who pays the
Adviser a monthly fee. The Investment Advisory Agreement (the "Agreement") was
approved by the Board of Directors on February 11, 1992 subject to stockholder
approval. The Agreement was approved by the stockholders of the Fund on
May 26, 1992. The continuance of the Agreement was approved by the Board of
Directors on March 28, 1996.
The Agreement requires the Adviser to supervise the investment of the
assets of the Fund, and place orders with securities broker/dealers for the
purchase or sale of securities on behalf of the Fund, subject to the policies
and controls of the Board of Directors of the Fund. In doing so, the Adviser
is to obtain and evaluate information, reports and studies, some or all of
which may be provided to the Adviser by the securities broker/dealers that
execute securities transactions for the Fund, for which their compensation may
consist solely of the brokerage commissions paid by the Fund. As consideration
for furnishing such services, the Agreement provides that the Adviser will
receive from the Fund Manager a monthly advisory fee which is a percentage of
the average weekly net assets of the Fund equal to the following: 1/2 of 1% on
the first $10,000,000 of the Fund's average monthly net assets, 1/4 of 1% of the
Fund's average weekly net assets in excess of $10,000,000 and less than
$25,000,000 and 1/8 of 1% of the Fund's average weekly net assets in excess of
$25,000,000. During the fiscal years ended November 30, 1994, 1995, and 1996,
the Adviser received from the Fund Manager $96,056, $97,356 and $101,700
respectively, in fees for investment and advisory services pursuant to the
Investment Advisory Agreement, representing .3%, .3%, and .3%, respectively,
of the Fund's net assets in each year.
The Agreement provides that it shall remain in force and effect for two
years and thereafter from year to year so long as such continuance is approved
at least annually by the Board of Directors of the Fund or by a majority of the
outstanding voting securities of the Fund, but in either event it must be
approved by a majority of the directors who are not parties to the Investment
Advisory Agreement or interested persons of any such party. The Agreement also
provides that it may be terminated without penalty at any time by the Board of
Directors of the Fund or by vote of a majority of the Fund's outstanding voting
securities or by the Adviser upon sixty days written notice and that it shall
terminate automatically in the event of its assignment.
The Adviser is owned by six of its employees. Richard C. Barrett, Vice
President of the Fund and President of the Adviser, has been primarily
responsible for the day-to-day management of the Fund's portfolio since 1984.
Although the organizational arrangements of the Adviser do not require that all
investment decisions be made by committee, it is the practice of the Adviser to
make such decisions by committee.
THE FUND MANAGER
NIF Management Co., Inc., 5990 Greenwood Plaza Blvd., Englewood, Colorado
80111, which is a wholly owned subsidiary of Preferred Financial Corp. ("PFC")
operates as Fund Manager pursuant to a management agreement (the "Management
Agreement") with the Fund. The Management Agreement was last approved by the
Board of Directors on March 28, 1996 and by shareholders of the Fund on May 26,
1992. All of the outstanding shares of PFC are held by Health Care Service
Corporation, a Mutual Legal Reserve Company. PFC also owns all of the stock of
Industry Savings Plans, Inc., the principal underwriter of the Fund's shares.
The Fund Manager is also the Transfer Agent.
The Management Agreement provides that it will remain in force and effect
from year to year provided that its continuance is specifically approved at
least annually by a majority of the directors of the Fund or a majority of the
outstanding securities of the Fund, but in either event it must be approved by a
majority of the directors who are not parties to the Management Agreement or
interested persons of any such party by vote cast in person at a meeting called
for the purpose of voting on such approval. The Management Agreement may be
terminated without penalty at any time by the Board of Directors of the Fund or
by vote of a majority of the outstanding securities or by the Fund Manager upon
sixty days written notice. The Management Agreement will automatically
terminate in the event of its assignment, except that it will not terminate in
the event of an assignment caused by any direct or indirect transfer of a
controlling block of the outstanding voting securities of the Fund Manager if a
majority of the Board of Directors of the Fund and a majority of the
disinterested directors (a) adopt a resolution to the effect that the
assignment will not adversely affect the Fund and, (b) determines to submit
the Management Agreement for ratification by vote of a majority of the
outstanding voting securities of the Fund at the next annual meeting of
stockholders.
The Management Agreement provides that the Fund Manager will supervise and
manage the business of the Fund subject to the direction and control of the
officers and directors of the Fund. This responsibility requires that the Fund
Manager provide certain services and facilities including, but not limited to,
the services of a chief executive officer and administrator for the Fund and
other personnel required by the Fund, the services of an investment adviser,
office space, furniture, equipment, supplies, files and records, supervision of
the maintenance of the books and records of the Fund, pricing of the portfolio
securities of the Fund on a daily basis, and the supervising of the
relationship between the Fund and the stockholders, custodian, transfer
agent and others, including the preparation of registration statements and
proxy material. The Fund Manager is also obligated to pay the fee of the
Adviser. See "Investment Adviser."
As consideration for furnishing such management services, the Management
Agreement provides that the Fund Manager will receive a monthly management fee
equal to the annual rate of 3/4 of 1% of the first $10,000,000 of the average
weekly net assets of the Fund, 5/8 of 1% of the next $15,000,000, and 9/16 of
1% of the excess over $25,000,000. The Management Agreement also provides that
if the total expenses of the Fund, including the management fee but excluding
taxes and interest, should exceed 2% of the average weekly net asset value of
the Fund, the management fee paid the Fund Manager will be reduced to an amount
which, together with all other expenses of the Fund (excluding taxes and
interest), shall equal 2% of the average weekly net asset value of the Fund.
The Fund Manager is required to reimburse the Fund if total Fund expenses
exceed 2%. The Management Agreement also provides that the Fund's expenses are
subject to the maximum limitation as from time to time provided in the
regulations adopted under the California securities laws, unless the express
consent of the Board of Directors is obtained. The present California
limitation is 2 1/2% of the first $30,000,000 of annual average net assets, 2%
of the next $70,000,000, and 1 1/2% of average annual net assets in excess of
$30,000,000.
The aggregate management fees, prior to payment of the Adviser fee, paid
during the years ended November 30, 1994, 1995, and 1996 were $208,619,
$213,093 and $232,277, respectively, representing .7%, .6% and .6%,
respectively, of the Fund's net assets in each year. The Fund is obligated
to pay the cost of its principal financial officer and of personnel operating
under the direction of the principal financial officer and bear the cost of
all legal and auditing fees and other business expenses of the Fund. The
expenses of the Fund borne by the Fund, including the fees paid to the Fund
Manager, during the year ended November 30, 1996 amounted to 1.47% of the
Fund's average net assets.
<PAGE>
THE CUSTODIAN
Colorado National Bank, 17th and Champa Street, Denver, Colorado 80202,
is retained as Custodian for the Fund.
THE TRANSFER AGENT
The Fund's transfer agent and dividend disbursing agent is NIF Management
Co., Inc., 5990 Greenwood Plaza Blvd., Englewood, Colorado 80111.
THE DISTRIBUTOR
Industry Savings Plans, Inc., 5990 Greenwood Plaza Blvd., Englewood,
Colorado 80111 serves as the Distributor and principal underwriter of the
Fund's shares without compensation and bears the expense of distribution of
the shares of the Fund.
CAPITAL STOCK
The Fund was organized as a corporation in the state of Delaware on
November 13, 1958. The authorized capitalization of the Fund consists of
10,000,000 shares of capital stock, all of one class, having a par value of
$1.00 per share. All shares participate equally in dividends and distributions
and in net assets on liquidation. The shares are fully paid and
non-assessable: they have no preference, pre-emptive, conversion, or exchange
rights. Fractional share interests have proportionate dividend and redemption
rights, but no voting rights.
Each full share has one vote, except that each stockholder entitled to
vote at any election of directors has the right to cumulate his votes. Under
the cumulative voting method, each stockholder is entitled to cast a total
number of votes equal to the number of directors to be elected multiplied by
the number of shares. The total number of cumulative votes may be cast for
one candidate or distributed among any number of candidates.
Stockholder inquiries concerning the Fund should be directed to a Fund
Manager's representative by calling (303) 220-8500.
<PAGE>
REPORTS TO STOCKHOLDERS
The Fund issues semi-annual and annual reports to its stockholders listing
securities held in its portfolio, complete financial statements, and other
informations. The financial statements of the Fund are audited annually by
independent public accountants.
TAXES ON DIVIDEND AND CAPITAL GAINS DISTRIBUTIONS
The Fund intends to qualify and elect to be taxed as a "regulated
investment company" under Subchapter M of the Internal Revenue Code (the
"Code"). In any fiscal year in which the Fund so qualifies and distributes at
least 90% of its taxable net investment income, the Fund will be relieved of
Federal income tax on the net investment income and net realized capital gains
distributed to stockholders. Any net investment income or realized capital
gains not distributed will be subject to Federal income tax. One of the
requirements the Fund must meet in order to qualify under Subchapter M
as a regulated investment company is that at least 90% of the Fund's gross
income be derived from certain sources, which include dividends, interest,
payments with respect to securities, loans and gains from the sale or other
disposition of stock or securities. In addition the Fund must meet certain
asset diversification and holding period requirements.
Net investment income and net short-term capital gains distributed by the
Fund, if any, will be taxable to stockholders as ordinary income whether
received in cash or additional shares. Any net long-term capital gains
realized by the Fund, and distributed, will be taxable to stockholders as
long-term capital gains regardless of the length of time investors have held
their shares.
A 4% non-deductible excise tax is imposed on a regulated investment
company which fails to distribute to its stockholders a specified amount of
its taxable ordinary income and capital gains during a calendar year.
The Fund may be required to withhold for Federal income taxes 31% of
distributions payable to stockholders who fail to provide the Fund with their
correct taxpayer identification numbers or make required representations, or
who have been notified by the Internal Revenue Service they are subject to
back-up withholding. Corporate stockholders, and other stockholders
specified by the Internal Revenue Code, are exempt from back-up withholding.
Dividends from net investment income are taxable to shareholders as
ordinary income and are generally eligible, in the case of corporations, for
the 70% deduction for corporate shareholders provided by the Internal Revenue
Code. Capital gains distributions do not qualify for such exclusion. For the
fiscal year ended November 30, 1996, there were no dividends paid from
investment income of the Fund so none were eligible for such exclusion.
Shareholders who are citizens or residents of the United States pay federal
taxes at capital gains rates on long-term capital gains which are distributed
to them, whether or not reinvested in the Fund, and regardless of the period of
time that such shares have been owned by the shareholders. Advice as to the
tax status and amount of each year's dividends and distributions will be mailed
annually.
SYSTEMATIC CASH WITHDRAWAL PLAN
A stockholder owning $10,000 or more of Fund shares at net asset value
may establish a Systematic Cash Withdrawal Plan (a "Withdrawal Plan") upon
completion of an authorized form. Qualified participants may then receive
monthly or quarterly checks of $50 or more in multiples of $10 as they choose.
The redemption is made on the 20th day of the month and payment is made
within seven days thereafter. These payments are drawn from shares redeemed
from the stockholders's account to meet the payment amounts he requested.
To the extent that these redemptions exceed dividends and capital gains
distributions, participants will eventually deplete their investments,
particularly if the net asset value of the Fund decreases. A systematic
withdrawal participant may discontinue receiving payments at any time, and
if he wishes, resume them at any time thereafter. The Fund also reserves
the right to cancel and Withdrawal Plan.
<PAGE>
Under this program, all dividends and capital gains distributions are
automatically reinvested, and share certificates are not issued. Amounts paid
to stockholders should not be considered income. NIF Management Co., Inc.
makes a service charge of $5.00 upon the establishment of a Withdrawal Plan.
No particular amount of periodic or quarterly payments is recommended. An
authorization form may be obtained from the Fund upon request.
PRICING
The public offering price per share, which is the net asset value per
share, is determined once daily as of the close of the New York Stock Exchange
on each day it is open for trading. This price is applicable to all orders to
buy or sell Fund shares received prior to 4:15 p.m. Eastern time each day the
Exchange is open. Orders received after such time are held until the next day
on which the public offering price is determined.
The net asset value per share is determined by dividing the total market
value of all the Fund's portfolio securities and other assets, less all
liabilities, by the total number of Fund shares outstanding. Securities listed
or traded on a registered securities exchange are valued at the last sale price
on the day of the computation or, if there is not a sale on that day, the last
reported bid price. Where market quotations of over-the-counter stocks or
other securities are readily available, the mean between the bid and asked price
is used; however, for dates on which the last sale price is available from
NASDAQ, or other source of equivalent reliability, the last sale price for such
date is used and for dates on which there is no last sale price available, the
mean of the bid and asked price is used. Short-term debt securities are valued
at fair value. The value of any other securities for which no market
quotations are available and other assets will be determined at fair value in
good faith by the Board of Directors. Dividends receivable are treated as
assets from the date on which stocks go ex-dividend, interest on bonds not
traded flat is accrued weekly, and insofar as is practicable, liabilities are
accrued semi-monthly.
HOW TO BUY AND REDEEM FUND SHARES
To buy shares: Complete a Share Purchase Application and send it to the
Distributor, Industry Savings Plans, Inc., P.O. Box 17007, Denver, Colorado
80217, along with your check or money order for $250 or more. Additional
purchases may be made without a new application at any time in amounts of $25 or
more by sending payments directly to the Distributor. After each purchase, you
will receive a confirmation showing the number of full and fractional shares
purchased and total shares owned. The Fund reserves the right to reject any
purchase order which it judges to be disadvantageous to the Fund. See
"Pricing".
Certificates representing the shares purchased are not issued unless
specifically requested. The Transfer Agent credits the stockholder's account
with the number of shares purchased. Each stockholder receives account
statements after every transaction and also annually to provide him with a
record of the total number of shares in his account. This relieves the
stockholder of responsibility for safekeeping of certificates, and should he
redeem his shares, eliminates the need to deliver certificates. The stockholder
may at any time request the Transfer Agent to issued certificates, for full
shares, for all or a part of his holdings upon payment of $1.00 for handling
cost, which payment should accompany the request. Prior to purchasing shares
of the Fund, the impact of dividends or capital gains distributions which have
been declared but not paid should be carefully considered. Any such dividends
or capital gains distributions paid to an investor shortly after the purchase
of shares by the investor will have the effect of reducing the per share net
asset value of his shares by the amount of the dividends or distributions. All
or a portion of such dividends or distribution, although in effect a return of
capital, are subject to taxes, which may be at ordinary income tax rates.
<PAGE>
TO REDEEM SHARES: If you wish to redeem shares for which you do not hold
share certificates, simply send your written redemption request, signed by all
registered owners, to the Transfer Agent. If you hold certificates for your
shares, endorse them for transfer and send them and a written redemption
request to the Transfer Agent.
A signature guarantee by a guarantor institution which participates in The
Securities Transfer Agents Medallion Program (STAMP), The Stock Exchange
Medallion Program (SEMP) or The New York Stock Exchange, Inc. Medallion
Signature Program(MSP), is required if payment is to be made to someone other
than the registered stockholder at his address as listed on the Fund's stock
records.
In case of a redemption, the redemption price will be paid as soon as
possible but not later than the seventh day following the day of surrender of
shares in proper form as described above, except as further postponement may
be permissible under the Investment Company Act of 1940 for any period when (a)
the exchange is closed for other than weekends or holidays or trading thereon
is restricted under conditions set forth by the Securities and Exchange
commission (the "Commission"), (b) the Commission has by order permitted such
suspension, or (c) there is an emergency as defined by the rules of the
Commission, which makes disposal of portfolio securities or valuation of the
net asset of the Fund not reasonably practicable. Payment for redemption of
recently purchased shares will be delayed until the Transfer Agent has been
advised that the purchase check has been honored, which may take up to 15 days.
The redemption price may be more or less than the cost of the shares
redeemed, depending upon the market value of the securities owned by the Fund
at the time of redemption.
As authorized by the Fund's Certificate of Incorporation, the Board of
Directors may, at its option, effect a redemption of any shares of a
stockholder who is a participant in the group investment plan described
below, which on the determination date aggregate less than $100 in net asset
value of shares, and which during the previous six months prior to the
determination date have not increased except through automatic dividend
reinvestment of such stockholders's account. See "Group Investment Plan."
At least 60 days prior to the determination date, all such Group Investment
Plan Accounts will be notified by mail at the last known address of record
as shown on the Fund's books, that if an investment is not made prior to the
determination date, which will be specified, such stockholder's shares will
be automatically redeemed at the net asset value determined on the
determination date. The redemption shall be effected in the same manner as
if the stockholder had requested such redemption. The proceeds will be
immediately mailed to the former stockholder in accordance with law. If
the Fund is unable to deliver the money to the stockholder, then the proceeds
will be held for the account of the stockholder in a non-interest bearing
account.
GROUP INVESTMENT PLAN
The Distributor may, at its discretion, waive the minimum initial and
subsequent investment requirement for individuals who are offered an
opportunity to participate in a salary deduction plan. At the present time
the initial and subsequent investment requirement for individuals in a salary
deduction plan is $5.00 for each investment. Individual accounts will be
established for each participant who will receive a separate confirmation,
and may be terminated by the participant at any time. Payments must be sent
directly to Industry Savings Plans, Inc., and will be invested in the same
manner as in any other investment account described above. Complete
information about group investments may be obtained from the Distributor. A
participant in the Group Investment Plan should be aware that if his account
is less than $100 and he has made no investment for a period of 6 months his
shares may be automatically redeemed. See the caption "How to Buy and Redeem
Fund Shares."
With respect to each stockholder account established between April 1,
1974, and March 31, 1982, under a Group Investment Plan, the Fund will
annually charge a maintenance fee on each such account at the rate of $2.00
per twelve-month period the account is maintained. Effective April 1, 1982
all newly established Group Investment Plan accounts will be charged a $5.00
account set up fee. The Fund will annually charge a maintenance fee on each
such account of $5.00 for each twelve-month period the account is maintained.
The Transfer Agent may collect such charge either by deducting the same from
distributions to the stockholders involved or by causing on the date such
charge is assessed a redemption in each such account sufficient to pay such
charge. An investor is not required to pay the maintenance fee charge if he
is not participating in the Group Investment Plan, but would be required to
make a minimum initial investment of $250 and subsequent investments of $25
or more.
<PAGE>
REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Income dividends and capital gains distributions, if any, are
automatically reinvested. Under this arrangement, the Fund pays the dividend
or distribution to the Transfer Agent which in turn purchases for the
stockholder full and fractional shares at the net asset value per share on
the day a dividend or distribution would otherwise be paid in cash and adds
these shares to the stockholder's account. The policy of the Fund has been
to pay dividends annually. Only holders of certificates are paid dividends
or capital gains distributions, if any, in cash.
<PAGE>
STONEBRIDGE GROWTH FUND, INC.
5990 Greenwood Plaza Boulevard
Englewood, Colorado 80111
<PAGE>
STONEBRIDGE GROWTH FUND, INC.
OFFICERS AND DIRECTORS
DEBRA L. NEWMAN, President
RICHARD C BARRETT, Vice President And Director
MICHAEL J.B. STONE, Vice President
COLLEEN M. SCHOMER, Secretary
JOANNE E. ASHTON, Treasurer & Assistant Secretary
SELVYN B. BLEIFER, M.D., Director
MARVIN FREEDMAN, Director
CHARLES F. HAAS, Director
EXECUTIVE OFFICES
1801 Century Park East
Los Angeles, California 90067
Telephone--(310)277-1450
DISTRIBUTOR
Industry Savings Plans, Inc.
5990 Greenwood Plaza Blvd.
Englewood, Colorado 80111
Telephone--(303)220-8500
FUND MANAGER AND TRANSFER AGENT
NIF Management Co., Inc.
5990 Greenwood Plaza Blvd.
Englewood, Colorado 80111
Telephone --(303)220-8500
INVESTMENT ADVISER
Stonebridge Capital Management, Incorporated
1801 Century Park East
Los Angeles, California 90067
CUSTODIAN
Colorado National Bank
17th and Champa Street--Denver, Colorado 80202
AUDITORS
Hein + Associates LLP
717 17th Street, Suite 1600, Denver, Colorado 80202
STONEBRIDGE GROWTH FUND, INC.
5990 Greenwood Plaza Boulevard
Englewood, CO 80111
PROSPECTUS
MARCH 30, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
STONEBRIDGE GROWTH FUND, INC.
5990 Greenwood Plaza Boulevard, Englewood, Colorado 80111
(303)220-8500
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE
READ IN CONJUNCTION WITH A PROSPECTUS, WHICH MAY BE OBTAINED BY WRITING
STONEBRIDGE GROWTH FUND, INC., 5990 GREENWOOD PLAZA BOULEVARD,
ENGLEWOOD, COLORADO 80111, (303)220-8500
STATEMENT OF ADDITIONAL INFORMATION DATED: MARCH 30, 1997
RELATING TO THE PROSPECTUS DATED: MARCH 30, 1997
(/R>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
Introduction...........................................................2
Investment Objectives, Policies and Restrictions.......................2
Management of the Registrant...........................................7
Investment Advisory and Other Services.................................8
Brokerage Transactions................................................11
Purchase, Redemption and Pricing of Securities being Offered..........12
Financial Statements..................................................12
<PAGE>
INTRODUCTION
Stonebridge Growth Fund, Inc. (the "Fund ") is a no-load diversified,
open-end investment company, commonly known as a mutual fund. The rules and
regulations of the United States Securities and Exchange Commission (the "SEC")
require all mutual funds to furnish prospective investors certain information
concerning the activities of the company being considered for investment. This
information is included in a Prospectus dated March 30, 1996,
(the "Prospectus"), which may be obtained without charge by writing or calling
the Fund. This Statement of Additional Information is intended to furnish
investors with additional information concerning the Fund. Some of the
information required to be in this Statement of Additional Information is also
included in the Fund's current Prospectus; and, in order to avoid repetition,
reference will be made o sections of the Prospectus. Additionally, the
Prospectus and this Statement of Additional Information omit certain
information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from the
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Information concerning the Fund's fundamental investment objective is set
forth in the Prospectus under the heading "Objectives and Investment Policy."
The Fund's principal objective is long-term growth of capital and increased
future income through investments primarily in common stocks. Immediate income
return is a secondary consideration. In order to achieve its investment
objectives, the Fund invests in securities of companies which appear to have
good prospects for increased earnings and dividends, and uses certain other
investment techniques in an effort to enhance income and reduce market risks.
Bank Certificates of Deposit and Bankers' Acceptance. Certificates of
deposit are negotiable certificates issued against funds deposited in a
commercial bank for a definite period of time and earning a specified return.
Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specified merchandise, which are
"accepted: by a bank, meaning in effect that the bank unconditionally agrees
to pay the face value of the instrument on maturity. Certificates of deposit
and bankers' acceptances acquired by the Fund will be dollar-denominated
obligations of domestic banks or financial institutions which at the time of
purchase meet certain credit standards.
REPURCHASE AGREEMENTS. Pursuant to a repurchase agreement, the Fund
purchases securities and the seller agrees to repurchase them from the Fund
at a mutually agreed-upon time and price. The period of maturity is usually
overnight or a few days, although it may extend over a number of months. The
resale price is in excess of the purchase price, reflecting an agreed-upon rate
of return effective for the period of time the Fund's money is invested in the
security. Each Fund's repurchase agreement will be fully collateralized at all
times in an amount at least equal to the purchase price. The instruments held
as collateral are valued daily. If the seller defaults and the value of the
collateral securing the repurchase agreement declines, the Fund may incur a
loss. If bankruptcy proceedings are commenced with respect to the seller,
realization upon the collateral by the Fund may be delayed or limited.
The Fund will only enter into repurchase agreements with financial
institutions and brokers and dealers which meet certain creditworthiness and
other criteria.
The Fund will not pledge, mortgage or hypothecate assets of the Fund taken
at market value to an extent greater than 15% of the gross assets of the Fund
taken at cost. The Fund will not invest in securities of companies which
have a record of less than three years continuous operations if such purchase
at the time thereof would cause more than 5% of the total assets of the Fund
to be invested in securities of such company or companies.
OPTIONS AND FUTURES TRANSACTIONS. The Fund intends to limit its
transactions in options to writing covered call options on stocks and stock
indexes, purchasing put options on stocks and stock indexes, and closing out
such options in closing transactions. The Fund intends to limit its
transactions in futures contracts (contracts to purchase or sell an underlying
instrument at a future date), to purchasing and selling stock index and foreign
currency futures contracts, and to the purchase of related options.
Transactions in such options and futures contracts may afford the Fund the
opportunity to hedge against a decline in the value of securities it owns, may
provide a means for the Fund to generate additional income on its investments,
or may provide opportunities for capital appreciation.
<PAGE>
In purchasing futures contracts and related options the Fund will comply
with rules and interpretations of the Commodity Futures Trading Commission
("CFTC"), under which the Fund is excluded from regulation as a "commodity pool
operator." CFTC regulations require, among other things, (1) that futures be
used solely for "bona fide hedging" purposes, as defined in CFTC regulations,
and (2) other positions for the establishment of which the aggregate initial
margin and option premiums (less the amount by which such options are "in the
money") do not exceed 5% of the Fund's net assets (after taking into account
unrealized gains and unrealized losses on any contract it has entered into).
The extent to which the Fund may engage in futures transactions may also be
limited by the Internal Revenue Code's requirements for qualification as a
regulated investment company.
The above limitations on the Fund's investments in futures contracts and
options, and the Fund's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit. The Fund
will not modify the above limitations to increase the permissible futures and
options activities without supplying additional information in a current
Prospectus or Statement of Additional Information that has been distributed or
made available to the Fund's shareholders.
OPTIONS ON SECURITIES. The Fund may write covered call options on
securities it owns to attempt to realize, through the receipt of premium
income, a greater return than would be realized on the securities alone. In
return for the premium, the Fund forfeits the right to any appreciation in
the value of the underlying security above the option's exercise price for
the life of the option (or until a closing transaction can be effected).
The Fund also gives up some control over when it may sell the underlying
securities, and must be prepared to deliver the underlying securities
against payment of the option's exercise price at any time during the life
of the option. The Fund retains the full risk of a decline in the price of
the underlying security held to cover the call for as long as its obligation
as a writer continues, except to the extent that the effect of such a decline
may be offset in part by the premium received.
The principal purpose of writing a covered put option would be to realize
income in the form of the option premium, in return for which the Fund would
assume the risk of a decline in the price of the underlying security below the
option's exercise price less the premium received. The Fund's potential profit
from writing a put option would be limited to the premium received.
When the Fund has written an option it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing
at the current market price an option identical as to underlying instrument,
exercise price and expiration date to the option written by the Fund. The Fund
may not effect a closing purchase transaction, however, after it has been
notified that the option it has written has been exercised. When the Fund has
purchased an option it may liquidate its position by exercising the option, or
by entering into a closing sale transaction by selling an option it may
liquidate its position by exercising the option, or by entering into a
closing sale transaction by selling an option identical to the option it has
purchased. There is no guarantee that closing transactions can be effected.
The Fund will realize a profit from a closing transaction if the price at
which the option is closed out is less than the premium received for writing
the option or more than the premium paid for purchasing the option.
Similarly, the Fund will realize a loss from a closing transaction if the
price at which the option is closed out is more than the premium received or
less than the premium paid. Transaction costs for opening and closing option
positions must be taken into account in these calculations.
<PAGE>
The Fund may purchase put options on securities it owns to attempt to
protect those securities against a decline in market value during the term of
the option. To the extent that the value of the securities declines, the Fund
may be able to realize a gain by closing out the put option (or, if the value
of the securities falls below the put option's exercise price, may exercise the
option and sell the securities at the exercise price), and thereby may
partially or completely offset the depreciation of the securities. If the
price of the securities does not fall during the life of the option, the
Fund may lose all or a portion of the premium it paid for the put option, and
would lose the entire premium if an option were allowed to expire unexercised.
Such a loss could, however, be offset entirely or in part if the value of the
securities owned should rise.
Stock Index and Foreign Currency Futures and Options on Such Futures. The
Fund may purchase and sell stock index and foreign currency futures contracts
(as sell as purchases and sell related options) as a hedge against changes
resulting from market conditions and exchange rates in the values of the
domestic and foreign securities held in the Fund or which it intends to
purchase and where the transactions are economically appropriate for the
reduction of risks inherent in the ongoing management of the Fund.
In addition, the Fund may utilize stock index futures contract in
anticipation of changes in the composition of its portfolio holdings. For
example, in the event that the Fund expects to narrow its range of industry
groups represented in its holdings it may, prior to making purchases of the
actual securities, establish a long futures position based on a more restricted
index, such as an index comprised of securities of a particular industry
group. The Fund may also sell futures contracts in connection with this
strategy, in order to protect against the possibility that the value of the
securities to be sold as part of the restructuring of the portfolio will
decline prior to the time of sale.
No price is paid or received by the Fund upon the purchase or sale of a
futures contract. Initially, the Fund will be required to deposit with the
broker or in a segregated account with the Fund's custodian an amount of cash
or cash equivalents, the value of which may vary but is generally equal to
10% or less of the value of the contract. This amount is known as initial
margin. The nature of initial margin in futures transactions is different
from that of margin in securities transactions in that futures contract
margin does not involve the borrowing of funds by the customer to finance
the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to
the Fund upon termination of the futures contract assuming all contractual
obligations have been satisfied. Subsequent payments, called variation
margin, to and from the broker, will be made on a daily basis as the price
of the underlying instruments fluctuates making the long and short positions
in the futures contract more or less valuable, a process known as
marking-to-market. For example, when the Fund has purchased a futures
contract and the price of the contract has risen in response to a rise in the
underlying instruments, that position will have increased in value and the
Fund will be entitled to receive from the broker a variation margin payment
equal to that increase in value. Conversely, where the Fund has purchased a
futures contract and the price of the futures contract has declined in
response to a decrease in the underlying instruments, the position would be
less valuable and the Fund would be required to make a variation margin payment
to the broker. At any time prior to expiration of the futures contract, the
Fund's investment adviser may elect to close the position by taking an opposite
position, subject to the availability of a secondary market, which will operate
to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required
to be paid by or released to the Fund, and the Fund realizes a loss or gain.
Futures options possess many of the same characteristics as options on
securities. A futures option gives the holder the right, in return for the
premium paid, to assume a long positions (call) or short position (put) in a
futures contract at a specified exercise price at any time during the period
of the option. Upon exercise of a call option, the holder acquires a long
position in the futures contract and the writer is assigned the opposite short
position. In the case of a put option, the opposite is true.
<PAGE>
Futures positions may be closed out only on an exchange or board of trade
which provides a market for such futures. Although the Fund intends to
purchase futures which appear to have an active market, there is no assurance
that a liquid market will exist for any particular contract or at any
particular time. Thus, it may not be possible to close a futures position in
anticipation of adverse price movements.
OPTIONS ON STOCK INDEXES. The Fund may write covered call options on
stock indexes to attempt to increase the return on its investments through
the receipt of premium income. The Fund will cover index calls by owning
securities whose price changes, in the opinion of the Fund's investment
adviser, are expected to be similar to those of the index. If the value of
an index on which the Fund has written a call option falls or remains the
same, the Fund would realize a profit in the form of the premium received
(less transaction costs) that could offset all or a portion of any decline
in the value of the securities it owns. If the value of the index rises,
however, the Fund would realize a loss in its call option position, which
would reduce the benefit of any unrealized appreciation of the Fund's stock
investments.
The principal reason for writing a covered put option on a stock index
would be to realize income in return for assuming the risk of a decline in the
index. To the extent that the price changes of securities owned by the Fund
correlate with changes in the value of the index, writing covered put options
on indexes would increase the Fund's losses in the event of a market decline,
although such losses would be offset in part by the premium received for
writing the option. The Fund would cover put options on indexes by
segregating assets equal to the option's exercise price, in the same manner
as put options on securities.
The Fund may purchase put options on stock indexes to hedge its
investments against a decline in value. By purchasing a put option on a
stock index, the Fund will seek to offset a decline in the value of
securities it owns through appreciation of the put option. If the value of
the Fund's investments did not decline as anticipated, or if the value of the
option did not increase, the Fund's loss would be limited to the premium paid
for the option. The success of this strategy will largely depend on the
accuracy of the correlation between the changes in value of the index and
the changes in value of the Fund's security holdings.
RISKS ASSOCIATED WITH OPTIONS ON SECURITIESAND INDICES. Because of the
imperfect correlation between movements in the price of the future and
movements in the price of the securities which are the subject of the hedge,
the price of the future may move more than or less than the price of the
securities being hedged. If the price of the future moves less than the
price of the securities which are the subject of the hedge, the hedge will
not be fully effective but, if the price of the securities being hedged has
moved in an unfavorable direction, the Fund would be in a better position
than if it had not hedged at all. If the price of the securities being
hedged has moved in a favorable direction, this advantage will be partially
offset by the loss on the future. If the price of the future moves more than
the price of the hedged securities, the Fund will experience either a loss or
gain of the future which will not be completely offset by movements in the
price of the securities which are the subject of the hedge. It is also
possible that, where the Fund has sold futures to hedge its portfolio against a
decline in the market, the market may advance and the value of securities
held in the Fund may decline. If this occured, the Fund would lose money on
the future and also experience a decline in value in its portfolio securities.
Where futures are purchased to hedge against a possible increase in the
price of securities before the Fund is able to invest its cash or cash
equivalents in securities or options in an orderly fashion, it is possible that
the market may decline instead; if the Fund then concludes not to invest in
securities or options at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss on the
futures contract that is not offset by a reduction in the price of securities
purchased.
<PAGE>
In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between movements in the futures and the securities
being hedged, the price of futures may not correlate perfectly with movement in
the cash market due to certain market distortions. First, rather than meeting
additional margin deposit requirements, investors may close futures contracts
through off-setting transactions which could distort the normal relationship
between the cash and futures markets. Second, with respect to financial
futures contracts, the liquidity of the futures market depends on participants
entering into off-setting transactions rather than making or taking delivery.
To the extent participants decide to make or take delivery, liquidity in the
futures market could be reduced thus producing distortions. Third, from the
point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price distortion in
the futures market, and because of the imperfect correlation between the
movements in the cash market and movements in the price of futures, a correct
forecast of general market trends or currency movements by the Fund's
investment adviser may still not result in a successful hedging transaction
over a short time frame. Moreover, if the Fund's advisor is incorrect in such
forecasts or interest rates or other applicable factors, the Fund would be in a
worse position than if it had not hedged at all. In addition, the Fund's
purchase and sale of options on indexes is subject to the risks described
above with respect to options on securities.
In the event of the bankruptcy of a broker though which a Fund engages in
transactions in futures contracts or options, the Fund could experience delays
and losses in liquidating open positions purchased or sold through the broker,
and incur a loss of all or part of its margin deposits with the broker.
RESTRICTIONS. The Certificate of Incorporation of the Fund places certain
restrictions upon its activities which may be amended only upon approval of a
majority of the outstanding voting shares of the Fund. The Fund may not:
(1) Purchase the securities of any issuer, except the United States
Government, if after such purchase more than 5% of the total assets
of the Fund would be invested in the securities of such issuer.
(2) Purchase more than 10% of the outstanding securities of any class of
any issuer including voting securities.
(3) Make short sales of securities or maintain a short position unless at
the time of the short sale the Fund owns or has the right to acquire
at no additional cost an equal amount of the securities being sold
short.
(4) Purchase securities on margin except for short-term credits as are
necessary for the clearance of transactions; provided, however, the
Fund may make initial and variation margin payments in connection
with purchase or sales of options or futures contracts.
(5) Borrow any money except temporarily and for extraordinary or
emergency purposes and then only in an amount not to exceed 10% of
the total assets of the Fund taken at cost.
(6) Lend any money to any person (for this purpose the purchase of a
portion of an issue of publicly distributed debt securities for the
investment purposes is not considered a loan).
(7) Act as an underwriter of securities.
(8) Invest in the securities of other investment companies if immediately
after such investment the Fund will own (i) securities issued by an
investment company having an aggregate value in excess of 5% of the
value of the total assets of the Fund, or (ii) securities issued by
all investment companies having an aggregate value in excess of 10%
of the value of the total assets of the Fund, except to the extent
permitted by the Investment Company Act of 1940 and any applicable
rules or exemptive orders issued thereunder.
(9) Engage in activity which involves promotion or business management by
the Fund.
(10) Invest in any security about which reliable information is not
available with respect to the history, management, assets, earnings,
and income of the issuer.
(11) Purchase any real estate, real estate mortgage loans, or any
commodities or commodity contracts, except that the Fund may buy and
sell futures contracts and options.
(12) Issue any senior securities.
<PAGE>
The Fund will not make any investment for the purpose of exercising
control or management of any other corporation; nor will it invest in any
security if the investment would subject the Fund to unlimited liability.
The Board of Directors of the Fund has adopted a policy that the Fund will
not invest in oil, gas and other mineral leases and, in addition to the
restrictions on real estate investments contained in paragraph (11) above,
the Fund will not purchase any real estate limited partnership interest.
Although the Fund's Certificate of Incorporation does not prohibit
purchases of restricted securities, the Fund does not presently intend to
purchase restricted securities.
<PAGE>
MANAGEMENT OF THE REGISTRANT
Officers and Directors of the Fund
Overall operations of the Fund are conducted by its officers under the
control of the Board of Directors. The officers and directors of the Fund,
their addresses and their principal occupation during the past 5 years are:
Richard C. Barrett (age 55) - Vice President and Director*
President and Director, Stonebridge Capital Management, Incorporated,
1801 Century Park East, Los Angeles, California 90067; Vice President and
Director, Stonebridge Aggressive Growth Fund, Inc.
Selvyn B. Bleifer, M.D. (age 67) - Director
Physician, Cardiovascular Medical Group, 414 North Camden Drive, Beverly
Hills, California 90212; Director, Stonebridge Aggressive Growth Fund,Inc.
Marvin Freedman (age 71) - Director
Partner, Freedman, Broder & Angen, Certified Public Accountants,
2501 Colorado Avenue, Suite 350, Santa Monica, California 90404; Director,
Stonebridge Aggressive Growth Fund, Inc.
Charles F. Haas (age 83) - Director
Retired motion picture and television director, 12626 Hortense Street,
Studio City, California, 91604; Director, Stonebridge Aggressive Growth
Fund, Inc.
Debra L. Newman (age 41) - President
Vice President, Chief Financial Officer, Secretary and Director,
Stonebridge Capital Management, Incorporated, 1801 Century Park East,
Los Angeles, California 90067; Vice President and Treasurer, Stonebridge
Aggressive Growth Fund, Inc.
Michael J.B. Stone (age 52) - Vice President
Vice President, Preferred Financial Corp., 5990 Greenwood Plaza Boulevard,
Englewood, Colorado 80111; President, Industry Savings Plans, Inc.;
President, NIF Management Co., Inc.
Colleen M. Schomer (age 30) - Secretary
Portfolio Administrator, Stonebridge Capital Management, Incorporated,
1801 Century Park East Los Angeles, California 90067; Secretary,
Stonebridge Aggressive Growth Fund, Inc.
Joanne E. Ashton (age 41) - Treasurer and Assistant Secretary
Secretary-Treasurer, Industry Savings Plans, Inc., 5990 Greenwood Plaza
Blvd., Englewood, Colorado 80111; Secretary-Treasurer, NIF Management Co.,
Inc.; Controller, Preferred Financial Corp.
As of February 1, 1997, officers and directors of the Fund, as a group,
owned of record and beneficially 508 shares or less than 1% of the outstanding
shares of the Fund.
None of the officers of the Fund received any compensation from the Fund
for his or her services during the fiscal year ended November 30, 1996. Each
director who is not an "interested person" of the Fund is entitled to receive
from the Fund $250 for each meeting of the Board of Directors. The following
table sets forth more detailed compensation information for the directors of
the Fund who are not affiliated with the Adviser during the fiscal year ended
November 30, 1996:
"Interested person" of the Fund as defined by the Investment Company Act
of 1940, as amended.
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL
AGGREGATE PENSION OR ESTIMATED ANNUAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS UPON FROM FUND AND
FROM FUND BENEFITS RETIREMENT FUND COMPLEX (1)
PAID TO DIRECTORS
...................................................................................................
<S> <C> <C> <C> <C>
Charles F. Haas 250 0 0 300
Marvin Freedman 250 0 0 300
Selvyn B. Bliefer, M.D. 250 0 0 300
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund's investment adviser is Stonebridge Capital Management,
Incorporated, 1801 Century Park East, Los Angeles, California 90067 (the
"Adviser"), which provides investment advisory services pursuant to an
investment advisory agreement (the "Agreement") approved by the stockholders on
May 26, 1992. John G. Ayer owns 9.8%, Richard C. Barrett owns 39.2%, Debra L.
Newman owns 15.6%, Karen H. Parris, Timothy G. Walt and Charles E. Woodhouse
each owns 11.8% of the outstanding stock of the Adviser.
The Fund's Custodian is Colorado National Bank, 17th and Champa Street,
Denver, Colorado 80202. It receives and deposits all cash and receives and
collects income from the Fund's investments. All securities of the Fund are
held by the Custodian's bank affiliates, the Depository Trust Company and Chase
Manhattan Bank of New York. These institutions also receive and deliver
securities bought or sold by the Fund. The Custodian has no part in the
management or investment decisions of the Fund.
The Fund's transfer agent and dividend disbursing agent is NIF Management
Co., Inc., 5990 Greenwood Plaza Boulevard, Englewood, Colorado 80111. As
transfer agent, NIF Management Co. maintains the Fund's records for the
stockholders who purchase shares. It accepts, confirms and processes payments
for purchase and redemptions, and disburses and reinvests dividends and capital
gains distributions, if any, made by the Fund to these stockholders. The fee
paid to the transfer agent for the year ended November 30, 1996, was $180,000
or .5% of the Fund's net assets.
Hein + Associates LLP, Denver Colorado (the "Auditors") serve as
independent accountants to the Fund. The Auditors conduct the audit of the
Fund's annual financial statements and prepare the Fund's tax returns. The
Auditors have no part in the management or investment decisions of the Fund.
..................................
(1) Stonebridge Aggressive Growth Fund, Inc. and the Fund comprise a Fund
Complex as such term is defined in Item 22(a)(1)(v) of Rule 14a-101 of the
Securities Exchange Act of 1934, because they have the same investment adviser.
<PAGE>
BROKERAGE TRANSACTIONS
Decisions to buy and sell securities for the Fund, assignment of its
portfolio business and negotiation of its commission rates are made by the
Adviser. It is the Fund's policy that the Adviser shall seek to obtain
both quality research and "bet execution" of purchase and sales transactions,
and that the Adviser shall seek to negotiate the brokerage commissions to
provide fair, competitive compensation for the broker's services, giving
consideration to the statistical and research services provided as well as the
brokerage execution services. Research services furnished by brokers through
whom the Fund effects security transactions may be used by the Adviser in
servicing all of its accounts and not all such services may be used by the
Adviser in connection with the Fund. Subject to periodic review by the Board
of Directors, the Adviser is authorized to pay higher commissions to brokerage
firms that provide it with investment and research information if the Adviser
determines such commissions are reasonable in relation to the overall services
provided. None of the broker/dealer firms with which the Fund conducts
business is engaged in sales of shares of the Fund and none is affiliated
with either the Fund or the Adviser.
<PAGE>
Statistical and research material furnished to the Adviser may be useful
to the Adviser in providing services to clients other than the Fund.
Similarly, such material furnished to the Adviser by brokers through which
other clients of the Adviser in providing services to the Fund. The Board of
Directors of the Fund reviews from time to time the extent and continuation
of this practice.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the Adviser, investments of the kind
made by the Fund may also be made by other such accounts. When a purchase or
sale of the same security is made at substantially the same time on behalf of
the Fund and one or more other accounts managed by the Adviser, available
investments are allocated in the discretion of the Adviser by such means as, in
its judgment, result in fair treatment. The Adviser aggregates orders for
purchases and sales of securities of the same issuer on the same day among the
Fund and its other managed accounts, and the price paid to or received by the
Fund and those accounts is the average obtained in those orders. In some
cases, such aggregation and allocation procedures may affect adversely the
price paid or received by the Fund or the size of the position purchased or
sold by the Fund.
When the Fund purchases or sells a security which is not listed on a
national securities exchange but which is traded in the over-the-counter
market, the transaction generally takes place directly with a principal market
maker, except in those circumstances where, in the opinion of the Fund, better
prices and executions will be achieved through the use of other broker-dealers.
The Adviser does not receive any benefit directly or indirectly arising from
these transactions.
The following provides information regarding the Fund's brokerage
transactions during the fiscal years ended November 30, 1995, 1994, and 1993.
<TABLE>
<CAPTION>
Annual Total
Portfolio Turnover Brokerage
Rate Commissions Paid
.................. ..................
<S> <C> <C>
1996 45% $ 63,806
1995 38% $ 67,890
1994 36% $ 104,550
</TABLE>
The anticipated annual portfolio turnover will normally be in the range of
25% to 75%. Portfolio turnover is a function of market shifts and relative
valuation of individual securities and market sectors. The Fund's Adviser
attempts to keep the Fund invested in those securities that have the potential
to meet the Fund's growth objective and that represent the best relative value.
The Fund has not acquired securities of any brokers or dealers, or the
parent thereof, during the fiscal year ended November 30, 1996.
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund are incorporated by reference to the
37th Annual Report to Stockholders date November 30, 1996, as filed with the
Securities and Exchange Commission on January 22, 1997. The Fund will furnish,
upon request and without charge, a copy of this report. Please contact
Mary Beth Pickett, Stonebridge Growth Fund, Inc., 5990 Greenwood Plaza
Boulevard, Englewood, Colorado 80111, (303)220-8500.
<PAGE>
PART C
OTHER INFORMATION
Item
24. (a) Financial Statements
In Part A:
Schedule of Condensed Financial Information
In Part B:
Report of Independent Auditors
Statement of Assets and Liabilities
Portfolio of Investments
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
(b) Exhibits (1) through (11):
Reference is made to the Exhibits to the Fund's Form N-1 and
Form N-1A and post-effective amendments thereto previously filed
with the Securities and Exchange Commission which are hereby
incorporated herein.
Exhibits (12) through (16):
Not applicable.
25. Persons Controlled By or Under Common Control with Registrant
Selvyn G. Bleifer, Marvin Freedman, Charles F. Haas and Richard C.
Barrett, comprising all of the Directors of the Fund, also comprise a
majority of the members of the Board of Directors of [Stonebridge
Aggressive Growth Fund, Inc.] (formerly Sierra Growth Fund, Inc.)
("Sierra"), a registered investment company. In addition, Mr.
Barrett, Debra L. Newman and Colleen Schomer, officers of the Fund
and Aggressive Growth may be deemed to be under common control.
26. Number of Holders of Securities
As of March 3, 1997, the number of record holders of each class of
securities of the Registrant were:
Title of Class
Capital Stock
(par value $1.00)
Number of Record Holders
10,214
27. Indemnification
The following indemnification of the corporation's directors and officers
is provided by Section 145 of the General Corporation Law of Delaware and
Section 7 of the Fund's bylaws:
<PAGE>
(a) This corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any crimina l action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgement order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in food faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) This corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including
attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except
that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his
duty to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonable entitled to
indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of this
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and
(b), or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys'fees) actually
and reasonable incurred by him in connection therewith.
(d) Any indemnification under subsections (a) or (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b). Such determination shall be made (1) by
the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding,
or (2) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal
counsel in a written option, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding
as authorized by the board of directors in the specific case upon
receipt of an undertaking by or on behalf of such director or
officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation
as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions,
if any, as the board of directors deems appropriate.
<PAGE>
(f) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification
may be entitled under any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall insure
to the benefit of the heirs, executors and administrators of such a
person.
(g) This corporation may, if the board of directors determines, purchase
and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power
to indemnify him against such liability under the provisions of this
section.
(h) For purposes of this section, references to "corporation" and to
"other enterprises" shall include the entities as defined in Section
145 of the Delaware General Corporation Law.
The corporation has been advised that it is the opinion of the Securities
and Exchange Commission that indemnification of officers and directors for
liabilities arising under the Securities Act of 1933 is against public policy
as expressed in the Act and is, therefore, unenforceable. The right of
indemnification set forth above shall be subject to any limitations imposed by
the applicable federal or state securities laws.
28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
During the two fiscal years ended November 30, 1996, Stonebridge Capital
Management, Incorporated, the Investment Adviser to the Fund, has engaged
principally in the business of providing investment management services to
institutional and individual clients. All of the additional information
required by this Item 28 with respect to the Investment Adviser is set forth in
the form ADV, as amended, of the Investment Adviser (File No. 801-5363), which
is incorporated herein by reference.
29. PRINCIPAL UNDERWRITERS
(a) Industry Savings Plans, Inc. does not act as a principal underwriter,
depositor, or investment adviser for any other investment company.
(b) The following table sets forth the principal business positions of
each director and officer of Industry Savings Plans, Inc.
<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH OFFICES WITH
BUSINESS ADDRESS UNDERWRITER REGISTRANT
....................... ................ .....................
<S> <C> <C>
Michael J.B. Stone President Vice President
5990 Greenwood Plaza Blvd.
Englewood, Colorado 80111
Joanne E. Ashton Secretary/Treasurer Treasurer & Assistant
5990 Greenwood Plaza Blvd. Secretary
Englewood, Colorado 80111
<PAGE>
30. LOCATION OF ACCOUNT AND RECORDS
1801 Century Park East,
Suite 1800
Los Angeles, California 90067
NIF Management Co., Inc.
5990 Greenwood Plaza Boulevard
Englewood, Colorado 80111
Colorado National Bank of Denver
17th and Champa Street
Denver, Colorado 80202
31. MANAGEMENT SERVICES
Inapplicable
32. UNDERTAKINGS
The Fund hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Fund's latest annual report to its
shareholders upon the request of such person and without charge.
<PAGE>
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 of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized in the City of Los Angeles and State of California on
the 30th day of March, 1997.
STONEBRIDGE GROWTH FUND, INC.
By: ..............................
Debra L. Newman, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 61 to the Registration Statement has been
signed below by the following persons in the capacities and on the date
indicated.
</TABLE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
........... ...... ......
<S> <C> <C>
(1) Principal Executive Officers:
...........................
Debra L. Newman President March 30, 1997
...........................
Richard C. Barrett Vice President March 30, 1997
(2) Principal Financial and
Accounting Officer:
...........................
Joanne E. Ashton Treasurer March 30, 1997
(3) Directors:
...........................
Richard C. Barrett Director March 30, 1997
...........................
Selvyn B. Bleifer, M.D. Director March 30, 1997
...........................
Marvin Freedman Director March 30, 1997
...........................
Charles F. Haas Director March 30, 1997
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT AUDITOR
We consent to the use in this Post-Effective Amendment No. 62 to the
Registration Statement (Form N-1A No. 2-15893) of our report dated December 16,
1996 on the financial statements and the per share data and ratios of
Stonebridge Growth Fund, Inc., incorporated herein by reference and to the
reference made to us under the caption "Financial Highlights" in the Prospectus
and under the caption "Investment Advisory and Other Services" in the Statement
of Additional Information.
HEIN + ASSOCIATES LLP
Denver, Colorado
March 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Thirty-Seventy Annual Report to Shareholders dated November 30, 1996 for the
Stonebridge Growth Fund, Inc. (formerly National Industries Fund, Inc.)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 27024
<INVESTMENTS-AT-VALUE> 39596
<RECEIVABLES> 52
<ASSETS-OTHER> 10
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39658
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 56
<TOTAL-LIABILITIES> 56
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20417
<SHARES-COMMON-STOCK> 2392
<SHARES-COMMON-PRIOR> 2422
<ACCUMULATED-NII-CURRENT> 217
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4004
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12572
<NET-ASSETS> 39602
<DIVIDEND-INCOME> 453
<INTEREST-INCOME> 313
<OTHER-INCOME> 0
<EXPENSES-NET> 524
<NET-INVESTMENT-INCOME> 243
<REALIZED-GAINS-CURRENT> 4029
<APPREC-INCREASE-CURRENT> 2883
<NET-CHANGE-FROM-OPS> 7156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (421)
<DISTRIBUTIONS-OF-GAINS> (1342)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 33
<NUMBER-OF-SHARES-REDEEMED> (191)
<SHARES-REINVESTED> 127
<NET-CHANGE-IN-ASSETS> 4827
<ACCUMULATED-NII-PRIOR> 395
<ACCUMULATED-GAINS-PRIOR> 1317
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 232
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 524
<AVERAGE-NET-ASSETS> 36173
<PER-SHARE-NAV-BEGIN> 14.36
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 2.83
<PER-SHARE-DIVIDEND> (.17)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.56)
<PER-SHARE-NAV-END> 16.56
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
