-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AwGy1NTbOzK10Iid0oCvYLh9bMQHPtv/8evVK1k2ukwxidDUqGq5j/CXFTEWfglv zyjCooXbQusktroZlEXGVg== 0000014170-98-000008.txt : 19980430 0000014170-98-000008.hdr.sgml : 19980430 ACCESSION NUMBER: 0000014170-98-000008 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIDGES INVESTMENT FUND INC CENTRAL INDEX KEY: 0000014170 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 476027880 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 002-21600 FILM NUMBER: 98604282 BUSINESS ADDRESS: STREET 1: 8401 W DODGE RD STREET 2: SUITE 256 CITY: OMAHA STATE: NE ZIP: 68114 BUSINESS PHONE: 4023974700 MAIL ADDRESS: STREET 1: 8401 WEST DODGE ROAD STREET 2: SUITE 256 CITY: OMAHA STATE: NE ZIP: 68114 485APOS 1 Bridges Investment Fund, Inc. 1 APRIL 28, 1998 Prospectus -- Part A INFORMATION REQUIRED IN A PROSPECTUS PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK APRIL 28, 1998 8401 WEST DODGE ROAD OMAHA, NEBRASKA 68114 402-397-4700 INVESTMENT OBJECTIVES THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A SECONDARY INVESTMENT OBJECTIVE. PORTFOLIO INVESTMENTS THE FUND INTENDS TO ACHIEVE ITS INVESTMENT OBJECTIVES THROUGH THE OWNERSHIP OF COMMON STOCKS, SECURITIES CONVERTIBLE INTO COMMON STOCKS, AND FIXED INCOME SECURITIES. THE NON-CONVERTIBLE FIXED INCOME SECURITIES ISSUED BY CORPORATIONS MAY NOT ACCOUNT FOR MORE THAN 40% OF THE MARKET VALUE OF THE FUND'S PORTFOLIO. PURCHASE PRICE SHARES OF CAPITAL STOCK ARE OFFERED TO THE PUBLIC BY THE FUND AT THE NEXT DETERMINED NET ASSET VALUE WHICH VARIES WITH THE CHANGES IN THE MARKET VALUE OF THE FUND'S PORTFOLIO. NO SELLING COMMISSIONS THE FUND RECEIVES THE FULL AMOUNT PAID BY PURCHASERS OF THESE SHARES SINCE THERE ARE NO UNDERWRITING DISCOUNTS OR SELLING CHARGES PAID TO ANYONE. HOWEVER, SERVICE CHARGES ARE IMPOSED ON CERTAIN PLAN ACCOUNT OPERATIONS AS DESCRIBED ON PAGES 18 AND 20. PURCHASE PLANS THE FUND REQUIRES A MINIMUM INITIAL INVESTMENT OF $500.00. SHARES CAN BE PURCHASED FOR LESSER AMOUNTS UNDER THE REINVESTMENT OF CASH DISTRIBUTIONS PLAN AND SCHEDULED INVESTMENTS PLAN AS DESCRIBED IN THIS PROSPECTUS. IN ADDITION, INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNTS (IRA) AND STANDARD RETIREMENT PLANS ARE AVAILABLE TO INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS. AS SET FORTH HEREIN, THERE ARE CERTAIN TRANSACTION CHARGES BY U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA AS INVESTOR'S AGENT IN CONNECTION WITH INVESTMENTS AND REINVESTMENTS UNDER SUCH PLANS. REDEMPTION PRICE SHARES OF CAPITAL STOCK OF THE FUND ARE REDEEMED AT CURRENT NET ASSET VALUE NEXT DETERMINED, WHICH VARIES WITH THE CHANGES IN MARKET VALUE OF SECURITIES OWNED. Bridges Investment Fund, Inc. -2- April 28, 1998 Prospectus -- Part A INVESTMENT ADVISER THE INVESTMENT ADVISER TO AND THE MANAGER FOR THE FUND IS BRIDGES INVESTMENT COUNSEL, INC., 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114. SPECIAL NOTICES THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT BRIDGES INVESTMENT FUND, INC. THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE INVESTING. THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. ADDITIONAL INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C. 20549, IN TWO SEGMENTS: PART B--INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION AND PART C--OTHER INFORMATION. DESCRIPTIONS OF THE TOPICS COVERED BY PART B AND PART C ARE FOUND ON PAGE 25 OF THIS PROSPECTUS. COPIES OF PART B AND PART C ARE AVAILABLE UPON REQUEST AND WITHOUT CHARGE. TO OBTAIN SUCH ADDITIONAL INFORMATION, WRITE OR CALL THE FUND'S OFFICE AT THE ADDRESS OR NUMBER SHOWN ABOVE. NO INFORMATION IN THIS PROSPECTUS HAS BEEN INCORPORATED BY REFERENCE FROM PART B OR PART C. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. (END OF COVER PAGE) SYNOPSIS THE FOLLOWING INFORMATION IS A SUMMARY OF IMPORTANT INFORMATION FOR A PROSPECTIVE INVESTOR OR A PRESENT SHAREHOLDER IN BRIDGES INVESTMENT FUND, INC.: a. THE TITLE OF THE SHARES OF THE FUND WHICH ARE OFFERED FOR SALE IN THIS PROSPECTUS IS CAPITAL STOCK. THE FUND DOES NOT OFFER ANY OTHER SECURITIES FOR SALE. b. THE NAME OF THE INVESTMENT ADVISER TO THE FUND IS BRIDGES INVESTMENT COUNSEL, INC. THE INVESTMENT ADVISER'S ADDRESS IS 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114. THE PHONE NUMBER OF THE INVESTMENT ADVISER IS 402-397-4700. c. THERE IS NO SALES LOAD OR COMMISSION PAID AS A PERCENTAGE OF THE NET AMOUNT INVESTED. d. THE MINIMUM INITIAL INVESTMENT IN SHARES OF CAPITAL STOCK OF THE FUND IS $500. e. THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A SECONDARY INVESTMENT OBJECTIVE. THERE CAN BE NO ASSURANCE THESE OBJECTIVES CAN BE ACHIEVED. SEE PAGES 3-5 IN THE STATEMENT OF ADDITIONAL INFORMATION- Bridges Investment Fund, Inc. -3- April 28, 1998 Prospectus -- Part A -PART B FOR A FULL EXPLANATION OF INVESTMENT OBJECTIVES, POLICIES, AND POLICY RESTRICTIONS. f. THE FUND HAS OPERATED AS AN OPEN-END DIVERSIFIED INVESTMENT COMPANY SINCE JULY 1, 1963, AND THE FUND INTENDS TO CONTINUE ON THIS SAME BASIS. g. THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC., PROVIDES SECURITY RESEARCH AND FINANCIAL ANALYSIS INFORMATION, DECISION-MAKING ASSISTANCE, INVESTMENT MANAGEMENT, CONSULTING JUDGMENT AND OPINIONS, AND ADMINISTRATIVE SERVICES TO A WIDE RANGE OF SECURITIES PORTFOLIOS REPRESENTING PERSONAL INDIVIDUALS, TRUSTS, CHARITABLE FOUNDATIONS, AND FINANCIAL INSTITUTIONS. THE FIRM MANAGES ONE NO-LOAD, OPEN-END INVESTMENT MANAGEMENT COMPANY, BRIDGES INVESTMENT FUND, INC. BRIDGES INVESTMENT COUNSEL, INC. RECEIVES AN ANNUAL FEE OF 1/2 OF 1% OF THE AVERAGE NET ASSET VALUE OF THE FUND, DETERMINED ON THE BASIS OF TWELVE MONTH-END VALUATIONS TO DETERMINE THE AVERAGE NET ASSET VALUE. h. THE REDEMPTION PRICE OF THE FUND IS THE NEXT DETERMINED NET ASSET VALUE PER SHARE. THE FUND REPURCHASES THE STOCKHOLDER'S SHARES. THERE IS NO SECONDARY MARKET FOR THE SHARES OF CAPITAL STOCK OF BRIDGES INVESTMENT FUND, INC. i. THE RISK OR SPECULATIVE FACTORS PECULIAR TO BRIDGES INVESTMENT FUND, INC. MAY BE THAT THE FUND IS A RELATIVELY SMALL INVESTMENT COMPANY WITH NET ASSETS OF $36.6 MILLION DOLLARS AT YEAR-END 1997, AND IT IS SPONSORED BY BRIDGES INVESTMENT COUNSEL, INC., A MEDIUM SIZED INVESTMENT COUNSEL FIRM WITH THREE PROFESSIONAL PERSONS AND MORE THAN FIFTEEN STAFF INDIVIDUALS. WITH RESPECT TO THE MODERATE SIZE OF THE BRIDGES INVESTMENT COUNSEL, INC. ORGANIZATION, SOME INVESTORS MAY CONSIDER THIS STRUCTURE TO BE AN ADVANTAGE RATHER THAN A DETRIMENT TO LONG-TERM SUCCESSFUL INVESTMENT RESULTS. j. BRIDGES INVESTMENT FUND, INC. IS AN OPEN-END INVESTMENT MANAGEMENT COMPANY DESIGNED TO PROVIDE INVESTORS IN SECURITIES WITH A DIVERSIFIED PORTFOLIO CONSISTING OF COMMON STOCKS, SECURITIES CONVERTIBLE INTO COMMON STOCKS, AND FIXED INCOME SECURITIES. THE NON-CONVERTIBLE U.S. TREASURY AND CORPORATE FIXED INCOME SECURITIES MAY NOT ACCOUNT FOR MORE THAN 40% OF THE MARKET VALUE OF THE FUND'S PORTFOLIO -- SEE PAGE 7. k. THE FUND WAS CREATED PRIMARILY FOR THE PURPOSE OF EXTENDING THE SERVICES OF THE INVESTMENT MANAGEMENT FIRM OF BRIDGES INVESTMENT COUNSEL, INC. TO INVESTORS WHOSE FUNDS ARE INSUFFICIENT IN SIZE TO PERMIT ECONOMICAL ADMINISTRATION AS SEPARATE ACCOUNTS. BY ACQUIRING SHARES OF THE FUND, INVESTORS OBTAIN SECURITIES DIVERSIFICATION AND CONTINUOUS INVESTMENT SUPERVISION. AN INVESTMENT IN THE FUND DOES NOT REMOVE THE MARKET RISK INHERENTLY INVOLVED IN MAKING SECURITIES INVESTMENTS. l. THE FUND MAY WRITE COVERED CALL OPTIONS AS DESCRIBED ON PAGES 4 AND 5 OF THE STATEMENT OF ADDITIONAL INFORMATION--PART B. THE RISK IN WRITING A COVERED CALL OPTION IS THAT THE PRICE OF THE UNDERLYING COMMON STOCK WILL Bridges Investment Fund, Inc. -4- April 28, 1998 Prospectus -- Part A RISE ABOVE ITS STRIKE OR SELLING PRICE OF THE OPTION CONTRACT. PROSPECTUS FEE TABLE SHAREHOLDER TRANSACTION EXPENSES REDEMPTION FEE (AS A PERCENTAGE OF THE AMOUNT REDEEMED): NONE REINVESTMENT OF CASH DISTRIBUTIONS TRANSACTION FEE; $1.05 PER TRANSACTION, FOUR TRANSACTIONS PER YEAR FOR DIVIDEND PAYMENTS, AND ONE TRANSACTION PER YEAR FOR CAPITAL GAINS DISTRIBUTIONS, IF ANY. ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) MANAGEMENT FEES 0.50% OTHER EXPENSES 0.31% AUDIT AND CUSTODIAN SERVICES 0.13% BOOKKEEPING, DIVIDEND AND TRANSFER AGENT SERVICES, COMPUTER PROGRAMMING, PRINTING AND SUPPLIES 0.12% INSURANCE, LICENSES, TAXES AND OTHER 0.06% TOTAL FUND OPERATING EXPENSES 0.81% EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS YOU WOULD PAY THE FOLLOWING EXPENSES ON A $1,000 INVESTMENT ASSUMING (1) 5% ANNUAL RETURN AND (2) REDEMPTION AT THE END OF EACH TIME PERIOD: $13 $39 $67 $146 YOU WOULD PAY THE FOLLOWING EXPENSES ON THE SAME INVESTMENT, ASSUMING NO REDEMPTION: $13 $39 $67 $146 THE TABLE ABOVE IS DESIGNED TO ASSIST AN INVESTOR IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT A HYPOTHETICAL INVESTMENT OF $1,000 IN BRIDGES INVESTMENT FUND, INC. WILL BEAR DIRECTLY OR INDIRECTLY FOR THE HOLDING PERIODS SHOWN AND FOR THE ASSUMPTIONS SET FORTH THEREIN. THE REINVESTMENT OF CASH DISTRIBUTIONS TRANSACTION FEE OF $1.05 IS DESCRIBED ON PAGE 13 OF THIS Bridges Investment Fund, Inc. -5- April 28, 1998 Prospectus -- Part A PROSPECTUS FOR FOUR QUARTERLY DIVIDEND PAYMENTS. THE TOTAL FUND OPERATING EXPENSES ARE TABULATED ON PAGE 30 OF THE STATEMENT OF ADDITIONAL INFORMATION, AND THEY ARE SUMMARIZED ON PAGE 11 OF THIS PROSPECTUS. THE EXPENSES IN THE HYPOTHETICAL EXAMPLE ARE CALCULATED FOR THE MOST RECENT FISCAL YEAR FOR THE FUND, EXCEPT WHERE AN EXPENSE HAS CHANGED FOR THE CURRENT FISCAL YEAR IN WHICH CASE THE PRESENT COST IS REFLECTED IN THE ESTIMATED COSTS. THE EXPENSES SHOW BOTH THE AMOUNTS PAID IN THE FUND'S FINANCIAL STATEMENTS AND THE COSTS PAID BY THE SHAREHOLDER. THIS HYPOTHETICAL EXAMPLE ASSUMES THAT ALL DIVIDENDS AND DISTRIBUTIONS ARE REINVESTED. AN INVESTOR WHO DOES NOT REINVEST THESE DISTRIBUTIONS WOULD SAVE $4 PER YEAR IN TRANSACTION FEES UNDER THE CALCULATIONS SHOWN IN THE TABLE ABOVE. THE ESTIMATES SHOWN IN THE HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THE AMOUNTS SHOWN. CONDENSED FINANCIAL INFORMATION THE FOLLOWING TABLE OF PER SHARE FINANCIAL HIGHLIGHTS HAS BEEN DERIVED FROM RECORDS MAINTAINED BY THE FUND. THE PER SHARE INCOME AND CAPITAL CHANGES FOR EACH OF THE MOST RECENT FIVE YEARS ENDED DECEMBER 31, 1997, HAVE BEEN AUDITED BY ARTHUR ANDERSEN LLP. THEIR REPORT APPEARS IN THE STATEMENT OF ADDITIONAL INFORMATION, AND THE ASSOCIATED FINANCIAL STATEMENTS AND NOTES THERETO SHOULD BE READ IN CONJUNCTION WITH THIS TABLE. [THIS SPACE IS LEFT BLANK INTENTIONALLY.] Bridges Investment Fund, Inc. -6- April 28, 1998 Prospectus -- Part A
FINANCIAL HIGHLIGHTS* FOR THE YEARS ENDED DECEMBER 31 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 NET ASSET VALUE, BEGINNING OF PERIOD $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 $15.97 $14.07 $15.00 INCOME FROM INVESTMENT OPERATIONS NET INVESTMENT $.51 $.55 $.58 $.59 $.61 $.63 $.66 $.67 $.67 $.69 INCOME NET GAINS OR (LOSSES) ON SECURITIES (BOTH REALIZED AND UNREALIZED) $4.77 $3.28 $4.63 $(.52) $.46 $.37 $2.44 $(.39) $2.44 $.34 TOTAL FROM INVEST. OPERATIONS $5.28 $3.83 $5.21 $.07 $1.07 $1.00 $3.10 $.28 $3.11 $1.03 LESS DISTRIBUTIONS DIVIDENDS FROM NET INVESTMENT INCOME $(.51) $(.55) $(.58) $(.59) $(.61) $(.63) $(.66) $(.67) $(.67) $(.85) DISTRIBUTIONS FROM CAPITAL GAINS $(.31) $(.26) $(.19) $(.18) $(.17) $(.16) $(.29) $(.43) $(.54)$(1.11) TOTAL $(.82) $(.81) $(.77) $(.77) $(.78) $(.79) $(.95) $(1.10)$(1.21)$(1.96) DISTRIBUTIONS NET ASSET VALUE, END OF PERIOD $29.02 $24.56 $21.54 $17.10 $17.80 $17.51 $17.30 $15.15 $15.97 $14.07 TOTAL RETURN 21.47% 17.78% 30.46% 0.39% 6.18% 5.94% 20.78% 1.89% 22.22% 6.96% RATIOS/SUPPLEMENTAL DATA NET ASSETS, END OF PERIOD (IN $36,648 $29,249 $24,052 $18,096 $17,991 $17,007 $14,375 $11,283 $10,895 $8,593 THOUSANDS) RATIO OF EXPENSES TO AVERAGE NET 0.81% 0.87% 0.89% 0.90% 0.90% 0.94% 0.98% 0.99% 0.99% 1.01% ASSETS** RATIO OF NET INC. TO AVG. NET ASSETS 2.64% 3.23% 3.80% 4.25% 4.32% 4.57% 4.91% 5.28% 4.29% 4.49% PORTFOLIO TURNOVER RATE 8% 8% 7% 10% 11% 7% 28% 26% 27% 31% AVG. COMM. RATE 0.1003 0.1900 0.1222 0.1470 0.1253 0.1781 0.1195 0.1297 0.2095 0.1929 PD.*** *PER SHARE INCOME AND CAPITAL CHANGE DATA IS COMPUTED USING THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING METHOD. **AVERAGE NET ASSET DATA IS COMPUTED USING MONTHLY NET ASSET VALUE FIGURES. ***CENTS PER SHARE
GENERAL DESCRIPTION OF REGISTRANT HISTORY -- THE FUND WAS ORGANIZED AS AN OPEN-END INVESTMENT COMPANY UNDER THE LAWS OF NEBRASKA ON MARCH 20, 1963. INVESTMENT OPERATIONS COMMENCED ON JULY 1, 1963, AND THE SHARES OF CAPITAL STOCK WERE SOLD TO THE GENERAL PUBLIC ON DECEMBER 7, 1963. THE FUND HAS CONDUCTED ITS BUSINESS CONTINUOUSLY SINCE THE INITIATION OF THESE ACTIVITIES. INVESTMENT OBJECTIVES AND POLICIES -- THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL APPRECIATION. IN PURSUIT OF THAT OBJECTIVE, THE FUND WILL INVEST PRIMARILY IN COMMON STOCKS AND SECURITIES CONVERTIBLE INTO COMMON STOCKS, AND THE MARKET VALUE OF THESE SECURITIES WILL NORMALLY REPRESENT 60% OR MORE OF THE TOTAL VALUE OF THE FUND'S ASSETS. THE SELECTION OF COMMON Bridges Investment Fund, Inc. -7- April 28, 1998 Prospectus -- Part A STOCKS AND CONVERTIBLE SECURITIES WILL EMPHASIZE COMPANIES WHICH, IN THE OPINION OF THE FUND'S MANAGEMENT, OFFER OPPORTUNITIES FOR INCREASED EARNINGS AND DIVIDENDS. HOWEVER, THE FUND MAY ALSO INVEST IN COMMON STOCKS WHICH MAY BE CYCLICALLY DEPRESSED OR UNDERVALUED, AND, THEREFORE, MAY OFFER POTENTIAL FOR CAPITAL APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A SECONDARY INVESTMENT OBJECTIVE OF THE FUND. IN MOVING TOWARDS THAT GOAL, THE FUND MAY ACQUIRE INVESTMENT GRADE CORPORATE BONDS, DEBENTURES, U.S. TREASURY BONDS AND NOTES, AND PREFERRED STOCKS, PROVIDED NOT MORE THAN 40% OF THE VALUE OF ITS ASSETS ARE MAINTAINED IN THESE TYPES OF FIXED INCOME SECURITIES. INVESTMENT GRADE CORPORATE BONDS AND PREFERRED STOCKS MUST CARRY, AT THE TIME OF PURCHASE, A MOODY'S INVESTOR SERVICE RATING OF BAA OR HIGHER OR A STANDARD & POOR'S CORPORATION RATING OF BBB OR HIGHER. SOME SECURITIES RATED BAA OR BBB MAY HAVE SPECULATIVE CHARACTERISTICS. THE INVESTMENT GRADE BONDS, DEBENTURES, AND PREFERRED STOCKS MAY ALSO BE EMPLOYED TO PROVIDE A SOURCE OF FUNDS FOR FUTURE PURCHASES OF EQUITY TYPE SECURITIES. THE FUND MAY PURCHASE INVESTMENTS IN SECURITIES OF FOREIGN ISSUERS, PROVIDED THAT THE MARKET VALUE OF SUCH SECURITIES WILL NOT EXCEED 10% OF TOTAL ASSETS, AND A FURTHER LIMITATION WILL REQUIRE THAT THESE SECURITIES BE TRADED AS AMERICAN DEPOSITORY RECEIPTS. FOR SPECULATIVE CAPITAL GAIN PURPOSES, THE FUND MAY PURCHASE BONDS, DEBENTURES, AND PREFERRED STOCKS THAT CARRY EXTRAORDINARILY HIGH YIELDS AND BALANCE SHEET RISK OR WHICH HAVE ONE OR MORE INTEREST OR DIVIDEND PAYMENTS IN ARREARS, PROVIDING THAT THE PURCHASE OF THIS TYPE OF SECURITIES WILL BE LIMITED TO 5% OF THE VALUE OF THE ASSETS OF THE FUND. SOME OF THE SECURITIES OF THIS GENERIC TYPE HAVE BEEN DESCRIBED IN THE CURRENT MARKET ENVIRONMENT AS JUNK BONDS. HISTORICALLY, THE FUND'S SECURITY SELECTION POLICY PERMITTED THE SELECTION OF ISSUES THAT HAD NOT BEEN PART OF A LEVERAGED BUY-OUT OR OTHER RECAPITALIZATION TRANSACTION BUT THAT WERE OR COULD BE ATTRACTIVE FOR REASONS RELATED TO A RECOVERY OF PREVIOUS FUNDAMENTAL VALUE THAT EXISTED AT THE TIME OF THEIR ORIGINAL ISSUANCE. REFER TO PAGE 5 -- PART B OF THE STATEMENT OF ADDITIONAL INFORMATION FOR AN EXPANDED DISCUSSION OF THIS POLICY. UNDER UNUSUAL ECONOMIC OR FINANCIAL MARKET CIRCUMSTANCES, THE FUND MAY MAINTAIN A SUBSTANTIAL PART OR ALL OF ITS ASSETS IN CASH OR U.S. GOVERNMENT SECURITIES FOR TEMPORARY DEFENSIVE PURPOSES. THE FUND MAY MAINTAIN POSITIONS IN U.S. GOVERNMENT SECURITIES FOR AS LONG AS SUCH UNUSUAL MARKET CONDITIONS EXIST, AND THE AMOUNTS OF THESE TREASURY SECURITIES WILL BE EXCLUDED WHEN THE DAILY CALCULATION IS MADE TO ALLOCATE SECURITIES VALUES UNDER THE 40% OF THE VALUE OF Bridges Investment Fund, Inc. -8- April 28, 1998 Prospectus -- Part A TOTAL ASSETS POLICY GUIDELINE FOR THE INVESTMENT GRADE BOND, DEBENTURES, AND PREFERRED STOCKS. THE FOREGOING POLICIES AS TO INVESTMENTS MAY BE ALTERED BY THE FUND'S BOARD OF DIRECTORS; HOWEVER, THEY WILL NOT BE CHANGED WITHOUT PRIOR WRITTEN NOTICE TO SHAREHOLDERS IN A SUPPLEMENT TO THE PROSPECTUS, OR AT SUCH TIME AS THE NEXT ANNUAL REVISIONS TO THE PROSPECTUS BECOME EFFECTIVE. IN ADDITION TO THE INVESTMENT OBJECTIVES AND POLICIES DISCLOSED ABOVE, THE FUND ADHERES TO CERTAIN OTHER INVESTMENT POLICY AND SELECTION RESTRICTIONS WHICH ARE SET FORTH IN THE STATEMENT OF ADDITIONAL INFORMATION. AN INVESTOR SHOULD BE AWARE THAT THE OWNERSHIP OF COMMON STOCKS THROUGH AN INVESTMENT IN THE FUND ENTAILS PRICE VOLATILITY RISKS ATTENDANT TO THE GENERAL MARKET ACTION FOR ALL TYPES OF EQUITIES. INVESTORS SHOULD ALSO RECOGNIZE THAT AN INVERSE RELATIONSHIP EXISTS BETWEEN BOND PRICES AND INTEREST RATES WHEREIN HIGHER INTEREST RATES COULD CAUSE LOWER BOND PRICES, AND LOWER INTEREST RATES COULD CREATE HIGHER BOND PRICES WITH THE IMPACT OF THESE INTEREST RATE CONDITION CHANGES BEING THE GREATEST UPON THE VERY LONG MATURITY ISSUES. WITH RESPECT TO THE UTILIZATION OF U.S. TREASURY SECURITIES FOR TEMPORARY DEFENSIVE PURPOSES, INVESTORS SHOULD ANTICIPATE THAT THESE DEFENSIVE ACTIONS MAY RESULT IN LESS THAN 60% OF THE ASSETS OF THE FUND TO BE HELD IN COMMON STOCKS AND OTHER EQUITY TYPE SECURITIES AND THAT SUCH TEMPORARY DEFENSIVE ACTIONS MAY BE TAKEN PRIOR TO THE DEVELOPMENT OF THE EXPECTED ADVERSE MARKET CIRCUMSTANCES. FURTHER, SUBSEQUENT EVENTS IN THE MARKET PLACE MAY OR MAY NOT VINDICATE THE JUDGMENT OF THE INVESTMENT MANAGER TO ESTABLISH THE TEMPORARY DEFENSIVE POSITIONS IN U.S. GOVERNMENT SECURITIES, AND THE LACK OF THE ONSET OF THE ADVERSE MARKET CONDITIONS MAY CAUSE TEMPORARY DEFENSIVE POSITIONS TO BE HELD FOR UNANTICIPATED, LONG INTERVALS OF TIME. MANAGEMENT OF THE FUND GOVERNANCE -- THE BOARD OF DIRECTORS OF THE FUND IS RESPONSIBLE FOR THE GENERAL GOVERNANCE OF THE AFFAIRS OF THE FUND. IN PARTICULAR, THE BOARD ESTABLISHES CONTRACTUAL RELATIONSHIPS AND MAINTAINS SURVEILLANCE OF THE INVESTMENT MANAGER, THE CUSTODIAN BANK AND TRANSFER AGENT, THE INSURANCE COVERAGE, THE CERTIFIED PUBLIC ACCOUNTANTS, AND THE LEGAL REPRESENTATION FOR THE FUND. IN ADDITION, THE BOARD OF DIRECTORS REVIEWS THE POSITION OF THE FUND WITH RESPECT TO FEDERAL AND STATE REGULATIONS, AND THE BOARD OF DIRECTORS IS CONCERNED ABOUT COMPLIANCE WITH TAX RULES TO MAINTAIN THE FUND'S POSITION AS A REGULATED OPEN-END INVESTMENT MANAGEMENT COMPANY. LASTLY, THE BOARD IS Bridges Investment Fund, Inc. -9- April 28, 1998 Prospectus -- Part A RESPONSIBLE FOR ATTRACTING INTERESTED AND COMPETENT INDIVIDUALS TO SERVE AS REPRESENTATIVES FOR THE SHAREHOLDERS. BOARD MEMBERS CARRY BROAD PERSPECTIVES BEYOND THE FIELDS OF FINANCE AND INVESTMENTS, AND THESE INDIVIDUALS PROVIDE INSIGHT AND GUIDANCE FOR THE GENERAL BUSINESS POLICY OF THE FUND THROUGH THE STRUCTURE OF THE AUDIT COMMITTEE, THE EXECUTIVE COMMITTEE, AND THE REGULAR QUARTERLY BOARD OF DIRECTORS MEETINGS. ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS CAN BE FOUND IN THE STATEMENT OF ADDITIONAL INFORMATION. INVESTMENT ADVISER -- BRIDGES INVESTMENT COUNSEL, INC., 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114, ACTS AS MANAGER AND INVESTMENT ADVISER UNDER A CONTRACT WITH THE FUND. IN ADDITION TO FURNISHING CONTINUING INVESTMENT SUPERVISION FOR THE FUND, THE INVESTMENT ADVISER PROVIDES OFFICE SPACE, FACILITIES, EQUIPMENT, AND PERSONNEL FOR MANAGING THE ASSETS OF THE FUND. FURTHER, THE INVESTMENT ADVISER PAYS THE COSTS OF MAINTAINING THE REGISTRATION OF SHARES OF THE FUND UNDER FEDERAL SECURITIES LAWS AND UNDER THE LAWS OF THE STATE OF NEBRASKA AND IN ANY OTHER STATE IF SUCH REGISTRATIONS SHOULD BE MADE AT A FUTURE DATE. BRIDGES INVESTMENT COUNSEL, INC. IS REGISTERED AS AN INVESTMENT ADVISER WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE INVESTMENT ADVISERS ACT OF 1940. THE FIRM AND ITS PREDECESSORS HAVE ACTED CONTINUOUSLY AS PROFESSIONAL INVESTMENT ADVISERS AND MANAGERS SINCE EARLY 1945. PORTFOLIO INVESTMENT SECURITIES ADVICE IS RENDERED TO INDIVIDUALS, PERSONAL TRUSTS, PENSION AND PROFIT SHARING ACCOUNTS, IRA ROLLOVERS, CHARITABLE ORGANIZATIONS AND FOUNDATIONS, CORPORATIONS AND OTHER ACCOUNT CLASSIFICATIONS. ASSETS UNDER MANAGEMENT AS OF THE LAST QUARTER OF 1997 WERE IN EXCESS OF $800 MILLION. BRIDGES INVESTMENT COUNSEL, INC. ALSO PROVIDES HOURLY CONSULTING ADVICE ABOUT A NUMBER OF ALTERNATIVE INVESTMENT MATTERS ON A LIMITED BASIS. HOURLY CONSULTING SERVICES ARE ALSO AVAILABLE FOR NON-PORTFOLIO SECURITIES MATTERS SUCH AS ESTATE AND FINANCIAL PLANNING AND GENERAL BUSINESS ADMINISTRATION PROJECTS. BRIDGES INVESTMENT COUNSEL, INC. HAS A MANAGEMENT AGREEMENT TO OPERATE PROVIDENT TRUST COMPANY, AN ENTERPRISE THAT WAS RESPONSIBLE FOR $354 MILLION IN TRUST CUSTOMER ASSETS AT DECEMBER 31, 1997. INVESTMENT SELECTIONS MADE BY BRIDGES INVESTMENT COUNSEL, INC. FOR THE FUND ARE PREDICATED UPON RESEARCH INTO GENERAL ECONOMIC TRENDS, STUDIES OF FINANCIAL MARKETS, AND INDUSTRY AND COMPANY ANALYSES. THE FIRM OBTAINS ITS SECURITY ANALYSIS INFORMATION FROM SEVERAL FINANCIAL RESEARCH ORGANIZATIONS WHICH RESTRICT THE RELEASE OF THEIR REPORTS PRIMARILY TO INSTITUTIONAL USERS SUCH AS BANKS, INSURANCE COMPANIES, INVESTMENT COUNSELORS, AND TRUST COMPANIES. UNDER A CONTRACT WITH THE FUND, BRIDGES INVESTMENT COUNSEL, INC. FURNISHES CONTINUOUS INVESTMENT SUPERVISION TO THE FUND, AND, FOR ITS SERVICES, IS ENTITLED TO RECEIVE A QUARTERLY FEE OF 1/8 OF 1% OF THE AVERAGE NET ASSET VALUE OF THE FUND, AS DETERMINED BY APPRAISALS AT THE CLOSE OF EACH MONTH IN THE Bridges Investment Fund, Inc. -10- April 28, 1998 Prospectus -- Part A QUARTERLY PERIOD. THIS TOTAL ANNUAL FEE OF 1/2 OF 1% OF THE FUND'S NET ASSETS AS DETERMINED ABOVE IS THE ONLY COMPENSATION RECEIVED BY BRIDGES INVESTMENT COUNSEL, INC. FROM THE FUND. THE FUND PAID $170,328 TO BRIDGES INVESTMENT COUNSEL, INC. FOR ITS SERVICES AS INVESTMENT ADVISER DURING THE FISCAL YEAR ENDING DECEMBER 31, 1997. THE ANNUAL REPORT OF THE FUND FOR 1997 INCLUDES ELEVEN PAGES OF TEXT, TABULAR AND GRAPHIC INFORMATION THAT REPORTS THE NAMES, TITLES, YEARS OF SERVICE, AND PRIMARY RESPONSIBILITIES OF THE PERSONS EMPLOYED BY BRIDGES INVESTMENT COUNSEL, INC. WHO ARE PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY MANAGEMENT OF THE FUND'S PORTFOLIO. IN ADDITION, THE DISCLOSURE IN THE ANNUAL REPORT OF THE FUND FOR 1997 DISCUSSES FACTORS, INCLUDING RELEVANT MARKET CONDITIONS AND THE INVESTMENT STRATEGIES AND TECHNIQUES PURSUED BY BRIDGES INVESTMENT COUNSEL, INC., THAT MATERIALLY AFFECTED THE PERFORMANCE OF THE REGISTRANT DURING THE MOST RECENTLY COMPLETED FISCAL YEAR. A LINE GRAPH IS PROVIDED THAT COMPARES THE INITIAL ACCOUNT VALUE AND SUBSEQUENT ACCOUNT VALUES AT THE END OF EACH OF THE MOST RECENTLY COMPLETED TEN FISCAL YEARS OF THE REGISTRANT, ASSUMING A $10,000 INVESTMENT IN THE FUND AT THE BEGINNING OF THE FIRST FISCAL YEAR, TO THE SAME INVESTMENT OVER THE SAME PERIODS IN AN APPROPRIATE BROAD-BASED SECURITIES MARKET INDEX. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE ONE, FIVE, AND TEN-YEAR PERIODS ENDED ON THE LAST DAY OF THE MOST RECENT FISCAL YEAR ACCOMPANY THE LINE GRAPH. THE PAST PERFORMANCE SHOWN THEREON IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ALL OF THESE ITEMS OF INFORMATION ARE INCLUDED IN A SECTION OF THE ANNUAL REPORT DESIGNATED AS A SHAREHOLDER COMMUNICATION WITH THE TITLE MANAGEMENT'S DISCUSSION AND ANALYSIS. THIS DISCUSSION IS FOUND AT THE BACK OF THE ANNUAL REPORT ON THE PAGES DESIGNATED AS MD&A 1-11. EACH PERSON WHO OBTAINS AN EFFECTIVE PROSPECTUS OF THE FUND MUST RECEIVE FROM REPRESENTATIVES OF THE FUND AN ANNUAL REPORT THAT INCLUDES THE MANAGEMENT DISCUSSION AND ANALYSIS FOR THE MOST RECENTLY COMPLETED FISCAL YEAR. PLEASE REFER TO PAGES 24-25 FOR A DESCRIPTION OF THE RESPONSIBILITIES AND EXPERIENCE OF THE FUND'S PORTFOLIO MANAGERS. CUSTODIAN -- FIRST NATIONAL BANK OF OMAHA, NEBRASKA, ONE FIRST NATIONAL CENTER, 1620 DODGE STREET, OMAHA, NEBRASKA, ACTS AS CUSTODIAN FOR THE FUND. THE BANK HOLDS ALL SECURITIES AND CASH OF THE FUND, RECEIVES AND PAYS FOR SECURITIES PURCHASED UPON DELIVERY OF THE ASSETS, DELIVERS AGAINST PAYMENT FROM BROKERS FOR SECURITIES SOLD, RECEIVES AND COLLECTS INCOME FROM INVESTMENTS. Bridges Investment Fund -11- April 28, 1998 Prospectus -- Part A THE BANK DOES NOT EXERCISE ANY SUPERVISORY FUNCTION IN MANAGEMENT MATTERS SUCH AS THE PURCHASE AND SALE OF PORTFOLIO SECURITIES. PLEASE REFER TO PAGE 25. DIVIDEND DISBURSING AND TRANSFER AGENT -- BRIDGES INVESTOR SERVICES, INC., 8401 WEST DODGE ROAD, OMAHA, NEBRASKA, ACTS AS DIVIDEND DISBURSING AND TRANSFER AGENT FOR THE FUND. SERVICES HANDLES THE TRANSACTIONS FOR ALL CAPITAL STOCK ISSUED BY THE FUND AND FOR ALL REDEMPTIONS OF FUND SHARES. SERVICES PROCESSES ALL REINVESTMENT AND SCHEDULED INVESTMENT TRANSACTIONS AS DESCRIBED LATER IN THIS PROSPECTUS. SERVICES IS RESPONSIBLE FOR ISSUING FORM 1099 INFORMATION TO SHAREHOLDERS EACH YEAR. EXPENSES -- THE FUND PAYS THE CHARGES OF THE CUSTODIAN, DIVIDEND DISBURSING AND TRANSFER AGENT, THE FEES OF THE AUDITORS AND LEGAL COUNSEL, AND THE FEES OF THE INVESTMENT ADVISER AS DESCRIBED EARLIER. THE FUND ALSO INCURS OTHER EXPENSES SUCH AS BOOKKEEPING, PUBLICATION OF NOTICES AND REPORTS TO SHAREHOLDERS, PRINTING AND MAILING OF STOCK CERTIFICATES, AND MISCELLANEOUS TAXES. HOWEVER, TOTAL ANNUAL EXPENSES OF THE FUND, EXCLUSIVE OF TAXES BUT INCLUDING FEES PAID TO THE INVESTMENT ADVISER, ARE LIMITED TO 1 1/2% OF AVERAGE NET ASSETS. BRIDGES INVESTMENT COUNSEL, INC. AGREES TO REIMBURSE THE FUND FOR EXPENDITURES IN EXCESS OF SUCH AMOUNT. DURING 1997, THERE WERE NO REIMBURSED EXPENSES PAID UNDER THIS CONTRACT ARRANGEMENT AND EXPENSE LIMITATION. COMPLETE INFORMATION ON EXPENSES OF THE FUND IN 1997 CAN BE FOUND IN THE STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997, SHOWN ON PAGE 30 OF THE STATEMENT OF ADDITIONAL INFORMATION. THE RATIO OF OPERATING EXPENSES TO AVERAGE NET ASSETS WAS 0.81% FOR THE FUND IN 1997. THE EXPENSES PAID BY THE FUND, EXPRESSED IN TERMS OF A PERCENTAGE OF AVERAGE NET ASSETS, CALCULATED MONTHLY, FOR 1997, ARE IDENTIFIED IN THE TABLE BELOW: EXPENSES PAID BY THE FUND PERCENT OF AVG. NET ASSETS TYPE OF EXPENSES NAME OF PAYEE(S) 1. INVESTMENT ADVISORY FEES BRIDGES INV. COUNSEL, INC. 0.50% 2. DISTRIBUTION EXPENSES NONE 0.00% 3. SHAREHOLDER SERV. EXP. BRIDGES INV. SERVICES, INC. 0.03% 4. OTHER EXPENSES FIRST NATIONAL BANK OF 0.28% OMAHA, OMAHA, NEBRASKA, ARTHUR ANDERSEN LLP, ICI MUTUAL INS. CO. AND OTHERS 5. TOTAL EXPENSES 0.81% BROKERAGE --THE FUND DOES NOT FOLLOW A PRACTICE OF PAYING BROKERAGE COMMISSIONS TO ANY BROKER (A) WHICH IS AN AFFILIATED PERSON OF THE FUND, OR (B) Bridges Investment Fund, Inc. 12 April 28, 1998 Prospectus -- Part A WHICH IS AN AFFILIATED PERSON OF SUCH PERSON, OR (C) AN AFFILIATED ENTITY WHICH IS AN AFFILIATED PERSON OF THE FUND, ITS INVESTMENT ADVISER, OR OTHER PERSON. THE FUND MAY PLACE BROKERAGE COMMISSIONS FOR GOODWILL, FROM TIME TO TIME, THAT COULD RECOGNIZE APPRECIATION FOR REFERRING INVESTORS TO THE FUND AND OTHER FACTORS OF AN INTANGIBLE BUT POSITIVE NATURE. DURING 1997, THERE WERE NO BROKERAGE COMMISSIONS ATTRIBUTED TO THE GOODWILL FACTOR. CAPITAL STOCK AND OTHER SECURITIES STRUCTURE -- THE CAPITAL STRUCTURE OF THE FUND CONSISTED OF 3,000,000 AUTHORIZED SHARES WITH A PAR VALUE OF ONE DOLLAR PER SHARE AS OF DECEMBER 31, 1997, WITH 2,005,454 SHARES ISSUED TO THAT DATE. THE SHARES HAVE EQUAL RIGHTS AS TO VOTING, REDEMPTION, DIVIDENDS, AND LIQUIDATION, WITH CUMULATIVE VOTING FOR THE ELECTION OF DIRECTORS. THE SHARES ARE REDEEMABLE ON WRITTEN DEMAND OF THE HOLDER AND ARE TRANSFERABLE. THE SHARES HAVE NO PREEMPTIVE OR CONVERSION RIGHTS AND ARE NOT SUBJECT TO ASSESSMENT. FRACTIONAL SHARES HAVE THE SAME RIGHTS PROPORTIONATELY AS FULL SHARES, EXCEPT THEY DO NOT CARRY THE RIGHT TO VOTE. SHARES REDEEMED BY THE FUND CANNOT BE REISSUED, AND THE FUND'S AUTHORIZED CAPITAL STOCK SHALL BE DEEMED TO BE REDUCED BY THE AMOUNT OF THE SHARES REDEEMED. AT DECEMBER 31, 1997, 742,636 SHARES OF THE FUND HAD BEEN REDEEMED SINCE INCEPTION OF THE FUND IN 1963. THE NET SHARES OF CAPITAL STOCK OUTSTANDING WERE 1,262,818 ON DECEMBER 31, 1997. CONTROL -- AS OF JANUARY 31, 1998, NO INDIVIDUAL OR GROUP OF INDIVIDUALS THROUGH BENEFICIAL OWNERSHIP OF SHARES IS IN CONTROL OF THE FUND. FOR THE PURPOSE OF THIS DISCLOSURE, CONTROL IS DEFINED AS THE OWNERSHIP OF 25% OF THE VOTING SECURITIES BY ONE OR MORE RELATED PARTIES. RIGHTS -- THE RIGHTS OF HOLDERS OF CAPITAL STOCK MAY NOT BE MODIFIED EXCEPT BY A VOTE OF A MAJORITY OF THE OWNERS OF THE OUTSTANDING SHARES OF SUCH STOCK. OTHER CLASSES OF SECURITIES -- THE FUND DOES NOT HAVE ANY OTHER CLASSES OF SECURITIES THAN CAPITAL STOCK. Bridges Investment Fund, Inc. -13- April 28, 1998 Prospectus -- Part A INQUIRIES -- SHAREHOLDER INQUIRIES FOR INFORMATION OF ASSISTANCE IN HANDLING ADMINISTRATIVE MATTERS SHOULD BE DIRECTED TO MRS. NANCY K. DODGE, TREASURER, BRIDGES INVESTMENT FUND, INC., 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114. MRS. DODGE MAY ALSO BE REACHED BY TELEPHONE AT 1-402-397-4701 X 229. DIVIDEND POLICY -- THE FUND WILL DISTRIBUTE TO SHAREHOLDERS SUBSTANTIALLY ALL OF THE NET INCOME AND NET CAPITAL GAINS, IF ANY, REALIZED FROM THE SALE OF SECURITIES. DIVIDENDS WILL BE PAID ON OR ABOUT THE 25TH DAY OF JANUARY, APRIL, JULY, AND OCTOBER. SHAREHOLDERS WILL BE ADVISED AS TO THE SOURCE OR SOURCES OF EACH DISTRIBUTION. A YEAR-END PAYMENT OF CAPITAL GAINS, IF ANY AMOUNTS ARE EARNED BETWEEN NOVEMBER 1 AND OCTOBER 31 IN ANY GIVEN YEAR, WILL BE PAID ON OR BEFORE DECEMBER 31ST TO MEET A SPECIAL REQUIREMENT OF THE TAX REFORM ACT OF 1986. THE FUND MUST DECLARE A DIVIDEND AMOUNT PAYABLE BEFORE JANUARY 31 OF THE NEXT YEAR ON DECEMBER 31 IN ORDER TO REMIT AT LEAST 98% OF THE NET INVESTMENT INCOME FOR THE CALENDAR YEAR TO COMPLY WITH THE PROVISIONS OF THE 1986 ACT. THE INVESTMENT RETURN WILL DEPEND UPON AND VARY WITH CHANGES IN INTEREST RATES, DIVIDEND YIELDS, INVESTMENT SELECTIONS OF THE FUND, AND MANY OTHER UNPREDICTABLE FACTORS. FEDERAL TAXATION -- THE FUND HAS COMPLIED WITH THE SPECIAL PROVISION OF THE INTERNAL REVENUE CODE WHICH PERTAIN TO INVESTMENT COMPANIES SO IT WILL BE RELIEVED OF PAYMENT OF FEDERAL INCOME TAXES ON AMOUNTS DISTRIBUTED TO SHAREHOLDERS. THE FUND INTENDS TO CONTINUE TO COMPLY WITH SUCH PROVISIONS OF THE INTERNAL REVENUE CODE. SHAREHOLDERS ARE SUBJECT TO FEDERAL INCOME TAX ON DISTRIBUTION OF INVESTMENT INCOME AND ON SHORT-TERM CAPITAL GAINS WHICH ARE TREATED AS ORDINARY INCOME. HOWEVER, PAYMENTS DESIGNATED AS CAPITAL GAIN DISTRIBUTIONS (DEFINED AS THE EXCESS OF NET LONG-TERM CAPITAL GAINS OVER NET SHORT-TERM CAPITAL LOSSES) ARE TAXABLE TO THE SHAREHOLDERS AS LONG-TERM CAPITAL GAINS IRRESPECTIVE OF THE LENGTH OF TIME A SHAREHOLDER HAS HELD HIS STOCK IN THE FUND. THE FUND WILL BE REQUIRED TO WITHHOLD 31% OF DIVIDEND DISTRIBUTIONS FOR PAYMENT OF FEDERAL INCOME TAXES FOR A SHAREHOLDER, UNLESS THE FUND RECEIVES A FORM W-9 ELECTION TO REQUEST THAT THE 31% AMOUNT NOT BE WITHHELD. THE FORM W-9, ALSO KNOWN AS BACK-UP WITHHOLDING, WILL BE SUPPLIED IN A SEPARATE DOCUMENT TO NEW SHAREHOLDERS BY BRIDGES INVESTOR SERVICES, INC. AT THE TIME OF INITIAL SUBSCRIPTION TO SHARES OF THE FUND. THE SHAREHOLDER WILL BE REQUIRED TO PROVIDE CERTAIN PERTINENT INFORMATION ON THE FORM W-9, INCLUDING THE APPROPRIATE SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER. Bridges Investment Fund, Inc -14- April 28, 1998 Prospectus -- Part A SHAREHOLDERS WHO ARE TAX-EXEMPT ENTITIES WITH RESPECT TO FEDERAL AND STATE INCOME TAXES WILL NOT BE SUBJECT TO TAX ON THE INCOME AND CAPITAL GAINS DISTRIBUTIONS FROM THE FUND. THE FUND, THROUGH AN ANNUAL TAX INFORMATION LETTER AND QUARTERLY SHAREHOLDER REPORTS, WILL INFORM THE INVESTORS OF THE AMOUNT AND GENERIC NATURE OF SUCH INCOME AND CAPITAL GAINS. BRIDGES INVESTOR SERVICES, INC., THROUGH THE ANNUAL FORM 1099 OR ITS SUBSTITUTE EQUIVALENT, WILL PROVIDE A REPORT FOR EACH INDIVIDUAL ACCOUNT WITHIN AN APPROPRIATE TIME FRAME AFTER THE CLOSE OF THE FUND'S FISCAL YEAR. SECURITIES OFFERED -- THE FUND OFFERS ONLY SHARES OF CAPITAL STOCK. THERE ARE NO OTHER SECURITIES TO BE DESCRIBED IN THIS PROSPECTUS. PURCHASE OF SECURITIES BEING OFFERED NET ASSET VALUE -- SHARES OF THE FUND ARE SOLD DIRECTLY TO INVESTORS BY THE FUND AT THE NEXT DETERMINED NET ASSET VALUE. THE NET ASSET VALUE OF A SHARE OF THE FUND AT ANY SPECIFIC TIME IS OBTAINED BY DIVIDING THE VALUE OF THE NET ASSETS OF THE FUND BY THE TOTAL NUMBER OF SHARES OUTSTANDING AT SUCH TIME. THE CALCULATION OF NET ASSET VALUE INCLUDES THE DAILY ACCRUAL OF INCOME AND EXPENSES. EXPENSES ARE ESTIMATED AT A DAILY ACCRUAL RATE, AND THIS DAILY ACCRUAL RATE IS ADJUSTED TO COSTS ON A MONTHLY OR QUARTERLY BASIS IF THE DAILY ACCRUAL RATE IS ABOVE OR BELOW ACTUAL COSTS WHEN SUCH COSTS BECOME KNOWN. SECURITIES TRADED ON STOCK EXCHANGES WILL ORDINARILY BE VALUED ON THE BASIS OF THE LAST SALES PRICE ON THE DATE OF VALUATION, OR LACKING ANY SALES, AT THE CLOSING BID ON SUCH DAY ON THE PRINCIPAL TRADING EXCHANGE OR MARKET. OTHER SECURITIES WILL BE VALUED AT THE CLOSING BID PRICE. SHORT-TERM SECURITIES SUCH AS TREASURY BILLS WITH UNDER A 60-DAY MATURITY ARE VALUED AT THE PURCHASE PRICE, AND THE INCOME FROM THE DISCOUNT IS REFLECTED AS ACCRUED INCOME ON A DAILY BASIS. HOWEVER, IF THE BOARD OF DIRECTORS DETERMINES THAT SUCH METHODS OF VALUATION DO NOT PROPERLY REFLECT THE TRUE MARKET VALUE AT SUCH TIME, IT MAY SUBSTITUTE SUCH OTHER METHOD AS, IN ITS JUDGMENT, MORE NEARLY REFLECTS SUCH TRUE MARKET VALUE, EXCEPT THAT IN NO CASE SHALL ITS ALTERNATE METHOD RESULT IN A PRICE BELOW THE CLOSING BID PRICE OR IN EXCESS OF THE CLOSING ASKED PRICE. SECURITIES AND OTHER ASSETS FOR WHICH NO MARKET QUOTATIONS ARE READILY AVAILABLE WILL BE VALUED AT THEIR FAIR VALUE AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS. SUBSCRIPTION ORDER FORM -- THE STOCK SUBSCRIPTION AND PLAN ORDER FORM WILL BE SENT WITH THIS PROSPECTUS, OR IT MAY BE OBTAINED FROM THE OFFICES OF THE FUND AT 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114. THE COMPLETED Bridges Investment Fund, Inc. -15- April 28, 1998 Prospectus -- Part A ORDER FORM AND CHECK PAYABLE TO THE FUND SHOULD BE SENT TO THE ABOVE ADDRESS. IF THE ORDER FORM IS RECEIVED PRIOR TO THE CLOSE OF THE NEW YORK STOCK EXCHANGE ON ANY DAY FROM MONDAY THROUGH FRIDAY ON WHICH THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE OF TRADING ON THAT DAY. IF THE ORDER FORM IS RECEIVED AFTER THE CLOSE OF THE NEW YORK STOCK EXCHANGE, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE OF TRADING UPON THE NEW YORK STOCK EXCHANGE ON THE NEXT SUCCEEDING DAY ON WHICH SUCH EXCHANGE IS OPEN FOR TRADING. ALL ORDER FORMS ARE SUBJECT TO ACCEPTANCE BY AUTHORIZED OFFICERS OF THE FUND IN OMAHA AND ARE NOT BINDING UNTIL SO ACCEPTED. IT IS THE POLICY OF THE FUND NOT TO ACCEPT ORDERS FOR STOCK UNDER CIRCUMSTANCES OR IN AMOUNTS CONSIDERED TO BE DISADVANTAGEOUS TO EXISTING SHAREHOLDERS. SHARES IN THE FUND MAY BE PURCHASED UNDER SEVERAL PLANS DESIGNED TO MEET THE NEEDS OF VARIOUS TYPES OF INVESTORS. UNSCHEDULED INVESTMENTS -- AN INVESTOR MAY PURCHASE SHARES OF THE FUND AT SUCH TIMES AND IN SUCH AMOUNTS AS HE DESIRES. HOWEVER, THE BOARD OF DIRECTORS OF THE FUND HAS ESTABLISHED A MINIMUM OF $500 FOR EACH UNSCHEDULED INVESTMENT IN SHARES OF THE FUND FOR INITIAL AND SUBSEQUENT COMMITMENTS. AN INVESTOR WHO WISHES TO BUY STOCK UNDER THIS INVESTMENT ALTERNATIVE SHOULD FILL OUT PART I OF THE STOCK SUBSCRIPTION AND PLAN ORDER FORM AND MAIL IT WITH A CHECK TO THE FUND. THE DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS, IF ANY, ON CAPITAL STOCK PURCHASED UNDER THIS PLAN WILL BE DISTRIBUTED TO THE INVESTOR. HOWEVER, IF THE INVESTOR DESIRES TO REINVEST HIS DIVIDENDS OR CAPITAL GAINS DISTRIBUTIONS, OR BOTH, HE SHOULD CONSIDER THE FUND'S REINVESTMENT OF CASH DISTRIBUTIONS PLAN. SHARES PURCHASED UNDER THIS PLAN ARE ENTERED ON THE STOCK TRANSFER RECORDS MAINTAINED BY BRIDGES INVESTOR SERVICES, INC. CERTIFICATES FOR FULL SHARES ARE DELIVERED TO THE INVESTOR UPON HIS DIRECTION OR REQUEST. FRACTIONAL SHARES ARE HELD ON THE BOOKS OF THE TRANSFER AGENT. THESE FRACTIONAL SHARES HAVE FULL DIVIDEND AND REDEMPTION RIGHTS, BUT THE FRACTIONAL SHARES DO NOT HAVE VOTING RIGHTS. REINVESTMENT OF CASH DISTRIBUTIONS PLAN -- FOR THE CONVENIENCE OF UNSCHEDULED INVESTORS WHO DESIRE TO HAVE THEIR DIVIDENDS OR CAPITAL GAINS DISTRIBUTIONS, OR BOTH, REINVESTED IN ADDITIONAL SHARES, ARRANGEMENTS HAVE BEEN MADE WITH BRIDGES INVESTOR SERVICES, INC. TO ACT AS THEIR AGENT TO MAKE SUCH REINVESTMENTS. THE INVESTOR SHOULD FILL IN PART II OF THE STOCK SUBSCRIPTION AND PLAN ORDER FORM AND SEND IT TO THE FUND. Bridges Investment Fund, Inc. -16- April 28, 1998 Prospectus -- Part A CERTIFICATES FOR SHARES PURCHASED UNDER THIS PLAN ARE NOT ISSUED, BUT ARE ENTERED ON THE STOCK TRANSFER RECORDS KEPT BY BRIDGES INVESTOR SERVICES, INC. THESE SHARES CARRY FULL RIGHTS AS TO VOTING, REDEMPTION, AND DIVIDENDS, EXCEPT THAT FRACTIONAL SHARES CARRY NO VOTING RIGHTS. CERTIFICATES FOR FULL SHARES WILL BE DELIVERED TO THE INVESTOR IF THEY ARE REQUESTED. AN INVESTOR STARTING A REINVESTMENT OF CASH DISTRIBUTIONS PLAN MAY TURN IN CERTIFICATES FOR SHARES ALREADY OWNED, AND, THEREAFTER, BRIDGES INVESTOR SERVICES, INC. WILL HOLD SUCH SHARES IN THE PLAN ACCOUNT. THE INVESTOR MAY TERMINATE THIS PLAN AT ANY TIME WITHOUT PENALTY, AND BRIDGES INVESTOR SERVICES, INC. WILL FORWARD TO HIM CERTIFICATES FOR HIS SHARES AND A CHECK FOR THE REDEMPTION PRICE OF ANY FRACTIONAL SHARE. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS, IF ANY, WILL BE PAID THEREAFTER TO THE INVESTOR IN CASH AS AN UNSCHEDULED INVESTOR. FOR ACTING AS THE INVESTOR'S AGENT IN REINVESTING CASH DISTRIBUTIONS, BRIDGES INVESTOR SERVICES, INC. DEDUCTS A SERVICE CHARGE OF $1.05 FOR EACH REINVESTMENT, SUCH CHARGE BEING DEDUCTED BEFORE THE REINVESTMENT IS MADE. A REINVESTMENT OF A COMBINED DIVIDEND AND CAPITAL GAINS DISTRIBUTION WILL BE CONSIDERED AS ONE REINVESTMENT. REINVESTMENT OF CASH DISTRIBUTIONS WILL BE MADE AT THE NET ASSET VALUE PER SHARE WHICH IS IN EFFECT ON THE DIVIDEND PAYMENT DATE. SCHEDULED INVESTMENTS PLAN -- INVESTORS WISHING TO PURCHASE SHARES OF THE FUND AT REGULAR INTERVALS MAY DO SO THROUGH THE FUND'S SCHEDULED INVESTMENTS PLAN. BRIDGES INVESTOR SERVICES, INC. WILL ACCEPT PERIODIC PAYMENTS FROM THE INVESTOR AND WILL BUY SHARES OF THE FUND ON HIS BEHALF. THE USEFULNESS OF THIS SCHEDULED INVESTMENTS PLAN IS TO ASSIST THE INVESTOR IN ORGANIZING REGULAR PAYMENTS OF UNIFORM AMOUNTS TO THE FUND TO BUILD HIS POSITION IN THE FUND OVER A LONG PERIOD OF TIME. TO START SUCH A PLAN, THE INVESTOR FILLS OUT PART III OF THE STOCK SUBSCRIPTION AND PLAN ORDER FORM AND MAILS IT WITH HIS INITIAL QUALIFICATION INVESTMENT TO THE FUND. THE INVESTOR'S INITIAL QUALIFICATION INVESTMENT MUST BE AT LEAST $500. HOWEVER, IF THE INVESTOR ALREADY OWNS SHARES OF THE FUND WITH A CURRENT MINIMUM NET ASSET VALUE OF AT LEAST $500, HE MAY REQUEST A RECLASSIFICATION OF THESE SHARES TO A SCHEDULED INVESTMENT PLAN WITH THE ORDER FORM AS HIS INITIAL QUALIFICATION INVESTMENT FOR THE PLAN. THE INVESTOR MUST SPECIFY ON THE ORDER FORM WHETHER HE INTENDS TO MAKE MONTHLY, BI-MONTHLY, OR QUARTERLY PAYMENTS AND THE AMOUNT OF HIS PAYMENTS. HE MAY OMIT A PAYMENT OR SEND MORE OR LESS THAN THE SPECIFIED AMOUNT SO LONG AS Bridges Investment Fund, Inc. 17 April 28, 1998 Prospectus -- Part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ridges Investment Fund, Inc. -18- April 28, 1998 Prospectus -- Part A INVESTORS MAY CHOOSE A MONEY PURCHASE PENSION PLAN, A PROFIT SHARING PLAN WHICH INCLUDES A SALARY REDUCTION ARRANGEMENT UNDER SECTION 401(K) OF THE CODE WITHIN THE STANDARD RETIREMENT PLAN, INCLUDING A SIMPLE MODEL AMENDMENT FOR EMPLOYERS WITH LESS THAN 100 EMPLOYEES. THE MASTER PLAN INCLUDES A STANDARD CUSTODIAL AGREEMENT (AS AMENDED AND RESTATED AS OF JANUARY 1, 1989) UNDER WHICH U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, WILL ACT AS CUSTODIAN. BRIDGES INVESTOR SERVICES, INC. WILL INVEST ALL CONTRIBUTIONS TO THE PLAN IN THE SHARES OF THE FUND AT NET ASSET VALUE, INVEST ALL DIVIDENDS AND CASH DISTRIBUTIONS IN SHARES OF THE FUND AT NET ASSET VALUE (LESS A $1.05 REINVESTMENT FEE PER PAYMENT), AND RECEIVE ON BEHALF OF THE CUSTODIAN SERVICE FEES CHARGEABLE TO THE PARTICIPANT ACCOUNTS IN THE PLAN OR THE EMPLOYER SPONSORING THE PLAN AS FOLLOWS: . ACCEPTANCE FEE: $5.00 FOR EACH PERSON PARTICIPATING IN THE PLAN; . ANNUAL MAINTENANCE FEE: $8.00 PER YEAR FOR EACH PERSON WHO IS A PARTICIPANT DURING ANY PART OF THE PLAN YEAR, INCLUDING PARTICIPANTS RECEIVING PERIODIC DISTRIBUTIONS UNDER THE PLAN AND INCLUDING ANY OWNER- EMPLOYEE WHOSE ACCOUNT IS BEING HELD BY THE CUSTODIAN AFTER TERMINATION OF THE PLAN AND BEFORE DISTRIBUTION; . TERMINATION FEE: $8.00 PER PARTICIPANT ON THE TERMINATION OF THE PLAN OR ON THE INITIAL WITHDRAWAL FROM SUCH PARTICIPANT'S ACCOUNT; . PERIODIC CASH DISTRIBUTION: $1.75 FOR EACH PAYMENT; . REINVESTMENT OF CASH DISTRIBUTIONS (DIVIDEND AND CAPITAL GAINS PAYMENTS FROM THE SHARES OF THE FUND): $1.05 FOR EACH REINVESTMENT. THE FOREGOING CHARGES MAY BE DEDUCTED BY THE CUSTODIAN FROM EMPLOYER CONTRIBUTIONS, DIVIDENDS OR CAPITAL GAINS DISTRIBUTIONS, PERIODIC CASH DISTRIBUTIONS, AND TERMINATION REMITTANCES BEFORE INVESTMENTS OR SEPARATION PAYMENTS ARE MADE. EXTRAORDINARY SERVICES RESULTING FROM UNUSUAL ADMINISTRATIVE RESPONSIBILITIES NOT CONTEMPLATED BY THE ABOVE SCHEDULE WILL BE SUBJECT TO SUCH ADDITIONAL CHARGES AS WILL REASONABLY COMPENSATE THE CUSTODIAN FOR THE ACTIONS AND RESPONSIBILITIES INVOLVED THAT WILL BE DESCRIBED ON A SPECIFIC BILLING STATEMENT. THE ACCEPTANCE FEE AND FIRST ANNUAL MAINTENANCE FEE FOR EACH PLAN PARTICIPANT MAY BE DEDUCTED BY THE CUSTODIAN FROM THE INITIAL CONTRIBUTION Bridges Investment Fund, Inc. -19- April 28, 1998 Prospectus -- Part A PAYMENT WHEN THE PLAN IS ESTABLISHED. SUBSEQUENT FEES ARE DEDUCTED FROM CONTRIBUTION PAYMENTS IN ANY GIVEN YEAR TO THE EXTENT CONTRIBUTIONS ARE MADE AND OTHERWISE ARE PAID BY LIQUIDATION OF ASSETS FROM A PARTICIPANT'S ACCOUNT. TO THE EXTENT ASSETS OF PARTICIPANT ACCOUNTS ARE INSUFFICIENT TO PAY FEES OF THE CUSTODIAN OR OTHER EXPENSES OF THE PLAN, THE STANDARD CUSTODIAL AGREEMENT PROVIDES THAT SUCH EXPENSES WILL BE CHARGED TO THE EMPLOYER. THE FEES FOR THE FOREGOING ARE SUBJECT TO ADJUSTMENT FROM TIME TO TIME BY WRITTEN AGREEMENT BETWEEN THE CUSTODIAN AND THE EMPLOYER. IN ADDITION, THE CUSTODIAN IS ENTITLED TO REIMBURSEMENT FOR CERTAIN EXPENSES AND TAXES, INCLUDING SECURITIES TRANSFER TAXES. THE CUSTODIAN MAY RESIGN OR BE REMOVED, AND A SUCCESSOR CUSTODIAN MAY BE APPOINTED. IF AN INVESTOR DESIRES TO APPOINT A DIFFERENT BANK AS CUSTODIAN, HE MAY MAKE HIS OWN FEE ARRANGEMENTS WITH THE BANK OF HIS CHOICE. FOR FURTHER DETAILS, SEE THE FORM OF STANDARD RETIREMENT PLAN NO. 001, PROFIT SHARING, AND NO. 002, MONEY PURCHASE PENSION, AND THEIR RELATED STANDARD CUSTODIAL AGREEMENTS, COPIES OF WHICH MAY BE OBTAINED FROM THE FUND'S OFFICE AT THE ADDRESS SHOWN ON THE COVER OF THIS PROSPECTUS. THE AMENDED DOCUMENTS AS OF JANUARY 1, 1989, WERE FILED WITH THE INTERNAL REVENUE SERVICE FOR APPROVAL AS PROTOTYPE MASTER PLANS IN DECEMBER, 1989. THE IRS HAS ASSIGNED QUALIFIED SERIAL NUMBERS TO THESE PLANS. IN UNDERTAKING SUCH A RETIREMENT PLAN INVOLVING INVESTMENTS OVER A PERIOD OF YEARS, IT IS IMPORTANT FOR THE INDIVIDUAL TO CONSIDER HIS NEEDS AND WHETHER OR NOT THE INVESTMENT OBJECTIVES OF THE FUND, DESCRIBED IN THIS PROSPECTUS, ARE LIKELY TO FULFILL THEM. AN INVESTOR WHO CONTEMPLATES ESTABLISHMENT OF SUCH A PLAN SHOULD CONSULT WITH HIS ATTORNEY AND/OR HIS PUBLIC ACCOUNTANT. THE PROTOTYPE STANDARDIZED PROFIT SHARING PLAN WITH CODA KNOWN IN OUR FUND AS STANDARD RETIREMENT PLAN NO. 001 (AS AMENDED AND RESTATED AS OF JANUARY 1, 1989) PROFIT SHARING WITH A SALARY REDUCTION ARRANGEMENT UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE RECEIVED APPROVAL FROM THE INTERNAL REVENUE SERVICE ON JULY 31, 1990. THIS PLAN NO. 001 IS IDENTIFIED BY LETTER SERIAL NO: D249067A. THE PROTOTYPE STANDARDIZED MONEY PURCHASE PENSION PLAN DESCRIBED BY OUR FUND AS THE STANDARD RETIREMENT PLAN NO. 002 (AS AMENDED AND RESTATED AS OF JANUARY 1, 1989) MONEY PURCHASE PENSION RECEIVED APPROVAL FROM THE INTERNAL REVENUE SERVICE ON JULY 31, 1990. THIS PLAN NO. 002 IS IDENTIFIED BY LETTER SERIAL NO: D249068A. BOTH PLANS HAVE INCORPORATED MODEL AMENDMENTS PUBLISHED BY THE INTERNAL REVENUE SERVICE WHICH ADOPT ALL CHANGES REQUIRED BY THE TAX LAWS SINCE THE PLANS WERE RESTATED. Bridges Investment Fund, Inc. -20- April 28, 1998 Prospectus -- Part A INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNT PROTOTYPE AN INVESTOR, REFERRED TO AS A DEPOSITOR IN THIS SECTION OF THE PROSPECTUS, MAY WISH TO PURCHASE SHARES OF BRIDGES INVESTMENT FUND, INC. IN CONJUNCTION WITH THE RETIREMENT BENEFITS PROVIDED BY THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. THERE IS AVAILABLE THROUGH BRIDGES INVESTMENT FUND, INC. A PROTOTYPE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT WITH APPLICATION FORM, CONTRIBUTION FORM, AND DISCLOSURE STATEMENT. THE CUSTODIAN AGREEMENT PROVIDES THAT U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, WILL FURNISH CUSTODIAL SERVICES AS REQUIRED BY SUCH ACT FOR FEES CHARGEABLE TO THE DEPOSITOR AS FOLLOWS: . ACCEPTANCE FEE $5.00 PAYABLE ON ESTABLISHMENT OF THE ACCOUNT. . ANNUAL MAINTENANCE FEE $8.00 PER YEAR UNTIL WITHDRAWALS FROM THE ACCOUNT ARE BEGUN BY THE DEPOSITOR OR HIS BENEFICIARY. . TERMINATION FEE $8.00, PAYABLE ON THE TERMINATION OF THE PLAN OR ON THE INITIAL WITHDRAWAL FROM THE ACCOUNT. . PERIODIC CASH DISTRIBUTION, $1.75 FOR EACH PAYMENT. . INVESTMENT OF CASH DISTRIBUTIONS AS DEFINED IN THIS PROSPECTUS, $1.05 FOR EACH REINVESTMENT. EXTRAORDINARY SERVICES RESULTING FROM UNUSUAL ADMINISTRATIVE RESPONSIBILITIES NOT CONTEMPLATED BY THE ABOVE SCHEDULE WILL BE SUBJECT TO SUCH ADDITIONAL CHARGES AS WILL REASONABLY COMPENSATE THE CUSTODIAN FOR THE SERVICES INVOLVED. THE DEPOSITOR OR THE CUSTODIAN SHALL HAVE THE RIGHT TO TERMINATE THE ACCOUNT UPON 60 DAYS' NOTICE TO THE OTHER PARTY. IN THE EVENT OF SUCH TERMINATION, THE CUSTODIAN SHALL MAKE DISTRIBUTION OF THE ACCOUNT TO THE DEPOSITOR OR TO ANOTHER QUALIFIED PLAN OR SUCCESSOR CUSTODIAN DESIGNATED BY THE DEPOSITOR. THE FUND'S INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT PROTOTYPE PERMITS A MAXIMUM ANNUAL CONTRIBUTION OF $2,000 OR 100% OF THE DEPOSITOR'S ANNUAL COMPENSATION FOR PERSONAL SERVICES, WHICHEVER IS LESS. IF AN INVESTOR HAS A NON-WORKING SPOUSE, AN ADDITIONAL ANNUAL CONTRIBUTION OF $2,000 IS PERMITTED TO A SEPARATE IRA MAINTAINED BY SUCH NON-WORKING SPOUSE FOR A TOTAL CONTRIBUTION OF $4,000. UNDER THE PROTOTYPE, THE ANNUAL CONTRIBUTION MAY BE DEDUCTIBLE UNDER CERTAIN CONDITIONS, AND EARNINGS, IF ANY, ACCUMULATE TAX-FREE UNTIL DISTRIBUTION AFTER AGE 59 1/2. NORMALLY, DISTRIBUTIONS FROM THE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT PRIOR TO AGE 59 Bridges Investment Fund, Inc. -21- April 28, 1998 Prospectus -- Part A 1/2, UNLESS SPECIFICALLY EXEMPTED BY LAW, WILL RESULT IN TAX PENALTIES IN ADDITION TO BEING INCLUDED IN TAXABLE INCOME. IN ADDITION, THERE IS A PENALTY ON EXCESS CONTRIBUTIONS AND A PENALTY ON INSUFFICIENT PAYOUTS AFTER AGE 70 1/2. TO ESTABLISH AN INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT, THE DEPOSITOR IS PROVIDED A COPY OF THE FUND'S CURRENT PROSPECTUS, THREE COPIES OF THE INDIVIDUAL RETIREMENT ACCOUNT CUSTODIAL AGREEMENT, THREE COPIES OF THE APPLICATION FORM, THREE COPIES OF THE CONTRIBUTION FORM, AND THREE COPIES OF THE DISCLOSURE STATEMENT. THE DEPOSITOR EXECUTES AND FORWARDS TO U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, THREE COPIES OF THE APPLICATION FORM AND THREE COPIES OF THE CONTRIBUTION FORM. U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, WILL RETURN ONE ACKNOWLEDGED COPY OF EACH FORM TO THE DEPOSITOR AND THE FUND FOR RETENTION BY EACH PARTY. THE DEPOSITOR WILL SIGN AND SEND ONE COPY OF THE DISCLOSURE STATEMENT TO THE FUND AT ITS OFFICE. THE DEPOSITOR SHOULD RETAIN THE OTHER EXECUTED COPY FOR A PERMANENT RECORD IN HIS FILES. THE CUSTODIAL AGREEMENT SETS FORTH PROVISIONS GOVERNING THE DEPOSITOR'S ACCOUNT, EXPRESSES THE PROHIBITED ACTIONS UNDER THE LAW, SETS FORTH THE PROVISIONS OF DISTRIBUTION OF PAYMENTS, PROVIDES THE RULES FOR REPORTS AND OTHER INFORMATION, OUTLINES THE CUSTODIAN'S RESPONSIBILITIES, AND PROVIDES FOR AMENDMENTS TO AND TERMINATION OF THE CUSTODIAL ACCOUNT. THE APPLICATION FORM ESTABLISHES THE CUSTODIAL ACCOUNT, COLLECTS PERTINENT INFORMATION TO GOVERN THE CUSTODIAL ACCOUNT, AND RECITES THE APPLICABLE FEES TO BE CHARGED BY U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA. BY EXECUTING THE APPLICATION FORM, THE DEPOSITOR ACKNOWLEDGES RECEIPT OF THE PROSPECTUS. THE CONTRIBUTION FORM GOVERNS THE METHOD AND TYPE OF CONTRIBUTION TO THE CUSTODIAL ACCOUNT. THE DISCLOSURE STATEMENT COVERS APPROPRIATE NOTICES OF APPLICABLE PROVISIONS OF THE INTERNAL REVENUE CODE, THE FEES FOR THE ACCOUNT, AND OTHER IMPORTANT INFORMATION CONCERNING THE OPERATION OF THE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT. PRIOR TO EXECUTING THESE DOCUMENTS, THE DEPOSITOR SHOULD READ ALL THE DOCUMENTS CONSTITUTING THE PROTOTYPE. THE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT SPONSORED BY THE FUND WAS APPROVED AS A PROTOTYPE PLAN PURSUANT TO AN OPINION LETTER RECEIVED FROM THE INTERNAL REVENUE SERVICE DATED JUNE 11, 1993. THE APPROVAL LETTER CARRIES THE SERIAL NO: D111476C. U.S. BANK NATIONAL ASSOCIATION, OMAHA, NEBRASKA, MEETS THE APPLICABLE LEGAL REQUIREMENTS TO ACT AS THE CUSTODIAN UNDER THE PROTOTYPE. Bridges Investment Fund, Inc. -22- April 28, 1998 Prospectus -- Part A THE PROVISIONS TO REDEEM SHARES OF THE FUND, AS DESCRIBED IN THIS PROSPECTUS, ARE NOT CHANGED BY THE TERMS OF THE PROTOTYPE. THE DEPOSITOR MAY REVOKE HIS CUSTODIAN ACCOUNT WITHIN AT LEAST SEVEN DAYS OF THE DATE OF ESTABLISHMENT AS PROVIDED IN ARTICLE VI C OF THE CUSTODIAN AGREEMENT, PARAGRAPH 9 OF THE APPLICATION FORM, AND IN PARAGRAPH 3 (I) OF THE DISCLOSURE STATEMENT. A SHAREHOLDER MAY WISH TO CONSIDER A REDEMPTION OF THE FUND SHARES AS AN ALTERNATIVE TO REVOKING HIS CUSTODIAN ACCOUNT. IN UNDERTAKING SUCH AN INDIVIDUAL RETIREMENT CUSTODIAN ACCOUNT AS PROVIDED BY THIS PROSPECTUS AND RELATED DOCUMENTS, INVOLVING INVESTMENTS OVER A PERIOD OF YEARS, IT IS IMPORTANT FOR THE INDIVIDUAL TO CONSIDER HIS OR HER NEEDS AND WHETHER OR NOT THE INVESTMENT OBJECTIVES OF THE FUND, DESCRIBED IN THIS PROSPECTUS, ARE LIKELY TO FULFILL THEM. THE INDIVIDUAL WHO CONTEMPLATES THE ESTABLISHMENT OF THE PROTOTYPE SHOULD CONSULT WITH HIS OR HER ATTORNEY OR TAX ADVISER REGARDING APPROPRIATE ADVICE AS TO THE ACTIONS TO BE TAKEN. PARTICULAR ATTENTION SHOULD BE DIRECTED TO CHANGES IN THE DEDUCTIBILITY OF CONTRIBUTIONS TO IRAS FOR TAX YEARS COMMENCING JANUARY 1, 1987, OR LATER FOR THOSE PERSONS WHO ARE COVERED BY EMPLOYER SPONSORED DEFERRED BENEFIT PLANS AND OTHER FACTORS RELATED TO ANNUAL REPORTED TAX AMOUNTS OF SINGLE AND JOINT INCOME. REFERENCE TO IRS ANNOUNCEMENT 86-121 SHOULD ALSO BE HELPFUL, COPIES OF WHICH MAY BE OBTAINED FROM THE FUND'S OFFICE. ADDITIONAL CONSIDERATION SHOULD BE GIVEN BY THE INDIVIDUAL WHO CONTEMPLATES THE ESTABLISHMENT OF A PROTOTYPE TO NEW CHOICES AND OPPORTUNITIES THAT WERE CREATED IN 1997. 1)THE SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT, AS DESCRIBED IN SECTION 408(P) OF THE INTERNAL REVENUE CODE MAY BE ESTABLISHED IN CONNECTION WITH A SALARY REDUCTION AGREEMENT. UNDER THIS FUNDING CHOICE, IT IS POSSIBLE TO SET ASIDE MORE THAN THE $2,000 PER YEAR CONTRIBUTION LIMIT FOR THE TRADITIONAL IRA ACCOUNT. DEPENDING UPON THE CIRCUMSTANCES INVOLVED, IT MAY BE POSSIBLE TO RECEIVE EMPLOYER MATCHING CONTRIBUTIONS IN THE ACCOUNT. THIS SIMPLE PLAN IS IDENTIFIED WITH THE INTERNAL REVENUE SERVICE THROUGH LETTER SERIAL NO. D111476C. 2) THE ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT OPPORTUNITY FOR INVESTMENT WAS CREATED BY THE TAXPAYER RELIEF ACT OF 1997. THE LEGISLATION PROVIDES FOR A NON-DEDUCTIBLE ANNUAL CONTRIBUTION OF $2,000 FOR A WORKING SPOUSE AND A $2,000 CONTRIBUTION FOR A NON-WORKING SPOUSE. BENEFITS PAID FROM THE ROTH IRA ARE TO BE NON-TAXABLE TO THE DEPOSITOR UPON HIS OR HER RETIREMENT. THE ROTH INDIVIDUAL RETIREMENT CUSTODIAL Bridges Investment Fund, Inc. -23- April 28, 1998 Prospectus -- Part A ACCOUNT MAY BE ESTABLISHED THROUGH THE EXECUTION OF THE FORM 5305-RA ISSUED UNDER SECTION 408A OF THE INTERNAL REVENUE CODE IN CONJUNCTION WITH THE STANDARD, TRADITIONAL IRA CUSTODIAL ACCOUNT OF THE FUND AS DESCRIBED ON PAGES 20 HEREIN. DEPOSITORS MAY ESTABLISH AND MAINTAIN BOTH THE "TRADITIONAL" IRA AND THE "ROTH" IRA ACCOUNTS, PROVIDED THE ASSETS ARE ALWAYS MAINTAINED IN SEPARATELY SEGREGATED ACCOUNTS AND PROVIDED FURTHER THAT THE TITLES THEREIN ACCURATELY REFLECT THE DISTINCTIONS BETWEEN THE TWO TYPES OF FUNDING PERMITTED BY STATUTE. DEPOSITORS WILL STILL HAVE A $2,000 ANNUAL LIMIT PER WORKING SPOUSE AND NON-WORKING SPOUSE, SO THAT A CHOICE MUST BE MADE BETWEEN THE CONTRIBUTION AMOUNTS THAT WOULD REPRESENT AN INCOME EXCLUSION AND THE CONTRIBUTION AMOUNTS THAT WOULD BE TAXABLE UNDERNEATH THE $2,000 ANNUAL CEILING. 3) AN INDIVIDUAL MAY DEPOSIT UP TO $500 A YEAR INTO AN EDUCATION INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT (INTERNAL REVENUE SERVICE FORM 5305-EA) FOR A CHILD UNDER AGE 18, PROVIDED THE TOTAL CONTRIBUTIONS FOR THE CHILD DURING THE YEAR DO NOT EXCEED $500. THE CONTRIBUTOR MAY BE A PARENT, RELATIVE, FRIEND, OR OTHER PERSON, INCLUDING THE CHILD HIM/HERSELF. tHE ABILITY TO CONTRIBUTE TO AN EDUCATION IRA PHASES OUT AT MODIFIED ADJUSTED GROSS INCOME LEVELS BETWEEN $95,000 AND $110,000 FOR UNMARRIED INDIVIDUALS AND BETWEEN $150,000 AND $160,000 FOR JOINT RETURN FILERS. DISTRIBUTIONS FROM AN EDUCATION IRA ARE TAX-FREE UP TO THE AMOUNT OF QUALIFIED HIGHER EDUCATION EXPENSES FOR A YEAR. QUALIFIED HIGHER EDUCATION EXPENSES INCLUDE TUITION, FEES, BOOKS, SUPPLIES, AND, IF THE BENEFICIARY IS AT LEAST A HALF-TIME STUDENT, ROOM AND BOARD. THE FUND'S OFFICE MAINTAINS A SUPPLY OF SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT FORMS AND AN INVENTORY FOR THE FORM 5305-RA FOR THE ROTH IRA, AND FORM 5305-EA FOR THE EDUCATION IRA TO ASSIST DEPOSITORS TO ESTABLISH THESE TYPES OF ACCOUNTS. OTHER DISCLOSURES -- THE FUND HAS NO PRINCIPAL OR OTHER UNDERWRITERS. THE FUND HAS NO DISTRIBUTION EXPENSES. ALL SUCH COSTS ARE PAID FOR BY BRIDGES INVESTMENT COUNSEL, INC. IF A SHAREHOLDER MAKES A MISCELLANEOUS PAYMENT TO SUBSCRIBE FOR SHARES IN THE FUND, THE PAYMENT WILL BE TREATED AS AN UNSCHEDULED INVESTMENT, EXCEPT THAT AMOUNTS LESS THAN $500 WILL HAVE A $1.05 FEE DEDUCTED AND PAID TO BRIDGES INVESTOR SERVICES, INC. NO SALES LOADS -- BRIDGES INVESTMENT FUND, INC. SHARES ARE PURCHASED DIRECTLY FROM THE FUND AT THE NEXT DETERMINED NET ASSET VALUE WITHOUT THE DEDUCTION OF ANY SALES LOAD OR SELLING COMMISSIONS. WITH THE EXCEPTION OF THE SERVICE CHARGES OUTLINED ABOVE ON PLAN ACCOUNTS, EVERY DOLLAR INVESTED BY A SHAREHOLDER IS ATTRIBUTED TO HIS PURCHASE OF SHARES. Bridges Investment Fund, Inc. -24- Aprkl 28, 1998 Prospectus -- Part A REDEMPTION OF SHARES A SHAREHOLDER MAY AT ANY TIME, EXCEPT AS SPECIFIED BELOW, REQUIRE THE FUND TO REDEEM HIS STOCK BY DELIVERING HIS PROPERLY ENDORSED STOCK CERTIFICATES, AS MORE FULLY DESCRIBED IN THE PARAGRAPH BELOW, TO THE FUND AT 256 DURHAM PLAZA, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. A SHAREHOLDER IN A PLAN ACCOUNT MUST SEND THE FUND A WRITTEN NOTIFICATION WHICH REQUESTS THAT PART OR ALL OF HIS STOCK BE REDEEMED. THE REDEMPTION PRICE IS THE NEXT DETERMINED NET ASSET VALUE THEREOF. THE REDEMPTION PRICE MAY BE ABOVE OR BELOW THE INVESTOR'S COST, DEPENDING ON THE MARKET VALUE OF THE FUND'S PORTFOLIO SECURITIES AT THE TIME OF THE REDEMPTION. IF A CERTIFICATE OR A WRITTEN NOTIFICATION IS RECEIVED IN GOOD FORM PRIOR TO THE CLOSE OF THE NEW YORK STOCK EXCHANGE ON ANY DAY FROM MONDAY THROUGH FRIDAY ON WHICH THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE OF TRADING ON THAT DAY. IF A CERTIFICATE OR A WRITTEN NOTIFICATION IS RECEIVED IN GOOD FORM AT ANY OTHER TIME, THE NET ASSET VALUE IS DETERMINED AS OF THE CLOSE OF TRADING UPON THE NEW YORK STOCK EXCHANGE ON THE NEXT SUCCEEDING DAY ON WHICH SUCH EXCHANGE IS OPEN FOR TRADING. ALL CERTIFICATES PRESENTED FOR REDEMPTION OR REQUESTS FOR LIQUIDATION OF UNCERTIFICATED SHARES HELD UNDER PLAN ACCOUNTS MUST BE DULY ENDORSED OR ACCOMPANIED BY A DULY EXECUTED SEPARATE ASSIGNMENT, WITH SIGNATURE(S) GUARANTEED BY EITHER A FINANCIAL OR BANKING INSTITUTION WHOSE DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY A BROKERAGE FIRM WHICH IS A MEMBER OF ANY EXCHANGE AS DEFINED IN THE FIDELITY INSURING BOND CARRIED BY THE FUND WITH ICI MUTUAL INSURANCE COMPANY. THE SIGNATURE(S) SHOULD BE IN THE NAME(S) OF THE STOCKHOLDER AS SHOWN ON THE STOCK TRANSFER RECORDS WHICH ARE MAINTAINED FOR THE FUND BY BRIDGES INVESTOR SERVICES, INC. THE SIGNATURE GUARANTEE MUST BE OBTAINED IN EACH INSTANCE OF A REDEMPTION FOR BOTH CERTIFICATED AND UNCERTIFICATED SHARES. THE FUND AND ITS TRANSFER AGENT WILL ALSO RECOGNIZE GUARANTORS THAT PARTICIPATE IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM (STAMP) THAT BEGAN AUGUST 24, 1992. PAYMENT FOR SHARES REDEEMED WILL BE MADE WITHIN SEVEN DAYS AFTER REQUEST IN GOOD ORDER FOR REDEMPTION AND TENDER OF SHARES HAS BEEN MADE. REDEMPTION PRIVILEGES AND PAYMENTS MAY, HOWEVER, BE SUSPENDED DURING PERIODS WHEN THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN WEEKENDS AND HOLIDAY CLOSINGS) OR TRADING THEREON IS RESTRICTED, OR FOR ANY PERIOD DURING WHICH AN EMERGENCY EXISTS AS A RESULT OF WHICH (A) DISPOSAL BY THE FUND OF SECURITIES OWNED BY IT IS NOT REASONABLY PRACTICABLE, OR (B) IT IS NOT REASONABLY PRACTICABLE FOR THE Bridges Investment Fund, Inc. -25- April 28, 1998 Prospectus -- Part A FUND TO FAIRLY DETERMINE THE VALUE OF ITS NET ASSETS, OR FOR SUCH OTHER PERIODS AS THE SECURITIES AND EXCHANGE COMMISSION MAY BY ORDER PERMIT FOR THE PROTECTION OF THE SECURITY HOLDERS OF THE FUND. THE SECURITIES AND EXCHANGE COMMISSION SHALL DETERMINE WHEN TRADING ON THE NEW YORK STOCK EXCHANGE IS RESTRICTED AND WHEN AN EMERGENCY EXISTS. THE FUND HAS NO PROCEDURE WHEREBY A SHAREHOLDER CAN SELL HIS SHARES TO THE FUND THROUGH A BROKER DEALER. THE FUND IS NOT PERMITTED TO REDEEM SHARES INVOLUNTARILY IN ACCOUNTS BELOW A CERTAIN NUMBER OR VALUE OF SHARES. THE FUND WILL HONOR ALL REQUESTS FOR REDEMPTION PROPERLY DOCUMENTED IRRESPECTIVE OF THE LENGTH OF TIME THE SHAREHOLDER HAS MAINTAINED HIS OR HER ACCOUNT WITH THE FUND. PORTFOLIO MANAGERS THE FOLLOWING DISCLOSURES ARE MADE ABOUT THE NAME AND TITLE OF THE PERSON OR PERSONS EMPLOYED BY OR ASSOCIATED WITH THE FUND'S INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC., WHO ARE PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY MANAGEMENT OF THE FUND'S PORTFOLIO AS WELL AS THE LENGTH OF THEIR SERVICE AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS. MR. EDSON L. BRIDGES III, PRESIDENT OF THE FUND AND EXECUTIVE VICE PRESIDENT-INVESTMENTS OF BRIDGES INVESTMENT COUNSEL, INC. IS THE PERSON PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY MANAGEMENT OF THE FUND'S PORTFOLIO. MR. BRIDGES III HAS MORE THAN 13 YEARS' EXPERIENCE WITH THE FUND'S PORTFOLIO. MR. EDSON L. BRIDGES II, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE FUND, IS THE BACK-UP PERSON FOR THE DAY-TO-DAY OPERATION OF THE FUND'S PORTFOLIO. MR. BRIDGES II HAS MORE THAN 34 YEARS OF EXPERIENCE IN MANAGING THE FUND'S INVESTMENT PORTFOLIO. PENDING LEGAL PROCEEDINGS: NONE: NOTICE 1: PART B OF THIS FILING ENTITLED INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION CONTAINS SUPPLEMENTAL INFORMATION ON THE FUND ON THE FOLLOWING SUBJECTS: GENERAL INFORMATION AND HISTORY; INVESTMENT OBJECTIVES AND POLICIES; MANAGEMENT OF THE FUND; CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES; INVESTMENT ADVISORY AND OTHER SERVICES; BROKERAGE ALLOCATION AND OTHER PRACTICES; CAPITAL STOCK AND OTHER SECURITIES; PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED; TAX STATUS; AND FINANCIAL STATEMENTS. NOTICE 2: PART C OF THIS FILING ENTITLED OTHER INFORMATION EMBODIES OTHER ITEMS FOR A PROPER FILING OF THIS FUND WITH THE SECURITIES AND EXCHANGE COMMISSION, MANY OF WHICH ARE INCORPORATED BY REFERENCE BECAUSE THE SUBMISSION Bridges Investment Fund, Inc. -26- April 28, 1998 Prospectus -- Part A OF THE MATERIAL WAS COMPLETED IN PREVIOUS YEARS TO THE CURRENT FILING OF AMENDMENTS TO THE REQUIRED FORMS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940. NONETHELESS, PART C WILL CONTAIN: FINANCIAL STATEMENTS AND EXHIBITS; PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT; NUMBER OF HOLDERS OF SECURITIES; INDEMNIFICATION; BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER; PRINCIPAL UNDERWRITERS; LOCATION OF ACCOUNTS AND RECORDS; MANAGEMENT SERVICES; AND UNDERTAKINGS. NOTICE 3: AS A PROSPECTIVE INVESTOR OR A SHAREHOLDER, YOU MAY BE INTERESTED IN THIS INFORMATION. YOU MAY REQUEST PART B AND/OR PART C FROM THE FUND AT THE ADDRESS SHOWN ON THE COVER OF THIS PROSPECTUS. Bridges Investment Fund, Inc. 1 April 28, 1998 Statement -- Part B PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION PROSPECTUS BRIDGES INVESTMENT FUND, INC. CAPITAL STOCK April 28, 1998 8401 WEST DODGE ROAD OMAHA, NEBRASKA 68114 402-397-4700 SPECIAL NOTICES . THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. . THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF BRIDGES INVESTMENT FUND, INC. DATED APRIL 28, 1998. . OTHER INFORMATION, PART C, OF THE FILING DATED APRIL 28, 1998, BY BRIDGES INVESTMENT FUND, INC. WITH THE SECURITIES AND EXCHANGE COMMISSION MAY CONTAIN USEFUL MATERIAL FOR PROSPECTIVE INVESTORS AND SHAREHOLDERS. . A COPY OF THE PROSPECTUS OF BRIDGES INVESTMENT FUND, INC. AND PART C MAY BE OBTAINED FROM THE OFFICE OF THE FUND AT THE ADDRESS SHOWN ABOVE. . THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS APRIL 28, 1998. Bridges Investment Fund, Inc. -2- April 28, 1998 Statement -- Part B
TABLE OF CONTENTS LOCATION OF RELATED LOCATION DISCLOSURE INFO. PAGE NO. IN PROSPECTUS IN THIS PART A INFORMATION REQUIRED IN STATEMENT OF ADDL. INFO. PART B - COVER PAGE................................................1 - TABLE OF CONTENTS.........................................2 6 GENERAL INFORMATION AND HISTORY...........................3 6 INVESTMENT OBJECTIVES AND POLICIES.......................3-6 6 PRIMARY AND SECONDARY.................................3 - INVESTMENT AND POLICY RESTRICTIONS...................3-5 5 PORTFOLIO TURNOVER....................................5 8 MANAGEMENT OF THE FUND....................................6 - DIRECTORS AND OFFICERS..............................6-10 12 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES....11-14 9-12 INVESTMENT ADVISORY AND OTHER SERVICES...................14 - CONTROL PERSONS......................................14 - AFFILIATED PERSONS...................................14 9 ADVISORY ............................................14 11 EXPENSE LIMITATION.................................14-15 - SERVICES PERFORMED ON BEHALF OF FUND.................15 SUPPLIED OR PAID FOR SUBSTANTIALLY BY INVESTMENT ADVISER 11 OTHER SERVICES.....................................15-16 11 BROKERAGE ALLOCATION AND OTHER PRACTICES...............16-17 12 CAPITAL STOCK AND OTHER SECURITIES.......................17 12 CLASSES..............................................17 CUMULATIVE VOTING....................................17 14 PURCHASE, REDEMPTION, AND PRICING OF SECURITIES..........18 BEING OFFERED - GENERAL INFORMATION...............................18 14 VALUATION.........................................18 SPECIMEN PRICE MAKE UP SHEET....................18,20 23 OTHER DISCLOSURES.................................18 13 TAX STATUS...............................................19 - UNDERWRITERS.............................................19 - CALCULATION OF PERFORMANCE DATA..........................19 - FINANCIAL STATEMENTS...................................21-36 REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.........21 SCHEDULE OF INVESTMENTS............................22-28 STATEMENT OF ASSETS AND LIABILITIES..................29 STATEMENT OF OPERATIONS..............................30 STATEMENTS OF CHANGES IN NET ASSETS..................31 NOTES TO FINANCIAL STATEMENTS......................32-36 Bridges Inestment Fund, Inc. -3- April 28, 1998 Statement -- Part B GENERAL INFORMATION AND HISTORY THE REGISTRANT HAS BEEN SOLELY IN THE BUSINESS OF AN OPEN-END, REGULATED INVESTMENT MANAGEMENT COMPANY SINCE INCEPTION ON JULY 1, 1963. THE FUND'S NAME HAS BEEN THE SAME THROUGHOUT ITS CORPORATE LIFE. FOR MORE INFORMATION, REFER TO PAGE 6 OF THE PROSPECTUS. INVESTMENT OBJECTIVES AND POLICIES PRIMARY AND SECONDARY -- THE PRIMARY INVESTMENT OBJECTIVE OF THE FUND IS LONG-TERM CAPITAL APPRECIATION. THE DEVELOPMENT OF A MODEST AMOUNT OF CURRENT INCOME IS A SECONDARY INVESTMENT OBJECTIVE OF THE FUND. COMMON STOCKS AND SECURITIES CONVERTIBLE INTO COMMON STOCKS WILL BE UTILIZED TO REACH THE CAPITAL GROWTH OBJECTIVE. BONDS, DEBENTURES, AND PREFERRED STOCKS ARE ACQUIRED OR HELD TO FULFILL THE MODEST INCOME OBJECTIVE. REFER TO PAGES 6-8 OF THE PROSPECTUS FOR A COMPLETE DISCUSSION OF THE INVESTMENT POLICY OBJECTIVES FOR THE FUND AND THE PRACTICES EMPLOYED TO ATTAIN THE GOALS SET FORTH HEREIN. INVESTMENT AND POLICY RESTRICTIONS -- THE ACTIVITIES OF THE FUND AND ITS INVESTMENT POLICIES ARE RESTRICTED AS SET FORTH IN THE FOLLOWING DISCUSSION. THESE RESTRICTIONS CANNOT BE CHANGED WITHOUT THE APPROVAL OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF THE FUND. THE FUND WILL NOT CONCENTRATE ITS INVESTMENTS IN A PARTICULAR INDUSTRY OR GROUP OF INDUSTRIES BY COMMITTING MORE THAN 25% OF TOTAL ASSETS TO SECURITIES IN ANY ONE INDUSTRY. WITH THE EXCEPTION OF INVESTMENTS IN U.S. GOVERNMENT SECURITIES, THE FUND WILL NOT MAKE INVESTMENTS WHICH WILL CAUSE MORE THAN 5% OF THE TOTAL VALUE OF ITS ASSETS (AT THE TIME OF PURCHASE) TO BE INVESTED IN THE SECURITIES OF ANY ONE ISSUER. FURTHERMORE, IN INITIAL OR SUBSEQUENT INVESTMENTS, THE FUND MAY NOT ACQUIRE MORE THAN 10% OF THE VOTING STOCK OF ANY ONE ISSUER, AND THE FUND MAY NOT ACQUIRE MORE THAN 10% OF ANY ONE CLASS OF THE OUTSTANDING SECURITIES OF ANY ONE ISSUER. FOR THE PURPOSES OF THIS RESTRICTION, ALL KINDS OF SECURITIES OF A COMPANY REPRESENTING DEBT ARE CONSIDERED AS A SINGLE CLASS IRRESPECTIVE OF THEIR DIFFERENCES, AND ALL KINDS OF PREFERRED STOCK OF A COMPANY ARE CONSIDERED A SINGLE CLASS IRRESPECTIVE OF THEIR DIFFERENCES. THE FUND WILL NOT BORROW MONEY OR PLEDGE OR MORTGAGE ITS ASSETS, EXCEPT AS A TEMPORARY MEASURE, IN WHICH EVENT TOTAL BORROWINGS SHALL NOT EXCEED 10% OF THE VALUE OF ITS TOTAL ASSETS. THE OPTION TO BORROW MONEY AS A TEMPORARY MEASURE HAS NEVER BEEN EXERCISED. IN ADDITION, THE FUND MAY NOT PURCHASE SECURITIES ON MARGIN OR MAKE SHORT SALES. THE FUND WILL NOT MAKE INVESTMENTS WHICH WILL CAUSE MORE THAN 5% OF THE VALUE OF ITS TOTAL ASSETS (AT THE TIME OF PURCHASE) TO BE INVESTED IN SECURITIES OF ISSUERS WHICH HAVE A RECORD OF LESS THAN THREE YEARS' OPERATION. Bridges Investment Fund, Inc. -4- April 28, 1998 Statement -- Part B THE FUND WILL NOT INVEST IN COMPANIES FOR THE PURPOSE OF EXERCISING CONTROL OR MANAGEMENT, AND THE FUND WILL NOT INVEST IN SECURITIES OF OTHER INVESTMENT COMPANIES EXCEPT BY PURCHASE IN OPEN MARKET, WHERE NO COMMISSION OR PROFIT TO A SPONSOR OR DEALER RESULTS FROM SUCH PURCHASE OTHER THAN THE CUSTOMARY BROKER'S COMMISSION, OR WHERE THE ACQUISITION IS PART OF A PLAN OF MERGER OR CONSOLIDATION. SUCH ACQUISITIONS, IF ANY, OF THE SECURITIES OF OTHER REGISTERED INVESTMENT COMPANIES SHALL BE UNLAWFUL FOR THE ACQUIRING COMPANY IF IMMEDIATELY AFTER SUCH PURCHASE OR ACQUISITION THE ACQUIRING COMPANY OWNS IN THE AGGREGATE: 1. MORE THAN 3 PER CENTUM OF THE OUTSTANDING VOTING STOCK OF ANOTHER INVESTMENT COMPANY; 2. SECURITIES ISSUED BY THE ACQUIRED COMPANY HAVING AN AGGREGATE VALUE IN EXCESS OF 5 PER CENTUM OF THE VALUE OF THE TOTAL ASSETS OF THE FUND; OR 3. SECURITIES ISSUED BY THE ACQUIRED COMPANY AND ALL OTHER INVESTMENT COMPANIES (OTHER THAN TREASURY STOCK OF THE ACQUIRING COMPANY) HAVING AN AGGREGATE VALUE IN EXCESS OF 10 PER CENTUM OF THE VALUE OF THE TOTAL ASSETS OF THE FUND. EACH INVESTMENT OF THE FUND WILL BE MADE WITH THE EXPECTATION THAT THE SECURITY ACQUIRED WILL BE HELD FOR THE LONG TERM. THE FUND WILL NOT PURCHASE SECURITIES WITH A VIEW TOWARDS RAPID TURNOVER FOR CAPITAL GAINS. HOWEVER, THE MANAGEMENT MAY SELL SECURITIES FOR SHORT TERM GAINS OR LOSSES IF NEW INFORMATION OR CHANGES IN MARKET CONDITIONS INDICATE SUCH SELLING ACTION IS ADVISABLE. THE FUND WILL NOT INVEST OUTSIDE OF THE AREA OF SECURITIES. IT WILL NOT PURCHASE OR SELL REAL ESTATE, COMMODITIES OR COMMODITY CONTRACTS. THE FUND WILL NOT MAKE LOANS TO OTHER PERSONS. (THE ACQUISITION OF A PORTION OF AN ISSUE OF PUBLICLY DISTRIBUTED BONDS, DEBENTURES, OR OTHER DEBT SECURITIES IS NOT TO BE CONSIDERED THE MAKING OF A LOAN.) THE FUND WILL NOT ENGAGE IN THE UNDERWRITING OF THE SECURITIES OF OTHER ISSUERS. THE FUND WILL NOT PURCHASE RESTRICTED OR NON-REGISTERED SECURITIES. THE FUND WILL NOT PURCHASE OR SELL PUT OR CALL OPTIONS, EXCEPT THE FUND MAY WRITE OR SELL CALL OPTIONS AGAINST SHARES HELD IN ITS SECURITIES PORTFOLIO ON Bridges Investment Fund, Inc. -5- April 28, 1998 Statement -- Part B THE AMERICAN STOCK EXCHANGE, INC., THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED, THE PACIFIC STOCK EXCHANGE INCORPORATED, AND THE PBW STOCK EXCHANGE, PROVIDED THAT ANY SUCH CALL OPTIONS WILL BE LIMITED TO SHARES OF COMMON STOCKS WHICH HAVE AN AGGREGATE MARKET VALUE OF LESS THAN 10% OF THE TOTAL VALUE OF THE FUND'S ASSETS AT THE TIME OF THE TRANSACTION, AND FURTHER PROVIDED THAT NOT MORE THAN ONE-HALF OF THE SHARES HELD IN ANY ONE ISSUER WILL BE ELIGIBLE FOR THE WRITING OF SUCH CALL OPTIONS. THE FUND MAY PURCHASE A CALL OPTION WITH TERMS IDENTICAL TO A CALL OPTION WHICH HAS BEEN PREVIOUSLY WRITTEN IN ORDER TO LIQUIDATE OR CLOSE AN EXISTING CALL OPTION POSITION. PRIOR TO DECEMBER 31, 1997, THE FUND HAD NOT EXERCISED ITS AUTHORITY TO WRITE A COVERED CALL OPTION. THE FUND MAY PURCHASE BONDS, DEBENTURES, AND PREFERRED STOCKS WHICH HAVE ONE OR MORE INTEREST OR DIVIDEND PAYMENTS IN ARREARS, BUT, NEVERTHELESS, OFFER PROSPECTS OF RESUMING THE PAYMENT OF THE ARREARAGE PLUS THE CURRENT INCOME RATE. SUCH SECURITIES MAY OFFER A SIGNIFICANT PRICE IMPROVEMENT FROM A DEPRESSED LEVEL, THEREBY CREATING A CAPITAL GAIN POTENTIAL SIMILAR TO THE ADVANCEMENT POSSIBLE FOR COMMON STOCK SELECTIONS. THE RISK OF OWNING THIS TYPE OF SECURITY IS THAT INCOME PAYMENTS WILL NOT BE RESUMED OR THAT THE PRINCIPAL WILL NEVER BE REPAID. FURTHER, THE FUND MAY ACQUIRE ISSUES, SOMETIMES KNOWN AS JUNK BONDS, WITH ABOVE AVERAGE YIELD AND BALANCE SHEET RISK. THE PURCHASE OF THIS LOWER GRADE OF SECURITIES WILL BE LIMITED TO 5% OF THE VALUE OF THE TOTAL ASSETS OF THE FUND. THIS PERMITTED INVESTMENT POLICY HAS SELDOM BEEN USED IN THE PAST HISTORY OF THE FUND, AND IT WOULD ONLY BE EMPLOYED IN AN EXCEPTIONALLY ATTRACTIVE CIRCUMSTANCE IN THE JUDGMENT OF THE INVESTMENT MANAGER. WITH RESPECT TO THE OWNERSHIP OF U.S. GOVERNMENT SECURITIES, THE FUND WILL INVEST PRIMARILY IN ISSUES OF THE TREASURY THAT ARE BACKED BY THE FULL FAITH AND CREDIT OF THE UNITED STATES OF AMERICA. THE FUND MAY PURCHASE BILLS, SHORT TERM; NOTES, INTERMEDIATE TERM; AND BONDS, LONG TERM INSTRUMENTS DEPENDING UPON THE ATTRACTIVENESS OF INTEREST RATES AND THE EXPECTED TRENDS OF THESE YIELDS IN THE FUTURE. PORTFOLIO TURNOVER -- IN THE TEN YEARS ENDING DECEMBER 31, 1997, THE PORTFOLIO TURNOVER RATE FOR THE FUND RANGED FROM A HIGH OF 31% IN 1988 TO A LOW OF 7% IN 1992 AND 1995. THE MEDIAN AVERAGE PORTFOLIO TURNOVER FOR THE PAST 10 YEARS WAS 10.5%. THE PORTFOLIO TURNOVER RATE IN 1997 WAS 8%. THE REGISTRANT HAS NO PLANS TO MATERIALLY CHANGE THE PORTFOLIO TURNOVER RATE FOR THE FUND FROM THE RANGE OF EXPERIENCE OF THE PAST AS JUST DESCRIBED; HOWEVER, PORTFOLIO RATES COULD INCREASE SIGNIFICANTLY IN ORDER TO RESPOND TO TURBULENT CONDITIONS IN THE SECURITIES MARKET. REFER TO PAGE 6 OF THE PROSPECTUS FOR DETAILED YEAR-TO-YEAR INFORMATION ON THE PORTFOLIO TURNOVER RATE. THE RATE OF PORTFOLIO TURNOVER SHALL BE CALCULATED BY DIVIDING (A) THE LESSER OF PURCHASES OR SALES OF PORTFOLIO SECURITIES FOR THE REPORTING PERIOD BY Bridges Investment Fund, Inc. -6- April 28, 1998 Statement -- Part B (B) THE MONTHLY AVERAGE OF THE VALUE OF THE PORTFOLIO SECURITIES OWNED BY THE REGISTRANT DURING THE REPORTING PERIOD. SUCH MONTHLY AVERAGE SHALL BE CALCULATED BY TOTALING THE MARKET VALUES OF THE PORTFOLIO SECURITIES AS OF THE BEGINNING AND END OF THE FIRST MONTH OF THE REPORTING PERIOD AND AS OF THE END OF EACH OF THE SUCCEEDING MONTHS IN THE PERIOD AND DIVIDING THE SUM BY THE NUMBER OF MONTHS IN THE PERIOD PLUS ONE. FOR PURPOSES OF THIS EXPLANATION, THERE SHALL BE EXCLUDED FROM BOTH THE NUMERATOR AND DENOMINATOR ALL SECURITIES, INCLUDING OPTIONS, WHOSE MATURITY OR EXPIRATION DATE AT THE TIME OF ACQUISITION WERE ONE YEAR OR LESS. ALL LONG-TERM SECURITIES, INCLUDING LONG-TERM U.S. GOVERNMENT SECURITIES, SHOULD BE INCLUDED. PURCHASES SHALL INCLUDE ANY CASH PAID UPON THE CONVERSION OF ONE PORTFOLIO SECURITY INTO ANOTHER. PURCHASES SHALL ALSO INCLUDE THE COST OF RIGHTS OR WARRANTS PURCHASED. SALES SHALL INCLUDE THE NET PROCEEDS FROM THE SALE OF RIGHTS OR WARRANTS. SALES SHALL ALSO INCLUDE THE NET PROCEEDS OF PORTFOLIO SECURITIES WHICH HAVE BEEN CALLED OR FOR WHICH PAYMENT HAS BEEN MADE THROUGH REDEMPTION OR MATURITY. THIS INFORMATION IS NOT GENERALLY AVAILABLE TO THE SHAREHOLDERS OR INTERESTED PUBLIC, BUT THE EXPLANATION ABOVE DETAILS THE MANNER IN WHICH THE PORTFOLIO TURNOVER RATE SHOWN ON PAGE 6 OF THE PROSPECTUS IS CALCULATED. IN GENERAL, PORTFOLIO TURNOVER RISES WHEN SECURITIES HELD NEED TO BE REPOSITIONED TO ADAPT THE FUND'S INVESTMENT POSITION TO NEW OPPORTUNITIES OR TO PROTECT AGAINST UNFORESEEN, ADVERSE MARKET CIRCUMSTANCES. MANAGEMENT OF THE FUND DIRECTORS AND OFFICERS -- THE BOARD OF DIRECTORS OF THE FUND IS RESPONSIBLE FOR THE MANAGEMENT OF THE BUSINESS AFFAIRS OF THE FUND. THE DAY-TO-DAY OPERATION OF THE FUND IS HANDLED BY THE OFFICERS WHO ARE CHOSEN BY, AND ACCOUNTABLE TO, THE BOARD OF DIRECTORS. THE OFFICERS HAVE AT THEIR DISPOSAL THE SERVICES OF THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. THIS FIRM IS OBLIGATED UNDER ITS INVESTMENT ADVISORY CONTRACT WITH THE FUND TO PERFORM ALL SERVICES NECESSARY IN CONNECTION WITH THE MANAGEMENT OF THE FUND. THE BUSINESS EXPERIENCE OF EACH OF THE OFFICERS AND DIRECTORS OF THE FUND AND OF THE INVESTMENT ADVISER DURING THE PAST FIVE YEARS IS AS FOLLOWS: FREDERICK N. BACKER, AGE 65, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. MR. BACKER IS CURRENTLY THE PRESIDENT OF JAT CORP., A PRIVATE INVESTMENT CONCERN THAT OPERATED A RESTAURANT FOR TWENTY-FIVE YEARS. HIS RESPONSIBILITY TO THIS CONCERN COMMENCED IN AUGUST, 1972. MR. BACKER IS AN INTERESTED PERSON MEMBER OF THE Bridges Investment Fund, Inc. -7- April 28, 1998 Statement -- Part B BOARD OF DIRECTORS OF THE FUND, WHICH IS DEFINED IN SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940. IN THE CONTEXT OF THIS PROSPECTUS, AN INTERESTED PERSON IS SOMEONE WHO HAS A MATERIAL BUSINESS OR PROFESSIONAL RELATIONSHIP WITH THE FUND'S INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. OR ITS PRINCIPAL OFFICERS. EDSON L. BRIDGES II, CFA, AGE 65, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, DIRECTOR OF THE FUND, AND MEMBER OF THE EXECUTIVE COMMITTEE AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. IN SEPTEMBER, 1959, MR. BRIDGES BECAME ASSOCIATED WITH THE PREDECESSOR FIRM TO BRIDGES INVESTMENT COUNSEL, INC., AND HE IS PRESENTLY THE PRESIDENT AND A DIRECTOR OF THAT FIRM. MR. BRIDGES IS AN AFFILIATED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. MR. BRIDGES WAS ELECTED A VICE PRESIDENT OF THE FUND ON APRIL 17, 1963, THEN PRESIDENT ON SEPTEMBER 28, 1970 -- A POSITION THAT HE HELD TO APRIL 11, 1997, WHEN HE WAS ELECTED TO HIS NEW RESPONSIBILITIES. EDSON L. BRIDGES III, CFA, AGE 39, PRESIDENT AND DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. MR. BRIDGES HAS BEEN A FULL-TIME MEMBER OF THE PROFESSIONAL STAFF OF BRIDGES INVESTMENT COUNSEL, INC. SINCE AUGUST, 1983, AND A PART-TIME MEMBER FROM JANUARY 1, 1983. MR. BRIDGES WAS ELECTED A VICE PRESIDENT OF THE FUND ON JUNE 28, 1985, EXECUTIVE VICE PRESIDENT ON APRIL 13, 1995, AND PRESIDENT ON APRIL 11, 1997. MR. BRIDGES IS AN AFFILIATED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. N. PHILLIPS DODGE, JR., AGE 61, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 8701 WEST DODGE ROAD, OMAHA, NEBRASKA. MR. DODGE IS PRESIDENT OF N. P. DODGE COMPANY, A LEADING COMMERCIAL AND RESIDENTIAL REAL ESTATE BROKERAGE CONCERN IN THE AREA OF OMAHA, NEBRASKA. MR. DODGE HAS HELD THIS POSITION SINCE JULY, 1978. MR. DODGE IS ALSO A PRINCIPAL OFFICER AND DIRECTOR OF A NUMBER OF SUBSIDIARY AND AFFILIATED COMPANIES IN THE PROPERTY MANAGEMENT, INSURANCE,AND REAL ESTATE SYNDICATION, AND HE IS A PUBLICLY ELECTED DIRECTOR OF THE OMAHA PUBLIC POWER DISTRICT. MR. DODGE IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. JOHN W. ESTABROOK, AGE 70, DIRECTOR OF THE FUND AND MEMBER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 10542 MULLEN ROAD, OMAHA, NEBRASKA. MR. ESTABROOK WAS THE CHIEF ADMINISTRATIVE OFFICER OF THE NEBRASKA METHODIST HOSPITAL IN OMAHA, NEBRASKA, FROM JUNE, 1959, TO DECEMBER, 1986. MR. ESTABROOK CONTINUED AS THE CHIEF EXECUTIVE OFFICER OF THE NEBRASKA METHODIST HEALTH SYSTEM, INC., WHICH OFFERS A VARIETY OF SERVICES TO OTHER HEALTH CARE PROVIDERS IN THE MIDWEST REGION, UNTIL AUGUST, 1992, WHEN HE RETIRED. MR. ESTABROOK IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS. Bridges Investment Fund, Inc. -8- April 28, 1998 Statement -- Part B JON D. HOFFMASTER, AGE 50, DIRECTOR OF THE FUND AND MEMBER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA. MR. HOFFMASTER IS A DIRECTOR OF AMERICAN BUSINESS INFORMATION IN OMAHA, NEBRASKA. FROM 1987 TO SEPTEMBER, 1991, MR. HOFFMASTER SERVED AS EXECUTIVE VICE PRESIDENT OF THE COMPANY. FROM SEPTEMBER, 1991, TO SEPTEMBER, 1993, MR. HOFFMASTER SERVED AS PRESIDENT AND CHIEF OPERATING OFFICER OF THE COMPANY. HE BECAME CHIEF FINANCIAL OFFICER IN JUNE, 1992, AND ASSUMED THE POSITION OF VICE CHAIRMAN OF THE BOARD IN SEPTEMBER, 1993. FROM 1980 TO 1987, MR. HOFFMASTER WAS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF FIRST NATIONAL BANK OF BELLEVUE, NEBRASKA. MR. HOFFMASTER IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. JOHN J. KORALESKI, AGE 48, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 1416 DODGE STREET, OMAHA, NEBRASKA. MR. KORALESKI IS EXECUTIVE VICE PRESIDENT-FINANCE OF THE UNION PACIFIC RAILROAD COMPANY HEADQUARTERED IN OMAHA, NEBRASKA. AS CHIEF FINANCIAL OFFICER OF THE RAILROAD, MR. KORALESKI HEADS AND MANAGES THE FINANCIAL PLANNING AND MANAGEMENT FUNCTIONS FOR THE RAILROAD, AND HE IS RESPONSIBLE FOR THE OPERATIONS OF THE COMPANY'S INFORMATION AND TELECOMMUNICATIONS TECHNOLOGIES. HE WAS APPOINTED TO HIS PRESENT POSITION IN SEPTEMBER, 1991. HE HAS SERVED THE UNION PACIFIC RAILROAD COMPANY IN VARIOUS CAPACITIES SINCE JUNE, 1972. ROGER A. KUPKA, AGE 68, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 2305 SOUTH 103RD STREET, OMAHA, NEBRASKA. MR. KUPKA IS THE RETIRED PRESIDENT AND CHIEF EXECUTIVE OF NEBRASKA BUILDERS PRODUCTS CO. OF OMAHA, NEBRASKA. HE HELD THIS POSITION FROM 1969 TO NOVEMBER, 1986. NEBRASKA BUILDERS PRODUCTS CO. SOLD OR DISTRIBUTED ADHESIVES, BRICK, CAULKING, INSULATION, ROOFING, SEALANTS, AND SPECIALTY PRODUCTS. SINCE AUGUST, 1992, MR. KUPKA HOLDS THE POSITION OF VICE CHAIRMAN OF THE BOARD OF DIRECTORS OF PSI GROUP, FORMERLY KNOWN AS DISCOUNT MAIL, INC., HEADQUARTERED IN OMAHA, NEBRASKA. MR. KUPKA ALSO SERVES AS PRESIDENT OF KUPKA, INC. AND PRESIDENT OF MICKLIN HOME IMPROVEMENT COMPANY. BOTH COMPANIES ARE LOCATED IN OMAHA, NEBRASKA. GARY L. PETERSEN, AGE 54, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE, 30 BISHOP SQUARE, LINCOLN, NEBRASKA. MR. PETERSEN IS THE RETIRED PRESIDENT OF PETERSEN MANUFACTURING CO. INC. OF DEWITT, NEBRASKA. MR. PETERSEN COMMENCED EMPLOYMENT WITH THAT COMPANY IN FEBRUARY, 1966, BECAME PRESIDENT IN MAY, 1979, AND RETIRED IN JUNE, 1985. PETERSEN MANUFACTURING CO. INC. PRODUCED A BROAD LINE OF HAND TOOLS FOR NATIONAL AND WORLDWIDE DISTRIBUTION UNDER THE BRAND NAMES VISE-GRIP, UNIBIT, PROSNIP, AND PUNCH PULLER. MR. PETERSEN IS AN INTERESTED PERSON MEMBER OF THE BOARD OF DIRECTORS OF THE FUND. Bridges Investment Fund, Inc. -9- April 28, 1998 Statement -- Part B ROY A. SMITH, AGE 64, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 5051 L STREET, OMAHA, NEBRASKA. MR. SMITH WAS PRESIDENT OF H. P. SMITH MOTORS, INC., A LEADING DEALERSHIP FOR THE FORD MOTOR CO., UNTIL ITS SALE IN 1997, AND HE IS CURRENTLY PRESIDENT OF OLD MILL TOYOTA INC. MR. SMITH IS A DIRECTOR OF THE MID CITY BANK OF OMAHA. L.B. THOMAS, AGE 61, DIRECTOR OF THE FUND AND MEMBER OF THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE FUND, 7813 PIERCE CIRCLE, OMAHA, NEBRASKA. MR. THOMAS RETIRED IN OCTOBER, 1996, FROM CONAGRA, INC. HE WAS SENIOR VICE PRESIDENT, RISK OFFICER, AND CORPORATE SECRETARY FOR CONAGRA, INC., WITH WORLD-WIDE OPERATIONS AND THE SECOND LARGEST MAJOR PROCESSOR OF FOOD PRODUCTS IN THE UNITED STATES, HEADQUARTERED IN OMAHA, NEBRASKA. HE WAS ALSO A MEMBER OF CONAGRA'S MANAGEMENT EXECUTIVE COMMITTEE. MR. THOMAS JOINED CONAGRA AS ASSISTANT TO THE TREASURER IN 1960. HE WAS NAMED ASSISTANT TREASURER IN 1996; VICE PRESIDENT, FINANCE IN 1969; VICE PRESIDENT, FINANCE AND TREASURER IN 1974; ADDED THE CORPORATE SECRETARY RESPONSIBILITY IN 1982; AND BECAME SENIOR VICE PRESIDENT IN 1991. DOUGLAS P. PERSON, AGE 40, VICE PRESIDENT OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA. MR. PERSON HAS BEEN A FULL-TIME MEMBER OF THE PROFESSIONAL STAFF OF BRIDGES INVESTMENT COUNSEL, INC. SINCE SEPTEMBER, 1985, AND HE IS CURRENTLY A VICE PRESIDENT OF THAT FIRM. PRIOR TO THAT TIME, MR. PERSON SERVED AS A LEGISLATIVE AIDE IN THE NEBRASKA STATE LEGISLATURE IN 1985. DURING 1984, MR. PERSON HELD THE POSITION OF TRUST MARKETING REPRESENTATIVE FOR THE FIRST NATIONAL BANK OF LINCOLN, LINCOLN, NEBRASKA. FROM JULY, 1982, THROUGH MARCH, 1984, MR. PERSON WAS A REGISTERED REPRESENTATIVE FOR SHEARSON/AMERICAN EXPRESS IN LINCOLN, NEBRASKA. MR. PERSON WAS ELECTED AN ASSISTANT VICE PRESIDENT OF THE FUND ON JANUARY 12, 1988, WITH THE APPOINTMENT BECOMING EFFECTIVE ON FEBRUARY 1, 1988. MARY ANN MASON, AGE 46, SECRETARY OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA, WAS EMPLOYED AS A STAFF SECRETARY OF BRIDGES INVESTMENT COUNSEL, INC. IN JUNE, 1981. SHE WAS APPOINTED CORPORATE SECRETARY FOR BRIDGES INVESTMENT COUNSEL, INC. IN 1987, AND WAS ELECTED ASSISTANT SECRETARY OF THE FUND ON APRIL 13, 1988. MRS. MASON BECAME SECRETARY OF THE FUND ON FEBRUARY 20, 1990. NANCY K. DODGE, AGE 35, TREASURER OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA WAS EMPLOYED BY BRIDGES INVESTMENT COUNSEL, INC. IN JANUARY, 1980, AS AN ENTRY LEVEL PERSON IN STAFF SERVICES AND ACCOUNTING. MRS. DODGE PROGRESSED THROUGH VARIOUS POSITIONS IN THE ACCOUNTING AREA TO BECOME MANAGER OF THAT DEPARTMENT OF THE FIRM IN 1986. DURING 1988, SHE ADVANCED TO THE POSITION OF EXECUTIVE ASSISTANT AND THEN ASSISTANT TO THE PRESIDENT IN 1992. MRS. DODGE Bridges Investment Fund, Inc. -10- April 28, 1998 Statement -- Part B WAS ELECTED ASSISTANT TREASURER OF THE FUND ON APRIL 11, 1986, AND SHE BECAME TREASURER OF THE FUND ON APRIL 12, 1991. KATHLEEN J. STRANIK, AGE 54, ASSISTANT SECRETARY OF THE FUND, 8401 WEST DODGE ROAD, OMAHA, NEBRASKA WAS EMPLOYED BY BRIDGES INVESTMENT COUNSEL, INC. AS A SECRETARY IN JANUARY, 1986. MRS. STRANIK HAS ASSUMED ADDITIONAL ADMINISTRATIVE RESPONSIBILITIES DURING HER CAREER WITH THE INVESTMENT ADVISER AND CURRENTLY HOLDS THE POSITION OF EXECUTIVE SECRETARY. MRS. STRANIK WAS ELECTED ASSISTANT SECRETARY OF THE FUND ON APRIL 13, 1995. THE BOARD OF DIRECTORS OF THE FUND HAS AN AUDIT COMMITTEE AND AN EXECUTIVE COMMITTEE. THE MEMBERS OF THESE COMMITTEES ARE APPOINTED ANNUALLY AT THE APRIL MEETING OF THE BOARD OF DIRECTORS. THE MEMBERS OF THE AUDIT COMMITTEE IN 1998 ARE: FREDERICK N. BACKER, JOHN W. ESTABROOK, JON D. HOFFMASTER, AND EDSON L. BRIDGES II, EX-OFFICIO. THE MEMBERS OF THE EXECUTIVE COMMITTEE IN 1998 ARE: FREDERICK N. BACKER, EDSON L. BRIDGES II, EDSON L. BRIDGES III, N. P. DODGE, JR., JOHN J. KORALESKI, ROGER A. KUPKA, GARY L. PETERSEN, ROY A. SMITH, AND L.B. THOMAS. THE EXECUTIVE COMMITTEE REVIEWS ALL CONTRACTS AND OTHER BUSINESS RELATIONSHIPS OF THE FUND. THE EXECUTIVE COMMITTEE WILL ACT ON BEHALF OF THE FULL BOARD OF DIRECTORS ON ANY MATTER REQUIRING ACTION PRIOR TO THE NEXT MEETING OF THE BOARD. THE EXECUTIVE COMMITTEE ALSO ACTS AS A NOMINATING COMMITTEE FOR REPLACEMENT OF RETIRING DIRECTORS. THE OFFICERS AND DIRECTORS OF THE FUND DO NOT RECEIVE ANY SALARIES OR FEES FROM THE FUND FOR THEIR SERVICES TO THE FUND IN SUCH CAPACITIES. HOWEVER, DURING 1997, THE DIRECTORS AS A GROUP RECEIVED $9,275.00 FROM BRIDGES INVESTMENT COUNSEL, INC. FOR COMPENSATION RELATED TO ATTENDANCE AT MEETINGS OF THE BOARD OF DIRECTORS, THE AUDIT COMMITTEE, AND THE EXECUTIVE COMMITTEE OF THE FUND. THE FOLLOWING AGGREGATE COMPENSATION IN EXCESS OF $60,000 PER COMPENSATED PERSON INFORMATION IS PROVIDED FOR ALL DIRECTORS OF THE FUND AND FOR EACH OF THE THREE HIGHEST PAID EXECUTIVE OFFICERS OR ANY AFFILIATED PERSON OF THE FUND FOR THE MOST RECENTLY COMPLETED FISCAL YEAR (1997): Bridges Investment Fund, Inc. -11- April 28, 1998 Statement -- Part B
COMPENSATION TABLE (1) (2) (3) (4) (5) TOTAL PENSION OR COMPENSATION AGGREGATE RETIREMENT ESTIMATED FROM REGISTRANT COMPENSATION BENEFITS ACCRUED ANNUAL AND FUND COMPLEX NAME OF PERSON, FROM AS PART BENEFITS UPON PAID TO DIRECTORS POSITION REGISTRANT OF FUND EXPENSES RETIREMENT THREE HIGHEST PAID EXECUTIVE OFFICERS: EDSON L. BRIDGES II NONE NONE NONE NONE CHAIRMAN AND CEO, AND DIRECTOR EDSON L. BRIDGES III NONE NONE NONE NONE PRESIDENT AND DIRECTOR DOUGLAS P. PERSON NONE NONE NONE NONE VICE PRESIDENT DIRECTORS OF THE FUND: FREDERICK N. BACKER NONE NONE NONE NONE N. P. DODGE, JR. NONE NONE NONE NONE JOHN W. ESTABROOK NONE NONE NONE NONE JON D. HOFFMASTER NONE NONE NONE NONE JOHN J. KORALESKI NONE NONE NONE NONE ROGER A. KUPKA NONE NONE NONE NONE GARY L. PETERSEN NONE NONE NONE NONE ROY A. SMITH NONE NONE NONE NONE L.B. THOMAS NONE NONE NONE NONE
THERE ARE NO MATERIAL PROVISIONS OF ANY PENSION, RETIREMENT, OR OTHER PLAN OR ARRANGEMENT OTHER THAN THE DISCLOSURE ARRANGEMENTS MADE IN THE TABLE ABOVE THAT REQUIRE DISCLOSURE HEREIN. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES NO PERSON OR SHAREHOLDER HAS CONTROL OF BRIDGES INVESTMENT FUND, INC. CONTROL IS DEFINED TO MEAN THE BENEFICIAL OWNERSHIP, EITHER DIRECTLY OR INDIRECTLY, OF MORE THAN 25% OF THE VOTING SECURITIES OF THE FUND. THERE IS ONE GROUP OF FAMILY MEMBERS WHO OWNED OF RECORD OR BENEFICIALLY MORE THAN 5% OF THE FUND'S OUTSTANDING CAPITAL STOCK AS OF JANUARY 31, 1998, WHEN THE FUND HAD A TOTAL OF 1,271,910 SHARES OUTSTANDING: THE FAMILY OF EDSON L. BRIDGES II. THE FAMILY OF EDSON L. BRIDGES II IS COMPOSED OF THE FOLLOWING MEMBERS: SALLY S. BRIDGES, WIFE; EDSON L. BRIDGES III, A MARRIED SON; JENNIFER B. HICKS, A MARRIED DAUGHTER; ROBERT W. BRIDGES, A MARRIED SON; AND MARVIN W. BRIDGES, JR., A BROTHER. THE EDSON L. BRIDGES II RESIDENCE ADDRESS IS 10725 CEDAR Bridges Investment Fund, Inc. -12- April 28, 1998 Statement -- Part B STREET, OMAHA, NEBRASKA 68124. THE EDSON L. BRIDGES III HOME ADDRESS IS 760 FAIRACRES ROAD, OMAHA, NEBRASKA 68132. THE ADDRESS FOR JENNIFER B. HICKS IS 1120 SOUTH 61ST STREET, OMAHA, NEBRASKA 68106. ROBERT W. BRIDGES LIVES AT 3200 PENDLETON AVENUE, CHARLOTTE, NORTH CAROLINA 28210. MARVIN W. BRIDGES, JR. RESIDES AT 1425 SHIRE CIRCLE, INVERNESS, ILLINOIS 60067. EDSON L. BRIDGES III'S WIFE IS TRACY T. BRIDGES. ROBERT W. BRIDGES' SPOUSE IS ELIZABETH H. BRIDGES. THE BENEFICIAL OWNERSHIP IN THE EDSON L. BRIDGES II BRANCH OF FAMILY MEMBERS IS AS FOLLOWS: EDSON L. BRIDGES II, 12,905 SHARES IN HIS OWN NAME; 7,476 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST; 3,116 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PENSION PLAN; AND 2,344 SHARES IN THE MASTER PLAN INDIVIDUAL RETIREMENT ACT AND SIMPLIFIED EMPLOYEE PENSION ACCOUNTS FOR A TOTAL OF 25,841 SHARES. SALLY S. BRIDGES HOLDS 3,565 SHARES IN HER OWN NAME AND 1,252 SHARES IN THE MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 4,817 SHARES. EDSON AND SALLY HAVE A COMBINED BENEFICIAL OWNERSHIP OF 30,658 SHARES. EDSON L. BRIDGES III HAS 734 SHARES THROUGH A ONE-THIRD BENEFICIAL INTEREST IN THE EDSON L. BRIDGES II IRREVOCABLE TRUST; 2,008 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST PLUS 2,789 SHARES IN THE 401(K) FEATURE OF THAT TRUST; 908 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PENSION PLAN AND 1,060 SHARES IN A MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 7,499 SHARES. TRACY T. BRIDGES OWNS 9,925 SHARES IN A 401(K) PLAN WITH THE FIRST NATIONAL BANK OF OMAHA AS CUSTODIAN AND 265 SHARES IN A MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 10,190 SHARES. EDSON III AND TRACY HAVE A COMBINED BENEFICIAL OWNERSHIP OF 17,689 SHARES. JENNIFER B. HICKS HAS 734 SHARES THROUGH A ONE-THIRD BENEFICIAL INTEREST IN THE EDSON L. BRIDGES II IRREVOCABLE TRUST; 161 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST; 38 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PENSION PLAN; AND 245 SHARES IN THE MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 1,178 SHARES. ROBERT W. BRIDGES HAS 420 SHARES IN HIS OWN NAME; 734 SHARES THROUGH A ONE-THIRD BENEFICIAL INTEREST IN THE EDSON L. BRIDGES II IRREVOCABLE TRUST; 265 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST PLUS 328 SHARES IN THE 401(K) PLAN; 176 SHARES IN THE BRIDGES INVESTMENT COUNSEL, INC. PENSION TRUST, AND 205 SHARES IN THE MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT FOR A TOTAL OF 2,128 SHARES. ROBERT W. BRIDGES AND ELIZABETH H. BRIDGES OWN JOINTLY 1,147 SHARES FOR A COMBINED OWNERSHIP OF 3,275 SHARES. THE TOTAL FOR BENEFICIAL AMOUNTS ATTRIBUTABLE TO THE FAMILY BRANCH OF EDSON L. BRIDGES II IS 52,799 SHARES OR 4.2% OF THE TOTAL SHARES OUTSTANDING ON JANUARY 31, 1998. MARVIN W. BRIDGES, JR. IS A BROTHER OF EDSON L. BRIDGES II. MR. BRIDGES RESIDES AT 1425 SHIRE CIRCLE, INVERNESS, ILLINOIS 60067. MARVIN W. BRIDGES, JR. HAS TWO MARRIED DAUGHTERS: ANN B. BRUCE, 10633 WEST KINGSTON ROAD, KINGSTON, WASHINGTON 98346 AND AMY B. LAWRENCE, 8225 N.E. 159TH STREET, BOTHELL, Bridges Investment Fund, Inc. -13- April 28, 1998 Statement -- Part B WASHINGTON 98011. MR. EDSON L. BRIDGES II IS TRUSTEE OF THE MARVIN W. BRIDGES, JR. CHARITABLE REMAINDER UNITRUST, OF WHICH MARVIN W. BRIDGES JR. IS A LIFE INCOME BENEFICIARY, AND MULTIPLE CHARITIES ARE PRINCIPAL BENEFICIARIES, THAT OWNS 10,026 SHARES. THE MARVIN W. BRIDGES, JR. IRREVOCABLE TRUST, PROVIDENT TRUST COMPANY SUCCESSOR CO-TRUSTEE WITH EDSON L. BRIDGES II, CO-TRUSTEE, OWNS 1,310 SHARES, IN WHICH MRS. BRUCE AND MRS. LAWRENCE EACH HAVE A ONE-HALF INTEREST IN THE TRUST AS PRINCIPAL BENEFICIARIES. MRS. LAWRENCE OWNS 263 SHARES IN A MASTER PLAN INDIVIDUAL RETIREMENT ACT ACCOUNT. THE TOTAL SHARES ATTRIBUTED DIRECTLY OR INDIRECTLY TO THE MEMBERS OF THE MARVIN W. BRIDGES, JR. FAMILY ARE 11,599 OR 0.9% OF THE TOTAL SHARES OUTSTANDING. TO SUMMARIZE THE TOTAL BENEFICIAL OWNERSHIP OF THE TWO FAMILY BRANCHES OF THE BRIDGES FAMILY (52,799 FOR EDSON II AND 11,599 FOR MARVIN, JR.) IS 64,398 SHARES, EQUAL TO 5.1% OF TOTAL SHARES OUTSTANDING. NO ONE PERSON IN THIS FAMILY OWNS OF RECORD OR BENEFICIALLY MORE THAN 5% OF THE TOTAL SHARES OUTSTANDING. THE OFFICERS AND DIRECTORS OF THE FUND OWNED BENEFICIALLY AND OF RECORD, OR HAD THE POWER TO VOTE, 116,060 SHARES OF THE FUND'S STOCK. THE MEMBERS OF THE IMMEDIATE FAMILIES OF OFFICERS AND DIRECTORS OWNED AN ADDITIONAL 99,586 SHARES FOR A TOTAL BENEFICIAL OWNERSHIP OF THESE PERSONS OF 215,646 SHARES WHICH WAS EQUAL TO 17.23% OF THE 1,271,910 SHARES OUTSTANDING AS OF JANUARY 31, 1998. WITH RESPECT TO THE ATTRIBUTED BENEFICIAL SHARE INTERESTS REPORTED FOR OFFICERS OF THE FUND FOR HOLDINGS OF THE FUND BY THE BRIDGES INVESTMENT COUNSEL, INC. PENSION PLAN AND THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST, ALL SHARES REPORTED ARE ESTIMATES AS OF JANUARY 31, 1998. THE TRUSTEES OF THE PENSION PLAN AND THE PROFIT SHARING TRUST WILL NOT REPORT THE ALLOCATIONS TO PARTICIPANTS FOR DECEMBER 31, 1997, UNTIL MARCH 15, 1998, BECAUSE THE FINANCIAL INFORMATION UPON WHICH THE ALLOCATIONS ARE MADE TO PARTICIPANTS WAS NOT COMPLETE ON THE FEBRUARY 27, 1998, FILING DATE FOR THIS PROSPECTUS AND STATEMENT, AND SUCH INFORMATION USUALLY IS NOT AVAILABLE FOR A VARIETY OF REASONS AND FACTORS RELATED TO THE CALCULATION OF BONUSES FOR EMPLOYEES AND THE FILING OF THE CORPORATE FEDERAL INCOME TAX FOR BRIDGES INVESTMENT COUNSEL, INC. ACCORDINGLY, THE DISCLOSURE OF BENEFICIAL INTERESTS IN THE PENSION PLAN AND PROFIT SHARING TRUST ARE BASED UPON DECEMBER 31, 1996, AND SEPTEMBER 30, 1997, PERCENTAGE INTERESTS FOR ALLOCATIONS OF THE JANUARY 22, 1998, SHARES OWNED BY THESE TRUSTS. BRIDGES INVESTMENT COUNSEL, INC. INITIATED A 401(K) ADDITIONAL FEATURE TO THE FIRM'S PROFIT SHARING TRUST IN 1988. THE NATIONAL BANK OF COMMERCE TRUSTEE HOLDS 6,099 SHARES FOR FIVE PARTICIPANTS, TWO OF WHOM ARE EDSON L. BRIDGES III AND ROBERT W. BRIDGES, AS DISCLOSED EARLIER. THREE OF THE OTHER PARTICIPANTS ARE OFFICERS OF THE FUND AND ITS INVESTMENT ADVISER: DOUGLAS P. Bridges Investment Fund, Inc. -14- April 28, 1998 Statement -- Part B PERSON, WHOSE OWNERSHIP INTEREST IS 1,566 SHARES, MARY ANN MASON, WHOSE OWNERSHIP INTEREST IS 1,324 SHARES, AND KATHLEEN J. STRANIK, WHOSE OWNERSHIP INTEREST IS 91 SHARES. UNLESS NOTED TO THE CONTRARY, ALL DISCLOSURES OF SHAREHOLDER OWNERSHIP IN THIS SECTION OF THE STATEMENT OF ADDITIONAL INFORMATION ARE MADE AS OF THE CLOSE OF BUSINESS ON JANUARY 31, 1998. INVESTMENT ADVISORY AND OTHER SERVICES CONTROL PERSONS -- TWO PERSONS, EDSON L. BRIDGES II AND EDSON L. BRIDGES III, OF THE ELEVEN MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND ARE ALSO DIRECTORS AND OFFICERS OF THE INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. MR. BRIDGES IS PRESIDENT AND DIRECTOR OF BRIDGES INVESTMENT COUNSEL, INC. AND CHAIRMAN AND CHIEF EXECUTIVE OFFICER AND DIRECTOR OF BRIDGES INVESTMENT FUND, INC. THE TOTAL OF 600 SHARES OF CAPITAL STOCK OF THE INVESTMENT ADVISER ARE OWNED AS FOLLOWS: EDSON L. BRIDGES II, 525 SHARES; EDSON L. BRIDGES III, SIX SHARES; SALLY S. BRIDGES, WIFE OF EDSON L. BRIDGES II, THREE SHARES; AND NATIONAL BANK OF COMMERCE, AS TRUSTEE FOR THE BRIDGES INVESTMENT COUNSEL, INC. PROFIT SHARING TRUST, 66 SHARES. SALLY S. BRIDGES, EDSON L. BRIDGES II, AND EDSON L. BRIDGES III ARE THE THREE DIRECTORS OF BRIDGES INVESTMENT COUNSEL, INC. MR. AND MRS. EDSON L. BRIDGES II HAVE BEEN DIRECTORS OF BRIDGES INVESTMENT COUNSEL, INC. SINCE JANUARY 2, 1963. MR. EDSON L. BRIDGES III WAS ELECTED A DIRECTOR ON DECEMBER 30, 1987. AFFILIATED PERSONS -- AS DIRECTORS AND OFFICERS OF BOTH BRIDGES INVESTMENT COUNSEL, INC. AND BRIDGES INVESTMENT FUND, INC., MR. EDSON L. BRIDGES II AND MR. EDSON L. BRIDGES III ARE AFFILIATED PERSONS OF BOTH ORGANIZATIONS. THERE ARE NO OTHER AFFILIATED PERSONS OF THE INVESTMENT ADVISER AND THE FUND. ADVISORY FEES -- BRIDGES INVESTMENT FUND, INC. PAID BRIDGES INVESTMENT COUNSEL, INC. THE FOLLOWING DOLLAR AMOUNTS FOR THE LAST THREE FISCAL YEARS AS AN INVESTMENT ADVISORY FEE: $107,149 IN 1995, $135,586 IN 1996 AND $170,328 IN 1997. THESE FEES ARE BASED ON THE MONTH-ENDING NET ASSETS, AVERAGED FOR A THREE-MONTH PERIOD, AND A 1/8 OF 1% FEE BASIS IS APPLIED TO THE RESULTING NUMBER. THE ANNUAL FEE BASIS IS 1/2 OF 1%. THE ANNUAL FEE IS THE SUM OF THE FOUR QUARTERLY FEES. THE ADVISORY FEE WAS NOT REDUCED BY ANY CREDITS DURING TWO OF THE LAST THREE FISCAL YEARS. EXPENSE LIMITATION -- BRIDGES INVESTMENT COUNSEL, INC. HAS AGREED WITH THE FUND TO PAY ANY EXPENSES, PROPERLY OWED BY THE FUND, WHICH EXCEED 1 1/2% OF THE Bridges Investment Fund, Inc. -15- April 28, 1998 Statement -- Part B AVERAGE NET ASSETS FOR ANY YEAR. THERE HAVE BEEN NO EXPENSE REIMBURSEMENTS DURING THE LAST THREE FISCAL YEARS. SERVICES PERFORMED ON BEHALF OF FUND -- SERVICES WHICH ARE SUPPLIED OR PAID FOR WHOLLY OR IN SUBSTANTIAL PART BY THE INVESTMENT ADVISER IN CONNECTION WITH THE INVESTMENT ADVISORY CONTRACT ARE: OCCUPANCY AND OFFICE RENTAL; REGISTRATION AND FILING FEES; SALARIES AND COMPENSATION OF THE FUND'S DIRECTORS AND OFFICERS; TRADING DEPARTMENT FOR SECURITIES; AND PROSPECTUS PREPARATION AND PRINTING. IN EFFECT, BRIDGES INVESTMENT COUNSEL, INC. SUPPLIES ALL PERSONNEL, EQUIPMENT, FACILITIES, AND ADMINISTRATIVE SERVICES AT ITS EXPENSE THAT WOULD BE PROVIDED FOR ALL INVESTMENT ADVISORY CLIENTS OF THE FIRM. IN ADDITION, BRIDGES INVESTMENT COUNSEL, INC. PAYS FOR ALL EXPENSES OF MAINTAINING FEDERAL AND STATE REGISTRATIONS AND THE MAJORITY OF LEGAL EXPENSES OF THE FUND INCLUDING THE COSTS ASSOCIATED WITH MASTER PLANS FOR STANDARD RETIREMENT PLANS AND INDIVIDUAL RETIREMENT ACT ACCOUNTS. LASTLY, THE INVESTMENT ADVISER PERFORMS ALL SERVICES NOT SPECIFICALLY IDENTIFIED TO ENSURE AN ORDERLY BUSINESS OPERATION OF THE FUND. THE FUND PAYS BRIDGES INVESTMENT COUNSEL, INC. FOR ACCOUNTING, CLERICAL, AND BOOKKEEPING SERVICES RELATED SOLELY TO SPECIAL FUNCTIONS FOR THE FUND AND FOR POSTAGE, STATIONERY, FORMS, SUPPLIES AND PRINTING -- INCLUDING QUARTERLY REPORTS TO SHAREHOLDERS. BRIDGES INVESTMENT COUNSEL, INC. PROVIDES THE STAFF PERSONNEL AND SERVICES FOR THESE TASKS, AND THE ADVISORY FIRM IS REIMBURSED AT ITS COST FOR THESE SERVICES. OTHER SERVICES -- THE FUND PAYS FOR THE SERVICES OF THE INDEPENDENT AUDITOR, ARTHUR ANDERSEN LLP, 1700 FARNAM STREET, OMAHA, NEBRASKA 68102. THE FUND ALSO ABSORBS THE FEES AND COSTS OF THE CUSTODIAN AS DESCRIBED ON PAGES 10, 11, AND 24 OF THE PROSPECTUS -- PART A. BRIDGES INVESTOR SERVICES, INC., 8401 WEST DODGE ROAD, OMAHA, NEBRASKA 68114, ACTS AS DIVIDEND DISBURSING AND TRANSFER AGENT. THE FUND PAYS COSTS AND FEES PER THE TERMS OF AN AGREEMENT BETWEEN THE FUND AND SERVICES. THE FUND ALSO BEARS THE COST OF THE INSURANCE PREMIUMS TO PROVIDE $500,000 IN FIDELITY AND ERRORS AND OMISSIONS COVERAGES UNDER AN INVESTMENT COMPANY BLANKET BOND EFFECTIVE APRIL 1, 1988. ICI MUTUAL INSURANCE COMPANY, P.O. BOX 730, BURLINGTON, VERMONT 05402-0730 IS THE CARRIER SUPPLYING THE COVERAGE. THE PERSONS OR CORPORATIONS IDENTIFIED IN THIS PARAGRAPH ARE THE ONLY PROVIDERS OF SERVICES TO THE FUND OTHER THAN BRIDGES INVESTMENT COUNSEL, INC. ARTHUR ANDERSEN LLP CONDUCTS THE ANNUAL AUDIT OF THE FUND'S OPERATION IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, THE APPLICABLE REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, AND THE PROVISIONS OF THE INTERNAL REVENUE CODE. REPRESENTATIVES OF ARTHUR ANDERSEN LLP MEET WITH THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS TO ESTABLISH THE SCOPE OF EACH AUDIT. THE FEDERAL AND STATE INCOME TAX RETURNS ARE PREPARED BY THE STAFF OF ARTHUR Bridges Investment Fund, Inc. -16- April 28, 1998 Statement -- Part B ANDERSEN LLP. LASTLY, ARTHUR ANDERSEN LLP PROVIDES CONSENTS TO PERMIT THE FILING OF FINANCIAL STATEMENTS WITH APPROPRIATE DOCUMENTS WITH THE SECURITIES AND EXCHANGE COMMISSION AT VARIOUS TIMES THROUGHOUT THE YEAR, AND A PARTNER OF THE FIRM OR HIS REPRESENTATIVE WILL BE IN ATTENDANCE AT THE ANNUAL MEETING OF STOCKHOLDERS TO ANSWER ANY INQUIRIES AT THAT TIME. THE SERVICES OF THE CUSTODIAN AND THE TRANSFER AGENT ARE DESCRIBED ON PAGES 10 AND 11 OF THE PROSPECTUS -- PART A. BROKERAGE ALLOCATIONS AND OTHER PRACTICES TRANSACTIONS IN THE FUND'S PORTFOLIO OF SECURITIES ARE EFFECTED THROUGH MORE THAN A FEW BROKERS TO REFLECT THE AVAILABILITY OF SECURITY RESEARCH INFORMATION, EXECUTION AND OTHER OPEN MARKET SERVICES, AND GOODWILL OR OTHER FACTORS. THE TOTAL BROKERAGE FEES PAID ON SECURITIES TRANSACTIONS FOR THE FUND FOR THE LAST THREE FISCAL YEARS WERE: $4,668.50 IN 1995, $16,091.31 IN 1996, AND $23,917.11 IN 1997. THE FUND'S MANAGEMENT HAS NO PLANS TO VARY THE BROKERAGE COMMISSION ACTIVITY FROM THE PATTERN SHOWN DURING THE LAST THREE FISCAL YEARS. DURING 1997, THE BROKERAGE COMMISSIONS ATTRIBUTED TO SECURITY RESEARCH INFORMATION WERE $23,917.11 OR 100.00% OF THE TOTAL. THERE WERE NO COMMISSIONS ATTRIBUTED TO SPECIAL BROKERAGE SERVICES OR TO GOOD WILL IN 1997. FIFTEEN BROKERS WERE USED BY THE FUND DURING 1997, RESULTING IN AN AVERAGE COMPENSATION PER BROKERAGE FIRM OF $1,594.48. THE LARGEST AMOUNT RECEIVED BY ANY FIRM WAS $5,000.00. THE FUND HAS NO PLANS TO CONCENTRATE SECURITIES TRANSACTION ORDERS WITH ANY SINGLE BROKER OR GROUP OF BROKERS. THERE WERE NO BROKERAGE CONCERNS OR INDIVIDUALS ACTING AS BROKERS WHO WERE AFFILIATED WITH THE FUND OR ITS INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC. THE RESEARCH INFORMATION PURCHASED WITH THE FUND'S BROKERAGE COMMISSIONS WAS PROVIDED TO THE FUND'S INVESTMENT ADVISER, BRIDGES INVESTMENT COUNSEL, INC., AND THIS MATERIAL BENEFITED ALL CLIENTS OF THAT FIRM, INCLUDING THE FUND. MANY CLIENTS OF BRIDGES INVESTMENT COUNSEL, INC. PARTICIPATE IN AN INFORMAL PROGRAM OF PLACING BROKERAGE TRANSACTIONS TO OBTAIN SECURITY RESEARCH INFORMATION; THUS, THE FUND AND ITS INVESTMENT ADVISER BENEFIT FROM THE BROKERAGE TRANSACTIONS OF MANY CLIENTS OF THE INVESTMENT ADVISER. MOST BROKERAGE FIRMS DO NOT PRICE THEIR RESEARCH SERVICES; THEREFORE, IT IS NOT POSSIBLE TO PLACE A MONETARY VALUE ON SUCH SERVICES. Bridges Investment Fund, Inc. 17 April 28, 1998 Statement -- Part B THE ADVENT OF NEGOTIATED BROKERAGE COMMISSIONS ON MAY 1, 1975, ENDED THE UNIFORM COMMISSION SCHEDULE OF NEW YORK STOCK EXCHANGE MEMBER FIRMS. AS A RESULT, IT IS DIFFICULT TO CONSTRUCT STUDIES OF COMPARABLE COSTS AND SERVICES ON EACH SECURITY TRANSACTION OF THE FUND. ACCORDINGLY, THE DISINTERESTED DIRECTORS OF BRIDGES INVESTMENT FUND, INC. HAVE AGREED THAT BRIDGES INVESTMENT COUNSEL, INC. MAY CAUSE THE FUND TO PAY A MEMBER OF AN EXCHANGE, BROKER, OR DEALER AN AMOUNT OF COMMISSION FOR EFFECTING A SECURITIES TRANSACTION BY THE FUND IN EXCESS OF THE AMOUNT OF COMMISSION WHICH WOULD HAVE BEEN CHARGED BY ANOTHER PERSON FOR EFFECTING SUCH TRANSACTIONS, PROVIDING THAT BRIDGES INVESTMENT COUNSEL, INC. DETERMINES IN GOOD FAITH THAT SUCH COMMISSION WAS REASONABLE IN RELATION TO THE VALUE OF THE BROKERAGE AND RESEARCH SERVICES PROVIDED BY SUCH EXCHANGE MEMBER, BROKER, OR DEALER SUBJECT ONLY TO THE LIMITATIONS AND DEFINITIONS CONTAINED IN SECTION 28(E) OF THE SECURITIES EXCHANGE ACT OF 1934 AND TO A PERIODIC REVIEW BY THE DISINTERESTED DIRECTORS OF THE ACTIONS OF THE INVESTMENT ADVISER IN DIRECTING THE BROKERAGE BUSINESS OF THE FUND. IN OTHER WORDS, BECAUSE OF THE PRACTICE OF USING SECURITIES TRANSACTIONS TO PURCHASE BROKERAGE SERVICES AND RESEARCH, THE FUND MAY NOT RECEIVE THE LOWEST POSSIBLE AGGREGATE EXECUTION COST WITH RESPECT TO ANY GIVEN BROKERAGE TRANSACTION. BRIDGES INVESTMENT COUNSEL, INC. IS ABLE TO SECURE DISCOUNTS FROM THE UNIFORM BROKERAGE COMMISSION SCHEDULE WHICH WAS IN EFFECT ON APRIL 30, 1975, FOR LISTED SECURITIES DURING THE PERIOD FROM MAY 1, 1975, THROUGH DECEMBER 31, 1997. THE BOARD OF DIRECTORS REVIEWS AND APPROVES THE LEVEL OF DISCOUNTS AND THE ACTUAL BROKERAGE COSTS ON EACH TRANSACTION IN THE PORTFOLIO AT EACH QUARTERLY MEETING. THE INVESTMENT ADVISER BELIEVES THESE DISCOUNTS TO BE APPROPRIATE AND SIMILAR TO THOSE EARNED BY OTHER INSTITUTIONAL PORTFOLIOS OF THE SIZE OF THE FUND. MR. EDSON L. BRIDGES III, PRESIDENT OF THE FUND, SELECTS THE BROKERS TO BE EMPLOYED FOR SECURITIES TRANSACTIONS OF THE FUND, AND HE DETERMINES THE ACCEPTABILITY OF THE DISCOUNT. CAPITAL STOCK AND OTHER SECURITIES CLASSES -- THE FUND OFFERS ONLY ONE CLASS OF SECURITY OUTSTANDING -- CAPITAL STOCK. THE TERMS OF THIS ISSUE ARE SET FORTH ON PAGE 12 OF THE PROSPECTUS. THERE ARE NO OTHER CLASSES OF SECURITIES AUTHORIZED BY THE ARTICLES OF INCORPORATION. CUMULATIVE VOTING -- THE TERMS OF THE ISSUANCE OF CAPITAL STOCK OF THE FUND PROVIDE FOR CUMULATIVE VOTING. THIS PROVISION PERMITS A SHAREHOLDER TO ALLOCATE THE VOTES OF HIS SHARES TOWARDS ONE OR MORE DIRECTORS IN ORDER TO INCREASE THE INFLUENCE OF HIS OWNERSHIP TOWARDS THE DIRECTOR OR DIRECTORS SELECTED FOR HIS SUPPORT IN AN ELECTION OF DIRECTORS. Bridges Investment Fund, Inc. -18- April 28, 1998 Statement -- Part B PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED GENERAL INFORMATION -- THE CAPITAL STOCK OF THE FUND IS OFFERED TO THE PUBLIC AT NET ASSET VALUE PER SHARE THROUGH THE FUND'S OFFICE, WHICH IS THE ONLY POINT OF DISTRIBUTION FOR THE PROSPECTUS, PART A, THE STATEMENT OF ADDITIONAL INFORMATION, PART B, AND OTHER INFORMATION, PART C. THE PLANS FOR PURCHASE OF SHARES OF THE FUND ARE SET FORTH IN THE PROSPECTUS ON PAGES 15-22. THE FUND DOES NOT USE LETTERS OF INTENT, CONTRACTUAL ACCUMULATION PLANS, WITHDRAWAL PLANS, OR EXCHANGE PRIVILEGES. THE FUND DOES OFFER SERVICES IN CONNECTION WITH RETIREMENT PLANS -- PLEASE REFER TO PAGES 17-22 IN THE PROSPECTUS FOR A COMPLETE DESCRIPTION OF THESE SERVICES. SHAREHOLDERS WHO REQUIRE ASSISTANCE IN GATHERING COST HISTORY AND SHARE INFORMATION REGARDING THEIR ACCOUNT WITH THE FUND SHOULD ANTICIPATE THAT BRIDGES INVESTOR SERVICES, INC. AS TRANSFER AGENT, WILL BILL THE DIRECT COSTS OF SUCH INVESTIGATIONS DIRECTLY TO THE SHAREHOLDER WITH AN EXPLANATION OF THE TYPE OF WORK CONDUCTED, THE DATES AND TIME COMMITTED, AND THE EXPENSES INCURRED BY SERVICES. IN THE NORMAL SITUATION, THE MAXIMUM CHARGE PER INQUIRY OF THIS TYPE WILL BE $25.00. VALUATION -- THE METHODS FOR DETERMINING THE NET ASSET VALUE PER SHARE OF THE FUND FOR PURCHASE OF SHARES AND THE NET ASSET VALUE PER SHARE FOR THE REDEMPTION OF OR SALES OF SHARES BACK TO THE FUND ARE DESCRIBED ON PAGES 14 AND 15 OF THE PROSPECTUS. PLEASE REFER TO THOSE PAGES FOR SPECIFIC INFORMATION ON THESE MATTERS. SPECIMEN PRICE MAKE UP -- PLEASE REFER TO APPENDIX A ON PAGE 20 FOR A COPY OF THE PRICE MAKE UP FORM USED BY THE FUND. THE EXAMPLE OR ILLUSTRATION USES THE ACTUAL DATA AND METHODS USED FOR THE FUND ON DECEMBER 31, 1997. THE AUDITED BALANCE SHEET INFORMATION WILL PROVIDE THE SAME INFORMATION WITH A DIFFERENT FORMAT AND CLASSIFICATION OF ITEMS FOR THE PURPOSE OF PROPER FINANCIAL STATEMENT PRESENTATION. OTHER DISCLOSURES -- THE FUND DOES NOT HAVE AN EXCESS OF THE OFFERING PRICE TO DISTRIBUTE TO UNDERWRITERS. THE FUND PRICES ITS SHARES ONLY ONCE PER DAY AFTER THE CLOSE OF THE NEW YORK STOCK EXCHANGE. THERE IS NO DIFFERENCE IN THE NET OFFERING PRICE CHARGED TO THE GENERAL PUBLIC AND THAT PRICE WHICH IS CHARGED TO OFFICERS, DIRECTORS, AND EMPLOYEES OF EITHER THE FUND OR ITS INVESTMENT ADVISER. THE FUND DOES NOT USE RULE 2A-7 UNDER THE GENERAL RULES AND REGULATIONS OF THE INVESTMENT COMPANY ACT OF 1940 FOR THE PURPOSE OF PRICING ITS SHARES TO THE PUBLIC. Bridges Investment Fund, Inc. -19- April 28, 1998 Statement -- Part B TAX STATUS THE FUND IS QUALIFIED OR INTENDS TO QUALIFY UNDER SUBCHAPTER M OF THE INTERNAL REVENUE CODE (26 U.S.C. 851-856). THE FUND HAS NO SPECIAL OR UNUSUAL TAX ASPECTS SUCH AS TAXATION RESULTING FROM FOREIGN INVESTMENT, OR FROM STATES AS A PERSONAL HOLDING COMPANY, OR FROM ANY TAX LOSS CARRYFORWARD. REFER TO PAGE 13 OF THE PROSPECTUS FOR A MORE COMPLETE DISCUSSION OF FEDERAL TAXATION OF THE FUND. UNDERWRITERS: NONE. CALCULATION OF PERFORMANCE DATA: NONE. NOTICE 1: AS A PROSPECTIVE INVESTOR OR SHAREHOLDER, YOU MAY BE INTERESTED IN SECURING PART C OF THIS FILING, AND YOU MUST RECEIVE PART A, THE PROSPECTUS, IN ORDER TO MAKE AN INVESTMENT IN THE FUND. YOU MAY REQUEST COPIES OF PARTS A, B, AND C FROM THE FUND'S OFFICE AT THE ADDRESS SHOWN ON THE COVER OF PART B. NOTICE 2: THE FUND'S MANAGEMENT AND BOARD OF DIRECTORS ENCOURAGES PROSPECTIVE INVESTORS AND SHAREHOLDERS TO REVIEW THE AUDITED FINANCIAL STATEMENTS, PARTICULARLY THE SCHEDULE OF INVESTMENTS, TO OBTAIN A USEFUL PERSPECTIVE ABOUT SECURITIES OWNED BY THE FUND. FINANCIAL STATEMENTS THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997 , APPEAR AT PAGES 21-36 IN THIS PART B. AS A UNIT, THESE STATEMENTS INCLUDE: THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS, THE SCHEDULE OF PORTFOLIO INVESTMENTS, THE STATEMENT OF ASSETS AND LIABILITIES, THE STATEMENT OF OPERATIONS, STATEMENTS OF CHANGES IN NET ASSETS, AND NOTES TO FINANCIAL STATEMENTS. THE PRICE MAKE UP SHEET, APPENDIX A, IS SHOWN ON PAGE 20; THEN THE FINANCIAL STATEMENTS FOLLOW AS A UNIT TO COMPLETE THIS PART B. Bridges Investment Fund, Inc. -20- April 28, 1998 Statement -- Part B
APPENDIX A(SPECIMEN) PRICE MAKE UP SHEET DECEMBER 31, 1997 JOURNAL FORM, LEDGER FORM, ACTUAL BALANCE SCHEDULE, OR OR MARKET ACCOUNT NUMBER VALUE FIGURES ACCOUNT (COST FIGURES IN PARENTHESES) ASSETS 01A-DR-C CASH-PRINCIPAL $ 18,214.64 01B-DR-C CASH-INCOME 83,706.71 02A-LF51 DIVIDENDS RECEIVABLE 50,501.25 02B-LF52 INTEREST RECEIVABLE 69,608.18 04A-CRDJ ACCTS. RECEIVABLE-SUBSCRIPTIONS TO CAPITAL STOCK 30,916.98 04B-CRDJ ACCTS. RECEIVABLE-SECURITIES SOLD 07 -SCHEDULE 7 INV. IN SECURITIES (20,808,607.01) 36,605,170.17 CRS TOTAL ASSETS 36,858,117.93 LIABILITIES: 13A-CRDJ ACCTS. PAY.-REDEMPTIONS OF CAPITAL STOCK $ 13B-CRDJ ACCTS. PAY.-PURCHASE OF SECURITIES 14A-CRDJ ACCRUED LIAB.-OPERATING EXPENSES 65,358.75 14B-CRDJ ACCRUED LIAB.-TAXES 14 -CRDJ DISTRIBUTIONS PAYABLE $145,224.05 TOTAL LIABILITIES $210,582.80 19 NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARES (TOT. ASSETS MINUS TOT. LIAB.) $36,647,535.13 20 -CRDJ DR-TA CAPITAL STOCK-TOTAL SHARES OUTSTANDING 1,262,818.371 NET ASSET VALUE PER SHARE PURCHASE PRICE PER SHARE $29.02 $29.02 REDEMPTION PRICE PER SHARE $29.02 X DIV. @ .115 EQUALIZATION COMPUTATION NET INVESTMENT INCOME 0.00 (CURRENT QTR.) (CURRENT QTR.) DIVIDEND INCOME $105,613.08 UNDISTRIBUTED NET INCOME 0.00 INTEREST INCOME 100,567.37 (PREVIOUS QTRS.) TOTAL INCOME 206,180.45 TOTAL ACCT. 21B 0.00 EQUALIZATION/SHARE .00 TAXES PAID $ ORDERS / EXPENSES UNPAID $ 68,100.00 NET SHARES PURCH., REDEMP. , , . REIMBURSED EXPENSES ( ) BALANCE, EQUALIZATION 5,236.90 TOT.EXP.POST CLOSE EQUALIZATION ENTRY EQUALIZATION FORWARD NET INVESTMENT INC. $138,080.45 CAPITAL SHARES FORWARD 1,262,818.371
Bridges Investment Fund, Inc. -21- April 28, 1998 Statement -- Part B ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS OF BRIDGES INVESTMENT FUND, INC.: WE HAVE AUDITED THE ACCOMPANYING STATEMENT OF ASSETS AND LIABILITIES OF BRIDGES INVESTMENT FUND, INC., INCLUDING THE SCHEDULE OF PORTFOLIO INVESTMENTS, AS OF DECEMBER 31, 1997, AND THE RELATED STATEMENT OF OPERATIONS FOR THE YEAR THEN ENDED, THE STATEMENTS OF CHANGES IN NET ASSETS FOR EACH OF THE TWO YEARS IN THE PERIOD THEN ENDED, AND THE FINANCIAL HIGHLIGHTS FOR EACH OF THE FIVE YEARS IN THE PERIOD THEN ENDED. THESE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS ARE THE RESPONSIBILITY OF THE FUND'S MANAGEMENT. OUR RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS BASED ON OUR AUDITS. WE CONDUCTED OUR AUDITS IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS ARE FREE OF MATERIAL MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS. OUR PROCEDURES INCLUDED CONFIRMATION OF SECURITIES OWNED AS OF DECEMBER 31, 1997, BY CORRESPONDENCE WITH THE CUSTODIAN AND BROKERS. AN AUDIT ALSO INCLUDES ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING THE OVERALL FINANCIAL STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDITS PROVIDE A REASONABLE BASIS FOR OUR OPINION. IN OUR OPINION, THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS REFERRED TO ABOVE PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF BRIDGES INVESTMENT FUND, INC. AS OF DECEMBER 31, 1997, THE RESULTS OF ITS OPERATIONS FOR THE YEAR THEN ENDED, THE CHANGES IN ITS NET ASSETS FOR EACH OF THE TWO YEARS IN THE PERIOD THEN ENDED, AND THE FINANCIAL HIGHLIGHTS FOR EACH OF THE FIVE YEARS IN THE PERIOD THEN ENDED, IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ARTHUR ANDERSEN LLP OMAHA, NEBRASKA JANUARY 16, 1998 Bridges Investment Fund, Inc. -22- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
Number Market Title of Security of Shares Value COMMON STOCKS - (85.1%) Advertising - 0.3% Outdoor Systems, Inc.* 3,000 $ 115,500 Aircraft - Manufacturing - 1.6% The Boeing Company 12,000 $ 587,250 Amusements - Recreation - Sporting Goods 0.6% Nike, Inc. 6,000 $ 234,375 Banking and Finance - 7.5% First National of Nebraska, Inc. 230 $ 851,000 MBNA Corporation 10,000 273,125 NationsBank Corporation 6,000 364,875 Norwest Corporation 12,000 465,000 The Charles Schwab Corporation 1,000 41,938 SLM Holding Corporation 2,000 278,250 State Street Corporation 8,000 465,500 ----------- $ 2,739,688 ----------- Beverages - Soft Drinks - 2.4% PepsiCo, Inc. 24,000 $ 870,000 Building Materials - Forest Products - 0.7% Georgia-Pacific Corporation 3,000 $ 182,250 Georgia-Pacific (Timber Group)* 3,000 68,062 ----------- $ 250,312 ----------- Chemicals - 4.6% The Dow Chemical Company 7,000 $ 710,500 Du Pont (E.I.) De Nemours & Company 8,000 480,500 Monsanto Company 12,000 504,000 ----------- $ 1,695,000 ----------- Communications - Radio and Television - 0.5% Clear Channel Communications, Inc.* 2,500 $ 198,594 *Nonincome-producing security Bridges Investment Fund, Inc. -23- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Number Market Title of Security of Shares Value COMMON STOCKS (Continued) Computers - Hardware and Software - 8.7% Cisco Systems, Inc.* 3,000 $ 167,250 Compaq Computer Corporation 1,000 56,500 Dell Computer Corporation * 1,000 84,000 EMC Corporation* 2,000 54,875 HNC Software, Inc.* 6,000 258,000 Hewlett-Packard Co. 12,000 748,500 International Business Machines Corporation 2,000 209,250 Microsoft Corporation* 7,500 969,375 Sun Microsystems, Inc.* 4,000 159,500 Transaction Systems Architects, Inc.* 13,000 494,000 ----------- $ 3,201,250 ------------ Drugs - Medicines - Cosmetics - 8.8% Abbott Laboratories 8,000 $ 524,000 Amgen, Inc.* 2,000 108,250 Bristol-Myers Squibb Co. 6,000 567,750 Elan Corporation PLC ADR* 6,000 307,125 Johnson & Johnson 10,000 658,750 Merck & Co., Inc. 10,000 1,060,000 ----------- $ 3,225,875 ----------- Electrical Equipment and Supplies - 2.4% General Electric Co. 12,000 $ 880,500 Electronics - 3.3% Intel Corporation 8,000 $ 562,000 Motorola, Inc. 8,000 457,500 Solectron Corporation * 5,000 207,812 ----------- $ 1,227,312 ----------- Energy - Alternate Sources - 0.5% CalEnergy Co., Inc. * 6,000 $ 172,500 Finance - Real Estate - 3.4% Freddie Mac 30,000 $ 1,258,125 Finance - Services - 2.4% Capital One Financial Corporation 10,000 $ 541,875 First Data Corporation 8,000 234,000 Paymentech, Inc. * 7,000 103,250 ----------- $ 879,125 ----------- *Nonincome-producing security Bridges Investment Fund, Inc. -24- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Number Market Title of Security of Shares Value COMMON STOCKS (Continued) Food - Miscellaneous Products - 3.7% Philip Morris Companies, Inc. 30,000 $ 1,357,500 Forest Products & Paper - 0.8% Kimberly-Clark Corporation 6,000 $ 295,875 Insurance - Mortgage - 0.9% MGIC Investment Corporation 5,000 $ 332,500 Insurance - Multiline - 1.6% American International Group, Inc. 1,500 $ 163,125 General Re Corp. 2,000 424,000 ----------- $ 587,125 ----------- Insurance - Municipal Bond - 1.8% MBIA, Inc. 10,000 $ 668,125 Lumber and Wood Products - 0.7% Weyerhaeuser Company 5,000 $ 245,313 Machinery - Construction & Mining - 0.8% Caterpillar Inc. 6,000 $ 291,000 Medical - Services - 0.4% HealthSouth Corporation * 5,000 $ 138,750 Metal Products - Miscellaneous - 0.7% Nucor Corporation 5,500 $ 265,719 Motion Pictures and Theatres - 1.9% The Walt Disney Company 7,000 $ 693,000 Oil Services - 0.2% Schlumberger, Ltd. 1,000 $ 80,500 Petroleum Producing - 6.3% Amoco Corporation 5,000 $ 425,625 Atlantic Richfield Company 4,000 320,500 Chevron Corporation 10,000 770,000 Exxon Corporation 8,000 489,500 Mobil Corporation 4,000 288,750 ----------- $ 2,294,375 ----------- *Nonincome-producing security Bridges Investment Fund, Inc. -25- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Number Market Title of Security of Shares Value COMMON STOCKS (Continued) Publishing - Newspapers - 1.4% Gannett Co., Inc. 8,000 $ 494,500 Publishing - Electronic - 1.1% Reuters Holdings PLC 6,000 $ 397,500 Restaurants - Retail - 0.2% Tricon Global Restaurants* 2,400 $ 69,750 Retail Stores - Apparel and Clothing - 2.2% Gap, Inc. 22,500 $ 797,344 Retail Stores - Building Materials and Home Improvement - 0.9% The Home Depot, Inc. 5,500 $ 323,812 Retail Stores - Department - 1.9% Dayton Hudson Corporation 10,500 $ 708,750 Retail Stores - Variety - 0.8% Albertson's Inc. 6,500 $ 307,125 Telecommunications - 5.8% AirTouch Communications, Inc.* 5,000 $ 207,812 GTE Corporation 10,000 522,500 Sprint Corporation 8,000 469,000 West Teleservices Corporation* 43,000 516,000 WorldCom, Inc.* 13,000 393,250 ----------- $ 2,108,562 ----------- Transportation - Airfreight - 2.6% Eagle USA Airfreight, Inc. * 20,000 $ 570,000 Federal Express Corporation * 6,000 366,375 ----------- $ 936,375 ----------- Transportation - Railroads - 0.7% Union Pacific Corporation 4,000 $ 250,500 ----------- TOTAL COMMON STOCKS (Cost - $15,608,641) $31,179,406 ----------- *Nonincome-producing security Bridges Investment Fund, Inc. -26- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Number of Shares or Principal Market Title of Security Amount Value PREFERRED STOCKS (1.2%) Banking and Finance - 0.7% CFC Capital Trust 9.375% Preferred, Series B 5,000 $ 132,500 CFB Capital II 8.20% Cumulative Preferred 5,000 128,125 ----------- $ 260,625 ----------- Telecommunications - 0.5% AirTouch Communications, Inc. 4.25% Series C 3,000 $ 186,938 Convertible Preferred ------------ Total Preferred Stocks (Cost - $387,925) $ 447,563 ----------- Total Stocks (Cost - $15,996,566) $31,626,969 ----------- DEBT SECURITIES (13.6%) Energy - Alternate Sources - 0.6% CalEnergy Co., Inc., 7.63% Notes due October 15, 2007 $200,000 $ 202,049 Food - Miscellaneous Products - 0.3% Super Valu Stores, Inc., 8.875% Promissory Notes, due June 15, 1999 $100,000 $ 103,756 Household Appliances and Utensils - 0.3% Maytag Corp., 9.75% Notes, due May 15, 2002 $100,000 $ 113,000 Office Equipment and Supplies - 0.3% Xerox Corporation, 9.750% Notes due March 15, 2000 $100,000 $ 107,417 Retail Stores - Department - 0.8% Dillard Department Stores, Inc., 7.850% Debentures, due October 1, 2012 $150,000 $ 168,665 Sears Roebuck & Co., 9.375% Debentures due November 1, 2011 100,000 124,930 ----------- $ 293,595 ----------- Bridges Investment Fund, Inc. -27- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Principal Market Title of Security Amount Value DEBT SECURITIES (Continued) Transportation - Railroads - 0.4% Union Pacific Corporation 6.00% Notes, due September 1, 2003 $150,000 $ 146,134 U.S. Government - 9.1% U.S. Treasury, 9.000% Notes, due May 15, 1998 $200,000 $ 202,468 U.S. Treasury, 9.125% Notes, due May 15, 1999 200,000 209,000 U.S. Treasury, 8.750% Notes, due August 15, 2000 200,000 214,719 U.S. Treasury, 8.000% Notes, due May 15, 2001 200,000 213,875 U.S. Treasury, 7.500% Notes, due May 15, 2002 200,000 213,500 U.S. Treasury, 10.750% Bonds due February 15, 2003 200,000 243,813 U.S. Treasury, 7.250% Notes, due May 15, 2004 300,000 323,719 U.S. Treasury, 7.500% Notes, due February 15, 2005 300,000 329,765 U.S. Treasury, 9.375% Bonds, due February 15, 2006 200,000 246,094 U.S. Treasury, 7.625% Bonds, due February 15, 2007 300,000 318,516 U.S. Treasury, 8.750% Bonds, due November 15, 2008 200,000 227,781 U.S. Treasury, 9.125% Bonds, due May 15, 2009 200,000 233,750 U.S. Treasury, 7.500% Bonds, due November 15, 2016 300,000 350,250 ----------- $ 3,327,250 ----------- Bridges Investment Fund, Inc. -28- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) DECEMBER 31, 1997 Principal Market Title of Security Amount Value DEBT SECURITIES (Continued) Commercial Paper - Short Term - 1.8% Ford Motor Credit Corp. Commercial Paper Note 6.10% due January 2, 1998 $ 425,000 $ 425,000 Prudential Funding Corp. Commercial Paper Note 5.77% due January 6, 1998 260,000 260,000 ----------- $ 685,000 ----------- TOTAL DEBT SECURITIES (Cost - $4,812,041) $ 4,978,201 ----------- TOTAL INVESTMENTS IN SECURITIES (Cost - $20,420,682) (99.9%) $36,605,170 CASH AND RECEIVABLES LESS TOTAL LIABILITIES (0.1%) 42,365 ----------- NET ASSETS, December 31, 1997 (100.0%) $36,647,535 ===========
The accompanying notes to financial statements are an integral part of this schedule. Bridges Investment Fund, Inc. -29- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1997
Amount ASSETS Investments, at market value Common and preferred stocks (cost $15,996,566) $31,626,969 Debt securities (cost $4,812,041) 4,978,201 ----------- Total Investments $36,605,170 Cash 101,921 Receivables Dividends and interest 120,110 Subscriptions to capital stock 30,917 ---------- TOTAL ASSETS $36,858,118 =========== LIABILITIES Dividend distributions payable $ 145,224 Investment advisor, management and service fees 47,978 Accrued operating expenses 17,381 ---------- TOTAL LIABILITIES $ 210,583 ----------- NET ASSETS Capital stock, $1 par value - Authorized 3,000,000 shares,less 742,636 shares redeemed; 2,005,454 shares issued; 1,262,818 shares outstanding $ 1,262,818 Paid-in surplus - Excess over par value of amounts received from sale of 2,005,454 shares, less amounts paid out in redeeming 742,636 shares 19,589,379 ----------- Net capital paid in on shares $20,852,197 Accumulated net realized loss on investment transactions (6,462) Net unrealized appreciation on investments 15,796,563 Accumulated undistributed net investment income 5,237 ----------- TOTAL NET ASSETS $36,647,535 =========== NET ASSET VALUE PER SHARE $29.02 ====== OFFERING PRICE PER SHARE $29.02 ====== REDEMPTION PRICE PER SHARE $29.02 ====== The accompanying notes to financial statements are an integral part of this statement.
Bridges Investment Fund, Inc. -30- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
Amount Amount INVESTMENT INCOME Interest $463,448 Dividends 435,355 -------- Total Investment Income $898,803 EXPENSES Management fees $170,328 Custodian fees 33,712 Insurance 15,656 Bookkeeping services 15,166 Printing and supplies 10,925 Professional services 10,900 Dividend disbursing and transfer agent fees 10,073 Computer programming 5,200 Foreign taxes paid on dividends 1,316 Taxes and licenses 1,065 -------- Total Expenses $ 274,341 --------- NET INVESTMENT INCOME $ 624,462 --------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on transactions in investment securities $ 380,365 Net increase in unrealized appreciation of investments 5,456,770 --------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $5,837,135 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,461,597 ========== The accompanying notes to financial statements are an integral part of this statement.
Bridges Investment Fund, Inc. -31- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1997 AND 1996
1997 1996 INCREASE IN NET ASSETS Operations - Net investment income $ 624,462 $ 639,251 Net realized gain on transactions in investment securities 380,365 310,925 ------------ ---------- Net increase in unrealized appreciation of investments 5,456,770 3,502,945 Net increase in net assets resulting from operations $ 6,461,597 $4,453,121 Net equalization credits 3,157 4,640 Distributions to shareholders from - Net investment income (624,462) (639,251) Net realized gain from investment transactions (383,918) (304,773) Equalization (2,651) (4,109) Net capital share transactions 1,944,324 1,687,114 ----------- ----------- Total Increase in Net Assets $ 7,398,047 $5,196,742 NET ASSETS: Beginning of year 29,249,488 24,052,746 ----------- ----------- End of year (including accumulated undistributed net investment income of $5,237 and $4,732, respectively) $ 36,647,535 $29,249,488 ============ =========== The accompanying notes to financial statements are an integral part of these statements.
Bridges Investment Fund, Inc. -32- April 28, 1998 Statement -- Part B BRIDGES INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Bridges Investment Fund, Inc. (Fund) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The primary investment objective of the Fund is long- term capital appreciation. In pursuit of that objective, the Fund invests primarily in common stocks. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A. Investments - Security transactions are recorded on the trade date at purchase cost or sales proceeds. Dividend income is recognized on the ex- dividend date, and interest income is recognized on an accrual basis. Securities owned are reflected in the accompanying statement of assets and liabilities and the schedule of portfolio investments at quoted market value. Quoted market value represents the last recorded sales price on the last business day of the calendar year for securities traded on a national securities exchange. If no sales were reported on that day, quoted market value represents the closing bid price. The cost of investments reflected in the statement of assets and liabilities and the schedule of portfolio investments is the same as the basis used for Federal income tax purposes. The difference between cost and quoted market value of securities is reflected separately as unrealized appreciation (depreciation) as applicable.
Net 1997 1996 Change Net unrealized appreciation (depreciation): Aggregate gross unrealized appreciation on securities $16,375,653 $10,462,757 Aggregate gross unrealized depreciation on securities (579,090) (122,964) ----------- ----------- Net $15,796,563 $10,339,793 $5,456,770 =========== =========== ==========
The net realized gain (loss) from the sales of securities is determined for income tax and accounting purposes on the basis of the cost of specific securities. The gain computed on the basis of average cost would have been substantially the same as that reflected in the accompanying statement of operations. Bridges Investment Fund, Inc. -33- April 28, 1998 Statement -- Part B B. Federal Income Taxes - It is the Fund's policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, including the distribution of substantially all taxable income including net realized gains on sales of investments. Therefore, no provision is made for Federal income taxes. C. Distribution To Shareholders - The Fund accrues dividends to shareholders on the ex-dividend date. D. Equalization - The Fund uses the accounting practice of equalization by which a portion of the proceeds from sales and costs of redemption of capital shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of the transactions, is credited or charged to undistributed income. As a result, undistributed net investment income per share is unaffected by sales or redemption of capital shares. E. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (2) INVESTMENT ADVISORY CONTRACT Under an Investment Advisory Contract, Bridges Investment Counsel, Inc. (Investment Adviser) furnishes investment advisory services and performs certain administrative functions for the Fund. In return, the Fund has agreed to pay the Investment Adviser a fee computed on a quarterly basis at the rate of 1/8 of 1% of the average net asset value of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser. The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of stamp and other taxes, but including fees paid to the Investment Adviser, shall not exceed, in total, a maximum of 1 and 1/2% of the average month end net asset value of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser as specifically identified in the Investment Advisory Contract. Bridges Investment Fund, Inc. -34- April 28, 1998 Statement -- Part B (3) DIVIDEND DISBURSING AND TRANSFER AGENT Effective October 1, 1987, dividend disbursing and transfer agent services are provided by Bridges Investor Services, Inc. (Transfer Agent). The fees paid to the Transfer Agent are intended to approximate the cost to the Transfer Agent for providing such services. Certain officers and directors of the Fund are also officers and directors of the Transfer Agent. (4) SECURITY TRANSACTIONS The cost of long-term investment purchases during the years ended December 31, was:
1997 1996 United States government obligations $ -- $ 915,945 Other Securities 6,360,243 1,597,324 ---------- ---------- Total Cost $6,360,243 $2,513,269 ========== ==========
Net proceeds from sales of long-term investments during the years ended December 31, were:
1997 1996 United States government obligations $ 200,000 $ 423,528 Other Securities 2,388,453 1,567,634 ---------- ---------- Total Net Proceeds $2,588,453 $1,991,162 ========== ========== Total Cost Basis of Securities Sold $2,208,087 $1,680,237 ========== ==========
(5) NET ASSET VALUE The net asset value per share represents the effective price for all subscriptions and redemptions. Bridges Investment Fund, Inc. -35- April 28, 1998 Statement -- Part B (6) CAPITAL STOCK Shares of capital stock issued and redeemed are as follows:
1997 1996 Shares sold 95,567 88,405 Shares issued to shareholders in reinvestment of net investment income and realized gain from security transactions 32,365 34,880 ------- -------- 127,932 123,285 Shares redeemed 55,945 49,074 ------- ------- Net increase 71,987 74,211 ====== ====== Value of capital stock issued and redeemed is as follows: 1997 1996 Shares sold 2,553,754 $1,992,810 Shares issued to shareholders in reinvestment of net investment income and realized gain from security transactions 884,491 832,894 --------- ---------- 3,438,245 $2,825,704 Shares redeemed 1,493,921 1,138,590 --------- ---------- Net increase $1,944,324 $1,687,114 ========== ========== (7) DISTRIBUTION TO SHAREHOLDERS On December 2, 1997 a cash distribution was declared from net investment income accrued through December 31, 1997. This distribution was ultimately calculated as $.115 per share aggregating $145,224. (This dividend includes $2,651 that represents a return of capital distribution to shareholders for Federal income tax purposes.) The dividend will be paid on January 22, 1998, to shareholders of record on December 31, 1997. (8) DERIVATIVE FINANCIAL INSTRUMENTS In October, 1994, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 119, Disclosure about Derivative Financial Investments and Fair Value of Financial Instruments. The Fund has not entered into any such investment or investment contracts. A covered call option contract is a form of a financial derivative instrument. The Fund's investment and policy restrictions do permit the Fund to sell or write covered call option contracts under certain circumstances and limitations as set forth in the Fund's prospectus. Bridges Investment Fund, Inc. -36- April 28, 1998 Statement -- Part B FINANCIAL HIGHLIGHTS* Per share income and capital changes for a share outstanding for each of the last five years were:
1997 1996 1995 1994 1993 Net Asset Value, Beginning of Period $24.56 $21.54 $17.10 $17.80 $17.51 Income From Investment Operations Net Investment Income $ .51 $ .55 $ .58 $ .59 $ .61 Net Gains or (Losses) on Securities (both realized and unrealized) 4.77 3.28 4.63 (.52) .46 ---- ---- ---- ----- ---- Total From Investment Operations $ 5.28 $ 3.83 $ 5.21 $ .07 $ 1.07 Less Distributions Dividends from net investment income $ (.51) $ (.55) $ (.58) $ (.59) $(.61) Distributions from capital gains (.31) (.26) (.19) (.18) (.17) ------- ------- ------ ------ ------ Total Distributions $ (.82) $ (.81) $ (.77) $ (.77) $ (.78) ------- ------- ------- ------- ------- Net Asset Value, End of Period $29.02 $24.56 $21.54 $17.10 $17.80 ====== ====== ====== ====== ====== Total Return 21.47% 17.78% 30.46% .39% 6.18% Ratios/Supplemental Data Net Assets, End of Period (in thousands) $36,648 $29,249 $24,052 $18,096 $17,991 Ratio of Expenses to Average Net Assets** .81% .87% .89% .90% .90% Ratio of Net Income to Average Net Assets ** 2.64% 3.23% 3.80% 4.25% 4.32% Portfolio Turnover Rate 8% 8% 7% 10% 11% Avg. Commission Rate Paid *** .1003 .1900 .1222 .1470 .1253 * Per share income and capital change data is computed using the weighted average number of shares outstanding method. ** Average net asset data is computed using monthly net asset value figures. *** Cents Per Share.
Bridges Investment Fund, Inc. 1 April 28, 1998 Other Information -- Part C PART C OTHER INFORMATION OTHER INFORMATION Bridges Investment Fund, Inc. CAPITAL STOCK April 28, 1998 8401 West Dodge Road Omaha, Nebraska 68114 402-397-4700 Contents Page No. Item 24. Financial Statements and Exhibits...............................2-8 Item 25. Persons Controlled by or Under Common Control....................8 Item 26. Number of Holders of Securities..................................8 Item 27. Indemnification................................................. 8 Item 28. Business and Other Connections of Investment Adviser...........8-10 Item 29. Principal Underwriters ...,,....................................10 Item 30. Location of Accounts and Records................................10 Item 31. Management Services.............................................10 Item 32. Undertakings....................................................10 SIGNATURES 11-12 SUMMARY PROSPECTUS None Bridges Investment Fund, Inc. -2- April 28, 1998 Other Information -- Part C Special Notices . This Other Information is not a Prospectus. . This Other Information should be read in conjunction with Part A, the Prospectus of Bridges Investment Fund, Inc. dated April 28, 1998, and Part B, Statement of Additional Information. . Copies of the Part A and Part B filings of Bridges Investment Fund, Inc. may be obtained from the office of the Fund at the address shown above. . The date of this Other Information is April 28, 1998 Item 24. Financial Statements and Exhibits Page (a) Financial Statements Part C Consent of Independent Public Accountants 3 Part B Report of Independent Public Accountants 21 Schedule of Portfolio Investments 22-28 Statement of Assets and Liabilities 29 Statement of Operations 30 Statements of Changes in Net Assets 31 Notes to Financial Statements 32-36 (Item 24 continues after the Consent of Independent Public Accountants) Bridges Investment Fund, Inc. -3- April 28, 1998 Other Information -- Part C ARTHUR ANDERSEN LLP CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our reports and to all references to our Firm included in or made a part of this Registration Statement. ARTHUR ANDERSEN LLP Omaha, Nebraska, February 27, 1998 Bridges Investment Fund, Inc. -4- April 28, 1998 Other Information -- Part C Item 24. Financial Statements and Exhibits (continued) (b) Exhibits: 1.The Articles of Incorporation, filed with the Form N-8B-1 and amendments thereto, in File No. 811-1209, are hereby incorporated by reference. 2.The By-Laws, filed with the Form N-8B-1 and amendments thereto, in File No. 811-1209, are hereby incorporated by reference. 3.Item 1 (b)(3) Not applicable 4.The Specimen Stock Certificate, filed with the Form S-5, in File No. 2-21600, is hereby incorporated by reference. 5.The Investment Advisory Agreement and Amendatory Advisory Agreement filed with Amendment No. 2 to the Form N-8B-1 in File No. 811-1209 are hereby incorporated by reference. 6.Item 1(b)(6) Not applicable 7.Item 1(b)(7) Not applicable 8.The Custodian Agreement and Amendatory Custodian Agreement filed with Amendment No. 1 to the Form N-8B-1 in File No. 811-1209 are hereby incorporated by reference. 9.Item 1(b)(9) Not applicable 10.The opinion and consent of counsel dated July 12, 1963, as to the legality of securities issued, filed as Exhibit F of the original Form S-5 in File No. 2-21600, are hereby incorporated by reference. 11.Item 1(b)(11) Not applicable 12.Item 1(b)(12) Not applicable 13.Written Assurance, specimen copy, by initial investors in the Fund is incorporated by reference to Post-Effective Amendment No. 21 to File No. 2-21600 and Amendment No. 7 to File No. 811-1209. Bridges Investment Fund, Inc. -5- April 28, 1998 Other Information -- Part C 14.Copies of the model plans used to establish retirement plans are hereby incorporated by reference as follows: a) Exhibit SE-1 filed with Post-Effective Amendment No. 1 to the Form S-5, File No. 2-21600, is hereby incorporated by Reference, including Amendments thereto with Post-Effective Amendments No. 2, 3 and 13. These materials relate to the Self-Employed Retirement Keogh Plans. b) Amendment No. 5 to Exhibit SE-1, Second Amendment to Bridges Investment Fund, Inc. Standard Profit Sharing and Retirement Plan is hereby incorporated by reference. c) Amendment No. 6 to Exhibit SE-1, Revised Bridges Investment Fund, Inc. Standard Profit Sharing and Retirement Plan, is hereby incorporated by reference. d) Amendment No. 7 to Exhibit SE-1, Standard Self-Employed Retirement Act Plan (as Amended and Restated as of January 1, 1982) is hereby incorporated by reference. e) Exhibit IDA-1, Bridges Investment Fund, Inc. Individual Retirement Act Custodian Agreement, is hereby incorporated by reference. f) Amendment No. 2 to Exhibit IDA-1, Individual Retirement Act Custodial Agreement, as Amended and Restated effective the 1st day of January, 1982, is hereby incorporated by reference. g) Amended and Restated Standard Retirement Plan as of January 1, 1984, is hereby incorporated by reference. h) Amendment No. 3 to Exhibit IDA-1, Individual Retirement Act Custodial Agreement, as Amended and Restated effective January 1, 1985, is hereby incorporated by reference. i) Amended and Restated Standard Retirement Plan, including Application Forms, Participant Request For Distribution Forms, and Designation of Beneficiary Forms, and the Standard Custodial Agreement. Bridges Investment Fund, Inc. -6- April 28, 1998 Other Information -- Part C j) Amended and Restated Standard Retirement Plan as described in (i) above, corrected to final text approval by the Internal Revenue Service on July 31, 1990. k) Amended and Restated Individual Retirement Account Custodial Agreement as described in (h) above corrected to final text approval by the Internal Revenue Service on June 11, 1993. l) Amendment to Bridges Investment Fund, Inc. Standard Retirement Plan effective January 1, 1994, as adopted on March 29, 1994. m) Model Amendment for Qualified Military Service, Model Amendment for SIMPLE 401(k) Provisions, and a new Profit Sharing Plan Application Form reflecting the SIMPLE 401(k) Provisions at Part III all related to the Standard Retirement Plan -- No. 001. n) Bridges Investment Fund, Inc. SIMPLE Individual Retirement Custodial Account Master Plan, including Application Form, Custodial Agreement, Disclosure Statement, Notice to Eligible Employees, Summary Description, Salary Reduction Agreement, Beneficiary Designation, and Request for Distribution Form. o) Roth Individual Retirement Custodial Account (IRS Form 5305-RA) with standardized text Attachment for Article IX. p) Education Individual Retirement Custodial Account (IRS Form 5305-EA) with standardized text Attachment for Article XI. 15.Item 24(b)(15) Not applicable 16.Item 24(b)(16) Not applicable 17.Exhibit 17, Reference Item 24(b)(1) and Original Filing Exhibit 1, Articles of Amendment to The Articles of Incorporation of Bridges Investment Fund, Inc. hereby incorporated by reference. 18.Exhibit 18, Reference to Item 24(b)(8) and Original Filing Exhibit 5, Amendatory Agreement to Custodian Agreement dated October 13, 1987, is hereby incorporated by reference. Bridges Investment Fund, Inc. -7- April 28, 1998 Other Information -- Part C 19.Exhibit 19, Reference to Item 24(b)(9)(i) Agreement dated July 14, 1987, to appoint Bridges Investor Services, Inc. as Dividend Disbursing and Transfer Agent, is hereby incorporated by reference. 20.Exhibit 20, Reference to Item 24(b)(a)(ii) Agreement dated October 13, 1987, to establish jointly insured status for Bridges Investment Fund, Inc. and Bridges Investor Services, Inc. under the Federal Insurance Company registered investment management company bond, is hereby incorporated by reference. 21.Exhibit 21, Reference to Item 24(b)(9)(iii) Agreement dated October 13, 1987, to establish jointly insured status under ICI Mutual Insurance Company fidelity blanket bond between Bridges Investment Fund, Inc.; Bridges Investor Services, Inc.; Bridges Investment Counsel, Inc.; and Edson Bridges II Investment Counsel in California, a proprietorship, is hereby incorporated by reference. 22.Exhibit 22, Reference to Item 24(b)(10), and Original Filing Exhibit F, the opinion and consent of legal counsel, February 25, 1988, as to the legality of securities issued, is hereby incorporated by reference. 23.Exhibit 23-A, Stock Subscription and Order Form (Revision 02-24- 1989) to be used by new investors on effective date of this filing. 24.Exhibit 24B, Stock Subscription and Order Form (Revision 02-26- 1990) to be used by investors on the effective date for this filing. 25.Exhibit 25, Articles of Amendment To The Articles of Incorporation of Bridges Investment Fund, Inc. Reference Item 24(b)(1) and Original Filing of The Articles of Incorporation as Exhibit 1, the terms of which and all other amendments are hereby incorporated by reference. 26.Exhibit 26, Custody Agreement between Bridges Investment Fund, Inc. and the First National Bank of Omaha dated April 23, 1997, to be placed electronically in File No. 811-1209. This Custody Agreement becomes effective on July 1, 1997, wherein the First National Bank of Omaha becomes Successor Custodian to First Bank N.A., Omaha, Nebraska. Bridges Investment Fund, Inc. -8- April 28, 1998 Other Information -- Part C 27.Exhibit 24C, Stock Subscription and Order Form (Revision 04-28-98) to be used by investors on the effective date of the filing of this Exhibit. Item 25. Persons Controlled by or under Common Control with Registrant Not applicable Item 26. Number of Holders of Securities (1) (2) Number of Record Title of Class Holders* Capital Stock 501 * Holders as of January 31, 1998 Item 27. Indemnification Not applicable Item 28. Business and Other Connections of Investment Adviser Edson L. Bridges II is the President and a Director of Bridges Investment Counsel, Inc., as well as being Chairman and Chief Executive Officer and a Director of Bridges Investment Fund, Inc. Mr. Bridges II is President and a Director of Bridges Investor Services, Inc. Mr. Bridges II has a principal profession in investment counselling. During the last two fiscal years for the Fund, Mr. Bridges II acted for his own account in the capacity of director, officer, employee, partner or trustee in the following businesses or activities: Name and Principal Position with Business Address Business or Activity Edson L. Bridges II Proprietor Bridges Investment Advisers 8401 West Dodge Road Omaha, Nebraska 68114 N. P. Dodge Company Director Real Estate Brokers and Management 8701 West Dodge Road Omaha, Nebraska 68114 Bridges Investment Fund, Inc. -9- April 28, 1998 Other Information -- Part C JAT Corporation Director 8401 West Dodge Road Omaha, Nebraska 68114 Provident Trust Company President and 256 Durham Plaza Director 8401 West Dodge Road Omaha, Nebraska 68114 Store Kraft Manufacturing Company Director Beatrice, Nebraska 68310 West Omaha Land & Cattle Company A Partner 8401 West Dodge Road Omaha, Nebraska 68114 The question in this item uses the terms substantial nature in requiring a response. None of the foregoing relationships are substantial in terms of time commitment or compensation received as they may require only several hours per month or per calendar quarter of Mr. Bridges' time. One exception to this statement would be Edson L. Bridges II, Bridges Investment Advisers, which is part of Mr. Bridges' principal profession. The other exception would be Provident Trust Company. Refer to page 10 for additional comments. Mr. Bridges II acts as a Trustee or Co-Trustee, primarily for revocable and testamentary trusts which have investment advisory client relationships with either Bridges Investment Counsel, Inc. or Bridges Investment Advisers. Mr. Edson L. Bridges III is Executive Vice President-Investments of Bridges Investment Counsel, Inc. and a Director of that Company. Mr. Bridges III is President and Director of Bridges Investment Fund, Inc. and Vice President and Director of Bridges Investor Services, Inc. Mr. Bridges III has a principal profession of investment counselling. During the last two fiscal years for the Fund, Mr. Bridges III acted for his own account in the capacity of director, officer, employee, partner, or trustee in the following businesses or activities: Name and Principal Position with Business Address Business or Activity Provident Trust Company Vice President 256 Durham Plaza and Director 8401 West Dodge Road Omaha, Nebraska 68114 Bridges Investment Fund, Inc. -10- April 28, 1998 Other Information -- Part C Stratus Fund, Inc. Director 500 Centre Terrace 1225 "L" Street Lincoln, Nebraska 68508 Provident Trust Company was granted a charter by the State of Nebraska Department of Banking on March 11, 1992. Trust business activities commenced on March 14, 1992. Provident has a Management Agreement with Bridges Investment Counsel, Inc. that was entered into on March 26, 1991. Mr. Bridges II and Mr. Bridges III were active during 1997 with assistance to Provident Trust Company for the conduct of its operations and services. On December 31, 1997, Provident Trust Company was responsible to 441 customer accounts with assets valued at $354,116,000. Item 29. Principal Underwriters Not applicable Item 30. Location of Accounts and Records The principal records for the Fund to maintain under Rule 31a-3 of The Investment Company Act of 1940 are maintained by the Fund and its investment adviser at the offices of the Fund, Suite 256, Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114. The persons in charge of the corporate records are Mrs. Mary Ann Mason, Secretary, and Mrs. Nancy K. Dodge, Treasurer. Documents of original entry regarding the safekeeping of securities, disbursing of dividends and transfer agency work are maintained by Bridges Investor Services, Inc. Item 31. Management Services Not applicable Item 32. Undertakings Not applicable Bridges Investment Fund, Inc. -11- April 28, 1998 Other Information -- Part C SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Registration Statement pursuant to Rule 485a under the Securities Act of 1933, and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, and State of Nebraska, on the 27th day of February, 1998. BRIDGES INVESTMENT FUND, IN BY /s/ Edson L. Bridges II Edson L. Bridges II, Chairman Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: /s/ Edson L. Bridges II Chairman February 27, 1998 Edson L. Bridges II Date /s/ Nancy K. Dodge Treasurer February 27, 1998 Nancy K. Dodge Date Director Frederick N. Backer Date /s/ Edson L. Bridges II Director February 27, 1998 Edson L. Bridges II Date /s/ Edson L. Bridges III President February 27, 1998 Edson L. Bridges III Date /s/ N. P. Dodge, Jr. Director February 27, 1998 N. P. Dodge, Jr. Date /s/ John W. Estabrook Director February 27, 1998 John W. Estabrook Date Director Jon D. Hoffmaster Date Bridges Investment Fund, Inc. -12- April 28, 1998 Other Information -- Part C /s/ John J. Koraleski Director February 27, 1998 John J. Koraleski Date Director Roger A. Kupka Date Director Gary L. Petersen Date /s/ Roy A. Smith Director February 27, 1998 Roy A. Smith Date /s/ L.B. Thomas Director February 27, 1998 L.B. Thomas Date EX-99.B4 2 STOCK SUBSCRIPTION AND PLAN ORDER FORM Bridges Investment Fund, Inc. _________________________________________ 256 Durham Plaza (Date form in executed) 8401 West Dodge Road Omaha, Nebraska 68114 __________________________Time________:_______ (Date form is received by Fund) Gentlemen: The undersigned acknowledges receipt of a copy of your current Prospectus and hereby purchases shares of capital stock of Bridges Investment Fund, Inc., according to the instructions indicated below. Checks submitted with this form should be drawn payable to Bridges Investment Fund, Inc. =========================================================================== =================== (Mark X in appropriate boxes and fill in blanks to indicate your choices) I. Unscheduled Investments Plan ($500 Minimum Investment) A. o Purchase full and fractional shares with enclosed payment of $________________. B. o Purchase exactly ________ shares with enclosed payment of $_____________. Cash in excess of purchase cost will be refunded. If amount submitted is less than purchase cost, I shall send check for net amount due to Bridges Investment Fund, Inc. in an envelope supplied by the Fund, immediately upon receipt of the Fund's invoice. C. o Send dividends and capital gains distributions to address shown in Part IV. II. Reinvestment of Cash Distributions D. o In conjunction with the purchase shown in Part I, Box A or Box B, please reinvest: (a) o dividends only; (b) o capital gains only; (c) o dividends, and capital gains. E. o The undersigned acknowledges that he has examined the terms of this Reinvestment of Cash Distributions Plan as set forth on the reverse side of this form and hereby authorizes the deduction of $1.05 from each reinvested payment. III. Scheduled Investment Plan ($500 Minimum Investment) F. o Purchase full and fractional shares with enclosed payment of $ _______________. G. o The undersigned intends to invest under the Plan $__________ (not less than $200) every (a) o month; (b) o two months; (c) o quarter, beginning on the o 5th; o 15th; o 25th of ______________________, ______. H. o The undersigned hereby empowers the Transfer Agent to deduct a $1.05 service charge from each scheduled investment payment under $500. IV. Registration of Shares In Name(s) of: Social Security No. __________________________ (Street Address) (City) (State) (Zip Code) V. Signatures The purchase price of these shares of Bridges Investment Fund, Inc. capital stock will be an amount equal to the Net Asset Value thereof in effect at the time this subscription is received by the Fund, as more fully set forth in the Prospectus. The undersigned agrees that this Order Form shall become effective only upon acceptance by the Fund in Nebraska. The passing of title to and delivery of the shares shall be deemed to take place in Nebraska, and the purchase and sale thereof shall be governed solely by the laws of Nebraska. The terms of the Prospectus are incorporated herein by reference. ACCEPTED: Officers of Bridges Investment Fund, Inc. Signature(s) of Subscriber The Fund cannot accept applications in the name of a minor, but it can accept Custodian Accounts registered under the Uniform Gifts to Minors Act. Terms of Reinvestment of Cash Distributions Plan 1. An unscheduled investor in Bridges Investment Fund, Inc. may have all dividends and capital gains distributions automatically reinvested in additional shares of the Fund by executing Part II of this Form. 2. All cash distributions will be reinvested in full and fractional shares (carried to three decimal places) on each dividend payment date at the Net Asset Value in effect on that day. Shares so purchased will be credited to the participant's Plan Account, the records of which are maintained by Bridges Investor Services, Inc. Advices will be forwarded to the participant showing the balance of shares in the Plan Account before a given purchase, the dollar amount of dividend reinvested, the Not Asset Value in effect for the purchase, the number of shares purchased, and the balance of shares in the Plan Account following the purchase. 3. Shares credited to a Plan Account will entitle the participant to the full rights of a shareholder in regard to dividends, redemption privileges, and voting, except that fractional shares carry no voting rights. Although no certificates will be issued automatically for shares purchased under the Reinvestment of Cash Distributions Plan, a participant may require the Fund to issue to him a certificate for all or part of the full shares credited to his Plan Account. 4. Upon authorization from the participant, signed by both tenants in the case of joint tenancy, any or all of the shares held in a Plan Account will be redeemed at the Net Asset Value in effect at the time of the receipt of the authorization as provided in the Prospectus. 5. A shareholder starting a Reinvestment of Cash Distribution Plan may forward certificates for shares already owned to the Fund, and thereafter the Bank will hold such shares in his Plan Account and include them in the share balance of the Advice slips. 6. The Fund reserves the right to modify or terminate the Plan on thirty days' notice to participants. 7. Bridges Investor Services, Inc., as Transfer Agent, will deduct a service charge of $1.05 from each distribution before the cash is submitted to purchase capital stock in the Fund. Terms of Scheduled Investments Plan 1. An investor should complete Part III of this Plan Order Form and send his initial payment directly to the Fund at 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114. Subsequent payments should be directed to Bridges Investment Fund, Inc. Each payment is invested at the Net Asset Value on the date the check is received by the Fund or on the following business day, if such payment is received after 3:00 p.m. or on the weekend. 2. To open a Plan Account, the qualification payment must be at least $500 in cash and/or shares (based on the current Net Asset Value). Each subsequent payment must be at least $200, and total subsequent payments during the twelve-month period after the qualification investment and in each twelve-month period thereafter must be at least $800. If the investor does not invest this minimum amount, he will be reclassified as an unscheduled investor. Participants may vary the amount and interval of payments subject to the above minimums. 3. The Fund will apply the entire amount of each payment received to the purchase of full and fractional shares (carried to three decimal places). Shares so purchased will be credited to the participant's Plan Account, the records of which are maintained by Bridges Investor Services, Inc. Advices showing the balance of shares held in the Plan Account before a given purchase, the dollar amount invested, the Net Asset Value in effect for the purchase, the number of shares purchased, and the balance of shares held in the Plan Account following the purchase will be forwarded to the participant. 4. All cash distributions on all shares owned by the participant will be used to purchase additional full and fractional shares at the Net Asset Value in effect on the payment date. Shares so purchased will be credited to the participant's Plan Account and confirmed to him in the same manner as other shares purchased under the Scheduled Investments Plan. 5. Shares credited to a Plan Account entitle the participant to the full rights of a shareholder in regard to dividends, redemption privileges, and voting, except that fractional shares carry no voting rights. A certificate for the full shares in the Account will be issued upon request. 6. Upon request from the participant (signed by both tenants in the case of joint tenancy), any or all of the shares held in a Plan Account will be redeemed at the Net Asset Value in effect at the time of the receipt of written notification as provided in the Prospectus. In the case of partial redemptions, shares will be redeemed on a first in-first out basis unless otherwise requested by the shareholder. 7. A shareholder starting a Scheduled Investments Plan may forward to the Fund certificates for shares already owned, and thereafter, Bridges Investor Services, Inc. will hold such shares in his Plan Account and include them in the share balances on the Advice slips. 8. The Fund reserves the right to modify or terminate the Plan on thirty days' notice to participants. 9. Bridges Investor Services, Inc. will deduct a $1.05 per distribution service charge for the reinvestment of dividends and capital gains. Bridges Investor Services, Inc. acting as Transfer Agent, is authorized to deduct a service charge of $1.05 from each payment under $500 to cover the cost of handling the Scheduled Investments Plan. Special Requirement for Redemption or Transfer of Shares All certificates presented for redemption or requests for liquidation of uncertificated shares held under Plan Accounts must be duly endorsed or accompanied by a duly executed separate assignment, with signature(s) guaranteed by a national bank or member firm of a national stock exchange. The transfer of shares to another beneficial owner will also require a signature guarantee, as outlined in the previous sentence. EX-99.B14 3 Form 5305-RA Roth Individual Retirement Custodial Account (January 1998) (Under section 408A of the Internal Revenue DO NOT File Department of Code) With the Inte the Treasury rnal Internal Revenue Servi Revenue Service ce Name of depositor Date of birth of Social security number depositor Address of depositor Check if Roth Conversion IRA " Check if Amendment " Name of custodian Address or principal place of business of U.S. Bank National custodian Association 1700 Farnam Street Omaha, NE 68102 The depositor whose name appears above is establishing a Roth individual retirement account (Roth IRA) under section 408A to provide for his or her retirement and for the support of his or her beneficiaries after death. The custodian named above has given the depositor the disclosure statement required under Regulations section 1.408-6. The depositor assigned the custodial account $ The depositor and the custodian make the following agreement: Article I 1. If this Roth IRA is not designated as a Roth Conversion IRA, then, except in the case of a rollover contribution described in section 408A(e), the custodian will accept only cash contributions and only up to a maximum amount of $2,000 for any tax year of the depositor. 2. If this Roth IRA is designated as a Roth Conversion IRA, no contributions other than IRA Conversion Contributions made during the same tax year will be accepted. Article II The $2,000 limit described in Article I is gradually reduced to $0 between certain levels of adjusted gross income (AGI). For a single depositor, the $2,000 annual contribution is phased out between AGI of $95,000 and $110,000; for a married depositor who files jointly, between AGI of $150,000 and $160,000; and for a married depositor who files separately, between $0 and $10,000. In the case of a conversion, the custodian will not accept IRA Conversion Contributions in a tax year if the depositor's AGI for that tax year exceeds $100,000 or if the depositor is married and files a separate return. Adjusted gross income is defined in section 408A(c)(3) and does not include IRA Conversion Contributions. Article III The depositor's interest in the balance in the custodial account is nonforfeitable. Article IV 1. No part of the custodial funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)). 2. No part of the custodial funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion. Article V 1. If the depositor dies before his or her entire interest is distributed to him or her and the depositor's surviving spouse is not the sole beneficiary, the entire remaining interest will, at the election of the depositor or, if the depositor has not so elected, at the election of the beneficiary or beneficiaries, either: (a) Be distributed by December 31 of the year containing the fifth anniversary of the depositor's death, or (b) Be distributed over the life expectancy of the designated beneficiary starting no later than December 31 of the year following the year of the depositor's death. If distributions do not begin by the date described in (b), distribution method (a) will apply. 2.In the case of distribution method 1 (b) above, to determine the minimum annual payment for each year, divide the depositor's entire interest in the custodial account as of the close of business on December 31 of the preceding year by the life expectancy of the designated beneficiary using the attained age of the designated beneficiary as of the beneficiary's birthday in the year distributions are required to commence and subtract 1 for each subsequent year. 3.If the depositor's spouse is the sole beneficiary on the depositor's date of death, such spouse will then be treated as the depositor. Article VI 1. The depositor agrees to provide the custodian with information necessary for the custodian to prepare any reports required under sections 408(i) and 408A(d)(3)(E), Regulations sections 1.408-5 and 1.408-6, and under guidance published by the Internal Revenue Service. 2. The custodian agrees to submit reports to the Internal Revenue Service and the depositor prescribed by the Internal Revenue Service. ISA STF FED9036F.1 Form 5305-RA (1-98) Form 5305-RA (1-98) Page 2 Article VII Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through IV and this sentence will be controlling. Any additional articles that are not consistent with section 408A, the related regulations, and other published guidance will be invalid. Article VIII This agreement will be amended from time to time to comply with the provisions of the Code, related regulations, and other published guidance. Other amendments may be made with the consent of the persons whose signatures appear below. Note: The following space (Article IX) may be used for any other provisions you want to add. ff you do not want to add any other provisions, draw a line through this space. If you do add provisions, they must comply with applicable requirements of state law and the Internal Revenue Code. Article IX SEE ATTACHED Depositor's signature ________________________________________________________________ Date_____________________________________ Custodian's signature _______________________________________________________________ Date_____________________________________ Witness' signature __________________________________________________________________ Date_____________________________________ (Use only if signature of the depositor or the custodian is required to be wit nessed.) General Instructions Contributions, amounts Specific Instructions rolled over or Section references are transferred from another Article I. The depositor to the Internal Revenue Roth IRA, and annual may be subject to a 6 Code unless otherwise cash contributions of up percent tax on excess noted. to $2,000 from the contributions if (1) depositor; or (2) if contributions to other Purpose of Form designated as a Roth individual retirement Conversion IRA (by arrangements of the Form 5305-RA is a model checking the box on page depositor have been made custodial account 1), only IRA Conversion for the same tax year, agreement that meets the Contributions for the (2) the depositor's requirements of section same tax year. adjusted gross income 408A and has been exceeds the applicable automatically approved To simplify the limits in Article II for by the IRS. A Roth identification of funds the tax year, or (3) the individual retirement distributed from Roth depositor's and spouse's account (Roth IRA) is IRAs, depositors are compensation does not established after the encouraged to maintain exceed the amount form is fully executed IRA Conversion contributed for them for by both the individual Contributions for each the tax year. The (depositor) and the tax year in a separate depositor should see the custodian. This account Roth IRA. disclosure statement or must be created in the Pub. 590 for more United States for the Definitions information. exclusive benefit of the depositor or his or her Roth Conversion IRA. A Article IX. Article IX beneficiaries. Roth Conversion IRA is a and any that follow it Roth IRA that accepts may incorporate Do not file Form only IRA Conversion additional provisions 5305-RA with the IRS. Contributions made that are agreed to by Instead, keep it for during the same tax the depositor and your records. year. custodian to complete the agreement. They may Unlike IRA Conversion include, for example, contributions to Contributions. IRA definitions, investment traditional individual Conversion Contributions powers, voting rights, retirement arrangements, are amounts rolled over, exculpatory provisions, contributions to a Roth transferred, or amendment and IRA are not deductible considered transferred termination, removal of from the depositor's from a nonRoth IRA to a the custodian, gross income; and Roth IRA. A nonRoth IRA custodian's fees, state distributions after 5 is an individual law requirements, years that are made when retirement account or beginning date of the depositor is 59(1/2) annuity described in distributions, accepting years of age or older or section 408(a) or only cash, treatment of on account of death, 408(b), other than a excess contributions, disability, or the Roth IRA. prohibited transactions purchase of a home by a with the depositor, etc. first-time homebuyer Custodian. The Use additional pages if (limited to $10,000), custodian must be a bank necessary and attach are not includible in or savings and loan them to this form. gross income. For more association, as defined information on Roth in section 408(n), or Note: Form 5305-RA IRAs, including the any person who has the may be reproduced and required disclosure the approval of the IRS to reduced in size for depositor can get from act as custodian. adaption to passbook the custodian, see Pub. purposes. 590, Individual Depositor. The Retirement Arrangements depositor is the person (IRAs). who establishes the custodial account. This Roth IRA can be used by a depositor to hold: (1) IRA Conversion STF FED9036F.2 ARTICLE IX Form 5305-RA Roth Individual Retirement Custodial Account 1. Upon completion and execution of the Form 5305-RA by the Depositor, and upon acceptance thereof by U.S. Bank National Association (hereinafter the "Custodian"), the Custodian shall establish and maintain a Roth Individual Retirement Custodial Account (hereinafter the "Account"), in the name of the Depositor. The Account established for the Depositor shall be a Roth IRA as described in Section 408A of the Internal Revenue Code. The contributions to the Roth IRA on behalf of the Depositor and any accumulations and earnings thereon shall be credited to the Account. 2. The amount of each contribution on behalf of the Depositor shall be applied to the purchase of shares of Bridges Investment Fund, Inc. (hereinafter referred to as "Investment Company Shares"). Such purchases shall be made on the first busi ness day following the day said contribution is received; provided, however, if the contribution received is less than $500 then, in such event, the purchase of Investment Company Shares shall be made not later than the next following 5th, 15th or 25th day of the month after receipt of the contribution. 3. All cash dividends and capital gain distributions received in respect of Investment Company Shares held in the Depositor's Account shall be reinvested in shares of the Investment Company from which they were received and such shares shall be credited to such Account. Such reinvestment shall be made on the last bank business day of the month in which the distribution is received by the Custodian and on which such shares are offered for sale. The amount of each such distribution, unless received in additional shares of such Company, and the amount of each contribution credited to such Account shall be applied to the purchase of as many full Investment Company Shares as can be purchased with the amount of such contribution or distribution plus any uninvested, unexpended balance of any prior such amount credited to such Account, and the Custodian, in its discretion may, but need not, purchase fractional shares of such Company. Any uninvested, unexpended balance of such contribution or distribution shall remain credited to such Account. If any distribution from Bridges Investment Fund, Inc., may be received at the election of the shareholder in additional Investment Company Shares or in cash or other property, the Custodian shall elect to receive such distribution in additional Investment Company Shares. All Investment Company Shares acquired by the Custodian shall be registered in the name of the Custodian or its nominee, but ownership thereof shall be deemed vested in the Depositor subject to the terms and provisions of this Article IX. 4. The Custodian shall make payments from the Depositor's Account from time to time in accordance with written instructions, in form acceptable to the Custodian, received from the Depositor. The Custodian shall be fully protected in acting on written instructions of the Depositor and shall not be liable with respect to such payment. The Depositor shall be solely responsible for determining his or her eligibility to participate in the Account and the timeliness and tax consequences of distributions from the Account. The Custodian shall be entitled to rely absolutely on the representations of the Depositor with respect to all such matters. The Custodian shall only be held responsible for a failure to use ordinary diligence in safekeeping all funds deposited hereunder or making payments as required by the Depositor. 5. Subject to applicable federal and state penalty taxes for early distribution, the Depositor shall always have the right to withdraw all or any part of his Account upon written notice to the Custodian. 6. Payments made in accordance with this Agreement will continue only so long as amounts remain in the Account. Once the Account is exhausted, the Custodian will be relieved of any and all liability to make payments to the Depositor or his or her Beneficiary. 7. If distributions from the Account had commenced to the designated Beneficiary of the Depositor, upon the death of such designated Beneficiary, the remaining undistributed portion of the Account shall be distributed to the surviving beneficiary (if any) designated by such Beneficiary or, if not, to the Beneficiary's spouse, if living, or, if not, to such Beneficiary's estate, in any manner mutually satisfactory to the recipient and the Custodian. 8. The Custodian shall not engage in any prohibited transactions as defined in Section 4975 of the Internal Revenue Code. 9. The Depositor or the Custodian shall have the right to terminate the Account upon 60 days written notice to the other party. In the event of such termination, the Custodian shall make distribution of the Account to the Depositor or to another qualified plan or successor Custodian designated by the Depositor. EX-99.B14 4 Form 5305-EA Education Individual Retirement Custodial Ac count (January 1998) DO NOT File Department of (Under section 530 of the Internal Revenue C With the Inte the Treasury ode) rnal Internal Revenue Servi Revenue Service ce Name of depositor Depositor's identification number Check if Amendment " Name of designated beneficiary Designated beneficiary's identification number Address of designated beneficiary Date of birth of designated beneficiary Name of responsible individual (generally the parent or guardian of the designated beneficiary) Address of responsible individual Name of Custodian Address or principal place of U. S. Bank National Association business of custodian 1700 Farnam Street, Omaha, Nebraska 68102 The depositor whose name appears above is establishing an education individual retirement custodial account under section 530 for the benefit of the designated beneficiary whose name appears above exclusively to pay for the qualified higher education expenses, within the meaning of section 530(b)(2), of such designated beneficiary. The custodian named above has provided the depositor with a concise statement disclosing the provisions governing section 530. This disclosure statement must include an explanation of the statutory requirements applicable to, and the income tax consequences of establishing and maintaining an account under section 530. Providing the depositor with a copy of Notice 97-60, 1997- 46 I.R.B. 8 (November 17, 1997) is considered a sufficient disclosure statement. The custodian also will provide a copy of this form and the disclosure statement to the responsible individual, as defined in Article VI below, if the responsible individual is not the same person as the depositor. The depositor assigned the custodial account _________________________________________________________ dollars ($__________________________) in cash. The depositor and the custodian make the following agreement: _______________________________________________________________________________ ___________________________________________________________________ Article I The custodian may accept additional cash contributions. These contributions may be from the depositor, or from any other individual, for the benefit of the designated beneficiary, provided the designated beneficiary has not attained the age of 18 as of the date such contributions are made. Total contributions that are not rollover contributions described in section 530(d)(5) are limited to a maximum amount of $500 for the taxable year. Article II The maximum aggregate contribution that an individual may make to the custodial account in any year may not exceed the $500 in total contributions that the custodial account can receive. In addition, the maximum aggregate contribution that an individual may make to the custodial account in any year is phased out for unmarried individuals who have modified adjusted gross income (AGI) between $95,000 and $110,000 for the year of the contribution and for married individuals who file joint returns with modified AGI between $150,000 and $160,000 for the year of the contribution. Unmarried individuals with modified AGI above $110,000 for the year and married individuals who file joint returns and have modified AGI above $160,000 for the year may not make a contribution for that year. Modified AGI is defined in section 530(c)(2). Article III No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common investment fund (within the meaning of section 530(b)(1)(D)). Article IV 1. Any balance to the credit of the designated beneficiary on the date on which such designated beneficiary attains age 30 shall be distributed to the designated beneficiary within 30 days of such date. 2. Any balance to the credit of the designated beneficiary shall be distributed to the estate of the designated beneficiary within 30 days of the date of such designated beneficiary's death. Article V The depositor shall have the power to direct the custodian regarding the investment of the above-listed amount assigned to the custodial account (including earnings thereon) in the investment choices offered by the custodian. The responsible individual, however, shall have the power to redirect the custodian regarding the investment of such amounts, as well as the power to direct the custodian regarding the investment of all additional contributions (including earnings thereon) to the custodial account. In the event that the responsible individual does not direct the custodian regarding the investment of additional contributions (including earnings thereon), the initial investment direction of the depositor also will govern all additional contributions made to the custodial account until such time as the responsible individual otherwise directs the custodian. Unless otherwise provided in this agreement, the responsible individual also shall have the power to direct the custodian regarding the administration, management, and distribution of the account. Article VI The "responsible individual" named by the depositor shall be a parent or guardian of the designated beneficiary. The custodial account shall have only one responsible individual at any time. If the responsible individual becomes incapacitated or dies while the designated beneficiary is a minor under state law, the successor responsible individual shall be the person named to succeed in that capacity by the preceding responsible individual in a witnessed writing or, if no successor is so named, the successor responsible individual shall be the designated beneficiary's other parent or successor guardian. Unless otherwise directed by checking the option below, at the time that the designated beneficiary attains the age of majority under state law, the designated beneficiary becomes the responsible individual. _____ Option (This provision is effective only if checked): The responsible individual shall continue to serve as the responsible individual for the custodial account after the designated beneficiary attains the age of majority under state law and until such time as all assets have been distributed from the custodial account and the custodial account terminates. If the responsible individual becomes incapacitated or dies after the designated beneficiary reaches the age of majority under state law, the responsible individual shall be the designated beneficiary. ISA STF FED 9038F.1 Form 5305-EA (1-98) Form 5305-EA (1-98) Page 2 Article VII The responsible individual _____ may or _____ may not change the beneficiary designated under this agreement to another member of the designated beneficiary's family described in section 529(e)(2) in accordance with the custodian's procedures. Article VIII 1. The depositor agrees to provide the custodian with the information necessary for the custodian to prepare any reports required under section 530(h). 2. The custodian agrees to submit reports to the Internal Revenue Service and the responsible individual as prescribed by the Internal Revenue Service. Article IX Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through IV will be controlling. Any additional articles that are not consistent with section 530 and related regulations will be invalid. Article X This agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the depositor and the custodian whose signatures appear below. _______________________________________________________________________________ _____________________________________________________________________ Note: The following space (Article XI) may be used for any other provisions you want to add. If you do not want to add any other provisions, draw a line through this space. If you do add provisions, they must comply with applicable requirements of state law and the Internal Revenue Code. _______________________________________________________________________________ _____________________________________________________________________ SEE ATTACHED _______________________________________________________________________________ Depositor's signature _______________________________________________________________________________ Date_______________________________________ Custodian's signature _______________________________________________________________________________ Date_______________________________________ Witness' signature _______________________________________________________________________________ Date_______________________________________ (Use only if signature of the depositor or the custodian is required to be wit nessed.) _______________________________________________________________________________ _____________________________________________________________________ General Instructions section 408(n), or any only for an Ed IRA for person who has the which a return is filed Section references are approval of the IRS to to report unrelated to the Internal Revenue act as custodian. Any business income. An EIN Code unless otherwise person who may serve as is required for a common noted. a custodian of a fund created for Ed traditional IRA may IRAs. Purpose of Form serve as the custodian of an Ed IRA. Specific Instructions Form 5305-EA is a model custodial account Depositor. The Article XI. Article XI agreement that meets the depositor is the person and any that follow may requirements of section who incorporate additional 530(a) and has been establishes the provisions that are automatically approved custodial account. agreed to by the by the IRS. An depositor and custodian education individual Designated beneficiary. to complete the retirement account (Ed The designated agreement. They may IRA) is established beneficiary is the include, for example, after the form is fully person on whose behalf provisions relating to: executed by both the the custodial account definitions, investment depositor and the has been established. powers, voting rights, custodian. This account exculpatory provisions, must be created in the Responsible individual. amendment and United States for the The responsible termination, removal of exclusive purpose of individual, generally, the custodian, paying the qualified is a parent or guardian custodian's fees, state higher education of the designated law requirements, expenses of the beneficiary. However, treatment of excess designated beneficiary. under certain contributions, and circumstances, the prohibited transactions Do not file Form 5305- responsible individual with the depositor, EA with the IRS. may be the designated designated beneficiary, Instead, keep it for beneficiary. or responsible your records. individual, etc. Use Identification Numbers additional pages as For more information, necessary and attach including information The depositor's and them to this form. about the required designated beneficiary's disclosure you must get social security numbers Optional provisions in from your custodian, see will serve as their Article VI and Article Notice 97-60, 1997-46 identification numbers. VII. Form 5305-EA may be I.R.B. 8 (November 17, If the depositor is a reproduced in a manner 1997). nonresident alien and that provides only those does not have an optional provisions Definitions identification number, offered by the write "Foreign" in the custodian. Custodian. The block where the number custodian must be a bank is requested. The Note: Form 5305-EA may or savings and loan designated beneficiary's be reproduced and association, as defined social security number reduced in size for in is the identification adaption to passbook number of his or her Ed purposes. IRA. An employer identification number (EIN) is required STF FED 9038F.1 ARTICLE XI Form 5305-EA Education Individual Retirement Custodial Account 1. Upon completion and execution of the Form 5305-EA by the Depositor, and upon acceptance thereof by U.S. Bank National Association (hereinafter the "Custodian"), the Custodian shall establish and maintain an Education Individual Retirement Custodial Account (hereinafter the "Account"), in the name of the Designated Beneficiary. The Account established for the Designated Beneficiary shall be an Education IRA as described in Section 530 of the Internal Revenue Code. The contributions to the Education IRA on behalf of the Designated Beneficiary and any accumulations and earnings thereon shall be credited to the Account. 2. The amount of each contribution on behalf of the Designated Beneficiary shall be applied to the purchase of shares of Bridges Investment Fund, Inc. (hereinafter referred to as "Investment Company Shares"). Such purchases shall be made on the first business day following the day said contribution is received; provided, however, if the contribution received is less than $500 then, in such event, the purchase of Investment Company Shares shall be made not later than the next following 5th, 15th or 25th day of the month after receipt of the contribution. 3. All cash dividends and capital gain distributions received in respect of Investment Company Shares held in the Account shall be reinvested in shares of the Investment Company from which they were received and such shares shall be credited to such Account. Such reinvestment shall be made on the last bank business day of the month in which the distribution is received by the Custodian and on which such shares are offered for sale. The amount of each such distribution, unless received in additional shares of such Company, and the amount of each contribution credited to such Account shall be applied to the purchase of as many full Investment Company Shares as can be purchased with the amount of such contribution or distribution plus any uninvested, unexpended balance of any prior such amount credited to such Account, and the Custodian, in its discretion may, but need not, purchase fractional shares of such Company. Any uninvested, unexpended balance of such contribution or distribution shall remain credited to such Account. If any distribution from Bridges Investment Fund, Inc., may be received at the election of the shareholder in additional Investment Company Shares or in cash or other property, the Custodian shall elect to receive such distribution in additional Investment Company Shares. All Investment Company Shares acquired by the Custodian shall be registered in the name of the Custodian or its nominee, but ownership thereof shall be deemed vested in the Designated Beneficiary subject to the terms and provisions of this Article XI. 4. The Custodian shall make payments from the Account from time to time in accordance with written instructions, in form acceptable to the Custodian, received from the Depositor, or "Responsible Individual" (as that term is defined in Article VI). The Custodian shall be fully protected in acting on written instructions of the Depositor or Responsible Individual and shall not be liable with respect to such payment. The Depositor shall be solely responsible for determining his or her eligibility to establish the Account, and the Depositor and/or Responsible Individual shall be solely responsible for the tax consequences of contributions to and distributions from the Account. The Custodian shall be entitled to rely absolutely on the representations of the Depositor and/or Responsible Individual with respect to all such matters. The Custodian shall only be held responsible for a failure to use ordinary diligence in safekeeping all funds deposited hereunder or making payments as required by the Depositor or Responsible Individual. 5. Subject to applicable federal and state penalty taxes for distributions not used for qualified education expenses, or distributions in excess of such expenses, the Responsible Individual shall always have the right to withdraw all or any part of this Account upon written notice to the Custodian. 6. Payments made in accordance with this Agreement will continue only so long as amounts remain in the Account. Once the Account is exhausted, the Custodian will be relieved of any and all liability to make payments to the Depositor or his or her Beneficiary. 7. The Custodian shall not engage in any prohibited transactions as defined in Section 4975 of the Internal Revenue Code. 8. The Depositor or the Custodian shall have the right to terminate the Account upon 60 days written notice to the other party. In the event of such termination, the Custodian shall make distribution of the Account to the Depositor or to another education IRA designated by the Depositor. -----END PRIVACY-ENHANCED MESSAGE-----