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THE ROCKWOOD GROWTH FUND, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE
HELD ON FEBRUARY 29, 1996
To the Shareholders of The Rockwood Growth Fund, Inc.:
The Annual Meeting of Shareholders of The Rockwood Growth Fund, Inc., an Idaho
corporation, will be held at 545 Shoup Avenue, Suite 303, on February 28, 1996,
at 7:00 p.m., MST, for the following purposes:
1. To elect four (4) directors to serve until the next annual meeting and
until their successors shall have been elected and qualified.
2. To ratify the selection of Peterson, Siler & Stevenson as the
independent accountants of the Fund for the fiscal year ending October 31, 1996.
3. To transact such other business as may properly come before the
meeting and/or any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Ross Farmer, President
January 22, 1996
545 Shoup Avenue, No. 303
Idaho Falls, ID 83402
YOUR VOTE IS IMPORTANT
Shareholders are urged to designate their choices on each of the matters to be
acted upon, and to date, sign and return the enclosed proxy in the envelope
provided. Your prompt return of the proxy will help assure a quorum at the
meeting and avoid the additional Fund expense of further solicitation.
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THE ROCKWOOD GROWTH FUND, INC.
545 SHOUP AVENUE, SUITE 303
IDAHO FALLS, ID 83402
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 29, 1996
This Proxy Statement is furnished to the shareholders of The Rockwood Growth
Fund, Inc. (the "Fund") in connection with the solicitation by the management of
the Fund of proxies to be used at the Annual Meeting of Shareholders of the
Fund, to be held in Idaho Falls at 545 Shoup Avenue, Suite 303, on February 29,
1996, at 7:00 p.m., MST, and/or at any adjournments thereof. The purpose of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting.
If the enclosed form of proxy is properly executed and returned in time to be
voted at the meeting, the shares of Common Stock represented thereby will be
voted in accordance with the instructions marked thereon. Executed proxies that
are unmarked will be voted for the nominees of management in the election of
directors and in favor of the other proposals indicated on the proxy. Any proxy
may be revoked at any time prior to its exercise, either by filing with the Fund
a written notice of revocation, by delivering a duly executed proxy bearing a
later date, or by attending the meeting and voting in person.
At the close of business on December 31, 1995, the record date for determining
shareholders entitled to notice of and to vote at the meeting, there were
outstanding 41,223.924 shares of Common Stock entitled to vote. Each share of
Common Stock entitles the holder thereof to one vote on all matters which come
before the meeting.
This Proxy Statement and the accompanying Form of Proxy will initially be mailed
to shareholders on or about January 22, 1996.
The cost of solicitation of proxies will be borne directly by the Fund, and,
therefore, indirectly by its shareholders. The Fund does not currently
contemplate retaining the services of a proxy solicitation organization, but may
choose to do so in order to obtain a quorum at the meeting; proxies will be
solicited by directors, officers and regular employees of the Fund and its
investment adviser, Aspen Securities & Advisory, Inc., (the "Advisor"). A copy
of the Annual Report of the Fund for the fiscal year ended October 31, 1995,
including financial statements, has been mailed to each shareholder of record at
the close of business October 31, 1995, and to each person who became a <PAGE>
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shareholder of record between that time and the close of business on December
31, 1995, the record date for the determination of shareholders entitled to
notice of and to vote at the meeting. At the close of business on December 31,
1995 the following persons owned of record and beneficially, in amounts stated
after their names, 5% or more of the Fund's outstanding securities:
<TABLE>
<CAPTION>
Number of Shares Percent
Beneficially of Shares
Name Owned (1) Outstanding
<S> <C> <C>
Pfendler Family Revocable 3411.585 8.3%
Living Trust
2507 Harsh Avenue S.E.
Massillon, OH 44646
Ron Kiehn 4979.837 12.1%
P.O. Box 4152
Jackson, WY 83001
G. Holton Quinn 2090.915 5.1%
Route 1, Box 223Q
Salmon, ID 83467
Ross H. Farmer 2048.431 5.0%
129 Princeton Court
Rexburg, ID 83440
</TABLE>
Beneficial ownership of shares comprises voting power (the power to vote, or
direct the voting, of such shares) and/or investment power (the power to
dispose, or to direct the disposition, of such shares).
ELECTION OF DIRECTORS
(Proposal No. 1)
Pursuant to the Bylaws of the Fund, the Board of Directors has fixed the number
of directors comprising the entire Board at not more than fifteen (15) and has
designated the four (4) persons listed below as management's nominees for
election as directors of the Fund to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualified. Each of
the Nominees is currently a director of the Fund. Mr. Farmer and Mr. Kiehn are
the only nominees for election as directors who are "interested persons" of the
Fund.
Unless otherwise specified in the accompanying proxy, the shares voted pursuant
thereto will be voted for the election as directors of the Fund of each of the
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persons named below. If for any reason any of the nominees named below should
be unable to stand for election or serve if elected, it is intended that such
proxy will be voted for the election of such other person or persons as
management may recommend. Each of the nominees has consented to his nomination
and has agreed to serve if elected. Management has no reason to believe that
any nominee will be unable to serve as a director.
The following table sets forth the names and addresses of the management
nominees for election as directors, their principal occupation or employment,
the periods during which each of them has served as a director of the Fund, and
the approximate number of shares of the Fund beneficially owned, directly or
indirectly, by each of them as of December 31, 1995. As of that date, the
directors and officers of the Fund as a group, beneficially owned, directly or
indirectly 9,119.183 shares of the Fund, representing approximately 22% of the
outstanding stock.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned Directly
or Indirectly
Principal Occupation as of
Name of Nominee Age or Employment** Since December 31, 1992
<S> <C> <C> <C> <C>
Ross H. Farmer* 53 President of the Fund 1985 2048.431
129 Princeton Ct. and the Advisor to the
Rexburg, ID 83440 Fund.
James C. Herndon 53 District Judge, Seventh 1987 0
P.O. Box 717 Judicial District, State
Blackfoot, ID 83221 of Idaho.
Ronald W. Kiehn* 69 President and controlling 1985 4979.837
P.O. Box 4152 shareholder, Rimrock, Inc.
Jackson, WY 83001 a consulting and investment
firm.
G. Holton Quinn 56 President, Q-B Corporation 1985 2090.915
Route 1, Box 223Q a manufacturer of glulam
Salmon, ID 83467 beams.
</TABLE>
The Fund does not pay any fees to its officers for their services as such.
* Messrs. Farmer and Kiehn are interested persons of the Fund, as defined by
the Investment Company Act of 1940. Mr. Farmer is an officer and director of
the Adviser and owns 79% of its voting stock. Mr. Kiehn is a director of the
Adviser and owns 2% of its voting stock. Mr. Kiehn has, for the past two years,
purchased monthly $220 of the Fund's common stock at the then market price.
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** Except as otherwise indicated, each individual has engaged in the
principal occupation or employment indicated for the last 5 years.
The executive officers of the Fund are elected annually by the Board of
Directors.
The Board of Directors of the Fund does not have a standing audit committee,
nominating committee or compensation committee.
Five meetings of the Board of Directors were held during the last fiscal year.
No Director attended less than 75% of the board meetings held during the last
full fiscal year.
INVESTMENT ADVISER
General
The investment adviser to the Fund is Aspen Securities and Advisory, Inc. (the
"Adviser"), 545 Shoup Avenue, Suite 303, Idaho Falls, ID 83402.
The Adviser is an Idaho corporation organized in 1983.
The investment advisory fees paid by the Fund are at an annual rate of 0.7% per
year of average net assets up to $50 million, 0.6% of the next $350 million and
0.5% of the excess over $400 million.
Ross H. Farmer has served as President of the Fund since 1985 and of Aspen
Securities and Advisory, Inc. since 1983.
The Fund paid investment advisory fees to the Adviser of $5,112.18 in 1995.
INVESTMENT ADVISORY CONTRACT
The investment advisory services of the Adviser are furnished to the Fund
pursuant to an Investment Advisory Contract which was approved by shareholders
of the Fund and became effective on November 14, 1985. In accordance with its
terms, the Investment Advisory Contract was initially in effect for a period of
two years. The Advisory Contract provides that after its initial term it will
continue from year to year if approved annually by the Board of Directors of the
Fund, including specific approval by vote of a majority of the directors who are
not parties to the contract or "interested persons" (as defined in the
Investment Company Act of 1940) of any such party, cast in person at a meeting
called for the purpose of voting on such approval. The contract may be
terminated at any time, without penalty, upon sixty (60) days written notice by
either party to the other, and will terminate automatically if assigned.
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Under the Advisory Contract, the Adviser supervises and assists in the
management of the Fund, provides investment research and makes and executes
recommendations for the purchase and sale of securities. The Adviser furnishes
at its expense all necessary office space and equipment and pays the
compensation of officers of the Fund. All other expenses incurred in the
operation of the Fund and the continuous offering of its shares, are borne by
the Fund. Such expenses include taxes, fees and commissions, bookkeeping
expenses, expenses of redemption of shares, charges of custodians and transfer
agents, auditing and legal expenses.
For the services provided by the Adviser, the Fund pays a basic quarterly
management fee at an annual rate of 0.7% of average net assets up to $50
million, 0.6% of the next $350 million and 0.5% of the excess over $400 million.
The Investment Advisory Contract contains a provision which requires the Adviser
to reimburse the Fund quarterly if the aggregate annual expenses of every
character exclusive of interest, taxes, extraordinary expenses, brokerage
commissions and other transaction costs shall exceed three percent (3%) of the
first $2 million, one and one-half percent (1 1/2%) of the next $28 million, of
average net assets and one percent (1%) of average net assets of the corporation
over $30 million.
ALLOCATION OF PORTFOLIO BROKERAGE
No officer or director of the Fund nor any officer, director or shareholder of
the Adviser has any material direct or indirect interest in any person employed
as a broker by or on behalf of the Fund. For the fiscal year ended October 31,
1995, the Fund paid brokerage fees on the purchase and sale of its portfolio
securities of $7,349.79.
Brokerage commissions are allocated by the Adviser primarily to brokerage firms
which provide useful research services; allocation to the Fund of desired
underwritten securities; and/or provide price quotations or publications which
are not available for cash. All of the brokerage fees paid by the Fund during
the fiscal year ended October 31, 1995 were paid to brokerage firms which met
the above criteria.
There is no present intention to allocate any specific amount of future
brokerage commissions to any particular broker or brokers. Management is
authorized to pay brokerage commissions in excess of those which another broker
might have charged for effecting the same transaction in recognition of the
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brokerage (i.e. execution) and research services provided by the broker
selected. The allocation of brokerage commissions is not based on the
application of any fixed formula or agreements, but is based simply on business
judgment and evaluation of the relative merit of the services, information and
statistics received, although it is not possible to place an actual dollar value
on such services. The rates of turnover of the Fund's portfolio for the fiscal
years ended October 31, 1993, 1994 and 1995 were 19%, 18%, and 30% respectively.
RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT ACCOUNTANTS
(Proposal No. 2)
Subject to ratification by shareholders, the directors, including a majority of
the non-interested directors of the Fund, selected, at a meeting of the Board of
Directors held on December 21, 1995, Peterson, Siler & Stevenson, as independent
accountants to examine the financial statements of the Fund for the fiscal year
ending October 31, 1996, and to render their report thereon. The Fund has been
informed that neither Peterson, Siler & Stevenson nor any of its partners has
any direct financial interest or any material indirect financial interest in the
Fund, nor has had any connection during the past three years with the Fund in
the capacity of promoter, underwriter, voting trustee, director, officer or
employee. Coopers & Lybrand has been dismissed as the Fund's independent
accountant. The auditor's reports have never contained an adverse opinion, a
disclaimer of opinion, a qualification or modification as to uncertainty, audit
scope, or accounting principles. The Board of Directors recommends a change in
auditors, believing a smaller firm will provide continuity in auditing personnel
from year to year and save the stockholders money.
All directors are provided with unaudited financial statements at each regular
meeting of the Board, as well as audited year-end financial statements. The
affirmative vote of the majority of the outstanding voting securities present at
the meeting or represented by proxy is required to ratify the selection of
independent accountants.
OTHER BUSINESS
Management knows of no other business which may be presented at the meeting.
However, if any matter not known comes before the meeting it is intended that
the persons named in the enclosed proxy, or their substitutes, will vote such
proxy in accordance with their judgment on such matters.
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PROPOSALS FOR 1997 ANNUAL MEETING
OF SHAREHOLDERS
Any proposals of shareholders that are intended to be presented at the 1996
Annual Meeting of Shareholders must be received at the Fund's principal
executive offices no later than May 1, 1996 and must comply with all applicable
legal requirements in order to be included in the Fund's proxy statement and
form of proxy for the meeting.
By Order of the Board of Directors
Ross H. Farmer, President
Date: January 22, 1996<PAGE>
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This Proxy is Solicited on Behalf of the Board of Directors
THE ROCKWOOD GROWTH FUND, INC.
Idaho Falls, ID 83402
The undersigned hereby appoints Ross H. Farmer as Proxy with the power to
appoint his substitute and hereby authorizes him to represent and to vote, as
designated below, all the undersigned's shares of common stock of The Rockwood
Growth Fund, Inc. held on record by the undersigned on December 31, 1995, at the
annual meeting of shareholders to be held on February 29, 1996 or any
adjournments thereof.
1. Election of Directors of The Rockwood Growth Fund, Inc.
FOR all nominees listed below / /
(Except as marked to the contrary below)
WITHHOLD AUTHORITY / /
to vote for all nominees listed below
Ross H. Farmer; James C. Herndon; Ronald W. Kiehn; G. Holton Quinn
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. Approval of appointment of independent accountants for fiscal 1996.
FOR / / AGAINST / / ABSTAIN / /
3. Upon any other matters that may properly come before the meeting any
adjournments thereof.
FOR / / AGAINST / / ABSTAIN / /
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION HEREIN
MADE. IN THE ABSENCE OF SUCH INDICATION, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Account Information:
Name:-------------------------------------------------------------------------
Shares:-----------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE.
Dated:-------------------, 1996.
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Signature
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Signature
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Signature
(Please sign exactly as name appears hereon. Joint owners should each sign.
Executors, Administrators, Trustees, etc. should so indicate when signing.)
