PRINCIPAL INVESTORS FUND, INC. ("Fund")
(previously Principal Special Markets Fund, Inc.)
680 8th Street
Des Moines, Iowa 50392-0200
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
This is the agenda for the Fund's shareholder meeting. It identifies
the matter to be voted on and the time and place of the meeting.
To the shareholders of the Fund:
A special meeting of shareholders will be held on October 23, 2000 at
680 8th Street, Des Moines, Iowa 50392-0200 at 10:00 a.m., C.S.T., to consider
the following: Election of Board of Directors.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
Shareholders of record as of the close of business on September 29,
2000 are entitled to vote at the meeting and any related follow-up meetings.
By Order of the Board of Directors
/s/ A. S. Filean
Arthur S. Filean, Senior Vice President
and Secretary
Des Moines, Iowa
October 4, 2000
Principal Investors Fund, Inc. ("Fund")
(previously Principal Special Markets Fund, Inc.)
INFORMATION STATEMENT
As a shareholder of the Fund, you are invited to attend a special
meeting of shareholders. The Fund will hold a meeting on October 23, 2000, at
10:00 a.m. C.S.T. at 680 8th Street, Des Moines, Iowa 50392-0200. At the
meeting, shareholders will vote on the proposal described below.
The Notice of Special Meeting and Information Statement was sent to
shareholders on October 4, 2000.
You may vote by attending the Special Meeting of Shareholders and
casting your vote.
The sponsor of the Fund is Principal Life Insurance Company ("Principal
Life"), the investment adviser is Principal Management Corporation (the
"Manager") and the principal underwriter is Princor Financial Services
Corporation ("Princor"). Principal Life, an insurance company organized in 1879
under the laws of the state of Iowa, the Manager and Princor are indirect,
wholly-owned subsidiaries of Principal Mutual Holding Company. Their address is
the Principal Financial Group, Des Moines, Iowa 50392-0200.
THE PROPOSAL
Election of Board of Directors.
VOTING INFORMATION
Voting procedures. We are furnishing this Information Statement to you in
connection with the Special Meeting of Shareholders on behalf of the Board of
Directors.
Voting rights. Only shareholders of record at the close of business on
September 29, 2000 (the "Record Date") are entitled to vote. You are entitled to
one vote on the proposal submitted to the shareholders of the Fund for each
share of the Fund which you hold.
Quorum requirements. A quorum must be present at the meeting for the
transaction of business. The presence in person of one-third of the shares of
the Fund outstanding at the close of business on the Record Date constitutes a
quorum for the meeting of the Fund. Abstentions are counted toward a quorum but
do not represent votes cast for any issue.
If a quorum is not present at the meeting of the Fund, the persons in
attendance at the meeting may agree to one or more adjournments of the meeting
to permit greater attendance. Any adjournment will require the affirmative vote
of a majority of the shares cast in person at the meeting.
Expenses of the meetings. The Fund will pay the expenses of its meeting.
The Fund will also reimburse brokers and other nominees for their reasonable
expenses in communicating with shareholders for whom they hold shares of the
Fund.
Shareholder proposals. If you would like to include a proposal on the
agenda at the shareholders meeting, you should send the proposal to the
Principal Mutual Funds at the Principal Financial Group, Des Moines, Iowa
50392-0200. To consider your proposal for presentation at the shareholders
meeting, we must receive it a reasonable time before the meeting. Timely
submission of a proposal does not necessarily mean that such proposal will be
included.
Fund reports. You may obtain a copy of the Fund's most recent annual and
semiannual reports without charge. Send your request to the Principal Mutual
Funds at the Principal Financial Group, Des Moines, Iowa 50392-0200 or call
1-800-451-5447.
PROPOSAL
ELECTION OF THE BOARD OF DIRECTORS
The Board of Directors has set the number of Directors at eight (8). Each
Director will serve until the next meeting of shareholders or until a successor
is elected and qualified.
The affirmative vote of the holders of a plurality of the shares voted at
the meeting of the Fund is required for the election of a director for the Fund.
Each nominee has agreed to serve if elected. The Board has no reason to
believe that any of the nominees will become unavailable for election as a
Director. In the event that a nominee is unable to serve, an alternative nominee
will be presented by the Board of Directors at the shareholders meeting.
The Fund Audit Committee members are identified below. The committee
reviews activities of the Fund 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 the Fund.
During the last fiscal year of the Fund, its Board of Directors held four
meetings and its Audit and Nominating Committee held one meeting. The Directors
of the Fund attended 100% of the meetings of the Board and of the committees of
which they were members.
All Directors hold similar positions with 25 funds sponsored by Principal
Life.
<TABLE>
<CAPTION>
Nominees for Director
Name/Age/Position Director
with the Fund Principal Occupation Since
<S> <C> <C> <C> <C>
* John E. Aschenbrenner Executive Vice President, Principal Life ____
(51) Nominee Insurance Company, since 2000;
Senior Vice President, 1996-1999.
@ James D. Davis Attorney. Vice President, 1993
(66) Director Deere and Company, Retired.
*& Ralph C. Eucher Vice President, Principal Life 1999
(48) Director and Insurance Company, Director and
President President, Principal Management
Corporation and Princor Financial
Services Corporation since 1999.
@ Pamela A. Ferguson Professor of Mathematics, Grinnell 1993
(57) Director College, since 1998. Prior thereto,
President, Grinnell College.
Richard W. Gilbert President, Gilbert Communications, Inc.,
(60) Nominee since 1993. Prior thereto, President and
Publisher, Pioneer Press.
*& J. Barry Griswell President and CEO, Principal Life Insurance 1993
(51) Director and Company, since 2000; President 1998-2000;
Chairman of the Board Executive Vice President, 1996-1998;
Senior Vice President, 1991-1996. Director and
Chairman of the Board, Principal
Management Corporation and Princor
Financial Services Corporation.
@ William C. Kimball Chairman and CEO, Medicap Pharmacies, ____
(52) Nominee Inc. since 1998; President and CEO,
1983-1998.
& Barbara A. Lukavsky President and CEO, Barbican Enterprises, 1993
(60) Director Inc., since 1997; President and CEO,
Lu San ELITE USA, L.C., 1985-1998.
</TABLE>
* Considered to be "Interested Persons" as defined in the 1940 Act because of
current affiliation with the Manager or Principal Life.
@ Member of Audit Committee
& Member of Executive Committee (which is selected by the Board and which may
exercise all the powers of the Board, with certain exceptions, when the
Board is not in session. The Committee must report its actions to the
Board.)
The following table provides information regarding the compensation
received by all directors of the Fund and by all directors and nominees from the
Fund Complex during the fiscal year ended December 31, 1999. On that date, there
were 20 funds in the Fund Complex. None of the Funds provide retirement benefits
to any of the directors.
<TABLE>
<CAPTION>
Director
James D. Pamela A. Richard W. William C. Barbara A.
Davis Ferguson Gilbert Kimball Lukavsky
<S> <C> <C> <C> <C> <C> <C>
Principal Investors Fund, Inc. $2,400 $2,400 N/A N/A $2,400
Fund Complex $55,050 $50,850 $50,100 $19,500 $50,250
</TABLE>
The Board of Directors recommends that you vote
to approve the proposal.
