<PAGE>
As filed with the Securities and Exchange Commission on April 30, 1997
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. 6 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 [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 #3300
Chicago, Illinois 60602
(Agents for service)
Amending the Prospectus, Statement of Additional Information and Part C, and
filing exhibits.
It is proposed that this filing will become effective:
____ immediately upon filing pursuant to rule 485(b)
X on April 30, 1997 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 18, 1997, registrant filed its Rule 24f-2
Notice for the year ended December 31, 1996.
------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Papp America-Abroad Fund, Inc.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Part A (Prospectus)
Item Location or Caption*
- ---- --------------------
<S> <C>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Part B (Additional Information Statement)
Item Location or Caption*
- ---- -------------------
<S> <C>
10(a) & (b) Front Cover
11 Front Cover
12 Not Applicable
13(a) - (c) Investment Policies and Restrictions
(d) Investment Methods (in the prospectus)
Portfolio Transactions
14(a) & (b) Directors and Officers
Management of the Fund (in the prospectus)
(c) 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
</TABLE>
- --------------
* References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
<PAGE>
[ARTWORK]
Prospectus
April 30, 1997
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. A Statement of Additional Information regarding
the Fund dated the date of this prospectus has been filed with the Securities
and Exchange Commission and (together with any supplement to it) is incorporated
by reference. The Statement of Additional Information may be obtained at no
charge by writing or telephoning the Fund at its address or telephone number
shown above.
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
Page
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
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............................................. 0.25%
----
Total Fund Operating Expenses (after any expense
reimbursement)............................................ 1.25%
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, 1996, 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 1996 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>
Year Ended December 31, Period Ended
------------------------------------------------------------------------ December 31,
1996 1995 1994 1993 1992 1991 (A)
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98 $ 10.00
Income from operations:
Net investment income .01 .04 .10 .10 .11 .02
Net realized and unrealized
gain (loss) on investments 4.48 4.52 .79 (.11) .71 .98
----------- ----------- ----------- ----------- ---------- ----------
Total from operations 4.49 4.56 .89 (.01) .82 1.00
Less distributions:
Dividend from net investment
income (.01) (.04) (.10) (.09) (.11) (.02)
Distribution of net realized
gain (.84) (.29) - (.12) (.02) -
----------- ----------- ----------- ----------- ---------- ----------
Total distributions (.85) (.33) (.10) (.21) (.13) (.02)
Net asset value, end of period $ 20.11 $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98
=========== =========== =========== =========== ========== ==========
Total return 27.65% 37.05% 7.77% (.08)% 7.44% 9.94%
=========== =========== =========== =========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of period $29,623,497 $15,988,267 $11,573,197 $10,934,293 $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.25% 1.22% 1.25% 1.25% 1.25% 1.25%*
Net investment income to
average net assets (C) 1.30% 1.50% 2.07% 2.28% 2.28% 4.51%*
Portfolio turnover rate 12.29% 26.65% 16.00% 8.00% 16.00% 0.00%
Average commission rate $ 0.0487
</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%,
1.30%, 1.33%, 3.16%, and 2.07% for the years ended December 31, 1996,
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
regular session trading on the New York Stock Exchange, currently 4:00 p.m. New
York City time, on any day on which that Exchange is open for trading, by
dividing the market value of the Fund's assets, less its liabilities, by the
number of shares outstanding, and rounding the result to the nearest full cent.
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 and Barbara D. Perleberg is Assistant Secretary of the Fund.
Mr. Clark has been a partner or associate of L. Roy Papp & Associates since
1987. Mr. Edwards has been a partner or associate of L. Roy Papp & Associates
since 1987. Ms. Cavallero has been a partner or associate of L. Roy Papp &
Associates since 1987. Mr. Hawley has been a partner or associate of L. Roy Papp
& Associates since 1993. Ms. Hein has been a partner or associate of L. Roy Papp
& Associates since 1989. Ms. Perleberg has been an associate of L. Roy Papp &
Associates since 1993. The address of all of the officers is L. Roy Papp &
Associates, 4400 North 32nd Street, Suite 280, Phoenix, Arizona 85018.
Investment 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 $630 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 $55 million and Papp America-Pacific Rim Fund, Inc. which commenced
operations in 1997 and whose assets approximate $2.2 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.
10
<PAGE>
The investment adviser receives from the Fund, as compensation for its
services, a fee, accrued daily and payable monthly, at an annual rate of 1% of
the Fund's net assets. On days for which the values of the Fund's net assets are
not determined, the fee is accrued on the most recently determined net assets
adjusted for subsequent daily income and expense accruals. The adviser has
obligated itself to reimburse the Fund to the extent the Fund's total annual
expenses, excluding taxes, interest and extraordinary litigation expenses,
during any of its fiscal years, exceed 1.25% of its average daily net asset
value in such year.
Under the agreement, the investment adviser furnishes at its own expense
office space to the Fund and all necessary office facilities, equipment, and
personnel for managing the assets of the Fund. The investment adviser also pays
all expenses of marketing shares of the Fund, all expenses in determination of
daily price computations, placement of securities orders and related
bookkeeping.
The Fund pays all expenses incident to its operations and business not
specifically assumed by the investment adviser, including expenses relating to
custodial, legal, and auditing charges; printing and mailing reports and
prospectuses to existing shareholders; taxes and corporate fees; maintaining
registration of the Fund under the Investment Company Act and registration of
its shares under the Securities Act of 1933; and 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 continue 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.
11
<PAGE>
If a shareholder fails to furnish his social security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate of 31% ("backup
withholding") from dividend, capital gain and redemption payments to him.
Dividend and capital gain payments may also be subject to backup withholding if
the shareholder fails to certify properly that he is not subject to backup
withholding due to the under-reporting of certain income. These certifications
are contained in the New Account Purchase Application which should be completed
and returned to the Fund when the initial investment is made.
Other Information
- -----------------
The Fund was incorporated in Maryland on 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 Statement of
Additional Information for a more complete explanation.
All performance data is based on the Fund's past investment results and
does not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of the
Fund's portfolio, and the Fund's operating expenses. Investment performance also
reflects the risks associated with the Fund's investment objective and policies.
These factors should be considered when comparing the Fund's investment results
to those of other mutual funds and other investment vehicles.
According to the law of Maryland, under which the Fund is incorporated, and
the Fund's bylaws, the Fund is not required to hold an annual meeting of
shareholders unless required to do so under the Investment Company Act.
Inquiries regarding the Fund should be directed to the Fund at its address or
telephone number shown on the front cover.
The Fund will call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing to
do so by record holders of at least 10% of the Fund's outstanding common shares,
and in connection with such meeting will comply with the provisions of section
16(c) of the Investment Company Act concerning assistance with a record
shareholder communication asking other record shareholders to join in that
request.
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
Founders Bank of Arizona
7335 E. Doubletree Ranch Road
Scottsdale, AZ 85258
Transfer and Dividend Disbursing Agent
L. Roy Papp & Associates
4400 North 32nd Street
Suite 280
Phoenix, AZ 85018
Independent Auditors
Arthur Andersen LLP
Two North Central Avenue
Phoenix, AZ 85004
Legal Counsel
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, IL 60602
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
Statement of Additional Information
-----------------------------------
April 30, 1997
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
</TABLE>
-----------------------------------
Additional Information
- ----------------------
This Statement of Additional Information is not a prospectus, but
provides information that should be read in conjunction with the Fund's
prospectus dated April 30, 1997 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 1996 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.
1
<PAGE>
Investment Policies and Restrictions
- ------------------------------------
The Fund's investment objective is stated in the prospectus on the front
cover and under "Investment Objective". The manner in which the Fund pursues its
investment objective is discussed in the prospectus under the captions
"Investment Methods" and "Risk Factors". The investment restrictions are set
forth in full immediately below.
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment),
invest more than 5% of its assets (valued at such time) in securities
of any one issuer, except in obligations of the United States
Government and its agencies and instrumentalities;
2. Acquire securities of any one issuer that at time of investment
(a) represent more than 10% of the voting securities of the issuer or
(b) have a value greater than 10% of the value of the outstanding
securities of the issuer;
3. Invest more than 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, 1996, 1995, and 1994 the Fund paid management fees of
$211,223, $137,892, and $108,170, respectively. During the same periods, the
Adviser reimbursed the Fund for expenses in excess of the applicable expense
limitations in the following amounts: 1996, $10,602; 1995, 0; and 1994, $5,750.
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, 1996. The Fund has no pension or retirement plan.
Aggregate Total Compensation from Fund
Compensation and L. Roy Papp Stock Fund
Name of Director From the Fund Paid to Directors
- ---------------- ------------- ----------------------------
James K. Ballinger $2,300.00 $5,450.00
Amy S. Clague $2,300.00 $5,450.00
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 and the five years ended December 31, 1996 and from December 6, 1991
(the commencement of the Fund's operations) through December 31, 1996, the
Average Annual Total Return would be 27.7%, 15.2%, and 17.1%, respectively.
Total Return for the same periods was 27.7%, 102.5%, and 122.6%, 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, 1996, brokerage commissions paid by the
Fund totaled $13,291 on portfolio transactions aggregating $13,392,557. 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
- ---------
Founders Bank of Arizona, 7335 E. Doubletree Ranch Road, Scottsdale,
Arizona 85258, is the custodian for the Fund. It is responsible for holding all
securities and cash of the Fund, receiving and paying for securities purchased,
delivering against payment securities sold, receiving and collecting income from
investments, making all payments covering expenses of the Fund, and performing
other administrative duties, all as directed by authorized persons of the Fund.
The custodian does not exercise any supervisory function in such matters as
purchase and sale of portfolio securities, payment of dividends, or payment of
expenses of the
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, 1997, 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 241,892 shares or 10.3% and whose
address is C/O The Northern Trust Company, P.O. Box 92956, Chicago, IL 60675.
The following institutions owned of record in excess of 5% of the outstanding
shares of capital stock of the Fund as nominees for their clients and without
power to vote or dispose of the shares: Charles Schwab & Co., Inc., 889,341
shares or 38.0% and National Financial Services Corp., 261,011 shares or 11.1%.
At that date, 72,248 shares, or 3.1% of the outstanding shares, were owned by
the directors and officers of the Fund as a group.
7
<PAGE>
[LINE DRAWING OF L. ROY PAPP]
PAPP AMERICA-ABROAD FUND, INC.
A No-Load Fund
ANNUAL REPORT
DECEMBER 31, 1996
Managed by:
L. Roy Papp & Associates
4400 North 32/nd/ Street
Suite 280
Phoenix, AZ 85018
(602)956-1115 Local
(800)421-4004
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
Dear Fellow Shareholder,
Our Fund did well in 1996, being up 27.7% for the year which was significantly
better than the major market indexes. This followed a good 1995 when we were up
37.1%. Since inception, a little more than five years ago, we were up 122.5% at
year-end. As the chart on the opposite page indicates, our long-term performance
comfortably exceeds that of the Morgan Stanley World Index. As of this writing,
we are up 7.9% in 1997. While we believe it will be difficult to match the
performance of 1995 and 1996, we are pleased that Morningstar Investor ranks our
Fund as the top performing "Large Growth" fund in the nation for the three years
ended December 31, 1996.
I am frequently asked whether the stock market is overpriced. My reply is I do
not think so. The market appears high if your reference point is book value or
many other historical yardsticks. If we were investing in companies requiring
large amounts of capital such as steel, automobiles, chemicals, and utilities, I
would be very worried about their cyclical nature and the possibility of rising
interest rates.
But, we live in a rapidly changing economic society and the rate of change keeps
on accelerating. Companies whose future is linked to technological innovations
like Intel, Microsoft, and Motorola reinvest their earnings primarily in
research and development rather than still more plants and equipment. These
companies reported quarterly earnings well in excess of analysts' expectations
and deserve to sell at a premium to the market as a whole.
Looking at stocks versus U.S. Treasuries, if one purchased a five year U.S.
Treasury today he would pay the equivalent of 16 times earnings while he would
pay about 19 times earnings for the typical stock. After five years, inflation
and taxes would negate practically all of his return on the Treasury while the
rising earnings of a good growth stock would more than justify the initial
differential in the price/earnings ratio. This is borne out by the fact that,
looking at historical results over the last 50 years, the after-inflation return
on stocks has been 3 1/2 to 5 times as large as the return on U.S. Treasuries.
In recent years the media has drawn these facts to the public's attention, and
this has resulted in enormous purchases of common stocks and mutual funds.
We organized Papp America-Abroad Fund because our clients wanted to benefit from
the increased globalization of the world's economies without incurring the many
risks and expenses associated with the direct purchase of foreign stocks. We
believed this goal could be accomplished with mainly United States companies, a
large part of whose earnings come from foreign countries, because these
companies have the technological leadership, marketing expertise, and quality
products wanted by the rest of the world. This belief has proven correct because
the international trade of U.S. multinational companies has grown much faster
than their domestic activities.
Our Fund is designed for those patient, long-term investors who share these
goals.
Best regards,
/s/ L. Roy Papp
--------------------------------
L. Roy Papp, Chairman
February 7, 1997
3
<PAGE>
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, 1996 and 1995,
including the schedule of portfolio investments as of December 31, 1996, 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 four 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, 1996, 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, 1996 and 1995, and the results
of its operations and changes in its net assets for the two years then ended and
its financial highlights for the four years then ended, in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
January 14, 1997.
4
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Industrial Services (13.7%)
Air Express International
(Air freight forwarding) 32,000 $1,032,000
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 30,800 1,463,000
Manpower, Inc.
(Provider of non-government employment services) 48,500 1,576,250
----------
4,071,250
----------
Computers and Software (11.5%)
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 14,400 723,600
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 13,000 1,702,188
Microsoft Corporation*
(Personal computer software) 12,000 991,500
----------
3,417,288
----------
HealthCare (10.5%)
Abbott Laboratories
(Healthcare products) 10,900 553,175
Johnson & Johnson
(Healthcare products) 23,500 1,169,125
Merck & Company
(Ethical drugs and specialty chemicals) 17,600 1,394,800
----------
3,117,100
----------
Electrical Equipment (8.6%)
General Electric Co.
(Diversified industrial company) 15,000 1,483,125
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 10,900 1,054,575
----------
2,537,700
----------
Distributors (8.3%)
Arrow Electronics, Inc.*
(Distributor of electronic components and computer products) 20,500 1,096,750
Sigma-Aldrich Corp.
(Develops, manufactures, and distributes specialty chemicals) 22,000 1,373,625
----------
2,470,375
----------
Consumer Products (8.0%)
Gillette Company
(Shaving and personal care) 16,000 1,244,000
Procter & Gamble Company
(Household, personal care, and food products) 10,400 1,118,000
----------
2,362,000
----------
</TABLE>
*Non-income producing security.
The accompanying notes are an integral part of this financial statement.
5
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number Market
Common Stocks (continued) of Shares Value
- -------------------------------------------------------------- --------- -----------
<S> <C> <C>
Food and Beverage (6.8%)
CPC International
(International food processor) 13,500 $ 1,046,250
Coca Cola Company
(Dominant international soft drink company) 18,600 978,825
-----------
2,025,075
-----------
Financial Services (6.2%)
State Street Boston Corporation
(Provider of U.S. and global securities custodial services) 28,300 1,825,350
-----------
Telecommunications ( 4.2%)
Motorola, Inc.
(Manufacturer of electronic equipment) 20,400 1,252,050
-----------
Restaurants ( 2.8%)
McDonald's Corporation
(Fast food restaurants and franchising) 18,400 832,600
-----------
Miscellaneous ( 17.9%)
Exxon Corp.
(Worldwide integrated oil company) 3,500 343,000
Intermagnetics General*
(Manufacturer of superconductive magnetic systems
and environmentally acceptable refrigerants) 15,364 184,367
Mattel, Inc.
(Toy manufacturer) 47,000 1,304,250
Millipore Corporation
(Leading supplier of purification products) 36,000 1,489,500
Pall Corporation
(Manufacturer of fluid filters and equipment for
fluid processing) 12,700 323,850
Reuters Holdings P.L.C.
(International news agency) 5,000 382,500
VeriFone, Inc.*
(Supplier of transaction automation systems) 42,000 1,239,000
-----------
5,266,467
-----------
Total Common Stocks - 98.5% 29,177,255
Cash and Other Assets, Less Liabilities - 1.5% 446,242
-----------
Net Assets $29,623,497
===========
Net Asset Value Per Share
(Based on 1,473,039 shares outstanding at December 31, 1996) $ 20.11
===========
</TABLE>
*Non-income producing security.
The accompanying notes are an integral part of this financial statement.
6
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
Investment in securities at market value (original
cost $19,817,375 and $10,558,570 at December 31,
1996 and 1995, respectively) (Note 1) $29,177,255 $15,884,263
Cash 403,963 83,326
Dividends and interest receivable 42,332 20,678
----------- -----------
Total assets $29,623,550 $15,988,267
=========== ===========
LIABILITIES
Redemptions Payable $ 53 $ --
=========== ===========
NET ASSETS
Paid-in capital applicable to 1,473,039 outstanding
shares at December 31, 1996 and 970,561 outstanding
shares at December 31, 1995 $20,263,617 $10,662,574
Net unrealized gain on investments 9,359,880 5,325,693
----------- -----------
Net assets $29,623,497 $15,988,267
=========== ===========
Net Asset Value Per Share (net assets/shares
outstanding) $ 20.11 $ 16.47
=========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
7
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 265,241 $ 201,325
Interest 10,180 7,941
Foreign taxes withheld (878) (1,754)
---------- ----------
Total investment income 274,543 207,512
---------- ----------
EXPENSES:
Management fee (Note 3) 211,223 137,892
Filing fees 26,353 4,584
Accounting 10,850 9,700
Custodial 8,140 4,963
Legal 6,173 1,118
Directors' attendance fees 4,600 3,500
Transfer agent fees 3,872 2,425
Other fees 3,420 3,675
---------- ----------
Total expenses 274,631 167,857
---------- ----------
Less fees waived by adviser (Note 3) (10,602) --
---------- ----------
Net expenses 264,029 167,857
---------- ----------
Net investment income 10,514 39,655
---------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Proceeds from sales of securities 2,584,954 3,627,982
Cost of securities sold 1,550,633 3,353,223
---------- ----------
Net realized gain on investments sold 1,034,321 274,759
Net change in unrealized gain on investments 4,034,187 3,960,701
---------- ----------
Net realized and unrealized gain on investments 5,068,508 4,235,460
---------- ----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,079,022 $4,275,115
========== ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
8
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 10,514 $ 39,655
Net realized gain on investments sold 1,034,321 274,759
Net change in unrealized gain on investments 4,034,187 3,960,701
----------- -----------
Increase in net assets resulting from
operations 5,079,022 4,275,115
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (10,514) (39,655)
Net realized gain on investments sold (1,034,321) (245,291)
----------- -----------
Decrease in net assets resulting from
distributions to shareholders (1,044,835) (284,946)
----------- -----------
FROM SHAREHOLDER TRANSACTIONS:
Proceeds from sale of shares 9,114,588 1,509,716
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gain on investments sold 996,599 277,836
Payments for redemption of shares (510,144) (1,362,651)
----------- -----------
Increase in net assets resulting
from shareholder transactions 9,601,043 424,901
----------- -----------
Total increase in net assets 13,635,230 4,415,070
Net assets at beginning of the period 15,988,267 11,573,197
----------- -----------
Net assets at end of period $29,623,497 $15,988,267
=========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
9
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(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 18, 1996, a dividend of approximately $.0073 a share, aggregating
$10,514 was declared from net investment income earned during 1996. A
distribution was also declared from net realized long-term capital gains of
approximately $.2713 a share aggregating $388,302. Also a distribution was
declared from net realized short-term capital gains of approximately $.0723 a
share aggregating $102,964. The dividend and distribution were paid on December
31, 1996, to shareholders of record on December 17, 1996.
On June 20, 1996, a distribution of approximately $.50 a share, aggregating
$543,055, was declared from net realized capital gains earned during 1996. The
distribution was paid on June 28, 1996, to shareholders of record on June 19,
1996.
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.
Dividends and distributions payable to its shareholders are recorded by the Fund
on the ex-dividend date.
(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 $10,602 was required in 1996. The Fund
incurred fees of $3,872 and $2,425 in 1996 and 1995, respectively, from the
manager for its services as shareholder services and transfer agent.
11
<PAGE>
The Fund's independent directors receive $600 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 years ended December 31, investment transactions excluding short-term
investments were as follows:
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Purchases at cost $10,809,437 $3,875,066
Sales 2,583,120 3,627,982
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS:
At December 31, 1996, 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, 1996
Shares issued $ 9,114,588 478,153
Dividends and distributions reinvested 996,599 52,290
Shares redeemed (510,144) (27,965)
----------- -------
Net increase $ 9,601,043 502,478
=========== =======
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
=========== =======
</TABLE>
(6) UNREALIZED APPRECIATION:
Unrealized appreciation of portfolio securities for both financial statement and
federal income tax purposes is as follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Market value $29,177,255 $15,884,263
Original cost 19,817,375 10,558,570
----------- -----------
Net unrealized appreciation $ 9,359,880 $ 5,325,693
=========== ===========
</TABLE>
As of December 31, 1996, gross unrealized gains on investments in which market
value exceeded cost totaled $9,467,081 and gross unrealized losses on
investments in which cost exceeded market value totaled $107,201.
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,
1996 1995 1994 1993 1992 1991 (A)
------------- ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98 $ 10.00
Income from operations:
Net investment income .01 .04 .10 .10 .11 .02
Net realized and unrealized
gain (loss) on investments 4.48 4.52 .79 (.11) .71 .98
----------- ----------- ----------- ----------- ---------- ----------
Total from operations 4.49 4.56 .89 (.01) .82 1.00
Less distributions:
Dividend from net investment
income (.01) (.04) (.10) (.09) (.11) (.02)
Distribution of net realized
gain (.84) (.29) -- (.12) (.02) --
----------- ----------- ----------- ----------- ---------- ----------
Total distributions (.85) (.33) (.10) (.21) (.13) (.02)
Net asset value, end of period $ 20.11 $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98
=========== =========== =========== =========== ========== ==========
Total return 27.65% 37.05% 7.77% (.08)% 7.44% 9.94%
=========== =========== =========== =========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of period $29,623,497 $15,988,267 $11,573,197 $10,934,293 $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.25% 1.22% 1.25% 1.25% 1.25% 1.25%*
Net investment income to
average net assets (C) 1.30% 1.50% 2.07% 2.28% 2.28% 4.51%*
Portfolio turnover rate 12.29% 26.65% 16.00% 8.00% 16.00% 0.00%
Average commission rate $0.0487
</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%, 1.30%, 1.33%,
3.16%, and 2.07% for the years ended December 31, 1996, 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
Assistant Secretary - Barbara D. Perleberg
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
Founders Bank of Arizona
7335 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
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 1996 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, 1996
Report of independent auditors
Statements of assets and liabilities - December 31, 1996 and 1995
Statements of operations - years ended December 31, 1996 and 1995
Statements of changes in net assets - years ended December 31, 1996 and
1995
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, 1996.
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 23, 1997
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
* Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement effective April 30, 1996.
Item 25. Persons Controlled By or Under Common Control with Registrant
- ------- -------------------------------------------------------------
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the captions "Management of the Fund" and "Investment Advisory Agreement"
and in the Additional Information Statement under the captions "Directors and
Officers" and "Investment Adviser" is incorporated by reference.
Item 26. Number of Holders of Securities
- ------- -------------------------------
Number of Record Holders
Title of Class At March 31, 1997
-------------- ------------------------
Capital Stock $.01 par value 707
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 28th day of April, 1997.
Papp America-Abroad Fund, Inc.
By: /s/ L. Roy Papp
---------------------------
L. Roy Papp, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ L. Roy Papp Director and Chairman )
- --------------------- (principal executive and )
L. Roy Papp financial officer) )
)
/s/ Harry A. Papp Director and President )
- --------------------- )
Harry A. Papp )
)
/s/ Robert L. Mueller Director, Vice President )
- --------------------- and Secretary )
Robert L. Mueller )
)
/s/ Bruce C. Williams Director and Vice President ) April 28, 1997
- ---------------------- )
Bruce C. Williams )
)
/s/ Rosellen C. Papp Director, Vice President and )
- ---------------------- Treasurer (principal accounting )
Rosellen C. Papp officer) )
)
/s/ James K. Ballinger Director )
- ---------------------- )
James K. Ballinger )
)
/s/ Amy S. Clague )
- ---------------------- Director )
Amy S. Clague )
<PAGE>
INDEX FOR EXHIBITS
FILED WITH THIS AMENDMENT
EXHIBIT NO. DESCRIPTION
- ---------- -----------
11. Consent of independent auditors dated April 23, 1997
16. Schedule of Computation of Performance Quotations
17. Financial Data Schedule
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
Exhibit 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Phoenix, Arizona
April 23, 1997
<PAGE>
EXHIBIT 16
Schedule of Computation
of Performance Quotations
Papp America-Abroad Fund, Inc.
Total Return Calculation
As of December 31, 1996
<TABLE>
<CAPTION>
Net Asset Net Asset
Value Per Value Redemption Annualized
Beginning Share at Shares Per Share Value Average
of Principal Beginning Shares at End End of End of Total Total Total
Period Invested of Period Acquired of Period Period Period Return Return % Years Return %
- --------- --------- --------- -------- --------- --------- ---------- --------- -------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/1/96 $1,000.00 $16.47 60.716 63.477 $20.11 $1,276.52 $276.52 27.7% 1 27.7%
1/1/92 $1,000.00 $10.98 91.075 100.676 $20.11 $2,024.59 $1,024.59 102.5% 5 15.2%
12/6/91 $1,000.00 $10.00 100.000 110.712 $20.11 $2,226.42 $1,226.42 122.6% 5.071 17.1%
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
NSAR 1996 & 1996 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19,817,375
<INVESTMENTS-AT-VALUE> 29,177,255
<RECEIVABLES> 42,332
<ASSETS-OTHER> 403,963
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,623,550
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,263,617
<SHARES-COMMON-STOCK> 1,473,039
<SHARES-COMMON-PRIOR> 970,561
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,359,880
<NET-ASSETS> 29,623,497
<DIVIDEND-INCOME> 265,241
<INTEREST-INCOME> 10,180
<OTHER-INCOME> (878)
<EXPENSES-NET> 264,029
<NET-INVESTMENT-INCOME> 10,514
<REALIZED-GAINS-CURRENT> 1,034,321
<APPREC-INCREASE-CURRENT> 4,034,187
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,514
<DISTRIBUTIONS-OF-GAINS> 1,034,321
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 478,153
<NUMBER-OF-SHARES-REDEEMED> 27,965
<SHARES-REINVESTED> 52,290
<NET-CHANGE-IN-ASSETS> 5,079,022
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 5,325,693
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 211,223
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 274,631
<AVERAGE-NET-ASSETS> 21,698,369
<PER-SHARE-NAV-BEGIN> 16.47
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 4.48
<PER-SHARE-DIVIDEND> .01
<PER-SHARE-DISTRIBUTIONS> .84
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.11
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
