MEMORANDUM
TO: Christian Sandoe, U.S. Securities and Exchange Commission
FROM: Dennis J. Fogland, Amber Neubert
Baird Holm Law Firm
DATE: February 14, 2006
RE: Response to SEC Comments on Preliminary Proxy Statement of Bridges
Investment Fund, Inc.
-------------------------------------------------------------------------------
This Memorandum is submitted on behalf of our client, Bridges Investment
Fund, Inc. (the "Fund") and responds to telephonic comments received from SEC
Examiner Brick Barrientos (#202-551-6946) on February 10, 2006, with regard to
the Preliminary Proxy filing of the Fund. The following comments and responses
will follow the page numbers and sections in the Fund's preliminary proxy
statement as filed with the SEC, and in the draft revised proxy statement
enclosed with this Memorandum.
(1) Page 3, second full paragraph: This paragraph should be in bold face
and moved further forward in the Proxy Statement.
This paragraph has been moved up in the Proxy Statement, and will be in
bold face. This paragraph has been printed in bold face on the printed version,
and the lack of bold face may have been a function of electronic filing.
(2) Page 3, last paragraph: What was the reasoning for the granting of the
exception to the retirement policy by the Administration and Nominating
Committee for Mr. Estabrook and Mr. Smith, and more specifically, was there a
concern that if they were no longer directors that they and their families would
withdraw their funds from the Fund, resulting in fewer Fund assets and higher
expenses?
Fund management has confirmed that, consistent with the expressed
retirement policy described in this paragraph, the disclosure accurately states
the basis for the Committee's decision, and that no concern was expressed, nor
consideration given, to the possibility of either Mr. Estabrook or Mr. Smith
withdrawing they and/or their families funds from the Fund. As set forth in the
director table later in the Proxy Statement, the shares beneficially owned by
Mr. Estabrook constitute 2.04% of Fund shares, and those beneficially owned by
Mr. Smith constitute 1.20% of Fund shares, and Fund management does not believe
that there would be a significant adverse impact on the Fund, if such shares
were withdrawn.
Christian Sandoe, U.S. Securities and Exchange Commission
February 14, 2006
Page 2
(3) Page 16, footnote 1 to the Compensation Table: Confirm in the response
to the SEC that Mr. Reed and Mrs. Stoney did not stand for re-election as
directors because of any disagreement with the Fund or the Board.
Fund management has confirmed that there was no disagreement between Mr.
Reed or Mrs. Stoney and the Fund or the Board, and that their retirement from
the Board was not because of any such disagreement.
(4) Page 17, Proposal 2: Explain in the response to the SEC why the Fund
is having the shareholders vote on the continuance of the investment advisory
contract, when the independent directors have already approved the agreement.
It has been the long-standing historical practice of the Fund, and
consistent with the Board's desire to meet the higher standards of best
practices, to submit the proposal to continue the Fund's investment advisory
contract to the Fund shareholders for approval, after review and approval by the
Fund's independent directors.
(5) Page 18, third full paragraph: Explain in the response to the SEC the
co-trustee relationship between Edson Bridges and Ted Bridges referred to in
this paragraph.
The co-trustee relationship disclosed in this paragraph is solely for
voting purposes and solely to comply with the regulatory requirements of the
Nebraska Department of Banking, Bureau of Securities, regarding the dual
registration of investment adviser representatives. As co-trustees, Edson L.
Bridges II and Edson L. Bridges III share the right to vote the Bridges
Investment Management, Inc. (BIM) shares and Bridges Investment Counsel, Inc.
(BIC) shares held by each of them. The co-trustee relationship does not involve
or change the legal title or the economic benefit of the respective BIM or BIC
shares.
(6) Page 18, Evaluation by the Fund's Board of Directors: Reference is
made to the requirements set forth in Item 22 of Form N-1A, and confirming that
the factors described therein are addressed in this Section.
We have reviewed the specific factors delineated in Item 22(d)(6) of Form
N-1A, and added language addressing the extent to which economies of scale would
be realized as the Fund grows, and whether fee levels reflect these economies of
scale for the benefit of Fund investors. These factors were addressed by the
Fund independent directors in their annual review and evaluation of the
investment management agreement, and a summary of the evaluation of these
factors has been added. The remaining specific factors set forth in Item 22 have
been addressed in this section.
(7) Page 21, Proposal 4: Correct the reference to minor amendments made in
1962 (before the incorporation of the Fund in 1963).
This date has been corrected to refer to 1969.
Christian Sandoe, U.S. Securities and Exchange Commission
February 14, 2006
Page 3
(8) Page 21, Proposal 4: It is the position of the SEC that the articles
of the Restated Articles which are being materially amended should be the
subject of a separate vote by the Fund shareholders. Either explain to the SEC
why the proposed Restatement should not be divided into separate proposals for a
shareholder vote, or make such changes, explaining the reasons for the proposed
amendments on a separate basis for the material amendments.
While the Fund believes that the original method of a single shareholder
vote on the proposed Restated Articles complies with the governing provisions
for taking such action set forth in the Nebraska Business Corporation Act, in
response to the SEC comment, the Fund has divided the proposal to approve the
Fund's Amended and Restated Articles of Incorporation into six separate
proposals, new Proposals 4 through 9, included in the revised draft of the Proxy
Statement, beginning on page 22.
The six separate proposals involve all of those articles in the proposed
Amended and Restated Articles which are materially different from articles in
the current Fund Articles of Incorporation (Proposals Four and Five) or which
are newly proposed provisions in the Articles (Proposals Six, Seven and Eight),
and Proposal Nine which includes the general restatement of the Articles of
Incorporation. As noted on Appendix A to the Proxy Statement, a number of the
articles in the proposed Amended and Restated Articles represent no, or very
minimal change, from the current Articles (Articles I, II, III, IV, V, VIII, XII
and XIII). The changes to the remaining articles are addressed in the discussion
to Proposals Four through Nine. Appropriate changes are also included in the
Notice at the beginning of the Proxy Statement, and separate voting for each
proposal will be added to the Fund's proxy card.
- --------------------------------------------------------------------------------
In light of the printing and mailing deadlines faced by the Fund for the
upcoming Annual Meeting, expeditious review of these changes will be
appreciated. Responses to this Memorandum may be made to Dennis J. Fogland,
(402) 636-8264, dfogland@bairdholm.com or Amber N. Neubert, (402) 636-8248,
aneubert@bairdholm.com, attorneys with the Baird Holm Law Firm, 1500 Woodmen
Tower, Omaha, Nebraska 68102.
cc: Mr. Ted Bridges, President, Bridges Investment Fund, Inc.