NOTICE AND PROXY STATEMENT
NAIC GROWTH FUND, INC.
NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS
April 20, 2006
To the shareholders of the NAIC Growth Fund, Inc.:
Notice is hereby given that the 2006 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, April 20, 2006 at 2:00 p.m.
for the following purposes:
1. To elect a Board of eight (8) Directors;
2. To ratify the selection of Plante & Moran, PLLC as
independent registered public accountants of the Fund for the
calendar year ending December 31, 2006; 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 February 22,
2006 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
February 24, 2006
PROXY STATEMENT
NAIC GROWTH FUND, INC.
711 West Thirteen Mile Road
Madison Heights, Michigan 48071
2006 Annual Meeting of Shareholders
April 20, 2006
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 2006 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 April
20, 2006. The approximate mailing date of this Proxy Statement is February
24, 2006.
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
registered public accountants. 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 February 22, 2006 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, 2005, the Fund had
outstanding 2,792,336 shares of common stock, par value $0.001 per share.
To the knowledge of the Fund as of December 31, 2005, the number of
shares set forth below of the Fund's common stock $0.001 par value were
beneficially owned by each officer, director and nominee and by all directors
and officers of the Fund as a group. The address of each is the address of the
Fund.
Number of shares and Nature
of Beneficial Ownership as
Owner of December 31, 2005 (a) Percent of Class
All Officers
as a group
(8 persons) 221,548 7.9%
Thomas O'Hara
Chairman & Director 12,564 *
Kenneth S. Janke,
President, Treasurer
and Director 25,558 *
Lewis A. Rockwell
Secretary and Director 32,253 1.2%
Peggy L. Schmeltz
Director 26,910 1.0%
Carl A. Holth
Director 2,157 *
James M.Lane
Director 2,300 *
Benedict J. Smith
Director 2,096 *
Luke E. Sims
Director 117,710 4.2%
(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 8,573 shares owned
by the Mutual Investment Club of Detroit Limited Partnership, a Michigan
limited partnership, of which revocable living trusts of which Messrs. O'Hara,
Janke and Rockwell are trustees, are general partners. Mr. O'Hara's trust is
also the managing general partner of the O'Hara Family Limited Partnership,
which is a general partner of the Mutual Investment Club of Detroit Limited
Partnership. 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 319
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 Richard A. Holthaus (President and CEO of
the National Association of Investors Corporation) are the sole partners. The
shares shown for Mr. Janke include 14,309 shares owned by a trust of which
he is trustee and 2,358 shares owned by his wife. Mr. Sims has informed the
Fund that he beneficially owns an aggregate of 117,710 shares, of which
97,569 are owned individually, and 20,141 are owned through a custodianship
for one of his children.
* Less than 1%.
The Fund's Board of Directors does not have a standing nominating
committee or committee performing similar functions as the Board has
determined, given its relatively small size, to perform this function as a
whole. The Board does not currently have a charter or other written policy
with regard to the nomination process, or a formal policy with respect to the
consideration of director candidates. The nominations of the directors
standing for re-election at the 2006 annual meeting were approved by the
Board of Directors, including Messrs. Holth, Smith, Lane and Sims, who are
independent directors within the meaning of Rule 19(a) of the Chicago Stock
Exchange Rules.
Qualifications for consideration as a board nominee may vary
according to the particular areas of expertise being sought as a complement to
the existing board composition. In making its nominations, the Board of
Directors considers relevant factors, including an individual's business
experience, breadth of knowledge about issues and matters affecting the Fund,
time available for meetings and consultation regarding the Fund matters, and
other particular skills and experience possessed by the individual. The Board
desires a diverse group of candidates who possess the background, skills and
expertise to make a significant contribution to the Board, the Fund and its
shareholders. In the event of a need for a new or additional director, the
Board of Directors would evaluate potential nominees by reviewing their
qualifications, results of personal interviews and such other information as
they may deem relevant.
The Fund does not currently employ an executive search firm, or pay a
fee to any other third party, to assist in identifying or evaluating potential
qualified candidates for director positions. Since 1989, the Board of
Directors has nominated the current directors for re-election at each annual
meeting of shareholders. All of the Fund's current members of the Board of
Directors have served as directors since 1989, except Mr. Lane, who became a
director in 1996, and Mr. Sims, who became a director in 2002.
The Board has not established special procedures for the Fund's
shareholders to submit director recommendations. If the Secretary of the
Fund were to receive recommendations of candidates from the Fund's
shareholders, the Board of Directors would consider such recommendations in
the same manner as all other candidates.
Shareholders of the Fund may send communications to the Board to
the attention of the Fund's Secretary at the Fund's principal executive
offices. All shareholder communications shall be compiled by the Secretary
and forwarded directly to the Board or the director as indicated in the letter.
All letters will be forwarded to the appropriate party. The Board of Directors
reserves the right to revise this in the event that this process is abused,
becomes unworkable or otherwise does not efficiently serve its purpose.
The Board of Directors does not currently have a policy with regard to
the attendance of board members at its annual meeting of shareholders. All of
the directors attended the Fund's 2005 Annual Meeting of Shareholders.
The Fund has no standing compensation committees of the Board of
Directors, or committee performing a similar function.
The Fund has an audit committee comprised of Messrs. Holth, Smith
and Lane. The audit committee is responsible for the appointment,
compensation, retention and oversight of the work of the Fund's independent
accountants. The audit committee met twice during 2005. Messrs. Holth,
Smith and Lane meet the requirements for independence set forth in Rule
19(b) of the Chicago Stock Exchange Rules. They are not "Interested
Persons" fo the Fund as defined in section 2(A)(19) of the Investment
Company Act of 1940. A copy of the report of the audit committee is
attached hereto as Exhibit A. The Board of Directors of the Fund has adopted
a written charter for the audit committee.
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.
Section 16(a) Beneficial Ownership Reporting Compliance
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, 2005 all such reports were timely filed.
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. Directors
will be elected by a plurality of votes cast at the Meeting. 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. Listed below are all nominees and their
backgrounds. "Interested Persons" of the Fund are those persons who are
"interested persons" of the Fund within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940.
Nominee Directors
Nominee Directors Who Are Interested Persons of the Fund
Thomas E. O'Hara
Age 90
Chairman of the Board and Director
Term of office
one year.
Served as Chairman as a director since 1989.
Principal Occupation(s) During Past 5 Years
Chairman Emeritus of the Board (since 2002) and Trustee (since 1951) of
the National Association of Investors Corporation, a nonprofit
corporation engaged in investment education ("NAIC") and Chairman
Emeritus (since 2002) and Director of the Growth Fund Advisor, Inc.
(since 1999), the Fund's investment adviser ("the Investment Adviser").
Chairman of NAIC (from 1951 to 2002) and Chariman of the Investment
Advisor (from 1999-2002).
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
Kenneth S. Janke
Age 71
Director, President and Treasurer
Term of office
one year.
Served as a President and a director since 1989.
Principal Occupation(s) During Past 5 Years
Chairman and Trustee of NAIC (since 2002) and Chairman, Chief Executive
Officer and Director (since 2002) and President and Treasurer
(since 1990) of the Investment Adviser. Chief Executive Officer of
NAIC (from 1981 to 2002).
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
Director, AFLAC Incorporated (Insurance).
Lewis A. Rockwell
Age 87
Director and Secretary
Term of office
one year.
Served as a Secretary and as a director since 1989.
Principal Occupation(s) During Past 5 Years
Chairman and Director of Sunshine Fifty, Inc., Trustee (since 1956)
and Secretary (since 1987) of NAIC; Director; and Secretary of the
Investment Adviser (since 1999).
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
Peggy Schmeltz
Age 78
Director
Term of office
one year.
Served as director since 1989.
Principal Occupation(s) During Past 5 Years
Adult Education Teacher; Trustee of NAIC (since 1995); Director of
Bowling Green State University Foundation Board. Former member of
NYSE Advisory Committee (1992 to 1994).
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
*The address of each is the address of the Fund. Messrs. O'Hara,
Janke and Rockwell and Mrs. Schmeltz are interested persons of the Fund
within the meaning of Section 2(a)(19) of the Investment Company Act of
1940. Mr. O'Hara is an interested person because he is a trustee of NAIC
and a director of the Investment Adviser. Messrs. Janke and Rockwell
are interested persons because they are trustees and officers of NAIC
and directors and officers of the Investment Adviser, as noted above.
Mrs. Schmeltz is an interested person because she is a trustee of NAIC.
**The Fund is not part of any fund complex.
Nominee Directors Who Are Not Interested Persons of the Fund
Carl A. Holth
Age 73
Director
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
Director, Sunshine Fifty, Inc., and Harrison Piping Supply, Inc.
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
Benedict J. Smith
Age 85
Director
Term of office
one year.
Served as a director since 1996.
Principal Occupation(s) During Past 5 Years
Retired; Director, Detroit Executive Service Corps; Director,
Vista Maria (a nonprofit charitable organization).
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
James M. Lane
Age 76
Director
Term of office
one year.
Served as a director since 1996.
Principal Occupation(s) During Past 5 Years
Retired; Director, Wheaton College, Baseball Chapel Inc. and Christian
Camps, Inc.
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
None.
Luke E. Sims
Age 56
Director
Term of office
one year.
Served as a director since 2002.
Principal Occupation(s) During Past 5 Years
Partner in the law firm of Foley & Lardner LLP and Director,
Wilson-Hurd Mfg. Co.
Number of Portfolios in Fund Complex Overseen by Director**
One
Other Directorships Held by Director (Public Companies)
LaCrosse Footwear, Inc. (developer and marketer of premium work and
outdoor footwear).
*The address of each is the address of the Fund.
**The Fund is not part of any fund complex.
The Fund's Investment Adviser, Growth Fund Advisor, Inc., is a
wholly owned subsidiary of N.A.I.C. Holding Corporation, a Michigan
corporation which conducts no business activities. The address of the
Investment Adviser is the address of the Fund. N.A.I.C. Holding Corporation
is a wholly owned subsidiarys of the National Association of Investment
Clubs Trust (the "Trust"). The Trust is the sole voting member of the NAIC.
Mr. O'Hara is the Chairman Emeritus and a Trustee of the Trust; Mr. Janke is
the Chairman and a Trustee of the Trust; and Mr. Rockwell is the Secretary
and a Trustee of the Trust. The Fund is the Investment Adviser's sole advisory
client. No other person provided any significant administrative or business
affairs management services to the Fund during 2005.
The Fund's principal underwriter is Broker Dealer Financial Services
Corp., whose address is 8800 NW 62nd Avenue, P.O. Box 6240, Johnston,
Iowa 50131.
No director or nominee for election as director who is not an
Interested Person of the Fund, nor any of their immediate family members,
owns any securities beneficially or of record in the Fund's Investment
Adviser or principal underwriter, or any of their affiliates.
There were three meetings of the Board of Directors held during 2005.
Each Director attended at least 75% of the meetings of the Board of Directors
and committees of the Board on which he or she served during 2005.
Dollar Range of Common Stock Owned by Directors and Nominee
The following tables set forth the dollar range of the Fund's common
stock, par value $0.001 per share, which is the Fund's only equity security,
beneficially owned by each director and nominee, valued at price per share of
$8.51 as of January 5, 2006.
Nominee Directors Who Are Interested Persons of the Fund
Name of Director Dollar Range of Equity Aggregate Dollar Range
or Nominee Securities in the Fund of Equity Securities in
All Funds Overseen or to
be Overseen by Director
or Nominee in Family of
Investment Companies*
Thomas E. O'Hara Over $100,000 None
Kenneth S. Janke Over $100,000 None
Lewis A. Rockwell Over $100,000 None
Peggy L. Schmeltz Over $100,000 None
*The Fund is not part of a family of investment companies.
Nominee Directors Who Are Not Interested Persons of the Fund
Name of Director Dollar Range of Equity Aggregate Dollar Range
or Nominee Securities in the Fund of Equity Securities in
All Funds Overseen or to
be Overseen by Director
or Nominee in Family of
Investment Companies*
Carl A. Holth $10,001 - $50,000 None
Benedict J. Smith $10,001 - $50,000 None
James M. Lane $10,001 - $50,000 None
Luke E. Sims Over $100,000 None
*The Fund is not part of a family of investment companies.
Compensation
The following tables sets forth the aggregate compensation paid to all
directors in 2005. Directors who are affiliated with the Investment Adviser or
the Investment Adviser's affiliates do not receive any compensation for
service as a director. The Chairman and President are not compensated by the
Fund, except for reimbursement for out-of-pocket expenses relating to
attendance at meetings and other operations of the Fund. No other officer of
the Fund received compensation from the Fund in 2005 in excess of $60,000.
Directors Who Are Interested Persons of the Fund
Nominee Directors Who Are Interested Persons of the Fund
Thomas E. O'Hara
Chairman and Director
Aggregate Compensation from Fund*
None
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
None
Kenneth S. Janke
President, Treasurer and Director
Aggregate Compensation from Fund*
None
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
None
Lewis A. Rockwell
Secretary and Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
$1,425
Peggy Schmeltz
Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
$1,425
Directors Who Are Not Interested Persons of the Fund
Carl A. Holth
Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$1,425
James M. Lane
Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$1,425
Benedict M. Smith
Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$1,425
Luke E. Sims
Director
Aggregate Compensation from Fund*
$1,425
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$1,425
*All amounts shown are for service as a director
**The Fund is not part of any fund complex.
PROPOSAL NO. 2
(Selection of Independent Accounts)
Plante & Moran, PLLC, independent registered public accountants,
has been selected by the audit committee to examine the financial statements
of the Fund for the year ending December 31, 2006. Unless a contrary
specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of such accountants. Representatives of Plante &
Moran, PLLC 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. The Board of Directors
recommends that shareholders vote "FOR" the ratification of Plante & Moran,
PLLC as the independent registered public accountants to examine the
financial statements of the Fund for the year ending December 31, 2006.
Audit Fees. Plante & Moran, PLLC was paid $15,075 for the fiscal
year ended December 31, 2005 and $16,250 for the fiscal year ended
December 31, 2004 by the Fund for audit fees.
Audit-Related Fees. Plante & Moran, PLLC was not paid any audit-
related fees by the Fund in either of the last two fiscal years.
Tax Fees. Plante & Moran, PLLC was paid $4,200 for the fiscal year
ended December 31, 2005 and $4,200 for fiscal year ended December 31,
2004 by the Fund for tax fees, for services in connection with the preparation
of the Fund's tax returns and assistance with IRS notice and tax matters.
All Other Fees. Plante & Moran, PLLC was paid $0 for the fiscal year
ended December 31, 2005 for all other fees and $6,500 for the fiscal year
ended December 31, 2004 by the Fund for all other fees, for services in
connection with (i) the review of registration documents and consent
procedures and a comfort letter and related procedures with respect to the
Fund's registration statement filed with the Securities and Exchange
Commission for its follow-on offering, and (ii) assistance with year-end
dividend calculation and reporting.
"Audit fees" are fees paid by the Fund to Plante & Moran, PLLC for
professional services for the audit of our financial statements, or for
services that are usually provided by an auditor in connection with
statutory and regulatory filings and engagements. "Audit-related fees" are
fees for assurance and related services that are reasonably related to the
performance of the audit or review of financial statements. "Tax fees"
are fees for tax compliance, tax advice and tax planning. All other fees
are fees billed for any services not included in the first three categories.
None of the services covered under the captions "Audit Related Fees,"
"Tax Fees," and All Other Fees with Respect to Plante & Moran, PLLC were
provided under the de minimis exception to audit committee approval of 17
CFR 210.2-01(c) 7(i)(C) and (ii). Plante & Moran, PLLC was not engaged
during the last two fiscal years to provide non-audit services to Investment
Adviser and its affiliates that provide ongoing services to the Fund that
relate directly to the operations and financial reporting of the Fund
("Other Non-Audit Services"). Under the audit committee charter, the audit
committee is to pre-approve all non-audit services of the Fund and all
Other Non-Audit Services. The audit committee has not adopted "pre-approval
policies and procedures" as such term is used in 17 CFR 210.2-01(c)(7)(i)(B)
and (ii).
PROPOSALS OF SHAREHOLDERS
Shareholder proposals for the 2007 Annual Meeting of Shareholders
must comply with applicable rules of the Securities and Exchange
Commission (including Rule 14a-8) and be received by the Fund at P.O. Box
220, Royal Oak, Michigan 48068 before the close of business on October 28,
2006 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
Lewis A. Rockwell, Secretary
February 24, 2006
EXHIBIT A
Report of Audit Committee
February 15, 2006
To the Board of Directors of the NAIC Growth Fund, Inc.:
We have reviewed and discussed with management the Fund's audited
financial statements as of and for the year ended December 31, 2005.
We have discussed with the independent registered public accountants the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing
Standards Board of the American Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from the
independent registered public accountants required by Independence Standard
No. 1, Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and have discussed with the auditors the
auditors' independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Fund's Annual Report to shareholders required by Section 30(e) of the
Investment Company Act of 1940 and Rule 30d-1 there under for the year
ended December 31, 2005 for filing with the Securities and Exchange
Commission.
Carl A. Holth, Chairman
Benedict J. Smith, Member
James M. Lane, Member