<PAGE>
As filed with the Securities and Exchange Commission on February 23, 1998.
Securities Act Registration No. 333-43945
Investment Company Act file No. 811-08601
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
---------------------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
---------------------------------
PAPP FOCUS FUND, INC.
(Registrant)
4400 North 32nd Street
Suite #280
Phoenix, Arizona 85018
Telephone number: 602/956-1115
---------------------------------
Robert L. Mueller Janet D. Olsen
Papp Focus 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)
Approximate date of proposed public offering: As soon as practicable after
effectiveness of the registration statement.
Registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933, or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
-----------------------------------------------------------------------
<PAGE>
Papp Focus Fund, Inc.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Part A (Prospectus)
<TABLE>
<CAPTION>
Item Location or Caption*
- ---- -------------------
<S> <C>
1(a) & (b) Front Cover
2(a) Fund Expenses
(b) - (c) Not Applicable
3(a) Not Applicable
(b) Not Applicable
(c) Other Information
(d) Not Applicable
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 Advisory Agreement
(g) Not Applicable
5A Not Applicable
6(a) The Fund
(b) - (d) Not Applicable
(e) The Fund
(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
</TABLE>
<PAGE>
Part B (Additional Information Statement)
<TABLE>
<CAPTION>
Item Location or Caption*
- ---- -------------------
<S> <C>
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) - (e) Portfolio Transactions
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
(ii) & (iii) Not Applicable
(iv) Performance Information
23 Additional Information
</TABLE>
- ------------
* References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
<PAGE>
[LOGO]
Prospectus
February 27, 1998
PAPP FOCUS FUND, INC.
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
(602)956-1115
(800)421-4004
Email: [email protected]
Internet: http://www.roypapp.com
Investment Objective: Long-Term Capital Growth
The Fund is a non-diversified investment company. It intends to make
substantial investments in a relatively small number of companies, all selected
for the possibility of long-term capital growth (see Investment Methods and Risk
Factors).
- 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 Focus 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 writing or telephoning the Fund at its address or telephone number shown
above. You may also obtain the Statement of Additional Information and other
information that has been electronically filed from the Securities and Exchange
Commission Internet 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>
Page
<S> <C>
Fund Expenses 3
Investment Objective 4
Investment Methods 4
Risk Factors 5
Investment Restrictions 5
Purchasing Shares 6
Redeeming Shares 6
Determination of Net Asset Value 7
Management of the Fund 8
Investment Adviser 9
Distributions 10
Federal Income Tax 10
The Fund 10
</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>
<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
</TABLE>
Annual Fund Operating Expenses
(as percentages of average daily net assets)
<TABLE>
<S> <C>
Management Fee................................................. 1.0%
12b-1 Fees..................................................... None
Other Expenses (after any expense reimbursement)............... 0.25%
-----
Total Fund Operating Expenses (after any expense
reimbursement)................................................. 1.25%
</TABLE>
Note: In the absence of an operating history, the amount shown for "other
expenses" is the maximum amount that may be incurred by the Fund, since
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. The
investment adviser has agreed to pay all organizational expenses, and such
expenses will not be reimbursed by the Fund. Absent that expense
limitation, other expenses and total Fund operating expenses for the
Fund's initial fiscal year are estimated to be approximately 1.50% and
2.50%, respectively.
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 operating
expense percentage shown in the table above, (3) reinvestment of all
distributions to shareholders, and (4) redemption at the end of each period.
<TABLE>
<CAPTION>
One Year Three Years
-------- -----------
<S> <C>
$12.50 $41.00
</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>
Investment Objective
- --------------------
The Fund's investment objective is long-term capital growth. The Fund's
investment objective is a fundamental policy that may not be changed without
shareholder approval.
Investment Methods
- ------------------
As a non-diversified investment company, the Fund invests in a relatively
small number of companies selected for the possibility of long-term capital
growth. 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.
The Fund is a non-diversified investment company. As such, it intends to
make substantial investments in a relatively small number of companies. While
there is no limitation on the number of stocks it may own, it is expected that
under normal market conditions the Fund will own 16 or fewer securities (other
than cash equivalents and U.S. Government securities).
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
provided that they 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.
As a non-diversified fund, Papp Focus Fund is not limited under the
Investment Company Act of 1940 in the percentage of its assets that it may
invest in any one issuer. However, the Fund intends to comply with the
diversification standards applicable to regulated investment companies under the
Internal Revenue Code of 1986. In order to meet those standards, among other
requirements, at the close of each quarter of its taxable year (a) at least 50%
of the value of the Fund's total assets must be represented by one or more of
the following: (i) cash and cash items, including receivables; (ii) U.S.
Government securities; (iii) securities of other regulated investment companies;
and (iv) securities (other than those in items (ii) and (iii) above) of any one
or more issuers as to which the Fund's investment in an issuer does not exceed
5% of the value of the Fund's total assets (valued at the time of investment);
and (b) not more than 25% of its total assets (valued at the time of investment)
may be invested in the securities of any one issuer (other than U.S. Government
securities or securities of other regulated investment companies).
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 100% of its
4
<PAGE>
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
- ------------
While the Fund's investment adviser believes that a strategy of investing
in a limited number of securities has the potential for higher total returns
than an investment strategy of investing in a larger number of securities, this
may increase the volatility of the Fund's investment performance. Also, if the
securities in which the Fund invests perform poorly, the Fund could incur
greater losses than it might have had it invested in a larger number of
securities.
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 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. 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;
2. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry.
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.
5
<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 Focus Fund, Inc., 4400 North 32nd Street, Suite 280, Phoenix, AZ
85018. 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.
The Fund may from time to time authorize certain financial services
companies, broker-dealers or their designees ("authorized agents") to accept
share purchase and redemption orders on the Fund's behalf. For purchase orders
placed through an authorized agent, a shareholder will pay the Fund's net asset
value per share next computed after the receipt by the authorized agent of such
purchase order, plus any applicable transaction charge imposed by the agent.
For redemption orders placed through an authorized agent, a shareholder will
receive redemption proceeds which reflect the net asset value per share next
computed after the receipt by the authorized agent of the redemption order, less
any redemption fees imposed by the agent. Charges imposed by the authorized
agent, if any, 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.
In some instances, an authorized agent or other financial services company
may not charge any transaction fees directly to investors in the Fund. However,
for accounting and shareholder services provided by such company with respect to
Fund shares held by that company for its customers, the company may charge a fee
(currently up to 0.35%) of the annual average value of those accounts. Those
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 4400 North 32nd Street, Suite 280, Phoenix, AZ 85018.
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;
(2) be signed by all owners exactly as their names appear on the account;
and
6
<PAGE>
(3) include a signature guarantee from an "eligible guarantor institution"
as defined by the rules under the Securities Exchange Act of 1934.
Eligible guarantor institutions include banks, brokers, dealers, credit
unions (if authorized by applicable state law), national securities
exchanges, registered securities associations, clearing agencies and
savings associations. A notary public is not an eligible guarantor
institution.
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 redemption request must be signed in the
name of the trust or partnership by a trustee or general partner, and must
include a signature guarantee. If the trustee or general partner is not named in
the account registration, the redemption request must also include evidence of
the trustee's or general partner's appointment as such (for example, a certified
copy of the partnership or trust instrument). Under certain circumstances,
before the shares can be redeemed, additional documents may be required in order
to verify the authority of the person seeking to redeem. Call 1-800-421-4004
before submitting a redemption request if you have any questions about the
documents required.
The redemption price per share is net asset value determined as described
under "Determination of Net Asset Value." There is no redemption charge if
shares are redeemed directly by the Fund. See "Purchasing Shares" for
information on charges that may be imposed by dealers. 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.
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
regular session 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.
7
<PAGE>
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 70.
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 69.
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.
The address of Messrs. L. Roy Papp, Harry A. Papp, Robert L. Mueller, Bruce
C. Williams, and Ms. Rosellen C. Papp, is 4400 North 32nd Street - Suite 280,
Phoenix, Arizona 85018; 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.
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 $100 for each
meeting of the board of directors attended.
8
<PAGE>
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 and Barbara D. Perleberg is Assistant
Secretary 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. Ms. Perleberg has been an associate of
L. Roy Papp & Associates since 1993. The address of all of the officers is L.
Roy Papp & Associates, 4400 North 32nd Street, Suite 280, Phoenix, Arizona
85018.
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 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 $80 million, Papp America-Abroad Fund, Inc. which commenced
operations in 1991 and whose assets approximate $290 million, and Papp America-
Pacific Rim Fund, Inc. which commenced operations in 1997 and whose assets
approximate $14 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
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.
9
<PAGE>
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.
The Fund
- --------
The Fund was incorporated in Maryland on December 17, 1997 and commenced
operations as an open-end non-diversified management investment company on the
date of this prospectus. 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.
10
<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 address or
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.
11
<PAGE>
Papp Focus Fund, Inc.
(a pure no-load fund)
Investment Adviser
L. Roy Papp & Associates
4400 North 32nd Street
Suite 280
Phoenix, AZ 85018
Telephone: (602) 956-0980
Custodian
Founders Bank of Arizona
7335 E. Doubletree Ranch Rd.
Scottsdale, AZ 85258
Transfer and Dividend Disbursing Agent
L. Roy Papp & Associates
4400 North 32nd Street
Suite 280
Phoenix, AZ 85018
Independent Auditors
Arthur Andersen LLP
Two North Central Avenue
Phoenix, AZ 85004
Legal Counsel
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, IL 60602
<PAGE>
[LOGO APPEARS HERE]
PAPP FOCUS FUND, INC.
Statement of Additional Information
-----------------------------------
February 27, 1998
4400 North 32nd Street - Suite #280
Phoenix, Arizona 85018
(602) 956-1115
(800) 421-4004
Email: [email protected]
Internet: http://www.roypapp.com
________________________________
Table of Contents
<TABLE>
<S> <C>
Additional Information................ 1
Investment Policies and Restrictions.. 2
Investment Adviser.................... 3
Directors and Officers................ 4
Performance Information............... 4
Purchasing and Redeeming Shares....... 5
Additional Tax Information............ 5
Portfolio Transactions................ 5
Custodian............................. 6
Transfer Agent........................ 7
Independent Auditors Report........... 8
Statement of Assets and Liabilities... 9
</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 February 27, 1998 and any supplement thereto.
The prospectus may be obtained from the Fund at no charge by writing
or telephoning the Fund at its address or telephone number shown above. If you
have access to the Internet, you may also obtain the prospectus by visiting our
web site (http://www.roypapp.com).
B-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. 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;
2. Invest more than 25% of its assets (valued at time of investment)
in securities of companies in any one industry;
3. 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);
4. 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;
5. Purchase or sell commodities, commodity contracts or options;
6. Make margin purchases or short sales of securities;
7. Invest in companies for the purpose of management or the
exercise of control;
8. Make loans (but this restriction shall not prevent the Fund from
investing in debt securities);
9. Issue any senior security except to the extent permitted under the
Investment Company Act of 1940.
Restrictions 1 through 9 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.
B-2
<PAGE>
The Fund has also adopted the following restrictions that may be changed by the
Board of Directors without shareholder approval:
The Fund will not:
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];
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 Statement of Additional
Information: 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.
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, 1999, but may be
continued from year to year only 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).
B-3
<PAGE>
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 expected to be paid by the Fund and by
all of the Papp Funds (the Fund, The L. Roy Papp Stock Fund, Papp America-Abroad
Fund, and Papp America-Pacific Rim Fund) to Mr. Ballinger, Mrs. Clague, and Mrs.
O'Malley during the fiscal year ending December 31, 1998. Neither the Fund nor
any of the Papp funds has any pension or retirement plan.
<TABLE>
<CAPTION>
Estimated Total Compensation from the
Estimated Aggregate Fund, The L. Roy Papp Stock Fund, Papp
Compensation America-Abroad Fund and Papp America-
Name of Director From the Fund Pacific Rim Fund Paid to Directors
- ----------------- -------------------- ----------------------------------------
<S> <C> <C>
James K. Ballinger $400.00 $6400.00
Amy S. Clague $400.00 $6400.00
Carolyn P. O'Malley $400.00 $ 800.00
</TABLE>
At the date of this Statement of Additional Information, L. Roy Papp, who
provided the Fund's organizational capital, owned 100% of the Fund's outstanding
common stock and therefore controlled the Fund.
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 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
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.
B-4
<PAGE>
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 determined by Lipper Analytical Services, Inc., Morningstar, Inc., or
that of 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. Redemptions in excess of the above
amount 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
B-5
<PAGE>
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.
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.
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.
B-6
<PAGE>
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.
Roy Papp & Associates has agreed to make no charges for the provision of these
services until January 1, 2000.
Independent Auditors
- --------------------
Arthur Andersen LLP, Two North Central, Suite 1000, Phoenix, Arizona
85004-2344, 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.
B-7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Papp Focus Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of PAPP
FOCUS FUND, INC. (a Maryland corporation), as of February 13, 1998. The
statement of assets and liabilities is the responsibility of Papp Focus Fund,
Inc. management. Our responsibility is to express and opinion on the statement
of assets and liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement assets and liabilities. Our
procedures included confirmation of cash held by the custodian of February 13,
1998. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the assets and liabilities of Papp
Focus Fund, Inc. as of February 13, 1998, in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen, LLP
Phoenix, Arizona,
February 13, 1998.
B-8
<PAGE>
PAPP FOCUS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
FEBRUARY 13, 1998
ASSETS
<TABLE>
<S> <C>
CASH $100,000
--------
Total assets $100,000
========
LIABILITIES
Total liabilities $ -
========
NET ASSETS
NET ASSETS $100,000
--------
Shares outstanding 10,000
Net asset value, offering and redemption price per share $ 10.00
========
</TABLE>
B-9
<PAGE>
PAPP FOCUS FUND, INC.
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 13, 1998
(1) THE FUND:
Papp Focus Fund, Inc. was organized as a Maryland corporation on December 17,
1997, and has been inactive since that date except for matters relating to its
organization, its registration as an open-end investment company and the
registration of its shares under the Investment Company Act of 1940, as amended,
and the Securities Act of 1933, as amended, and the sale of the outstanding
shares to a partner of L. Roy Papp & Associates, the Fund's investment adviser.
The Fund is authorized to issue 25,000,000 shares of capital stock ($.01 par
value). All costs to organize the Fund have been paid by L. Roy Papp &
Associates, the Fund's adviser, and will not be reimbursed by the Fund.
(2) RELATED PARTIES:
L. Roy Papp & Associates will act as investment adviser to and manage the
investment and reinvestment of the assets of the Fund. For these services, the
Fund has agreed to pay an annual management fee of 1.00% of its average daily
net assets as described in the Prospectus.
(3) TAXES:
The Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and make the requisite
distributions of income to its shareholders which will be sufficient to relieve
it from all or substantially all federal income taxes.
B-10
<PAGE>
Part C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Financial Statements included in Part B (there are none in part A):
Independent auditor's report
Statement of assets and liabilities, February 13, 1998
(2) Financial statements included in Part C.
None
(b) Exhibits
1. Articles of Incorporation*
2. Bylaws*
3. None
4. None
5. Investment Advisory Agreement*
6. None
7. None
8. Custodian Agreement*
9. Transfer Agency Agreement*
10. Opinion and consent of Bell, Boyd & Lloyd
10.1 Opinion and consent of Piper & Marbury L.L.P.
11. Consent of independent auditors
12. None
13. Initial Subscription Agreement*
14. None
15. None
16. None
17. Financial Data Schedule
18. None
19. New Account Purchase Application*
- -----------------------------------------------------------------------------
*Incorporated by reference to the exhibit of the same number filed
with the initial registration statement on Form N-1A No. 333-43945, filed
January 9, 1998.
<PAGE>
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 Adviser" 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
<TABLE>
<CAPTION>
Number of Record Holders
Title of Series as of February 13, 1998
--------------- ------------------------
<S> <C>
Papp Focus Fund, Inc. 1
common stock
</TABLE>
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 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.
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 issuer.
Item 28. Business and Other Connections of Investment Adviser
The information in the prospectus under the captions "Management of the
Fund" and "Investment Adviser" 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, 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
C-2
<PAGE>
Item 30. Location of Accounts and Records
Rosellen C. Papp, Treasurer
Papp Focus Fund, Inc.
4400 North 32nd Street, Suite 280
Phoenix, AZ 85018
Item 31. Management Services
None
Item 32. Undertakings
The registrant undertakes to file a post-effective amendment
containing financial statements, which need not be certified, within 60 days of
the end of the four to six month period from the effective date of this
registration statement.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Phoenix, Arizona on February 23, 1998.
Papp Focus Fund, Inc.
By: /s/ L. Roy Papp
--------------------------
L. Roy Papp, 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.
<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 )
)
) February 23, 1998
/s/ Bruce C. Williams Director and Vice President )
- --------------------------- )
Bruce C. Williams )
)
)
/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
<TABLE>
<CAPTION>
EDGAR N-1A ITEM 23
EXHIBIT NO. EXHIBIT NO. DESCRIPTION
- ----------- ----------- -----------
<S> <C> <C>
EX-99.B1 1. Articles of Incorporation*
EX-99.B2 2. Bylaws*
EX-99.B3 3. None
EX-99.B4 4. None
EX-99.B5 5. Investment Advisory Agreement*
EX-99.B6 6. None
EX-99.B7 7. None
EX-99.B8 8. Custodian Agreement*
EX-99.B9 9. Transfer Agency Agreement*
EX-99.B10 10. Opinion and consent of Bell, Boyd & Lloyd
EX-99.B10.1 10.1 Opinion and consent of Piper & Marbury L.L.P.
EX-99.B11 11. Consent of independent auditors
EX-99.B12 12. None
EX-99.B13 13. Initial Subscription Agreement*
EX-99.B14 14. None
EX-99.B15 15. None
EX-99.B16 16. None
EX-99.B17 17. Financial Data Schedule
EX-99.B18 18. None
EX-99.B19 19. New Account Purchase Application*
</TABLE>
- ----------------------------------
* Incorporated by reference to the exhibit of the same number filed with the
initial registration statement on form N-1A, No. 333-43945, on January 9,
1998.
<PAGE>
EXHIBIT 10
BELL, BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
312 372 1121
Fax: 312 372 2098
February 23, 1998
Papp Focus Fund, Inc.
4400 North 32nd Street
Suite 280
Phoenix, Arizona 85018
Ladies and Gentlemen:
We have acted as counsel for Papp Focus 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. 333-43945 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 23, 1998, 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>
EXHIBIT 10.1
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 23, 1998
Papp Focus Fund, Inc.
4400 North 32nd Street, Suite #280
Phoenix, Arizona 85018
Registration Statement on Form N-1A
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Gentlemen:
We have acted as special Maryland counsel to Papp Focus Fund, Inc., a
Maryland corporation (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, as
amended (the "Registration Statement"), under the Securities Act of 1933, as
amended (File No. 333-43945), and the Investment Company Act of 1940, as amended
(File No. 811-08601).
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, a
Certificate of the Secretary of the Company dated the date hereof, 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, without independent investigation, the
genuineness of all signatures, the legal capacity of all individuals who have
executed any of the aforesaid documents, the authenticity of all documents
submitted to us as originals, the conformity with originals of all documents
submitted to us as copies (and the authenticity of the originals of such
copies), no substantial change in the final documents of documents submitted to
us as drafts, and that all public records reviewed are accurate and complete. 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 Focus Fund, Inc.
February 23, 1998
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. This opinion is limited to the matters set forth herein,
and no other opinion should be inferred beyond the matters expressly stated.
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 11
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,
February 13, 1998.
<TABLE> <S> <C>
<PAGE>
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<NUMBER> 01
<NAME> PAPP FOCUS FUND, INC.
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<PERIOD-END> FEB-13-1998
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