SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
Filed by a party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to 240.14a-12
Princor Utilities Fund, Inc.
(Name of Registrant as Specified In Its Charter)
Name Of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
<PAGE>
Please read the complete Proxy Statement. For your convenience, we are providing
a brief overview of the matters you are voting on.
Q Why are you receiving this proxy statement?
A Federal securities laws require a vote by each Fund's shareholders on
certain important issues. Shareholders of all Princor Funds are being asked
to vote for the Board of Directors, ratify the Board's selection of
independent public accountants, change the name of the Funds and modify the
Fund's Management Agreement.
In addition, there are issues that affect specific funds (Cash Management,
Capital Accumulation, Growth, Government Securities, and Tax-Exempt Cash
Management). If you own shares of those Funds, the proxy statement explains
changes to certain investment policies being recommended by Management.
Q Why will the Princor Funds name be changed to Principal Funds?
A Association with The Principal Financial Group and its national advertising
program provides potential benefit to our marketing activities. This may
lead to increased Fund assets and greater economies of scale (and reduction
in operating expenses).
Other specific name changes are designed to make it easier for present and
future investors to understand the investment objectives and strategies of
the Funds.
Q Why is the Management Agreement being changed?
A Though there is no current plan for the Manager to include a profit element
in the amount it charges the Funds for transfer agent services, it would
like this flexibility for the future. Approving the change now avoids the
cost of a future shareholder meeting on this issue.
Q Why should the Capital Accumulation, Growth, Government Securities Income
and Cash Management Funds be permitted to buy shares of other investment
companies?
A Allowing the Funds to do this provides increased investment flexibility by
providing an additional way for the Funds to invest any excess cash that
may accumulate. All other Princor Funds have this flexibility.
Q For the Cash Management and Tax-Exempt Cash Management Funds, what impact
does the modification to the diversification requirements have?
A The proposed modification merely allows the funds to have the increased
flexibility recently permitted by changes to SEC Rules.
Q How will these changes affect my account?
A You can expect the same level of management expertise and high-quality
shareholder service you have received in the past. Proposed name changes
are designed to create increased name recognition and marketability to new
shareholders. Other proposals will give increased flexibility to the
portfolio managers.
Q How do the Boards of Directors suggest that you vote?
A After careful consideration of each issue, the Board of Directors of each
Fund unanimously recommends that you vote "FOR" all the proposals.
Q Will my vote make a difference?
A Your vote is needed to ensure the proposals can be acted upon. Your
immediate response on the enclosed proxy card(s) will help save the cost of
any further solicitations for a shareholder vote.
Q How can you vote your shares?
A You can vote by completing, signing, dating and mailing the enclosed proxy
card(s) in the postage paid envelope. If you have any questions regarding
the proxy or need assistance in voting your shares, please call our proxy
solicitor, D. F. King & Co., Inc. at 1-800-659-5550.
June_____________, 1997
Dear Shareholder
Your Board of Directors has scheduled a shareholder meeting for September 16 to
vote on important issues affecting your Fund. The changes proposed will provide
additional flexibility needed in today's competitive market. The Board of each
Fund believes that these changes are in the best interest of the Funds.
No matter how many shares you own, it is important that you take time to read
the proxy and complete and mail the proxy card(s) as soon as you can. If proxies
are not returned, the Fund(s) may have to incur the expense of follow-up
solicitations to achieve a quorum. All shareholders benefit from the speedy
return of proxies.
Thank you for responding to these important matters. If you have questions
regarding the proxy or the voting process, please call our proxy solicitor, D.
F. King & Co., Inc. at 1-800-659-5550. If you have questions concerning your
account, please call our shareholder services department at 1-800-247-4123.
Sincerely,
Stephan L Jones
President
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 1997
<TABLE>
<CAPTION>
Growth-Oriented Funds Income-Oriented Funds
<S> <C>
Princor Balanced Fund, Inc. Princor Bond Fund, Inc.
Princor Blue Chip Fund, Inc. Princor Government Securities Income Fund, Inc.
Princor Capital Accumulation Fund, Inc. Princor High Yield Fund, Inc.
Princor Emerging Growth Fund, Inc. Princor Limited Term Bond Fund, Inc.
Princor Growth Fund, Inc. Princor Tax-Exempt Bond Fund, Inc.
Princor Utilities Fund, Inc.
Princor World Fund, Inc.
</TABLE>
Money Market Funds
Princor Cash Management Fund, Inc.
Princor Tax-Exempt Cash Management Fund, Inc.
A meeting of Shareholders of each of the Princor Funds will be held at the
offices of The Principal Financial Group, 801 Grand Avenue, Des Moines, Iowa on
September 16, 1997, at 10:00 a.m. The meetings are being held to consider and
vote on the following matters as well as any other issues that properly come
before the meeting and any adjournments:
1. Election of the Board of Directors (all Funds)
2. Ratification of selection of Ernst & Young LLP as independent public
auditors (all Funds)
3. Approval of change of fund name (all Funds)
4. Approval of modification of Management Agreement (all Funds)
5. Approval of elimination of the fundamental investment restriction
regarding the purchase of shares of other investment companies
(Capital Accumulation, Growth, Government Securities Income and Cash
Management funds only)
6. Approval of change to the fundamental investment restriction with
respect to diversification requirements (Cash Management and
Tax-Exempt Cash Management funds only)
The close of business on June 23, 1997, is the record date for the Meeting and
any adjournment(s). Shareholders as of that date are entitled to notice of and
to vote at the meeting.
Your vote is important. No matter how many shares you own, PLEASE VOTE. If you
own shares in more than one fund, you need to return ALL of the proxy cards. To
save your Fund from incurring the cost of additional solicitations, please
review the materials and vote today.
For the Board of Directors
A. S. Filean
Vice President and Secretary
Dated: June _____, 1997
PROXY STATEMENT
As a shareholder of one or more of the Princor Mutual Funds ("the Funds"), you
are invited to attend a special meeting of shareholders. Each Fund will hold a
meeting on September 16, 1997, at 10:00 a.m. The Funds will hold their
shareholder meetings simultaneously. At the meeting, shareholders will vote on
the issues described below. Each share of a Fund is entitled to one vote on each
matter submitted to the shareholders of that Fund. If you are not able to attend
the meeting, the Board of Directors (the "Board") of each Fund is asking
permission to vote for you. The shares will be voted as you indicate in the
boxes on the enclosed proxy card or for approval of each matter for which there
is no indication. If you change your mind after you send in the card, you may
change or revoke your vote by writing to The Princor Mutual Funds at The
Principal Financial Group, Des Moines, Iowa 50392-0200. Abstentions and broker
non-votes (proxies from brokers or nominees indicating that they have not
received instructions from the beneficial owners on an item for which the broker
or nominee does not have discretionary power) are counted toward a quorum but do
not represent votes cast for any other issue.
Proxies will be solicited primarily by mail. Additional solicitations may be
made by telephone, facsimile or personal contact by officers or employees of
each Fund or Princor Management Corporation (the "Manager" of the Funds) who
will not be specially compensated for these services. Proxies will also be
solicited by D. F. King & Co., Inc. which has been retained to assist in the
solicitation for estimated fees and expenses of $137,000 for the services it
provides for all of the Funds.
Each Fund will pay the expenses of its meeting, the solicitation of proxies and
the fees of D. F. King & Co., Inc., as incurred by each Fund. The Funds will
also reimburse brokers and other nominees for their reasonable expenses in
communication with the shareholders for whom they hold shares of the Funds. To
avoid the cost of further solicitation, it is important for you to vote
promptly.
<TABLE>
<S> <C> <C>
To vote your shares: by mail - return your proxy card in the enclosed postage paid envelope
or mail to P.O. Box 9043, Smithtown, NY 11787-9816
by fax - fax to -800-XXXXXXXXXXXX
by telephone - call D. F. King & Co., Inc. (the proxy solicitors) at 1-800659-5550
</TABLE>
This proxy statement and the enclosed proxy card are first being sent to
shareholders on or about July 7, 1997. Only shareholders of record at the close
of business on June 23, 1997, (the "Record Date") are entitled to vote. The
table below shows outstanding shares, by class, of each Fund as of the Record
Date.
Number of Shares Outstanding
Fund Class A Class B Class R
- -------------------------------------------------------------------------------
Princor Balanced
Princor Blue Chip
Princor Bond
Princor Capital Accumulation
Princor Cash Management
Princor Emerging Growth
Princor Government Securities Income
Princor Growth
Princor High Yield
Princor Limited Term Bond
Princor Tax-Exempt Bond
Princor Tax-Exempt Cash Management
Princor Utilities
Princor World
Principal Mutual Life Insurance Company and its corporate affiliates own more
than 5% of the outstanding shares of the following funds:_________________.
Each Fund has entered into a Management Agreement with the Manager. The Manager
has entered into agreements with Invista Capital Management, Inc. ("Invista")
under which Invista has agreed to provide investment advisory services for the
Balanced, Blue Chip, Capital Accumulation, Emerging Growth, Government
Securities Income, Growth, Limited Term Bond and Utilities Funds. Each Fund has
entered into an Investment Services Agreement with the Manager and PML which
provides that PML will furnish at cost certain personnel, services and
facilities required by the Manager. The Manager and Invista are indirect,
wholly-owned subsidiaries of PML. The address for the Manager and PML is
Principal Financial Group, Des Moines, Iowa 50392, for Invista is 1500 Hub
Tower, 699 Walnut, Des Moines, Iowa 50309.
A shareholder that has an issue that it would like to have included in the
agenda at a shareholder meeting, should send the proposal to the Princor Mutual
Funds at Principal Financial Group, Des Moines, Iowa 50392-0200. To be
considered for presentation at a shareholder's meeting, the proposal must be
received a reasonable time before a solicitation is made for such meeting.
Timely submission of a proposal does not necessarily mean that such proposal
will be included.
You may obtain a copy of each Fund's most recent annual and semiannual reports
without charge. Send your request to The Princor Mutual Funds at The Principal
Financial Group, Des Moines, Iowa 50392-0200 or call 1-800-247-4123.
ISSUES FOR EACH OF THE FUNDS
1. ELECTION OF THE BOARD OF DIRECTORS
The Board of each Fund has set the number of Directors at nine. Each Director
will serve until the next meeting of shareholders or until a successor is
elected and qualified. Unless you do not authorize it, your proxy will be voted
in favor of the nine nominees listed below. The affirmative vote of the holders
of a plurality of the shares represented at the meeting of each Fund is required
for the election of a director for that Fund. Each nominee has agreed to be
named in this Proxy Statement and to serve if elected. All Directors hold
similar positions with twenty-five mutual funds sponsored by Principal Mutual
Life Insurance Company. In addition, Directors Davis, Ferguson, Griswell, Jones
and Lukavsky serve on the Board of one other Fund sponsored by Principal Mutual
Life Insurance Company.
The Directors have no reason to believe that any of the nominees will become
unavailable for election as a Director. However, if that should occur before the
Shareholder Meeting, your proxy will be voted for the individuals recommended by
the Directors.
The Board of each Fund held four meetings during the last fiscal year. The
Directors attended 100% of the meetings of the Board and of the committees of
which they are members.
Each Fund has an Audit and Nominating Committee, the members of which are
identified below. The committee reviews activities of the Funds and reports
filed with the Securities and Exchange Commission ("SEC") and then takes
appropriate action. It meets with the independent auditors to discuss results of
the audits and reports to the full Board of each Fund. The committee also
nominates candidates when necessary to fill Board vacancies of directors who are
not "interested persons" (as defined in the Investment Company Act of 1940, as
amended ("the '40 Act")).
<TABLE>
<CAPTION>
NOMINEES FOR BOARD OF DIRECTORS
Nominees for Director
Name/Age/Position Director
with each Fund Principal Occupation Since1
<S> <C> <C>
James. D. Davis Attorney. Vice President, Deere and Company, Retired. 1974
(63) Director
* Roy W. Ehrle Retired. Vice Chairman, Principal Mutual Life Insurance Company 1992 to 1993. 1971
(69) Director
@ Pamela A. Ferguson President and Professor of Mathematics, Grinnell College since 1991. 1993
(54) Director
@ Richard W. Gilbert President, Gilbert Communications, Inc. since 1993. Prior thereto, President and 1985
(57) Director Publisher, Pioneer Press.
*#J. Barry Griswell Executive Vice President, Principal Mutual Life Insurance Company since 1995. 1995
(48) Director and Senior Vice President 1991 to 1995. Director and Chairman of the Board, Princor
Chairman of the Board Financial Services Corporation and Princor Management Corporation.
*#Stephan L. Jones Vice President, Principal Mutual Life Insurance Company since 1986. Director and 1988
(61) Director and President, Princor Financial Services Corporation and Princor Management
President Corporation.
* Ronald E. Keller Executive Vice President, Principal Mutual Life Insurance Company since 1992. 1993
(61) Director
@ Barbara A. Lukavsky President, LuSan, Inc. 1987
(56) Director
# Richard G. Peebler Dean and Professor Emeritus, Drake University, College of Business and Public 1969
(67) Director Administration since 1996. Prior thereto, Professor, Drake University, College of
Business and Public Administration.
<FN>
* Considered to be "Interested Persons," as defined in the Investment Company
Act of 1940, as amended, because of current or former affiliation with the
Manager or PML.
@ Member of Audit and Nominating Committee.
# Member of the Executive Committee. The Executive Committee is elected by
the Board of Directors and may exercise all the powers of the Board of
Directors, except those which by statute may not be delegated, when the
Board is not in session and shall report its actions to the Board.
1 Since Fund's inception, if later.
</FN>
</TABLE>
The Funds pay no salaries or other compensation to the directors other than
director's fees. Only directors who are not currently affiliated with the
Manager or PML receive an annual retainer of $600 per Fund and a fee of $150 for
each Board or committee meeting attended.
PRINCOR FUND OWNERSHIP BY DIRECTORS
Listed below is the number of shares of the Funds owned by each Director as of
June 23, 1997.
Shares owned
as of
Director Fund June 23, 1997*
- -----------------------------------------------------------
James D. Davis Balanced
Blue Chip
Bond
Capital Accumulation
Emerging Growth
Government Securities
Income
Growth
High Yield
Tax-Exempt Bond
Utilities
World
Roy W. Ehrle High Yield
World
Pamela A. Ferguson Balanced
Blue Chip
Bond
Capital Accumulation
Emerging Growth
Growth
High Yield
Tax-Exempt Bond
Utilities
World
Richard W. Gilbert Balanced
Blue Chip
Bond
Capital Accumulation
Emerging Growth
Government Securities
Income
Growth
High Yield
Tax-Exempt Bond
Utilities
World
J. Barry Griswell Balanced
Blue Chip
Bond
Capital Accumulation
Emerging Growth
Government Securities
Income
Growth
High Yield
Tax-Exempt Bond
Utilities
World
Stephan L. Jones Balanced
Blue Chip
Bond
Capital Accumulation
Emerging Growth
Government Securities
Income
Growth
High Yield
Tax-Exempt Bond
Utilities
World
Ronald E. Keller Capital Accumulation
Barbara A. LukavskyBalanced
Capital Accumulation
Emerging Growth
High Yield
Tax-Exempt Bond
Utilities
World
Richard G. Peebler Capital Accumulation
Growth
* The list does not include shares of Princor money market funds.
** The Directors and executive officers of the Funds together own less than 1%
of the outstanding shares of each of the Funds.
DIRECTOR COMPENSATION*
Each Princor Fund Princor
except Princor Limited Limited Term Total From
Director Term Bond Fund Bond Fund Fund Complex
- -----------------------------------------------------------------------------
James D. Davis $1,200 $1,800 $32,100
Roy W. Ehrle $1,200 $1,800 $30,900
Pamela A Ferguson 1 $1,200 $1,800 $35,850
Richard W. Gilbert 1 $1,200 $1,800 $33,000
J. Barry Griswell** none none none
Stephan L. Jones** none none none
Ronald E. Keller** none none none
Barbara A. Lukavsky 1 $1,200 $1,800 $35,850
Richard G. Peebler 2 $1,200 $1,800 $33,525
* None of the Funds provide retirement benefits for any of the Directors.
** Affiliated with the Funds and, accordingly, received no compensation from
the Funds
1 Received an additional $150 from each Fund for service on Audit Committee
2 Received an additional $75 from the World Fund and an additional $150 from
the Emerging Growth, Capital Accumulation and Growth Funds for service on
Executive Committee.
2. RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC AUDITORS
The Board of each Fund has selected Ernst & Young LLP as the independent auditor
for the Fund. This selection was made unanimously by the members of the Board,
including those who are not interested persons. The selection is to be ratified
at the meeting.
Ernst & Young LLP has been the auditor for the Funds since each was organized.
They also serve as auditor for the Manager and other members of The Principal
Financial Group. The audit services Ernst & Young LLP provide to the Funds
include examination of the annual financial statements and review of the filings
with the SEC. Ernst & Young LLP has no financial interest in the Funds. No
representative of Ernst & Young LLP is expected to be at the shareholder
meetings.
Ratification for each Fund requires the affirmative vote of the majority of the
votes cast with respect to that Fund. Your proxy will be voted in favor of
ratification unless you express a contrary choice.
3. APPROVAL OF CHANGE OF FUND NAMES
At meetings held on March 10, 1997, the Board of Directors of each Fund
unanimously approved, subject to shareholder approval, an amendment to its
Articles of Incorporation to change the name of the Fund. The change will delete
the word "Princor" from each Fund's name and replace it with the word
"Principal". For example, Princor Balanced Fund, Inc. will become Principal
Balanced Fund, Inc.
Each Fund is often identified with The Principal Financial Group in connection
with media coverage, advertising, marketing relationships and investment
management. The Principal Financial Group has a national reputation in the
financial services industry and seeks to enhance its reputation through its
extensive advertising program. Management feels closer identification with The
Principal Financial Group will strengthen the Fund's marketing activities. If
more effective marketing results in an increase in Fund assets, the Funds may
achieve greater economies of scale, which may result in a reduction in operating
expenses for shareholders. Also, a significant group of shareholders of the
Funds use other products and services of The Principal Financial Group and
Management anticipates that adopting the word "Principal" as a replacement for
"Princor" will lessen potential confusion regarding the Funds.
In addition to substituting Principal for Princor, Management is recommending
additional changes in the names of Princor Capital Accumulation Fund, Princor
Emerging Growth Fund and Princor World Fund.
Princor Capital Accumulation Fund, Inc.
Management recommends that the name of Princor Capital Accumulation Fund, Inc.
be changed to Principal Capital Value Fund, Inc. to reflect more clearly the
Fund's investment strategy.
To achieve its investment objective, the Fund invests in securities that have
"value" characteristics. This process is known as "value investing." Value
investing is purchasing securities of companies with above average dividend
yields and below average price to earnings (P/E) ratios. Management recommends
the use of "Value" in the name of the Fund to identify more clearly to existing
and potential shareholders the actual strategy the Fund uses in managing its
investment portfolio. Use of the term "value investing" is common within the
mutual fund industry and will aid in identifying the Fund among others with
similar investment objectives. The Fund is not changing its investment
objective, which continues to be long-term capital appreciation and,
secondarily, growth of investment income through the purchase primarily of
common stocks.
If this proposal is approved, the Articles of Incorporation will be amended to
change the name of the Fund from Princor Capital Accumulation Fund, Inc. to
Principal Capital Value Fund, Inc.
Princor Emerging Growth Fund, Inc.
Management recommends that the name of Princor Emerging Growth Fund, Inc. be
changed to Principal MidCap Fund, Inc.
The investment objective of the Fund is long-term capital appreciation. To
achieve this objective, the Fund has employed an investment strategy of
investing primarily in securities of emerging and growth oriented companies with
market capitalizations of $1 billion or less. Two factors caused management to
propose a name change for the Fund. First, confusion with other mutual funds.
Today there are a number of mutual funds that invest in the securities of
companies located in foreign countries - countries that are often described as
"emerging markets." Many of these funds have the word "emerging" in their name
or investment objective. This has caused some confusion among potential
investors who have thought the Fund was investing in the securities of foreign
companies. This has not been the case. Management feels removal of "Emerging"
from the Fund's name will eliminate any confusion.
Second, Management feels the Fund's strategy of investing primarily in companies
with market capitalizations (i.e. value of the company as determined by the
market price of its outstanding stock) of $1 billion or less is unduly
restrictive in today's market. Larger companies offer the Fund attractive
opportunities to achieve its investment objective. If the proposed name change
is approved, the Fund intends to purchase more stocks of companies with market
capitalizations in the $1 billion to $10 billion range. This range has been
characterized by the investment industry as "medium capitalization" or "mid-cap"
investing. As a result, Management feels the use of "MidCap" in the Fund's name
will be more descriptive of the strategy the Fund intends to use to achieve its
investment objective.
If this proposal is approved, the Articles of Incorporation will be amended to
change the name of the Fund from Princor Emerging Growth Fund, Inc. to Principal
MidCap Fund, Inc.
Princor World Fund, Inc.
Management proposes that the name of the Princor World Fund, Inc. be changed to
Principal International Fund, Inc. to reflect more clearly the investment
strategy of the Fund.
The mutual fund industry has informally identified two general categories of
funds that invest in foreign securities. Funds which invest in securities issued
both by companies incorporated in the United States and by companies
incorporated in foreign countries have come to be known as "Global" funds. These
are often referred to as "World" funds. "International" funds are those that
invest only in securities issued by companies incorporated outside the borders
of the United States. The Princor World Fund's investment strategy is the
strategy of an international fund. Management feels the name should reflect this
fact. This will become more critical as new investors find foreign investing
attractive and become more accustomed to the industry meaning of the word
"international".
If this proposal is approved, the Articles of Incorporation will be amended to
change the name from Princor World Fund, Inc. to Principal International Fund,
Inc.
The Board of Directors for each Fund recommends approval of each name change
proposal. The proposed name change for each Fund requires an affirmative vote of
a majority of the votes entitled to be cast by shareholders of that Fund. If
approved, the change for each Fund will be effective January 1, 1998.
4. APPROVAL OF MODIFICATION OF MANAGEMENT AGREEMENT
Each Fund has signed a Management Agreement with the Manager, an indirectly
wholly-owned subsidiary of Principal Mutual Life Insurance Company. The Manager
was organized in 1969 and since then has managed various mutual funds which are
sponsored by Principal Mutual Life Insurance Company.
The Management Agreement is continuous from year to year if the Board grants
annual approval. The agreement may be terminated without penalty by the Board,
by the majority of shareholders of the Fund and by the parties to the Management
Agreement. The Board of each Fund approved continuation of the Management
Agreement at a meeting held on September 9, 1996.
The Management Agreement for each Fund (Exhibit A) identifies transfer agent
services which the Manager furnishes at cost (without a profit) to the Fund.
These services include: administering shareholder accounts; preparing and
distributing dividend and capital gain payments; redeeming and repurchasing
shares; and communicating with shareholders. The Management fees and other
important information relating to the Management Agreement are found in Exhibit
B.
The Manager has requested the Management Agreement for each Fund be modified to
permit the Manager to provide transfer agent services at a price which includes
a profit. The Manager does not currently intend to provide transfer agent
services to the Funds on other than an "at cost" basis. However, to provide
flexibility to respond to situations which may arise in the future, to encourage
development of additional services for Fund shareholders and to avoid the
expense of another shareholder meeting, the Board of each Fund recommends
approval of this proposal. The Board of each Fund will review charges for
transfer agent services to assure they are reasonable.
In addition, the Manager proposes elimination of Section 8 of the Management
Agreement. This section refers to limitations on reimbursement of Fund expenses
by the Manager. Formerly, such restrictions could have been imposed by any state
in which the Funds are registered. Under the National Securities Markets
Improvement Act of 1996, the states are no longer permitted to impose such
restrictions thus making this section of the agreement void.
The Board of Directors of each Fund recommends approval of the proposed
modifications. Approval of this proposal by a Fund requires the affirmative vote
of the lesser of 1) 67% of the shares of the Fund present or represented at the
meeting if more than 50% of the shares of the Fund are present or represented by
proxy, or 2) more than 50% of the outstanding shares of the Fund. If approved,
the Management Agreement for each Fund will be amended effective January 1,
1998.
ISSUE FOR PRINCOR CAPITAL ACCUMULATION, PRINCOR GROWTH,
PRINCOR GOVERNMENT SECURITIES INCOME AND
PRINCOR CASH MANAGEMENT FUNDS ONLY
5. APPROVAL OF ELIMINATION OF THE FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
THE PURCHASE OF SHARES OF OTHER INVESTMENT COMPANIES
Each of Princor Capital Accumulation Fund, Princor Growth Fund, Princor
Government Securities Income Fund and Princor Cash Management Fund has a
fundamental investment restriction prohibiting the Fund from purchasing
"securities of other investment companies except in connection with a merger,
consolidation or plan of reorganization." The Boards of these Funds recommend
the elimination of the restriction for these Funds. The other Princor Funds do
not have this fundamental restriction.
Each Fund maintains a level of liquidity to meet cash demands for redemptions or
to make long term investments. On occasion, the Funds accumulate excess cash.
Elimination of the restriction increases the Funds' investment flexibility. The
proposal allows the Fund to purchase other investment company shares as a means
of investing its excess cash if other investment options are not available.
In addition, because the other Princor Funds already have this flexibility, this
proposal provides a standard investment restriction for all the Funds. This
allows the Manager to monitor more easily each Fund's compliance with its
investment policies. Each Fund has adopted a non-fundamental restriction (one
that may be changed by action of the Board of Directors without shareholder
approval) which deals with the purchase of shares of other investment companies
and will become effective at the effective time of the elimination of the
fundamental restriction. This non-fundamental restriction is the same as that
adopted by certain of the other Funds and provides that a Fund will not:
Invest its assets in the securities of any investment company except that
the Fund may invest not more than 10% of its assets in securities of other
investment companies, investment not more than 5% of its total assets in
the securities of any one investment company, or acquire not more than 3%
of the outstanding voting securities of any one investment company except
in connection with a merger, consolidation or plan of reorganization.
The Board of Directors of each Fund recommends approval of this proposal.
Approval of this proposal by a Fund requires the affirmative vote of the lesser
of 1) 67% of the shares of the Fund present or represented at the meeting if
more than 50% of the shares of the Fund are present or represented by proxy, or
2) more than 50% of the outstanding shares of the Fund. If approved, the
investment policy of the Fund will be changed effective January 1, 1998.
ISSUE FOR PRINCOR CASH MANAGEMENT AND
PRINCOR TAX-EXEMPT CASH MANAGEMENT FUNDS ONLY
6. APPROVAL OF CHANGE TO THE FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO
DIVERSIFICATION REQUIREMENTS
The Princor Cash Management Fund and Princor Tax-Exempt Cash Management Fund
each has a restriction which prohibits it from investing more than 5% of its
assets in securities of any one issuer (other than U.S. Government securities).
The Boards of these Funds recommend a modification to the restriction which will
allow each Fund to invest more than 5% (but not more than 25%) of total Fund
assets in the securities of a single issuer. However, the securities must be
rated by an independent rating service (e.g. Moody's Investors Service, Inc.,
Standard & Poor's Corporation) in the highest short term rating category for
debt obligations, issued by entities that receive such a rating for comparable
short-term debt or comparable unrated securities. Each such investment would be
limited to a maximum of three business days.
This proposed change is more flexible than the current restriction but is
permitted by the current requirements of the 40 Act. The Boards of these Funds
recommend modifications to the restrictions which will allow each Fund to invest
more than 5% (but not more than 25%) of total Fund assets in the securities of a
single issuer in accordance with the rules of the SEC governing money market
funds.
A change to the Funds' fundamental investment restrictions must be approved by
the shareholders. By amending the existing restriction to permit a more flexible
investment policy, you are providing the Funds with the maximum flexibility
permitted by the 40 Act.
As amended, the Fund's investment restriction would provide that the Fund may
not:
Purchase the securities of any issuer if the purchase will cause more than
5% of the value of its total assets to be invested in the securities on any
one issuer (except securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities).
The Board of Directors of each Fund recommends approval of this proposal.
Approval of this proposal requires the affirmative vote of the lesser of 1) 67%
of the shares of the Fund present or represented at the meeting if more than 50%
of the shares of the Fund are present or represented by proxy, or 2) more than
50% of the outstanding shares of the Fund. If approved, the investment policy of
the Fund will be changed effective January 1, 1998.
7. GENERAL
The Funds do not know of any other matter that may properly be brought before
the meeting. However, any other business that does come before the meeting will
be voted upon by the persons named in the proxy.
Exhibit A
MANAGEMENT AGREEMENT
(Marked to show changes from the current Management Agreement)
AGREEMENT to be effective the _______ day of _________________, 19____, by
and between PRINCOR ______________________ FUND, INC., a Maryland corporation
(hereinafter called the "Fund") and PRINCOR MANAGEMENT CORPORATION, an Iowa
corporation (hereinafter called "the Manager").
W I T N E S S E T H:
WHEREAS, The Fund has furnished the Manager with copies properly certified
or authenticated of each of the following:
(a) Certificate of Incorporation of the Fund;
(b) Bylaws of the Fund as adopted by the Board of Directors;
(c) Resolutions of the Board of Directors of the Fund selecting the Manager
as investment adviser and approving the form of this Agreement.
NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the Fund hereby appoints the Manager to act as investment
adviser and manager of the Fund, and the Manager agrees to act, perform or
assume the responsibility therefor in the manner and subject to the conditions
hereinafter set forth. The Fund will furnish the Manager from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.
1. INVESTMENT ADVISORY SERVICES
The Manager will regularly perform the following services for the Fund:
(a) Provide investment research, advice and supervision;
(b) Provide investment advisory, research and statistical facilities and
all clerical services relating to research, statistical and investment
work;
(c) Furnish to the Board of Directors of the Fund (or any appropriate
committee of such Board), and revise from time to time as economic
conditions require, a recommended investment program for the Fund's
portfolio consistent with the Fund's investment objective and
policies;
(d) Implement such of its recommended investment program as the Fund shall
approve, by placing orders for the purchase and sale of securities,
subject always to the provisions of the Fund's Certificate of
Incorporation and Bylaws and the requirements of the Investment
Company Act of 1940, as each of the same shall be from time to time in
effect;
(e) Advise and assist the officers of the Fund in taking such steps as are
necessary or appropriate to carry out the decisions of its Board of
Directors and any appropriate committees of such Board regarding the
general conduct of the investment business of the Fund; and
(f) Report to the Board of Directors of the Fund at such times and in such
detail as the Board may deem appropriate in order to enable it to
determine that the investment policies of the Fund are being observed.
2. CORPORATE ADMINISTRATIVE SERVICES
In addition to the investment advisory services set forth in Section 1, the
Manager will perform the following corporate administrative services:
(a) Furnish the services of such of the Manager's officers and employees
as may be elected officers or directors of the Fund, subject to their
individual consent to serve and to any limitations imposed by law;
(b) Furnish office space, and all necessary office facilities and
equipment, for the general corporate functions of the Fund (i.e.,
functions other than (i) underwriting and distribution of Fund shares;
(ii) custody of Fund assets, and (iii) transfer and paying agency
services); and
(c) Furnish the services of the supervisory and clerical personnel
necessary to perform the general corporate functions of the Fund.
(d) Determine the net asset value of the shares of the Fund's Capital
Stock as frequently as the Fund shall request, or as shall be required
by applicable law or regulations.
3. RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
The Manager in assuming responsibility for the various services as set
forth in this Agreement reserves the right to enter into agreements with others
for the performance of certain duties and services or to delegate the
performance of some or all of such duties and services to Principal Mutual Life
Insurance Company, or an affiliate thereof.
4. EXPENSES BORNE BY THE MANAGER
The Manager will pay:
(a) The compensation and expenses of all officers and executive employees
of the Fund;
(b) The compensation and expenses of all directors of the Fund who are
persons affiliated with the Manager; and
(c) The expenses of the organization of the Fund, including its
registration under the Investment Company Act of 1940, and the initial
registration and qualification of its Capital Stock for sale under the
Securities Act of 1933 and the Blue Sky laws of the states in which it
initially qualifies.
5. COMPENSATION OF THE MANAGER BY FUND
For all services to be rendered and payments made as provided in Sections
1, 2 and 4 hereof, the Fund will accrue daily and pay the Manager within five
days after the end of each calendar month a fee based on the average of the
values placed on the net assets of the Fund as of the time of determination of
the net asset value on each trading day throughout the month in accordance with
the following schedule Management Fee Schedules attached hereto.
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
First $100,000,000 ___%
Next 100,000,000 ___%
Next 100,000,000 ___%
Next 100,000,000 ___%
Amount Over 400,000,000 ___%
Net asset value shall be determined pursuant to applicable provisions of
the Certificate of Incorporation of the Fund. If pursuant to such provisions the
determination of net asset value is suspended, then for the purposes of this
Section 5 the value of the net assets of the Fund as last determined shall be
deemed to be the value of the net assets for each day the suspension continues.
The Manager may, at its option, waive all or part of its compensation for
such period of time as it deems necessary or appropriate.
6. SERVICES FURNISHED AT COST BY THE MANAGER
The Manager (in addition to the services to be performed by it pursuant to
Sections 1 and 2 hereof) will:
(a) Act as, and provide all services customarily performed by, the transfer
and paying agent of the Fund including, without limitation, the
following:
(i) Preparation and distribution to shareholders of reports, tax
information, notices, proxy statements and proxies;
(ii) Preparation and distribution of dividend and capital gain
payments to shareholders;
(iii)Issuance, transfer and registry of shares, and maintenance of
open account system;
(iv) Delivery, redemption and repurchase of shares, and remittances to
shareholders; and
(v) Communication with shareholders concerning items (i), (ii), (iii)
and (iv) above.
In the carrying out of this function the Manager may contract with others
for data systems, processing services and other administrative services.
(b) Use its best efforts to qualify the Capital Stock of the Fund for sale
in states and jurisdictions other than those in which initially
qualified, as directed by the Fund; and
(c) Prepare stock certificates, and distribute the same as requested by
shareholders of the Fund.
The Manager will maintain records in reasonable detail of the costs
(including a reasonable charge for administrative overhead) incurred by it in
the that will support the amount it charges the Fund for performance of the
services set forth in this Section 6. and At the end of each calendar month the
Fund will reimburse pay the Manager for such costs its performance of these
services.
7. EXPENSES BORNE BY FUND
(a) The Fund will pay, without reimbursement by the Manager, the following
expenses:
(i) Taxes, including in case of redeemed shares any initial transfer
taxes, and governmental fees (except with respect to the Fund's
organization and the initial qualification and registration of
its Capital Stock);
(ii) Portfolio brokerage fees and incidental brokerage expenses; and
(iii) Interest.
(b) The Fund will pay, without reimbursement by the Manager except under
the circumstances set forth in Section 8, the following expenses:
(i) The fees of its independent auditor and its legal counsel,
incurred subsequent to the Fund's organization and the initial
qualification and registration of its Capital Stock;
(ii) The fees and expenses of the Custodian of its assets;
(iii)The fees and expenses of all directors of the Fund who are not
persons affiliated with the Manager; and
(iv) The cost of meetings of shareholders.
8. REIMBURSEMENT OF CERTAIN FUND EXPENSES
If in any fiscal year of the Fund the normal operating expenses of the Fund
chargeable to its income account shall exceed the lowest applicable percentage
of average net assets or income limitations prescribed by any state in which
Fund shares are qualified for sale, the Manager will pay the Fund, as promptly
as practical after the end of such year, an amount equal to such excess. For
purposes of this Section 8, "normal operating expenses" shall include the
Section 5 investment advisory fee, the Section 6 monthly reimbursement, and the
expenses enumerated in subsection 7(b), but shall not include the expenses
enumerated in subsection 7(a).
98. AVOIDANCE OF INCONSISTENT POSITION
In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Manager nor any of the Manager's directors,
officers or employees will act as a principal or agent or receive any
commission.
109. LIMITATION OF LIABILITY OF THE MANAGER
The Manager shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Manager's part in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement.
1110.DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall remain in force until the first meeting of the
shareholders of the Fund and if it is approved by a vote of a majority of the
outstanding voting securities of the Fund it shall continue in effect thereafter
from year to year provided that the continuance is specifically approved at
least annually either by the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund and in either event by
vote of a majority of the directors of the Fund who are not interested persons
of the Manager, Principal Mutual Life Insurance Company, or the Fund cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement may, on sixty days written notice, be terminated at any time without
the payment of any penalty, by the Board of Directors of the Fund, by vote of a
majority of the outstanding voting securities of the Fund, or by the Manager.
This Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 10, the definitions contained in
Section 2(a) of the Investment Company Act of 1940 (particularly the definitions
of "interested person," "assignment" and "voting security") shall be applied.
1211.AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of the holders of a majority of the Fund's outstanding voting securities
and by vote of a majority of the directors who are not interested persons of the
Manager, Principal Mutual Life Insurance Company or the Fund cast in person at a
meeting called for the purpose of voting on such approval.
1312.ADDRESS FOR PURPOSE OF NOTICE
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the address of the Fund and that of the
Manager for this purpose shall be The Principal Financial Group, Des Moines,
Iowa 50392.
1413.MISCELLANEOUS
The captions in this Agreement are included for convenience of reference
only, and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
PRINCOR ___________________ FUND, INC.
By _____________________________________
PRINCOR MANAGEMENT CORPORATION
By _____________________________________
SCHEDULE 1
MANAGEMENT FEES
World Fund
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
-------------------------------------------------------------------
First $100,000,000 .75%
Next 100,000,000 .70%
Next 100,000,000 .65%
Next 100,000,000 .60%
Amount Over 400,000,000 .55%
SCHEDULE 2
MANAGEMENT FEES
MidCap Fund
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
-------------------------------------------------------------------
First $100,000,000 .65%
Next 100,000,000 .60%
Next 100,000,000 .55%
Next 100,000,000 .50%
Amount Over 400,000,000 .45%
SCHEDULE 3
MANAGEMENT FEES
Balanced, High Yield and Utilities Funds
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
-------------------------------------------------------------------
First $100,000,000 .60%
Next 100,000,000 .55%
Next 100,000,000 .50%
Next 100,000,000 .45%
Amount Over 400,000,000 .40%
SCHEDULE 4
MANAGEMENT FEES
Blue Chip, Bond, Capital Value, Cash Management,
Government Securities Income, Growth, Limited Term Bond,
Tax-Exempt Bond and Tax-Exempt Cash Management Funds
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
-------------------------------------------------------------------
First $100,000,000 .50%
Next 100,000,000 .45%
Next 100,000,000 .40%
Next 100,000,000 .35%
Amount Over 400,000,000 .30%
Exhibit B
1. Cost of Manager's Services
For providing the Investment advisory services and specified other services, the
Manager is entitled to receive a fee computed and accrued daily and payable
monthly, at the following annual rates:
Balanced, High
World Emerging Yield and All Other
Net Asset Value of Fund Fund Growth Fund Utilities Fund Funds
- -----------------------------------------------------------------------------
First 100,000,000 .75% .65% .60% .50%
Next 100,000,000 .70% .60% .55% .45%
Next 100,000,000 .65% .55% .50% .40%
Next 100,000,000 .60% .50% .45% .35%
Over 400,000,000 .55% .45% .40% .30%
2. The rate as applied to the net asset value of each fund for the fiscal year
ending October 31, 1996, was:
Management Fee
Net Assets as of For Fiscal Year
Fund October 31, 1996 Ended October 31, 1996
---- ------------------- ------------------------
Balanced $ 77,658,393 .60%
Blue Chip 52,490,401 .50
Bond 121,938,969 .47*
Capital Accumulation 447,201,123 .43
Cash Management 697,121,081 .37*
Emerging Growth 259,960,901 .62
Government Securities Income 271,095,796 .46
Growth 254,393,295 .46
High Yield 30,669,461 .60
Limited Term Bond 17,444,164 .23*
Tax-Exempt Bond 192,973,655 .48
Tax-Exempt Cash Management 98,508,842 .43*
Utilities 72,212,558 .52*
World 189,078,438 .73
* Before waiver.
3. Fees paid by each Fund for investment management services and amounts paid by
each Fund for other expenses were as follows:
Reimbursement by Fund
Management Fees For of Certain Costs For
Fiscal Year Ended Fiscal Year Ended
Fund October 31, 1996 October 31, 1996
Balanced $ 404,461 $ 251,542
Blue Chip 212,845 206,942
Bond 534,366* 221,648
Capital Accumulation 1,671,502 567,786
Cash Management 2,555,687* 1,762,455
Emerging Growth 1,293,848 942,986
Government Securities Income 1,223,631 394,360
Growth 1,040,897 837,917
High Yield 159,773 66,305
Limited Term Bond 18,619* ** 32,982**
Tax-Exempt Bond 888,967 145,931
Tax-Exempt Cash Management 451,467* 205,099
Utilities 375,780* 288,489
World 1,154,783 598,305
* Before waiver.
** Period from February 29, 1996 (Date Operations Commenced) through
October 31, 1996.
4. Directors and Executive Officers of the Manager
The Manager serves as the investment advisor for the Funds. Invista Capital
Management, Inc. ("Invista") acts as sub-advisor for the Growth-Oriented Funds,
Princor Government Securities Income Fund, Princor Limited Term Bond Fund and
Princor Utilities Fund. The principal executive officers and directors of the
Manager and Invista are listed below. The address of the Manager and Invista are
set forth in the proxy statement. The address of all directors is The Principal
Financial Group, Des Moines, Iowa 50392.
<TABLE>
<CAPTION>
Office Held With Office held With
Name Each Fund The Manager/Invista
<S> <C> <C>
Michael J. Beer Financial Officer Vice President and Chief Operating Officer
(Manager)
Arthur S. Filean Vice President and Secretary Vice President (Manager)
Ernest H. Gillum Assistant Secretary Assistant Vice President, Registered
Products (Manager)
J. Barry Griswell Director and Chairman Director and Chairman of the Board
of the Board (Manager)
Stephan L. Jones Director and President Director and President (Manager)
Ronald E. Keller Director Director (Manager)
Director and Chairman of the Board
(Invista)
Michael D. Roughton Counsel Counsel (Manager; Invista)
</TABLE>
5. The Manager serves as investment advisor for 26 mutual funds sponsored by
Principal Mutual Life Insurance Company.
Management Fee
Net Assets as of For Fiscal Year Ended
Fund October 31, 1996 October 31, 1996
---- ---------------- ----------------
Princor Balanced $ 77,658,393 .60%
Princor Blue Chip 52,490,401 .50
Princor Bond 121,938,969 .49*
Princor Capital Accumulation 447,201,123 .43
Princor Cash Management 697,121,081 .37*
Princor Emerging Growth 259,960,901 .62
Princor Government Securities Income 271,095,796 .46
Princor Growth 254,393,295 .46
Princor High Yield 30,669,461 .60
Princor Limited Term Bond 17,444,164 .11*
Princor Tax-Exempt Bond 192,973,655 .48
Princor Tax-Exempt Cash Management 98,508,842 .43*
Princor Utilities 72,212,558 .60*
Princor World 189,078,438 .73
Management Fee
Net Assets as of For Fiscal Year Ended
Fund December 31, 1996 December 31, 1996
---- ----------------- -----------------
Principal Aggressive Growth 90,105,549 .80
Principal Asset Allocation 61,631,138 .80
Principal Balanced 93,157,669 .60
Principal Bond 63,386,561 .50
Principal Capital Accumulation 205,018,528 .48
Principal Emerging Growth 137,160,881 .64
Principal Government Securities 85,099,858 .50
Principal Growth 99,611,910 .50
Principal High Yield 13,740,343 .60
Principal Money Market 46,244,249 .50
Principal World 71,682,015 .75
Principal Special Markets Fund
International Securities Portfolio 28,160,624 .90
Mortgage-Backed Securities 14,968,258 .45
* Before waiver.
Brokerage commissions paid to affiliated brokers during the year ended October
31, 1996 were as follows:
Commissions Paid to Principal Financial Securities, Inc.
Total Dollar As Percent of
Fund Amount Total Commissions
Capital Accumulation Fund $ 16,593 4.4%
Utilities Fund 2,217 3.2%
Principal Financial Securities, Inc. is an indirect, wholly-owned subsidiary of
PML.
Commissions Paid to Morgan Stanley and Co.
Total Dollar As Percent of
Fund Amount Total Commissions
Balanced Fund $ 555 1.3%
Blue Chip Fund 420 3.0%
Capital Accumulation Fund 9,400 2.5%
Emerging Growth Fund 500 .5%
World Fund 4,038 1.2%
Morgan Stanley and Co. Is affiliated with Morgan Stanley Asset Management, Inc.,
which acts as sub-advisor to two mutual funds included in the Fund complex.
<PAGE>
PROXY CARD
This proxy is solicited on behalf of the Directors of the Fund. The undersigned
shareholder appoints Arthur S Filean, Ernest H Gillum, and Stephan L Jones, and
each of them separately, Proxies, with power of substitution, and authorizes
them to represent and to vote as designated below, at the meeting of
shareholders of Princor ______________ Fund, Inc. to be held on September 16,
1997 at 10:00 a.m., and at any adjournments thereof, all the shares of the fund
that the undersigned shareholder would be entitled to vote if personally
present.
Check the appropriate boxes below, date this form and sign exactly as your name
appears. Your signature acknowledges receipt of Notice of Special Meeting of
Shareholders and Proxy Statement dated June ____, 1997. Shares will be voted as
you instruct. In their discretion, the Proxies will also be authorized to vote
upon such other matters that may properly come before the meeting.
Account Number: Number of Shares:
This Proxy is solicited on behalf of the Board of Directors of the Princor
____________ Fund, Inc. Arthur S. Filean, Ernest H. Gillum and Stephan L. Jones,
or any one of them, are hereby authorized to represent me and to vote my shares
of stock at the Special Meeting of Shareholders of Princor _____________ Fund,
Inc. to be held on September 16, 1997, at 10:00 a.m. or at any adjournment, on
the matters listed below.
If no box is checked, the proxy will be voted "For" issues 1, 2, 3 and 4 below.
PRINCOR (BALANCED, BLUE CHIP, BOND, EMERGING GROWTH, HIGH YIELD, LIMITED TERM
BOND, TAX-EXEMPT BOND, UTILITIES, AND WORLD) FUND, INC. PROPOSAL TO:
1. Elect Board of Directors. The nominees for For Withhold For
Directors are: J.D.Davis,R.W.Ehrle,P.A.Ferguson, All All All
R.W.Gilbert,J.B.Griswell,S.L.Jones,R.E.Keller, Except
B.A. Lukavsky and R.G.Peebler __ __ __
To withhold authority to vote for one or more nominee,mark "For All Except" and
write those nominees' names below
__________________________
For Against Abstain
2. Ratify selection of Ernst & Young LLP as
independent auditors of the Fund __ __ __
3. Approve change of Fund Name __ __ __
4. Approve modification of Management Agreement __ __ __
___________________________ _______ __________________________ _______
Signature Date Signature (joint owner) Date
If shares are held jointly, both parties must sign.
If executed by a corporation, an authorized officer must sign.
Executors, administrators and trustees should so indicate when signing.
