NOTICE AND PROXY STATEMENT
NAIC GROWTH FUND, INC.
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 1996
To the shareholders of the NAIC Growth Fund, Inc.:
Notice is hereby given that the 1996 Annual Meeting of
Shareholders (the "Meeting" of the NAIC Growth Fund, Inc.
(the "Fund) will be held at the Fund's principal executive
offices located at 711 West Thirteen Mile Road, Madison
Heights, Michigan, on Thursday, May 16, 1996 at 2:00 p.m.
for the following purposes:
1. To elect a Board of eight (8) Directors;
2. To ratify or reject the selection of Arthur Andersen LLP
as independent auditors of the Fund for the calendar year
ending December 31, 1996; and
3. To act upon such other business as may properly come
before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
March 23, 1996 as the record date for the determination of
shareholders entitled to vote at the Meeting or any
adjournment thereof.
You are cordially invited to attend the Meeting.
Shareholders who do not expect to attend the Meeting in
person are requested to complete, date and sign the enclosed
proxy form and return it promptly in the envelope provided
for that purpose. The enclosed proxy is being solicited on
behalf of the Board of Directors of the Fund.
By Order of the Board of Directors
Lewis A. Rockwell
Secretary
April 10, 1996
PROXY STATEMENT
NAIC GROWTH FUND, INC.
711 West Thirteen Mile Road
Madison Heights, Michigan 48071
1996 Annual Meeting of Shareholders
May 16, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors
of NAIC Growth Fund, Inc., a Maryland corporation (the
"Fund"), to be voted at the 1996 Annual Meeting of
Shareholders of the Fund (the "Meeting"), to be held at the
executive offices of the National Association of Investors
Corporation, 711 West Thirteen Mile Road, Madison Heights,
Michigan 48071, at 2:00 p.m. on May 16, 1996. The
approximate mailing date of this Proxy Statement is April
10, 1996.
All properly executed proxies received prior to the Meeting
will be voted at the Meeting in accordance with the
instructions marked thereon or otherwise as provided
therein.
Unless instructions to the contrary are marked, proxies will
be voted for the election of eight Directors and for the
ratification of the independent auditors. Any proxy may be
revoked at any time prior to the exercise thereof by giving
written notice to the Secretary of the Fund.
The Directors have fixed the close of business on March 23,
1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the
Meeting and at any adjournment thereof. Shareholders on the
record date will be entitled to one vote for each share
held, with no shares having cumulative voting rights. As of
December 31, 1995, the Fund had outstanding 723,444 shares
of common stock, par value $0.001 per share. To the
knowledge of management of the Fund no person owned
beneficially more than 5% of its outstanding shares at such
date.
To the knowledge of the Fund as of December 31, 1995, the
following number of shares of the Fund's common stock $0.001
par value were beneficially owned by each director and by
all directors and officers of the Fund as a group:
Number of Shares and Nature
of Beneficial Ownership Percent
Owner as of December 31, 1995 (a) of Class
All Officers and Directors as
a group (8 persons) 18,444 2.55
Thomas E. O'Hara 3,578 *
Kenneth S. Janke 5,600 *
Lewis A. Rockwell 5,210 *
Peggy L. Schmeltz 2,908 *
Cynthia P. Charles 636 *
Robert L. Eldred 0 *
Carl A. Holth 512 *
William T. Endicott 0 *
(a) The nature of beneficial ownership of shares shown in
this column is sole voting and investment power unless
otherwise indicated. The shares shown for Messrs. O'Hara,
Janke and Rockwell include 3,059 shares owned by the Mutual
Investment Club of Detroit Limited Partnership, a Michigan
limited partnership, of which Messrs. O'Hara, Rockwell
and Janke are general partners. The individual retirement
accounts of Messrs. O'Hara and Janke are limited partners of
the Mutual Investment Club of Detroit Limited Partnership.
The shares shown for Messrs. O'Hara and Janke also
include 108 shares owned by the National Association of
Investors Corporation and held by NAIC Associates, a
Michigan co-partnership, a nominee partnership in which
Messrs. O'Hara, Janke and James A. Sobol (Comptroller of the
Investment Adviser) are the sole partners. The shares shown
for Mr. Rockwell include 2,151 shares owned jointly with his
wife. The shares shown for Mr. Janke include 2,434 shares
owned by a trust of which he is trustee. The shares shown
for Mrs. Charles include 316 shares owned jointly with her
children. The shares shown for Mr. Holth are owned by a
pension trust of which he is trustee.
* Less than 1%.
The Directors have elected three (3) officers for the Fund.
The following sets forth information concerning each of
these officers:
Office Name and Age Served
Since
Chairman of the Board and Thomas E. O'Hara-80 1989
Chief Executive Officer
President, Chief Operating Kenneth S. Janke-61 1989
Officer and Treasurer
Secretary Lewis A. Rockwell-77 1989
The Fund has no standing audit, nominating or compensation
committees of the Board of Directors, or committees
performing similar functions. The Fund has a Management
Proxy Committee comprised of Messrs. O'Hara and Janke to
cast votes represented by properly executed proxies.
A copy of the Fund's Annual Report for the year ended
December 31, 1995, including audited financial statements,
has been included with this proxy statement.
The Directors of the Fund know of no business other than
that mentioned in Items 1 and 2 of the Notice of Meeting
which will be presented for consideration at the Meeting.
If any other matter is properly presented, it is the
intention of the persons named in the enclosed proxy to vote
in accordance with their best judgment.
PROPOSAL NO. 1
(Election of Directors)
A Board of eight (8) Directors to serve for a term of one
(1) year, or until their successors are elected and
qualified, is to be elected at the Meeting. Unless
authorization to do so is withheld, it is intended that the
proxies will be voted for the election of the nominees named
below. If any nominee becomes unavailable for election, an
event not now anticipated by the Board of Directors, the
proxy will be voted for such other nominee as may be
designated by the Board of Directors. All nominees are
presently Directors of the Fund and have consented to
continuing as Directors. Listed below are all nominees and
their backgrounds.
Nominee Directors
Thomas E. O'Hara * 80 Chairman of the Board, 1989
Chairman of the Board and Chief Executive Officer Trustee of
the National and Director Association of Investors
Corporation, the Fund's Investment Adviser (the "Investment
Adviser"); Partner, NAIC Associates; Director, Sunshine-
Fifty, Inc.
Kenneth S. Janke * 61 Director, President, Chief 1989
President and Trustee of the Operating Officer and
Investment Adviser; Director, Treasurer AFLAC; Partner, NAIC
Associates.
Lewis A. Rockwell * 77 Director and Secretary 1989
Attorney and Counsel to the law firm of Bodman, Longley &
Dahling LLP, counsel to the Fund and the Investment Adviser
(January, 1990 to present); attorney and member of the law
firm of Rockwell and Kotz, P.C. (December, 1982 to January,
1990); Trustee and Secretary of the Investment Adviser;
President, Director, and Secretary, Sunshine-Fifty, Inc.
Peggy L. Schmeltz * 68 Director
1989
Adult Education Teacher.
Cynthia P. Charles 74 Director
1989
Retired.
Robert L. Eldred 73 Director
1989
Retired.
Carl A. Holth 63 Director
1989
President and Director, Greater Detroit Capital Corporation;
Financial Consultant and President of Carl A. Holth &
Associates, Inc. (a private financial consulting and
businessappraising firm located in Grosse Pointe Woods,
Michigan); Director, Sunshine-Fifty, Inc.
William T. Endicott 50 Director
1995
Consultant, Pulsifer & Hutner, Inc. (1991-Present).
* An "interested person" of the Fund within the meaning of
Section 2(a)(19) of the Investment Company Act of 1940.
There were four (4) meetings of the Board of Directors held
during the past year. Each Director attended at least 75%
of the meetings of the Board of Directors during 1995.
Compensation of Directors and Officers
and Ownership Reports
The Directors of the Fund who are not affiliated with the
Investment Adviser or the Investment Adviser's affiliates
are paid $1,000 per year plus $100 per meeting attended.
All other officers and directors, including the Chairman,
President and Secretary, are not compensated by the Fund,
except for out-of-pocket expenses relating to attendance at
meetings and other operations of the Fund.
Directors and officers of the Fund and certain of its
affiliates and beneficial owners of more than 10% of the
Fund's common stock are required to file initial reports of
ownership and reports of changes in ownership of the Fund's
common stock pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended. The Fund has reviewed
such reports received by it and written representations of
such persons who are known by the Fund, and based solely
upon such review, the Fund believes that during the year
ended December 31, 1995 all filing requirements were met.
Investment Advisor
The Fund has entered into an Investment Advisory Agreement
dated October 2, 1989, as amended, between the National
Association of Investors Corporation (the "Investment
Adviser") and the Fund (the "Advisory Agreement"). The
shareholders approved the continuance of the Advisory
Agreement through June 30, 1993 and modification to the
Advisory Agreement at the Annual Meeting of Shareholders
which was held on May 21, 1992. The Advisory Agreement,
which became effective on July 2, 1990, continues in effect
for a period of two years from its effective date and
thereafter only so long as such continuance is specifically
approved at least annually by the Board of Directors of the
Fund or by a vote of the majority of the outstanding voting
securities of the Fund. The continuance of the Advisory
Agreement through June 30, 1997 was approved by the Board of
Directors of the Fund at its meeting on December 14, 1995.
The Investment Adviser is a Michigan nonprofit corporation
which provides investment education and advisory services.
The address of the Investment Adviser is the same as the
Fund. Messrs. O'Hara, Janke and Rockwell, who are directors
and officers of the Fund, are also trustees and officers of
the Investment Adviser. See "Proposal No. 1 - Nominee
Directors." The Fund is the Investment Adviser's sole
advisory client. A copy of the consolidated balance sheet
as of September 30, 1995 of National Association of
Investment Clubs Trust, which wholly owns the Investment
Adviser, is attached hereto as Exhibit A.
The following table set forth the name, title and principal
occupation of the officers and trustees of the Investment
Adviser. The address of each is the address of the Fund.
Position With National
Association of Investors. Other Principal
Name Corp (Investors Adviser) Occupation
Warren B. Alexander Trustee Retired
Donald E. Danko Trustee Managing Editor of
Better Investing.
Lorrie Gustin Trustee Consultant, Stand In
Office Services; (1995-
Present)Vice President
of W.R. Gustin &
Associates, Inc. (1956-
1995).
Robert W. Hague Trustee Investment adviser for
SIGMA Investment
Counselors (1989-
Present); Senior Vice
President of Federal-
Mogul Corporation (1964-
1989).
Richard H. Holthaus Trustee Vice President,
Fleishman-Hillard (1992-
Present); Senior Vice
President, Christensen
& Associates (1989-
1992);
Vice President of
Investor Relations for
CitiCorp-CitiBank
(1971-1989).
Kenneth S. Janke Trustee None.
and President
Kenneth R. Lightcap Trustee Weller, O'Sullivan,
Zucherman & Lightcap,
(1996-Present) Vice
President, Director
Public Relations,Pedone
&
Partners (1994-1996);
Managing Director,
Manning Selvage & Lee
(1992-1993); Vice
President of Shareholder
Relations, Reebok
International, Ltd.,
(1989-1991); Vice
President of Public
Affairs and Investor
Relations for
Chesebrough-Ponds, Inc.
(1976-1989).
Leroy F. Mumford Trustee President of PlanCon
Associates, Inc. (1982-
Present).
Thomas E. O'Hara Trustee and None.
Chairman of
the Board
Lewis A. Rockwell Trustee and Counsel to the law firm
of Secretary Bodman, Longley &
Dahling
LLP (1990-Present);
Member of the law firm
of
Rockwell and Kotz, P.C.
(1982-1990); President,
Director and Secretary,
Sunshine-Fifty, Inc.
Ralph L. Seger, Jr. Trustee President, Seger-
Elvekrog, Inc. (1981-
Present)
Sharon Vuinovich Trustee Vice President,
Financial
Communications/
Investor Relations,
McDonald's Corp.
Peggy L. Schmeltz Trustee Adult Education Teacher.
Elizabeth N. Hamm Trustee Adult Education Teacher.
The Investment Adviser is wholly owned by the National
Association of Investment Clubs Trust (the "Trust"), a trust
formed under Michigan law. The address of the Trust is the
address of the Fund. The trustees of the Investment Adviser
are also the trustees of the Trust. No officer, director or
trustee of the Fund or the Investment Adviser has any direct
or indirect interest in the Investment Adviser or the Trust.
Advisory Agreement
The Advisory Agreement provides that, subject to the
direction of the Board of Directors of the Fund, the
Investment Adviser is responsible for the actual management
of the Fund's portfolio. The responsibility for making
decisions to buy, sell or hold a particular security rests
with the Investment Adviser, subject to review by the Board
of Directors of the Fund.
Fees and Expense
For the services provided by the Investment Adviser under
the Advisory Agreement, the Fund is to pay to the Investment
Adviser a monthly fee at an annual rate of three-quarters of
one percent (0.75%) of the weekly net assets of the Fund,
which fee is higher than those paid by most other investment
companies; however, if the weekly net asset value of the
Fund is below Three Million Eight Hundred Thousand and
00/100 ($3,800,000.00) Dollars, no Investment Adviser's fee
will be paid or accrued by the Fund to the Investment
Adviser for that week. The Investment Adviser waived its
fees from 1991 through 1995 and has waived all of its fees
for 1996, except with respect to certain costs and expenses
incurred by the Investment Adviser in connection with the
Fund which are anticipated to be approximately six percent
(6%) of the three-quarters of one percent (0.75%) fees for
1996, or forty-five hundredths of one percent (0.045%). The
Fund made no material payments to the Investment Adviser in
1995.
In addition to the fee of the Investment Adviser, the Fund
pays all of the other costs and expenses of its operation
including, among other things, expenses for legal and
auditing services, costs of printing proxies, stock
certificates and shareholder reports, charges of the
custodian, transfer agent, Securities and Exchange
Commission fees, fees and expenses of unaffiliated
directors, accounting and pricing costs, membership fees and
trade associations, insurance, interest, brokerage costs,
taxes, stock exchange listing fees and expenses, expenses of
qualifying the Fund's shares for sale in various states and
other miscellaneous expenses properly payable by the Fund.
The Advisory Agreement provides that in the event the
average weekly net asset value of the Fund falls below Three
Million Eight Hundred Thousand and 00/100 ($3,800,000.00)
Dollars, the Investment Adviser will not be paid its fee,
nor will such fee be accrued. The Advisory Agreement
provides that the Fund may not incur annual aggregate
expenses in excess of two percent (2%) of the first Ten
Million and 00/100 ($10,000,000.00) Dollars of the Fund's
average net assets, one and one-half percent (1 1/2%) of the
next Twenty Million and 00/100 ($20,000,000.00) Dollars of
the average net assets, and one percent (1%) of the
remaining average net assets for any fiscal year. Any
excess expenses shall be the responsibility of the
Investment Adviser. The pro rata portion of the estimate
annual excess expenses will be offset against the Investment
Adviser's monthly fee. In the event such amount exceeds the
fee payable in any month, no fees shall be collected by the
Investment Adviser at such time.
Termination
The Advisory Agreement is not assignable. The Advisory
Agreement may be terminated at any time without the payment
of any penalty by the Board of Directors of the Fund or by a
vote of the majority of the outstanding voting securities of
the Fund. The Investment Adviser may terminate the Advisory
Agreement upon sixty days notice to the Fund.
Use of Name
The Investment Adviser has become well known through its
educational activities and publications. The Fund had no
prior operating history and therefore at the time of the
initial offering was not well known. As a result, the
Investment Adviser consented to allow the Fund to use NAIC
as part of the Fund's name. The Fund acknowledges that the
Investment Adviser may withdraw from the Fund the use of its
name, however in doing so, the Investment Adviser agrees to
submit the question of continuing the Advisory Agreement to
a vote of the Fund's shareholders at that time. The
Advisory Agreement also reserves the right of the Investment
Adviser to grant the use of its name in whole or in part to
another investment company or business enterprise. However,
the Investment Adviser agrees to submit the question of
continuing the Advisory Agreement to the vote of the Fund's
shareholders at that time.
Portfolio Transactions and Brokerage
Subject to the policies established by the Board of
Directors of the Fund, the Investment Adviser is primarily
responsible for the execution of the Fund's portfolio
transactions and the allocation of brokerage. In executing
such transactions, the Investment Adviser seeks to obtain
the most favorable execution and price taking into account
such factors as price, size of order, difficulty of
execution and operation of facilities of the firm involved
and the firm's risk in positioning a block of securities.
The Investment Adviser and the Fund have no obligations to
deal with any broker or group of brokers in executing
transactions in portfolio securities. The Investment
Adviser is also authorized to consider, in selecting brokers
or dealers with which such orders may be placed, certain
statistical, research and other information or services
furnished to the Investment Adviser by brokers or dealers
(the terms "statistical, research and other information or
services" include advice as to the value of securities, the
responsibility of investing in, purchasing or selling
securities; the availability of securities or purchasers or
sellers of securities; and the furnishing of analysis and
reports concerning issuers, industries, securities, economic
factors and trends, and portfolio strategy in the
performance of accounts). The Investment Adviser may pay a
broker a commission in excess of that which another broker
might charge in recognition of the value of the statistical,
research and other information provided by such broker.
The Investment Adviser will also make recommendations as to
the manner in which voting rights, rights to consent to
corporate action or other rights pertaining to the Fund's
portfolio securities will be exercised.
A substantial portion of the securities in which the Fund
will invest may be traded in the over-the-counter market,
and the Fund intends to deal directly with the dealers who
make markets in the securities involved, except in those
circumstances where better prices and execution are
available elsewhere. Under the 1940 Act, persons affiliated
with the Fund are prohibited from dealing with the Fund as
principal in the purchase and sale of securities. Since
transactions in the over-the-counter market usually involve
transactions with dealers acting as principle for their own
account, the Fund will not deal with affiliated persons in
connection with such transactions. However, affiliated
persons of the Fund may serve as its broker in the over-the-
counter market and other transactions conducted on an agency
basis.
The Board of Directors of the Fund has adopted certain
policies incorporating the standards of Rule 17e-1 issued by
the Securities and Exchange Commission under the 1940 Act,
which require that the commissions paid to affiliates of the
Fund, or to affiliates of such persons, must be reasonable
and fair compared to the commissions, fees or other
remuneration received or to be received by other brokers in
connection with comparable transactions involving similar
securities during a comparable period of time. The rule and
procedures also contain review requirements and require the
Investment Adviser to furnish reports to the Board of
Directors of the Fund and to maintain records in connection
with such reviews. After consideration of all factors
deemed relevant, the Board of Directors of the Fund will
consider from time to time whether the advisory fee will be
reduced by all or a portion of the brokerage commission
given to brokers that are affiliated with the Fund.
The aggregate dollar amount of brokerage commissions paid by
the Fund during its fiscal year ended December 31, 1995 was
$5,930.
PROPOSAL NO. 2
(Selection of Independent Accounts)
The Board of Directors has selected Arthur Andersen LLP,
independent accountants, to examine the financial statements
of the Fund for the year ending December 31, 1996. Unless a
contrary specification is made, the accompanying proxy will
be voted in favor of ratifying the selection of such
accountants. Representatives of Arthur Andersen LLP are
expected to be present at the Meeting where they will have
the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
There has been no change in the Fund's accountants since the
creation of the Fund. The Board of Directors recommends
that shareholders vote "FOR" the ratification of Arthur
Andersen LLP as the independent accountants for the Fund.
PROPOSALS OF SHAREHOLDERS
Shareholder proposals for the 1997 Annual Meeting of
Shareholders must be received by the Fund at P.O. Box 220,
Royal Oak, Michigan 48068 before the close of business on
December 9, 1996 for consideration for inclusion in the
Fund's proxy statement. Shareholder proposals should be
addressed to the attention of the Fund's Secretary.
MISCELLANEOUS
The Board of Directors is not aware of any other business
that will be presented for action at the Meeting. If any
other business comes before the Meeting, the Management
Proxy Committee has been directed by the Board of Directors
to cast such votes at its discretion. The cost of preparing
and mailing the notice of meeting, proxy statement and proxy
to the shareholders will be borne by the Fund.
By Order of the Board of Directors
April 10, 1996
Lewis A. Rockwell, Secretary
Exhibit A
Independent Auditor's Report
To the Directors and Stockholders
National Association of Investment
Clubs Trust and Subsidiaries
We have audited the accompanying consolidated statement of
financial position of National Association of Investments
Clubs Trust and subsidiaries (a not-for-profit corporation)
as of September 30, 1995 and the related statements of
revenue and expenses and changes in trust equity and cash
flows for the year then ended. These consolidated financial
statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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 are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. 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 consolidated financial statements
referred to above present fairly, in all material respects
the financial position of National Association of Investment
Clubs Trust and subsidiaries as of September 30, 1995 and
the results of their operations and their cash flows for the
year then ended, in conformity with generally accepted
accounting principles.
Plante & Moran, LLP
November 21, 1995
National Association of Invesement Clubs Trust and
Subsidiaries
(a not-for-profit corporation)
Consolditaed Balance Sheet
September 30, 1995 and 1994
1995 1994
Assets
Current Assets
Cash and cash equivalents $1,218,700 $
789,833
Investments (Note 2) 3,295,395
1,989,729
Accounts Receivable
(less allowance for uncollectible
accounts $27,910) 277,591
183,986
Inventories 198,804
169,158
Defered tax asset (Note 4) 5,398
0
Federal income taxes refundable 41,400
146,432
Prepaid expenses and other 119,962
103,482
Members Dividend Reinvestment
Funds Deposited with Escrow Agent
(Note 5) 0
102,983
Total current assets 5,157,250
3,485,513
Property, Buildings and Equipment
(Note 3) 2,019,085
1,999,328
Other Assets
Investments-Deferred
compensation 285,737
244,714
Deferred tax asset 25,836
76,896
Investment in and Advances to
Affiliates 0
7,863
Total assets $7,487,908
$5,814,314
Liabilities and Trust Equities
Current Liabilities
Accounts payable $ 390,826 $
233,899
Deferred revenue 3,037,206
2,364,109
Accured compensation 84,647
156,363
Other accrued liabilities 90,045
65,992
Membership Dividend Reinvestment
Funds (Note 5) 0
100,127
Total current libabilities 3,602,724
2,920,490
Deferred Compensation 285,261
244,714
Deferred Income Taxes 0
3,314
Total liabilities 3,887,985
3,168,518
TrustEquity 3,599,923
2,645,796
Total liabilities and
trust equity $7,487,908
$5,814,314
National Association of Investment Clubs Trust and
Subsidiaries
(a not-or-profit corporation)
Notes to Consolidated Financial Statements
September 30,1996
Note 1-Nature of Operations and Significant Accounting
Policies
The consolidated financial statements include the accounts
of National Association of Investment Clubs Trust and its
wholly-owned subsidiaries, National Association of Investors
Corporation, NAIC Investor Advisory Service Corporation and
National Investors Association (collectively, the Trust).
All significant intercompany transactions have been
eliminated in consolidation.
The Trust is engaged principally in providing its members
with the tools to make informed investment decisions in the
common stock market. Revenue consists primarily of
membership dues, subscriptions, and sales of publications
and market analysis tools to members throughout the country.
Revenue Recognition - Membership dues and publication
subscriptions are deferred and recognized ratably over the
applicable term. Advertising revenue is recognized at the
time of the publications. Sales revenue is recognized at
the time of shipment to members.
Cash Equivalents - The Trust considers all highly liquid
investments purchased with an original maturity of three
months or less to be cash equivalents.
Investments - Investments in debt securities that are
expected to be held to maturity are recorded at amortized
cost. Other investments are carried at the lower of cost or
market value.
Inventories - Inventories consist primarily of investment
software, books and publications for sale to members,
recorded at the lower of cost or market value determined
using the first-in, first-out method.
Property, Buildings and Equipment - Property, buildings and
equipment are recorded at cost. Depreciation is computed
principally on the straight-line method over the estimated
useful lives of the assets. Costs of maintenance and
repairs are charged to expense when incurred.
Income Taxes - The Trust and its subsidiaries are not exempt
from income taxes. Income taxes are accournted for in
accordance with Statement of Financial Accounting Standards
No. 109. A current tax liability or asset is recognized for
estimated taxes payable or refundable on tax returns for the
year. Deferred tax liabilities or assets are recognized for
the estimate future tax effects of temporary differences
between financial reporting and tax accounting and operating
loss carryforwards.
Profit-Sharing Plan - The Trust has a defined contribution
profit-sharing plan covering substantially all employees
with more than one year of service. The benefits are based
on years of service and discretionary employer contributions
based on net profit of the Trust as a percentage of
participants' wages. Profit-sharing expense for fiscal 1995
totaled $114,692.
Restatement - Trust equity at October 1, 1994 has been
restated to include the Trust's subsidiary, National
Investors Association. The effect of the restatement was to
increase Trust equity in the amount of $221,956.
Note 2 - Investments
Investments consist of the following:
Cost Market
U.S. government notes and bonds $1,394,996 $1,403,131
Certificates of deposit 815,421 815,421
Stocks and corporate bonds 1,084,978 1,520,879
Total $3,295,395 $3,739,431
Realized gains on sales of investments totaled approximately
$22,000 for fiscal 1995. The net unrealized appreciation in
market value of investments for 1995 was approximately
$266,000.
Note 3 - Property, Buildings and Equipment
Property, buildings and equipment are summarized as follows:
Land $ 229,197
Buildings and improvements 1,432,499
Machinery and equipment 654,384
Furniture and fixtures 430,648
Vehicles 48,783
Total cost 2,795,511
Accumulated depreciation 776,426
Net carrying amount $2,019,085
Depreciation expense for the year ended September 30, 1995
totaled $164,716.
Note 4 - Income taxes
The provision for income is as follows:
Current $360,695
Deferred 42,347
Total tax provision $403,042
A reconciliation of the provision for income taxes from
continuing operations to income taxes computed by applying
the statutory United States federal tax rate to income
before taxes is as follows:
Tax, computed at 34 percent of pretax income $384,282
Effect of nontaxable income 31,060
Effect of nondeductible expenese and other (12,300)
Total tax expense $ 403,042
The details of the net deferred tax asset at September
30,1995 are as follows:
Total deferred tax liabilities $(68,000)
Total deferred tax assets 99,234
Valuation allowance recognized
for deferred tax assets --
Net deferred tax asset 31,324
Deferred tax liabilities result primarily from use of
accelerated depreciation for tax reporting purposes.
Deferred tax assets result from expenses recorded for
financial reporting purposes but not currently deductible
for tax purposes.
Cash paid for income taxes totaled $255,000 for the year
ended September 30, 1995.
Note 5 - Low Cost Investment Plan
The Trust acts as agent for members for the purchase of
shares of corporations that have a dividend reinvestment
plan and are willing to accept the Trust's purchases on
behalf of members. Funds received from members for such
purchases are placed in escrow prior to the periodic
purchase dates specified by each corporation's dividend
reinvestment agent. At September 30, 1995, member funds
held in escrow by the Trust totaled approximately $348,000.
Although these funds are held by the Trust, they are
excluded from the accompanying consolidated statement of
financial position since they are not assets of the Trust.
NAIC GROWTH FUND, INC.
The undersigned hereby appoints Thomas E. O'Hara and
Kenneth S. Janke, jointly and severally, proxies, with full
power of substitution, to represent the undersigned at the
Annual Meeting of Shareholders of the NAIC Growth Fund,
Inc., to be held at the offices of the National Association
of Investors Corporation, 711 West Thirteen Mile Road,
Madison Heights, Michigan, on Thursday, May 16, 1996 at 2:00
o'clock in the afternoon, or at any adjournments thereof,
and to vote all shares of common stock which the undersigned
is entitled to vote, and act with all the powers the
undersigned would possess if personally present at the
meeting:
1. The election of the following persons as Directors of
the Fund to hold office until the next annual meeting and
until their successors shall have been elected and
qualified:
Thomas E. O'Hara Kenneth S. Janke Lewis A. Rockwell
Peggy L. Schmeltz Cynthia P. Charles Carl A. Holth
William T. Endicott Robert L. Eldred
A VOTE FOR ANY OF THE ABOVE MAY BE WITHHELD BY LINING OUT
THEIR NAME(S).
2. The selection of Arthur Andersen LLP as independent
accountants for the Fund's year ending December 31, 1996.
3. In their discretion, for or against such other matters
as may properly come before the Meeting or any
adjournment or adjournments thereof.
The Board of Directors recommends a vote "For" items 1 and
2.
Unless otherwise directed herein, the proxy or proxies
appointed hereby are authorized to vote "FOR" items 1 and 2,
and to vote in their discretion with respect to all other
matters which may come before the meeting.
If only one of the above-named proxies shall be present
in person or by substitute at the Meeting, or any
adjournment thereof, then that one, either in person or by
substitute, may exercise all of the powers hereby given.
Any proxy or proxies heretofore given to vote such
shares are hereby revoked.
Date: , 1996
(Please sign exactly as name(s) appear hereon)
(This Proxy is Solicited by the Board of Directors)
