NOTICE AND PROXY STATEMENT
NAIC GROWTH FUND, INC.
NOTICE OF 2003 ANNUAL MEETING OF SHAREHOLDERS
April 17, 2003
To the shareholders of the NAIC Growth Fund, Inc.:
Notice is hereby given that the 2003 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 17, 2003 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 Plante & Moran, PLLC
as independent auditors of the Fund for the calendar year
ending December 31, 2003; 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
27, 2003 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 28, 2003
PROXY STATEMENT
NAIC GROWTH FUND, INC.
711 West Thirteen Mile Road
Madison Heights, Michigan 48071
2003 Annual Meeting of Shareholders
April 17, 2003
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 2003 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 17, 2003. The approximate mailing date of
this Proxy Statement is February 28, 2003.
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 February 27,
2003 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,
2002, the Fund had outstanding 2,264,097 shares of common stock, par
value $0.001 per share.
To the knowledge of the Fund as of December 31, 2002, the
following number of shares 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. No person is known by the Fund to be the beneficial
owner of more than 5% of the Fund's issued and outstanding common
stock.
Number of Shares and Nature Percent
Owner of Beneficial Ownership as of of Class
December 31, 2002 (a)
All officers and
Directors as a group
(8 persons) 164,834 7.3%
Thomas E. O'Hara,
Chairman and Director 9,020 *
Kenneth S. Janke,
President, Treasurer
and Director 19,189 *
Lewis A. Rockwell,
Secretary and Director 18,957 *
Peggy L. Schmeltz,
Director 14,980 *
Carl A. Holth, Director 1,690 *
James M. Lane, Director 2,300 *
Benedict J. Smith,
Director 1,309 *
Luke E. Sims, Director 97,389 4.3%
(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 7,455
shares owned by the Mutual Investment Club of Detroit Limited
Partnership, a Michigan limited partnership, of which Mr. Rockwell and
revocable living trusts of which Messrs. O'Hara and Janke 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 250 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 T. Sobol (Vice President of
Finance of the National Association of Investors Corporation) are the sole
partners. The shares shown for Mr. Janke include 10,139 shares owned
by a trust of which he is trustee and 1,345 shares owned by his wife. The
shares shown for Mr. Holth are owned by a revocable living trust of which
he is trustee. Mr. Sims has informed the Fund that he beneficially owns an
aggregate of 97,389 shares, of which 45 are owned by his self-directed
Keogh plan, 28,099 are owned individually, 17,415 are owned through
custodianships for his children, and 51,830 are owned through a limited
liability company established by Mr. Sims of which he is the sole
manager, has complete control over the investment decisions and is the
sole beneficial owner of the securities held by such limited liability
company.
* Less than 1%.
The Fund has no standing 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.
The Fund also has an audit committee comprised of Messrs. O'Hara,
Holth and Smith. The audit committee reviews the services provided by
the Fund's independent accountants and consults with the accountants.
Messrs. Holth and Smith are independent directors within the meaning of
Rule 4200(a)(15) of the National Association of Securities Dealers' listing
standards. A copy of the report of the audit committee is attached hereto
as Exhibit A. The Board of Directors of the Fund has not 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, 2002 all filing
requirements were met, though Messrs. O'Hara, Janke, and Rockwell each
inadvertently filed late Form 4's. Mr. O'Hara was late in filing one report
for three different transactions; Mr. Rockwell was late in filing two reports
for seven different transactions; and Mr. Janke was late in filing three
reports for three different transactions.
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.
Directors Who Are Interested Persons of the Fund
Thomas E. O'Hara
Age 87
Chairman of the Board and Director
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
Chairman Emeritus of the Board and Trustee of the National
Association of Investors Corporation, a nonprofit corporation
engaged in investment education ("NAIC") and Chairman Emeritus
and Director of Growth Fund Advisor, Inc., the Fund's investment
adviser (the "Investment Adviser") February, 2002 to present.
Chairman and Trustee of NAIC and Chairman and Director of the
Investment Adviser to February, 2002.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
None.
Kenneth S. Janke
Age 68
Director, President and Treasurer
Term of Office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
Chairman and Trustee of NAIC and Chairman, Chief Executive Officer
and Director of the Investment Adviser July, 2002. Chairman,
Chief Executive Officer and Trustee of NAIC and Chairman and Chief
Executive Officer and Director of the Investment Adviser from
February, 2002 to July 2002. President and Director of the Investment
Adviser to February, 2002.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
Director, AFLAC.
Lewis A. Rockwell
Age 84
Director and Secretary
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
Counsel to the law firm of Bodman, Longley & Dahling LLP, counsel to
the Fund, NAIC and the Investment Adviser; Trustee and Secretary of
NAIC; Director and Secretary of the Investment Adviser.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
None.
Peggy L. Schmeltz
Age 75
Director
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years.
Adult Education Teacher; Trustee of NAIC; Director of Bowling Green
State University Foundation Board. Former member of NYSE Advisory
Committee.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
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.
Carl A. Holth
Age 70
Director
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
President and Director, Greater Detroit Capital Corporation; Financial
Consultant and President of Carl A. Holth & Associates, Inc. (a private
financial consulting and business appraisal firm); Director, Sunshine
Fifty, Inc., and Harrison Piping Supply, Inc.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
None.
Benedict J. Smith
Age 82
Director
Term of office
one year.
Served as a director since 1989.
Principal Occupation(s) During Past 5 Years
Retired; Director and Treasurer, Detroit Executive Service Corps;
Director, Vista Maria (nonprofit charitable organization); Trustee,
Henry Ford Health System, Behavioral Services.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
None
James M. Lane
Age 73
Director
Term of office
one year.
Served as a director since 1996.
Principal Occupation(s) During Past 5 Years
Retired; Director, Wheaton College, William Tyndale College,
Baseball Chapel, Inc. and Christian Camps, Inc.
Number of Portfolios in Fund Complex Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
Chateau Communities, Inc. (Owner and operator of manufactured
home communities)
Luke E. Sims
Age 53
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; Director, Wilson-Hurd Mfg.
Co. and Notre Dame Middle School, Inc.
Number of Portfolios in Fund Overseen by Director or
Nominee for Director**
One
Other Directorships Held by Director or Nominee for Director
LaCrosse Footwear, Inc. (manufacturer and marketer of sporting and
industrial 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 is a wholly owned subsidiary of
N.A.I.C. Holding Corporation, a Michigan corporation which conducts no
business activities. NAIC and N.A.I.C. Holding Corporation are each
wholly owned subsidiaries of the National Association of Investment
Clubs Trust (the "Trust"). 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 director or nominee for election as director, nor any of their
immediate family members, owns any securities beneficially or of record
in the Fund's Investment Adviser or any of its affiliates.
There were four meetings of the Board of Directors held during
2002. 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
2002.
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, owned by each director and nominee, valued at price per
share of $10.90 as of February 6, 2003.
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 $50,001 - $100,000 $50,001 - $100,000
Kenneth S. Janke Over $100,000 Over $100,000
Lewis A. Rockwell Over $100,000 Over $100,000
Peggy L. Schmeltz Over $100,000 Over $100,000
*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 $10,001 - $50,000
Benedict J. Smith $10,001 - $50,000 $10,001 - $50,000
James M. Lane $10,001 - $50,000 $10,001 - $50,000
Luke E. Sims Over $100,000 Over $100,000
*The Fund is not part of a family of investment companies.
Compensation
The following table sets forth the aggregate compensation paid to
all directors in 2002. 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 2002 in excess of $60,000.
Directors Who Are Interested Persons of the Fund
Name of Person,
Position
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 Fund Complex Paid to Directors**
None
Name of Person,
Position
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 Fund Complex Paid to Directors**
None
Name of Person,
Position
Lewis A. Rockwell,
Secretary 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 Fund Complex Paid to Directors**
None
Name of Person,
Position
Peggy L. Schmeltz,
Director
Aggregate Compensation from Fund*
$1900.00
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Fund Complex Paid to Directors**
$1900.00
*All amounts shown are for service as a director.
**The Fund is not part of any fund complex.
Directors Who Are Not Interested Persons of the Fund
Name of Person,
Position
Carl A. Holth,
Director
Aggregate Compensation from Fund*
$1900.00
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Fund Complex Paid to Directors**
$1900.00
Name of Person,
Position
James M. Lane,
Director
Aggregate Compensation from Fund*
$1900.00
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Fund Complex Paid to Directors**
$1900.00
Name of Person,
Position
Benedict M. Smith,
Director
Aggregate Compensation from Fund*
$1900.00
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Fund Complex Paid to Directors**
$1900.00
Name of Person,
Position
Luke E. Sims,
Director
Aggregate Compensation from Fund*
$1900.00
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Fund Complex Paid to Directors**
$1900.00
*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)
The Board of Directors has selected Plante & Moran, PLLC,
independent accountants, to examine the financial statements of the Fund
for the year ending December 31, 2003. 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 accountants for the Fund.
AUDIT FEES,
FINANCIAL INFORMATION, SYTEM DESIGNS AND
IMPLEMENTATION FEES, AND
ALL OTHER FEES
Fees paid to Plante & Moran, PLLC for the last annual audit were
$18,000. There were no financial information systems design and
implementation fees or other fees paid to Plante & Moran, PLLC for the
year ending December 31, 2002.
PROPOSALS OF SHAREHOLDERS
Shareholder proposals for the 2004 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 November 28, 2003 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
February 28, 2003
Lewis A. Rockwell, Secretary
EXHIBIT A
Report of Audit Committee
February 12, 2003
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, 2002.
We have discussed with the independent auditors 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 auditors 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 for the year ended December 31,
2002.
Thomas E. O'Hara, Chairman
Carl A. Holth, Member
Benedict J. Smith, Member