NAIC
GROWTH
FUND,
INC.
Annual Report
December 31, 1996
Contents
Report to Shareowners 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, 1996
Even though many stock market professionals at the beginning of the year
felt that 1996 could not approach 1995 in performance, the year turned
out to be a stellar one when measured by the Dow Jones Industrial
Average. While small cap stocks did not keep up with the general market,
those holding the blue chips did exceptionally well. Your Fund was not
alone in benefiting from the trend. The Net Asset Value increased from
$15.19 to $18.13. When the dividends paid in 1996 were added back in,
the increase was 24.4%.
Of the $0.76 dividend paid last year, $0.57 came from long term capital
gains. While the managers do not wish to time the market, the sales
which contributed to the capital gains were, in large part, an effort to
upgrade the portfolio by switching from some cyclical holdings to more
growth oriented companies.
Sales by the Fund included 5,000 Kimball International, 4,000 Maytag, 600
Liqui-Box, 3,000 Lukens, 500 Anheuser-Busch, 5,000 Detection Systems,
7,900 Guardsman Products, 4,800 Ryder System, 3,000 WMX Technologies and
3,000 ADC Telecommunications. Each resulted in a capital gain. The sale
of ADC Telecommunications was a partial one, leaving 9,000 shares in the
portfolio. We continue to like the prospects and growth pattern for the
company, but in the opinion of the managers, the stock became overvalued
on a fundamental basis.
Additions to the portfolio were 8,048 (adjusted for a subsequent stock
split) Clayton Homes, 3,000 Dallas Semiconductor, 3,000 Federal Signal,
1,000 Hannaford Bros., 3,000 Molex, 1,000 Newell, 3,750 RPM, 1,000 Sysco,
2,000 Teleflex and 1,583 (adjusted for subsequent stock dividend) Vishay
Intertechnology. Clayton Homes, Hannaford Bros., Newell, Sysco and
Vishay Technology were additions to previous positions.
A number of stocks in the portfolio also paid stock dividends or splits
during 1996 including ADC Telecommunications (2-1), AFLAC (3-2), American
Home Products (2-1), Clayton Homes (5-4), Coca-Cola (2-1), Huntington
Bancshares (10%), Johnson & Johnson (2-1), Monsanto (5-1), Pentair (2-1),
PepsiCo (2-1), Stryker (2-1), Synovus Financial (3-2), TSI Inc. (2-1),
Thermo Electron (3-2) and Vishay Intertechnology (5%).
In all, it was a good year for the Fund and its shareowners. The closing
price on the Chicago Stock Exchange was $18.875 compared with the 1995
closing of $13.75.
Thomas E. O'Hara, Chairman Kenneth S. Janke, President
NAIC Growth Fund, Inc.
Statement of Assets and Liabilities
As of December 31, 1996
ASSETS
Investment securities
at market value (cost $6,074,029) $12,600,582
Short-term investments
at amortized cost 724,252
Cash and cash equivalents 650,233
Dividends and interest receivable 18,029
Prepaid insurance 11,148
14,004,244
LIABILITIES
Dividends payable 498,360
Accounts payable 18,099 516,459
TOTAL NET ASSETS $13,487,785
SHAREHOLDERS' EQUITY
Common Stock @ par value $0.001 per share;
authorized 50,000,000 shares,
outstanding 743,821 shares $ 744
Additional Paid-in Capital 6,954,577
Undistributed net investment income 5,911
Undistributed net realized gain
on investments 0
Unrealized appreciation of investments 6,526,553
SHAREHOLDERS' EQUITY $13,487,785
NET ASSET VALUE PER SHARE $ 18.13
See notes to financial statements
NAIC Growth Fund, Inc.
Statement of Operations
For the year ended December 31, 1996
INVESTMENT INCOME
Interest $ 52,831
Dividends 202,540
255,371
EXPENSES
Advisory fees 92,793
Transfer agent & custodian fees 23,625
Legal fees 20,011
Insurance 19,111
Audit fees 14,000
Directors fees & expenses 13,078
Printing 10,428
Annual shareholders meeting 6,193
Mailing & postage 3,041
Other fees & expenses 5,041
Less: Advisory fees waived (88,190)
Net Expenses 119,131
Net investment income 136,240
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on investments:
Proceeds from sale of investment securities 1,108,401
Cost of investment securities sold 683,742
Net realized gain on investments 424,659
Unrealized appreciation of investments:
Unrealized appreciation at beginning of year 4,364,512
Unrealized appreciation at end of year 6,526,553
Increase in unrealized appreciation on investments 2,162,041
Net realized and unrealized gain on investments 2,586,700
NET INCREASE FROM OPERATIONS $ 2,722,940
See notes to financial statements
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
For the years ended:
December 31, 1996 December 31, 1995
FROM OPERATIONS:
Net investment income $136,240 $112,973
Net realized gain on investments 424,659 151,995
Net change in unrealized appreciation
on investments 2,162,041 2,610,159
Net increase from operations 2,722,940 2,875,127
DISTRIBUTION TO STOCKHOLDERS FROM:
Net investment income 139,410 106,065
Net realized gain from investment
transactions 424,659 96,499
Total distributions 564,069 202,564
FROM CAPITAL STOCK TRANSACTIONS:
Dividend reinvestment 150,443 0
Cash purchases 189,356 0
Net increase from capital stock
transactions 339,799 0
Net increase in net assets 2,498,670 2,672,563
TOTAL NET ASSETS:
Beginning of year $10,989,115 $8,316,552
End of year (including undistributed
net investment income of $5,911 and
$9,081, respectively) $13,487,785 $10,989,115
Shares:
Shares issued to common stockholders
under the dividend reinvestment and
cash purchase plan 20,377 0
Shares at beginning of year 723,444 723,444
Shares at end of year 743,821 723,444
See notes to financial statements
NAIC Growth Fund, Inc.
Financial Highlights
For the years ended:
1996 1995 1994 1993 1992
Net asset value at
beginning of year $15.19 $11.50 $11.24 $10.83 $10.06
Net investment income .19 .15 .09 .07 .09
Net realized and unrealized
gain on investments 3.51 3.82 .26 .43 .86
Total from investment
operation 3.70 3.97 .35 .50 .95
Distributions from:
Net investment income (.19) (.15) (.09) (.07) (.09)
Realized gains (.57) (.13) .00 (.02) (.09)
Total distributions (.76) (.28) (.09) (.09) (.18)
Net asset value at
end of year $18.13 $15.19 $11.50 $11.24 $10.83
Per share market value,
end of year Ask 19 1/2 14 1/4 9 1/2 11 1/4 12
Bid 18 7/8 13 3/4 9 3/8 9 1/2 9 1/2
Total Investment Return:
based on market value
1 year 42.94% 49.70% (0.54%) 0.83% 1.72%
from inception 12.59% 7.85% 0.27% 0.50% 0.37%
based on net asset value
1 year 24.46% 34.60% 3.12% 4.65% 9.51%
from inception 11.92% 9.78% 4.92% 5.45% 5.77%
Net Assets,
end of year $13,487,785 $10,989,115 $8,316,552 $8,081,804 $7,432,322
Ratios to average net assets:
Ratio of expenses to average
net assets (a) 0.96% 1.19% 1.81% 2.00% 2.00%
Ratio of net investment
income to average net
assets (a) 1.10% 1.16% 0.77% 0.63% 0.92%
Portfolio turnover rate 5.93% 6.90% 6.56% 0.62% 3.50%
Average commission rate $0.12 $0.12
(a) In 1996, 1995 and 1994, the adviser voluntarily waived its fee. Had the
adviser not done so in 1996, 1995 and 1994, the ratio of expenses to average
net assets would have been 1.68%, 1.94% and 2.00% and the ratio of net
investment income to average net assets would have been 0.38%, 0.41% and
0.58%, respectively.
See notes to financial statementsSee Notes to Financial Statements
NAIC Growth Fund, Inc.
Portfolio of Investments - December 31, 1996
1.0 Auto Replacement
Dana Corp. 4,000 53,250 130,500
8.8 Banking
Citicorp 4,000 79,167 412,000
Comerica, Inc. 2,000 58,750 104,750
Huntington Banc. 12,007 91,101 316,685
First Chicago NBD 2,000 64,750 107,500
Synovus Financial 7,500 81,125 240,937
0.5 Broadcasting
Walt Disney 1,049 67,660 73,168
2.8 Building Products
Johnson Controls 3,000 96,895 248,625
Clayton Homes 10,000 131,981 135,000
4.6 Chemicals
Monsanto 7,500 71,448 291,563
RPM 10,000 119,125 170,000
Sigma Aldrich 2,500 94,938 156,093
1.1 Computers
IBM 1,000 99,387 151,500
3.2 Consumer Products
Colgate-Palmolive 2,000 98,500 184,500
Alltrista Corp. * 1,125 16,361 28,969
Newell Co. 7,000 153,000 220,500
4.3 Electrical Equipment
General Electric 2,000 56,000 197,750
Vishay Intertech. * 11,550 132,025 268,538
Westinghouse Elec. 2,000 23,875 39,750
Federal Signal 3,000 68,625 77,625
2.1 Electronics
Dynatech Corp. * 4,000 35,513 177,000
Molex 3,000 93,250 106,875
11.4 Ethical Drugs
Amer. Home Prod. 3,000 90,510 175,875
Bristol-Myers Squibb 2,000 146,475 218,000
Eli Lilly 5,000 168,963 365,000
Johnson & Johnson 2,000 45,500 99,500
Merck & Co., Inc. 2,500 83,319 199,063
Pfizer, Inc. 2,000 58,750 166,000
Pharmicia & Upjohn 7,975 200,070 316,009
8.7 Financial Services
Allied Group 7,500 131,625 244,687
Beneficial Corp. 4,000 119,537 253,500
Cognizant Corp.* 1,500 35,799 49,500
Dun & Bradstreet 1,500 24,934 35,625
Household Intl. 5,000 123,313 461,250
State Street Boston 2,000 75,500 129,250
3.1 Food
ConAgra 3,000 78,125 149,250
Heinz 3,000 67,250 107,250
McCormick & Co. 7,000 145,100 164,934
1.5 Grocery
Hannaford Bros. 6,000 138,562 204,000
2.5 Hospital Supplies
Biomet Corp. 2,000 26,750 30,250
Stryker Corp. 4,000 69,250 119,500
St. Jude Medical* 4,500 100,125 190,688
0.8 Industrial Services
Donaldson Co. 3,000 37,588 100,500
1.3 Instruments
TSI Inc. 15,000 48,375 172,500
3.0 Insurance
AFLAC Inc. 3,750 51,875 160,312
Amer. Int'l. Group 2,250 79,053 243,563
4.2 Machinery
Commercial Inter. 4,500 22,649 61,312
Cooper Industries 3,500 129,018 147,437
Cuno Inc.* 4,500 28,826 66,937
Emerson Electric 3,000 113,518 290,625
0.8 Maritime
Sea Containers 7,000 136,563 109,375
3.6 Multi Industry
Pentair 3,000 23,875 96,750
Teleflex 2,000 92,750 104,250
Thermo Electron * 6,750 106,687 278,437
0.6 Office Equipment
American Bus. Prod. 3,000 62,625 75,375
2.2 Paper
Mead Corp. 5,000 134,002 290,625
1.1 Petroleum
Kerr McGee 2,000 95,250 144,000
3.4 Publishing
Reuters Holdings 6,000 125,375 459,000
2.7 Restaurants
McDonald's 8,000 115,260 363,000
0.3 Rubber
Cooper Tire & Rubber 2,000 31,823 39,500
0.5 Semiconductor
Dallas Semiconductor 3,000 56,250 69,000
4.2 Soft Drinks
Coca Cola 4,000 82,250 210,500
PepsiCo 12,000 222,250 351,000
3.4 Telecommunications
ADC Telecom. * 9,000 21,234 280,125
Cincinnati Bell 3,000 55,250 184,875
1.7 Tobacco
Philip Morris 2,000 91,588 226,000
1.2 Transportation
Arnold Industries 2,000 27,850 31,750
Sysco Corp. 4,000 108,250 130,500
1.1 Utilities
Century Telephone 5,000 140,625 154,375
1.8 Water Treatment
Ionics * 5,000 117,187 240,000
93.5 $6,074,029 $12,600,582
Short-term Investments
5.3 United States Treasury Bill,
maturing 1/9/97 724,252
4.8 Misc. Cash Equivalents 650,233
10.1 1,374,485
Total Investments 13,975,067
(3.6) All other assets less liabilities (487,282)
100.0% Total Net Assets $13,487,785
* 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).
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.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
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.
The following information is based upon Federal income tax cost of
portfolio investments as of December 31, 1996:
Gross unrealized appreciation $ 6,553,741
Gross unrealized depreciation (27,188)
Net unrealized appreciation $ 6,526,553
Federal income tax cost $ 6,074,029
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 $20,011 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 $88,190 of
its total fee of $92,793 for the year ended 1996.
Plan Agent
First Chicago NBD serves as the Fund's custodian pursuant to the
Custodian Agreement. As the Fund's custodian, NBD receives 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. Boston EquiServe serves
as the Fund's transfer agent and dividend disbursing agent pursuant to
Transfer Agency and Dividend counsel has incurred $10,103 for ongoing
legal services during the period.
Disbursement Agreements. Boston EquiServe receives 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 16, 1996, a distribution of $0.09 per share aggregating $65,709
was declared from net investment income. The dividend was paid August
1, 1996, to shareholders of record June 28, 1996. On December 5, 1996,
a dividend of $0.67 per share aggregating $498,360 was declared from net
investment income and net realized gains payable January 29, 1997, to
shareholders of record December 31, 1996.
(6) Investment transactions
Purchases and sales of securities, other than short-term securities for
the year ended December 31, 1996, were $682,946 and $1,108,401,
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, 1996, 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, 1996, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of NAIC Growth Fund, Inc. as of December 31, 1996,
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 8, 1997.
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 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 $18.875 on December 31, 1996. 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,
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
Benedict J. Smith
Director,
Birmingham, MI
Robert L. Eldred
Director,
Chippewa Lake, MI
William T. Endicott
Director,
Bethesda, MD
Cynthia P. Charles
Director,
Ambler, 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.
