<PAGE>
As filed with the Securities and Exchange Commission on April 29, 1996
Securities Act Registration No. 33-42549
Investment Company Act file No. 811-6402
__________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
_________________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-effective Amendment No. 5 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 8 [X]
_________________________________
PAPP AMERICA-ABROAD FUND, INC.
(Registrant)
4400 North 32nd Street
Suite #280
Phoenix, Arizona 85018
Telephone number: 602/956-1115
__________________________________________
Robert L. Mueller Janet D. Olsen
L. Roy Papp & Associates Bell, Boyd & Lloyd
4400 North 32nd Street, #280 70 West Madison Street
Phoenix, Arizona 85018 Suite #3200
Chicago, Illinois 60602
(Agents for service)
Amending the Prospectus, Statement of Additional Information and Part C, and
filing exhibits.
It is proposed that this filing will become effective:
________ immediately upon filing pursuant to rule 485(b)
X
________ on April 30, 1996 pursuant to rule 485(b)
________ 60 days after filing pursuant to rule 485(a)(1)
________ on _____________ pursuant to rule 485(a)(1)
________ 75 days after filing pursuant to rule 485(a)(2)
________ on _________ pursuant to rule 485(a)(2)
Registrant has elected to register an indefinite number of securities pursuant
to Rule 24f-2. On or about February 6, 1996, registrant filed its Rule 24f-2
Notice for the year ended December 31, 1995.
_________________________________________________________________
Page 1 of 47 sequential pages (including exhibits)
The index of exhibits is on sequential page 29
<PAGE>
Papp America-Abroad Fund, Inc.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Part A (Prospectus)
Item Location or Caption*
- ---- -------------------
1(a) & (b) Front Cover
2(a) Fund Expenses
(b) - (c) Not Applicable
3(a) Financial Highlights
(b) Not Applicable
(c) Other Information
4(a)(i) Other Information
(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 Advisory Agreement
(c) Investment Advisory Agreement
(d) Not Applicable
(e) Final Page
(f) Fund Expenses; Investment Advisory
Agreement
(g) Not Applicable
5A The information required is included in
registrant's most recent Annual Report
to Shareholders
6(a) Other Information
(b) - (d) Not Applicable
(e) Other Information
(f) Distributions
(g) Federal Income Tax
7 Purchasing Shares
(a) Not Applicable
(b) Determination of Net Asset Value
Purchasing Shares
(c) Not Applicable
(d) Front Cover
(e) & (f) Not Applicable
8(a) Redeeming Shares
(b) Purchasing Shares
(c) & (d) Redeeming Shares
9 Not Applicable
<PAGE>
Part B (Additional Information Statement)
Item Location or Caption*
- ---- -------------------
10(a) & (b) Front Cover
11 Front Cover
12 Not Applicable
13(a) - (c) Investment Policies and
Restrictions
(d) Investment Methods (in the
prospectus)
Portfolio Transactions
14(a) & (b) Directors and Officers
Management of the Fund
(in the prospectus)
(c) Not Applicable
15(a) Not Applicable
(b) & (c) Certain Shareholders
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) & (d) 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
- ------------
* References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
<PAGE>
Prospectus
April 30, 1996
[LOGO]
PAPP AMERICA-ABROAD FUND, INC.
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
(602)956-1115
(800)421-4004
INVESTMENT OBJECTIVE: LONG-TERM CAPITAL GROWTH
The Fund invests with the objective of long-term capital growth resulting
to a considerable extent from international activities of its portfolio
companies. The Fund acquires common stocks of United States enterprises that
have substantial international activities, and common stocks of foreign
enterprises that are traded publicly in United States securities markets.
Additional information appears under the captions "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 America-Abroad Fund, Inc. (the "Fund"). Please
retain it for future reference. An Additional Information Statement 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 Additional Information Statement may be obtained at no charge
by writing or telephoning the Fund at its address or telephone number shown
above.
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.
1
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Fund Expenses 3
Financial Highlights 4
Investment Objective 5
Investment Methods 5
Risk Factors 6
Investment Restrictions 7
Purchasing Shares 7
Redeeming Shares 8
Determination of Net Asset Value 9
Management of the Fund 9
Investment Advisory Agreement 10
Distributions 11
Federal Income Tax 11
Other Information 12
</TABLE>
2
<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
Sales Load Imposed on Purchases..................................... None
Sales Load Imposed on Reinvested Dividends.......................... None
Deferred Sales Load................................................. None
Redemption Fees..................................................... None
Exchange Fees....................................................... None
Annual Fund Operating Expenses
(as percentages of average daily net assets)
Management Fee.......................................................1.0%
12b-1 Fees.......................................................... None
Other Expenses...................................................... 0.22%
Total Fund Operating Expenses (after any expense reimbursement)..... 1.22%
Example:
The investor would pay the following expenses on a $1,000 investment in the Fund
assuming (1) a 5% annual rate of return, (2) continuance of the above operating
expense percentage, (3) reinvestment of all distributions to shareholders, and
(4) redemption at the end of each period.
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
$13 $41 $71 $155
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
3
<PAGE>
FINANCIAL HIGHLIGHTS:
- --------------------
Per share income and capital changes (for a share outstanding throughout the
period)
The following information has been audited by Arthur Andersen LLP., independent
auditors, for the years ended December 31, 1995, 1994, and 1993, and by other
auditors for prior periods, whose reports thereon are unqualified. The audited
financial statements of the Fund and the auditor's report thereon are contained
in the Fund's 1995 Annual Report, which may be obtained from the Fund upon
request at no cost. The Annual Report also includes information about the
Fund's investment performance.
<TABLE>
<CAPTION>
Period Ended
Year Ended December 31, December 31,
1995 1994 1993 1992 1991 (A)
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 12.24 $ 11.45 $ 11.67 $ 10.98 $ 10.00
Income from investment
operations:
Net investment income .04 .10 .10 .11 .02
Net realized and unrealized
gain (loss) on investments 4.52 .79 (.11) .71 .98
----------- ----------- ----------- ---------- ----------
Total from investment
operations 4.56 .89 (.01) .82 1.00
Less Distributions:
Dividend from net investment
income (.04) (.10) (.09) (.11) (.02)
Distribution of net realized
gain (.29) - (.12) (.02) -
----------- ----------- ----------- ---------- ----------
Total Distributions (.33) (.10) (.21) (.13) (.02)
Net asset value, end of period $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98
Total return 37.05% 7.77% (.08)% 7.44% 9.94%
Ratios/Supplemental Data:
Net assets, end of period $15,988,267 $11,573,197 $10,934,293 $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.22% 1.25% 1.25% 1.25% 1.25%*
Net investment income to
average net assets (C) 1.50% 2.07% 2.28% 2.28% 4.51%*
Portfolio turnover rate 26.65% 16.00% 8.00% 16.00% 0.00%
</TABLE>
- -------------------------------
* Annualized
(A) From the date of commencement of operations (December 6, 1991).
(B) If the Fund had paid all of its expenses and there had been no
reimbursement by the investment adviser, this ratio would have been 1.30%,
1.33%, 3.16% and 2.07% for the years ended December 31, 1994, 1993, 1992
and the period ended December 31, 1991.
(C) Computed giving effect to investment adviser's expense limitation
undertaking.
4
<PAGE>
INVESTMENT OBJECTIVE
- --------------------
The Fund invests with the objective of long-term capital growth resulting
to a considerable extent from the international activities of its portfolio
companies. The Fund's investment objective is a fundamental policy that may not
be changed without shareholder approval. The Fund acquires
common stocks of United States enterprises that have substantial
international activities, and
common stocks of foreign enterprises that are traded publicly in
United States securities markets.
Additional information appears under "Investment Methods".
INVESTMENT METHODS
- ------------------
United States international companies. The Fund invests at least 70% of its
common stock assets (valued at the time of each investment) in stocks of United
States-domiciled companies, each of which satisfies at least one of the
alternative criteria in either of clauses (a) or (b) below, measured according
to the most recent annual data published by the company and then available to
the investment adviser:
(a) at least 35% of its aggregate reported sales (including United States
exports) and other revenues, or of its reported "operating" earnings
(however labeled by the company), were classified by the company as
"foreign", "international" or "outside of the United States", or
(b) at least 25% of any one of its aggregate reported revenues, operating
earnings, or identifiable assets were classified as foreign, and had
doubled in amount over the past five years, and the Fund's investment
adviser believes that prospects are excellent for a continuing large
increase over the company's next five fiscal years.
The Fund expects that all of its United States portfolio companies will be
required to publish the annual geographic segment data needed for the above
measurements, pursuant to and in the manner prescribed by rules of the
Securities and Exchange Commission, and the Fund will rely entirely upon those
published data in its measurements.
Foreign companies. The Fund may invest a maximum of 30% of its common stock
assets (valued at the time of each investment), in common stocks of foreign-
domiciled companies that are traded, either directly or in the form of American
Depositary Receipts (ADRs), on a United States stock exchange or in the Nasdaq
National Market. ADRs evidence the beneficial ownership of common stocks of
foreign-domiciled companies held in trust by United States fiduciaries.
In this prospectus, "companies" refers to business enterprises in general,
and in the case of foreign enterprises "common stock" refers to residual equity
interests that are similar in nature generally to common stocks of United States
corporations. Some foreign enterprises with ADRs held by the Fund, e.g., a
German GmbH, and their equity interests, though similar to United States
companies and common stocks from an investment viewpoint, could have some
national legal characteristics that do not correspond wholly with those of
United States companies.
5
<PAGE>
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 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, it is expected that the Fund's
annual portfolio turnover rate will be less than that of most mutual funds that
invest primarily in common stocks.
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 assets in United States government, agency and instrumentality
obligations, and in other domestic debt rated in one of the two highest grades
by one or more of the nationally recognized statistical ratings organizations
or, if unrated, believed by the investment adviser to be comparable in quality,
are readily salable, and mature or are redeemable by the Fund not more than one
year from the time of investment.
RISK FACTORS
- ------------
Investment in foreign business interests (either in United States
enterprises with substantial international activities, or in shares, or ADRs for
shares, of foreign companies), may be riskier in some ways than domestic
investment because of possibilities of: foreign controls over currency exchange;
restrictions on monetary repatriation; oppressive regulation; differing tax
systems among countries, with differing consequences to portfolio companies;
heavy or confiscatory taxation; less liquidity and more price volatility of some
foreign securities and ADRs; less governmental supervision of issuers of
securities; limited publicly available corporate information; varying
accounting, auditing and financial reporting standards and financial statements
among countries; difficulties in obtaining legal recourse and enforcing
judgments abroad; nationalization or expropriation of assets; and political,
economic or social instability. Also, risk may be increased to the extent of
commitments by portfolio companies in developing countries, contrasted with
developed countries. Unless and until such time as conditions in the former
Communist-bloc countries of eastern Europe are drastically improved, the Fund
will not invest in any enterprise in such a country nor in any enterprise
domiciled elsewhere but having all or a major part of its commitments or assets
in one or more of those 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.
6
<PAGE>
INVESTMENT RESTRICTIONS
- -----------------------
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment),
invest more than 5% of its assets (valued at such time) in securities of
any one issuer, except in obligations of the United States Government and
its agencies and instrumentalities;
2. Acquire securities of any one issuer that at time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;
3. Invest more than 5% of its assets (valued at time of investment) in
securities of issuers with less than three years' operation (including
predecessors);
4. Invest more than 5% of its assets (valued at time of investment) in
securities that are not readily marketable.
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
Additional Information Statement.
PURCHASING SHARES (see New Account Purchase Application accompanying this
- -----------------
prospectus)
Shares of the Fund are purchased at the net asset value per share next
determined after receipt of the purchase order, as described under
"Determination of Net Asset Value." There are no sales commissions or
underwriting discounts. The minimum initial investment is $5,000, except for
Individual Retirement Accounts (IRAs) where the minimum is $1,000. Minimum
subsequent investments in all cases are $1,000, excluding reinvestments of
dividends and capital gains distributions.
To make an initial purchase of shares, complete and sign the New Account
Purchase Application and mail it, together with a check for the total purchase
price, to Papp America-Abroad 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.
Shares may be purchased or redeemed directly through the Fund or through an
investment dealer, bank or other institution. The Fund may enter into an
arrangement with such an institution allowing the institution to process
purchase orders or redemption requests for its customers with the Fund on an
expedited basis, including requesting share redemptions by telephone. Although
these arrangements might permit one to effect a purchase or redemption of Fund
shares through the institution more quickly than would otherwise be possible,
the institution may impose charges for its
7
<PAGE>
services. Those charges could constitute a significant portion of a smaller
account, and might not be in a shareholder's best interest. Shares of the Fund
may be purchased or redeemed directly from the Fund without imposition of any
charges other than those described in the prospectus.
Some financial institutions that maintain nominee accounts with the Fund for
their clients for whom they hold Fund shares charge an annual fee of up to 0.35%
of the average net assets held in such accounts for accounting, servicing, and
distribution services they provide with respect to the underlying Fund shares.
Such fees are paid by the Adviser.
The Fund reserves the right not to accept purchase orders under
circumstances or in amounts considered disadvantageous to existing shareholders.
REDEEMING SHARES
- ----------------
The Fund will redeem all or any part of shares owned upon written request
delivered to the Fund at 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;
(3) include a signature guarantee from any "eligible guarantor institution"
as defined by the rules under the Securities Exchange Act of 1934.
Eligible guarantor institutions include banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations. A notary public is not an
eligible guarantor; and
(4) be accompanied by any stock certificate(s) representing the shares to
be redeemed, if they are represented by certificates.
In the case of shares registered in the name of a corporation, the
redemption request must be signed in the name of the corporation by an officer
whose title must be stated, and a certified bylaw provision or resolution of the
board of directors authorizing the officer to so act must be furnished. In the
case of a trust or a partnership, the signature must include the name of the
registered shareholder and the title of the person signing on its behalf. Under
certain circumstances, before the shares can be redeemed, additional documents
may be required in order to verify the authority of the person seeking to
redeem.
The redemption price per share is net asset value determined as described
under "Determination of Net Asset Value." There is no redemption charge. The
redemption value of the shares may be more or less than the cost, depending upon
the value of the Fund's portfolio securities at the time of redemption. If the
net asset value of the shares in an account is less than $1,000 as a result of
previous redemptions and not market price declines, the Fund may notify the
registered holder that unless the account value is increased to at least the
minimum within 60 days the Fund will redeem all shares in the account and pay
the redemption price to the registered holder.
8
<PAGE>
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
trading on the New York Stock Exchange, currently 4:00 p.m. New York City time,
on any day on which that Exchange is open for trading, by dividing the market
value of the Fund's assets, less its liabilities, by the number of shares
outstanding, and rounding the result to the nearest full cent.
MANAGEMENT OF THE FUND
- ----------------------
The board of directors has overall responsibility for the conduct of the
Fund's affairs. The directors of the Fund, including those directors who are
also officers, and their principal business activities during the past five
years, are:
L. Roy Papp, Chairman and director.
Partner, L. Roy Papp & Associates (investment manager).
Harry A. Papp, CFA, President and director.
Partner, L. Roy Papp & Associates.
Robert L. Mueller, Vice President, Secretary and director.
Partner, L. Roy Papp & Associates.
Rosellen C. Papp, CFA, Vice President, Treasurer and director.
Partner, L. Roy Papp & Associates.
Bruce C. Williams, CFA, Vice President and director. Partner, L. Roy Papp
& Associates.
James K. Ballinger, director. The Director of the Phoenix Art Museum.
Amy S. Clague, director. Partner, Boyd and Clague (bookkeeping services
for small companies).
9
<PAGE>
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 and Mr. Ballinger 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; and the address of Mrs. Clague is 326 East Kaler
Drive, Phoenix, Arizona 85020.
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 $600 for each
meeting of the board of directors attended.
The following are Vice Presidents of the Fund: George D. Clark, Jr.,
Jeffrey N. Edwards, Robert L. Hawley and Victoria S. Cavallero. Julie A. Hein
is Assistant Treasurer of the Fund. Mr. Clark has been a partner or associate
of L. Roy Papp & Associates since 1987. Mr. Edwards has been a partner or
associate of L. Roy Papp & Associates since 1987. Ms. Cavallero has been a
partner or associate of L. Roy Papp & Associates since 1987. Mr. Hawley has
been a partner or associate of L. Roy Papp & Associates since 1993. Ms. Hein
has been a partner or associate of L. Roy Papp & Associates since 1989. The
address of all of the officers is L. Roy Papp & Associates, 4400 North 32nd
Street, Suite 280, Phoenix, Arizona 85018.
INVESTMENT ADVISORY AGREEMENT
- -----------------------------
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 $589 million. The firm also acts as investment adviser
to The L. Roy Papp Stock Fund, Inc. which commenced operations in 1989 and whose
assets approximate $45 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
10
<PAGE>
net assets adjusted for subsequent daily income and expense accruals. The fee
percentage is higher than those of most other mutual funds, but 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 qualifying and maintaining
qualification of its shares under the securities laws of certain states.
DISTRIBUTIONS
- -------------
The Fund intends to distribute to shareholders substantially all net
investment income and any net capital gains realized from sales of the Fund's
portfolio securities.
Dividends from net investment income and distributions from any net
realized capital gains are reinvested in additional shares of the Fund unless
the shareholder has requested in writing to have them paid by check.
FEDERAL INCOME TAX
- ------------------
The Fund intends to qualify to be taxed as a regulated investment company
under the Internal Revenue Code so as to be relieved of federal income tax on
its capital gains and net investment income currently distributed to its
shareholders. Dividends from investment income and net short-term capital gains
are taxable as ordinary income. Distributions of long-term capital gains are
taxable as long-term capital gains regardless of the length of time shares in
the Fund have been held. Distributions are taxable, whether received in cash or
reinvested in shares of the Fund.
Each shareholder is advised annually of the source or sources of
distributions for federal income tax purposes. A shareholder who is not subject
to federal income taxation will not be required to pay tax on distributions
received.
If shares are purchased shortly before a record date for a distribution,
the shareholder will, in effect, receive a return of a portion of his
investment, but the distribution will be taxable to him even if the net asset
value of the shares is reduced below the shareholder's cost. However, for
federal income tax purposes the original cost would continue as the tax basis.
If shares are redeemed within six months, any loss on the sale of those shares
would be long-term capital loss to the extent of any distributions of long-term
capital gains that the shareholder has received on those shares.
If a shareholder fails to furnish his social security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate
11
<PAGE>
of 31% ("backup withholding") from dividend, capital gain and redemption
payments to him. Dividend and capital gain payments may also be subject to
backup withholding if the shareholder fails to certify properly that he is not
subject to backup withholding due to the under-reporting of certain
income. These certifications are contained in the New Account Purchase
Application which should be completed and returned to the Fund when the initial
investment is made.
OTHER INFORMATION
- -----------------
The Fund was incorporated in Maryland on August 15, 1991, and commenced
operations as an open-end diversified management investment company on December
6, 1991. 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.
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
Additional Information Statement 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.
12
<PAGE>
Papp America-Abroad 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
First Interstate Bank of Arizona, N.A.
100 West Washington Street
Phoenix, AZ 85003
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
13
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
[LOGO]
Additional Information Statement
--------------------------------
April 30, 1996
4400 North 32nd Street - Suite #280
Phoenix, Arizona 85018
Phone (602) 956-1115
(800) 421-4004
________________________________
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Additional Information...............................................1
Investment Policies and Restrictions.................................2
Investment Adviser...................................................3
Directors and Officers...............................................4
Performance Information..............................................4
Purchasing and Redeeming Shares......................................5
Additional Tax Information...........................................5
Portfolio Transactions...............................................5
Custodian............................................................6
Transfer Agent.......................................................7
Certain Shareholders.................................................7
</TABLE>
_______________________________
Additional Information
- ----------------------
This Additional Information Statement is not a prospectus, but provides
information that should be read in conjunction with the Fund's prospectus dated
April 30, 1996 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.
The 1995 annual report of the Fund, a copy of which accompanies this
Additional Information Statement, contains financial statements, notes thereto,
and reports of independent auditors, all of which (but no other part of the
annual report) are incorporated herein by reference.
<PAGE>
Investment Policies and Restrictions
- ------------------------------------
The Fund's investment objective is stated in the prospectus on the front
cover and under "Investment Objective". The manner in which the Fund pursues
its investment objective is discussed in the prospectus under the captions
"Investment Methods" and "Risk Factors". The investment restrictions are set
forth in full immediately below.
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment),
invest more than 5% of its assets (valued at such time) in securities
of any one issuer, except in obligations of the United States
Government and its agencies and instrumentalities;
2. Acquire securities of any one issuer that at time of investment
(a) represent more than 10% of the voting securities of the issuer or
(b) have a value greater than 10% of the value of the outstanding
securities of the issuer;
3. Invest more than 5% of its assets (valued at time of investment)
in securities of issuers with less than three years' operation
(including predecessors);
4. Invest more than 5% of its assets (valued at time of investment)
in securities that are not readily marketable;
5. Invest more than 25% of its assets (valued at time of investment)
in securities of companies in any one industry;
6. Invest in repurchase agreements or reverse repurchase agreements;
7. 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];
8. Purchase or retain securities of a company if all of the directors
and officers of the Fund and of its investment adviser who
individually own beneficially more than 1/2% of the securities of the
company collectively own beneficially more than 5% of such
securities;
9. 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);
2
<PAGE>
10. Pledge, mortgage or hypothecate its assets, except for
temporary or emergency purposes and then to an extent not greater than
15% of its assets at cost;
11. 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;
12. Purchase or sell real estate or interests in real estate,
although it may invest in marketable securities of enterprises that
invest in real estate or interests in real estate;
13. Purchase or sell commodities, commodity contracts or options;
14. Make margin purchases or short sales of securities;
15. Invest in companies for the purpose of management or the
exercise of control;
16. Make loans (but this restriction shall not prevent the Fund from
investing in debt securities, subject to the 5% limitation stated in
restriction 4 above);
17. Invest in or write puts, calls, straddles or spreads;
18. Invest in oil, gas or other mineral exploration or development
programs, although it may invest in marketable securities of
enterprises engaged in oil, gas or mineral exploration;
19. Invest more than 5% of its net assets (valued at time of
investment) in warrants, nor more than 2% of its net assets in
warrants that are not listed on the New York or American Stock
Exchanges.
All 19 restrictions 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.
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
Advisory Agreement", and is incorporated herein by reference. During the fiscal
periods ended December 31, 1995, 1994, and 1993 the Fund paid management fees of
$137,892, $108,170, and $89,159, respectively. During the same periods, the
Adviser reimbursed the Fund for expenses in excess of the applicable expense
limitations in the following amounts: 1995, 0; 1994, $5,750; and 1993,
$6,894.
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 and Amy S. Clague, are
partners of L. Roy Papp & Associates, the Fund's investment adviser, and serve
without any compensation from the Fund. The following table sets forth
compensation paid by the Fund to Mr. Ballinger and Mrs. Clague during the fiscal
year ended December 31, 1995. The Fund has no pension or retirement plan.
<TABLE>
<CAPTION>
Aggregate Total Compensation from Fund
Compensation and L. Roy Papp Stock Fund
Name of Director From the Fund Paid to Directors
- ---------------- ------------- ----------------------------
<S> <C> <C>
James K. Ballinger $2,000.00 $5,000.00
Amy S. Clague $1,500.00 $3,750.00
</TABLE>
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
Applying the above method of computation to the operations of the Fund for the
one year ended December 31, 1995 and from December 6, 1991 (the commencement of
the Fund's operations) through December 31, 1995, the Average Annual Total
Return would be 37.1% and 14.6%, respectively. Total Return for the same
periods was 37.1% and 74.3%, respectively.
The Fund imposes no sales charge and pays no distribution expenses. Income
taxes are not taken into account. The Fund's performance is a function of
conditions in the securities markets, portfolio management, and operating
expenses. Although information such as that shown above is useful in reviewing
the Fund's performance and in providing some basis for comparison with other
investment alternatives, it should not be used for comparison with other
investments using different reinvestment assumptions or time periods.
In advertising and sales literature, the Fund's performance may be compared
with that of market indices and other mutual funds. In addition to the above
computations, the Fund
4
<PAGE>
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 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
amounts will normally be paid in cash, but may be paid wholly or partly by a
distribution in kind of securities.
Redemptions will be made at net asset value. See "Determination of Net
Asset Value" in the prospectus, which information is incorporated herein by
reference.
Additional Tax Information
- --------------------------
See "Federal Income Tax" in the prospectus. All that information is
incorporated herein by reference.
Portfolio Transactions
- ----------------------
The Fund expects that its annual portfolio turnover rate will not exceed
25% under normal conditions, a turnover rate less than that of most mutual funds
that invest primarily in common stocks. However, there can be no assurance that
the Fund will not exceed this rate, and the portfolio turnover rate may vary
from year to year.
The investment adviser places portfolio transactions of the Fund with those
securities brokers and dealers that it believes will provide the best value in
transaction and research services for the Fund, either in a particular
transaction or over a period of time. Although some transactions involve only
brokerage services, some involve research services as well.
In valuing brokerage services, the investment adviser makes a judgment as
to which brokers are capable of providing the most favorable net price (not
necessarily the lowest commission considered alone) and the best execution in a
particular transaction. Best execution
5
<PAGE>
connotes not only general competence and reliability of a broker, but specific
expertise and effort of a broker in overcoming the anticipated difficulties in
fulfilling the requirements of particular transactions, because the problems of
execution and the required skills and effort vary greatly among transactions.
In valuing research services, the investment adviser makes a judgment of
the usefulness of research and other information provided by a broker to the
investment adviser in managing the Fund's investment portfolio. The
information, e.g., data or recommendations concerning particular securities,
relates to the specific transaction placed with the broker. The extent, if any,
to which the obtaining of such information may reduce the expenses of the
adviser in providing management services to the Fund is not determinable. In
addition, it is understood by the Board of Directors that other clients of the
investment adviser might also benefit from the information obtained for the
Fund, in the same manner that the Fund might also benefit from information
obtained by the investment adviser in performing services to others.
The reasonableness of brokerage commissions paid by the Fund in relation to
transaction and research services received is evaluated by the staff of the
investment adviser on an ongoing basis. The general level of brokerage charges
and other aspects of the Fund's portfolio transactions are reviewed periodically
by the Board of Directors.
Transactions of the Fund in the over-the-counter market are executed with
primary market makers acting as principal except where it is believed that
better prices and execution may be obtained otherwise.
Subject to the overriding objective of seeking the best value in
transaction and research services for the Fund, the adviser may select those
brokers and dealers who have made recommendations resulting in sales of Fund
shares.
Although investment decisions for the Fund are made independently from
those for other investment advisory clients of L. Roy Papp & Associates, it may
develop that the same investment decision is made for both the Fund and one or
more other advisory clients. If both the Fund and other clients purchase or
sell the same class of securities on the same day, the transactions will be
allocated as to amount and price in a manner considered equitable to each.
During the year ended December 31, 1995, brokerage commissions paid by the
Fund totaled $11,947 on portfolio transactions aggregating $7,503,048. Of this
amount, zero was paid for research services. All commissions were paid to
discount brokers or to brokers who are primary market makers in the over-the-
counter security purchased.
Custodian
- ---------
First Interstate Bank of Arizona, N.A., P.O. Box 53434, Phoenix, Arizona
85018, 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
6
<PAGE>
Fund. The Fund has authorized the custodian to deposit certain portfolio
securities in central depository systems as permitted under federal law. The
Fund may invest in obligations of the custodian and may purchase or sell
securities from or to the custodian.
Transfer Agent
- --------------
L. Roy Papp & Associates, the investment adviser to the Fund, also acts as
transfer, dividend disbursing, and shareholder servicing agent for the Fund
pursuant to a written agreement with the Fund. Under the agreement, L. Roy Papp
& Associates is responsible for administering and performing transfer agent
functions, for acting as service agent in connection with dividend and
distribution functions, for performing shareholder account administration agent
functions in connection with the issuance, transfer and redemption of the Fund's
shares, and maintaining necessary records in accordance with applicable laws,
rules and regulations.
For its services L. Roy Papp & Associates receives from the Fund a monthly
fee of $.75 for each shareholder account of the Fund, $.50 for each dividend
paid on a shareholder account, and $1.00 for each purchase (other than by
reinvestment, transfer or redemption) of shares of the Fund. The Board of
Directors of the Fund has determined the charges by L. Roy Papp & Associates to
the Fund are comparable to the charges of others performing similar services.
Certain Shareholders
- --------------------
At April 1, 1996, the only person known to the Fund to own of record and
beneficially in excess of 5% of the outstanding shares of capital stock of the
Fund was the Sisters of Mercy who owned 320,128 shares or 31.9% and whose
address is C/O The Northern Trust Co., P.O. Box 92956, Chicago, IL 60675. At
that date, 70,747 shares, or 7.0% of the outstanding shares, were owned by the
directors and officers of the Fund as a group.
7
<PAGE>
[LOGO]
PAPP AMERICA-ABROAD FUND, INC.
A NO-LOAD FUND
ANNUAL REPORT
DECEMBER 31, 1995
Managed by:
L. Roy Papp & Associates
4400 North 32nd Street
Suite 280
Phoenix, AZ 85018
(602)956-1115 Local
(800)421-4004
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PAPP AMERICA-ABROAD FUND, INC. AND
THE MORGAN STANLEY WORLD INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Years Papp America-Abroad Fund Morgan Stanley World Index
- -------------------------------------------------------------------------
<S> <C> <C>
12/6/91 $10,000 $10,000
1991 10,994 10,720
1992 11,811 10,162
1993 11,801 12,449
1994 12,718 13,084
1995 17,432 15,792
- -------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
=========================================================================
</TABLE>
*Last year, the Fund's performance was compared to that of the Standard & Poor's
500 Stock Index. However, given the Fund's investment objective and the fact
that approximately 50% of the earnings of the companies in its portfolio are
derived from foreign sources, and 50% from United States sources, it is believed
that a comparison with The Morgan Stanley World Index (which includes
approximately 59% foreign companies and 41% U.S. companies) is more appropriate.
For the year ended December 31, 1995, on a total return basis, the Fund was
+37.1%, the S&P 500 Stock Index was +37.3%, and The World Index was +20.7%.
===================================
AVERAGE ANNUAL TOTAL RETURN
- -----------------------------------
Since
1 Year Inception
- -----------------------------------
Papp-America- 37.05% 14.63%
Abroad Fund
- -----------------------------------
Morgan Stanley
World Index 20.70% 11.88%
===================================
2
<PAGE>
Papp America-Abroad Fund, Inc.
Dear Fellow Shareholder:
Our Fund had fine results in 1995. On a total return basis, we were up 37.1%
for the year. Since inception, a little more than four years ago, we were up
74.2%. As the chart on the opposite page indicates, our long-term performance
comfortably exceeds that of the Morgan Stanley World Index against which we
compare ourselves.
As you know, our Fund is almost entirely invested in United States companies, a
major portion of whose earnings are derived from foreign activities. We believe
that well-managed, growth oriented U.S. companies are uniquely suited to
successfully compete in the worldwide marketplace. Some, e.g., Coca Cola,
Gillette, McDonald's, and Proctor & Gamble, are household names no matter where
you happen to live. Others, such as Intel, Hewlett-Packard, Microsoft, and
Motorola, are technology powerhouses whose leadership in their various areas of
expertise is unquestioned. Most of these companies performed very well last
year.
The most important factor in our 1995 performance was that we remained fully
invested throughout the year and thus were able to fully participate in the
remarkable increase in stock prices. As you may have read in the newspapers,
many of the market pundits believed that stock prices would fall sharply and
positioned themselves accordingly. We disagreed with that assessment.
In my Views from Camelback Mountain letter dated December 31, 1994, I made the
following statement:
"I believe the economy will show a good steady growth for the next two or
three years. Interest rates will be more stable and climb less. I do
expect more inflation, but at a moderate rate. I continue to think stocks
are attractive for the long run and still offer the best long-term
returns."
Even with the Federal Reserve cut in interest rates, I continue to believe that
our economy will grow only modestly this year. I think it will be slow with
many complaints. We expect next year to be up too, and perhaps a little bit
stronger. I am not upset with a small reduction in the budget deficit. I am
concerned that a couple years from now inflation will be a little bit higher as
will interest rates. The stock market has started the year very strongly, and I
feel hopeful that stocks will go up the rest of the year at a modest pace.
However, I would be very cautious about cyclical stocks and very long bonds.
Best regards,
/s/ L. Roy Papp
L. Roy Papp, Chairman
February 7, 1996
3
<PAGE>
Arthur Andersen LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of the
Papp America-Abroad Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of the
Papp America-Abroad Fund, Inc. (the Fund) as of December 31, 1995 and 1994,
including the schedule of portfolio investments as of December 31, 1995, and the
related statements of operations and statements of changes in net assets for the
two years then ended, and the financial highlights for the three years then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights of the Papp America-Abroad Fund, Inc. for the
year ended December 31, 1992, and the period from December 6, 1991 (date of
commencement of operations) through December 31, 1991, were audited by other
auditors whose report dated January 29, 1993, expressed an unqualified opinion
on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1995, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Papp America-Abroad Fund, Inc. as of December 31, 1995 and 1994, and the results
of its operations and changes in its net assets for the two years then ended and
its financial highlights for the three years then ended, in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
January 19, 1996.
4
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market
Number Value
Common Stocks of Shares (Note 1)
- --------------------------------------------------------------- --------- -----------
<S> <C> <C>
INDUSTRIAL SERVICES (13.4%)
Air Express International
(Air freight forwarding) 30,000 $ 690,000
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 19,000 824,125
Manpower, Inc.
(Provider of nongovernment employment services) 22,500 632,813
----------
2,146,938
----------
HEALTHCARE (12.6%)
Abbott Laboratories
(Healthcare products) 10,900 455,075
Johnson & Johnson
(Healthcare products) 7,000 599,375
Merck & Company
(Ethical drugs and specialty chemicals) 14,500 953,375
----------
2,007,825
----------
FOOD AND BEVERAGE (12.4%)
CPC International
(International food processor) 9,000 617,625
Coca Cola Company
(Dominant international soft drink company) 11,800 876,150
International Flavors & Fragrances, Inc.
(Creator and manufacturer of flavors and fragrances) 10,300 494,400
----------
1,988,175
----------
CONSUMER PRODUCTS (12.0%)
Gillette Company
(Shaving and personal care) 17,000 886,125
Procter & Gamble Company
(Household, personal care, and food products) 10,400 863,200
Sara Lee Corporation
(International consumer products) 5,000 159,375
----------
1,908,700
----------
FINANCIAL SERVICES (10.8%)
Advance Ross Corporation*
(Provider of value-added tax refunds) 31,000 871,875
State Street Boston Corporation
(Provider of U.S. and global securities custodial services) 19,000 855,000
----------
1,726,875
----------
</TABLE>
*Non-income producing security.
The accompanying notes are an integral part of this schedule.
5
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market
Number Value
Common Stocks (continued) of Shares (Note 1)
- -------------------------------------------------------------------- --------- ------------
<S> <C> <C>
COMPUTERS AND SOFTWARE (9.6%)
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 4,000 $ 335,000
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 12,000 681,000
Microsoft Corporation*
(Personal computer software) 6,000 526,500
-----------
1,542,500
-----------
RESTAURANTS (5.5%)
McDonald's Corporation
(Fast food restaurants and franchising) 19,400 875,425
-----------
TELECOMMUNICATIONS (5.4%)
Motorola, Inc.
(Manufacturer of electronic equipment) 15,200 866,400
-----------
ELECTRICAL EQUIPMENT (5.3%)
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 10,400 850,200
-----------
PUBLISHING (1.7%)
Reuters Holdings P.L.C.
(International news agency) 5,000 275,625
-----------
ENVIRONMENTAL/RECYCLING (1.1%)
Intermagnetics General*
(Manufacturer of superconductive magnetic systems
and environmentally acceptable refrigerants) 8,200 172,200
-----------
MISCELLANEOUS (9.5%)
Mattel, Inc.
(Toy manufacturer) 27,200 836,400
Verifone, Inc.*
(Supplier of transaction automation systems) 24,000 687,000
-----------
1,523,400
-----------
TOTAL COMMON STOCKS - 99.3% 15,884,263
CASH AND OTHER ASSETS, LESS LIABILITIES - .7% 104,004
-----------
NET ASSETS - 100.0% $15,988,267
===========
NET ASSET VALUE PER SHARE
(Based on 970,561 shares outstanding at December 31, 1995) $16.47
===========
</TABLE>
*Non-income producing security.
The accompanying notes are an integral part of this schedule.
6
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Investment in securities at market value (identified
cost $10,558,570 and $10,036,727 at December 31,
1995 and 1994, respectively) (Note 1) $15,884,263 $11,401,719
Cash 83,326 125,153
Dividends and interest receivable 20,678 31,325
Subscription receivable - 15,000
----------- -----------
Total assets $15,988,267 $11,573,197
=========== ===========
NET ASSETS
Paid-in capital applicable to 970,561 outstanding
shares at December 31, 1995 and 945,228
outstanding shares at December 31, 1994 $10,662,574 $10,237,673
Undistributed net realized loss on investments - (29,468)
Net unrealized gain on investments 5,325,693 1,364,992
----------- -----------
Net assets $15,988,267 $11,573,197
=========== ===========
Net Asset Value Per Share (net assets/share
outstanding) $ 16.47 $ 12.24
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 201,325 $ 214,189
Interest 7,941 5,289
Foreign taxes withheld (1,754) (1,071)
---------- ----------
Total investment income 207,512 218,407
---------- ----------
EXPENSES:
Management fee (Note 3) 137,892 108,170
Accounting 9,700 10,725
Filing fees 4,584 4,127
Directors' attendance fees 3,500 4,000
Custodial 4,963 3,400
Transfer agent fees 2,425 2,287
Legal 1,118 1,169
Other fees 3,675 3,340
---------- ----------
Total expenses 167,857 137,218
---------- ----------
Less fees waived by adviser (Note 3) - (5,750)
---------- ----------
Net expenses 167,857 131,468
---------- ----------
Net investment income 39,655 86,939
---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Proceeds from sales of securities 3,627,982 1,857,818
Cost of securities sold 3,353,223 1,887,286
---------- ----------
Net realized gain (loss) on investments sold 274,759 (29,468)
Net change in unrealized gain on investments 3,960,701 763,886
---------- ----------
Net realized and unrealized gain on investments 4,235,460 734,418
---------- ----------
Net increase in net assets resulting from operations $4,275,115 $ 821,357
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 39,655 $ 86,939
Net realized gain (loss) on investments sold 274,759 (29,468)
Net change in unrealized gain on investments 3,960,701 763,886
----------- -----------
Increase in net assets resulting from
operations 4,275,115 821,357
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (39,655) (86,939)
Net realized gain on investments sold (245,291) -
----------- -----------
Total distributions to shareholders (284,946) (86,939)
----------- -----------
FROM SHAREHOLDER TRANSACTIONS:
Proceeds from sale of shares 1,509,716 877,737
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gain on investments sold 277,836 83,389
Payments for redemption of shares (1,362,651) (1,056,640)
----------- -----------
Increase (decrease) in net assets resulting
from share transactions 424,901 (95,514)
----------- -----------
Total increase in net assets 4,415,070 638,904
Net assets at beginning of the year 11,573,197 10,934,293
----------- -----------
Net assets at end of year $15,988,267 $11,573,197
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) SIGNIFICANT ACCOUNTING POLICIES:
Papp America-Abroad Fund, Inc. (the Fund) was incorporated on August 15, 1991,
and is registered under the Investment Company Act of 1940 as an open-end
diversified management investment company. Operations of the Fund commenced on
December 6, 1991. The Fund invests with the objective of long-term capital
growth in the common stocks of United States companies that have substantial
international activities and, to a much lesser extent, in the common stocks of
foreign enterprises that are traded publicly in United States securities
markets.
The policies described below are followed by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
(A) INVESTMENT IN SECURITIES
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 valued at the most
recent bid quotations. Securities for which quotations are not available and
any other assets are valued at a fair value as determined in good faith by the
Board of Directors. The price per share for a purchase order or redemption
request is the net asset value next determined after receipt of the order.
The net asset value of a share of the Fund is determined as of the close of
trading on the New York Stock Exchange, currently 4:00 p.m. New York City time,
on any day on which that Exchange is open for trading, by dividing the market
value by the number of shares outstanding, and rounding the result to the
nearest full cent.
Investment transactions are accounted for on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the ex-dividend
date and interest is recorded on the accrual basis. Realized gains and losses
from investment transactions and unrealized appreciation or depreciation are
calculated on the identified cost basis.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
10
<PAGE>
(B) FEDERAL INCOME TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code which are applicable to regulated investment companies. The Code requires
that substantially all of the Fund's taxable income, as well as any net realized
gain on sales of investments, is to be distributed to the shareholders. The
Fund has complied with this policy and, accordingly, no provision for federal
income taxes is required.
(2) DIVIDENDS AND DISTRIBUTIONS:
Dividends and capital gain distributions are reinvested in additional shares of
the Fund unless the shareholder has requested in writing to be paid by check.
On December 21, 1995, a dividend of approximately $.010567 a share, aggregating
$10,435, was declared from net investment income earned during 1995. A
distribution was also declared from net realized long-term capital gains of
approximately $.256864 a share, aggregating $245,291. The dividend and
distribution were paid on December 29, 1995, to shareholders of record on
December 20, 1995.
On June 21, 1995, a dividend of approximately $.031 a share, aggregating
$29,220, was declared from net investment income earned during 1995. The
dividend was paid on June 30, 1995, to shareholders of record on June 20, 1995.
On December 21, 1994, a dividend of approximately $.042853 a share, aggregating
$40,799, was declared from net investment income earned during 1994. The
dividend was paid on December 30, 1994, to shareholders of record on December
20, 1994.
On June 22, 1994, a dividend of approximately $.0516 a share, aggregating
$46,140, was declared from net investment income earned during 1994. The
dividend was paid on June 30, 1994, to shareholders of record on June 22, 1994.
Dividends and distributions payable to its shareholders are recorded by the Fund
on the ex-dividend date. At December 31, 1994, there was an undistributed net
realized loss on investment transactions of $29,468. This loss was offset
against the net realized gains which were distributed in 1995.
(3) TRANSACTIONS WITH AFFILIATES:
The Fund has an investment advisory and management services agreement with L.
Roy Papp & Associates (Manager). The Manager 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. The Manager will 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. A
management fee expense reimbursement of $5,750 was required in 1994. The Fund
incurred fees of $2,425 and $2,287 in 1995 and 1994, respectively, from the
manager for its services as shareholder services and transfer agent.
11
<PAGE>
The Fund's independent directors receive $500 for each meeting of the Board of
Directors attended on behalf of the Fund. Certain officers and/or directors of
the Fund are also partners of the Manager and shareholders in the Fund. The
Fund made no payments to its officers or directors, except to independent
directors as stated above.
(4) PURCHASES AND SALES OF SECURITIES:
For the year ended December 31, investment transactions excluding short-term
investments were as follows:
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Purchases at cost $3,875,066 $1,674,040
Sales 3,627,982 1,857,818
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS:
At December 31, 1995, there were 5,000,000 shares of $.01 par value capital
stock authorized. Transactions in capital shares of the Fund were as follows:
<TABLE>
<CAPTION>
Proceeds Shares
------------ --------
<S> <C> <C>
Year ended December 31, 1995
Shares issued $ 1,509,716 105,481
Dividends and distributions reinvested 277,836 17,193
Shares redeemed (1,362,651) (97,341)
----------- -------
Net increase $ 424,901 25,333
=========== =======
Year ended December 31, 1994
Shares issued $ 877,737 74,866
Dividends and distributions reinvested 83,389 7,075
Shares redeemed (1,056,640) (92,075)
----------- -------
Net decrease $ (95,514) (10,134)
=========== =======
</TABLE>
(6) UNREALIZED APPRECIATION:
Unrealized appreciation of portfolio securities for both financial statement and
federal income tax purposes is as follows:
<TABLE>
<CAPTION>
1995 1994
----------- ------------
<S> <C> <C>
Market value $15,884,263 $11,401,719
Original cost 10,558,570 10,036,727
----------- -----------
Net unrealized appreciation $ 5,325,693 $ 1,364,992
=========== ===========
</TABLE>
As of December 31, 1995, gross unrealized gains on investments in which market
value exceeded cost totaled $5,328,808 and gross unrealized losses on
investments in which cost exceeded market value totaled $3,115.
12
<PAGE>
(7) SELECTED FINANCIAL HIGHLIGHTS:
The following selected per share data has been calculated using revenues and
expenses for the periods indicated, divided by the weighted average number of
shares outstanding during the periods. The ratios are calculated using the
revenues and expenses for the periods, divided by the weighted average of the
daily net assets of the Fund.
<TABLE>
<CAPTION>
Year Ended December 31, Period Ended
------------------------------------------------------ December 31,
1995 1994 1993 1992 1991 (A)
------------ ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 12.24 $ 11.45 $ 11.67 $ 10.98 $ 10.00
Income from investment
operations:
Net investment income .04 .10 .10 .11 .02
Net realized and unrealized
gain (loss) on investments 4.52 .79 (.11) .71 .98
----------- ----------- ----------- ---------- ----------
Total from investment
operations 4.56 .89 (.01) .82 1.00
Less Distributions:
Dividend from investment
income (.04) (.10) (.09) (.11) (.02)
Distribution of net realized
gain (.29) - (.12) (.02) -
----------- ----------- ----------- ---------- ----------
Total Distributions (.33) (.10) (.21) (.13) (.02)
Net asset value, end of period $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98
=========== =========== =========== ========== ==========
Total return 37.05% 7.77% (.08)% 7.44% 9.94%
=========== =========== =========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of period $15,988,267 $11,573,197 $10,934,293 $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.22% 1.25% 1.25% 1.25% 1.25%*
Net investment income to
average net assets (C) 1.50% 2.07% 2.28% 2.28% 4.51%*
Portfolio turnover rate 26.65% 16.00% 8.00% 16.00% 0.00%
</TABLE>
* Annualized
(A) From the date of commencement of operations (December 6, 1991).
(B) If the Fund had paid all of its expenses and there had been no
reimbursement by the investment adviser, this ratio would have been
1.30%, 1.33%, 3.16% and 2.07% for the years ended December 31, 1994,
1993, 1992 and the period ended December 31, 1991.
(C) Computed giving effect to investment adviser's expense limitation
undertaking.
13
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
DIRECTORS
James K. Ballinger L. Roy Papp
Amy S. Clague Rosellen C. Papp
Robert L. Mueller Bruce C. Williams
Harry A. Papp
OFFICERS
Chairman - L. Roy Papp President - Harry A. Papp
VICE PRESIDENTS
Victoria S. Cavallero Robert L. Mueller
George D. Clark, Jr. Rosellen C. Papp
Jeffrey N. Edwards Bruce C. Williams
Robert L. Hawley
Secretary - Robert L. Mueller
Treasurer - Rosellen C. Papp
Assistant Treasurer - Julie A. Hein
INVESTMENT ADVISER
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
CUSTODIAN
First Interstate Bank of Arizona
100 West Washington Street
Phoenix, Arizona 85003
SHAREHOLDER SERVICES AND TRANSFER AGENT
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
(800) 421-4004
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
2 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
LEGAL COUNSEL
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, Illinois 60602
This report is submitted for the general information of the shareholders of the
Fund. The report is not authorized for distribution to prospective investors in
the Fund unless it is accompanied or preceded by a currently effective
prospectus of the Fund. No sales charge to the shareholder or to the new
investor is made in offering the shares of the Fund.
<PAGE>
Part C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
--------------------
(1) Financial statements included in Part B of this amendment (incorporated by
reference to 1995 annual report of registrant; a copy of that annual
report is attached hereto but, except for those portions incorporated by
reference, is furnished for the information of the Commission and is not
deemed to be filed as part of this amendment):
Schedule of portfolio investments - December 31, 1995
Report of independent auditors
Statements of assets and liabilities - December 31, 1995 and 1994
Statements of operations - years ended December 31, 1995 and 1994
Statements of changes in net assets - years ended December 31, 1995 and
1994
Notes to financial statements
(2) Financial statements included in Part C of this amendment:
None
Note: The following schedules have been omitted for the following reasons:
Schedule I - The required information is presented in the statement of
investments at December 31, 1995.
Schedules II, IV, and V - The required information is not present.
(b) Exhibits
1. Articles of Incorporation
1.1 Amendment to Articles of Incorporation
2. Bylaws
3. None
C-1
<PAGE>
4. Form of stock certificate
5. Investment Advisory Agreement
6. None
7. None
8. Custodian Agreement
9. Transfer Agency Agreement
10. Opinion and consent of Bell, Boyd & Lloyd
11. Consent of independent auditors dated April 24, 1996
12. None
13. Initial Subscription Agreement
13.1 New Account Purchase Application
14. None
15. None
16. Schedule of Computation of Performance Quotations
17. Financial Data Schedule
18. Not Applicable
Item 25. Persons Controlled By or Under Common Control with Registrant
- ------- -------------------------------------------------------------
The registrant does not consider that there are any persons directly or
indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the captions "Management of the Fund" and "Investment Advisory Agreement"
and in the Additional Information Statement under the captions "Directors and
Officers" and "Investment Adviser" is incorporated by reference.
Item 26. Number of Holders of Securities
- ------- -------------------------------
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class At March 31, 1996
-------------- ------------------------
<S> <C>
Capital Stock $.01 par value 339
</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 17(h) of the Investment Company Act provides that neither the
articles of incorporation of the registrant, nor any other instrument pursuant
to which the registrant is organized or administered, shall contain any
provision that protects or purports to protect any director or officer of the
registrant against any liability to the registrant or its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
C-2
<PAGE>
Section 9.01 of Article IX of the bylaws of the registrant (exhibit 2 to
the registration statement, which is incorporated herein by reference) provides
in effect that the registrant shall provide certain indemnification of its
directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
In the absence of a final decision on the merits by a court or other body
before which a proceeding was brought that a person to be indemnified
(indemnitee) was not liable by reason of his willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office, the registrant will not indemnify any person unless a determination
that the indemnitee was not so liable shall have been made on behalf of the
registrant by (a) vote of a majority of directors who are neither "interested
persons" of the registrant as defined in section 2(a)(19) of the Act nor parties
to the proceeding (disinterested, non-party directors), or (b) an independent
legal counsel in a written opinion. The registrant will not advance attorneys'
fees or other expenses incurred by an indemnitee in connection with a proceeding
unless the registrant receives an undertaking by or on behalf of the indemnitee
to repay the advance (unless it is ultimately determined that he is entitled to
indemnification) and (a) the indemnitee shall provide a security for his
undertaking, or (b) a majority of the disinterested, non-party directors of the
registrant, or an independent legal counsel in a written option, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
- ------- ----------------------------------------------------
The information in the prospectus under the captions "Management of the
Fund" and "Investment Advisory Agreement" is incorporated by reference. Neither
L. Roy Papp & Associates nor any of its partners has at any time during the past
two years been engaged in any other business, 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-3
<PAGE>
Item 30. Location of Accounts and Records
- ------- --------------------------------
Rosellen C. Papp, Treasurer
Papp America-Abroad Fund, Inc.
4400 North 32nd Street, Suite 280
Phoenix, AZ 85018
Item 31. Management Services
- ------- -------------------
None
Item 32. Undertakings
- ------- ------------
a) Not applicable
b) Not applicable
c) Registrant undertakes to deliver to each person to whom a
prospectus is delivered, upon request and without charge, a copy
of Registrant's Annual Report to Shareholders.
The registrant undertakes to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director or directors when requested
to do so by the record holders of at least 10% of the registrant's outstanding
common shares, and in connection with such meeting to comply with provisions of
section 16(c) of the Investment Company Act concerning assistance with a record
shareholder communication asking other shareholders to join in that request,
provided that the shareholders requesting the meeting shall have paid to the
registrant the reasonably estimated cost of preparing and mailing the notice
thereof, which the secretary shall determine and specify to such shareholders.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this registration statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Phoenix, and the State of Arizona on
the 26th day of April, 1996.
Papp America-Abroad Fund, Inc.
By: L. Roy Papp, Chairman
____________________________
L. Roy Papp, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
L. Roy Papp Director and Chairman )
- ------------------------- (principal executive and )
L. Roy Papp financial officer) )
)
)
Harry A. Papp Director and President )
- ------------------------- )
Harry A. Papp )
)
)
Robert L. Mueller Director, Vice President )
- ------------------------- and Secretary )
Robert L. Mueller )
)
) April 26, 1996
Bruce C. Williams Director and Vice President )
- ------------------------- )
Bruce C. Williams )
)
)
Rosellen C. Papp Director, Vice President and )
- ------------------------- Treasurer (principal accounting )
Rosellen C. Papp officer) )
)
)
James K. Ballinger Director )
- ------------------------- )
James K. Ballinger )
)
)
Amy S. Clague Director )
- ------------------------- )
Amy S. Clague )
<PAGE>
INDEX FOR EXHIBITS
FILED WITH THIS AMENDMENT
EXHIBIT NO. DESCRIPTION
- ---------- -----------
1. Articles of Incorporation
2. Bylaws
3. None
4. Form of stock certificate
5. Investment Advisory Agreement
6. None
7. None
8. Custodian Agreement
9. Transfer Agency Agreement
10. Opinion and consent of Bell, Boyd & Lloyd
11. Consent of independent auditors dated April 24, 1996
12. None
13. Initial Subscription Agreement
13.1 New Account Purchase Application
14. None
15. None
16. Schedule of Computation of Performance Quotations
17. Financial Data Schedule
18. Not Applicable
<PAGE>
EXHIBIT 1
L. ROY PAPP AMERICAN-INTERNATIONAL FUND, INC.
Articles of Incorporation
The undersigned, being a natural person and acting as incorporator, hereby
adopts the following articles of incorporation for the purpose of forming a
business corporation under and by virtue of the general laws of the state of
Maryland.
FIRST. Incorporation. The incorporator is R. James Gormley who is at
least eighteen years of age and whose address is 70 West Madison Street, Suite
3200, Chicago, Illinois 60602. He is forming the corporation named in these
articles of incorporation under the general laws of the state of Maryland.
SECOND. Name. The name of the corporation is L. Roy Papp American-
International Fund, Inc.
THIRD. Purposes. The purposes for which the corporation is formed are:
1. To engage in the business of an open-end management investment
company.
2. To invest and reinvest in, to buy or otherwise acquire, to hold for
investment or otherwise, and to sell or otherwise dispose of:
a. Securities of all kinds, however evidenced, and rights or
warrants to acquire securities, of private and public companies,
corporations, associations, trusts and other enterprises and
organizations;
b. Obligations issued or guaranteed by national and state
governments and their instrumentalities and subdivisions;
c. Deposits in banks, savings banks, trust companies and savings and
loan associations;
d. Assets and interests other than securities or deposits.
FOURTH. Address and resident agent. The post office address of the
principal office of the corporation in the State of Maryland is c/o The
Corporation Trust, Incorporated, 32 South Street, Baltimore, Maryland 21202.
The name and post office address of the resident agent of the corporation in the
State of Maryland is The Corporation Trust, Incorporated, 32 South Street,
Baltimore, Maryland 21202. The resident agent is a Maryland Corporation.
FIFTH. Authorized stock. The total number of shares of stock which the
corporation initially shall have authority to issue is 5,000,000 shares, all of
which shall be capital stock, $.01 par value per share (capital stock), having
an aggregate par value of $50,000. The board of directors of the corporation
may, as long as the corporation is registered as an open-end investment company
under the Investment Company Act of 1940, increase or decrease the aggregate
number of shares of capital stock or the number of shares of stock of any class
that the corporation shall have authority to issue.
<PAGE>
SIXTH. Sale and redemption of shares.
A. Sale of shares. The board of directors may authorize the sale from
time to time of shares of capital stock, whether now or hereafter authorized,
for such consideration as the board of directors considers advisable, but not
less than either par value or the net asset value of the shares which is next
computed after the time of receipt of an unconditional order for purchase of the
shares, except as may be permitted by or pursuant to the Investment Company Act
of 1940 and other applicable law.
Stock may be issued in fractions of whole shares, to which attach pro rata
all of the rights of whole shares, including the right of voting and of receipt
of dividends, except that there shall be no right of receipt of a certificate
representing any fraction of a whole share.
B. Redemption of shares. Any stockholder of the corporation may at any
time require the corporation to redeem all or any part of the shares of capital
stock registered in the name of such stockholder, except as specified below, at
the net asset value of the shares which is next computed after the time of
receipt of an order for redemption of the shares in good form.
An order for redemption in good form shall mean receipt by the corporation
or its designated agent of a written unconditional and irrevocable instruction
of the stockholder to redeem, in form acceptable to the corporation or its
designated agent, together with any certificates which may have been issued
therefor, endorsed or accompanied by proper instrument of transfer, and such
other documents as the corporation or its designated agent may require.
Payment for shares redeemed shall be made within seven days after receipt
of an order for redemption of the shares in good form. However, the right of
redemption of shares may be suspended, and the payment for shares previously
redeemed may be postponed, by or under the authority of the board of directors
for the whole or any part of any period during which such suspension or
postponement is permitted by the Investment Company Act of 1940, or by rule or
order of the Securities and Exchange Commission pursuant to that Act.
The corporation shall have the right at any time without prior notice to
the stockholder to redeem shares of any stockholder for their then current net
asset value per share if at such time the shares registered in the name of the
stockholder have an aggregate net asset value of less than $2,500, subject to
such terms and conditions as the board of directors may approve, and subject to
the corporation's giving general notice to all stockholders of its intention to
avail itself of such right, either by publication in the corporation's
prospectus, if any, or by such other means as the board of directors may
determine.
Subject to the rules and regulations of the Securities and Exchange
Commission, the corporation may pay the redemption price in whole or in part by
a distribution in kind of securities from the portfolio of the corporation, in
lieu of money, valuing such securities at their value employed for determining
the net asset value governing such redemption price, and selecting the
securities in such manner as may be determined to be fair and equitable by or
under the authority of the board of directors.
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C. Determination of net asset value of shares. The net asset value shall
be determined as of such times as the board of directors shall prescribe by
resolution, subject to applicable rules and regulations, if any, of the
Securities and Exchange Commission. In the absence of any such resolution of
the board of directors, the net asset value shall be determined as of the time
of the close of trading on the New York Stock Exchange on any day on which that
exchange is open for trading and there is a purchase or redemption of shares of
the corporation.
The net asset value of each share of the corporation shall be determined by
or under the authority of the board of directors in accordance with the
provisions of and the rules of the Securities and Exchange Commission under the
Investment Company Act of 1940 and, as to matters of accounting, in conformity
with generally accepted accounting principles. The board of directors may
appoint persons to assist it in the determination of the value of assets,
liabilities and net asset value per share, and to make the actual calculations
pursuant to the direction of the board of directors.
D. No preemptive rights. No holder of shares of the corporation, whether
now or hereafter authorized, shall be entitled as of right to acquire from the
corporation any shares of the corporation, whether now or hereafter authorized.
SEVENTH. Bylaws. The board of directors is authorized to adopt, alter and
repeal the bylaws of the corporation, except to the extent that the bylaws
provide otherwise.
EIGHTH. Majority votes of stockholders. Notwithstanding any provision of
the laws of the state of Maryland requiring approval by the stockholders of any
action by the affirmative vote of a greater proportion than a majority of the
votes entitled to be cast on the matter, any such action may be taken or
authorized upon the concurrence of at least a majority of the aggregate number
of votes entitled to be cast thereon.
NINTH. Limitation of Liability. To the fullest extent permitted by
Maryland statutory or decisional law, as amended or interpreted, no director or
officer of the corporation shall be personally liable to the corporation or to
its stockholders for money damages; provided, however, that this article shall
not protect any director or officer of the corporation against any liability to
the corporation or to its stockholders 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.
No amendment of the charter of the corporation or repeal of any of its
provisions shall limit or eliminate the benefits provided to directors and
officers under this provision in connection with any act or omission that
occurred prior to such amendment or repeal.
TENTH. Board of directors.
1. The number of directors of the corporation, until such number shall be
changed by the bylaws of the corporation, is three.
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2. The names of the persons who will serve as directors of the corporation
until the first annual meeting of stockholders and until their successors are
elected and qualify are as follows:
Robert L. Mueller Harry A. Papp
L. Roy Papp
ELEVENTH. Right to name. The corporation acknowledges that it is adopting
its corporate name through permission of L. Roy Papp & Associates, an Arizona
proprietorship, and agrees that L. Roy Papp & Associates reserves to itself and
any successor to its business the right to grant the nonexclusive right to use
the name "L. Roy Papp" or "Papp" or "---- Papp Fund" or any similar name to any
other corporation or entity, including but not limited to any investment company
of which L. Roy Papp & Associates or any subsidiary or affiliate thereof or any
successor to the business thereof shall be the investment adviser.
TWELFTH. Amendment of articles of incorporation. The corporation reserves
the right to amend, alter, change or repeal any provision contained in its
articles of incorporation, in the manner now or hereafter prescribed by statute,
and any contract rights conferred upon the stockholders are granted subject to
this reservation.
IN WITNESS WHEREOF, I have signed these articles of incorporation and have
acknowledged the same to be my act on this 14th day of August 1991.
/s/ R. James Gormley
-----------------------
R. James Gormley
WITNESS:
/s/ Cameron S. Avery
--------------------
Cameron S. Avery
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EXHIBIT 1.1
L. ROY PAPP AMERICAN-INTERNATIONAL FUND, INC.
Articles of Amendment
---------------------
L. Roy Papp American-International Fund, Inc., a Maryland corporation
having its principal office in Baltimore, Maryland (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The articles of incorporation of the corporation are amended as
follows:
Article SECOND of the articles of incorporation is deleted, and
the following is inserted in lieu thereof:
SECOND. Name. The name of the corporation is Papp
America-Abroad Fund, Inc.
SECOND: The board of directors of the corporation on November 20, 1991
duly adopted a resolution in which was set forth the foregoing amendment to the
articles of incorporation, declaring that the amendment as proposed was
advisable and directing that it be submitted for consideration by the sole
shareholder of the corporation without a meeting.
THIRD: The amendment hereinabove set forth was approved in writing by the
sole shareholder of the corporation without a meeting.
FOURTH: The amendment as hereinabove set forth has been duly advised by
the board of directors and duly approved by the sole shareholder of the
corporation.
IN WITNESS WHEREOF, L. Roy Papp American-International Fund, Inc. has
caused these articles to be signed in its name and on its behalf by its
president and attested by its secretary on November 2, 1991.
L. ROY PAPP AMERICAN-
INTERNATIONAL FUND, INC.
L. ROY PAPP AMERICAN-
INTERNATIONAL FUND, INC. By /s/ Harry A. Papp
---------------------------
Harry A. Papp, President
Attest:
/s/ Robert L. Mueller
-------------------------------
Robert L. Mueller, Secretary
<PAGE>
EXHIBIT 1.1
THE UNDERSIGNED, president of L. Roy Papp American-International Fund,
Inc., who executed on behalf of the corporation the foregoing articles of
amendment, of which this certificate is made a part, acknowledges, in the name
and on behalf of the corporation, the foregoing articles of amendment to be the
corporate act of the corporation, and further certifies that to the best of his
knowledge, information and belief, the matters and facts set forth herein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/ Harry A. Papp
-----------------
Harry A. Papp
<PAGE>
EXHIBIT 2
Papp America-Abroad Fund, Inc.
BYLAWS
------
ARTICLE I
OFFICES
Section 1.01. Principal office. The principal office of the corporation
in the State of Maryland shall be located in the City of Baltimore.
Section 1.02. Other offices. The corporation may also have offices at
such other places both within and without the State of Maryland as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01. Place of meetings. All meetings of the stockholders shall
be held in the City of Phoenix, State of Arizona, or at such other place in the
United States as shall be designated from time to time by the board of
directors, at such time and place as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2.02. Annual meeting. As long as the corporation is registered as
an investment company under the Investment Company Act of 1940, the corporation
shall not be required to hold an annual meeting of stockholders during any year
in which none of the following is required to be acted on by stockholders under
that Act: (1) an election of directors; (2) approval of an investment advisory
agreement; (3) ratification of a selection of independent public accountants;
and (4) approval of a distribution agreement. If there is to be an annual
meeting, it shall be held on the third Tuesday of April if not a legal holiday,
and if a legal holiday, then on the next secular day following, at 2:00 p.m., or
at such other date and time within the month of April as shall be designated
from time to time by the board of directors and stated in the notice of the
meeting, at which they shall elect a board of directors and transact such other
business as may properly be brought before the meeting.
Section 2.03. Special meetings. Special meetings of stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the articles
of incorporation, may be called at any time by the chairman, the president or
the board of directors. Special meetings of stockholders shall be called by the
secretary upon the written request of stockholders entitled to cast a least 25
percent of all the votes entitled to be cast at such meeting, provided that {a)
such request shall state the purpose or purposes of the meeting and the matters
proposed to be acted on at it; and (b) the stockholders requesting the meeting
shall have paid to the corporation the reasonably estimated cost of preparing
and mailing the notice thereof, which the secretary shall
<PAGE>
determine and specify to such stockholders. Upon payment of these costs to the
corporation, the secretary shall notify each stockholder entitled to notice of
the meeting. Unless requested by stockholders entitled to cast a majority of all
votes entitled to be cast at the meeting, a special meeting need not be called
to consider any matter which is substantially the same as a matter voted on at
any special meeting of stockholders held during the preceding twelve months.
Section 2.04. Stockholders entitled to vote; number of votes. If a record
date has been fixed for the determination of stockholders entitled to notice of
or to vote at any meeting of stockholders, each stockholder of the corporation
shall be entitled to vote, in person or by proxy, each share of stock (or
fraction thereof) registered in his name on the books of the corporation
outstanding at the close of business on such record date, with one vote (or
fraction of a vote) for each share (or fraction thereof) so outstanding.
Section 2.05. Notice of meetings. Written notice of each meeting of
stockholders stating the place, date and hour of the meeting and, in the case of
a special meeting or if otherwise required by law, the purpose or purposes for
which the meeting is called, shall be given, not less than 10 nor more than 90
days before the date of the meeting, to each stockholder entitled to vote at
such meeting.
Section 2.06. Quorum; adjournment. The holders of a majority of the stock
entitled to vote at a meeting of stockholders, present in person or represented
by proxy, shall constitute a quorum at the meeting for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of stockholders, the stockholders entitled to vote thereat present
in person or represented by proxy shall have the power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At any adjourned meeting at which a
quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than 120 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each stockholder entitled to vote at the meeting.
Section 2.07. Proxies. No proxy shall be valid more than eleven months
after its date, unless it provides for a longer period.
Section 2.08. Action without meeting. Any action required or permitted to
be taken at a meeting of stockholders may be taken without a meeting if a
unanimous written consent which sets forth the action is signed by each
stockholder entitled to vote on the matter is filed with the record of
stockholders' meetings.
Section 2.09. Stock ledger. The secretary of the corporation shall cause
an original or duplicate stock ledger to be maintained at the office of the
corporation's transfer agent.
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ARTICLE III
DIRECTORS AND COMMITTEES
Section 3.01. Function and powers. The business and affairs of the
corporation shall be managed under the direction of its board of directors. All
powers of the corporation may be exercised by or under the authority of the
board of directors except as conferred on or reserved to the stockholders by
statute or the articles of incorporation or these bylaws.
Section 3.02. Number. The number of directors which shall constitute the
entire board of directors may be fixed by a vote of the majority of the
directors from time to time-but shall in no event be less than three nor more
than nine.
Section 3.03. Election and term of office. The directors shall be elected
at the annual meeting of the stockholders (if any such meeting is held), except
as provided in Section 3.04 of this article, and each director elected shall
hold office until his successor is elected and qualifies or until his earlier
resignation or removal. Directors need not be stockholders.
Section 3.04. Vacancies. Any vacancy occurring in the board of directors
for any cause other than by reason of an increase in the number of directors may
be filled by a majority of the remaining members of the board of directors,
although such majority is less than a quorum; provided, however, that no vacancy
shall be so filled unless immediately thereafter at least two-thirds of the
directors then holding office shall have been elected to such office by the
stockholders, and provided further that if at any time (other than prior to the
first annual meeting of stockholders) less than a majority of the directors
holding office at that time were elected by the stockholders, a meeting of the
stockholders shall be held promptly and in any event within 60 days for the
purpose of electing directors to fill any existing vacancy in the board of
directors, unless the Securities and Exchange Commission shall by order extend
such period under the authority granted by section 16(a) of the Investment
Company Act of 1940. A director elected to fill a vacancy shall be elected to
hold office until the next annual meeting of stockholders or until his successor
is elected and qualifies.
Section 3.05. Annual and regular meetings. The board of directors from
time to time may provide for the holding of annual and regular meetings of the
board and fix their time and place.
Section 3.06. Special meetings. Special meetings of the board may be
called by the chairman on three days' notice to each director, either personally
or by mail or by telegram. Special meetings shall be called by the chairman or
secretary in like manner and on like notice on the written request of a majority
of the directors or a majority of the members of the executive committee.
Section 3.07. Quorum and voting. At all meetings of the board one-half of
the directors in office shall constitute a quorum for the transaction of
business, but in no event shall less than one-third of the directors currently
prescribed by resolution of the board of directors constitute a quorum. The act
of a majority of the directors present at any meeting at which there is a quorum
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shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or the articles of incorporation or these
bylaws. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 3.08. Telephone meetings. Members of the board of directors or
any committee thereof may participate in a meeting of such board or committee by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time, and participation by such means shall constitute presence in person at the
meeting.
Section 3.09. Action without meeting. Unless otherwise restricted by
statute or the articles of incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting if a unanimous written consent
which sets forth the action is signed by each member of the board or committee,
as the case may be, and filed with the minutes of proceedings of the board or
committee.
Section 3.10. Committees. The board of directors may, by resolution
passed by a majority of the entire board, designate an executive committee and
other committees, each committee to consist of two or more directors of the
corporation. In the absence of a member of a committee, the members thereof
present at any meeting, whether or not they constitute a quorum, may appoint
another member of the board of directors to act at the meeting in the place of
any such absent member.
Section 3.11. Executive committee. Unless otherwise provided by
resolution of the board of directors, the executive committee shall have and may
exercise all powers of the board of directors in the management of the business
and affairs of the corporation that may lawfully be exercised by an executive
committee, except the power to: (i) declare dividends or distributions on stock;
(ii) issue stock, except as provided by statute; (iii) recommend to the
stockholders any action which requires stockholder approval; (iv) amend the
bylaws; or (v) approve any merger or share exchange which does not require
stockholder approval.
Section 3.12. Other committees. To the extent provided by resolution of
the board of directors, other committees of the board shall have and may
exercise any of the powers that may lawfully be granted to the executive
committee.
Section 3.13. Minutes of committee meetings. Each committee shall keep
regular minutes of its meetings and report the same to the board of directors
when required.
Section 3.14. Expenses and compensation of directors. The directors may
be paid their expenses, if any, of attendance at each meeting of the board of
directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
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<PAGE>
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 4.01. Type of notice. Whenever, under the provisions of any
statute or the articles of incorporation or these bylaws, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram or facsimile.
Section 4.02. Waiver of notice. Whenever the provisions of any statute or
the articles of incorporation or these bylaws require notice of the time, place
or purpose of a meeting of the board of directors or a committee of the board,
or of stockholders, each person who is entitled to the notice waives notice if:
(a) before or after the meeting he signs a waiver of notice which is filed with
the records of the meeting; or (b) he is present at the meeting or, in the case
of a stockholders' meeting, is represented by proxy.
ARTICLE V
OFFICERS
Section 5.01. Officers. The officers of the corporation shall be elected
by the board of directors and shall be a chairman, a president, one or more vice
president, a secretary and a treasurer. The board of directors may also appoint
one or more vice chairmen, assistant secretaries and assistant treasurers. Any
number of offices may be held by the same person, unless the articles of
incorporation or these bylaws otherwise provide, except that no one may serve
concurrently as both president and vice president. A person who holds more than
one office may not act in more than one capacity to execute, acknowledge or
verify an instrument required by law to be executed, acknowledged or verified by
more than one officer.
Section 5.02. Annual elections. The board of directors annually shall
elect a chairman, a president, one or more vice presidents, a secretary and a
treasurer.
Section 5.03. Other officers and agents. The board of directors may
appoint such other officers and agents as it shall deem necessary, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the board.
Section 5.04. Remuneration. The salaries or other remuneration, if any,
of all officers of the corporation shall be fixed by the board of directors.
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Section 5.05. Term of office; removal; vacancies. The officers of the
corporation shall hold office until their respective successors are chosen and
qualify. Any officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the board of
directors, when the board in its judgment finds that the best interests of the
corporation will be served by such action. The removal of an officer or agent
does not prejudice any of his contract rights. Any vacancy occurring in any
office of the corporation shall be filled by the board of directors.
Section 5.06. The chairman. The chairman: (a) shall be the chief
executive officer of the corporation; (b) shall preside at all meetings of the
board of directors and stockholders; and (c) shall have general and active
management of the business of the corporation and shall see that all orders and
resolutions of the board of directors are carried into effect. The chairman may
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
Section 5.07. The vice chairman. In the absence of the chairman, the vice
chairman (or in the event there be more than one vice chairman, the vice
chairmen in the order designated, or in the absence of any designation, then in
the order of their appointment) shall preside at all meetings of the board of
directors and stockholders.
Section 5.08. The president. The president shall be the chief operating
officer of the corporation. In the absence of the chairman, or in the event of
his inability of refusal to act, the president shall perform the duties of the
chairman (except that the president shall not preside at a meeting of the board
of directors or stockholders if there is a vice chairman present) and when so
acting shall have all the powers of, and be subject to all of the restrictions
upon, the chairman. The president may execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
Section 5.09. The vice presidents. In the absence of the president or in
the event of his inability or refusal to act, the vice president (or in the
event there be more than one vice president, the vice presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting shall
have all the powers of and be subject to all the restrictions upon the
president. The vice president shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
Section 5.10. The secretary. The secretary: (a) shall attend all meetings
of the board of directors and all meetings of stockholders and record all the
proceedings of the meetings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required; (b) shall give,
or cause to be given, notice of all meetings of the stockholders and special
meetings of the board of directors, and shall perform such other duties as may
be
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prescribed by the board of directors, the chairman or the president, under whose
supervision the secretary shall be; and (c) shall have custody of the corporate
seal of the corporation and shall have authority to affix the same to any
instrument requiring it, and when so affixed it may be attested by his
signature.
Section 5.11. The assistant secretary. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 5.12. The treasurer. The treasurer: (a) shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; (b) shall deposit with the corporation's custodian all moneys and
other valuable effects in the name and to the credit of the corporation; (c)
shall direct the custodian to make such disbursements of the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements; and (d) shall render to the president and the board of
directors, at its regular meetings, or when the board of directors so requires,
an account of all his transactions as treasurer and financial statements of the
corporation.
Section 5.13. The assistant treasurer. The assistant treasurer, or if
there shall be more than one, the assistant treasurers in the order determined
by the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the treasurer or in the event
of his inability or refusal to act, perform the duties and exercise the powers
of the treasurer and shall perform such other duties and have such other powers
as the board of directors may from time to time prescribe.
ARTICLE VI
CAPITAL STOCK
Section 6.01. Certificates of stock. Every holder of stock in the
corporation shall be entitled, upon request, to have a certificate or
certificates, signed by, or in the name of the corporation by, the chairman, the
president or a vice president and the treasurer, an assistant treasurer, the
secretary or an assistant secretary of the corporation, certifying the number of
full shares owned by him in the corporation. No certificates shall be issued
for fractional shares. Where a certificate is countersigned by a transfer agent
other than the corporation or its employee, any other signature on the
certificate may be facsimile. In case any officer or transfer agent who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer or transfer agent before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer or transfer agent at the date of issue.
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Section 6.02. Lost certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
The issuance of a new certificate under this section does not constitute an
overissue of the shares it represents,
Section 6.03. Transfers of stock. Transfers of shares of stock of the
corporation shall be recorded in the stock transfer records of the corporation
at the request of the person entitled to the recording of the transfer thereof
in person or by a duly authorized attorney, upon presentation to the corporation
or its transfer agent of a duly executed assignment or authority to transfer, or
proper evidence of succession, and, if the shares are represented by a
certificate, a duly endorsed certificate or certificates of stock surrendered
for cancellation, and with such proof of the authenticity of the signatures as
the corporation or its transfer agent any reasonably require. The transfer
shall be recorded in the stock transfer records of the corporation, the old
certificates if any, shall be canceled, and the new record holder, upon request,
shall be entitled to a new certificate or certificates.
Section 6.04. Fixing of record date. The board of directors may fix a
date, not prior to the time of the close of business on the date fixed as a
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or to receive payment
of any dividend or other distribution or allotment of any rights, or to exercise
any rights in connection with any change, conversion or exchange of stock, or
for the purpose of any other lawful action, provided that such record date shall
not be prior to the close of business on the day the record date is fixed nor be
a date more than 90 days, and in the case of a meeting of stockholders not less
than 10 days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken. In such case only such
stockholders as shall be stockholders of record on the record date so fixed
shall be entitled to such notice of, and to vote at, such meeting or
adjournment, or to give such consent, or to receive payment of such dividend or
other distribution, or to receive such allotment of rights, or to exercise such
rights, or to take such other action, as the case may be.
Section 6.05. Registered stockholders. The corporation shall be entitled
to treat the holder of record of shares as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by statute.
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ARTICLE VII
CUSTODIAN
Section 7.01. Qualifications. The corporation shall at all times employ,
pursuant to a written contract, a bank or trust company having an aggregate
capital, surplus and undivided profits (as shown in its last published report)
of at least $2,000,000 as custodian to hold the funds; and securities of the
corporation.
Section 7.02. Contract. Such contract shall be upon such terms and
conditions and may provide for such compensation as the board of directors deems
necessary or appropriate, provided such contract shall further provide that the
custodian shall deliver securities owned by the corporation only upon sale of
such securities for the account of the corporation and receipt of payment
therefore by the custodian or when such securities may be called, redeemed,
retired or otherwise become payable. Such limitation shall not, however,
prevent:
(a) the delivery of securities for examination to the broker selling
the same in accord with the "street delivery" custom whereby such securities are
delivered to such broker in exchange for a delivery receipt exchanged on the
same day for an uncertified check of such broker to be presented on the same day
for certification;
(b) the delivery of securities of an issuer in exchange for or
conversion into other securities alone or cash and other securities pursuant to
any plan of merger, consolidation, reorganization, recapitalization or
readjustment of the securities of such issuer;
(c) the conversion by the custodian of securities owned by the
corporation pursuant to the provisions of such securities into other securities;
(d) the surrender by the custodian of warrants, rights or similar
securities owned by the corporation in the exercise of such warrants, rights or
similar securities, or the surrender of interim receipts or temporary securities
for definitive securities;
(e) the delivery of securities as collateral on borrowing effected by
the corporation;
(f) the delivery of securities owned by the corporation as a
redemption in kind of securities issued by the corporation.
The custodian shall deliver funds of the corporation only upon the purchase of
securities for the portfolio of the corporation and the delivery of such
securities to the custodian, but such limitation shall not prevent the release
of funds by the custodian for redemption of shares issued by the corporation,
for payment of interest, dividend disbursements, taxes and management fees, for
payments in connection with the conversion, exchange or surrender of securities
owned by the corporation as set forth in sub-paragraphs (b), (c) and (d) above
and for operating expenses of the corporation.
9
<PAGE>
Section 7.03. Termination of contract. The contract of employment of the
custodian shall be terminable by either party on 60 days' written notice to the
other party. Upon any termination, the board of directors shall use its best
efforts to obtain a successor custodian, but lacking success in the appointment
of a successor custodian, the question of whether the corporation shall be
liquidated or shall function without a custodian shall be submitted to the
stockholders before delivery of any funds or securities of the corporation to
any person other than a successor custodian, including a temporary successor
selected by the retiring custodian. If a successor custodian is found, the
retiring custodian shall deliver funds and securities owned by the corporation
directly to the successor custodian.
Section 7.04. Agents of custodian. The provisions of any other section of
these bylaws to the contrary notwithstanding, any contract of employment of a
custodian to hold the funds and securities of the corporation may authorize the
custodian, upon approval of the board of directors, to appoint other banks or
trust companies meeting the requirements of this article, domestic and foreign
(including domestic and foreign branches), to perform all or a part of the
duties of the custodian under its contract with the corporation. In the case of
foreign banks, no authorization or appointment providing for the holding of
funds or securities of the corporation (other than in connection with the
clearing of transactions of exchanges of securities) shall become effective
unless permitted by an appropriate order, rule or written advice of the
Securities and Exchange Commission.
Section 7.05. Negotiable instruments. Except as otherwise authorized by
the board of directors, all checks and drafts for the payment of money shall be
signed in the name of the corporation by the custodian, and all requisitions or
orders for the payment of money by the custodian or for the issue of checks and
drafts therefor, all promissory notes, all assignments of shares or securities
standing in the name of the corporation, and all requisitions or orders for the
assignment of shares or securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the corporation by not less than two of its officers. Promissory
notes, checks or drafts payable to the corporation may be endorsed only to the
order of the custodian or its agent.
ARTICLE VIII
SECURITIES TRANSACTIONS
Section 8.01. Transactions with directors and officers. The corporation
shall not purchase any securities (other than shares issued by the corporation)
from, or sell any securities (other than shares issued by the corporation and
securities paid in satisfaction of shares deposited for redemption during a
period during which the corporation is redeeming its shares principally in kind)
to, any director or officer of the corporation, or any director, officer or
partner of any firm which acts as investment adviser or principal underwriter
for the corporation acting as principal, except to the extent permitted to do so
under the Investment Company Act of 1940 or the rules or regulations thereunder
or by appropriate order or written advice of the Securities and Exchange
Commission.
10
<PAGE>
Section 8.02. Ownership of same issuer by corporation and directors or
officers. The corporation will not purchase or retain securities of a company
if all of the directors and officers of the corporation and of its investment
adviser who individually own beneficially more than 1/2% of the securities of
the company collectively own more than 5% of such securities.
Section 8.03. Positions of directors and officers in stock of corporation.
No director or officer of the corporation or of its investment adviser shall
take a long or short position in the capital stock of the corporation, except
that officers or directors may purchase capital stock in the corporation for
investment purposes at the same price as that available to the public at the
time of purchase.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Indemnification of directors and officers. Each person who
is or was a director or officer of the corporation and each person who serves or
served at the request of the corporation as a director or officer of another
enterprise shall be indemnified by the corporation in accordance with, and to
the fullest extent authorized by, the General Corporation Law of the State of
Maryland as it may be in effect from time to time, provided that this section
shall not protect any director or officer of the corporation against any
liability to the corporation or to its stockholders 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.
ARTICLE X
GENERAL PROVISIONS
Section 10.01. Dividends.
(a) The board of directors, from time to time as it may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the stockholders
according to their respective rights and interests and in accordance with the
applicable provisions of the articles of incorporation.
(b) The board of directors may prescribe from time to time that
dividends declared are payable at the election of any of the stockholders,
either in cash or in shares of the corporation.
(c) The board of directors shall cause any dividend payment to be
accompanied by a written statement if paid wholly or partly from any source
other than:
(i) the corporation's accumulated undistributed net income
(determined in accordance with generally accepted accounting principles and the
rules and regulations of the Securities and Exchange Commission then in effect)
and not including profits or losses realized upon the sale of securities or
other properties; or
11
<PAGE>
(ii) the corporation's net income so determined for the current
or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.
Section 10.02. Fiscal Year. The fiscal year of the corporation shall end
on December 31.
Section 10.03. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the words, "Corporate Seal, Maryland". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or by placing the word "seal" adjacent to the signature of the
authorized officer of the corporation. Any officer or director of the
corporation shall have authority to affix the corporate seal of the corporation
to any document requiring the same.
ARTICLE XI
AMENDMENTS
Section 11.01. General. Except as provided in section 11.02, these bylaws
may be altered, amended or repealed, and new bylaws may be adopted solely by the
board of directors, at any meeting of the board of directors.
Section 11.02. Amendment by stockholders only. Section 2.06 of article
II, section 3.04 of article III, article VII, article VIII, and subsection
10.01(c) of article X of these bylaws may be altered, amended or repealed only
with the approval of the holders of a "majority of the outstanding voting
securities" of the corporation, as that term is defined in section 2(a)(42) of
the Investment Company Act of 1940.
I, THE UNDERSIGNED, being the secretary of Papp America-Abroad Fund, Inc.
DO HEREBY CERTIFY the foregoing to be the bylaws of said corporation, as adopted
by Unanimous Consent of its Board of Directors on the 29th day of August, 1991.
/s/ Robert L. Mueller
---------------------
Secretary
[SEAL]
12
<PAGE>
NUMBER SHARES
LRP [LOGO]
SEE REVERSE FOR CUSIP #
CERTAIN DEFINITIONS
L. ROY PAPP AMERICAN-INTERNATIONAL FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
THIS CERTIFIES that is the owner of
full paid and nonassessable shares of the capital stock, $.01 par value per
share, of
L. Roy Papp American-International Fund, Inc.
transferable on the books of the corporation by the holder hereof in person or
by attorney upon surrender of this certificate duly endorsed or assigned. This
certificate and the shares represented hereby are subject to the laws of the
State of Maryland and to the articles of incorporation and bylaws of the
corporation and amendments thereof.
This certificate is not valid until countersigned by the Transfer Agent.
Witness the seal of the corporation and the signatures of its duly
authorized officers.
Dated
[CORPORATE SEAL]
- -------------------------------------- ----------------------------------------
SECRETARY PRESIDENT
COUNTERSIGNED
L. ROY PAPP & ASSOCIATES
BY TRANSFER AGENT
- ----------------------------------
AUTHORIZED SIGNATURE
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM--as tenants in common UNIF GIFT MIN ACT--________ Custodian ________
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN--as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act _________________________
tenants in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
TRANSFER FORM
COMPLETE THIS FORM ONLY WHEN TRANSFERRING TO ANOTHER PERSON
For value received _____________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(please typewrite name and address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------- Shares
of the capital stock represented by the within certificate and do hereby
irrevocably constitute and appoint ___________________________________ attorney,
to transfer the same on the books of the within-named corporation, with full
power of substitution in the premises.
Dated _________________________________
SIGNATURE GUARANTEED BY
- -------------------------------------- ----------------------------------------
SIGNATURE(S)
Signature guarantee must be made by a member or a member organization of the New
York Stock Exchange, or by a commercial bank (not a savings bank), or by a trust
company.
NOTICE: The signature(s) to the assignment must correspond with the name as
written upon the face of the certificate in every particular, without alteration
or enlargement or any change whatever.
----------
REDEMPTION FORM
COMPLETE THIS FORM ONLY WHEN REDEEMING SHARES
The undersigned hereby tenders the within certificate properly endorsed in
blank or in favor of the corporation with any requisite guarantee of signature
and supporting papers and requests the redemption of __________________________
___________________________________________________________ (__________) Shares
(Indicate the number of shares to be redeemed. A new certificate will be issued
for any unredeemed balance)
of capital stock represented by the within certificate in accordance with the
terms of the articles of incorporation of the corporation.
Dated _________________________________
SIGNATURE GUARANTEED BY
- -------------------------------------- ----------------------------------------
SIGNATURE(S)
Signature guarantee must be made by a member or a member organization of the New
York Stock Exchange, or by a commercial bank (not a savings bank), or by a trust
company.
NOTICE: The signature(s) to the assignment must correspond with the name as
written upon the face of the certificate in every particular, without alteration
or enlargement or any change whatever.
----------------------------------------
----------------------------------------
Address
- --------------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
PAPP AMERICA-ABROAD FUND, INC., a Maryland corporation registered under the
Investment Company Act of 1940 (1940 Act) as an open-end diversified management
investment company (Fund), and L. Roy Papp & Associates, an Arizona partnership
registered under the Investment Advisers Act of 1940 as an investment adviser
(Manager), agree that:
1. Engagement of Manager. Manager shall manage the investment and
reinvestment of the assets, and the other operations, of Fund, subject to the
supervision of the board of directors of Fund, for the period and on the terms
set forth in this agreement. Manager shall give due consideration to the
investment objectives, policies and restrictions and the other statements
concerning Fund in Fund's articles of incorporation, bylaws, and registration
statements under the 1940 Act and the Securities Act of 1933 (1933 Act), and to
the provisions of the Internal Revenue Code applicable to Fund as a regulated
investment company. Manager shall be deemed for all purposes to be an
independent contractor and not an agent of Fund, and unless otherwise expressly
provided or authorized, shall have no authority to act or represent Fund in any
way.
Manager is authorized to make decisions to buy and sell securities for
Fund, to place Fund's portfolio transactions with broker-dealers, and to
negotiate the terms of such transactions, including brokerage commissions on
brokerage transactions, on behalf of Fund.
Manager is authorized to exercise discretion within Fund's policy
concerning allocation of the Fund's portfolio brokerage as permitted by law,
including but not limited to section 28(e) of the Securities Exchange Act of
1934, and in so doing shall not be required to make any reduction in its
investment advisory fees.
2. Expenses to be paid by Manager. Manager shall furnish, at its own
expense, office space to Fund and all necessary office facilities, equipment and
personnel for managing the assets of Fund. Manager shall also assume and pay
all other expenses incurred by it in connection with managing the assets of
Fund, all expenses of marketing shares of Fund, all expenses in determination of
daily price computations, placement of securities orders and related
bookkeeping, and one-half of all fees, dues and other expenses related to
membership of Fund in any trade association or other investment company
organization.
3. Expenses to be paid by Fund. Fund shall pay all expenses incident to
its operations and business not specifically assumed by Manager pursuant to
paragraphs 2 and 5, including without limitation: the fees of Manager pursuant
to paragraph 4; all charges of depositories, custodians, and other agencies for
the safekeeping and servicing of its cash, securities, and other property and of
its transfer agents and registrars and its dividend disbursing and redemption
agents, if any; all charges of legal counsel and of independent auditors; all
compensation of directors other than those affiliated with Manager, and all
expenses incurred in connection with their services to Fund; all expenses of
publication of notices and reports to its shareholders and to governmental
bodies or regulatory agencies; all expenses of proxy solicitations of Fund or
its board of directors; all expenses of shareholder meetings; all expenses
<PAGE>
of typesetting of Fund's prospectus and of printing and mailing copies of the
prospectus furnished to each then-existing shareholder or beneficial owner; all
taxes and corporate fees payable to federal, state or other governmental
agencies, domestic or foreign; all stamp or other transfer taxes; all expenses
of printing and mailing certificates for shares of Fund; all expenses of bond
and insurance coverage required by law or deemed advisable by Fund's board of
directors; all expenses of maintaining the registration of Fund under the 1940
Act; all expenses of maintaining the registration of shares of Fund under the
1933 Act and of qualifying and maintaining qualification of shares of Fund under
the securities laws of such United States jurisdictions as Fund may from time to
time reasonably designate; and one-half of all fees, dues and other expenses
related to membership of Fund in any trade association or other investment
company organization. In addition to the payment of expenses, Fund shall also
pay all brokers' commissions and other charges relative to the purchase and sale
of portfolio securities.
4. Compensation of Manager. For the services to be rendered and the
charges and expenses to be assumed and to be paid by Manager hereunder, Fund
shall pay to Manager a monthly fee out of Fund assets, which is computed and
accrued daily of 1/12 of 1% of the average net assets of Fund as determined as
of the close of each day in the monthly period.
5. Limitation of expenses of Fund. The total expenses of Fund, excluding
taxes, interest and extraordinary litigation expenses, but including fees paid
to Manager, during any of the Fund's fiscal years, shall not exceed the lesser
of (i) 1.25% of its average daily net asset value in such year or (ii) the most
restrictive limits prescribed by any state in which Fund's shares are then being
offered for sale, and Manager agrees to reimburse Fund for any sums expended for
such expenses in excess of that amount. Brokers' commissions and other charges
relative to the purchase and sale of portfolio securities shall not be regarded
as expenses.
6. Services of Manager no exclusive. The services of Manager to Fund
hereunder are not to be deemed exclusive, and Manager shall be free to render
similar services to others so long as its services under this agreement are not
impaired by such other activities.
7. Limitation of liability of Manager. Manager shall not be liable to
Fund or its shareholders for any loss suffered by Fund or its shareholders from
or as a consequence of any act or omission of Manager, or of any of the
partners, employees or agents of Manager, in connection with or pursuant to this
agreement, except by reason of willful misfeasance, bad faith or gross
negligence on the part of Manager in the performance of its duties or by reason
of reckless disregard by Manager of its obligations and duties under this
agreement.
8. Duration and renewal. Unless terminated as provided in section 9, this
agreement shall continue in effect until two years from the date of execution,
and thereafter from year to year only so long as such continuance is
specifically approved at least annually (a) by a majority of those directors who
are not interested persons of Fund or of Manager, voting in person at a
2
<PAGE>
meeting called for the purpose of voting on such approval, and (b) by either the
board of directors of Fund or vote of the holders of a "majority of the
outstanding shares of Fund" (which term as used throughout this agreement shall
be construed in accordance with the definition of "vote of a majority of the
outstanding voting securities of a company" in section 2(a)(42) of the 1940
Act).
9. Termination. This agreement may be terminated at any time, without
payment of any penalty, by the board of directors of Fund, or by a vote of the
holders of a majority of the outstanding shares of Fund, upon 60 days' written
notice to Manager. This agreement may be terminated by Manager at any time upon
60 days' written notice to Fund. This agreement shall terminate automatically
in the event of its assignment (as defined in section 2(a)(4) of the 1940 Act).
10. Use of Manager's name. Fund may use the name Papp America-Abroad
Fund, Inc. or any other name using or derived from the name "L. Roy Papp" only
for so long as this agreement or any extension, renewal or amendment hereof
remains in effect, including any similar agreement with any organization which
shall have succeeded to the business of Manager as investment adviser. At such
time as this agreement or any extension, renewal or amendment hereof, or such
other similar agreement shall no longer be in effect, Fund will (by corporate
action, if necessary) cease to use any name using or derived from the name "L.
Roy Papp," any name similar thereto or otherwise connected with Manager, or with
any organization that shall have succeeded to Manager's business as investment
adviser. Manager may at any time permit other investment companies and other
enterprises to sue such name, or any name derived from "L. Roy Papp".
11. Amendment. This agreement may not be amended without the affirmative
vote (a) of a majority of those directors who are not "interested persons" (as
defined in section 2(a)(19) of the 1940 Act) of Fund or of Manager, voting in
person at a meeting called for the purpose of voting on such approval, and (b)
of the holders of a majority of the outstanding shares of Fund.
Dated August 29, 1991
Papp America-Abroad Fund, Inc.
/S/ Harry Papp
By___________________________________
President
L. Roy Papp & Associates
/S/ L. Roy Papp
By___________________________________
A General Partner
3
<PAGE>
EXHIBIT 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on September 24, 1991, between L. ROY PAPP AMERICAN-
INTERNATIONAL FUND, INC., a Maryland corporation registered with the Securities
and Exchange Commission under the Investment Company Act of 1940 as an open-end
diversified management investment company (the "Fund"), and FIRST INTERSTATE
BANK OF ARIZONA, N.A., a national association authorized to do a banking
business ("Custodian").
WHEREAS, the Fund desires that its securities and cash shall be hereafter
held and administered by Custodian pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Fund engages Custodian as custodian of securities and funds owned by the Fund,
and Custodian accepts that engagement, and the Fund and Custodian agree as
follows;
1. Definitions
-----------
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase, or subscribe for the same, or evidencing or representing any other
rights or interest therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
Chairman, the President, certain Vice Presidents, the Secretary and the
Treasurer of the Fund, or any other persons duly authorized to sign by the Board
of the Fund.
The word "Board" shall mean the Board of Directors of the Fund and the
Executive Committee of that Board.
2. Names, Titles, and Signatures of the Funds Officers
---------------------------------------------------
An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board,
together with any changes which may occur from time to time.
3. Receipt and Disbursement of Money
---------------------------------
A. Custodian shall open and maintain one or more segregated accounts
in the name of the Fund for its cash, subject only to draft or order by
Custodian acting pursuant to the terms
<PAGE>
of this Agreement. Custodian shall hold in such account or accounts, subject to
the provisions hereof, all cash received by it from sales of shares of the Fund
and otherwise from or for the account of the Fund. Custodian shall make payments
of cash to, or for the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the
Fund upon the delivery of such securities to Custodian,
registered in the name of the Fund or of the nominee of
Custodian referred to in Section 7 or in the proper form for
transfer;
(b) for the purchase or redemption of shares of the common stock of
the Fund upon delivery thereof to Custodian, or upon proper
instructions from the Fund;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without limitation
thereto, fees for legal, accounting, auditing, and custodian services
and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange, or
surrender of securities owned or subscribed to by the Fund held by or
to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of the
Board.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c) or (d) of this
Subsection A, and also, as to item (e), upon receipt of an officers' certificate
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom such payment is to be made, provided,
however, that an officers' certificate need not precede the disbursement of cash
for the purpose of purchasing a money market instrument, or any other security
with same or next-day settlement, if the Chairman, the President, certain named
Vice Presidents, the Secretary or the Treasurer of the Fund issues appropriate
oral or facsimile instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts, or other orders for the payment of money received by Custodian for the
account of the Fund.
2
<PAGE>
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the Custodian in the amount of checks received in payment for
shares of the Fund which are deposited into the Fund's account.
4. Receipt of Securities
---------------------
Custodian shall hold in a separate account, and physically segregated
at all times from those of any other persons, firms, or corporations, pursuant
to the provisions hereof, all securities received by it for or for the account
of the Fund. All such securities are to be held or disposed of by Custodian
for, and subject at all times to the instructions of, the Fund, pursuant to the
terms of the Agreement. The Custodian shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any such securities and
investments, except pursuant to the directive of the Fund and only for the
account of the Fund as set forth in Section 5 of this Agreement.
5. Transfer, Exchange, Redelivery, etc. of Securities
--------------------------------------------------
Custodian shall have sole power to release or deliver any securities
of the Fund held by Custodian pursuant to this Agreement. Custodian agrees to
transfer, exchange, or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund
upon receipt by Custodian of payment therefor;
(b) when such securities are called, redeemed, or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities for the
Fund, in accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization, or readjustment, or
otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase, or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
3
<PAGE>
(h) for the purpose of redeeming in kind shares of common stock of the
Fund upon delivery thereof to the Custodian; or
(i) for other proper corporate purposes certified by resolution of the
Board.
As to any deliveries made by Custodian pursuant to items (a), (b),
(d), (e), (f) and (g), securities or cash receivable in exchange therefor shall
be deliverable to Custodian.
Before making any such transfer, exchange, or delivery, Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this
section 5 and also, as to item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or nextday settlement, if the Chairman, the President,
certain named Vice Presidents, the Secretary or the Treasurer of the Fund issues
appropriate oral or facsimile instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two business days
thereafter.
6. Custodian's Acts Without Instructions
-------------------------------------
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund that call for payment upon
presentation, and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights, and similar securities issued on any
securities held by it hereunder; and (d) execute, as agent on behalf of the
Fund, all necessary ownership certificates required by the Internal Revenue Code
or the Income Tax Regulations of the United States Treasury Department or under
the laws of any state now or hereafter in effect, inserting the Fund's name on
such certificates as the owner of the securities covered thereby, to the extent
it may lawfully do so.
4
<PAGE>
7. Registration of Securities; Depositories
----------------------------------------
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities that it may
hold for the account of the Fund and which may from time to time be registered
in the name of the Fund.
Custodian may use a central securities clearing agency or securities
depository for the holding of the Fund's securities, provided, however, that
Custodian and the central securities clearing agency or securities depository
meet all applicable federal and state laws and Regulations, and the Board
approves by resolution the use of such central securities clearing agency or
securities depository.
8. Voting and Other Action
-----------------------
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the Fund all
notices, proxies, and proxy soliciting materials with relation to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith) received by Custodian from
issuers of the securities being held for the Fund. With respect to tender or
exchange offers, Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of
5
<PAGE>
the securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
9. Transfer Tax and Other Disbursements
------------------------------------
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. Concerning Custodian
--------------------
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims, and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act, or willful
misconduct. Custodian is authorized to charge any account of the Fund for such
items. In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Fund, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims, or liabilities in connection with their
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act, or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor.
6
<PAGE>
11. Subcustodians
-------------
Subject to approval in advance by the Board, Custodian may engage
another bank or trust company as a subcustodian for all or any part of the
Fund's assets, so long as any such bank or trust company is a bank or trust
company organized under the laws of any state of the United States, having an
aggregate capital, surplus, and undivided profit, as shown by its last published
report, of not less than Two Million Dollars ($2,000,000) and provided further
that, if the Custodian utilizes the services of a subcustodian, the Custodian
shall remain fully liable and responsible for any losses caused to the Fund by
the subcustodian as fully as if the Custodian was directly responsible for any
such losses under the terms of the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund requires the
Custodian to engage specific subcustodians for the safekeeping and/or clearing
of assets, the Fund agrees to indemnify and hold harmless Custodian from all
claims, expenses, and liabilities incurred or assessed against it in connection
with the use of such subcustodian in regard to the Fund's assets, except as may
arise from its own negligent action, negligent failure to act, or willful
misconduct.
12. Reports by Custodian
--------------------
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of the Fund.
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
13. Termination or Assignment
-------------------------
This Agreement may be terminated by the Fund, or by Custodian, on
sixty (60) days notice, given in writing and sent by registered mail to
Custodian at P.O. Box 53434, Phoenix, Arizona 85072-3434, or to the Fund at 4400
North 32nd Street, Suite 280, Phoenix, Arizona 85018, as the case may be. Upon
any termination of this Agreement, pending appointment of a successor to
Custodian or a vote of the shareholders of the Fund to dissolve or to function
without a custodian of its cash, securities and other property, Custodian shall
not deliver cash, securities or other property of the Fund to the Fund, but may
deliver them to a bank or trust company of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report of not less than Two Million Dollars ($2,000,000) as a
Custodian for the Fund to be held under
7
<PAGE>
terms similar to those of this Agreement, provided, however, that Custodian
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by Custodian or on or against Custodian, and
until full payment shall have been made to Custodian of all its fees,
compensation, costs, and expenses, subject to the provisions of Section 10 of
this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of the Board.
14. Records
-------
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Fund pursuant to the
provisions of the Investment Company Act of 1940 or the rules and regulations
promulgated thereunder, Custodian agrees to make any such records available to
the Fund upon request and to preserve such records for the periods prescribed in
Rule 3la-2 under the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRST INTERSTATE BANK OF
ARIZONA, N.A.
/s/ Cynthia Hazeltine By:/s/ Vanessa Fulton
- --------------------- ------------------
Assistant Secretary Banking Officer
Attest: L. ROY PAPP AMERICAN-
INTERNATIONAL FUND, INC.
/s/ Robert L. Mueller By:/s/ Harry A. Papp
- --------------------- -----------------
Secretary President
L. Roy Papp American-
International Fund, Inc.
Corporate Seal
Maryland
8
<PAGE>
APPENDIX A
We, L. Roy Papp, Chairman, and Robert L. Mueller, Secretary, of Papp America-
Abroad Fund, Inc., a Maryland corporation (the "Fund"), do hereby certify that
the following individuals have been duly authorized by the Board of Directors of
the Fund, in conformity with the Fund's Articles of Incorporation and Bylaws, to
give Oral Instructions and Written Instructions on behalf of the Fund, and the
signatures set forth opposite their respective names are their true and correct
signatures:
Name Signatures
- ---- ----------
L. Roy Papp /s/ L. Roy Papp
----------------------------------
Harry A. Papp /s/ Harry A. Papp
----------------------------------
Robert L. Mueller /s/ Robert L. Mueller
----------------------------------
Rosellen C. Papp /s/ Rosellen C. Papp
----------------------------------
Richard A. Steuk /s/ Richard A. Steuk
----------------------------------
/s/ L. Roy Papp
----------------------------------
L. Roy Papp, Chairman
/s/ Robert L. Mueller
----------------------------------
Robert L. Mueller, Secretary
<PAGE>
APPENDIX B
We, L. Roy Papp, chairman, and Robert L. Mueller, secretary, of Papp America-
Abroad Fund, Inc., a Maryland corporation ("The Fund") do hereby certify that
the following individuals serve in the positions with the Fund set forth below
their respective names and have been duly elected by the Board of Directors of
the Fund to such positions and qualified therefor in conformity with the Fund's
Articles of Incorporation and Bylaws, and the signatures set forth opposite
their respective names are their true and correct signatures:
Name Signatures
- ---- ----------
L. Roy Papp /s/ L. Roy Papp
Chairman ----------------------------------
Harry A. Papp /s/ Harry A. Papp
President ----------------------------------
Robert L. Mueller /s/ Robert L. Mueller
Vice President and Secretary ----------------------------------
Rosellen C. Papp /s/ Rosellen C. Papp
Vice President and Treasurer ----------------------------------
Richard A. Steuk /s/ Richard A. Steuk
Vice President ----------------------------------
/s/ L. Roy Papp
----------------------------------
L. Roy Papp, Chairman
/s/ Robert L. Mueller
----------------------------------
Robert L. Mueller, Secretary
<PAGE>
CERTIFICATION
The undersigned, Robert L. Mueller, hereby certifies that he is the duly
elected and acting Secretary of Papp America-Abroad Fund, Inc. (the "Fund"), and
further certifies that the following resolutions were adopted by the Board of
Directors of the Fund at a meeting held on August 14, 1991, at which a quorum
was at all times present and that such resolutions have not been modified or
rescinded and are in full force and effect as of the date hereof:
RESOLVED, that First Interstate Bank of Arizona of Phoenix, Arizona, is
designated as the custodian for the Fund;
RESOLVED FURTHER, that the officers of the Fund are authorized in the name
and on behalf of the Fund to enter into an agreement with First Interstate Bank
of Arizona in the form presented to this meeting, together with such changes
therein as may be approved by the officers executing the agreement, such
approval to be evidenced by such officers' execution thereof;
RESOLVED FURTHER, that the officers of the Fund are authorized and directed
to take such further action as they may consider necessary or advisable to
effectuate such agreement, and the secretary is directed to file a copy of the
form of agreement presented to this meeting with the records of the Fund;
RESOLVED FURTHER, that communication to the custodian from the Fund may be
made by the use of a facsimile communication device whereby pictures of
instructions, including the signatures of signatories, are transmitted to the
custodian, and that the directors are satisfied that use of such equipment
provides one of a number of adequate safeguards for the Fund's assets; and
RESOLVED FURTHER, that the custodian is authorized to use the Federal
Reserve/Treasury Book Entry System in connection with the purchase, holding and
sale by the Fund of securities issued by the U.S. Government and its agencies
and the facilities of The Depository Trust Company in connection with all other
securities owned by the Fund in accordance with the terms of the custodian
agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of Papp
America-Abroad Fund, Inc. as of September 24, 1991.
/s/ Robert L. Mueller
----------------------------------
Secretary
(corporate seal)
<PAGE>
FEE SCHEDULE
Commencing on the date shares of Papp America-Abroad Fund, Inc. (The
"Fund") are first offered for sale to the public, compensation payable by the
Fund to First Interstate Bank of Arizona (the "Custodian") pursuant to Article
IX-8 of the Custody Agreement between the Fund and the Custodian dated August
14, 1991 shall be as follows:
ANNUAL BASE FEE $1,250.00
PLUS:
Annual charge for each issue held $ 25.00
Charge for each transaction $ 50.00
Transactions are defined as a purchase, a sale, a call or a maturity.
It is understood that additional fees, as agreed to between Custodian and
Fund, may become payable by Fund should Fund engage in certain activities,
including but not limited to, the lending of portfolio securities of the Fund,
which result in the incurring of additional expenses by the Custodian.
Approved:
Papp America-Abroad Fund, Inc.
By:/s/ Robert L. Mueller
------------------------------
Vice President
First Interstate Bank of Arizona
By:/s/ Vanessa Fulton
------------------------------
Banking Officer
<PAGE>
EXHIBIT 9
TRANSFER AGENCY AGREEMENT
L. ROY PAPP & ASSOCIATES, an Arizona partnership (The "Transfer Agent"),
and PAPP AMERICA-ABROAD FUND, INC., a Maryland corporation registered with the
Securities and Exchange Commission as an open-end investment company (the
"Fund"), agree that:
1. Definitions. Whenever used in this agreement, the following words and
phrases, unless the context otherwise requires, have the following meanings:
(a) "Articles of Incorporation" means the Articles of Incorporation of the
Fund as they may be amended from time to time;
(b) "Authorized Person" includes the Chairman, the President, any Vice
President, the Secretary or any Assistant Secretary, the Treasurer or any
Assistant Treasurer, of the Fund, or any other person, whether or not such
person is an Officer or employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund as indicated in a
certification pursuant to Section 6(d) or 6(e) as may be received by the
Transfer Agent from time to time;
(c) "Certificate" means any notice, instruction or other instrument in
writing, authorized or required by this agreement to be given to the Transfer
Agent, which is actually received by the Transfer Agent and signed on behalf of
the Fund by any two Officers thereof;
(d) "Commission" means the Securities and Exchange Commission;
(e) "Custodian" means the custodian of the securities and moneys owned by
the Fund, which is to be First Interstate Bank of Arizona unless and until the
Transfer Agent shall receive a certificate otherwise;
(f) "Directors" means the duly elected Directors of the Fund; "Board of
Directors" means the Board of Directors of the Fund;
(g) "Fund" means Papp America-Abroad Fund, Inc., a Maryland corporation;
(h) The "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations of the Commission thereunder;
(i) "Officer" means the Chairman, the President, and Vice President, the
Secretary and the Treasurer of the Fund;
(j) "Oral Instructions" means instructions orally communicated and actually
received by the Transfer Agent from an Authorized Person or from a person
reasonably believed by the Transfer Agent to be an Authorized Person;
<PAGE>
(k) "Prospectus" means the prospectus of the Fund relating to the Fund's
Shares that became effective most recently under the Securities Act of 1933, and
as it may subsequently have been supplemented;
(l) "Shares" means capital stock, $.01 par value per share, of the Fund;
(m) "Shareholder" means registered owner of Shares;
(n) "Written Instruction" means a written communication actually received
by the Transfer Agent from an Authorized Person or from a person reasonably
believed by the Transfer Agent to be an Authorized Person by telex or any other
such system whereby the receiver of such communication is able to verify through
codes or otherwise with a reasonable degree of certainty the authenticity of the
sender of such communication;
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it is duly registered as a transfer agent
as provided in section 17A(c) of the Securities Exchange Act of 1934, as
amended.
3. Appointment of the Transfer Agent. The Fund appoints the Transfer Agent
as transfer agent for all of the Shares and as shareholder servicing agent for
the Fund. The Transfer Agent accepts such appointments and agrees to perform
the duties herein set forth.
4. Compensation.
(a) The Fund shall compensate the Transfer Agent for its services rendered
under this agreement in accordance with the fees set forth in the fee schedule
annexed hereto and incorporated herein.
(b) The compensation agreed to hereunder may be adjusted from time to time
by attaching a revised fee schedule, dated and signed by an Officer of each
party hereto, to this agreement.
(c) The Transfer Agent shall present a bill to the Fund as soon as
practicable after the end of each calendar month, detailed in accordance with
the fee schedule. The Fund shall promptly pay to the Transfer Agent the amount
of such billing.
5. Documents. In connection with the appointment of the Transfer Agent,
the Fund shall, on or before the date this Agreement goes into effect, file with
the Transfer Agent a copy of each of the following documents:
(a) The Articles of Incorporation, as then in effect;
(b) The bylaws of the Fund, as then in effect;
(c) The resolution of the Board of Directors authorizing this agreement;
2
<PAGE>
(d) A specimen of the certificate for Shares in the form approved by the
Board of Directors, with a Certificate of the Secretary as to such approval;
(e) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by the
Fund relating to the sale, holding or redemption of Shares.
6. Further Documentation. The Fund shall also furnish from time to time a
copy of each of the following documents:
(a) Each registration statement filed with the Commission, and all related
amendments and orders relating to the sale of Shares;
(b) Each amendment to the Articles of Incorporation and to the bylaws of
the Fund;
(c) Copies of each resolution of the Directors designating Authorized
Persons to give instructions to the Transfer Agent;
(d) A certificate of any change in any Officer or Director of the Fund;
(e) Specimens of each new certificate for Shares, accompanied by a
resolution of Board of Directors approving such form of certificate; and
(f) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Transfer Agent in the proper performance
of its duties.
7. Representations of the Fund. The Fund represents to the Transfer Agent
that, as of the date of this agreement, it is authorized to issue 5,000,000
Shares. When Shares are hereafter issued in accordance with the terms of sale
in the Prospectus, such Shares shall be validly issued, full paid and
nonassessable by the Fund.
8. Duties of the Transfer Agent.
(a) The Transfer Agent shall be responsible for administering and
performing the functions required for the Shares, for acting as service agent in
connection with dividends and distributions on the Shares, and for performing
shareholder account administrative agent functions in connection with the
issuance, transfer and redemption or repurchase (including coordination with the
Custodian) of the Shares. The details of the operating standards and procedures
to be followed shall be determined from time to time by agreement between the
Transfer Agent and the Fund, and where appropriate, the Custodian.
(b) The Transfer Agent shall create and maintain all necessary records
including those specified in Section 17 hereof, in accordance with all
applicable laws, rules and regulations, including but not limited to records
required by Section 31(a) of the 1940 Act and those records pertaining to the
various functions performed by it hereunder. All records shall be available for
inspection and use by the Fund, including after termination of this agreement.
Where applicable,
3
<PAGE>
such records shall be maintained by the Transfer Agent for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
(c) The Transfer Agent shall make available during regular business hours
all records and other data created and maintained pursuant to this agreement,
for reasonable audit and inspection by the Fund and any person retained by the
Fund. Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours its facilities and premises employed in
connection with its performance of this agreement for reasonable visitation by
the Fund and any person retained by the Fund.
(d) At the expense of the Fund, the Transfer Agent shall maintain an
adequate supply of the blank Share certificates to meet the Fund's and Transfer
Agent's requirements therefor. Each Share certificate shall be issued to
represent whole Shares only (but not fractions of any whole Share), and shall be
properly signed, manually or by facsimile, upon issuance of the Certificate.
Notwithstanding the death, resignation, or removal of any Officer of the Fund
whose signature appears on such certificate, the Transfer Agent may continue to
countersign certificates that bear such signature until otherwise directed by
the Fund.
(e) The Transfer Agent shall issue replacement Share certificates in lieu
of certificates that have been lost, stolen or destroyed, without any further
action by the Board of Directors or any Officer of the Fund, in each case upon
receipt by the Transfer Agent of properly executed affidavits and lost
certificate bonds for an appropriate amount that it considers reasonably
adequate for the protection of the Fund and the Transfer Agent, in form
satisfactory to the Transfer Agent, in which the Fund and the Transfer Agent are
obligees under the bonds.
(f) The Transfer Agent shall maintain records of the name of each
registered owner of Shares, the number of Shares to the nearest one-thousandth
of a Share) owned by such registered owner and in the aggregate by all
registered owners, of each certificate for whole shares, if any, issued to
represent any Shares owned by such registered owner, and, to the extent it is
able to do so, the address and tax identification number of each registered
owner. The Transfer Agent shall maintain a stop transfer record of certificates
for Shares lost or replaced or both.
(g) The Transfer Agent shall address and mail all communications by the
Fund to its Shareholders, including reports to Shareholders, dividend and
distribution notices, and notices of and proxy materials for meetings of
Shareholders.
(h) The Transfer Agent shall investigate all Shareholder inquiries relating
to accounts of the respective Shareholders, and shall answer all correspondence
from Shareholders, and to the extent appropriate, from securities brokers and
others, relating to its duties hereunder, and such other correspondence as may
from time to time be mutually agreed upon between the Transfer Agent and the
Fund.
(i) The Transfer Agent shall furnish the Fund with reports of registration
of ownership of Shares, such periodic and special reports as the Fund may
reasonably request and the Transfer Agent can reasonably provide, and such other
information, including Shareholder
4
<PAGE>
lists and statistical information concerning Shareholder accounts, as may be
agreed upon from time to time between the Fund and the Transfer Agent.
(j) In connection with special and annual meetings of Shareholders, the
Transfer Agent shall prepare lists of Shareholders, shall mail to the
Shareholders notices of the meetings and proxy materials, shall furnish to the
Fund affidavits of such mailings, shall process and tabulate the voting
instructions of the proxies returned by or for Shareholders, shall report to the
Fund on such returns and tabulations, shall report at each meeting on the number
of Shares represented at the meeting by proxy and, separately, by Shareholders
in person, shall act as teller at the meeting, and shall certify the voting of
holders of Shares.
9. Sales of Fund Shares.
(a) Whenever the Fund shall sell any of its Shares, the Fund shall deliver
or cause to be delivered to the Transfer Agent a Certificate duly specifying:
(i) the number of Shares sold, trade date and price per Share and the total
price; (ii) the amount of money to be delivered to the Custodian from the sale
of such Shares; and (iii) in the case of a new account, a new account
application or sufficient information with which to establish an account.
(b) The Transfer Agent shall, upon receipt by it of a check or other medium
of payment identified by it as funds or a claim of funds in payment of the
purchase price for sales of Shares (and where required, payable or endorsed to
the Transfer Agent as agent for, or identified as being for the account of, the
Fund), promptly deposit such check or other payment to the appropriate account
postings necessary to reflect the sale according to arrangements to be made
between it and the Custodian. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related account adjustments.
(c) Upon receipt of the notification required under paragraph (a) hereof,
the Transfer Agent shall issue to the purchaser a confirmation of the
information received under paragraph 9(a) (including, if needed, a request for
additional information needed for the account records).
(d) Upon the issuance of any Shares in accordance with the foregoing
provisions of this Section, the Transfer Agent shall not be responsible for the
payment of any original issue or other taxes required to be paid by the Fund in
connection with such issuance.
(e) The Transfer Agent may establish such additional rules and regulations
governing the transfer or registration of certificates for Shares as it may deem
advisable and as are consistent with rules and regulations generally adopted by
bank transfer agents, except as it may be instructed otherwise by an Officer.
10. Failure of Payment. In the event that any check or other order for
the payment of the price of Shares sold by the Fund is for any reason not paid
upon demand for payment, the Transfer Agent will: (i) give prompt notice to the
Fund or its designee of such failure of payment; (ii) place a stop transfer
order against all Shares that were to have been issued in consideration for such
failed payment; and (iii) take such other steps as the Transfer Agent may, in
its discretion, deem appropriate or as the Fund or its designee may instruct.
5
<PAGE>
11. Redemptions. The Transfer Agent shall duly process demands by
Shareholders for redemption of Shares only in accordance with the requirements
and procedures set forth in the Prospectus, except as and to the extent waived
or otherwise specified by an Officer in any individual redemption.
12. Transfers and Exchanges. The Transfer Agent shall duly process
transfers of registered ownership of Shares only in accordance with the
requirements and procedures set forth in the Prospectus applicable to
redemptions (modified, if necessary, to accommodate any difference in a transfer
from a redemption), except as and to the extent waived or otherwise specified by
an Officer in any individual transaction.
13. Right to Seek Assurances. The Transfer Agent reserves the right not
to process a transfer or redemption of Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers or redemptions which
the Transfer Agent, in its judgment, deems improper or unauthorized, or until it
is satisfied that there is no basis for any claims adverse to such transfer or
redemption. The Transfer Agent may, in effecting transfers, rely upon the
provisions of the Uniform Act for the Simplification of Fiduciary Security
Transfers of Arizona or the Uniform Commercial Code of Arizona, as they may be
amended from time to time, which in the opinion of legal counsel for the Fund or
of its own legal counsel protect it in not requiring certain documents in
connection with the transfer or redemption of Shares, and the Fund shall
indemnify the Transfer Agent for any act done or omitted by it in reliance upon
such laws or opinions of counsel of the Fund or of its own counsel.
14. Distributions.
(a) The Fund shall promptly notify the Transfer Agent of the declaration of
any dividend or other distribution on Shares. The Fund shall furnish to the
Transfer Agent a resolution of the Board of Directors certified by the Secretary
declaring a dividend or distribution of a specified amount per Share or in the
aggregate, the medium of payment if payable other than in United States dollars,
and the record date and the payable date of the distribution if the declaration
was in an aggregate amount. In the event that the amount of the dividend or
distribution is declared in the aggregate, then promptly after the record date a
Certificate will be furnished to the Transfer Agent stating the per share
equivalent of the aggregate amount as of the record date.
(b) The Transfer Agent shall, on or before the payable date of any dividend
or distribution, notify the Custodian of the estimated amount of cash required
to pay the dividend or distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall instruct the Custodian
to place in a dividend disbursing account funds equal to the cash amount to be
paid. As of the first calendar day after the record date, the Transfer Agent
shall record in the Share accounts of those registered Shareholders whose
dividends or distributions are to be reinvested in Shares the number and price
of the Shares so acquired priced at the applicable net asset value. The
Transfer Agent shall calculate, prepare and mail checks to Shareholders whose
dividends and other distributions are to be received by them in money.
6
<PAGE>
(c) The Transfer Agent shall replace lost checks upon receipt of properly
executed affidavits, and will maintain stop payment orders against replaced
checks.
(d) The Transfer Agent shall not be liable for the propriety of payments
made in accordance with the resolutions of the Board of Directors.
(e) If the Transfer Agent does not receive from the Custodian sufficient
cash to make payment to all Shareholders as of the record date, the Transfer
Agent shall, upon notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is provided to the
Transfer Agent.
15. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and functions and
shall be paid such amounts therefore as may from time to time be agreed in
writing.
16. Taxes. The Transfer Agent shall file such appropriate information
returns concerning the payment of dividends and capital gains distributions with
the proper Federal, state and local authorities as are required by law to be
filed by the Fund and shall withhold such sums as are required to be withheld by
applicable law.
17. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
Shareholder's account the following: (i) names, addresses and tax identification
numbers; (ii) numbers of shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information on withholdings; (vi)
any capital gain or dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance of a
Shareholder's account; (vii) certificate numbers and denominations of all Shares
represented by certificates; (viii) any information required in order for the
Transfer Agent to perform the calculations contemplated or required by this
agreement; and (ix) such other information and data as may be required by law.
(b) Any records required to be maintained by Rule 31a-1 under the 1940 Act
will be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act.
Such records may be inspected by the Fund at reasonable times. The Transfer
Agent may, at its option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the Transfer Agent's files,
records and documents created and maintained by the Transfer Agent in
performance of its services or for its protection.
18. Reliance by Transfer Agent; Instructions
(a) The Transfer Agent shall be protected in acting upon any paper or
document believed by it to be genuine and to have been signed by an Authorized
Person, and shall not be held to have any notice of any change of authority of
any person until receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates that
7
<PAGE>
it reasonably believes to bear the proper manual or facsimile signatures of the
Officers of the Fund, but shall be responsible for the proper countersignature
of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized Person of
the Fund for Written Instructions, and at the expense of the Fund, may seek
advice from legal counsel for the Fund or its own legal counsel, with respect to
any matter arising in connection with this agreement, and it shall not be liable
for any action taken or not taken or suffered by it in good faith in accordance
with such Written Instructions or with the opinion of such counsel and, apart
from that, in the exercise of reasonable care. In addition, the Transfer Agent,
its officers, agents or employees, shall accept instructions or requests given
to them by any person representing or acting on behalf of the Fund only if said
representative is known by the Transfer Agent, its officers, agents or
employees, to be an Authorized Person. The Transfer Agent shall have no duty or
obligation to inquire into, nor shall the Transfer Agent be responsible for, the
legality of any act done by it upon the request or direction of Authorized
Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of this agreement, the
Transfer Agent shall be under no duty or obligation to inquire into, and shall
not be liable for: (i) the legality of the issue or sale of any Shares of the
Fund, nor the sufficiency of the amount to be received therefor; (ii) the
legality of the redemption of any Shares of the Fund, nor the propriety of the
amount to be paid therefor; (iii) the legality of the declaration of any
dividend by the Fund, nor the legality of the issue of any dividend by the Fund,
nor the legality of the issue of any Shares of the Fund in payment of any stock
dividend; or (iv) the legality of any recapitalization or readjustment of the
Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this agreement, employ
agents or attorneys in fact, or both, and shall not be liable for any loss
arising out of or in connection with its actions (which includes the actions of
its agents and attorneys in fact) under this agreement so long as it (which
includes its agents and attorneys in fact) acts in good faith and with due
diligence, and is not negligent or guilty of any willful misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the Transfer
Agent from and against any and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of: (i) any action
taken or omitted to be taken by the Transfer Agent in good faith in reliance
upon any Certificate, instrument, order or stock certificate believed by it to
be genuine and to be signed, countersigned or executed by any duly authorized
person, upon the Oral Instructions or Written Instructions of an Authorized
Person of the Fund or upon the opinion of legal counsel for the Fund or its own
counsel; or (ii) any action taken or omitted to be taken by the Transfer Agent
in good faith in reliance upon any law, act, regulation or interpretation of the
same even though the same may thereafter have been altered, changed, amended or
repealed. However, indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its
8
<PAGE>
partners, employees or agents in case of its own negligence, willful misconduct,
bad faith, or reckless disregard of its or their own duties hereunder.
(c) The Transfer Agent hereby agrees to indemnify and hold harmless the
Fund from and against any and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of any and every nature which the
Fund may sustain or incur or which may be asserted against the Fund by any
person by reason of, or as a result of, the negligence or misconduct of the
Transfer Agent or its agents or contractors. However, indemnification hereunder
shall not apply to actions or omissions of the Fund or its directors, officers,
employees or agents in case of its own negligence, willful misconduct, bad
faith, or reckless disregard of its own or their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the partners and employees of the Transfer Agent may be interested in the Fund
as directors, officers, employees, agents, Shareholders, or otherwise. The fact
that any officer, director, employee, agent or Shareholder (or two or more of
them) of the Fund is or may be an affiliated person (as defined in the 1940 Act)
of the Transfer Agent shall not affect the validity of this agreement.
21. Term.
(a) This agreement shall become effective on the date on which the Fund's
registration of its shares under the Securities Act of 1933 on form N-1A No. 33-
42549 becomes effective under that Act (the "Effective Date") and shall continue
in effect from year to year thereafter, on and after two years from the
Effective Date, so long as such continuance is specifically approved at least
annually both (i) by either the Board of Directors, or by the vote of a majority
of the outstanding voting securities of the Fund (as defined in the 1940 Act),
and (ii) by a vote of the majority of the Directors who are not interested
persons of the Fund (as defined in the 1940 Act), voting in person at a meeting
of the Board of Directors called for the purpose of voting on such approval.
(b) This agreement may be terminated at any time, without payment of
penalty, by the Board of Directors of the Fund, or by a vote of the holders of a
majority of the outstanding voting securities of the Fund, on not more than 60
days' written notice to the Transfer Agent. In the event such notice is given
by the Fund, it shall be accompanied by a resolution of the Board of Directors
certified by the Secretary, electing to terminate this agreement and designating
a successor transfer agent. This agreement may be terminated by the Transfer
Agent at any time upon 60 days' written notice to the Fund. This agreement
shall terminate automatically in the event of its assignment (as defined in
Section 2(a)(4) of the 1940 act).
22. Amendment. This agreement may not be amended or modified in any
manner except by a written agreement executed by both parties to this agreement,
and approved in the manner required by subparagraph 21(a) for the continuation
of the agreement.
23. Subcontracting. The Fund agrees that Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided hereunder;
provided, however, that the
9
<PAGE>
Transfer Agent shall continue to be responsible to the Fund for the performance
of those services to the extent specified in this agreement.
24. Security. The Transfer Agent represents and warrants that, to the
best of its knowledge, the various procedures and systems which the Transfer
Agent has implemented with regard to safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for twenty-
four hours a day restricted access) the Fund's blank checks, records and other
data and the Transfer Agent's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder. The parties
shall review such systems and procedures on a periodic basis.
25. Confidentiality of Records. The Transfer Agent agrees not to disclose
any information received from the Fund to any person except the Transfer Agent's
employees and agents, and shall use its best efforts to maintain such
information as confidential. Upon termination of this agreement, the Transfer
Agent shall return to the Fund all records in the possession and control of the
Transfer Agent related to the Fund's activities, other than the Transfer Agent's
own business records.
26. Miscellaneous.
(a) This agreement shall be construed in accordance with the laws of the
State of Arizona.
(b) This agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original: but such counterparts shall, together,
constitute only one instrument.
Dated September 24, 1991
L. ROY PAPP & ASSOCIATES
By: /s/ L. Roy Papp
-------------------------------------
L. Roy Papp, a general partner
PAPP AMERICA-ABROAD FUND, INC.
By: /s/ Harry A. Papp
-------------------------------------
Harry A. Papp, President
10
<PAGE>
FEE SCHEDULE
Commencing on the date shares of Papp America-Abroad Fund, Inc. (the
"Fund") are first offered for sale to the public, compensation payable by the
Fund to L. Roy Papp & Associates (the "Transfer Agent") pursuant to Section 4 of
the Transfer Agency agreement between the Fund and the Transfer Agent dated
September 24, 1991 shall be as follows:
<TABLE>
<S> <C>
Monthly fee per Shareholder account $ .75
Fee per Shareholder-initiated transaction--
purchase (other than by reinvestment in Fund
shares) transfer or redemption 1.00
Fee per account for dividend or distribution paid
(other than by reinvestment in Fund shares) .50
</TABLE>
There is no charge for the processing changes in account information or for
furnishing information with respect to any account, and there is no charge for
opening a new account other than the $1 fee assessed for the initial purchase.
A dividend and distribution payable on the same date shall result in the
imposition of only one fee per account. The full monthly account fee will be
payable on an account that is open for any portion of a month. It is understood
that the Transfer Agent will make no charges for its services hereunder until
January 1, 1993.
Approved:
PAPP AMERICA-ABROAD FUND, INC. L. ROY PAPP & ASSOCIATES
By: /s/ Harry A. Papp By: /s/ L. Roy Papp
--------------------------- --------------------------
President a general partner
11
<PAGE>
EXHIBIT 9.1
I hereby certify that I am the duly elected and acting Secretary of Papp
America-Abroad Fund, Inc. and that the following resolution amending the
Transfer Agency Agreement between The Fund and L. Roy Papp & Associates was
unanimously adopted at a duly constituted meeting of the Board of Directors of
said Fund held June 21, 1995:
RESOLVED, that Section 18(a) of the Transfer Agency Agreement dated September
24, 1991 between the Fund and L. Roy Papp & Associates is amended to read as
follows:
"18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper or
document believed by it to be genuine and to have been signed by two Authorized
Persons, and shall not be held to have any notice of any change of authority of
any person until receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates that it reasonably
believes to bear the proper manual of facsimile signatures of the Officers of
the Fund, but shall be responsible for the proper countersignature of the
Transfer Agent."
/s/ Robert L. Mueller
----------------------------------
Robert L. Mueller, Secretary
July 20, 1995
Accepted:
/s/ Bruce E. Williams
----------------------
a general partner of
L. Roy Papp & Associates
<PAGE>
EXHIBIT 10
BELL, BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602
November 25, 1991
Papp America-Abroad Fund, Inc.
4400 North 32nd Street
Suite 280
Phoenix, Arizona 85018
Dear Sirs:
We have acted as counsel for Papp America-Abroad 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. 33-42549 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, the form of certificates to evidence 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.
<PAGE>
Papp America-Abroad Fund, Inc.
November 25, 1991
Page 2
In giving the opinion expressed in subparagraph 2 above, we have assumed
that the number of shares issued 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,
BELL, BOYD & LLOYD
<PAGE>
Exhibit 11
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
April 24, 1996.
<PAGE>
EXHIBIT 13
Papp America-Abroad Fund, Inc.
Subscription Agreement
----------------------
1. Subscription for Shares. I agree to purchase from Papp America-Abroad
Fund, Inc. 10,000 shares of capital stock of the Fund for a price of $10 per
share, on the terms and conditions set forth herein and in the preliminary
prospectus described below, and agree to tender $100,000 in payment therefor at
such time as the board of directors or the president determines.
I understand that the Fund filed a registration statement with the
Securities and Exchange Commission on Form N-1A, which contains the preliminary
prospectus describing the Fund and the stock. I acknowledge receipt of a copy
of the preliminary prospectus.
I recognize that the Fund will not be fully operational until it commences
a public offering of its hares. Accordingly, a number of features of the Fund
described in the preliminary prospectus, including, without limitation, the
declaration and payment of dividends, and redemption of shares upon request of
shareholders, are not, in fact, in existence at the present time and will not be
instituted until the Fund's registration statement becomes effective under the
Securities Act of 1933.
2. Representations and Warranties. I represent and warrant as follows:
(a) I am aware that no federal or state agency has made any finding
or determination as to the fairness for investment, nor any recommendation
nor endorsement, of the shares:
(b) I have such knowledge and experience of financial and business
matters as will enable me to utilize the information made available to me
in connection with the offering of the shares to evaluate the merits and
risks of the prospective investment and to make an informed investment
decision;
(c) I recognize that the Fund has only recently been organized and has
no financial or operating history and, further, that investment in the Fund
involves certain risks, and I have taken full cognizance of and understand
all of the risks related to the purchase of the shares and I acknowledge
that I have suitable financial resources and anticipated income to bear the
economic risk of such an investment;
(d) I am purchasing the shares for my own account, for investment, and
not with any intention of redemption, distribution, or resale of the
shares, either in whole or in part;
(e) I will not sell the shares purchased by me without registration of
them under the Securities Act of 1933 or exemption therefrom;
<PAGE>
(f) I have been furnished with and have read this agreement, the
preliminary prospectus and such other documents relating to the Fund as I
have requested and as have been provided to me by the Fund;
(g) I have also had the opportunity to ask questions of, and receive
answers from, officers of the Fund concerning the Fund and the terms of the
offering.
3. Rejection of Subscription. I recognize that the Fund reserves the
right to reject or limit any subscription.
4. Social Security Number. I certify under penalties of perjury that the
number shown on this form is my correct social security number and that I am not
subject to backup withholding as result of a failure to report all interest and
dividend income to the Internal Revenue Service.
L. Roy Papp ###-##-####
- ------------------------------ ------------------------------------
(Name please print) (Social Security Number)
4400 North 32nd Street, Suite 280, Phoenix, Arizona 85018
- -------------------------------------------------------------------------
(Address)
Dated: August 30, 1991 /s/ L. Roy Papp
--------------- ----------------------
(Signature)
2
<PAGE>
Exhibit 13.1
PAPP AMERICA-ABROAD FUND, INC.
[LOGO]
4400 NORTH 32ND STREET
SUITE 280
NEW ACCOUNT PURCHASE APPLICATION PHOENIX, ARIZONA 85018
(602) 956-1115
(800) 421-4004
Dated:___________________________
Make checks payable to, and mail to: Papp America-Abroad Fund, Inc., 4400 North
32nd Street, Suite 280, Phoenix, AZ 85018
................................................................................
1 AMOUNT OF PURCHASE: $ ($5,000 minimum for new account, except for
Individual Retirement Accounts (IRAs) where the minimum is $1,000)
................................................................................
2 REGISTRATION: (check one)
[ ] Individual or
Joint Account:______________________ _______________________________
(Individual) (Joint Tenant, if any)
[ ] Transfer (or Gift) to Minor:__________, Custodian for______________________
(Custodian) (Minor)
Under the Uniform Transfers (or Gifts) to Minors Act of____________________
(State of residence)
[ ] IRA:_________________________ Custodian for____________________________
(Custodian) (Individual)
IRA IRA Rollover (circle one)
[ ] Other: (Corporations, Trusts, or others):__________________________________
(Trustee(s), corporation, partnership or other entity)
________________________________________________________________________________
................................................................................
3 ADDRESS OF RECORD:___________________________________________________________
City_______________________ State_____ Zip_______ Telephone ( )_________
4 CITIZENSHIP: [ ] United States [ ] Other (specify)________________
................................................................................
5 SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER:________________________________
Page 1 of 2
(Please complete both sides of this application)
<PAGE>
NEW ACCOUNT PURCHASE APPLICATION
6 DISTRIBUTIONS - Dividends and capital gain distributions will be reinvested
automatically in additional shares (whole and fractional) unless the Fund is
otherwise instructed in writing. If you wish all or a portion of distributions
to be paid in cash, please so indicate.
[ ] Pay income dividends [ ] Pay any capital gains
in cash distributions in cash
................................................................................
7 AGREEMENT - By signing this Application, I certify that I have received and
read the prospectus and agree to its terms and that all information provided in
the Application is correct.
................................................................................
8 TAX CERTIFICATIONS - Under penalties of perjury, I certify that:
1. the number shown on this Application is my correct Social Security or other
tax identification number (or I am waiting for a number to be issued to me),
and
2. I am not subject to backup withholding, either because the IRS has not
notified me that I am subject to backup withholding for failure to report
dividend or interest income, or because the IRS has notified me that I am no
longer subject to backup withholding.
The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding (under
the heading "Tax Certifications").
................................................................................
SIGNATURE:
________________________________ _________________________________________
(signature of shareholder) (signature of joint investor, if any)
................................................................................
Each transaction in your account will be confirmed in writing. The Fund does not
issue stock certificates. All full and fractional shares are held in book entry
form.
Page 2 of 2
(Please complete both sides of this application)
<PAGE>
Exhibit 16
Schedule of Computation
of Performance Quotations
Papp America-Abroad Fund, Inc.
Total Return Calculation
As of December 31, 1995
<TABLE>
<CAPTION>
Net Asset
Value
Beginning Per Share at Shares Net Asset Value Redemption Annualized
of Principal Beginning Shares at End Per Share at Value End Total Total Average
Period Invested of Period Acquired of Period End of Period of Period Return Return % Years Total Return %
- --------- --------- ------------ ---------- --------- ------------- --------- ------ -------- ----- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/1/95 $1,000.00 $12.24 81.699 83.214 $16.47 $1,370.53 $370.53 37.05% 1 37.1%
12/6/91 $1,000.00 $10.00 100.000 105.897 $16.47 $1,744.12 $744.12 74.41% 4.071 14.6%
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
NSAR 1995 & 1995 Audited F/S and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 10,558,570
<INVESTMENTS-AT-VALUE> 15,884,263
<RECEIVABLES> 20,678
<ASSETS-OTHER> 83,326
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,988,267
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,662,574
<SHARES-COMMON-STOCK> 970,561
<SHARES-COMMON-PRIOR> 945,228
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,325,693
<NET-ASSETS> 15,988,267
<DIVIDEND-INCOME> 201,325
<INTEREST-INCOME> 7,941
<OTHER-INCOME> (1,754)
<EXPENSES-NET> 167,857
<NET-INVESTMENT-INCOME> 39,655
<REALIZED-GAINS-CURRENT> 274,759
<APPREC-INCREASE-CURRENT> 3,960,701
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 39,655
<DISTRIBUTIONS-OF-GAINS> 245,291
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105,481
<NUMBER-OF-SHARES-REDEEMED> 97,341
<SHARES-REINVESTED> 17,193
<NET-CHANGE-IN-ASSETS> 4,275,115
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,364,992
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 137,892
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 167,857
<AVERAGE-NET-ASSETS> 14,971,000
<PER-SHARE-NAV-BEGIN> 12.24
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 4.52
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> .29
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.47
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
