<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ROCKIES FUND, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Neuman & Cobb, 1507 Pine Street, Boulder, Colorado 80302
---------------------------------------------------------
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: _____
2) Aggregate number of securities to which transaction applies: ________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined): ______
4) Proposed maximum aggregate value of transaction: ____________________
5) Total fee paid: _____________________________________________________
[ ] Fee Paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________________________
2) Form, Schedule or Registration Statement No.: __________________
3) Filing Party: __________________________________________________
4) Date Filed: ____________________________________________________
<PAGE>
<PAGE>
THE ROCKIES FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 6, 1996
The Annual Meeting of Shareholders of The Rockies Fund, Inc. ("the Fund" or the
"Company") will be held at 4465 Northpark Drive, Colorado Springs, Colorado
80907 on September 6, 1996 at 10:00 o'clock a.m. Mountain Daylight Time for the
purpose of considering and voting upon the following:
1. To elect three (3) Directors to serve until the next Annual Meeting
of Shareholders or until their successors have been duly elected and
qualified.
2. To ratify and approve the selection by the Board of Directors of the
firm of GELFOND HOCHSTADT PANGBURN & CO., a Professional Corporation,
as the independent certified public accountant for the Fund for the
fiscal year ending December 31, 1996.
3. Any other matters properly brought before said meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement. Only holders of outstanding shares of the Company's common
stock of record at the close of business on July 31, 1996 will be entitled to
vote at the meeting or any adjournment thereof.
A copy of the Company's Annual Report to Shareholders, including financial
statements for the year ended December 31, 1995, will be mailed to shareholders
concurrently with the mailing of the Proxy Statement.
Shareholders are cordially invited to attend the meeting in person.
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT WOULD BE
APPRECIATED IF YOU WOULD PROMPTLY FILL IN, SIGN AND DATE THE ENCLOSED PROXY
STATEMENT AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. Any proxy may be
revoked at any time before it is voted by written notice mailed or delivered to
the Secretary, by receipt or a proxy properly signed and dated subsequent to an
earlier proxy, and by revocation of a written proxy by request in person at the
Annual Meeting of Shareholders. If not so revoked, the shares represented by
the proxy will be voted in accordance with your instruction on the proxy form.
THE ROCKIES FUND, INC.
By: _______________________________
Wendy D. Haddad, Secretary
<PAGE>
<PAGE>
THE ROCKIES FUND, INC.
4465 Northpark Drive
Colorado Springs, Colorado 80907
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of The Rockies Fund,
Inc. (respectively the "Shareholders" and the "Fund") in connection with the
solicitation by the Fund of proxies to be used at the Annual Meeting of
Shareholders and at any adjournments thereof (the "Meeting"), at the time,
place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders and at any adjournment thereof. When the accompanying
proxy is properly executed and returned, the shares of common stock it
represents will be voted at the Meeting and, where a choice has been specified
on a proxy, will be voted in accordance with such specification. If no choice
is specified on a proxy, the shares it represents will be voted FOR the
election of three (3) Directors of the Fund, FOR the ratification of GELFOND
HOCHSTADT PANGBURN & CO., a Professional Corporation, as the Fund's independent
certified public accountant for the fiscal year ending December 31, 1996, and
according to the judgment of the persons named in the enclosed proxies as to
any other action which may properly come before the Meeting or any adjournment
thereof.
In the event the Meeting is, for any reason, adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the Meeting. At the adjourned meeting, any business
may be transacted which might have been transacted at the original Meeting.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY RECEIPT OF A PROXY PROPERLY SIGNED AND
DATED SUBSEQUENT TO AN EARLIER PROXY, AND BY REVOCATION OF A WRITTEN PROXY BY
REQUEST IN PERSON AT THE ANNUAL MEETING OF SHAREHOLDERS. IF NOT SO REVOKED,
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE PROXY FORM.
This Statement is being mailed on or about August 2, 1996, to Shareholders
eligible to vote at the Meeting. Concurrently with the mailing of this
Statement, the Fund is furnishing to Shareholders its Annual Report for its
fiscal year ended December 31, 1995.
The Fund is bearing all costs of soliciting proxies, and expressly
reserves the right to solicit proxies otherwise than by mail. The solicitation
of proxies by mail may be followed by telephone, telegraph or other personal
solicitations of certain Shareholders and brokers by one or more of the
Directors or by Officers or employees of the Fund. The Fund may request banks
and brokers or other similar agents or fiduciaries for the voting instructions
of beneficial owners and reimburse the expenses incurred by such agents or
fiduciaries in obtaining such instructions. As of the date of this mailing,
however, the Fund has not made any contracts or arrangements for such
solicitations, hence it cannot identify any parties or estimate the cost of
such solicitation.
Only Shareholders of record as of the close of business on July 31, 1996
(the "Record Date"), will be entitled to vote at the Meeting. Representation
of a majority of the Fund's shares of common stock outstanding on such date,
either in person or by proxy, constitutes a quorum for the Meeting. When a
quorum is present, the vote by the holders of a majority of the shares
represented at the Meeting shall decide the proposals to be voted upon at the
Meeting. As of the Record Date, the Fund had outstanding 640,256 shares of
common stock ("Shares"), with each Share being entitled to one vote.
<PAGE>
<PAGE>
1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
-----------------------------------------------------------
The following table sets forth as of July 31, 1996, certain
information with respect to the ownership of the Fund's common stock by
(i) each of the Fund's officers and directors, (ii) shareholders known by the
Fund to own beneficially more than five percent (5%) of the outstanding common
stock of the Fund, and (iii) all officers and directors as a group. Each
beneficial owner of the Fund's common stock listed below has sole investment
and voting power of the shares that he beneficially owns, except as noted.
<TABLE>
<CAPTION>
Title
of Name and Address of Amount and Nature Percent
Class Beneficial Owner of Beneficial Ownership of Class
- ------ ------------------- ----------------------- --------
<S> <C> <C> <C>
Common D.A Davidson & Co. (1) 232,110 36.3%
Stock 8 Third Street, North
Great Falls, Montana 59401
" Stephen G. Calandrella 233,000 36.4%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" Charles C. Powell -0- 0%
4475 Walnut, Suite 2-D
Boulder, Colorado 80301
" Clifford C. Thygesen -0- 0%
4893 Idylwild Trail
Boulder, Colorado 80301
" Craig T. Rogers -0- 0%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" John R. Overturf, Jr. 2,000 .3%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" Wendy D. Haddad -0- 0%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" Barbara A. Hamstad -0- 0%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" All Officers and
Directors as a
Group (7 Persons) 235,000 36.70%
- --------------------------------------
<FN>
(1) Voting and investment power with respect to securities held by D.A.
Davidson & Company is exercised by its Board of Directors.
</FN>
</TABLE>
<PAGE>
<PAGE>
2. ELECTION OF DIRECTORS
---------------------
The Directors voted to nominate three (3) Directors for election to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Each of the following nominees has
consented to be nominated to serve as a Director of the Fund. All of the
nominees are currently Directors of the Fund.
The Fund's Articles of Incorporation expressly prohibit cumulative
voting. Therefore, the holders of a majority of the Fund's shares could elect
all of the Directors. It is expected that the proxies received by the
Directors' nominees will be voted, except to the extent that authority is
withheld on any proxy as to all or one or more individuals, to elect as
Directors the following nominees, whose principal occupations during the past
five (5) years, directorships and certain other affiliations and information
are set forth below:
A. Information Concerning Nominees
--------------------------------
The following table sets forth certain information about the
nominees for election as directors:
<TABLE>
<CAPTION>
Principal Occupation Shares Beneficially
Name, Age and During Past Five Years and Owned As Of
Office With Fund Current Affiliations July 31, 1996
---------------- -------------------------- --------------
<S> <C> <C>
Stephen G. Calandrella*, 35, Mr. Calandrella has been President and 233,000 shares
President and Director since Director of The Rockies Fund, Inc. 36.4%
February, 1991, and CEO and since February, 1991, and Chief Executive
Treasurer since January, 1994 Officer and Treasurer since January 30,
1994. Mr. Calandrella has served as a
- -------------- Director of Kelly Motors, Ltd., a Fort
Collins, Colorado-based manufacturer of
* Mr. Calandrella is considered speciality automobiles, Combined Penny
by the Fund and its counsel to Stock Fund, Inc. and Redwood MicroCap
be a person who is an "interested Fund, Inc., both of which are closed-end
person" (as defined in the 1940 investment companies registered under the
Act) of the Fund because he is Investment Act of 1940, Good Times
an officer of the Fund. Restaurants, Inc., a publicly-held Denver,
Colorado-based company engaged in owning
and operating Good Times Restaurants and
Round-The-Corner Restaurants, Southshore
Corp, a publicly-traded family entertain-
ment company, Cogenco International, Inc.,
a publicly-traded financial services
company, and Premier Concepts, Inc., a
publicly-traded company involved in the
<PAGE>
<PAGE>
ownership and operation of faux jewelry
retail stores. Mr. Calandrella
currently serves as Interim President and
on the Board of Directors of Global
Casinos, Inc., a publicly-held company
engaged in the ownership and operation of
domestic and international casinos; and as
an officer and member of the Board of
Directors of Optimax Industries, Inc.
(f/k/a Plants For Tomorrow, Inc.) a NASDAQ
listed holding company. Mr. Calandrella
is also engaged in financing and consult-
ing activities for development stage
companies, which consist of advising
public and private companies on capital
formation methods, enhancing shareholder
valuations, mergers, acquisitions and
corporate restructurings, as well as
arranging for bridge loans and equity
purchases.
Charles Powell, 42, Director Mr. Powell is current Vice-President -0- shares
since February, 1991 and Director of Antalys Corporation.
From 1992 to 1996, Mr. Powell was
Vice-President of Finance for KaPre
Software, a privately-held company which
sells commercial business applications
software. From March 1992 to June 1993,
Mr. Powell was CEO of Generation 5
Technologies, Inc. From January 1989 to
March 1992, he was Director of Inter-
national Operations at J.D. Edwards &
Company, a software company that develops
and distributes general business applica
tion financial software. From September
to December, 1988, Mr. Powell was employed
by the Company to provide assistance in
financial and operation areas. From April
1988 to June 1989, Mr. Powell was Presi
dent of Sheridan Securities, Inc., an
investment banking firm. From January
1987 to March 1988 he was international
sales manager for Columbine Systems, a
software development company for the
broadcast industry. From January 1985 to
December 1986, he was employed by Aweida
Systems engaged in the business of
<PAGE>
<PAGE>
distributing company products, first as
Chief Financial Officer and subsequently
as Vice President of Marketing. From
February 1979 to December 1985, he was
employed by Storage Technology, Inc.,
engaged in the business of manufacturing
computer storage devices in a variety of
capacities, with his last position being
that of Vice President of Financial
Marketing. Mr. Powell graduated from the
University of Colorado with a Bachelor of
Science degree in accounting and finance
in 1976 and he received his license as a
Certified Public Accountant in 1976. Mr.
Powell serves as a director of the follow
ing publicly-held companies: The Rockies
Fund, a business development company; and
Milestone Capital Corporation, a business
development company. He is also Director
of Kinetics Company, SISCOM, Premier
Concepts, Inc. and International Nursing.
Clifford C. Thygesen, 61, Mr. Thygesen has been a director of the -0- shares
Director since February 1991 Company since February, 1991. Mr. Thygesen
is also currently President and a Director
of American Educational Products, Inc., a
publicly-traded company involved in the
manufacture and distribution of educa
tional products, with principal offices in
Boulder, Colorado. From 1971 to 1973, Mr.
Thygesen was Vice- President of Operations
for the Ithaca Gun Company of Ithaca, New
York, a manufacturer of high quality
firearms. From 1973 to 1976, Mr. Thygesen
served as President of Alpine Designs
Corporation, a company which produces
backpacking equipment, skiwear and hunting
apparel. During the period of his
employment with Ithaca Gun Company and
Alpine Designs, these two companies were
subsidiaries of General Recreation, Inc.
In 1975 and 1976, Mr. Thygesen was
corporate Director of Manufacturing for
General Recreation, Inc., and, in this
capacity, assumed responsibility for
decentralizing manufacturing operations in
addition to his duties at Alpine Designs. <PAGE>
<PAGE>
From 1977 to 1981, he served as Vice
President of Manufacturing for Pure Cycle
Corporation, a company that designed
water recycling systems for residential
use. From 1981 until February, 1988,
Mr. Thygesen was President, Chief
Operating Officer and a Director of Tri
Coast Environmental Corporation, formerly
Colorado Venture Capital Corporation. He
received his B.S. degree in Industrial
Administration from the University of
Illinois in 1961.
</TABLE>
B. Meetings and Committees of the Board of Directors
-------------------------------------------------
i. Meetings of the Board of Directors
----------------------------------
During the fiscal year ended December 31, 1995, the
Company's Board of Directors held three (3) meetings which were attended,
either in person or by telephone, by 100% of the Board members. Each incumbent
director participated in each action of the Board of Directors. Each director
of the Fund who is not also an officer is paid the sum of $500 for each Board
meeting attended by such director. All directors are reimbursed for expenses
associated with attendance at Board of Directors meetings of the Fund. Other
than the foregoing, no director receives any additional compensation or
remuneration as a member of the Fund's Board of Directors.
ii. Appraisal and Review
--------------------
While no formal Appraisal or Review Committee exists, the
Board has established Appraisal and Review procedures to facilitate the Board's
review of all transactions with respect to execution price and brokerage
commissions, to determine if the Fund is receiving "the best execution." The
Board is also responsible for developing and implementing appropriate methods
of evaluation for securities that are not publicly-traded or are otherwise
subject to restrictions upon transfer. Evaluations for such securities are
determined in good faith by the Board of Directors. Finally, the Board has
established and implemented procedures to evaluate and make recommendations
with respect to all investment opportunities presented to the Fund.
<PAGE>
<PAGE>
iii. Committees
----------
There are no standing audit, compensation or nominating
committees of the Board. The foregoing notwithstanding, Craig T. Rogers, the
Fund's Chief Operating Officer, has been charged with the responsibility of
maintaining all journals and ledgers which the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated thereunder, require the
Fund to maintain.
C. Legal Proceedings
-----------------
During 1995, the Company received requests for information from
the United States Securities and Exchange Commission ("SEC") related to an
investigation begun by the SEC during 1994 into various matters, including the
administrative and record keeping practices of the Company, its securities
trading activities and those of one of its officers. As of the date of this
Proxy Statement, neither management of the Company nor the Company's legal
counsel have been informed of the results, if any, of the SEC's investigation
or of any timetable for the SEC to complete its investigation. There can be no
assurance of the outcome of this matter or the ultimate effect on the Company's
financial position.
Other than the foregoing, during the last five (5) years no
director or officer of the Company has:
(1) had any bankruptcy petition filed by or against any
business of which such person was a general partner or
executive officer either at the time of the bankruptcy or
within two (2) years prior to that time;
(2) been convicted in a criminal proceeding or subject to a
pending criminal proceeding;
(3) been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court
of competent jurisdiction, permanently or temporarily,
enjoining, barring, suspending, or otherwise limiting his
involvement in any type of business, securities or banking
activities; or
(4) been found by a Court of competent jurisdiction in a civil
action, the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities
or commodities law, and the judgement has not been
reversed, suspended, or vacated.
D. Key Employees
-------------
CRAIG T. ROGERS. Mr. Rogers has been Chief Operating Officer of
the Fund since July 26, 1993. Mr. Rogers also serves as a director and the
Chief Financial Officer, Secretary and Treasurer of Cell Robotics
International, Inc., f/k/a Intelligent Financial Corporation, a Colorado
corporation, that, through its wholly-owned subsidiary, Cell Robotics, Inc., a
New Mexico corporation, is engaged in the development, manufacturing and
marketing of micro-manipulation instruments utilizing laser technology in the
emerging micro-manipulation, micro-dissection and micro-analysis markets. Mr.
Rogers also serves as a director and officer of Discovery Technologies, Inc.,
<PAGE>
<PAGE>
and from April, 1988 to June, 1991, Mr. Rogers served as Chief Financial
Officer, for DMA Computer Solutions, a general partnership operating four (4)
Connecting Point franchise stores. He served as President of DMA Financial
Corporation from inception until its merger into Intelligent Financial
Corporation in June, 1991. From August 1986 to March 1988, Mr. Rogers was
Assistant Vice-President of Century Bank, Colorado Springs, Colorado, where he
managed an eight million dollar commercial loan portfolio. From June 1984 to
August 1986, he was a Commercial Loan Officer with Colorado National Bank -
Exchange in Colorado Springs, Colorado. Mr. Rogers received a Bachelor of Arts
Degree in Business/Economics from Colorado College in 1984. He was a Boettcher
Scholar, graduated summa cum laude, Phi Beta Kappa and co-valedictorian. Mr.
Rogers currently serves as a member of the Board of Directors of Cell Robotics
International, Inc. and Discovery Technologies, Inc.
JOHN R. OVERTURF, JR., Vice-President of Administration of the
Fund since July, 1993. Mr. Overturf graduated from the University of Northern
Colorado ("UNC") in 1983 with a degree in Business Finance. Following his
graduation from UNC, Mr. Overturf took a position with Offices America, Inc. a
commercial real estate development firm. He was involved in the development of
several retail centers and office buildings. Upon leaving Offices America,
Inc., Mr. Overturf went to Colorado National Bank ("CNB") where he worked for 8
years in various positions including Assistant Vice President of real estate
and construction lending, commercial lending, and special assets. In February,
1992, Mr. Overturf left CNB for a position with Intelligent Financial
Corporation as its National Manager of Leasing. Mr. Overturf became a Director
of BioSource International, Inc. in November 1993. BioSource is a supplier of
high quality products to the biomedical research and diagnostic markets. Mr.
Overturf served as Chairman of the Board of the Pikes Peak Regional Building
Committee from 1987 to 1993.
E. Transactions With Management and Others
---------------------------------------
Notes payable to related parties at December 31, 1995 includes
$46,700 payable to related parties of the Company's President, which notes are
unsecured, carry interest at the rate of twelve percent (12%) per annum, and
are due upon demand, and $24,578 in non-interest bearing advances from the
Company's President which are due on demand.
The Company currently holds a 5% ownership interest in Bear
Star, LLC, formerly a wholly owned subsidiary of Columbine Home Sales, LLC. As
a result of the Company's ownership interest in Bear Star during 1995, Bear
Star would be considered to be an affiliated company. In exchange for the 5%
equity interest in Bear Star, LLC., the Company agreed to act as a guarantor
for a line of credit for Columbine Home Sales, LLC. totaling $500,000.
The Company has entered into an agreement to advance up to
$35,000 to Intelligent Financial Holding Corp. ("IFHC"). As of December 31,
1994, $17,000 had been advanced under this agreement. However, effective
January 1, 1995, the Company converted the $17,000 advanced under the Agreement
into shares of IFHC common stock, and was released from all further obligation
under the Agreement. Following the conversion, the Company held a total of
40,322 shares of IFHC common stock, which shares represented 4.8% of the total
shares outstanding immediately following the conversion.
As a result of the Company's investment during 1995 and/or
position on the entity's Board of Directors, the Company would, at various
times during fiscal 1995, be considered to have been an affiliate of Global
Casinos, Inc., Optimax Industries, Inc., Capital 2000, Inc., Southshore
Corporation, BioSource International, Inc., Discovery Technologies, Inc.,
Intelligent Financial Holding Corporation, and Premier Concepts, Inc.<PAGE>
<PAGE>
On October 1, 1995, Mr. Calandrella, the Company's President and
a Director, was elected to serve as Interim President of Global Casinos, Inc.,
a portfolio company and affiliate of the Company. In consideration of his
services as Interim President of Global Casinos, Inc., Mr. Calandrella receives
the equivalent of $5,000 per month, payable in the form of shares of common
stock of Global Casinos, Inc. valued at market. Mr. Calandrella has also been
granted Incentive Stock Options under the Global Casinos, Inc. Stock Incentive
Plan, exercisable to purchase, in the aggregate, 150,000 shares of common stock
at an exercise price of $.50 per share. Of those Incentive Stock Options,
50,000 are fully vested, and the remaining 100,000 Incentive Stock Options vest
ratably over the next two (2) years, subject to Mr. Calandrella's continuing to
serve as an executive officer or key employee of Global Casinos, Inc.
Mr. Calandrella also serves as a member of the Board of
Directors of Global Casinos, Inc. In consideration of his services as a
director of Global Casinos, Inc., Mr. Calandrella has been granted Non-
Qualified Stock Options exercisable to purchase, in the aggregate, an
additional 150,000 shares of common stock at an exercise price of $.50 per
share, of which 50,000 Non-Qualified Stock Options are fully vested, and the
remaining 100,000 Non-Qualified Stock Options vest ratably over the next two
(2) years, subject to Mr. Calandrella's continuing to serve as a director of
that company.
There exists no arrangement or agreement whereby the Company has
any direct or indirect beneficial interest or pecuniary interest in any of the
securities or other compensation issued to Mr. Calandrella in consideration of
his services as an executive officer or director of Global Casinos, Inc.
F. Compliance With Section 16(a) of the Exchange Act
-------------------------------------------------
Under the Securities Laws of the United States, the Company's
Directors, its Executive (and certain other) officers, and any persons holding
more than ten percent (10%) of the Company's common stock are required to
report their ownership of the Company's common stock and any changes in that
ownership to the Securities and Exchange Commission and the NASDAQ stock
market. Specific due dates for these reports have been established and the
Company is required to report in this Report any failure to file by these dates
during 1994 and 1995. All of these filing requirements were satisfied by its
Officers and Directors and ten percent holders except as follows:
Stephen G. Calandrella failed to file with the Securities and
Exchange Commission, on a timely basis, seven reports relating to eleven
transactions involving Common Stock of the Company beneficially owned by him.
Craig T. Rogers failed to file two such reports on a timely basis relating to
two transactions involving Common Stock of the Company owned by him. John R.
Overturf, Jr. failed to file one such report on a timely basis relating to one
transaction involving Common Stock of the Company owned by him. In making
these statements, the Company has relied on the representations of its
Directors, Officers and/or ten percent (10%) shareholders, or copies of the
reports that they have filed with the Commission.
G. Executive Compensation
----------------------
The following tables and discussion set forth information with
respect to all plan and non-plan compensation awarded to, earned by or paid to
the Chief Executive Officer ("CEO"), and the Company's four (4) most highly
compensated executive officers other than the CEO, for all services rendered in
<PAGE>
<PAGE>
all capacities to the Company and its subsidiaries for each of the Company's
last three (3) completed fiscal years; provided, however, that no disclosure
has been made for any executive officer, other than the CEO, whose total annual
salary and bonus does not exceed $100,000.
<TABLE>
- ----------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------
<CAPTION>
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
------------------------------------ ------------------- ------------------
Other
Name Annual Restricted
and Compen- Stock LTIP All Other
Principal Salary Bonus sation Award(s) Options/ Payouts Compensa-
Position Year ($) ($) ($) ($) SARs(#) ($) tion ($)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $48,000 -0- -0- $-0- -0- -0- -0-
Stephen G.
Calandrella, 1994 $48,000 -0- -0- $-0- -0- -0- -0-
President
1993 $16,000 -0- -0- $-0- -0- -0- -0-
- -----------------------------------------------------------------------------------------------
</TABLE>
No other executive officer of the Fund received compensation
during the years ended December 31, 1995, 1994, or 1993, in excess of $100,000.
All officers and employees of the Company are eligible to
participate in the Company's group health and dental insurance plan. The
Company has a Salary Deferred Simplified Employee Pension Plan (SAR-SEP)
adopted in September, 1994. There has been no employer contribution made to
the Plan since inception, nor does the Company incur any administrative fees
associated with this Plan. The Company currently has no written employment
agreements with any of its executive officers. The Company has not implemented
any stock option, stock bonus, incentive stock option or other similar plans;
although the Company may consider the implementation of such plans in the
future.
<PAGE>
<PAGE>
H. Voting Requirement
------------------
Election of the nominees as directors requires the affirmative
vote of a majority of the Fund's outstanding voting securities as defined in
the 1940 Act (the lesser of (i) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares are represented or (ii) more than
50% of the outstanding shares).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE NOMINEES AS DIRECTORS
3. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL YEAR 1996
-------------------------------------------------------------------
On July 1, 1996, the client-auditor relationship between the Company
and its principal accountants, KPMG Peat Marwick LLP, ceased. The cessation of
the relationship was the result of the resignation by KPMG Peat Marwick LLP and
was effective July 1, 1996. The cessation of the relationship was approved by
the Company's Board of Directors. The reports of KPMG Peat Marwick LLP related
to the consolidated financial statements of the Company for the fiscal years
ended December 31, 1994 and 1995, did not contain any adverse opinion or
disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope, or accounting principles. In connection with the audits of the
Company's financial statements for each of the fiscal years ended December 31,
1994 and 1995, and for the period from January 1, 1996 through July 1, 1996,
there were no disagreements with KPMG Peat Marwick LLP on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope and procedures which, if not resolved to the satisfaction of KPMG Peat
Marwick LLP, would have caused KPMG Peat Marwick LLP to make reference to the
matter in their report.
A majority of the members of the Board of Directors who are not
interested persons of the Fund have appointed GELFOND HOCHSTADT PANGBURN & CO.,
a Professional Corporation, to replace KPMG Peat Marwick LLP, and to serve as
the Fund's independent certified public accountants for fiscal year 1996. This
engagement is effective July 30, 1996. Prior to its engagement as the
Company's principal independent accountant, GELFOND HOCHSTADT PANGBURN & CO., a
Professional Corporation, had not been consulted by the Company either with
respect to the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements or on any matter which was the
subject of any prior disagreement between the Company and its previous
certifying accountant. The affirmative vote of the holders of at least a
majority of the shares of the Fund's common stock present and voting, in person
or by proxy, at the Meeting, is required to ratify and confirm this
appointment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE IN FAVOR OF THE APPOINTMENT.
If such appointment is not approved by the shareholders, it would be
unlawful for the Fund to file with the United States Securities and Exchange
Commission any financial statement signed or certified by GELFOND HOCHSTADT
PANGBURN & CO., a Professional Corporation, and new independent certified
public accountants would have to be appointed and the appointment submitted to
shareholders for approval. Neither a representative of KPMG Peat Marwick, nor
a representative of GELFOND HOCHSTADT PANGBURN & CO., a Professional
Corporation, is expected to be present at the Meeting. However, should a
representative of either or both accounting firms attend the Meeting, he will
be given the opportunity to make a statement if he so desires, and would be
available to respond to appropriate questions.<PAGE>
<PAGE>
4. STATEMENT OF RISKS OF INVESTMENTS IN BUSINESS DEVELOPMENT COMPANIES
-------------------------------------------------------------------
A. Regulation.
----------
The Fund has elected to be treated as a Business Development
Company ("BDC") under the Small Business Investment Incentive Act of 1980 (the
"1980 provisions"), which modifies the Investment Company Act of 1940 (the
"1940 Act"). Although the 1980 provisions exempt BDC's from registration under
the 1940 Act and relieve such companies from compliance with many of the
provisions of the 1940 Act, the 1980 provisions impose on BDC's greater
restrictions on permitted types of investments. Moreover, the applicable
provisions of the 1940 Act continue to impose numerous restrictions on the
activities of the Fund, including restrictions on the nature of its
investments. There can be no assurance that the 1980 provisions will be
interpreted or administratively implemented in a manner consistent with the
Fund's investment objectives and manner of operation. In the event that the
Fund determines that it can not operate effectively as a BDC, the Fund may at
some future date decide to withdraw its election to be treated as a BDC.
Should the Fund seek to withdraw such election, it must obtain the approval of
stockholders who represent a majority of the Fund's outstanding stock (as
defined in the 1940 Act).
B. Transactions with affiliates; potential conflict of interest.
------------------------------------------------------------
The 1940 Act restricts transactions between the Fund and
"affiliated persons" (as defined in the 1940 Act) including, among others, the
Fund's officers, directors, principals, stockholders and employees, and any
affiliates of such affiliates. In many cases, the 1940 Act prohibits
transactions between the Fund and such persons unless the Fund first applies
for and obtains an exemptive order from the Commission. Delays and costs
involved in obtaining necessary approvals may decrease the profitability of
such transactions or make it impracticable or impossible to consummate such
transactions. The Fund's Board of Directors has implemented procedures
designed to regulate investment activity by affiliates in conflict with or in
conjunction with the Fund's activities, including adopting a Code of Ethics
containing provisions designed to prevent employees from engaging in acts
prohibited by Rule 17j-i under the 1940 Act. However, circumstances could
develop which would require Commission approval in advance of proposed
transactions by the Fund or its affiliates with Eligible Portfolio Companies
("Portfolio Company(ies)") or their affiliates. Depending upon the extent of
management's influence and control with respect to such Portfolio Companies the
selection of the affiliates of management to perform various services for
Portfolio Companies may not be a disinterested decision, and the terms and
conditions for the performance of such services and the amount in terms of
compensation to be received therefor may not be determined in arm's length
negotiations. In addition, officers or directors of the Fund or its affiliates
may serve as directors of or act as underwriter or placement agent or as a
consultant to certain Portfolio Companies and, in connection therewith, earn
consulting fees, finder's fees and underwriter's or placement agent's
commissions and other fees and commissions, which may be paid in the form of
cash, securities or other forms of consideration. Moreover, while members of
management are obligated to use their best efforts to provide the Fund with a
continuing and suitable investment program consistent with its investment
objectives and policies, subject to any applicable legal restrictions, members
of management are not required to present to the Fund any particular investment
opportunity which has come to their attention, even if such opportunity is
within the investment objectives and policies of the Fund. As a result,
<PAGE>
<PAGE>
certain conflicts of interest may exist between the Fund and its officers and
directors (as in the area of corporate opportunities) which can only be
properly resolved through exercise by the officers and directors of such
judgment as is consistent with their fiduciary duties to the Fund. The Fund's
Portfolio Companies may also enter into certain financial arrangements with the
Fund and or its affiliates subject to the appropriate regulatory guidelines or
approvals as required. Additionally, the Fund may from time to time co-invest
in Portfolio Companies with an officer and/or director of the Fund or with an
affiliate of such an officer or director, subject to the appropriate regulatory
guidelines or approvals as required. Because of their potentially varying
investment objectives or other factors, conflicts could arise between the Fund
and its affiliates relating to such co-investments, which can only be resolved
through the exercise by the Fund's officers and directors of such judgment as
is consistent with their fiduciary duties to the Fund. Even with the proper
exercise of such judgment, however, there can be no assurance that potential
conflicts will be resolved in a manner favorable to the Fund.
C. High risk investments.
---------------------
The Fund currently makes investments in small public and private
companies, some of which are in the early stages of development with little or
no operating history, or more seasoned companies that operate at losses or
which experience substantial fluctuations in operating results. These
companies may also need substantial capital to support expansion or to achieve
or maintain a competitive position. Such companies may face intense
competition, including competition from companies with greater financial
resources, more extensive research and development, manufacturing, marketing
and service capabilities, and a larger number of qualified managerial and
technical personnel. Such companies may have insufficient cash flow to service
their debt obligations, including bridge loans made by the Fund and may not
have the resources to pay principal and/or interest on such loans in the event
of failure to consummate a proposed public offering or inability to obtain
subsequent financing. Additionally, such investments will generally be
unsecured. Moreover, the Fund may take significant positions in companies in
rapidly changing high-technology fields or intensely regulated industries.
Such companies may face additional risks of product and technological
obsolescence or rapidly changing regulatory environments which could adversely
affect such company's prospects, over which the Fund will have no control. As
a result, no assurance can be given that the Fund's investments will not result
in substantial or complete losses.
D. Bridge financing.
-----------------
Although, with respect to its bridge financing activities the
Fund has, and intends to continue, to invest primarily in Portfolio Companies
which have entered into a letter of intent relating to a public offering, there
is substantial risk that such offerings will not be consummated. Portfolio
Companies may be unable to repay bridge loans made by the Fund in the event
that a contemplated public offering of securities by any such Portfolio Company
or other transaction involving such company is not consummated. Additionally,
the Fund may invest in companies that have not entered into letters of intent
relating to future public offerings and such transactions may not be pursued.
E. Limited liquidity of portfolio investments.
-------------------------------------------
Currently, a significant portion of the equity participations
obtained in bridge financings and securities purchased in other types of
private placements in which the Fund invests consist of securities that are
subject to restrictions on sale. Restricted securities can not be sold
publicly without prior agreement with the issuer to register these securities
<PAGE>
<PAGE>
under the Securities Act of 1933, as amended, (the "1933 Act"), or by selling
such securities under Rule 144 or other rules under the 1933 Act which permit
only limited sales under specified conditions. Since it is anticipated that
the Fund will continue to invest in emerging growth companies underwritten by
relatively small underwriters and which may have a limited number of market
makers, the Fund's ability to sell its equity participations and other
securities purchased in private placements may be limited by, and subject to,
the lack or limited nature of a trading market for the securities of Portfolio
Companies and the volatility of the stock market as a whole. Such limitations
could prevent or delay any sale of the Fund's securities or reduce the amount
of proceeds that might otherwise by realized therefrom. Accordingly, the Fund
is substantially dependent upon the ability of the Portfolio Company to
implement a plan which, within a reasonable period of time, would facilitate a
trading market for its securities. Restricted securities generally sell at a
price lower than similar securities that are not subject to restrictions on
sale. When restricted securities are sold to the public, the Fund, under
certain circumstances, may be deemed an "underwriter" or a controlling person
with respect thereto for the purposes of the 1933 Act, and be subject to
liabilities as such under that Act.
F. Possible need for additional investments in Portfolio Companies.
---------------------------------------------------------------
Following its initial investment, the Fund may make additional
debt and equity investments in Portfolio Companies ("Additional Investment(s)")
in order to increase its investment in a successful Portfolio Fund, to exercise
warrants, options, or convertible securities that were acquired in the original
financing, to preserve the Fund's proportionate ownership when a subsequent
financing is planned or to protect the Fund's initial investment when such
Portfolio Companies' performance does not meet expectations. The Fund will
have the discretion to make any Additional Investments as it determines subject
to the availability of capital resources. The failure to make such Additional
Investments may, in certain circumstances, jeopardize the continued viability
of a Portfolio Company and the Fund's initial investment. The necessity of
making Additional Investments may limit the number of companies in which the
Fund has the ability to invest. There can be no assurance that the Fund will
have sufficient funds to make necessary Additional Investments or that,
following an Additional Investment, the Fund will not lose the entire amount of
its initial and Additional Investment. The Fund has no established criteria in
deciding whether to make an Additional Investment except that management will
exercise its business judgment and apply similar criteria as it does with
initial investments. In addition, it is possible that there may be
circumstances under which an Additional Investment would be considered an
affiliated transaction requiring prior Commission approval. The approval
process could be time consuming and costly and there can be no assurance that
such approval would be obtained.
G. Dependence on public offering market.
------------------------------------
The investment strategy of the Fund is based in large part upon
the state of the securities markets in general and the market for public
financing in particular. Changes in these securities markets and general
economic conditions, including economic downturns, fluctuations in interest
rates, the availability of credit, inflation and other factors, may affect the
value of investments of the Fund. The market for public offerings is cyclical
in nature and, accordingly, there can be no assurance that the securities
markets will, at any point in time, be receptive to public offerings,
particularly those of emerging growth companies. Any adverse change in the
market for public offerings could have a material adverse effect on the Fund
and could severely limit the Fund's ability to realize its investment
objective.<PAGE>
<PAGE>
H. Competition for investments.
---------------------------
The Fund has and expects to continue to encounter competition in
its efforts to locate attractive opportunities for the investment of its
capital from other entities and individuals having similar investment
objectives. The primary competition for desirable investments comes from
investment companies, investment partnerships and wealthy individuals. Some of
the competing entities and individuals have investment managers or advisors
with significantly greater experience, resources and managerial capabilities
then the Fund and are therefore in a better position than the Fund to obtain
access to attractive investments. To the extent that the Fund can compete for
such investments it may only be able to do so on less favorable terms than
those obtained by larger more established investors.
I. Developing companies.
--------------------
Although the Fund believes that developing companies may have
significant potential for price appreciation, higher market and credit risks
are often associated with these companies. Developing companies generally have
limited product lines, markets, market share and financial resources, or
generally are dependent on a smaller inexperienced management team. In
addition, stocks of developing companies may trade less frequently and in more
limited volume and be subject to greater and more abrupt price swings than
stocks of larger companies. There can be no assurance that any of the
developing companies in which the Fund may invest will realize any anticipated
price appreciation.
J. Turnaround and restructuring companies.
--------------------------------------
The Fund has, and may continue, to invest a portion of its
assets in companies involved in "turnaround" or other "restructuring"
situations that management believes, with the infusion of additional working
capital and/or strengthening of the management team, will realize significant
price appreciation and rapid growth in profits. To the extent that these
companies are unable to successfully turnaround or restructure, the Fund's
investment is likely not to appreciate in value and may be lost in its
entirety.
K. Dependence on management.
------------------------
The Fund will be substantially dependent upon the services of
Mr. Calandrella, the Fund's President and Portfolio Manager, who has assumed
principal responsibility for the Fund's investments. The Fund is, therefore,
dependent upon the ability of Mr. Calandrella to select what he believes are
appropriate investments for the Fund and upon the personal contacts and
relationships of Mr. Calandrella and other members of the Fund's management in
order for such investment opportunities to be offered to the Fund. The Fund
has not entered into employment, consulting or non-competition agreements with
Mr. Calandrella or any of its other officers. Therefore, there can be no
assurance that such officers will remain associated with the Fund in any
particular capacity or that they will not, in the future, compete, directly or
indirectly, with the Fund. In the event that any officers of the Fund cease to
be associated with the Fund, the Fund will seek to find a qualified person or
persons to fill their positions. There can, however, be no assurance that such
individuals can be engaged by the Fund. The loss of services of any of the
Fund's officers could have an adverse effect on the Fund.
<PAGE>
<PAGE>
L. Reduced Access to, and Limited Participation in, Management.
-----------------------------------------------------------
As a result of the decision by the Board of Directors to amend
the Fund's Investment Objective, increasing the geographic region within which
it conducts its investment activities from the Rocky Mountain region of the
United States to the entire geographic region of the United States, the Fund's
ability to actively participate in the management of those Portfolio Companies
located outside the Rocky Mountain region is greatly reduced. As a
consequence, the Fund must rely upon the expertise and abilities of existing
management teams, which, in many instances, are smaller and lack hands on
management experience.
OTHER MATTERS
The Board of Directors knows of no business to be brought before the
Meeting other than as set forth above. If, however, any other matters properly
come before the Meeting, it is the intention of the person's named in the
enclosed proxy form to vote such proxies on such matters in accordance with
their best judgment.
Whether or not you expect to be present at the meeting, please sign and
return the enclosed proxy promptly. Your vote is important. If you wish to
attend the Meeting and wish to vote in person, you may withdraw your proxy.
THE ROCKIES FUND, INC.
By: ___________________________________
Wendy D. Haddad, Secretary
Shareholder Proposals For The 1997 Annual Meeting
-------------------------------------------------
If any shareholder wishes to present a proposal for inclusion in the
proxy materials to be mailed by the Fund with respect to the 1997 Annual
Meeting of Shareholders, the proposal must be presented to the Fund's
management prior to May 31, 1997, along with proof of common stock ownership in
the Fund.
<PAGE>
<PAGE>
THE ROCKIES FUND, INC.
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Stephen G. Calandrella or
Clifford C. Thygesen _________________________________________________________
_______________________ (SEE NOTE BELOW) or either of them acting in the
absence of the other, with full power of substitution the true and lawful
attorneys or attorney and proxies of the undersigned to attend the Annual
Meeting of the Shareholders of The Rockies Fund, Inc. (the "Fund") to be held
at the principal offices of the Fund, 4465 Northpark Drive, Colorado Springs,
Colorado, 80907, on September 6, 1996 at 10:00 o'clock a.m. Mountain Daylight
Time, or any adjournment or adjournments thereof, and vote all the shares of
the Fund standing in the name of the undersigned with all the powers the
undersigned would possess if present at said meeting.
(1) FOR __________ WITHHOLD AUTHORITY __________
To elect all of the nominees listed below:
Stephen G. Calandrella, Charles Powell and Clifford C. Thygesen
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name below)
________________________________________
(2) FOR __________ AGAINST __________ ABSTAIN __________
The ratification and approval of the selection by the Board of
Directors of the firm of GELFOND HOCHSTADT PANGBURN & CO., a
Professional Corporation, as the independent accountants for the
Fund for the fiscal year ending December 31, 1996.
(3) Upon such other matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1 AND ITEM 2 AND
IN THE DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUSINESS.
(NOTE: Should you desire to appoint a proxy other than the management designees
named above, strike out the names of the management designees and insert the
name of your proxy in the space provided above. Should you do this, give this
proxy card to the person you appoint instead of returning the proxy card to the
Company.)
(PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)
Receipt is acknowledged of Notice of Annual Meeting and Proxy Statement for the
meeting.
Date ________________________________________________, 1996
___________________________________________________________
Name (please type or print)
___________________________________________________________
Signature
___________________________________________________________
Signature, if held jointly
Please sign exactly as name appears to the left. When shares are held by
joint tenants, both should sign. When signing as executor, administrator,
attorney, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporation name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
