NAIC GROWTH FUND, INC.
Annual Report
December 31, 1997
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, 1997
As measured by the popular averages, the stock market experienced
a dramatic increase for the third consecutive year. It was also a good
year for the NAIC Growth Fund. The Net Asset Value was $9.07 at the
end of 1996 and on December 31, 1997 was $11.46 when the dividends were
added back in to the actual NAV of $10.99. That was an increase of
26.3% for the year. The price of the stock closed the year at $14.75,
up 56.3% from the 1996 closing price.
All figures have been adjusted for the 100% stock dividend paid on
October 1st. The dividend payments last year increased 29.5% over
1996, including regular income and capital gains.
Two new issues were added to the portfolio - 6,000 OM Group and
4,000 O'Reilly Automotive. We increased our positions with the
addition of 4,000 American Business Products, 5,000 Biomet, 3,000 CBS,
2,000 Dallas Semiconductor, 2,000 Federal Signal, 1,000 McCormick,
2,000 Stryker, 1,000 Sysco and 1,000 Teleflex.
We reduced our positions in four stocks with partial sales of Eli
Lilly, McDonald's, Mead and Bristol-Myers Squibb. Full sales were made
in Philip Morris, Cooper Tire & Rubber, Walt Disney, Arnold Industries,
Cuno, Commercial Intertech, Dun & Bradstreet, Sea Containers and
Alltrista.
Stocks which split or paid stock dividends during the year
included: Allied Group (3-2); American International Group (3-2);
Bristol-Myers Squibb (2-1); Cincinnati Bell (2-1); Colgate-Palmolive
(2-1); ConAgra (2-1); Eli Lilly (2-1); Emerson Electric (2-1); General
Electric (2-1); Huntington Bancshares (10%); IBM (2-1); Johnson
Controls (2-1); Mead (2-1); Molex (5- 4); O'Reilly Automotive (2-1);
Pfizer (2-1); RPM (5-4); Sigma Aldrich (2-1); State Street (2-1);
Synovus Financial (3-2); Teleflex (2-1) and Vishay Intertechnology
(5%).
With the turmoil in the Asian markets and projected lower earnings
gains for many companies, 1998 will be a challenging year. We feel
that our portfolio is well positioned and expect continued earnings
progress for the stocks we hold. They are continually monitored to
seek opportunities to increase positions and to add new issues to the
Fund's portfolio.
Thomas E. O'Hara, Chairman Kenneth S. Janke, President
NAIC Growth Fund, Inc.
Statement of Assets and Liabilities
As of December 31, 1997
ASSETS
Investment securities
-at market value (cost $6,307,866) $15,650,593
Short-term investments
-at amortized cost 1,598,476
Cash and cash equivalents 734,919
Dividends and interest receivable 18,795
Prepaid insurance 11,444
18,014,227
LIABILITIES
Dividends payable 651,296
Accounts payable 27,626 678,922
TOTAL NET ASSETS $17,335,305
SHAREHOLDERS' EQUITY
Common Stock-par value $0.001 per share;
authorized 50,000,000 shares,
outstanding 1,576,988 shares $ 1,577
Additional Paid-in Capital 7,990,479
Undistributed net investment income 522
Undistributed net realized gain
on investments 0
Unrealized appreciation of investments 9,342,727
SHAREHOLDERS' EQUITY $17,335,305
NET ASSET VALUE PER SHARE $ 10.99
See notes to financial statements
NAIC Growth Fund, Inc.
Statement of Operations
For the year ended December 31, 1997
INVESTMENT INCOME
Interest $ 92,768
Dividends 208,849
301,617
EXPENSES
Advisory fees 118,047
Transfer agent & custodian fees 32,444
Legal fees 30,057
Insurance 19,323
Audit fees 15,450
Directors' fees & expenses 12,986
Printing 11,876
Annual shareholders' meeting 9,847
Mailing & postage 3,360
Other fees & expenses 12,326
Less: Advisory fees waived (114,329)
Net Expenses 151,387
Net investment income 150,230
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on investments:
Proceeds from sale of investment
securities 1,235,419
Cost of investment securities sold 658,391
Net realized gain on investments 577,028
Unrealized appreciation of investments:
Unrealized appreciation at
beginning of year 6,526,553
Unrealized appreciation at end of year 9,342,727
Increase in unrealized appreciation
on investments 2,816,174
Net realized and unrealized
gain on investments 3,393,202
NET INCREASE FROM OPERATIONS $ 3,543,432
See notes to financial statements
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
For the years ended:
December 31, 1997 December 31, 1996
FROM OPERATIONS:
Net investment income $150,230 $136,240
Net realized gain on investments 577,028 424,659
Net change in unrealized
appreciation on investments 2,816,174 2,162,041
Net increase from operations 3,543,432 2,722,940
DISTRIBUTION TO STOCKHOLDERS FROM:
Net investment income 155,619 139,410
Net realized gain from
investment transactions 577,028 424,659
Total distributions 732,647 564,069
FROM CAPITAL STOCK TRANSACTIONS:
Dividend reinvestment 423,948 150,443
Cash purchases 612,787 189,356
Net increase from capital
stock transactions 1,036,735 339,799
Net increase in
net assets 3,847,520 2,498,670
TOTAL NET ASSETS:
Beginning of year $13,487,785 $10,989,115
End of year (including
undistributed net investment
income of $522 and
$5,911, respectively) $17,335,305 $13,487,785
Shares:
Shares issued to common
stockholders under the dividend
reinvestment and cash purchase plan 89,346 40,754
Shares at beginning of year 1,487,642 1,446,888
Shares at end of year 1,576,988 1,487,642
See notes to financial statements
NAIC Growth Fund, Inc.
Financial Highlights
For the years ended:
1997 1996 1995 1994 1993
Net asset value at
beginning of year $9.07 $7.60 $5.75 $5.62 $5.42
Net investment income .10 .10 .08 .05 .04
Net realized and unrealized gain
on investments 2.29 1.75 1.91 .13 .21
Total from investment
operations 2.39 1.85 1.99 .18 .25
Distributions from:
Net investment income (.10) (.10) (.08) (.05) (.04)
Realized gains (.37) (.28) (.06) .00 (.01)
Total distributions (.47) (.38) (.14) (.05) (.05)
Net asset value at
end of year $10.99 $9.07 $7.60 $5.75 $5.62
Per share market value,
end of year
Ask 15 1/4 9 3/4 7 1/8 4 3/4 5 5/8
Bid 14 1/2 9 7/16 6 7/8 4 11/16 4 3/4
Total Investment Return:
based on market value
1 year 58.50% 42.94% 49.70% (0.54%) 0.83%
from inception 17.84% 12.59% 7.85% 0.27% 0.50%
based on net asset value
1 year 26.43% 24.46% 34.60% 3.12% 4.65%
from inception 13.69% 11.92% 9.78% 4.92% 5.45%
Net Assets, end of
year (mil) $17,335.3 $13,487.8 $10,989.1 $8,316.6 $8,081.8
Ratios to average net assets:
Ratio of expenses to average
net assets (a) 0.96% 0.96% 1.19% 1.81% 2.00%
Ratio of net investment
income to average
net assets (a) 0.96% 1.10% 1.16% 0.77% 0.63%
Portfolio turnover rate 6.31% 5.93% 6.90% 6.56% 0.62%
Average commission rate $0.12 $0.12 $0.12
(a) In 1997, 1996, 1995 and 1994, the adviser voluntarily waived its
fee. Had the adviser not done so in 1997, 1996, 1995 and 1994,
the ratio of expenses to average net assets would have been 1.69%,
1.68%, 1.94% and 2.00% and the ratio of net investment
income to average net assets would have been 0.23%, 0.38%, 0.41% and
0.58%, respectively.
See notes to financial statements
NAIC Growth Fund, Inc.
Portfolio of Investments - December 31, 1997
% Common Stock Shares Cost Market
1.8 Agriculture
Monsanto 7,500 65,339 315,000
1.7 Auto Replacement
Dana Corp. 4,000 53,250 190,000
O'Reilly Automotive * 4,000 84,750 105,000
9.8 Banking
Citicorp 4,000 79,167 505,750
Comerica, Inc. 2,000 58,750 180,500
First Chicago NBD 2,000 64,750 167,000
Huntington Banc. 13,207 91,093 475,452
Synovus Financial 11,250 81,125 368,438
2.7 Building Products
Clayton Homes 10,000 131,981 180,000
Johnson Controls 6,000 96,895 286,500
3.7 Chemicals
OM Group, Inc. 6,000 195,562 219,750
RPM 12,500 119,125 190,625
Sigma Aldrich 5,000 94,937 198,750
Solutia, Inc. 1,500 6,109 40,031
1.2 Computers
IBM 2,000 99,387 209,250
3.4 Consumer Products
Colgate-Palmolive 4,000 98,500 294,000
Newell Co. 7,000 153,000 297,500
4.8 Electrical Equipment
CBS Corp. 5,000 102,437 147,188
Federal Signal 5,000 119,875 108,125
General Electric 4,000 56,000 293,500
Vishay Intertech. * 12,127 132,026 285,742
2.4 Electronics
Dynatech Corp. * 6,000 111,138 281,250
Molex, Inc. 4,687 93,240 134,751
11.1 Ethical Drugs
Amer. Home Prod. 3,000 90,510 229,500
Bristol-Myers Squibb 3,000 106,538 283,875
Eli Lilly 6,000 91,688 417,750
Johnson & Johnson 2,000 45,500 131,750
Merck & Co., Inc. 2,500 83,320 265,000
Pfizer, Inc. 4,000 58,750 298,250
Pharmicia & Upjohn 7,975 200,070 292,084
9.2 Financial Services
Allied Group 11,250 131,625 322,031
Beneficial Corp. 4,000 119,538 332,500
Cognizant Corp. 1,500 35,799 66,938
Household Intl. 5,000 123,312 638,125
State Street Boston 4,000 75,500 232,750
3.3 Food
ConAgra 6,000 78,125 198,750
Heinz, H.J. 3,000 67,250 152,438
McCormick & Co. 8,000 168,850 224,000
1.5 Grocery
Hannaford Bros. 6,000 138,562 260,625
3.1 Hospital Supplies
Biomet Corp. 7,000 122,250 179,375
Stryker Corp. 6,000 121,750 223,500
St. Jude Medical* 4,500 100,125 137,250
0.8 Industrial Services
Donaldson Co. 3,000 37,588 135,188
0.9 Instruments
TSI, Inc. 15,000 48,375 150,000
3.2 Insurance
AFLAC, Inc. 3,750 51,875 191,719
Amer. Int'l. Group 3,375 79,052 367,031
3.0 Machinery
Cooper Industries 3,500 129,018 171,500
Emerson Electric Co. 6,000 113,518 338,625
3.6 Multi Industry
Pentair 3,000 23,875 107,812
Teleflex 6,000 145,188 226,500
Thermo Electron * 6,750 106,688 297,000
0.9 Office Equipment
American Bus. Prod. 7,000 158,000 151,375
1.0 Paper
Mead Corp. 6,000 74,144 168,000
0.7 Petroleum
Kerr McGee 2,000 95,250 126,625
2.3 Publishing
Reuters Holdings 6,000 125,375 397,500
1.9 Restaurants
McDonald's 6,000 83,125 286,500
Tricon Global Rest. * 1,200 16,876 34,875
1.2 Semiconductor
Dallas Semiconductor 5,000 107,750 203,750
4.0 Soft Drinks
Coca Cola 4,000 82,250 266,750
PepsiCo 12,000 205,374 435,000
3.3 Telecommunications
ADC Telecom. * 9,000 21,234 375,750
Cincinnati Bell 6,000 55,250 186,000
1.3 Transportation
Sysco Corp. 5,000 142,750 227,812
1.4 Utilities
Century Telephone 5,000 140,625 249,063
1.1 Water Treatment
Ionics * 5,000 117,188 195,625
90.3 $6,307,866 $15,650,593
Short-term Investments
9.2 United States Treasury Bill,
maturing 1/8/98 1,598,476
4.2 Misc. Cash Equivalents 734,919
13.4 2,333,395
Total Investments 17,983,988
(3.7) All other assets less liabilities (648,683)
100.0% Total Net Assets $17,335,305
* non-income producing security
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, 1997:
Gross unrealized appreciation $ 9,361,102
Gross unrealized depreciation (18,375)
Net unrealized appreciation $ 9,342,727
Federal income tax cost $ 6,307,866
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 Advisory Agreement provides that the Fund may not incur
annual aggregate expenses in excess of two percent (2%) of the first
Ten Million Dollars of the Fund's average net assets, one and one-half
percent (1 1/2%) of the next Twenty Million 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, and the pro rata portion of the estimated
annual excess expenses will be offset against the Investment Adviser's
monthly fee. A director of the Fund is of counsel to the Fund's legal
counsel. Legal counsel has incurred $30,057 for ongoing legal services
during the year.
(3) MANAGEMENT ARRANGEMENTS
Investment Adviser - National Association of Investors Corporation
(NAIC) 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
$114,329 of its total fee of $118,047 for the year ended 1997.
NAIC entered into a Consulting Agreement dated January 1, 1997 with
Hutner Capital Management Inc. ("Hutner"), an investment adviser,
pursuant to which Hutner acted as consultant and adviser to NAIC with
respect to the investment of certain assets of the Fund (constituting
approximately 10% of the Fund's total assets). The Consulting
Agreement required NAIC to evaluate the recommendations of Hutner and,
in its sole and absolute discretion, to accept or reject such
recommendations in accordance with applicable law, its fiduciary
obligations to the Fund and the terms of the Advisory Agreement. NAIC
paid Hutner $3,718 in 1997 for its services. The Consulting Agreement
terminated on December 31, 1997. Plan Agent - In 1997, the Fund
changed custodians from First Chicago NBD (NBD) to Michigan National
Bank (MNB). NBD and MNB served as the Fund's custodians pursuant to
the Custodian Agreement. As the Fund's custodians, NBD and MNB
received 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 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 15, 1997, a distribution of $0.0525 per share aggregating
$81,351 was declared from net investment income. The dividend was paid
August 1, 1997, to shareholders of record June 30, 1997. On December
4, 1997, a dividend of $0.413 per share aggregating $651,296 was
declared from net investment income and net realized gains payable
January 29, 1998, to shareholders of record December 29, 1997.
The Board of Directors also declared a 100% stock dividend on August
22, 1997. The stock dividend was paid October 1, 1997 to shareholders
of record September 12, 1997. All per share disclosures have been
retroactively adjusted for the stock dividend.
(6) Investment transactions
Purchases and sales of securities, other than short-term securities for
the year ended December 31, 1997, were $892,228 and $1,235,419,
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, 1997, 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, 1997, 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, 1997,
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 7, 1998.
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 $14 3/4 on December 31, 1997. 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 withoutearning 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 and a termination fee of up to one ($1.00)
dollar.
With respect to purchases from voluntary cash payments, the Plan
Agent will charge 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,
Clinton Twp., MI
Kenneth S. Janke
President,
Bloomfield Hills, MI
Benedict J. Smith
Director,
Birmingham, MI
James M. Lane
Director,
Grosse Pointe Farms, MI
Peggy L. Schmeltz
Director,
Bowling Green, OH
Cynthia P. Charles
Director,
Ambler, PA
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 248-583-6242 Ext. 322.
