<PAGE>
As filed with the Securities and Exchange Commission on April 30, 1998
Securities Act Registration No. 333-19235
Investment Company Act file No. 811-8005
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
_________________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post Effective Amendment No 2 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No 4 [X]
_________________________________
PAPP AMERICA-PACIFIC RIM FUND, INC.
(Registrant)
4400 North 32nd Street
Suite #280
Phoenix, Arizona 85018
Telephone number: 602/956-1115
__________________________________________
Robert L. Mueller Janet D. Olsen
Papp America-Pacific Rim Fund, Inc. Bell, Boyd & Lloyd
4400 North 32nd Street, #280 70 West Madison Street
Phoenix, Arizona 85018 Suite #3300
Chicago, Illinois 60602
(Agents for service)
Amending the Prospectus, Statement of Additional Information and Part C, and
filing exhibits.
It is proposed that this filing will become effective:
----- immediately upon filing pursuant to rule 485(b)
X on April 30, 1998 pursuant to rule 485(b)
-----
----- 60 days after filing pursuant to rule 485(a)(1)
----- on _____________ pursuant to rule 485(a)(1)
----- 75 days after filing pursuant to rule 485(a)(2)
----- on_________ pursuant to rule 485(a)(2)
- --------------------------------------------------------------------------------
<PAGE>
Papp America-Pacific Rim Fund, Inc.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Part A (Prospectus)
Item Location or Caption*
---- -------------------
1(a) & (b) Front Cover
2(a) Fund Expenses
(b) - (c) Not Applicable
3(a) Selected Financial Highlights
(b) Not Applicable
(c) Other Information
(d) Selected Financial Highlights
4(a)(i) The Fund
(ii) Front Cover
Investment Objective
Investment Methods
(b) Investment Restrictions
(c) Risk Factors
5(a) Management of the Fund
(b) Management of the Fund
Investment Adviser
(c) Investment Adviser
(d) Not Applicable
(e) Final Page
(f) Fund Expenses; Investment Adviser
(g) Not Applicable
5A The information required is included in registrant's most
recent Annual Report to Shareholders.
6(a) Other Information
(b) - (d) Not Applicable
(e) Other Information
(f) Distributions
(g) Federal Income Tax
(h) Not Applicable
7 Purchasing Shares
(a) Not Applicable
(b) Determination of Net Asset Value
Purchasing Shares
(c) Not Applicable
(d) Front Cover
(e) & (f) Not Applicable
8(a) Redeeming Shares
(b) Purchasing Shares
(c) & (d) Redeeming Shares
9 Not Applicable
<PAGE>
Part B (Additional Information Statement)
Item Location or Caption*
- ---- -------------------
10(a) & (b) Front Cover
11 Front Cover
12 Not Applicable
13(a) - (c) Investment Policies and Restrictions
(d) Investment Methods (in the prospectus)
Portfolio Transactions
14(a) & (b) Directors and Officers
Management of the Fund (in the prospectus)
(c)(1) Directors and Officers
(c)(2) Not Applicable
15(a) - (c) Management of the Fund
16(a) & (b) Investment Adviser
(c) - (g) Not Applicable
(h) Final page of prospectus
(i) Transfer Agent
17(a) Portfolio Transactions
(b) Not Applicable
(c) Portfolio Transactions
(d) - (e) Not Applicable
18(a) & (b) Not Applicable
19(a) Purchasing and Redeeming Shares
(b) Purchasing and Redeeming Shares; Additional
Information
(c) Purchasing and Redeeming Shares
20 Additional Tax Information
21 Not Applicable
22(a) Not Applicable
(b)(i) Performance Information
(i) & (iii) Not Applicable
(i) Performance Information
23 Additional Information
- --------------
* References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
<PAGE>
Prospectus
April 30, 1998
PAPP AMERICA-PACIFIC RIM FUND, INC.
Telephone
(602) 956-1115
(800) 421-4004
Email: [email protected]
------------------
Internet: http://www.roypapp.com
Investment Objective: Long-Term Capital Growth
The Fund invests with the objective of long-term capital growth resulting
to a considerable extent from international activities, particularly in the
Pacific Rim nations, of its portfolio companies.
- Minimum Investment -
Initial Purchase $5,000
Subsequent Purchases and
Individual Retirement Accounts (IRAs) $1,000
No sales or redemption charges
(A pure no-load fund)
This prospectus sets forth concisely information a prospective investor should
know before investing in Papp America-Pacific Rim Fund, Inc. (the "Fund").
Please retain it for future reference. A Statement of Additional Information
regarding the Fund dated the date of this prospectus has been filed with the
Securities and Exchange Commission and (together with any supplement to it) is
incorporated by reference. The Statement of Additional Information may be
obtained at no charge by telephoning the Fund at its telephone number shown
above. The Statement of Additional Information and other information filed
electronically may also be obtained from the Commission's web site
(http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Fund Expenses 3
Selected Financial Highlights 4
Investment Objective 5
Investment Methods 5
Risk Factors 6
Investment Restrictions 6
Purchasing Shares 7
Redeeming Shares 7
Determination of Net Asset Value 9
Management of the Fund 9
Investment Adviser 10
Distributions 10
Federal Income Tax 11
Other Information 11
</TABLE>
<PAGE>
Fund Expenses
- -------------
The following table illustrates all expenses and fees that a shareholder of the
Fund will bear, directly or indirectly.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Load Imposed on Purchases.................... None
Maximum Sales Load Imposed on Reinvested Dividends......... None
Deferred Sales Load........................................ None
Redemption Fees............................................ None
Exchange Fees.............................................. None
Annual Fund Operating Expenses
(as percentages of average daily net assets)
Management Fee............................................. 1.00%
12b-1 Fees................................................. None
Other Expenses (see note below)............................ 0.25%
-----
Total Fund Operating Expenses (after any expense
reimbursement)........................................... 1.25%
</TABLE>
. The investment adviser has obligated itself to reimburse the Fund to the
extent the Fund's regular operating expenses during any of its fiscal years
exceed 1.25% of its average daily net asset value in such year. Without such
expense reimbursement, "Other Expenses" in 1997 would have been .55%, and "Total
Fund Operating Expenses" would have been 1.55%. See "Investment Advisory
Agreement."
Example:
The investor would pay the following expenses on a $1,000 investment in the Fund
assuming (1) a 5% annual rate of return, (2) continuance of the above operating
expense percentage, (3) reinvestment of all distributions to shareholders, and
(4) redemption at the end of each period.
<TABLE>
<CAPTION>
One Year Three Years
-------- -----------
<S> <C>
$13 $41
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses and return may be greater or less than
those shown.
3
<PAGE>
Selected Financial Highlights:
- ------------------------------
The following information has been audited by Arthur Andersen LLP, independent
auditors, whose report thereon was unqualified. The audited financial statements
of the Fund and the auditors' report thereon are contained in the Fund's 1997
Annual Report, which may be obtained from the Fund upon request at no cost. The
Annual Report also includes information about the Fund's investment performance.
<TABLE>
<CAPTION>
Period Ended December 31,
1997
--------------------------
<S> <C>
Net asset value, beginning
of period (A) $ 10.00
Income from investment
operations:
Net investment income -
Net realized and unrealized
gain (loss) on investments 2.11
-----------
Total from investment
operations 2.11
Less Distributions:
Dividend from investment
income -
Distribution of net realized
gain (.01)
-----------
Total Distributions (.01)
Net asset value, end of period $ 12.10
===========
Total return 21.11%
===========
Ratios/Supplemental Data:
Net assets, end of period $13,741,389
Expenses to average
net assets (B) 1.25%*
Net investment income to
average net assets (C) 1.30%*
Portfolio turnover rate 14.30%
Average commission per share $ 0.0535
</TABLE>
* Annualized
(A) From the date of commencement of operations (March 14, 1997).
(B) If the Fund had paid all of its expenses and there had been no
reimbursement by the investment adviser, this ratio would have been
1.55%, for the period ended December 31, 1997.
(C) Computed giving effect to investment adviser's expense limitation
undertaking.
4
<PAGE>
Investment Objective
- --------------------
The Fund invests with the objective of long-term capital growth resulting
to a considerable extent from the international activities, particularly in the
Pacific Rim nations, of its portfolio companies. The Fund's investment objective
is a fundamental policy that may not be changed without shareholder approval.
Investment Methods
- -------------------
United States international companies. The Fund acquires the common stocks
of United States companies that appear to have substantial sales to and receive
significant income from countries within the Pacific Rim (defined as those
countries bordering the Pacific Ocean). Under normal market conditions, at least
65% of the Fund's total assets (valued at the time of each investment) will be
invested in United States companies (a) 50% or more of whose earnings or sales
can be attributed to, or assets are situated in, Pacific Rim countries including
the United States, and (b) 15% or more of whose earnings or sales can be
attributed to, or assets are situated in, Pacific Rim countries outside the
United States. In addition (and not included towards the 65% discussed in the
preceding sentence), the Fund may invest in United States companies that, in the
opinion of the Fund's investment adviser, will soon meet these criteria. In
determining which United States companies are eligible for inclusion in the
Fund's securities portfolio, the Fund's investment adviser will largely rely on
published annual geographic data provided by many multinational companies.
However, because a number of companies do not separately set forth the
geographical areas from which their earnings and sales are derived, e.g.,
separating Asian earnings and sales from European earnings and sales, the Fund's
investment adviser will also rely on verbal discussions with officials of
companies being considered for inclusion in the Fund's securities portfolio.
Foreign companies. The Fund may invest a maximum of 30% of its common stock
assets (valued at the time of each investment), in common stocks of foreign-
domiciled companies that are traded, either directly or in the form of American
Depository Receipts (ADRs), on a United States stock exchange or in the Nasdaq
Stock Market, 15% or more of whose earnings, sales, or assets can be attributed
to Pacific Rim countries, excluding the United States or, in the opinion of its
investment adviser, will soon meet these criteria.
The Fund seeks to purchase the shares of companies that it regards as
having excellent prospects for capital appreciation (measured on an overall
basis by such considerations as earnings growth over extended periods of time,
long-term dividend growth, above-average profitability created through operating
efficiency rather than financial leverage, and cash flows that appear to confirm
the sustainability of growth) at a price, relative to the market as a whole,
that does not fully reflect the superiority of a particular company. The
production of current income is not a determinative factor in the selection of
portfolio securities, and the Fund is not designed for investors seeking income
rather than capital appreciation. Investments are not limited by ratings or
other external criteria of quality, and investments may vary in quality measured
by such criteria, and may include speculative securities. Once purchased, the
shares of such companies are ordinarily retained so long as the investment
adviser believes that the prospects for appreciation continue to be favorable
and that the securities are not overvalued in the marketplace. Accordingly,
although the Fund's annual portfolio turnover rate will vary from year to year,
it is not expected to exceed 25% under normal market conditions.
Under normal market conditions, substantially all of the Fund's assets are
invested in common stocks, other than cash and cash equivalents anticipated to
be needed for payment of the Fund's obligations. However, if a temporary
defensive position should be considered by the investment adviser to be
advisable in view of market conditions, the Fund may hold cash and may invest up
to
5
<PAGE>
100% of its assets in United States government, agency and instrumentality
obligations, and in other domestic debt rated in one of the two highest grades
by one or more of the nationally recognized statistical ratings organizations
or, if unrated, believed by the investment adviser to be comparable in quality,
are readily salable, and mature or are redeemable by the Fund not more than one
year from the time of investment.
Risk Factors
- ------------
Investment in foreign business interests (either in United States
enterprises with substantial international activities, or in shares, or ADRs for
shares, of foreign companies), may be riskier in some ways than domestic
investment because of possibilities of: foreign controls over currency exchange;
restrictions on monetary repatriation; oppressive regulation; differing tax
systems among countries, with differing consequences to portfolio companies;
heavy or confiscatory taxation; less liquidity and more price volatility of some
foreign securities and ADRs; less governmental supervision of issuers of
securities; limited publicly available corporate information; varying
accounting, auditing and financial reporting standards and financial statements
among countries; difficulties in obtaining legal recourse and enforcing
judgments abroad; nationalization or expropriation of assets; and political,
economic or social instability. Also, risk may be increased to the extent of
commitments by portfolio companies in developing countries, contrasted with
developed countries.
The Fund's focus on companies with significant earnings, sales or assets in
Pacific Rim countries outside the United States makes the Fund more vulnerable
to potential adverse economic or market developments affecting that region than
would be the case for a fund investing in companies with broader geographic
diversification of their businesses.
The Fund is not intended to present a balanced investment program. It is
not intended to be a vehicle for short-term trading, but is intended for
investment for the long-term. The securities in which the Fund invests are
subject to the risks inherent in the respective portfolio companies and to
market fluctuations, and there can be no assurance that the Fund will achieve
its investment objective.
Investment Restrictions
- -----------------------
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment),
invest more than 5% of its assets (valued at such time) in securities of
any one issuer, except in obligations of the United States Government and
its agencies and instrumentalities;
2. Acquire securities of any one issuer that at time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;
3. Invest more than 5% of its assets (valued at time of investment) in
securities of issuers with less than three years' operation (including
predecessors);
4. Invest more than 5% of its assets (valued at time of investment) in
securities that are not readily marketable.
The first three of these restrictions cannot be changed without the approval of
the holders of a "majority of the outstanding voting securities" as defined in
the Investment Company Act. All of the Fund's investment restrictions are set
forth in the Statement of Additional Information.
6
<PAGE>
Purchasing Shares (see New Account Purchase Application accompanying this
- -----------------
prospectus)
Shares of the Fund are purchased at the net asset value per share next
determined after receipt of the purchase order, as described under
"Determination of Net Asset Value." There are no sales commissions or
underwriting discounts. The minimum initial investment is $5,000, except for
Individual Retirement Accounts (IRAs) where the minimum is $1,000. Minimum
subsequent investments in all cases are $1,000, excluding reinvestments of
dividends and capital gains distributions.
To make an initial purchase of shares, complete and sign the New Account
Purchase Application and mail it, together with a check for the total purchase
price, to Papp America-Pacific Rim Fund, Inc., Post Office Box 15508, Phoenix,
AZ 85060. The purchase price is the net asset value per share as described under
"Determination of Net Asset Value."
Each investment in shares of the Fund, including dividends and capital
gains distributions reinvested in Fund shares, is acknowledged by a statement
showing the number of shares purchased, the net asset value at which the shares
are purchased, and the new balance of Fund shares owned. The Fund does not issue
stock certificates for the shares purchased. All full and fractional shares will
be carried on the books of the Fund without the issuance of certificates.
Shares may be purchased or redeemed directly through the Fund or through an
investment dealer or other institution. The Fund may enter into an arrangement
with such an institution allowing the institution to process purchase orders or
redemption requests for its customers with the Fund on an expedited basis,
including requesting share redemptions by telephone. Although these arrangements
might permit one to effect a purchase or redemption of Fund shares through the
institution more quickly than would otherwise be possible, the institution may
impose charges for its services. Those charges could constitute a significant
portion of a smaller account, and might not be in a shareholder's best interest.
Shares of the Fund may be purchased or redeemed directly from the Fund without
imposition of any charges other than those described in the prospectus.
Some financial institutions that maintain nominee accounts with the Fund
for their clients for whom they hold Fund shares charge an annual fee of up to
0.35% of the average net assets held in such accounts for accounting, servicing,
and distribution services they provide with respect to the underlying Fund
shares. Such fees are paid by the Adviser.
The Fund reserves the right not to accept purchase orders under
circumstances or in amounts considered disadvantageous to existing shareholders.
Redeeming Shares
- ----------------
The Fund will redeem all or any part of shares owned upon written
request delivered to the Fund at Post Office Box 15508, Phoenix, AZ 85060. The
redemption request must:
(1) specify the number of shares or dollar amount to be redeemed, if less
than all shares are to be redeemed; and
(2) be signed by all owners exactly as their names appear on the account.
7
<PAGE>
In the case of shares registered in the name of a corporation, the
redemption request must be signed in the name of the corporation by an officer
whose title must be stated, and a certified bylaw provision or resolution of the
board of directors authorizing the officer to so act must be furnished. In the
case of a trust or a partnership, the signature must include the name of the
registered shareholder and the title of the person signing on its behalf. Under
certain circumstances, before the shares can be redeemed, additional documents,
including signature guarantees, may be required in order to verify the authority
of the person seeking to redeem.
Signature Guarantee Requirements
Under ordinary circumstances, a signature guarantee will not be required.
However, a signature guarantee is necessary under the following circumstances:
(1) the redemption request exceeds $25,000;
(2) the proceeds of the redemption are requested to be sent to a person
other then the registered holder(s) of the shares to be redeemed;
(3) the proceeds of the redemption are to be mailed to an address other
than the address of record; or
(4) a change of address request has been received by the Fund or the
Transfer Agent within the last 20 business days.
In such cases, each signature on any redemption request must be guaranteed
by a commercial bank or trust company in the United States, a member firm of the
New York Stock Exchange or other eligible guarantor institution. A notary public
is not an eligible guarantor.
Redemption Price
The redemption price per share is the net asset value determined as
described under "Determination of Net Asset Value." There is no redemption
charge. The redemption value of the shares may be more or less than the cost,
depending upon the value of the Fund's portfolio securities at the time of
redemption. If the net asset value of the shares in an account is less than
$1,000 as a result of previous redemptions and not market price declines, the
Fund may notify the registered holder that unless the account value is increased
to at least the minimum within 60 days the Fund will redeem all shares in the
account and pay the redemption price to the registered holder.
Payment for shares redeemed is made within seven days after receipt by the
Fund of a request for redemption in good order. However, if shares are redeemed
immediately after they are purchased, the Fund may delay paying the redemption
proceeds only until the shareholder's check for the purchase price has been
cleared, which may take up to 15 days. The Fund reserves the right to suspend or
postpone redemptions during any period when (a) trading on the New York Stock
Exchange is restricted, as determined by the Securities and Exchange Commission,
or that Exchange is closed for other than customary weekend and holiday
closings, (b) the Commission has by order permitted such suspension, or (c) an
emergency, as determined by the Commission, exists making disposal of portfolio
securities or valuation of net assets of the Fund not reasonably practicable.
8
<PAGE>
Determination of Net Asset Value
- --------------------------------
For purposes of computing the net asset value of a share of the Fund,
securities traded on securities exchanges, or in the over-the-counter market in
which transaction prices are reported, are valued at the last sales prices at
the time of valuation or, lacking any reported sales on that day, at the most
recent bid quotations. Other securities traded over-the-counter are also valued
at the most recent bid quotations. Securities for which quotations are not
available and any other assets are valued at a fair value as determined in good
faith by the board of directors. The price per share for a purchase order or
redemption request is the net asset value next determined after receipt of the
order.
The net asset value of a share of the Fund is determined as of the close of
trading on the New York Stock Exchange, currently 4:00 p.m. New York City time,
on any day on which that Exchange is open for trading, by dividing the market
value of the Fund's assets, less its liabilities, by the number of shares
outstanding, and rounding the result to the nearest full cent.
Management of the Fund
- ----------------------
The board of directors has overall responsibility for the conduct of the
Fund's affairs. The directors of the Fund, including those directors who are
also officers, and their principal business activities during the past five
years, are:
L. Roy Papp, Chairman and director. Age 71.
Partner, L. Roy Papp & Associates (investment manager).
Harry A. Papp, CFA, President and director. Age 43.
Partner, L. Roy Papp & Associates.
Robert L. Mueller, Vice President, Secretary and director. Age 70.
Partner, L. Roy Papp & Associates.
Rosellen C. Papp, CFA, Vice President, Treasurer and director. Age 43.
Partner, L. Roy Papp & Associates.
Bruce C. Williams, CFA, Vice President and director. Age 44.
Partner, L. Roy Papp & Associates.
James K. Ballinger, director. Age 48.
The Director of the Phoenix Art Museum.
Amy S. Clague, director. Age 65. Partner, Boyd and Clague (bookkeeping
services for small companies).
Carolyn P. O'Malley, director. Age 50. The Director of the Desert
Botanical Garden since 1994. Prior thereto, Assistant Director of the
Garden and Director of Public Relations of The Volunteer Center of Maricopa
County, Phoenix, Arizona.
Each of the following is an "interested person" of the Fund (as defined in
the Investment Company Act): L. Roy Papp as an officer of the Fund and a partner
of its investment adviser, L. Roy Papp & Associates; Harry A. Papp and Rosellen
C. Papp, as officers of the Fund, partners of the investment adviser and as the
son and daughter-in-law, respectively, of L. Roy Papp; Robert L. Mueller and
Bruce C. Williams as partners of the investment adviser and as officers of the
Fund. All but Mrs. Clague, Mr. Ballinger, and Mrs. O'Malley are also personnel
of the investment adviser.
9
<PAGE>
L. Roy Papp, Harry A. Papp, and Robert L. Mueller are the members of the
executive committee, which has authority during intervals between meetings of
the board of directors to exercise the powers of the Board, with certain
exceptions. Directors not affiliated with the investment adviser and not
officers of the Fund receive from the Fund an attendance fee of $250 for each
meeting of the board of directors attended.
The following are Vice Presidents of the Fund: George D. Clark, Jr.,
Jeffrey N. Edwards, Robert L. Hawley and Victoria S. Cavallero. Julie A. Hein is
Vice President and Assistant Treasurer of the Fund. Mr. Clark has been a partner
or associate of L. Roy Papp & Associates since 1987. Mr. Edwards has been a
partner or associate of L. Roy Papp & Associates since 1987. Ms. Cavallero has
been a partner or associate of L. Roy Papp & Associates since 1987. Mr. Hawley
has been a partner or associate of L. Roy Papp & Associates since 1993. Ms. Hein
has been a partner or associate of L. Roy Papp & Associates since 1989.
Investment Adviser
- ------------------
L. Roy Papp & Associates serves as investment adviser to the Fund. L. Roy
Papp and Rosellen C. Papp, partners of that firm, manage the portfolio of the
Fund. Except for two years when he was United States director of, and ambassador
to, the Asian Development Bank, Manila, Philippines, Mr. Papp has been in the
money management field since 1955. He has been either sole proprietor of or a
partner of L. Roy Papp & Associates since 1978. Rosellen C. Papp has been the
Director of Research of L. Roy Papp & Associates since 1981.
The firm of L. Roy Papp & Associates is also investment adviser to
individuals, trusts, retirement plans, endowments, and foundations. Assets under
management exceed $1.1 billion. The firm also acts as investment adviser to The
L. Roy Papp Stock Fund, Inc. which commenced operations in 1989 and whose assets
approximate $91 million, Papp America-Abroad Fund, Inc. which commenced
operations in 1991 and whose assets approximate $370 million, and Papp Focus
Fund, Inc. which commenced operations in 1998 and whose assets approximate $1.5
million.
Subject to the overall authority of the Fund's board of directors, the
adviser furnishes continuous investment supervision and management to the Fund
under an investment advisory agreement.
The investment adviser receives from the Fund, as compensation for its
services, a fee, accrued daily and payable monthly, at an annual rate of 1% of
the Fund's net assets. On days for which the values of the Fund's net assets are
not determined, the fee is accrued on the most recently determined net assets
adjusted for subsequent daily income and expense accruals. The adviser has
obligated itself to reimburse the Fund to the extent the Fund's total annual
expenses, excluding taxes, interest and extraordinary litigation expenses,
during any of its fiscal years, exceed 1.25% of its average daily net asset
value in such year.
Under the agreement, the investment adviser furnishes at its own expense
office space to the Fund and all necessary office facilities, equipment, and
personnel for managing the assets of the Fund. The investment adviser also pays
all expenses of marketing shares of the Fund, all expenses in determination of
daily price computations, placement of securities orders and related
bookkeeping.
The Fund pays all expenses incident to its operations and business not
specifically assumed by the investment adviser, including expenses relating to
custodial, legal, and auditing charges; printing and mailing reports and
prospectuses to existing shareholders; taxes and corporate fees; maintaining
10
<PAGE>
registration of the Fund under the Investment Company Act and registration of
its shares under the Securities Act of 1933; and complying with the securities
laws of certain states.
Distributions
- -------------
The Fund intends to distribute to shareholders substantially all net
investment income and any net capital gains realized from sales of the Fund's
portfolio securities.
Dividends from net investment income and distributions from any net
realized capital gains are reinvested in additional shares of the Fund unless
the shareholder has requested in writing to have them paid by check.
Federal Income Tax
- ------------------
The Fund intends to qualify to be taxed as a regulated investment company
under the Internal Revenue Code so as to be relieved of federal income tax on
its capital gains and net investment income currently distributed to its
shareholders. Dividends from investment income and net short-term capital gains
are taxable as ordinary income. Distributions of long-term capital gains are
taxable as long-term capital gains regardless of the length of time shares in
the Fund have been held. Distributions are taxable, whether received in cash or
reinvested in shares of the Fund.
Each shareholder is advised annually of the source or sources of
distributions for federal income tax purposes. A shareholder who is not subject
to federal income taxation will not be required to pay tax on distributions
received.
If shares are purchased shortly before a record date for a distribution,
the shareholder will, in effect, receive a return of a portion of his
investment, but the distribution will be taxable to him even if the net asset
value of the shares is reduced below the shareholder's cost. However, for
federal income tax purposes the original cost would continue as the tax basis.
If shares are redeemed within six months, any loss on the sale of those shares
would be long-term capital loss to the extent of any distributions of long-term
capital gains that the shareholder has received on those shares.
If a shareholder fails to furnish his social security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate of 31% ("backup
withholding") from dividend, capital gain and redemption payments to him.
Dividend and capital gain payments may also be subject to backup withholding if
the shareholder fails to certify properly that he is not subject to backup
withholding due to the under-reporting of certain income. These certifications
are contained in the New Account Purchase Application which should be completed
and returned to the Fund when the initial investment is made.
Other Information
- -----------------
The Fund was incorporated in Maryland on December 18, 1996 and commenced
operations as an open-end diversified management investment company on March 14,
1997. Each share of capital stock, $.01 par value, is entitled to share pro rata
in any dividends and other distributions on shares declared by the board of
directors, to one vote per share in elections of directors and other matters
presented to shareholders, and to equal rights per share in the event of
liquidation.
The Fund issues annual reports to shareholders containing financial
statements audited by its independent auditors, Arthur Andersen LLP. The Fund
also issues interim quarterly reports containing lists of securities owned by
the Fund.
11
<PAGE>
The Fund may provide information about its total return and average annual
total return in letters to shareholders or in sales materials. Total return is
the percentage change in value during the period of an investment in the Fund,
including the value of shares acquired through reinvestment of all dividend and
capital gains distributions. Average annual total return is the average annual
compounded rate of change in value represented by the total return for the
period. Performance quotations for any period when an expense limitation is in
effect will be greater than if the limitation had not been in effect. The Fund's
performance may also be compared to various indices. See the Statement of
Additional Information for a more complete explanation.
All performance data is based on the Fund's past investment results and
does not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of the
Fund's portfolio, and the Fund's operating expenses. Investment performance also
reflects the risks associated with the Fund's investment objective and policies.
These factors should be considered when comparing the Fund's investment results
to those of other mutual funds and other investment vehicles.
According to the law of Maryland, under which the Fund is incorporated, and
the Fund's bylaws, the Fund is not required to hold an annual meeting of
shareholders unless required to do so under the Investment Company Act.
Inquiries regarding the Fund should be directed to the Fund at its telephone
number shown on the front cover.
The Fund will call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing to
do so by record holders of at least 10% of the Fund's outstanding common shares,
and in connection with such meeting will comply with the provisions of section
16(c) of the Investment Company Act concerning assistance with a record
shareholder communication asking other record shareholders to join in that
request.
Papp America-Pacific Rim Fund, Inc.
Telephone: (602) 956-0980
Investment Adviser Custodian
L. Roy Papp & Associates Founders Bank of Arizona
4400 North 32nd Street 7335 E. Doubletree Ranch Rd.
Suite 280 Scottsdale, AZ 85258
Phoenix, AZ 85018
Transfer and Dividend Disbursing Agent Independent Auditors
L. Roy Papp & Associates Arthur Andersen LLP
501 North 44th St., Ste. 300
Phoenix, AZ 85008
Legal Counsel
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, IL 60602
12
<PAGE>
PAPP AMERICA-PACIFIC RIM FUND, INC.
Statement of Additional Information
April 30, 1998
4400 North 32nd Street - Suite #280
Phoenix, Arizona 85018
Phone (602) 956-1115
(800) 421-4004
Email: [email protected]
------------------
Internet: http://www.roypapp.com
-------------------------
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Additional Information................ 1
Investment Policies and Restrictions.. 2
Investment Adviser.................... 3
Directors and Officers................ 4
Performance Information............... 4
Additional Tax Information............ 6
Portfolio Transactions................ 6
Custodian............................. 7
Transfer Agent........................ 7
Independent Auditors.................. 8
Certain Shareholders.................. 8
</TABLE>
-------------------------
Additional Information
- ----------------------
This Statement of Additional Information is not a prospectus, but provides
information that should be read in conjunction with the Fund's prospectus dated
April 30, 1998 and any supplement thereto. The prospectus may be obtained from
the Fund at no charge by telephoning the Fund at its telephone number shown
above. The 1997 Annual Report of the Fund, a copy of which accompanies this
Statement of Additional Information, contains financial statements, notes
thereto, and the report of the Fund's independent auditors, all of which (but no
other part of the annual report) is incorporated herein by reference.
1
<PAGE>
Investment Policies and Restrictions
- ------------------------------------
The Fund's investment objective is stated in the prospectus on the front
cover and under "Investment Objective." The manner in which the Fund pursues its
investment objective is discussed in the prospectus under the captions
"Investment Methods" and "Risk Factors." The investment restrictions are set
forth in full immediately below.
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment),
invest more than 5% of its assets (valued at such time) in securities of
any one issuer, except in obligations of the United States Government and
its agencies and instrumentalities;
2. Acquire securities of any one issuer that at time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;
3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry;
4. Invest in repurchase agreements or reverse repurchase agreements;
5. Borrow money except from banks for temporary or emergency purposes in
amounts not exceeding 10% of the value of the Fund's assets at the time of
borrowing (the Fund will not purchase additional securities when its
borrowings exceed 5% of the value of its assets);
6. Underwrite the distribution of securities of other issuers, or acquire
"restricted" securities that, in the event of a resale, might be required
to be registered under the Securities Act of 1933 on the ground that the
Fund could be regarded as an underwriter as defined by that Act with
respect to such resale;
7. Purchase or sell commodities, commodity contracts or options;
8. Make margin purchases or short sales of securities;
9. Invest in companies for the purpose of management or the exercise of
control;
10. Make loans (but this restriction shall not prevent the Fund from
investing in debt securities, subject to the 5% limitation stated in
restriction 5 above);
11. Issue any senior security except to the extent permitted under the
Investment Company Act of 1940.
Restrictions 1 through 11 listed above are fundamental policies, and may be
changed only with the approval of a "majority of the outstanding voting
securities" as defined in the Investment Company Act.
2
<PAGE>
The Fund has also adopted the following restrictions that may be changed by the
Board of Directors without shareholder approval:
a. Invest more than 5% of its assets (valued at time of investment) in
securities of issuers with less than three years' operation (including
predecessors);
b. Invest more than 5% of its assets (valued at time of investment) in
securities that are not readily marketable;
c. Acquire securities of other investment companies except (a) by purchase
in the open market, where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission and
(b) where the acquisition results from a dividend or a merger,
consolidation or other reorganization [in addition to this investment
restriction, the Investment Company Act of 1940 provides that the Fund may
neither purchase more than 3% of the voting securities of any one
investment company nor invest more than 10% of the Fund's assets (valued at
time of investment) in all investment company securities purchased by the
Fund];
d. Pledge, mortgage or hypothecate its assets, except for temporary or
emergency purposes and then to an extent not greater than 15% of its total
assets at cost;
e. Purchase or sell real estate or interests in real estate, although it
may invest in marketable securities of enterprises that invest in real
estate or interests in real estate;
f. Invest in or write puts, calls, straddles or spreads;
g. Invest in oil, gas or other mineral exploration or development
programs, although it may invest in marketable securities of enterprises
engaged in oil, gas or mineral exploration;
h. Invest more than 5% of its net assets (valued at time of investment) in
warrants, nor more than 2% of its net assets in warrants that are not
listed on the New York or American Stock Exchanges.
Investment Adviser
- ------------------
Information on the Fund's investment adviser, L. Roy Papp & Associates, is
set forth in the prospectus under "Management of the Fund" and "Investment
Adviser," and is incorporated herein by reference.
The adviser is an Arizona general partnership owned and controlled by its
partners, of whom there were 10 at the date of this Additional Information
Statement: L. Roy Papp, Harry A. Papp, Robert L. Mueller, Rosellen C. Papp,
Bruce C. Williams, George D. Clark, Jr., Jeffrey N. Edwards, Robert L. Hawley,
Victoria S. Cavallero, and Julie A. Hein.
3
<PAGE>
The Advisory Agreement provides that the adviser shall not be liable for
any loss suffered by the Fund or its shareholders as a consequence of any act or
omission in connection with services under the Agreement, except by reason of
the adviser's willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations and duties under the Advisory Agreement.
The Advisory Agreement expires on September 24, 1998, but may be continued
from year to year so long as the continuance is approved annually (a) by the
vote of a majority of the Directors of the Fund who are not "interested persons"
of the Fund or the adviser cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Board of Directors or by the vote of a
majority (as defined in the 1940 Act) of the outstanding shares of the Fund. The
Agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act).
Directors and Officers
- ----------------------
Information about the directors and officers of the Fund and their
principal business activities during the past five years is set forth in the
prospectus under "Management of the Fund", and is incorporated herein by
reference.
All of the directors, except James K. Ballinger, Amy S. Clague, and Carolyn
P. O'Malley are partners of L. Roy Papp & Associates, the Fund's investment
adviser, and serve without any compensation from the Fund. The following table
sets forth compensation paid by the Fund and by all of the Papp Funds (the Fund,
Papp America-Abroad Fund, and The L. Roy Papp Stock Fund) to Mr. Ballinger, Mrs.
Clague, and Mrs. O'Malley during the fiscal year ending December 31, 1997.
Neither the Fund nor any of the Papp funds has any pension or retirement plan.
<TABLE>
<CAPTION>
Aggregate Total Compensation from the Fund,
Compensation Papp America-Abroad Fund and The
Name of Director From the Fund L. Roy Papp Stock Fund Paid to Directors
- ---------------- ------------- ----------------------------------------
<S> <C> <C>
James K. Ballinger $400 $6,150
Amy S. Clague $400 $6,150
Carolyn P. O'Malley $400 $ 400
</TABLE>
The address of Messrs. L. Roy Papp, Harry A. Papp, Robert L. Mueller, Bruce
C. Williams, and Ms. Rosellen C. Papp, is 4400 N. 32nd Street, Suite 280,
Phoenix, Arizona 85060; the address of Mr. Ballinger is 1625 North Central
Avenue, Phoenix, Arizona 85004; the address of Mrs. Clague is 326 East Kaler
Drive, Phoenix, Arizona 85020; and the address of Mrs. O'Malley is 1201 N.
Galvin Parkway, Phoenix, Arizona 85008.
Performance Information
- -----------------------
From time to time the Fund may quote total return figures. "Total Return"
for a period is the percentage change in value during the period of an
investment in Fund shares, including the value of shares acquired through
reinvestment of all dividends and capital gains
4
<PAGE>
distributions. "Average Annual Total Return" is the average annual compounded
rate of change in value represented by the Total Return Percentage for the
period.
Average Annual Total Return is computed as follows:
ERV = P(1 + T)/n/
Where: P = the amount of an assumed initial investment in Fund shares
T = average annual total return
n = number of years from initial investment to the end of
the period
ERV = ending redeemable value of shares held at the end of
the period
Applying the above method of computation to the operations of the Fund from
commencement of operations on March 14, 1997 through December 31, 1997, the
Fund's total return for the period was 21.1%.
The Fund imposes no sales charge and pays no distribution expenses. Income
taxes are not taken into account. The Fund's performance is a function of
conditions in the securities markets, portfolio management, and operating
expenses. Although information such as that shown above is useful in reviewing
the Fund's performance and in providing some basis for comparison with other
investment alternatives, it should not be used for comparison with other
investments using different reinvestment assumptions or time periods.
In advertising and sales literature, the Fund's performance may be compared
with that of market indices and other mutual funds. In addition to the above
computations, the Fund might use comparative performance as computed in a
ranking or rating determined by Lipper Analytical Services, Inc., Morningstar,
Inc., or another service.
Purchasing and Redeeming Shares
- -------------------------------
Purchases and redemptions are discussed in the Fund's prospectus under the
headings "Purchasing Shares" and "Redeeming Shares." All of that information is
incorporated herein by reference.
The Fund's net asset value is determined on days on which the New York
Stock Exchange is open for trading, which regularly is every day except Saturday
and Sunday. However, that Exchange is also closed on New Year's Day, the third
Monday in January, the third Monday in February, Good Friday, the last Monday in
May, Independence Day, Labor Day, Thanksgiving Day and Christmas Day, and if one
of those holidays should fall on a Saturday or a Sunday, on the preceding Friday
or the following Monday, respectively. Net asset value will not be computed on
the days of observance of those holidays, unless, in the judgment of the board
of directors, it should be determined on any such day, in which case the
determination will be made as of 1:00 p.m., Phoenix time.
The Fund has elected to be governed by rule 18f-1 under the Investment
Company Act pursuant to which it is obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the net asset value of the Fund during any
90-day period for any one shareholder.
5
<PAGE>
Redemptions in excess of the above amounts will normally be paid in cash, but
may be paid wholly or partly by a distribution in kind of securities.
Redemptions will be made at net asset value. See "Determination of Net
Asset Value" in the prospectus, which information is incorporated herein by
reference.
Additional Tax Information
- --------------------------
See "Federal Income Tax" in the prospectus. All that information is
incorporated herein by reference.
Portfolio Transactions
- ----------------------
The Fund expects that its annual portfolio turnover rate will not exceed
25% under normal conditions, a turnover rate less than that of most mutual funds
that invest primarily in common stocks. However, there can be no assurance that
the Fund will not exceed this rate, and the portfolio turnover rate may vary
from year to year.
The investment adviser places portfolio transactions of the Fund with those
securities brokers and dealers that it believes will provide the best value in
transaction and research services for the Fund, either in a particular
transaction or over a period of time. Although some transactions involve only
brokerage services, some involve research services as well.
In valuing brokerage services, the investment adviser makes a judgment as
to which brokers are capable of providing the most favorable net price (not
necessarily the lowest commission considered alone) and the best execution in a
particular transaction. Best execution connotes not only general competence and
reliability of a broker, but specific expertise and effort of a broker in
overcoming the anticipated difficulties in fulfilling the requirements of
particular transactions, because the problems of execution and the required
skills and effort vary greatly among transactions.
In valuing research services, the investment adviser makes a judgment of
the usefulness of research and other information provided by a broker to the
investment adviser in managing the Fund's investment portfolio. The information,
e.g., data or recommendations concerning particular securities, relates to the
specific transaction placed with the broker. The extent, if any, to which the
obtaining of such information may reduce the expenses of the adviser in
providing management services to the Fund is not determinable. In addition, it
is understood by the Board of Directors that other clients of the investment
adviser might also benefit from the information obtained for the Fund, in the
same manner that the Fund might also benefit from information obtained by the
investment adviser in performing services to others.
The reasonableness of brokerage commissions paid by the Fund in relation to
transaction and research services received is evaluated by the staff of the
investment adviser on an ongoing basis. The general level of brokerage charges
and other aspects of the Fund's portfolio transactions are reviewed periodically
by the Board of Directors.
6
<PAGE>
Transactions of the Fund in the over-the-counter market are executed with
primary market makers acting as principal except where it is believed that
better prices and execution may be obtained otherwise.
Subject to the overriding objective of seeking the best value in
transaction and research services for the Fund, the adviser may select those
brokers and dealers who have made recommendations resulting in sales of Fund
shares.
Although investment decisions for the Fund are made independently from
those for other investment advisory clients of L. Roy Papp & Associates, it may
develop that the same investment decision is made for both the Fund and one or
more other advisory clients. If both the Fund and other clients purchase or sell
the same class of securities on the same day, the transactions will be allocated
as to amount and price in a manner considered equitable to each.
During the period ended December 31, 1997, brokerage commissions paid by
the Fund totaled $13,291 on portfolio transactions aggregating $13,392,557. All
commissions were paid to discount brokers.
Custodian
- ---------
Founders Bank of Arizona, 7335 E. Doubletree Ranch Road, Scottsdale, AZ
85258, is the custodian for the Fund. It is responsible for holding all
securities and cash of the Fund, receiving and paying for securities purchased,
delivering against payment securities sold, receiving and collecting income from
investments, making all payments covering expenses of the Fund, and performing
other administrative duties, all as directed by authorized persons of the Fund.
The custodian does not exercise any supervisory function in such matters as
purchase and sale of portfolio securities, payment of dividends, or payment of
expenses of the Fund. The Fund has authorized the custodian to deposit certain
portfolio securities in central depository systems as permitted under federal
law. The Fund may invest in obligations of the custodian and may purchase or
sell securities from or to the custodian.
Transfer Agent
- --------------
L. Roy Papp & Associates, the investment adviser to the Fund, also acts as
transfer, dividend disbursing, and shareholder servicing agent for the Fund
pursuant to a written agreement with the Fund. Under the agreement, L. Roy Papp
& Associates is responsible for administering and performing transfer agent
functions, for acting as service agent in connection with dividend and
distribution functions, for performing shareholder account administration agent
functions in connection with the issuance, transfer and redemption of the Fund's
shares, and maintaining necessary records in accordance with applicable laws,
rules and regulations.
For its services L. Roy Papp & Associates receives from the Fund a monthly
fee of $.75 for each shareholder account of the Fund, $.50 for each dividend
paid on a shareholder account, and $1.00 for each purchase (other than by
reinvestment, transfer or redemption) of shares of the Fund. The Board of
Directors of the Fund has determined the charges by L. Roy Papp & Associates to
the Fund are comparable to the charges of others performing similar services. L.
7
<PAGE>
Roy Papp & Associates has agreed to make no charges for the provision of these
services until January 1, 1999.
Independent Auditors
- --------------------
Arthur Andersen LLP, 501 North 44th Street, Suite 300, Phoenix, Arizona
85008, audits and reports on the Fund's annual financial statements, reviews
certain regulatory reports and the Fund's tax returns, and performs other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Fund.
Certain Shareholders
- --------------------
At April 1, 1998, no person was known by the Fund to own of record in
excess of 5% of the outstanding shares of capital stock of the Fund. The
following institutions owned of record in excess of 5% of the outstanding shares
of capital stock of the Fund as nominees for their clients and without power to
vote or dispose of the shares: Charles Schwab & Co., Inc. 201,406 shares or
18.3% and Rodac & Co., 59,368 shares or 5.4%. At that date, 121,063 shares or 1%
of the outstanding shares, were owned by the directors and officers of the Fund
as a group.
8
<PAGE>
Part C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
--------------------
(1) Financial statements included in Part B of this amendment (incorporated by
reference to 1997 annual report of registrant).
Schedule of portfolio investments - December 31, 1997
Report of independent auditors
Statements of assets and liabilities - December 31, 1997
Statements of operations period ended December 31, 1997
Statements of changes in net assets period ended December 31, 1997
Notes to financial statements
(2) Financial statements included in Part C of this amendment:
None
Note: The following schedules have been omitted for the following reasons:
Schedule I - The required information is presented in the statement of
investments at December 31, 1997.
Schedules II, III, IV, and V - The required information is not
present.
(b) Exhibits
1. Articles of Incorporation*
2. Bylaws*
3. None
C-1
<PAGE>
4. None
5. Investment Advisory Agreement*
6. None
7. None
8. Custodian Agreement*
9. Transfer Agency Agreement with L. Roy Papp & Associates dated
December 18, 1996
10.1 Opinion of Bell, Boyd & Lloyd
10.2 Consent of Bell, Boyd & Lloyd
11. Consent of independent auditors dated April 27, 1998
12. None
13. Initial Subscription Agreement*
13.1 New Account Purchase Application
14. None
15. None
16. Schedule of Computation of Performance Quotations
17. Financial Data Schedule
18. Not Applicable
* Previously filed. Incorporated by reference to the exhibit of the same number
included in Registrant's registration statement on Form N-1A, Securities Act
file number 333-19235 (the "Registration Statement") filed on January 3, 1997.
** Previously filed. Incorporated by reference to the exhibit of the same number
included in pre-effective amendment no. 1 to the Registration Statement filed on
March 3, 1997.
Item 25. Persons Controlled By or Under Common Control with Registrant
- ------- -------------------------------------------------------------
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the captions "Management of the Fund" and "Investment Advisory Agreement"
and in the Additional Information Statement under the captions "Directors and
Officers" and "Investment Adviser" is incorporated by reference.
Item 26. Number of Holders of Securities
- ------- -------------------------------
Number of Record Holders
Title of Class At April 1, 1998
-------------- ------------------------
Capital Stock $.01 par value 462
Item 27. Indemnification
- ------- ---------------
Section 2-418 of the General Corporation Law of Maryland authorizes
the registrant to indemnify its directors and officers under specified
circumstances.
Section 17(h) of the Investment Company Act provides that neither the
articles of incorporation of the registrant, nor any other instrument pursuant
to which the registrant is organized or
C-2
<PAGE>
administered, shall contain any provision that protects or purports to protect
any director or officer of the registrant against any liability to the
registrant or its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Section 9.01 of Article IX of the bylaws of the registrant (exhibit 2 to
the registration statement, which is incorporated herein by reference) provides
in effect that the registrant shall provide certain indemnification of its
directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
In the absence of a final decision on the merits by a court or other body
before which a proceeding was brought that a person to be indemnified
(indemnitee) was not liable by reason of his willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office, the registrant will not indemnify any person unless a determination
that the indemnitee was not so liable shall have been made on behalf of the
registrant by (a) vote of a majority of directors who are neither "interested
persons" of the registrant as defined in section 2(a)(19) of the Act nor parties
to the proceeding (disinterested, non-party directors), or (b) an independent
legal counsel in a written opinion. The registrant will not advance attorneys'
fees or other expenses incurred by an indemnitee in connection with a proceeding
unless the registrant receives an undertaking by or on behalf of the indemnitee
to repay the advance (unless it is ultimately determined that he is entitled to
indemnification) and (a) the indemnitee shall provide a security for his
undertaking, or (b) a majority of the disinterested, non-party directors of the
registrant, or an independent legal counsel in a written option, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
- ------- ----------------------------------------------------
The information in the prospectus under the captions "Management of the
Fund" and "Investment Advisory Agreement" is incorporated by reference. Neither
L. Roy Papp & Associates nor any of its partners has at any time during the past
two years been engaged in any other business,
C-3
<PAGE>
profession, vocation or employment of a substantial nature either for its, his
or her own account or in the capacity of director, officer, employee, partner or
trustee.
Item 29. Principal Underwriters
- ------- ----------------------
None
Item 30. Location of Accounts and Records
- ------- --------------------------------
Rosellen C. Papp, Treasurer
Papp America-Pacific Rim Fund, Inc.
4400 North 32nd Street, Suite 280
Phoenix, AZ 85018
Item 31. Management Services
- ------- -------------------
None
Item 32. Undertakings
- ------- ------------
a) Not applicable
b) Not applicable
c) Registrant undertakes to deliver to each person to whom a
prospectus is delivered, upon request and without charge, a copy
of Registrant's Annual Report to Shareholders.
The registrant undertakes to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director or directors when requested
to do so by the record holders of at least 10% of the registrant's outstanding
common shares, and in connection with such meeting to comply with provisions of
section 16(c) of the Investment Company Act of 1940.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this amendment pursuant to Rule 485(b)
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 Phoenix, and the State of Arizona on April 27, 1998.
Papp America-Pacific Rim Fund, Inc.
By: /s/ L. Roy Papp
---------------
L. Roy Papp, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ L. Roy Papp Director and Chairman )
- ----------------------------------- (principal executive and )
L. Roy Papp financial officer) )
)
)
/s/ Harry A. Papp Director and President )
- ----------------------------------- )
Harry A. Papp )
)
)
/s/ Robert L. Mueller Director, Vice President )
- ----------------------------------- and Secretary )
Robert L. Mueller )
)
)
/s/ Bruce C. Williams Director and Vice President )
- ----------------------------------- )
Bruce C. Williams )
) April 27, 1998
)
/s/ Rosellen C. Papp Director, Vice President and )
- ----------------------------------- Treasurer (principal accounting )
Rosellen C. Papp officer) )
)
)
/s/ James K. Ballinger Director )
- ----------------------------------- )
James K. Ballinger )
)
/s/ Amy S. Clague Director )
- ----------------------------------- )
Amy S. Clague )
)
/s/ Carolyn P. O'Malley Director )
- ----------------------------------- )
Carolyn P. O'Malley )
</TABLE>
<PAGE>
INDEX FOR EXHIBITS
FILED WITH THIS AMENDMENT
EXHIBIT NO. DESCRIPTION
- ---------- -----------
10.1 Opinion of Bell, Boyd & Lloyd
10.2 Consent of Bell, Boyd & Lloyd
11. Consent of independent auditors dated April 27, 1998
13.1 New Account Purchase Application
16. Schedule of Computation of Performance Quotations
17. Financial Data Schedule
<PAGE>
Exhibit 10.1
BELL, BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
312 372 1121
Fax: 312 372 2098
March 3, 1997
Papp America-Pacific Rim Fund, Inc.
4400 North 32nd Street
Suite 280
Phoenix, Arizona 85018
Ladies and Gentlemen:
We have acted as counsel for Papp America-Pacific Rim Fund, Inc., a
Maryland corporation (the "Fund"), in connection with the registration under the
Securities Act of 1933 (the "Act") of an indefinite number of shares of its
capital stock, $0.01 par value per share (the "shares"), pursuant to the Fund's
registration statement, no. 333-19235 on Form N-1A (the "registration
statement"). In this connection, we have examined originals, or copies certified
or otherwise identified to our satisfaction, of such documents, corporate and
other records, certificates and other papers as we deemed it necessary to
examine for the purpose of this opinion, including the articles of incorporation
and bylaws of the Fund, resolutions of the board of directors authorizing the
issuance of the shares, and the registration statement.
Based upon the foregoing examination, we are of the opinion that:
1. The Fund is a corporation duly organized and legally existing in good
standing under the laws of Maryland.
2. Upon the issuance and delivery of the shares in accordance with the
articles of incorporation of the Fund and the resolutions of the board
of directors authorizing the issuance of its shares and the receipt by
the Fund of a purchase price of not less than the net asset value or
the par value per share, the shares will be legally issued and
outstanding, fully paid and nonassessable.
In giving this opinion, we have relied upon the opinion of Piper & Marbury,
L.L.P. to us dated February 28, 1997, and have made no independent inquiry with
respect to any matter covered by such opinion. Further, we have assumed that the
number of shares issued by the Fund at any time will not exceed the total number
of shares authorized to be issued by the Fund's articles of incorporation.
We consent to the filing of this opinion as an exhibit to the registration
statement. In giving this consent we do not admit that we are in the category
of persons whose consent is required under section 7 of the Act.
Very truly yours,
/s/ Bell, Boyd & Lloyd
<PAGE>
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET WASHINGTON
Baltimore, Maryland 21201-3018 NEW YORK
410-539-2530 PHILADELPHIA
FAX: 410-539-0489 EASTON
February 28, 1997
Papp America-Pacific Rim Fund, Inc.
4400 North 32nd Street, Suite #280
Phoenix, Arizona 85018
Registration Statement on Form N-1A
-----------------------------------
Gentlemen:
We have acted as special Maryland counsel to Papp America-Pacific Rim Fund,
Inc. (the "Fund"), in connection with the registration by the Fund of an
indefinite number of shares of its Common Stock, par value $0.01 per share (the
"Shares"), pursuant to a registration statement on Form N-1A (File No. 333-
19235), as amended (the "Registration Statement"), under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended.
In this capacity, we have examined the Fund's charter and by-laws, the
proceedings of the Board of Directors of the Fund authorizing the issuance of
the Shares from time to time in accordance with the Registration Statement, and
such other statutes, certificates, instruments and documents relating to the
Fund and matters of law as we have deemed necessary to the issuance of this
opinion. In such examination, we have assumed the genuineness of all signatures,
the conformity of final documents in all material respects to the versions
thereof submitted to us in draft form, the authenticity of all documents
submitted to us as originals, and the conformity with originals of all documents
submitted to us as copies. As to factual matters, we have relied on the
Certificate of the Secretary and have not independently verified the matters
stated therein.
Based upon the foregoing, and limited in all respects to applicable
Maryland law, we are of the opinion and advise you that:
1. The Fund has been duly incorporated and is validly existing as a
corporation under the laws of the State of Maryland.
<PAGE>
Piper & Marbury
L.L.P.
Papp America-Pacific Rim Fund, Inc.
February 28, 1997
Page 2
2. The Shares to be issued by the Fund pursuant to the Registration
Statement have been duly authorized and, when issued as contemplated in the
Registration Statement, will be validly issued, fully paid and nonassessable.
Messrs. Bell, Boyd & Lloyd are authorized to rely upon this opinion in
rendering any opinion to the Fund which is to be filed as an exhibit to the
Registration Statement. We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to our firm in the
Registration Statement and the related Prospectus. In giving this consent, we do
not thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE>
Exhibit 10.2
BELL, BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
312 372 1121
Fax: 312 372 2098
As counsel for Papp America-Pacific Rim Fund, Inc. (the "Fund"), we consent
to the incorporation by reference of our opinion dated March 3, 1997 as an
exhibit to pre-effective amendment no. 1 to the registration statement of the
Fund, no. 333-19235 on Form N-1A. In giving this consent we do not admit that we
are in the category of persons whose consent is required under section 7 of the
Act.
April 28, 1998
/s/ Bell, Boyd & Lloyd
<PAGE>
Exhibit 11
Arthur Andersen LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
April 27, 1998.
<PAGE>
Exhibit 13.1
PAPP AMERICA-PACIFIC RIM FUND, INC.
Post Office Box 15508
NEW ACCOUNT PURCHASE APPLICATION Phoenix, Arizona 85060
(602) 956-1115
(800) 421-4004
Dated:
-------------------------
Make checks payable to, and mail to: Papp America-Pacific Rim Fund, Inc., P.O.
Box 15508, Phoenix, AZ 85060
- --------------------------------------------------------------------------------
1 AMOUNT OF PURCHASE: $__________ ($5,000 minimum for new account, except for
Individual Retirement Accounts (IRAs) where the minimum is $1,000)
- --------------------------------------------------------------------------------
2 REGISTRATION: (check one)
[_] Individual or
Joint Account:
------------------------ -----------------------------
(Individual) (Joint Tenant, if any)
[_] Transfer (or Gift) to Minor: , Custodian for
--------------- ---------------
(Custodian) (Minor)
Under the Uniform Transfers (or Gifts) to Minors Act of
-------------------
(State of residence)
[_] IRA: Custodian for
--------------------------- ----------------------------
(Custodian) (Individual)
IRA IRA Rollover (circle one)
[_] Other: (Corporations, Trusts, or others):
---------------------------------
---------------------------------------------------------------------------
(Trustee(s) - please include agreement date, corporation, partnership or
other entity)
- --------------------------------------------------------------------------------
3 ADDRESS OF RECORD:
--------------------------------------------------------
City State Zip Telephone ( )
---------------------- ---------- ------- --------
4 CITIZENSHIP: [_] United States [_] Other (specify)
----------------------
- --------------------------------------------------------------------------------
5 SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER:
-----------------------------
Page 1 of 2
(Please complete both sides of this application)
<PAGE>
Exhibit 16
Schedule of Computation
of Performance Quotations
Papp America-Pacific Rim Fund, Inc.
Total Return Calculation
As of December 31, 1997
<TABLE>
<CAPTION>
Net Asset Value Annualized
Beginning Per Share at Shares Net Asset Value Average
of Principal Beginning Shares at End Per Share at Redemption Value Total Total Total
Period Invested of Period Acquired of Period End of Period End of Period Return Return % Months Return %
------ -------- --------- -------- --------- ------------- ------------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/14/97 $1,000.00 $10.00 100 100.000 $12.10 $1,211.00 211.1 21.1% 9 1/2 21.1%
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAR-14-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 13,296,858
<INVESTMENTS-AT-VALUE> 13,696,938
<RECEIVABLES> 21,577
<ASSETS-OTHER> 30,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,748,679
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,341,309
<SHARES-COMMON-STOCK> 1,135,717
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 400,080
<NET-ASSETS> 13,741,389
<DIVIDEND-INCOME> 83,072
<INTEREST-INCOME> 9,418
<OTHER-INCOME> 0
<EXPENSES-NET> 110,158
<NET-INVESTMENT-INCOME> (21,456)
<REALIZED-GAINS-CURRENT> 9,546
<APPREC-INCREASE-CURRENT> 400,080
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 9,546
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,345,160
<NUMBER-OF-SHARES-REDEEMED> 210,372
<SHARES-REINVESTED> 929
<NET-CHANGE-IN-ASSETS> 413,032
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 77,151
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 110,158
<AVERAGE-NET-ASSETS> 8,199,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 2.11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.10
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
