NAIC
GROWTH
FUND,
INC.
Annual Report
December 31, 1995
Contents
Report to Shareholder 2
Statement of Assets and Liabilities 3
Statement of Operations 4
Statements of Changes in Net Assets 5
Financial Highlights 6
Portfolio of Investments 7
Notes to Financial Statements 10
Auditors' Report 13
Dividends and Distributions 14
NAIC Growth Fund, Inc., Board of Directors 18
Shareholder Information 18
Report to Shareowners:
December 31, 1995
As measured by the Dow Jones Industrial Average, the stock market had
a great advance during 1995, rising 35.5%. New highs were attained
several times throughout the year. Much of the advance has been
attributed to lower interest rates, along with higher earnings in both
growth and cyclical stocks. While some purchases and sales were made,
price improvement on stocks already held by the Fund led to the higher
Net Asset Value at year end.
Sales by the Fund included Perry Drug Stores convertible subordinated
debentures, when the company merged resulting in a $53,575 capital
gain; Hershey Foods which generated a gain of $43,679, a small holding
of Structural Dynamics that made a $4,250 profit, a $45,994 profit
from the sale of Archer-Daniels-Midland and 2,000 shares of ADC
Telecommunications giving the Fund a $50,812 gain. Laidlaw "B" was
sold at a loss of $29,114 and the sale of Community Psychiatric
Centers also resulted in a loss of $17,211. In the case of ADC
Telecommunications, the Fund continues to hold 6,000 shares from the
original purchase.
Additions to the portfolio included 3,000 American Business Products,
1,000 Capital Cities/ABC, 5,000 Century Telephone, 5,000 McCormick,
2,000 Newell, 3,000 PepsiCo and 1,250 RPM.
Several stocks in the portfolio also paid stock dividends during 1995
including ADC Telecommunications (2-1), American International Group
(3-2), Clayton Homes (5-4),Dynatech (2-1), H. J. Heinz (3-2),
Huntington Bancshares (5%), Ionics (2-1), Eli Lilly (2-1), Pfizer (2-
1), RPM (5-4), St. Jude Medical (3-2), Thermo Electron (3-2) and
Vishay Intertechnology (2-1). There were also two major mergers
involving holdings. Upjohn merged with Pharmacia to create Pharmacia
and Upjohn and NBD Bancorp merged with First Chicago to form First
Chicago - NBD. The Fund managers felt that both mergers made sense
and the shares were retained in the portfolio.
An agreement was reached with NAIC during the year to have Pulsifer
and Hutner of New York to serve as a consultant for approximately 10%
of the equity portfolio. Many of the stocks followed by that firm are
the same as those held by the Fund. That firm will closely monitor
Capital Cities/ABC, American International Group, Comerica, Coca-Cola,
Johnson & Johnson and Philip Morris in addition to making further
recommendations to the Fund managers. We also added William Endicott
to the board of directors, who has been associated with Pulsifer &
Hutner as a client for a number of years, and who brings valuable
experience to the board. The Net Asset Value of your Fund was $15.19
at the end of the year compared with $11.50 a year earlier. Adding
back the total 1995 dividend of $0.28, the NAV increased 34.5%. The
closing price on the Chicago Stock Exchange was $13.75.
Thomas E. O'Hara, Chairman Kenneth S. Janke, President
NAIC Growth Fund, Inc.
Statement of Assets and Liabilities
As of December 31, 1995
ASSETS
Investment securities
-at market value (cost $6,074,825) $10,439,337
Short-term investments
-at amortized cost 164,936
Cash and cash equivalents 535,047
Dividends and interest receivable 19,263
Prepaid insurance 11,148
11,169,731
LIABILITIES
Dividends payable 170,009
Accounts payable 10,607 180,616
TOTAL NET ASSETS $10,989,115
SHAREHOLDERS' EQUITY
Common Stock-par value $0.001 per share;
authorized 50,000,000 shares,
outstanding 723,444 shares $ 723
Additional Paid-in Capital 6,614,799
Undistributed net investment income 9,081
Undistributed net realized gain
on investment 0
Unrealized appreciation of investments 4,364,512
SHAREHOLDERS' EQUITY $10,989,115
NET ASSET VALUE PER SHARE $ 15.19
See notes to financial statements
NAIC Growth Fund, Inc.
Statement of Operations
For the year ended December 31, 1995
INVESTMENT INCOME
Interest $ 36,803
Dividends 192,370
229,173
EXPENSES
Advisory fees 73,024
Insurance 19,721
Transfer agent & custodian fee 19,545
Legal fees 14,954
Amortization of organization costs 14,219
Audit fees 13,900
Directors' fees & expenses 12,205
Printing 7,581
Annual shareholders' meeting 3,756
Mailing & postage 3,546
Other fees & expenses 6,773
Less: Advisory fees waived (73,024)
Net Expenses 116,200
Net investment income 112,973
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on investments:
Proceeds from sale of investment securities 740,245
Cost of investment securities sold 588,250
Net realized gain on investments 151,995
Unrealized appreciation of investments:
Unrealized appreciation at beginning of year 1,754,353
Unrealized appreciation at end of year 4,364,512
Increase in unrealized appreciation on investments 2,610,159
Net realized and unrealized gain on investments 2,762,154
NET INCREASE FROM OPERATIONS $ 2,875,127
See notes to financial statements
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
For the years ended:
December 31, 1995 December 31, 1994
FROM OPERATIONS:
Net investment income $112,973 $62,497
Net realized gain (loss) on investments 151,995 (55,496)
Net change in unrealized appreciation on
investments 2,610,159 240,598
Net increase from operations 2,875,127 247,599
DISTRIBUTION TO STOCKHOLDERS FROM:
Net investment income 106,065 61,493
Net realized gain from investment
transactions 96,499 0
Total distribution 202,564 61,493
FROM CAPITAL STOCK TRANSACTIONS:
Shares issued to common stockholders:
Dividend reinvestment 0 29,110
Cash purchases 0 19,532
Net increase from capital stock transactions 0 48,642
Net increase in net asset 2,672,563 234,748
TOTAL NET ASSETS:
Beginning of year $8,316,552 8,081,804
End of year (including undistributed
net investment income of $9,081
and $2,173, respectively) $10,989,115 $8,316,552
Shares:
Shares issued to common stockholders
under the dividend reinvestment
and cash purchase plan 0 4,371
Shares at beginning of year 723,444 719,073
Shares at end of year 723,444 723,444
See notes to financial statements
NAIC Growth Fund, Inc.
Financial Highlights
For the years ended:
1995 1994 1993 1992 1991
Net asset value at $11.50 $11.24 $10.83 $10.06 $8.72
beginning of year
Net investment income .15 .09 .07 .09 .19
Net realized and unrealized
gain on investments 3.82 .26 .43 .86 1.49
Total from investment 3.97 .35 .50 .95 1.68
operations
Distributions from:
Net investment income (.15) (.09) (.07) (.09) (.19)
Realized gains (.13) .00 (.02) (.09) (.07)
Total distributions (.28) (.09) (.09) (.18) (.26)
Registration and initial
public offering costs .00 .00 .00 .00 (.08)
Net asset value at $15.19 $11.50 $11.24 $10.83 $10.06
end of year
Per share market value, Ask 14 1/4 9 1/2 11 1/4 12 12
end of year Bid 13 3/4 9 3/8 9 1/2 9 1/2 9 1/2
Total Investment Return:
based on market value
1 year 49.70% (0.54%) 0.83% 1.72% (12.52%)
from inception 7.85% 0.27% 0.50% 0.37% (0.52%)
based on net asset value
1 year 34.60% 3.12% 4.65% 9.51% 18.18%
from inception 9.78% 4.92% 5.45% 5.77% 3.35%
Net Assets, end of year 10,989,115 8,316,552 8,081,804 7,432,322 6,187,758
Ratios to average net assets:
Ratio of expenses to average
net assets (a) 1.19% 1.81% 2.00% 2.00% 2.00%
Ratio of net investment income
to average net assets (a) 1.16% 0.77% 0.63% 0.92% 1.94%
Portfolio turnover rate 6.9% 6.56% 0.62% 3.50% 1.46%
Average commission rate $0.12
(a) In 1995 and 1994, the adviser voluntarily waived its fee. Had the adviser
not done so in 1995 and 1994, the ratio of expenses to average net assets
would have been 1.94% and 2.00% and the ratio of net investment income to
average net assets would have been 0.41% and 0.58%, respectively.
See notes to financial statements
NAIC Growth Fund, Inc.
Portfolio of Investments - December 31, 1995
% Common Stock Shares Cost Market
0.7 Appliances
Maytag Corp. 4,000 $53,020 81,000
1.1 Auto Replacement
Dana Corp. 4,000 53,250 117,000
7.6 Banking
Citicorp 4,000 79,167 269,000
Comerica Inc. 2,000 58,750 80,000
Huntington Banc. 10,916 91,105 261,984
First Chicago NBD 2,000 64,750 79,000
Synovus Financial 5,000 81,125 142,500
1.1 Broadcasting
Capital Cities ABC 1,000 116,810 23,375
2.2 Building Products
Johnson Controls 3,000 96,895 206,250
Clayton Homes 1,562 16,625 33,398
4.7 Chemicals
Guardsman Prod. 7,900 70,660 105,663
Monsanto 1,500 71,448 183,750
RPM 6,250 61,000 103,125
Sigma Aldrich 2,500 94,938 123,750
0.8 Computers
IBM 1,000 99,387 91,375
2.9 Consumer Products
Colgate-Palmolive 2,000 98,500 140,500
Alltrista Corp. * 1,125 16,361 20,250
Newell Co. 6,000 124,875 155,250
0.3 Distillery
Anheuser-Busch 500 25,875 33,437
4.3 Electrical Equipment
General Electric 2,000 56,000 144,000
Vishay Intertech. * 9,492 91,122 298,998
Westinghouse Elec. 2,000 23,875 32,750
0.9 Electronics
Detection Systems * 5,000 31,071 29,375
Dynatech Corp. * 4,000 35,513 68,000
11.7 Ethical Drugs
Amer. Home Prod. 1,500 90,510 145,500
Bristol-Myers Squibb 2,000 146,475 171,750
Eli Lilly 5,000 168,963 281,250
Johnson & Johnson 1,000 45,500 85,500
Merck & Co., Inc. 2,500 83,319 164,063
Pfizer Inc. 2,000 58,750 126,000
Pharmicia & Upjohn 7,975 200,070 309,031
7.7 Financial Services
Allied Group 5,000 131,625 180,000
Beneficial Corp. 4,000 119,537 186,500
Dun & Bradstreet 1,500 66,615 97,125
Household Intl. 5,000 123,313 297,500
State Street Boston 2,000 75,500 90,000
3.5 Food
ConAgra 3,000 78,125 123,750
Heinz 3,000 67,250 99,375
McCormick & Co. 7,000 145,100 168,875
1.1 Furniture
Kimball Intl. 5,000 117,250 126,250
1.1 Grocery
Hannaford Bros. 5,000 109,812 123,125
1.3 Hospital Supplies
Biomet Corp. * 2,000 26,750 35,750
Stryker Corp. 2,000 69,250 105,000
1.8 Hospital
St. Jude Medical 4,500 100,125 193,500
0.7 Industrial Services
Donaldson Co. 3,000 37,588 75,375
1.0 Instruments
TSI Inc. 7,500 48,375 105,000
2.9 Insurance
AFLAC Inc. 2,500 51,875 108,750
Amer. Int'l. Group 2,250 79,053 208,125
1.1 Leasing
Ryder System Inc. 4,800 75,973 118,800
4.1 Machinery
Commercial Inter. 4,500 51,475 81,563
Cooper Industries 3,500 129,018 128,625
Emerson Electric 3,000 113,518 245,250
1.1 Maritime
Sea Containers 7,000 136,563 121,625
2.8 Multi Industry
Pentair 1,500 23,875 74,625
Thermo Electron * 4,500 106,687 234,000
0.8 Office Equipment
American Bus. Prod. 3,000 62,625 85,500
0.2 Packaging
Liqui Box 600 14,690 17,775
2.4 Paper
Mead Corp. 5,000 134,002 261,250
1.2 Petroleum
Kerr McGee 2,000 95,250 127,000
0.8 Pollution Control
WMX Tech. 3,000 92,647 89,250
3.0 Publishing
Reuters Holdings 6,000 125,375 330,750
3.3 Restaurants
McDonald's 8,000 115,260 361,000
0.5 Rubber
Cooper Tire & Rubber 2,000 31,823 49,250
4.4 Soft Drinks
Coca Cola 2,000 82,250 148,500
PepsiCo 6,000 222,250 335,250
0.8 Steel
Lukens 3,000 72,755 86,250
2.9 Telecommunications
ADC Telecom. * 6,000 28,312 219,000
Cincinnati Bell 3,000 55,250 104,250
1.6 Tobacco
Philip Morris 2,000 91,588 180,500
1.2 Transportation
Arnold Industries 2,000 27,850 34,750
Sysco Corp. 3,000 75,125 97,500
1.4 Utilities
Century Telephone 5,000 140,625 158,750
2.0 Water Treatment
Ionics * 5,000 117,187 217,500
95.0 $6,074,825 $10,439,337
Short-term Investments
1.3 United States Treasury Securities 144,936
4.9 Misc. Cash Equivalents 535,047
0.2 Commercial Paper 20,000
6.4 699,983
Total Investments 11,139,320
(1.4) All other assets less liabilities (150,205)
100.0% Total Net Assets $10,989,115
* non-income producing securities
NAIC Growth Fund, Inc.
Notes to Financial Statements
(1) ORGANIZATION
The NAIC Growth Fund, Inc. (the "Fund") was organized under Maryland
law on April 11, 1989 as a diversified closed-end investment company
under the Investment Company Act of 1940. The Fund commenced
operations on July 2, 1990.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
followed by the Fund not otherwise set forth in the notes to financial
statements:
Dividends and Distributions - Dividends from the Fund's net investment
income and realized net long- and short-term capital gains will be
declared and distributed at least annually. Shareholders may elect to
participate in the Dividend Reinvestment and Cash Purchase Plan (see
Note 4).
Organization Costs - Organization costs are to be amortized over a
period of 60 months from the commencement of operations of the Fund.
Investments - Investments in equity securities are stated at market
value, which is determined based on quoted market prices or dealer
quotes. Pursuant to Rule 2a-7 of the Investment Company Act of 1940,
the Fund utilizes the amortized cost method to determine the carrying
value of short-term debt obligations. Under this method, investment
securities are valued for both financial reporting and Federal tax
purposes at amortized cost. Any discount or premium is amortized from
the date of acquisition to maturity. Investment security purchases
and sales are accounted for on a trade date basis.
Federal Income Taxes - The Fund intends to comply with the general
qualification requirements of the Internal Revenue Code applicable to
regulated investment companies. The Fund intends to distribute at
least 90% of its taxable income, including net long-term capital
gains, to its shareholders. In order to avoid imposition of the
excise tax applicable to regulated investment companies, it is also
the Fund's intention to declare as dividends in each calendar year at
least 98% of its net investment income and 98% of its net realized
capital gains plus undistributed amounts from prior years. For federal
tax purposes, as of December 31, 1994, the Fund had a capital loss
carryforward of $55,496 which was used to offset current net realized
gains on investments.
The following information is based upon Federal income tax cost of
portfolio investments as of December 31, 1995:
Gross unrealized appreciation $ 4,392,949
Gross unrealized depreciation (28,437)
Net unrealized appreciation $ 4,364,512
Federal income tax cost $ 6,074,825
Expenses - The Fund's service contractors bear all expenses in
connection with the performance of their services. The Fund bears all
expenses incurred in connection with its operations including, but not
limited to, management fees (as discussed in Note 3), legal and audit
fees, taxes, insurance, shareholder reporting and other related costs.
Such expenses will be charged to expense daily as a percentage of net
assets. The Fund's expenses in excess of two percent (2%) of average
net assets shall be the responsibility of the Investment Adviser. A
director of the Fund is of counsel to the Fund's legal counsel. Legal
counsel has incurred $14,954 for ongoing legal services during the
year.
(3) MANAGEMENT ARRANGEMENTS
Investment Adviser
National Association of Investors Corporation serves as the Fund's
Investment Adviser subject to the Investment Advisory Agreement, and
is responsible for the management of the Fund's portfolio, subject to
review by the board of directors of the Fund.
For the services provided under the Investment Advisory Agreement, the
Investment Adviser receives a monthly fee at an annual rate of three-
quarters of one percent (0.75%) of the average weekly net asset value
of the Fund, during the times when the average weekly net asset value
is at least $3,800,000. The Investment Adviser will not be entitled
to any compensation for a week in which the average weekly net asset
value falls below $3,800,000. The Adviser has voluntarily waived its
fee of $73,024 for the year ended 1995.
Plan Agent
First Chicago NBD, formerly known as NBD Bank, serves as the Fund's
custodian pursuant to the Custodian Agreement. As the Fund's
custodian, NBD will receive fees and compensation of expenses for
services provided including, but not limited to, an annual account
charge, annual security fee, security transaction fee and statement of
inventory fee. In August, 1994, Boston EquiServe, formerly known as
State Street Bank and Trust Company, became the Fund's transfer agent
and dividend disbursing agent pursuant to Transfer Agency and Dividend
Disbursement Agreements. Boston EquiServe will receive fees for
services provided including, but not limited to, account maintenance
fees, activity and transaction processing fees and reimbursement of
out-of-pocket expenses such as forms and mailing costs.
(4) DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund has a Dividend Reinvestment and Cash Purchase Plan (the
"Plan") which allows shareholders to reinvest dividends paid and make
additional contributions.
Under the Plan, if on the valuation date the net asset value per share
is lower than the market price at the close of trading on that day,
then the Plan Agent will elect on behalf of the shareholders who are
participants of the Plan to take the dividends in newly issued shares
of the Fund's common stock. If net asset value exceeds the market
price on the valuation date, the Plan Agent will elect to receive cash
dividends, and will promptly buy shares of the Fund's common stock on
whatever market is consistent with best price and execution. The
number of shares credited to each shareholder participant's account
will be based upon the average purchase price for all shares
purchased.
(5) DISTRIBUTIONS TO SHAREHOLDERS
On May 18, 1995, a distribution of $0.045 per share aggregating
$32,555 was declared from net investment income. The dividend was
paid August 1, 1995, to shareholders of record June 30, 1995. On
December 7, 1995, a dividend of $0.235 per share aggregating $170,009
was declared from net investment income and net realized gains payable
January 29, 1996, to shareholders of record December 29, 1995.
(6) Investment transactions
Purchases and sales of securities, other than short-term securities
for the year ended December 31, 1995, were $628,685 and $740,245,
respectively.
(7) FINANCIAL HIGHLIGHTS
The Financial Highlights present a per share analysis of how the
Fund's net asset value has changed during the years presented.
Additional quantitative measures expressed in ratio form analyze
important relationships between certain items presented in the
financial statements. These Financial Highlights have been derived
from the financial statements of the Fund and other information for
the years presented. The Total Investment Return based on market
value assumes that shareholders bought into the Fund at the bid price
and sold out of the Fund at the bid price. In reality, shareholders
buy into the Fund at the ask price and sell out of the Fund at the bid
price. Therefore, actual returns may differ from the amounts stated.
Report of Independent Public Accountants
To the Board of Directors and Shareholders of NAIC Growth Fund, Inc.:
We have audited the accompanying statement of assets and liabilities
of NAIC GROWTH FUND, INC. (a Maryland corporation), including the
portfolio of investments, as of December 31, 1995, and the related
statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period 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.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
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. Our procedures included
confirmation of securities owned as of December 31, 1995, by
correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of NAIC Growth Fund, Inc. as of December 31, 1995,
the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then
ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
January 11, 1996.
NAIC Growth Fund, Inc.
Dividends and Distributions:Dividend Reinvestment and Cash Purchase
Plan
We invite you to join the Dividend Reinvestment and Cash Purchase Plan
(the "Plan"), which is provided to give you easy and economical ways
of increasing your investment in the Fund's shares. THOSE SHAREHOLDERS
WHO HAVE ELECTED TO PARTICIPATE IN THE PLAN NEED NOT DO ANYTHING
FURTHER TO MAINTAIN THEIR ELECTION.
Boston EquiServe, formerly known as State Street Bank and Trust
Company, will act as the Plan Agent on behalf of shareholders who are
participants in the Plan.
All shareholders of the Fund (other than brokers and nominees of
financial institutions) who have not previously elected to participate
in the Plan or who have terminated their election may elect to become
participants in the Plan by filling in and signing the form of
authorization obtainable from Boston EquiServe, P.O. Box 8200, Boston,
Massachusetts 02266, the transfer agent for the Fund's shares and the
shareholders' agent for the Plan, and mailing it to Boston EquiServe.
The authorization must be signed by the registered shareholders of an
account. Participation is voluntary and may be terminated or resumed
at any time upon written notice from the participant received by the
Plan Agent prior to the record date of the next dividend. Additional
information regarding the election may be obtained from the Fund.
Dividend payments and other distributions to be made by the Fund to
participants in the Plan either will be paid to the Plan Agent in cash
(which then must be used to purchase shares in the open market) or,
will be represented by the delivery of shares depending upon which of
the two options would be the most favorable to participants, as
hereafter determined. On each date on which the Fund determines the
net asset value of the shares (a Valuation Date), and which occurs not
more than five business days prior to a date fixed for payment of a
dividend or other distribution from the Fund, the Plan Agent will
compare the determined net asset value per share with the market price
per share. For all purposes of the Plan, market price shall be deemed
to be the highest price bid at the close of the market by any market
maker on the date which coincides with the relevant Valuation Date,
or, if no bids were made on such date, the next preceding day on which
a bid was made. The market price was $13.75 on December 31, 1995. If
the net asset value in any such comparison is found to be lower than
said market price, the Plan Agent will demand that the Fund satisfy
its obligation with respect to any such dividend or other distribution
by issuing additional shares to the Participants in the Plan at a
price per share equal to the greater of the determined net asset value
per share or ninety-five percent (95%) of the market price per share
determined as of the close of business on the relevant Valuation Date.
However, if the net asset value per share (as determined above) is
higher than the market price per share, then the Plan Agent will
demand that the Fund satisfy its obligation with respect to any such
dividend or other distribution by a cash payment to the Plan Agent for
the account of Plan participants and the Plan Agent then shall use
such cash payment to buy additional shares in the open market for the
account of the Plan participants, provided, however, that the Plan
Agent shall not purchase shares in the "open market" at a price in
excess of the net asset value as of the relevant Valuation Date. In
the event the Plan Agent is unable to complete its acquisition of
shares to be purchased in the "open market" by the end of the first
trading day following receipt of the cash payment from the Fund, any
remaining funds shall be used by the Plan Agent to purchase newly
issued shares of the Fund's common stock from the Fund at the greater
of the determined net asset value per share or ninety-five percent
(95%) of the market price per share as of the date coinciding with or
next preceding the date of the relevant Valuation Date.
Participants in the Plan will also have the option of making
additional cash payments to the Plan Agent, on a monthly basis, for
investment in the Fund's shares. Such payments may be made in any
amount from a minimum of $50.00 to a maximum of $1,000.00 per month.
The Fund may, in its discretion, waive the maximum monthly limit with
respect to any participant. At the end of each calendar month, the
Plan Agent will determine the amount of funds accumulated. Purchases
made from the accumulation of payments during any one calendar month
will be made on or about the first business day of the following month
(Investment Date). The funds will be used to purchase shares of the
Fund's common stock from the Fund if the net asset value of the shares
is lower than the market price as of the Valuation Date which occurs
not more than five business days prior to the relevant Investment
Date. In such case, such shares will be newly issued shares and will
be issued at a price per share equal to the greater of the determined
net asset value per share or ninety-five percent (95%) of the market
price per share. If the net asset value per share is higher than the
market price per share, then the Plan Agent shall use such cash
payments to buy additional shares in the open market for the account
of the Plan participants, provided, however, that the Plan Agent shall
not purchase shares in the "open market" at a price in excess of the
net asset value as of the relevant Valuation Date. In the event the
Plan Agent is unable to complete its acquisition of shares to be
purchased in the "open market" by the end of the Investment Date, any
remaining cash payments shall be used by the Plan Agent to purchase
newly issued shares of the Fund's common stock from the Fund at the
greater of the determined net asset value per share or ninety-five
(95%) percent of the market price per share as of the relevant
Valuation Date. All cash payments received by the Plan Agent in
connection with the Plan will be held without earning interest. To
avoid unnecessary cash accumulations, and also to allow ample time of
receipt and processing by the Plan Agent in connection with the Plan
will be held without earning interest. To avoid unnecessary cash
accumulations, and also to allow ample time of receipt and processing
by the Plan Agent, participants that wish to make voluntary cash
payments should send such payments to the Plan Agent in such a manner
that assures that the Plan Agent will receive and collect Federal
Funds by the end of the month. This procedure will avoid unnecessary
accumulations of cash and will enable participants to realize lower
brokerage commissions and to avoid additional transaction charges. If
a voluntary cash payment is not received in time to purchase shares in
any calendar month, such payment shall be invested on the next
Investment Date. A participant may withdraw a voluntary cash payment
by written notice to the Plan Agent if the notice is received by the
Plan Agent at least forty-eight hours before such payment is to be
invested by the Plan Agent.
Boston EquiServe as the Plan Agent will perform bookkeeping and other
administrative functions, such as maintaining all shareholder accounts
in the Plan and furnishing written confirmation of all transactions in
the account, including information needed by shareholders for personal
and tax records. Shares in the account of each Plan participant will
be held by the Plan Agent in noncertificated form in the name of the
participant, and each shareholder's proxy will include those shares
purchased pursuant to the Plan and of record as of the record date for
determining those shareholders who are entitled to vote on any matter
involving the Fund. In case of shareholders such as banks, brokers or
nominees, which hold shares for others who are the beneficial owners,
the Plan Agent will administer the Plan on the basis of the number of
shares certified from time to time by such shareholders as
representing and limited to the total number of shares registered in
the shareholder's name and held for the account of beneficial owners
who have elected to participate in the Plan.
There are no special fees or charges to participants other than
reasonable transaction fees, which shall not exceed the lesser of five
percent (5%) of the amount reinvested or three ($3.00) dollars and a
termination fee of up to one ($1.00) dollar.
With respect to purchases from voluntary cash payments, the Plan Agent
will charge three ($3.00) dollars, plus a pro rata share of the
brokerage commissions, if any. Brokerage charges for purchasing small
blocks of stock for individual accounts through the Plan are expected
to be less than the usual brokerage charges for such transactions, as
the Plan Agent will be purchasing shares for all participants in
larger blocks and prorating the lower commission rate thus applied.
The automatic reinvestment of dividends and distributions will not
relieve participants of any income tax liability associated therewith.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the
Plan as applied to any voluntary cash payment received and any
dividend or distribution to be paid subsequent to a date specified in
a notice of the change sent to all shareholders at least ninety days
before such specified date. The Plan may also be terminated on at
least ninety days' written notice to all shareholders in the Plan. All
correspondence concerning the Plan should be directed to Boston
EquiServe, P.O. Box 8200, Boston, Massachusetts 02266 or call 1-800-
257-1770.
NAIC Growth Fund, Inc.
Board of Directors
Thomas E. O'Hara
Chairman,
Bloomfield Hills, MI
Lewis A. Rockwell
Secretary,
Grosse Pointe Shores, MI
Carl A. Holth
Director,
Grosse Pointe, MI
Kenneth S. Janke
President,
Bloomfield Hills, MI
Robert M. Bilkie, Jr.
Director,
Grosse Pointe, Mi
Robert L. Eldred
Director,
Chippewa Lake, MI
William T. Endicott
Director,
Bethesda, MD
Cynthia P. Charles
Director,
Amber, PA
Peggy L. Schmeltz
Director,
Bowling Green, OH
Shareholder Information
The ticker symbol for the NAIC Growth Fund, Inc., on the Chicago Stock
Exchange is GRF.
The dividend reinvestment plan allows shareholders to automatically
reinvest dividends in Fund common stock without paying commission. Once
enrolled, you can make additional stock purchases through monthly cash
deposits ranging from $50 to $1,000. For more information, request a copy
of the Dividend Reinvestment Service for Stockholders of NAIC Growth Fund,
Inc., from Boston EquiServe, P.O. Box 8200, Boston, Massachusetts 02266.
Telephone 1-800-257-1770.
Questions about dividend checks, statements, account consolidation, address
changes, stock certificates or transfer procedures write Boston EquiServe,
P.O. Box 8200, Boston, Massachusetts 02266. Telephone 1-800-257-1770.
Shareholders or individuals wanting general information or having
questions, write NAIC, P.O. Box 220, Royal Oak, Michigan 48068.
Telephone 810-583-6242 Ext. 322.
