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001 A000000 PRINCOR WORLD FUND, INC.
001 B000000 811-3183
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002 A000000 THE PRINCIPAL FINANCIAL GROUP
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020 A000001 W. I. CARR (AMERICA) LTD
020 B000001 13-2927466
020 C000001 50
020 A000002 PEREGRIN BROKERAGE, INC.
020 B000002 13-3580644
020 C000002 29
020 A000003 SALOMON BROTHERS
020 B000003 13-3082694
020 C000003 27
020 A000004 HG ASIA-SMITH BARNEY, INC.
020 B000004 13-3781330
020 C000004 19
020 A000005 NATWEST SECURITIES CORP.
020 B000005 13-3312778
020 C000005 14
020 A000006 FIRST BOSTON CORP.
020 B000006 13-5659485
020 C000006 14
020 A000007 ING SECURITIES
020 B000007 13-3713590
020 C000007 13
020 A000008 PARIBUS CORP.
020 B000008 13-3235334
020 C000008 12
020 A000009 PETERS & CO. (CANADIAN)
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<PAGE> PAGE 2
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022 A000001 ASSOCIATES CORPORATION OF NORTH AMERICA
022 B000001 74-1494554
022 C000001 297580
022 D000001 0
022 A000002 GENERAL ELECTRIC CAPITAL CORP.
022 B000002 13-1500700
022 C000002 192645
022 D000002 0
022 A000003 AMERICAN EXPRESS CREDIT CORPORATION
022 B000003 11-1988350
022 C000003 80531
022 D000003 0
022 A000004 FORD MOTOR CREDIT CO.
022 B000004 38-1612444
022 C000004 64072
022 D000004 0
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022 C000005 50103
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SIGNATURE ARTHUR S. FILEAN
TITLE V.PRES & SECRETARY
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-END> OCT-31-1996
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<TOTAL-LIABILITIES> 319,178
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<DISTRIBUTIONS-OF-GAINS> (5,735,484)
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<NUMBER-OF-SHARES-REDEEMED> (2,342,950)
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INVESTMENTS-AT-VALUE> 188,347,013
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<ACCUMULATED-NII-PRIOR> 776,759
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<PER-SHARE-NAV-BEGIN> 7.48
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</TABLE>
Report of Independent Auditors on Internal Control Structure
Board of Directors and Shareholders
Princor World Fund, Inc.
In planning and performing our audit of the financial statements of Princor
World Fund, Inc. for the year ended October 31, 1996, we considered its internal
control structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of Princor World Fund, Inc. is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
October 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
ERNST & YOUNG
Des Moines, Iowa
November 27, 1996
ARTICLES SUPPLEMENTARY
OF
PRINCOR WORLD FUND, INC.
Princor World Fund, Inc., and Maryland Corporation having its principal office
on this state in Baltimore City, Maryland (hereinafter called the Corporation),
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940. SECOND: The Board of Directors of the
Corporation have classified authorized but unissued stock of the Corporation
under authority contained in the charter of the Corporation.
THIRD: A description of the stock as set by the Board of Directors and as
provided in Article V of the corporate charter as supplemented by these Articles
Supplementary is as follows:
ARTICLE V
Capital Stock
Section 1. Authorized Shares: The total number of shares of stock which the
Corporation shall have authority to issue is one hundred million (100,000,000)
shares, of the par value of one cent ($.01) each and of the aggregate par value
of one million dollars ($1,000,000). The shares may be issued by the Board of
Directors in such separate distinct classes as the Board of Directors shall from
time to time create and establish. The Board of Directors shall have full power
and authority, in its sole discretion, to establish and designate classes, and
to classify or reclassify any unissued shares in separate classes having such
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as shall be fixed and determined from time to time by the Board of
Directors. Expenses related to the distribution of, and other identified
expenses that should properly be allocated to, the shares of a particular class
may be charged to and borne solely by such class, and the bearing of expenses
solely by a class may be appropriately reflected (in a manner determined by the
Board of Directors) and cause differences in the net asset value attributable
to, and the dividend, redemption and liquidation rights of, the shares of each
class. Subject to the authority of the Board of Directors to increase and
decrease the number of, and to reclassify the, shares of any class, there are
hereby established two classes of common stock, each comprising the number of
shares and having the designation indicated:
Class Number of Shares
Class A 50,000,000
Class B 25,000,000
Class R 25,000,000
In addition, the Board of Directors is hereby expressly granted authority to
change the designation of any class, to increase or decrease the number of
shares of any class, provided that the number of shares of any class shall not
be decreased by the Board of Directors below the number of shares thereof then
outstanding, and to reclassify any unissued shares into one or more classes that
may be established and designated from time to time. Notwithstanding the
designations herein of classes, the Corporation may refer, in prospectuses and
other documents furnished to shareholders, filed with the Securities and
Exchange Commission or used for other purposes, to a class of shares as a
"series".
(a) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares
in fractional denominations shall be shares of stock having
proportionately, to the respective fractions represented thereby,
all the rights of whole shares, including without limitation, the
right to vote, the right to receive dividends and distributions
and the right to participate upon liquidation of the Corporation,
but excluding the right to receive a stock certificate
representing fractional shares.
(b) The holder of each share of stock of the Corporation shall be
entitled to one vote for each full share, and the fractional vote
for each fractional share of stock, irrespective of the class,
then standing in the holder's name on the books of the
Corporation. On any matter submitted to a vote of stockholders,
all shares of the Corporation then issued and outstanding and
entitled to vote shall be voted in the aggregate and not by class
except that (1) when otherwise expressly required by the Maryland
General Corporation Law or the Investment Company Act of 1940, as
amended, shares shall be voted by individual class, and (2) if
the Board of Directors, in its discretion, determines that a
matter affects the interests of only one or more particular
classes then only the holders of shares of such affected class or
classes shall be entitled to vote thereon.
(c) Unless otherwise provided in the resolution of the Board of
Directors providing for the establishment and designation of any
new class or classes, each class of stock of the Corporation
shall have the following powers, preferences and rights, and
qualifications, restrictions and limitations thereof:
(1) Assets belonging to a class. All consideration received by
the Corporation for the issue or sale of shares of a
particular class, together with all assets in which such
consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall irrevocably belong to that class for all purposes,
subject only to the rights of creditors, and shall be so
recorded upon the books and accounts of the corporation.
Such consideration, assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any general
items allocated to that class as provided in the following
sentence, are hereinafter referred to as "assets belonging
to" that class. In the event that there are any assets,
income, earning, profits, proceeds thereof, funds or
payments which are not readily identifiable as belonging to
any particular class (collectively "general items"), such
general items shall be allocated by or under the supervision
of the Board of Directors to and among any one or more of
the classes established and designated from time to time in
such manner and on such basis as the Board of Directors, in
its sole discretion, deems fair and equitable, and any
general items so allocated to a particular class shall
belong to that class. Each such allocation by the Board of
Directors shall be conclusive and binding for all purposes.
Notwithstanding the foregoing, the assets belonging to the
Class A Shares and to the Class B Shares need not be
segregated or recorded separately on the books and records
of the Corporation, and reference herein to each of those
classes shall refer to the proportional interest of that
class in the aggregate assets belonging to both classes.
(2) Liabilities belonging to a class. The assets belonging to
each particular class shall be charged with the liabilities
of the Corporation in respect of that class and all
expenses, costs, charges, and reserves attributable to that
class, and any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily
identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the
Board of Directors to and among any one or more of the
classes established and designated from time to time in such
manner and on such basis as the Board of Directors, in its
sole discretion, deems fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so
charged to a class are herein referred to a "liabilities
belonging to" that class. Each allocation of liabilities,
expenses, costs, charges and reserves by the Board of
Directors shall be conclusive and binding for all purposes.
(3) Dividends. The Board of Directors may from time to time
declare and pay dividends or distributions, in stock,
property or cash, on any or all classes of stock, the amount
of such dividends and property distributions and the payment
of them being wholly in the discretion of the Board of
Directors. Dividends may be declared daily or otherwise
pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Board of Directors
may determine, after providing for actual and accrued
liabilities belonging to that class. All dividends or
distributions on shares of a particular class shall be paid
only out of surplus or other lawfully available assets
determined by the Board of Directors as belonging to such
class. The Board of Directors shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in
part as capital gains distribution, amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation, or where applicable each class of shares, to
qualify as a regulated investment company under the Internal
Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations, promulgated
thereunder, and to avoid liability for the Corporation, or
each class of shares, for federal income and excise taxes in
respect of that or any other year.
(4) Liquidation. In the event of the liquidation of the
Corporation or of the assets attributable to a particular
class, the shareholders of each class that has been
established and designated and is being liquidated shall be
entitled to receive, as a class, when and as declared by the
Board of Directors, the excess of the assets belonging to
that class over the liabilities belonging to that class. The
holders of shares of any class shall not be entitled thereby
to any distribution upon liquidation of any other class. The
assets so distributable to the shareholder of any particular
class shall be distributed among such shareholders according
to their respective rights taking into account the proper
allocation of expenses being borne by that class. The
liquidation of assets attributable to any particular class
in which there are shares then outstanding may be authorized
by vote of a majority of the Board of Directors then in
office, subject to the approval of a majority of the
outstanding voting securities of that class, as defined in
the Investment Company Act of 1940, as amended. In the event
that there are any general assets not belonging to any
particular class of stock and available for distribution,
such distribution shall be made to the holder of stock of
various classes in such proportion as the Board of Directors
shall be conclusive and binding for all purposes.
(5) Redemption. All shares of stock of the Corporation shall
have the redemption rights provided for in Article V,
Section 5.
(d) The Corporation's shares of stock are issued and sole, and all
persons who shall acquire stock of the Corporation shall acquire
the same, subject to the condition and understanding that the
provisions of the Corporation's Articles of Incorporation, as
from time to time amended, shall be binding upon them.
Section 2. Quorum requirements and voting rights: Except as otherwise
expressly provided by the Maryland General Corporation Law, the presence in
person or by proxy of the holders of one-third of the shares of capital stock of
quorum at any meeting of the stockholders, except that where the holders of any
class are required or permitted to vote as a class, one-third of the aggregate
number of shares of that class outstanding and entitled to vote shall constitute
a quorum.
Notwithstanding any provision of Maryland General Corporation Law requiring
a greater proportion than a majority of the votes of all classes or of any
classes of the Corporation's stock entitled to be cast in order to take or
authorize any action, any such action may be taken or authorized upon the
concurrence of a majority of the aggregate number of votes entitled to be cast
thereon subject to the applicable laws and regulations as from time to time in
effect or rules or orders of the Securities and Exchange Commission or any
successor thereto. All shares of stock of this Corporation shall have the voting
rights provided for in Article V, Section 1, paragraph (b).
Section 3. No preemptive rights: No holder of shares of capital stock of
the Corporation shall, as such holder, have any right to purchase or subscribe
for any shares of capital stock of the Corporation which the Corporation may
issue or sell (whether consisting of shares of capital stock authorized by these
Articles of Incorporation, or shares of capital stock of the Corporation
acquired by it after the issue thereof, or other shares) other than any right
which the Board of Directors of the Corporation, in its discretion, may
determine.
Section 4. Determination of net asset value: The net asset value of each
shares of the Corporation, or of each class, shall be the quotient obtained by
dividing the value of the net assets of the Corporation, or if applicable of the
class (being the value of the assets of the Corporation or of the particular
class less its actual and accrued liabilities exclusive of capital stock and
surplus), by the total number of outstanding shares of the Corporation or the
class, as applicable. Such determination may be made on a class-by-class basis
and shall include any expenses allocated to a specific class thereof. The Board
of Directors may adopt procedures for determination of net asset value
consistent with the requirements of applicable statutes and regulations and, so
far as accounting matters are concerned, with generally accepted accounting
principles. The procedures may include, without limitation, procedures for
valuation of the Corporation's portfolio securities and other assets, for
accrual of expenses or creation of reserves and for the determination of the
number of shares issued and outstanding at any given time.
Section 5. Redemption and repurchase of shares of capital stock: Any
shareholder may redeem shares of the Corporation for the net asset value of each
class or series thereof by presentation of an appropriate request, together with
the certificates, if any, for such shares, duly endorsed, at the office or
agency designated by the Corporation. Redemptions as aforesaid, or purchases by
the Corporation of its own stock, shall be made in the manner and subject to the
conditions contained in the bylaws or approved by the Board of Directors.
Section 6. Purchase of shares: The Corporation shall be entitled to
purchase shares of any class of its capital stock, to the extent that the
Corporation may lawfully effect such purchase under Maryland General Corporation
Law, upon such terms and conditions and for such consideration as the Board of
Directors shall deem advisable, by agreement with the stockholder at a price not
exceeding the net asset value per share computed in accordance with Section 4 of
this Article.
Section 7. Redemption of minimum amounts:
(a) If after giving effect to a request for redemption by a
stockholder the aggregate net asset value of his remaining shares
of any class will be less than the minimum amount then in effect,
the Corporation shall be entitled to require the redemption of
the remaining shares of such class owned by such stockholder,
upon notice given in accordance with paragraph (c) of this
section, to the extent that the Corporation may lawfully effect
such redemptions under Maryland General Corporation Law.
(b) The term "Minimum Amount" when used herein shall mean Three
Hundred Dollars ($300) unless otherwise fixed by the Board of
Directors from time to time, provided that the minimum amount may
not in any event exceed Five Thousand Dollars ($5,000).
(c) If any redemption under paragraph (a) of this section is upon
notice, the notice shall be in writing personally delivered or
deposited in the mail, at least thirty days prior to such
redemption. If mailed, the notice shall be addressed to the
stockholder at his post office address as shown on the books of
the Corporation, and sent by certified or registered mail,
postage prepaid. The price for shares redeemed by the Corporation
pursuant to paragraph (a) of this section shall be paid in cash
in an amount equal to the net asset value of such shares,
computed in accordance with Section 4 of this article.
Section 8. Mode of payment: Payment by the Corporation for shares of any
class of the capital stock of the Corporation surrendered to it for redemption
shall be made by the Corporation within seven business days of such surrender
out of the funds legally available, therefor, provided that the Corporation may
suspend the right of the holders of capital stock of the Corporation to redeem
shares of capital stock and may postpone the right of such holders to receive
payment for any shares when permitted or required to do so by law. Payment of
the redemption or purchase price may be made in cash or, at the option of the
Corporation, wholly or partly in such portfolio securities of the Corporation as
the Corporation may select.
Section 9. Rights of holders of shares purchased or redeemed: The right of
any holder of any class of capital stock of the Corporation purchased or
redeemed by the Corporation as provided in this article to receive dividends
thereon and all other rights of such holder with respect to such shares shall
terminate on all other rights of such holder with respect to such shares shall
terminate at the time as of which the purchase or redemption price of such
shares id determined, except the right of such holder to receive (i) the
purchase or redemption price of such shares from the Corporation or its
designated agent and (ii) any dividend or distribution or voting rights to which
such holder has previously become entitled as the record holder of such shares
on the record date for the determination of the stockholders entitled to receive
such dividend or distribution or to vote at the meeting of stockholders.
Section 10. Status of shares purchased or redeemed: In the absence of any
specification as to the purchase for which such shares of any class of capital
stock of the Corporation are redeemed or purchased by it, all shares so redeemed
or purchased shall be deemed to re retired in the sense contemplated by the laws
of the State of Maryland and may be reissued. The number of authorized shares of
capital stock of the Corporation shall not be reduced by the number of any
shares redeemed or purchased by it.
Section 11. Additional limitations and powers: The following provisions are
inserted for the purpose of defining limiting and regulating the powers of the
Corporation and of the Board of Directors and stockholders:
(a) Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted
accounting principles by or pursuant to the direction of the
Board of Directors, as to the amount of the assets, debts,
obligations or liabilities of the Corporation, as to the amount
of any reserves or charges set up and the propriety thereof, as
to the time of or purpose for creating such reserves or charges,
as to the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for
which such reserves or charges shall have been created shall have
been paid or discharged or shall be then or thereafter required
to be paid or discharged), as to the establishment or designation
of procedures or methods to be employed for valuing any
investment or other assets as to the allocation of any asset of
the Corporation to a particular class or classes of the
Corporation's stock, as to the funds available for the
declaration of dividends and as to the declaration of dividends,
as to the charging of any liability of the Corporation to a
particular class or classes of the Corporation's stock, as to the
number of shares of any class or classes of the Corporation's
outstanding stock, as to the estimated expense to the Corporation
in connection with purchases or redemptions of its shares, as to
the ability to liquidate investments in orderly fashion, or as to
any other matters relating to the issue, sale, purchase or
redemption or other acquisition or disposition of investments or
shares of the Corporation, or in the determination of the net
asset value per share of shares of any class of the Corporation's
stock shall be conclusive and binding for all purposes.
(b) Except to the extend prohibited by the Investment Company Act of
1940, as amended, or rules, regulations or orders thereunder
promulgated by the Securities and Exchange Commission or any
successor thereto or by the bylaws of the Corporation, a
director, officer or employee of the Corporation shall not be
disqualified by his position from dealing or contracting with the
Corporation, nor shall any transaction or contract of the
Corporation be void or voidable by reason of the fact that any
director, officer or employee or any firm of which any director,
officer or employee is a member, of any corporation of which any
director, officer or employee is a stockholder, officer or
director, is in any way interested in such transaction or
contract; provided that in case a director, or a firm or
corporation of which a director is a member, stockholder, officer
or director is so interested, such fact shall be disclosed to or
shall have been known by the Board of Directors or a majority
thereof. Nor shall any director or officer of the Corporation by
liable to the Corporation or to any stockholder or creditor
thereof or to any person for any loss incurred by it or him or
for any profit realized by such director or officer under or by
reason of such contract or transaction; provided that nothing
herein shall protect any director or officer of the Corporation
against any liability to the Corporation or to 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;
and provided always that such contract or transaction shall have
been on terms that were not unfair to the Corporation at the time
at which it was entered into. Any director of the Corporation who
is so interested, or who is a member, stockholder, officer or
director of such firm or corporation, may be counted in
determining the existence of a quorum at any meeting of the Board
of Directors of the Corporation which shall authorize any such
transaction or contract, with like force and effect as if he were
not such director, or member, stockholder, officer or director of
such firm or corporation.
(c) Specifically and without limitation of the foregoing paragraph
(b) but subject to the exception therein prescribed, the
Corporation may enter into management or advisory, underwriting,
distribution and administration contracts, custodian contracts
and such other contracts as may be appropriate.
I, Arthur S. Filean, Vice President and Secretary, hereby acknowledge on
behalf of Princor World Fund, Inc., that the foregoing Articles Supplementary
are the corporate act of said Corporation under the penalties of perjury.
ARTHUR S. FILEAN
By _______________________________________________
Arthur S. Filean, Vice President and Secretary
Princor World Fund, Inc.
ATTEST:
ERNEST H. GILLUM
By ________________________________________
Ernest H. Gillum
Assistant Secretary
