January 23, 2008
Dear Fellow Shareholders,
For
2007, our Funds net asset value (NAV) declined 2.0%, after taking into account
the $0.8765 per share year-end dividend. The S&P 500, calculated on a total
return basis, increased 5.5% for the year.
As
weve said before, we think NAV is the only proper way to measure the
performance of a closed-end fund, so we ignore the short-term movement of the
Funds stock price. However, we should note that the discount between the
Funds stock price and NAV narrowed from 10.7% to 2.2% during the year.
Since the beginning of 2000,
the Funds NAV has outperformed the S&P 500 as shown in the graph below:
Return of $100 invested in NAIC Growth Fund, Inc. and
S&P 500 since 2000
Our
Funds performance suffered because:
A. Our
Fund was overweight in financial companies. As we noted in the 2007 Semiannual
Report, at mid-year, our Fund had 29% of its assets in financial companies
(banks, financial companies and insurers), compared to an S&P 500 weighing
of approximately 22% at the beginning of 2007 and 18% at the end of the year.
Financial companies suffered from subprime mortgage woes and sloppy risk
management.
B. Our
investments in Home Depot (HD) and Lowes (LOW) suffered as the U.S. housing
industry continued its sharp decline.
Our
long-term goal is to outperform the S&P 500 over an extended time period,
but we have to give ourselves a C- for our 2007 investment performance. Were
not used to getting average or below average grades, so were not pleased with
our short-term performance.
Despite
the 2007 problems, were still very happy with the overall Fund portfolio.
Virtually all of our portfolio companies continue to be profitable and growing
despite their stock market performance. We view a share of stock as a piece of
the underlying business (in accordance with Benjamin Grahams wisdom).
Therefore, as long as we can identify and invest in great growth companies,
were confident that our Funds investment performance will eventually track
the operating performance of its underlying portfolio securities.
In
early 2008, Standard & Poors dropped United Parcel Service from the ranks
of its AAA-rated industrial companies, leaving only five companies in that
elite category. Were happy to note that the Fund owns four of these five great
companies---Automatic Data Processing, Inc. (ADP) (purchased in early 2008),
General Electric (GE), Johnson & Johnson (JNJ) and Pfizer (PFE). (In case
youre curious, the one missing company is
ExxonMobil
(XON).) We favor companies with extremely high quality balance sheets and
conservative finances. We view investing as a long-term proposition, and have
no desire to risk a permanent loss of our capital.
Weve
added some companies to the portfolio that provide some insight into our
investment thinking. We bought Eaton Vance (EV) in the Fund during 2007 and
Franklin Resources, Inc. (BEN) in early 2008. We love the mutual fund
management businessgreat operating, pretax and after-tax margins; very good
(albeit somewhat cyclical) growth; excellent demographics; well-recognized
trademarks and operational scale that provide high barriers to entry; and
superb cash generation. While the mutual fund managers will experience some
near-term speed bumps as the stock market bounces around, the long-term future
for the premier fund managers is excellent.
While
our investment performance during 2007 was nothing to write home about, we took
a number of important steps to position the Fund for the future:
1.
In October the Fund
moved to the American Stock Exchange (AMEX). This gave us a better trading
market, with a specialist making a market in our stock.
2.
One of the
immediate benefits of the move to the AMEX was the consolidation of our dual
trading markets and dual trading symbols into one market under one trading
symbol (GRF). Prior to our move to the AMEX, the Funds shares traded on the
Chicago Stock Exchange and in the over-the-counter market, under different
trading symbols. This created confusion and the potential for Fund shareholders
to be taken advantage of.
3.
During the latter
part of the year, we revised the Funds dividend reinvestment plan (DRIP) to
allow participating shareholders to easily reinvest their cash dividends in new
Fund shares. The Funds costs are, for the most part, fixed, so there is a
compelling need to grow the Funds assets, spread these fixed costs over a
larger asset base and get the Funds expense ratio down. Pursuant to the
operation of the revised DRIP, over $1.3 million of the year-end 2007 cash
dividend was invested in new Fund shares.
As
indicated by the Funds name, the NAIC (National Association of Investors
Corporation) plays an important role in the Funds investment philosophy.
During the first half of 2008 we have to change the Funds name, although the
NAICs guiding principles will continue to play an important role in our
investment philosophy. This decision is driven by the NAIC, which recently
headed in a new strategic direction that precludes it from continuing to
license the NAIC name to us. Our new corporate name, Eagle Capital Growth
Fund, Inc. (and logo), is shown on the inside cover of this Annual Report and will
be used starting in May, 2008. Our stock symbol will remain GRF.
From
time to time we are asked about how closely we follow the NAIC investment
philosophy, principles and analytic framework. While we embrace the NAICs
philosophy of long-term investing with a focus on growth companies, we also
employ other analytic tools. Our goal is to try to understand each underlying
business as well as we can, using both quantitative as well as qualitative
tests. As noted above, we try to identify industries (such as the mutual fund
managers and the orthopedic implant makers) where the economics of the industry
are favorable and where all, or virtually all, of the competitors do well.
Therefore, while we embrace the NAICs quantitative approach, we also spend
time on more subjective topics, such as quality of management, operating
philosophy and the industry within which the company operates.
If
you have any questions or comments, please contact us. Of course, as weve
mentioned before, we wont discuss any potential portfolio change (addition or
reduction) that we may be considering.
|
|
|
|
|
|
|
Luke E. Sims
|
|
David C.
Sims
|
e-mail:
luke@simscapital.com
|
|
e-mail:
dave@simscapital.com
|
(414)
530-5680
|
|
(414)
765-1107
|
NAIC Growth Fund,
Inc.
Statement of Assets and Liabilities
As of December 31, 2007
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stockat market value (cost $14,554,978)
|
|
$
|
23,461,361
|
|
|
|
|
Cash and cash-equivalents
|
|
|
1,522,968
|
|
|
|
|
Interest receivable
|
|
|
4,346
|
|
|
|
|
Dividends receivable
|
|
|
47,780
|
|
|
|
|
Prepaid insurance
|
|
|
3,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,039,977
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
10,822
|
|
|
|
|
Accrued expenses
|
|
|
38,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(48,946
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net assets
|
|
|
|
|
$
|
24,991,031
|
|
|
|
|
|
|
|
|
|
Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock- $0.001 par value per share; authorized 50,000,000
shares, outstanding 2,947,082 shares
|
|
$
|
2,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid-in capital
|
|
|
16,091,233
|
|
|
|
|
Overdistributed net investment income
|
|
|
(9,534
|
)
|
|
|
|
Unrealized net appreciation on investments
|
|
|
8,906,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity
|
|
|
|
|
$
|
24,991,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per share
|
|
|
|
|
$
|
8.48
|
|
See Notes to
Financial Statements.
NAIC Growth Fund, Inc.
Statement of Operations
For the Year Ended December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
Investment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
$
|
549,844
|
|
|
|
|
|
|
|
Interest
|
|
|
109,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investment income
|
|
|
|
|
$
|
659,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees
|
|
$
|
201,349
|
|
|
|
|
|
|
|
Legal fees
|
|
|
106,700
|
|
|
|
|
|
|
|
Insurance
|
|
|
27,325
|
|
|
|
|
|
|
|
Transfer agent
|
|
|
27,635
|
|
|
|
|
|
|
|
Audit fees
|
|
|
23,850
|
|
|
|
|
|
|
|
Directors fees and
expenses
|
|
|
10,445
|
|
|
|
|
|
|
|
Custodian fees
|
|
|
12,435
|
|
|
|
|
|
|
|
Mailing and postage
|
|
|
5,721
|
|
|
|
|
|
|
|
Other fees and
expenses
|
|
|
22,809
|
|
|
|
|
|
|
|
Taxes
|
|
|
132
|
|
|
|
|
|
|
|
Annual shareholder
meeting
|
|
|
3,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
|
|
$
|
441,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
$
|
217,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gain and Unrealized
Depreciation on
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized gain on
investments:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
sale of investment securities
|
|
$
|
4,559,958
|
|
|
|
|
|
|
|
Less: cost of
investment securities sold
|
|
|
2,344,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
gain on investments
|
|
|
|
|
$
|
2,215,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on
investments:
|
|
|
|
|
|
|
|
|
|
|
Unrealized
appreciation at end of period
|
|
$
|
8,906,383
|
|
|
|
|
|
|
|
Less:
unrealized appreciation at beginning of period
|
|
|
11,869,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in
unrealized appreciation on investments
|
|
|
|
|
|
(2,963,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
gain and unrealized depreciation on investments
|
|
|
|
|
|
|
|
|
(748,242
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease from
operations
|
|
|
|
|
|
|
|
$
|
(530,266
|
)
|
See Notes to Financial
Statements.
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
Year
Ended
December 31,
2006
|
|
Year
Ended
December 31,
2007
|
|
|
|
|
|
|
|
From
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
232,267
|
|
$
|
217,976
|
|
Net realized gain on
investments
|
|
|
3,081,779
|
|
|
2,215,083
|
|
Net change in unrealized
appreciation on investments
|
|
|
(100,080
|
)
|
|
(2,963,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) from operations
|
|
$
|
3,213,966
|
|
$
|
(530,266
|
)
|
|
|
|
|
|
|
|
|
Distributions to Shareholders
from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(231,328
|
)
|
|
(232,401
|
)
|
Net realized gain from
investment transactions
|
|
|
(3,081,779
|
)
|
|
(2,215,083
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
distribution
|
|
$
|
(3,313,107
|
)
|
$
|
(2,447,484
|
)
|
|
|
|
|
|
|
|
|
From Capital Stock
Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend reinvestment
|
|
|
|
|
|
1,308,377
|
|
Cash Purchases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase from
capital stock transactions
|
|
|
|
|
|
1,308,377
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in net assets
|
|
$
|
(99,141
|
)
|
$
|
(1,669,373
|
)
|
|
|
|
|
|
|
|
|
Total Net
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
$
|
26,759,545
|
|
$
|
26,660,404
|
|
End of period (including
under(over)distributed net investment income
of $4,891 and ($9,534), respectively)
|
|
$
|
26,660,404
|
|
$
|
24,991,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares:
|
|
|
|
|
|
|
|
Shares issued to shareholders
under the Dividend Reinvestment and
Cash Purchase Plan
|
|
|
|
|
|
154,746
|
|
|
|
|
|
|
|
|
|
Shares at beginning of
year
|
|
|
2,792,336
|
|
|
2,792,336
|
|
Shares at end of
period
|
|
|
2,792,336
|
|
|
2,947,082
|
|
See Notes to
Financial Statements.
NAIC Growth Fund, Inc.
Financial Highlights
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the periods ended:
|
|
2003
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value at
beginning of year
|
|
$
|
7.90
|
|
$
|
8.99
|
|
$
|
9.63
|
|
$
|
9.58
|
|
$
|
9.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
0.01
|
|
$
|
0.01
|
|
$
|
0.07
|
|
$
|
0.08
|
|
$
|
0.07
|
|
Net realized gain and
unrealized appreciation (loss) on investments
|
|
$
|
1.39
|
|
$
|
0.81
|
|
$
|
0.05
|
|
$
|
1.07
|
|
($
|
0.26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment
operations
|
|
$
|
1.40
|
|
$
|
0.82
|
|
$
|
0.12
|
|
$
|
1.15
|
|
($
|
0.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.07
|
)
|
|
(0.08
|
)
|
|
(0.08
|
)
|
Realized
gains
|
|
|
(0.30
|
)
|
|
(0.17
|
)
|
|
(0.10
|
)
|
|
(1.10
|
)
|
|
(0.80
|
)
|
Total distributions
|
|
|
(0.31
|
)
|
|
(0.18
|
)
|
|
(0.17
|
)
|
|
(1.18
|
)
|
|
(0.88
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value at end of
period
|
|
$
|
8.99
|
|
$
|
9.63
|
|
$
|
9.58
|
|
$
|
9.55
|
|
$
|
8.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share market price,
end of period last traded price (B)
|
|
$
|
8.26
|
|
$
|
7.83
|
|
$
|
8.70
|
|
$
|
8.00
|
|
$
|
8.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return (C):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on market value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year
|
|
|
(1
|
%)
|
|
(3
|
%)
|
|
13
|
%
|
|
4
|
%
|
|
12
|
%
|
5
Year
|
|
|
8
|
%
|
|
7
|
%
|
|
3
|
%
|
|
3
|
%
|
|
5
|
%
|
10
Year
|
|
|
14
|
%
|
|
13
|
%
|
|
9
|
%
|
|
7
|
%
|
|
3
|
%
|
From
inception
|
|
|
10
|
%
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year
|
|
|
18
|
%
|
|
9
|
%
|
|
1
|
%
|
|
13
|
%
|
|
(2
|
%)
|
5
Year
|
|
|
5
|
%
|
|
6
|
%
|
|
2
|
%
|
|
5
|
%
|
|
8
|
%
|
10
Year
|
|
|
13
|
%
|
|
13
|
%
|
|
9
|
%
|
|
9
|
%
|
|
7
|
%
|
From
inception
|
|
|
11
|
%
|
|
11
|
%
|
|
10
|
%
|
|
10
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year
(000s omitted)
|
|
$
|
24,501
|
|
$
|
26,873
|
|
$
|
26,760
|
|
$
|
26,660
|
|
$
|
24,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets (annualized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of expenses to
average net assets
|
|
|
1.79
|
%
|
|
1.80
|
%
|
|
1.46
|
%
|
|
1.50
|
%
|
|
1.64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net investment
income to average net assets
|
|
|
0.06
|
%
|
|
0.11
|
%
|
|
0.72
|
%
|
|
0.85
|
%
|
|
0.81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
11
|
%
|
|
7
|
%
|
|
4
|
%
|
|
7
|
%
|
|
16
|
%
|
Average commission paid
per share
|
|
$
|
0.13
|
|
$
|
0.10
|
|
$
|
0.08
|
|
$
|
0.06
|
|
$
|
0.02
|
|
(A) All per share data for
the periods shown has been restated to reflect the effect of a 15% stock
dividend that was declared on April 21, 2005, and paid on May 23, 2005 to
shareholders of record on May 13, 2005.
(B) If there was no sale on
the valuation date, the bid price for each such date is shown.
(C) Sims Capital Management
LLC became the investment advisor to the Fund on June 1, 2007.
See Notes to
Financial Statements.
NAIC Growth Fund, Inc.
Portfolio of Investments (as of December 31, 2007)
Common Stock (93.9% of total
investments)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Cost
|
|
Market
Value
|
|
Percent
of Total
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food/Beverage/Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|
Colgate-Palmolive Co.
|
|
16,000
|
|
$
|
469,850
|
|
$
|
1,247,360
|
|
|
|
|
PepsiCo, Inc.
|
|
15,000
|
|
|
335,649
|
|
|
1,138,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,385,860
|
|
(9.6%
|
)
|
|
Drug/Medical
Device
|
|
|
|
|
|
|
|
|
|
|
|
|
Abbott Laboratories
|
|
20,000
|
|
|
860,150
|
|
|
1,123,000
|
|
|
|
|
Johnson & Johnson
|
|
20,000
|
|
|
915,045
|
|
|
1,334,000
|
|
|
|
|
Medtronic Inc.
|
|
17,000
|
|
|
850,214
|
|
|
854,590
|
|
|
|
|
Pfizer Inc.
|
|
28,000
|
|
|
606,755
|
|
|
636,440
|
|
|
|
|
Stryker Corp.
|
|
22,000
|
|
|
180,012
|
|
|
1,643,840
|
|
|
|
|
Zimmer Holdings Inc.*
|
|
1,000
|
|
|
81,859
|
|
|
66,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,658,020
|
|
(22.6%
|
)
|
|
Bank/Financial/Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
AFLAC Inc.
|
|
18,000
|
|
|
107,094
|
|
|
1,127,340
|
|
|
|
|
CIT Group Inc.
|
|
10,000
|
|
|
392,785
|
|
|
240,300
|
|
|
|
|
Citigroup Inc.
|
|
22,000
|
|
|
368,636
|
|
|
647,680
|
|
|
|
|
Eaton Vance Corp.
|
|
14,000
|
|
|
549,007
|
|
|
635,740
|
|
|
|
|
Huntington Bancshares
Inc.
|
|
25,000
|
|
|
238,023
|
|
|
369,000
|
|
|
|
|
Jack Henry & Associates
Inc.
|
|
34,000
|
|
|
626,877
|
|
|
827,560
|
|
|
|
|
JP Morgan Chase &
Co
|
|
15,000
|
|
|
396,347
|
|
|
654,750
|
|
|
|
|
Marshall & Ilsley
Corp.
|
|
5,000
|
|
|
167,716
|
|
|
132,400
|
|
|
|
|
Metavante Technologies,
Inc.*
|
|
1,666
|
|
|
43,292
|
|
|
38,851
|
|
|
|
|
State Street Corp.
|
|
14,000
|
|
|
339,934
|
|
|
1,136,800
|
|
|
|
|
Synovus Financial
Corp.
|
|
27,000
|
|
|
317,651
|
|
|
650,160
|
|
|
|
|
US Bancorp
|
|
15,000
|
|
|
465,675
|
|
|
476,100
|
|
|
|
|
Washington Mutual Inc.
|
|
15,000
|
|
|
609,130
|
|
|
204,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,140,831
|
|
(28.6%
|
)
|
|
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
Avery Dennison
Corporation
|
|
12,000
|
|
|
666,064
|
|
|
637,680
|
|
|
|
|
Emerson Electric Co.
|
|
20,000
|
|
|
335,278
|
|
|
1,133,200
|
|
|
|
|
General Electric Co.
|
|
24,000
|
|
|
441,341
|
|
|
889,680
|
|
|
|
|
Graco Inc.
|
|
25,000
|
|
|
987,169
|
|
|
931,500
|
|
|
|
|
Sigma-Aldrich Corp.
|
|
7,000
|
|
|
58,094
|
|
|
382,200
|
|
|
|
|
Teleflex Inc.
|
|
16,000
|
|
|
545,607
|
|
|
1,008,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,982,420
|
|
(19.9%
|
)
|
|
Retail/Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
The Home Depot, Inc.
|
|
36,500
|
|
|
1,432,696
|
|
|
983,310
|
|
|
|
|
Lowes Companies
Inc.
|
|
15,000
|
|
|
470,212
|
|
|
339,300
|
|
|
|
|
OReilly Automotive
Inc.*
|
|
30,000
|
|
|
189,637
|
|
|
972,900
|
|
|
|
|
Sysco Corp.
|
|
32,000
|
|
|
507,179
|
|
|
998,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,294,230
|
|
(13.2%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common stock
investments
|
|
|
|
$
|
14,554,978
|
|
$
|
23,461,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash-equivalents (6.1%
of total investments)
|
|
|
|
$
|
1,522,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
|
|
|
|
$
|
24,984,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other assets less
liabilities
|
|
|
|
|
|
|
|
6,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net assets
|
|
|
|
|
|
|
$
|
24,991,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*=Non-dividend paying
security
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial
Statements.
Notes to Financial Statements
|
|
(1)
|
Organization.
|
|
|
|
The NAIC Growth Fund,
Inc., a Maryland corporation (Fund), is a diversified closed-end investment
company subject to the Investment Company Act of 1940.
|
|
|
(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 the Financial Statements:
|
|
|
|
Dividends
and distributions
Dividends
from the Funds net investment income and realized net long- and short-term
capital gains will be declared and distributed at least annually.
|
|
|
|
Investments
Investments in equity securities are
stated at market value, which is determined based on quoted market prices or
dealer quotes. If no such price is available on the valuation date, the Board
of Directors has determined that the most recent market price be used. The
Fund uses 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,
which approximates fair value. 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. Interest income is accrued on a daily
basis while dividends are included in income on the ex-dividend date.
|
|
|
|
Use of
estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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 such as
the Fund. The Fund plans to distribute annually 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, the Fund intends to declare as dividends in each calendar year an
amount equal to at least 98% of its net investment income and 98% of its net
realized capital gains (including undistributed amounts from previous years).
|
|
|
|
The following information
is based upon the Federal income tax basis of portfolio investments as of
December 31, 2007:
|
|
|
|
|
|
Gross unrealized
appreciation
|
|
$
|
10,183,665
|
|
Gross unrealized
depreciation
|
|
|
(1,277,282
|
)
|
|
|
|
|
|
Net unrealized
appreciation
|
|
$
|
8,906,383
|
|
|
|
|
|
|
Federal income tax basis
|
|
$
|
14,554,978
|
|
|
|
|
Expenses
The Funds service providers bear all of
their expenses in connection with the performance of their services. The Fund
bears all of its expenses incurred in connection with its operations
including, but not limited to, investment advisory fees (as discussed in Note
3), legal and audit fees, taxes, insurance, shareholder reporting and other
related costs. As noted in Note 3, the Funds investment advisor, as part of
its responsibilities under the Investment Advisory Agreement, is required to
provide certain internal administrative services to the Fund at such
investment advisors expense. The Investment Advisory Agreement provides that
the Fund may not incur annual aggregate expenses in excess of two percent
(2%) of the first $10 million of the Funds average net assets, one and a
half percent (1.5%) of the next $20 million of the average net assets, and
one percent (1%) of the remaining average net assets for any fiscal year. Any
excess expenses are the responsibility of the investment advisor.
|
|
|
(3)
|
Certain
Service Providers Arrangements
|
|
|
|
Investment
Advisor
For its
services under the Investment Advisory Agreement, the investment advisor
receives a monthly fee calculated at an annual rate of three-quarters of one
percent (0.75%) of the average weekly net asset value of the Fund, as long as
the average weekly net asset value is at least $3.8 million. The investment
advisor is not entitled to any compensation for any week in which the average
weekly net asset value falls below $3.8 million. Pursuant to the Investment
Advisory Agreement, the investment advisor is required to provide certain
internal administrative services to the Fund at the investment advisors
expense.
|
|
|
|
Effective June 1, 2007,
following shareholder approval of a new investment advisory agreement, Sims
Capital Management LLC (SCM) began serving as the Funds investment
advisor. Pursuant to the Investment Advisory Agreement, SCM is responsible
for the management of the Funds portfolio, subject to oversight by the
Funds Board of Directors. SCM is 50 percent owned by a Director of the Fund
who is also an owner of more than five percent of the Funds outstanding
shares. A family member of the same Director owns the remaining 50 percent of
SCM. Investment advisory fees for 2007 totaled $201,349 of which $115,470
related to advisory services rendered by SCM for the period June 1, 2007 to
December 31, 2007, of which $14,000 was included in accrued expenses at
December 31, 2007.
|
|
|
|
Custodian
LaSalle Bank, NA (LaSalle) serves as the
Funds custodian pursuant to a custodian agreement. As the Funds custodian,
LaSalle receives fees and for services provided including, but not limited
to, an annual account charge, annual security fee, security transaction fee
and statement of inventory fee.
|
|
|
|
Transfer
Agent
Transfer
agent American Stock Transfer & Trust Company (AST) serves as the
Funds transfer agent and dividend disbursing agent pursuant to custody
agreements. AST receives fees for services provided including, but not
limited to, account maintenance fees, activity and transaction processing
fees and reimbursement for its out-of-pocket expenses. AST also acts as the
agent under the Funds DRIP.
|
|
|
(4)
|
Dividend
Reinvestment and Cash Purchase Plan.
|
|
|
|
The Fund has a Dividend
Reinvestment and Cash Purchase Plan (DRIP) which allows shareholders to
reinvest cash dividends and make cash contributions. Pursuant to the terms of
the DRIP, cash dividends may be used by the DRIP agent to either purchase
shares from the Fund or in the open market, depending on the most favorable
pricing available to DRIP participants. Voluntary cash contributions from
DRIP participants are used to purchase Fund shares in the open market. A
complete copy of the DRIP is available on the Funds website
(www.naicgrowthfund.com) or from AST, the DRIP agent.
|
|
|
(5)
|
Distributions
to Shareholders
|
|
|
|
On December 3, 2007, a
distribution of $0.8765 per share aggregating $2,447,484 was declared from
realized short- and long-term gains and ordinary income. The dividend was
paid on December 27, 2007, to shareholders of record December 14, 2007.
|
|
|
|
The tax character of
distributions paid during 2006 and 2007 was as follows:
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
Ordinary Income
|
|
$
|
262,108
|
|
$
|
232,401
|
|
Capital Gains:
|
|
|
|
|
|
|
|
Short-term
|
|
|
0
|
|
|
23,816
|
|
Long-term
|
|
|
3,050,999
|
|
|
2,191,267
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,313,107
|
|
$
|
2,447,484
|
|
|
|
|
As of December 31, 2007,
the components of distributable earnings on a tax basis were as follows:
|
|
|
|
|
|
Over-distributed ordinary
income
|
|
$
|
(9,534
|
)
|
Unrealized
Appreciation
|
|
$
|
8,906,383
|
|
|
|
(6)
|
Fund
Investment Transactions.
|
|
|
|
Purchases and sales of
securities, other than short-term securities, for the period ended December
31, 2007, were $4,197,641 and $4,559,958, respectively.
|
|
|
(7)
|
Financial
Highlights.
|
|
|
|
The
Financial Highlights present a per share analysis of how the Funds net asset
value has changed during the periods presented. Additional quantitative
measures expressed in ratio form analyze important relationships between certain
items presented in the financial statements. 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 asked price and sell out of the Fund at the bid
price. Therefore, actual returns may differ from the amounts shown.
|
Report of Independent Registered Accounting
Firm
To the Board of Directors and Shareowners
NAIC Growth Fund, Inc.
We
have audited the accompanying statement of assets and liabilities of NAIC
Growth Fund, Inc., including the portfolio of investments, as of December 31,
2007 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 Funds management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly we express no
such opinion. An audit also 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, 2007 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 audit provides 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, 2007, the results of its operations for
the year then ended, the 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, in conformity with accounting principles generally
accepted in the United States of America.
February 28,
2008
NAIC GROWTH FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
(THE 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 Funds shares. THOSE SHAREHOLDERS WHO HAVE ELECTED TO
PARTICIPATE IN THE PLAN NEED NOT DO ANYTHING FURTHER TO MAINTAIN THEIR
ELECTION.
ADVANTAGES OF THE PLAN
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Your
increased shareholdings of NAIC Growth Fund, Inc. common stock will generate
additional dividend and/or other distribution income.
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You may
choose to have all of your dividends and/or other distributions reinvested in
shares of NAIC Growth Fund, Inc. common stock.
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You may make
an additional voluntary cash investment as often as once each month, in an
amount of not less than $50 nor more than $250,000 per year.
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Your cash
dividends and/or other distributions will go directly to American Stock
Transfer & Trust Company (the Plan Agent), which will administer the
Plan, assuring prompt reinvestment of your dividends and/or other
distributions. It is intended that such cash dividends and/or other
distributions, together with any voluntary cash payments, will be fully
utilized to purchase shares of NAIC Growth Fund, Inc. common stock.
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The Plan
Agent does all of the work and, at your option, will accept delivery from
you, for safekeeping of, the certificates which you hold in your own name and
representing shares of stock of NAIC Growth Fund, Inc. by establishing a
book-entry account in your name.
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The
maintenance of your personal records is simplified by the detailed statements
which the Plan Agent will mail to you after each investment.
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Participation
in the Plan is entirely voluntary. You may join at any time, and you may
terminate your participation whenever you wish by following the procedures
described below.
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There are no
fees or charges imposed upon you, other than brokerage commissions, and
reasonable transaction and termination fees.
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PARTICIPATION IN THE PLAN
Any
holder of common stock of NAIC Growth Fund, Inc., may participate in the Plan.
JOINING THE PLAN
To
join the Plan, you can either enroll on-line at
www.amstock.com
and clicking on
Shareholder Account Access or request DRIP forms by contacting David Sims at
205 E. Wisconsin Ave, Suite 120, Milwaukee, WI 53202, telephone (414) 765-1107.
Please make sure that that you sign your name on the forms exactly the same as
shown on your shareholder account. Once you have completed and returned the
form to American Stock Transfer & Trust Company, you will begin
participating automatically in the Plan and all cash dividends and/or other
distributions on NAIC Growth Fund, Inc. common stock registered in your name
will be reinvested automatically.
COSTS OF THE PLAN
There
are no special fees or charges relating to participation in the Plan, other
than reasonable transaction fees and brokerage commissions. A termination or
sale fee (currently $15 plus $0.10 per share) may be imposed when you terminate
or sell your shares in the Plan and take delivery of accumulated shares. The
benefit of any reduced brokerage commissions will be
passed on,
pro rata
, to participants. In addition, if
you wish to deposit your certificated shares in your plan account, there is
currently a transaction fee of $7.50 for this service.
DIVIDEND REINVESTMENT
Dividend
payments and/or other distributions made by the Fund to participants in the
Plan are made in one of two ways. They are paid to the Plan Agent either in
cash (which then are used to purchase shares in the open market), or by the
delivery of newly-issued Fund shares. The option chosen by the Fund is the one
that the Fund determines is the most favorable to participants, as described below
under Additional Terms and Conditions of Participation in the NAIC Growth
Fund, Inc. Dividend Reinvestment and Cash Purchase Plan. In the event the Plan
Agent is unable to complete its acquisition of shares to be purchased on the
open market by the end of the thirtieth (30th) day following receipt of the
cash dividends and/or other distributions from the Fund, any remaining funds
will be returned to the Participants on a pro rata basis.
VOLUNTARY CASH PAYMENTS
You
may make voluntary monthly cash payments of not less than $50 (but not more
than $250,000 per year) for the purpose of acquiring additional shares. You may
make these voluntary cash payments regularly or from time to time, and you may
also vary the amount of each payment so long as the amount of any monthly
voluntary cash payment meets the foregoing limitations. Voluntary cash payments
must be received by the Plan Agent on or prior to the last day of any month and
will be invested beginning on or about the first business day of the following
month (an Investment Date). Voluntary cash payments will be invested in
shares purchased in the open market, (calculated to three decimal places in
your account). However, if purchases of shares on the open market with such
voluntary cash payments have not been completed by an ex-dividend date, the
balance of such cash payments will be returned and credited on a pro rata
basis. The Plan Agent will also return all voluntary cash payments it is
holding or receives for purchases to be made on the Investment Date immediately
following the dividend payment date if purchases are being made with the cash
dividends or other distributions on or after such Investment Date. In the event
the Plan Agent is unable to complete its acquisition of shares to be purchased
on the open market by the end of the thirtieth (30
th
) day following
the Investment Date, any remaining funds will be returned to the participants
on a pro rata basis. 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 for 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 avoid additional transaction
charges. If a voluntary cash payment is not received in time to purchase shares
for the calendar month indicated, the Plan Agent shall attempt to invest such
payment on the next Investment Date. Optional cash payments can also be made
on-line at
www.amstock.com.
You need to know your American Stock Transfer &
Trust Company 10 digit account number to access your account.
If
an optional cash payment is paid by a check and the check is returned by the
bank, a fee of $25 will be charged. If the funds have not yet been invested,
the Plan Agent will debit the amount of such funds. If the funds have been
invested, then the Plan Agent will sell the shares to recover the amount of the
returned check. If the cash balance of the sale is not enough to cover the
debit of the amount of the returned check, then the Plan Agent reserves the
right to sell account shares to pay the balance. The Plan Agent will also sell
additional shares to recover the amount of the return fee.
HOLDING OF SHARES
For
your convenience, the Plan Agent will hold all shares that you acquire as a
result of your participation in the Plan for safekeeping. However, upon your
on-line request at
www.amstock.com
, telephonically at (877) 739-9994 or request
by mail, the Plan Agent will send you a certificate representing a specified
number of full shares which you have acquired through the Plan and which are
held for your account.
The
Plan Agent will also allow you to deposit with it, in safekeeping and in your
book-entry account for the Plan, any additional stock certificates for the
Funds shares you might have in your possession. This will enable you to guard
against loss, theft or damage.
STATEMENT OF ACCOUNT
A
cumulative, detailed statement of your account under the Plan for each current
calendar year will be sent to you by the Plan Agent; and you will also receive
the customary Form 1099 (Internal Revenue Service) reporting dividend and/or
other distribution income.
WITHDRAWAL OF SHARES
You
are not committed to remain in the Plan. You may terminate your participation
at any time by written notice to the Plan Agent or on line at
www.amstock.com.
All requests for termination of participation in the Plan must be received at
least three business days prior to the next dividend and/or other distribution
payment date in order for the cash dividend and/or other distribution not to be
reinvested. A separate written request, however, must be made to obtain the
return of any voluntary cash payment. You may obtain the return of any
voluntary cash payment if your written request is received by the Plan Agent at
least forty-eight (48) hours prior to the time such voluntary cash payment is
invested.
Upon
terminating participation in the Plan, certificates for full shares held in
your account will be issued and sent to you. Any remaining fractional share
will be converted to cash, on the basis of the then current market price of the
Funds common stock, and a check, representing the same, will be issued and
sent to you (less service fees). If you desire, you may direct that your full
shares be sold in the open market and that the proceeds (less any brokerage
commission incurred as a result of such sale) be sent to you.
INCOME TAX CONSIDERATIONS
Dividends
(including those declared in shares of stock) and other distributions invested
under the Plan are taxable in the same way as dividends and other distributions
paid to you in cash.
SHAREHOLDERS RIGHTS
Shares
held under the Plan have the same rights as all other shares, in terms of stock
dividends, stock splits, and preemptive and voting rights. Stock dividends will
be fully credited to your account. Transaction processing may either be
curtailed or suspended until the completion of any stock dividend, stock split
or corporate action.
MORE DETAILED INFORMATION
If
you have any questions regarding your specific participation in the Plan,
please visit the Plan Agent on-line at
www.amstock.com
, call the Plan Agent at
(877) 739-9994 or write the Plan Agent at:
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Transaction Processing
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American
Stock Transfer & Trust Company
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DRP Plan
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P.O. Box 922
Wall Street Station
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New York, NY
10269-0560
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Inquiries
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American
Stock Transfer & Trust Company
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6201 15
th
Avenue
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Brooklyn, NY
11219
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Directors Who Are Interested Persons of the
Fund and Officers
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Name,
Address and
Age*
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Position(s)
Held with
Fund
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Term
of
Office and
Length of
Time Served
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Principal
Occupation(s) During
Past 5 Years (in addition to
positions held in the Fund)
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Number
of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee for
Director**
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Other
Directorships
Held by Director
or Nominee for
Director
(Public
Companies)
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Luke E.
Sims
age 58
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President; Chief Executive
Officer and Director
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Term of office one year.
Served as a director since 2002.
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Partner in the law firm of
Foley & Lardner LLP since 1984; Director, Wilson-Hurd Mfg. Co.; Manager
of the Advisor since 2003.
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One
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LaCrosse Footwear, Inc.
(manufacturer and marketer of sporting and industrial footwear)
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* The
address of Mr. Sims is the address of the principal executive office of the
Fund. Luke E. Sims is an Interested Person within the meaning of Section
2(a)(19) of the Investment Company Act of 1940 because he is the President and
Chief Executive Officer of the Fund, beneficially owns in excess of 5% of the
Funds outstanding shares of common stock and he is affiliated with the Funds
investment advisor, Sims Capital Management LLC (the Advisor). Luke E. Sims
is the father of David C. Sims, the Chief Financial Officer and Chief
Compliance Officer of the Fund.
** The
Fund is not part of any fund complex.
Directors Who Are Not Interested Persons
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Name,
Address and
Age*
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Position(s)
Held with
Fund
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Term
of
Office and
Length of
Time Served
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|
Principal
Occupation(s) During
Past 5 Years
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|
Number
of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee for
Director**
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Other
Directorships
Held by
Director or
Nominee for
Director
(Public
Companies)
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Robert M.
Bilkie, Jr.,
age 47
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Chairman; Director
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Term of office one year.
Served as a director since 2006.
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President and Chief
Executive Officer of Sigma Investment Counselors, Inc. (a registered
investment advisor) since 1987; member of the NAIC/Better Investing
Securities Review Committee and of the NAIC/Better Investing Editorial
Advisory Committee (non-remunerative).
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One
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None
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Carl A. Holth
age 75
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Director
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Term of office one year.
Served as a director since 1989.
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Retired; former Director,
Sunshine Fifty, Inc. and former Director Harrison Piping Supply, Inc.
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One
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None
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Peggy L.
Schmeltz
age 80
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Director
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Term of office one year.
Served as a director since 1989.
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Retired; Trustee of Better
Investing (NAIC) (since 1995); lecturer at various NAIC chapters, former
Director of Bowling Green State University Foundation Board.
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One
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None
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Benedict J.
Smith
age 88
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Director
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Term of office one year.
Served as a director since 1996.
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Retired; Director, Detroit
Executive Service Corps (an advisory service for non-profit organizations);
Director, Vista Maria (a nonprofit charitable organization).
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One
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None
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* The
address of each is the address of the principal executive office of the Fund.
** The
Fund is not part of any fund complex.
Officers Who Are Not Directors
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Name,
Address and
Age*
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Position(s)
Held with
Fund
|
|
Term
of
Office and
Length of
Time Served
|
|
Principal
Occupation(s) During
Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee for
Director**
|
|
Other
Directorships
Held by
Director or
Nominee for
Director
(Public
Companies)
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David C.
Sims
age 26
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Chief Financial Officer and
Chief Compliance Officer
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Term of office one year.
Served as Chief Financial Officer and Chief Compliance Officer since 2007*
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Manager, Peregrine
Investment Fund LLC (private investment fund) since 2003; Manager of the
Advisor since 2003.
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One
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None
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Christopher
J. Dine
age 51
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Secretary
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Term of office one year.
Served as Secretary since 2007.
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Attorney with Bodman LLP
since 1985
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None
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None
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* The
address of each is the address of the principal executive office of the Fund.
** The
Fund is not part of any fund complex.
*** David
C. Sims is the son of Luke E. Sims, the President and Chief Executive Officer
of the Fund.
Compensation.
The
following table sets forth the aggregate compensation paid to all directors who
were entitled to directors fees during 2007. Directors also receive
reimbursement for out-of-pocket expenses in connection with attending Board meetings.
No Fund officer receives compensation in his/her capacity as an officer of the
Fund. Commencing June 1, 2007, Luke E. Sims was no longer entitled to receive
directors fees from the Fund by reason of his relationship to the Funds
investment advisor. Former directors, Thomas E. OHara and Kenneth S. Janke,
who resigned as directors as of June 1, 2007, received no compensation for
serving as directors.
The
Fund is not part of a mutual fund complex.
The
officers of the Fund are as follows: Luke E. Sims, President and Chief
Executive Officer; Carl A. Holth; Christopher J. Dine, Secretary; and David C.
Sims, Chief Financial Officer and Chief Compliance Officer. Robert M. Bilkie is
the Chairman of the Fund. It is a non-executive, non-officer position. As of
June 1, 2007, David C. Sims became an interested person of the Fund and Peggy
L. Schmeltz ceased to be an interested person.
Directors who are interested persons of the
Fund:
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Name,
Position
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Aggregate
Compensation
From Fund*
|
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Pension or Retirement
Benefits Accrued as
part of Fund
Expenses
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Estimated
Annual
Benefits upon
Retirement
|
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Total
Compensation
from Fund and
Complex paid
to Directors**
|
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Luke E.
Sims,
Director
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$
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1,300
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|
None
|
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None
|
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|
$
|
1,300
|
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|
|
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Directors who are not interested persons of the
Fund:
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name,
Position
|
|
Aggregate
Compensation
From Fund*
|
|
Pension or Retirement
Benefits Accrued as
part of Fund
Expenses
|
|
Estimated
Annual
Benefits upon
Retirement
|
|
Total
Compensation
from Fund and
Complex paid
to Directors**
|
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|
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Robert M.
Bilkie, Jr.,
Director
|
|
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$
|
2,000
|
|
|
None
|
|
|
None
|
|
|
|
$
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peggy L.
Schmeltz,***
Director
|
|
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$
|
1,900
|
|
|
None
|
|
|
None
|
|
|
|
$
|
1,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benedict J.
Smith,
Director
|
|
|
$
|
2,000
|
|
|
None
|
|
|
None
|
|
|
|
$
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl A.
Holth,
Director
|
|
|
$
|
2,000
|
|
|
None
|
|
|
None
|
|
|
|
$
|
2,000
|
|
|
* All amounts
shown are for service as a director.
** The Fund is
not part of any fund complex.
*** Ms.
Schmeltz was an interested party of the Fund until June 1, 2007. She was an
interested person because she is a trustee of NAIC which was affiliated with
the then investment advisor of the Fund.
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|
Board of Directors
|
|
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|
|
Robert M.
Bilkie, Jr.
Chairman of the Board
Southfield, MI
|
|
Carl A.
Holth
Director
Clinton Twp., MI
|
|
Peggy L.
Schmeltz
Director
Bowling Green, OH
|
|
|
|
|
|
Luke E. Sims
President, Chief Executive Officer
Milwaukee, WI
|
|
Benedict J.
Smith
Director
Birmingham, MI
|
|
|
Shareholder Information
Trading.
Fund shares
trade under the symbol GRF on the American Stock Exchange.
Fund Stock Repurchases.
The Fund is authorized, from time to time, to repurchase its shares in the open
market, in private transactions or otherwise, at a price or prices reasonably
related to the then prevailing market price.
Dividend Reinvestment and Cash Purchase Plan
(DRIP).
By participating in the Funds Dividend
Reinvestment and Cash Purchase Plan (DRIP), you can automatically reinvest
your cash dividends in additional Fund shares without paying brokerage
commissions. You can obtain a copy of the Plan from the Funds website
(www.naicgrowthfund.com) or by contacting American Stock Transfer & Trust
Company, 6201 15
th
Avenue, Brooklyn NY 11219, telephone number (800)
937-5449.
Dividend Checks/Stock Certificates/Address
Changes/Etc
. If you have a question about lost or
misplaced dividend checks or stock certificates, have an address change to
report or have a comparable shareholder issue or question, please contact the
Funds transfer agent, American Stock Transfer and Trust Company, 6201 15
th
Avenue, Brooklyn NY 11219, telephone number (800) 937-5449.
Proxy Voting.
The
Fund typically votes by proxy the shares of portfolio companies. If youd like
information about the policies and procedures that the Fund follows in voting,
or how the Fund has voted on a particular issue or matter during the most
recent 12-month period ended June 30, 2007, you can get that information (Form
N-PX) from the SECs website (www.sec.gov) or the Funds website
(www.naicgrowthfund.com), or by calling the Fund at (414) 765-1107 (collect) or
by sending an e-mail request (to dave@simscapital.com).
Fund Privacy Policy/Customer Privacy Notice
(February 28, 2008
). We collect nonpublic personal
information about you from the following sources: (i) information we receive
from you on applications or other forms and (ii) information about your
transactions with us or others. We do not disclose any nonpublic personal
information about you to anyone, except as permitted by law, and as follows. We
may disclose all of the information we collect, as described above, to
companies that perform marketing services on our behalf or to other financial
institutions with whom we have joint marketing agreements. If you decide to
close your account(s) or no longer be a shareholder of record, we will adhere
to the privacy policies and practices as described in this notice. We restrict
access to your personal and account information except to those employees who
need to know that information to provide services to you. We maintain physical,
electronic, and procedural safeguards to guard you nonpublic personal
information. In this notice, the term we refers to Fund, NAIC Growth Fund,
Inc.
Additional Information.
The Fund files a complete schedule of its portfolio holdings with the
Securities and Exchange Commission (SEC) as of the end of the first and third
calendar quarters on SEC Form N-Q. You can obtain copies of these filings, and
other information about the Fund, from the SECs website (www.sec.gov) or from
the Funds website (www.naicgrowthfund.com), or by calling the Fund at (414)
765-1107. The Funds Forms N-Q can be reviewed and copied at the SECs Public
Reference Room in Washington, D.C., and you can obtain information about the
operation of the Public Reference Room by calling the SEC at (800) 732-0330.
Electronic Distribution of Shareholder
Reports and Other Communications.
If you would like to
receive copies of the Funds annual reports, semiannual reports, proxy
statement, press releases and other comparable communications electronically,
please provide your e-mail address to dave@simscapital.com. By providing your
e-mail address to the Fund, you are consenting to the Fund sending the identified
materials to you by e-mail.
General Inquiries.
If you have a question or comment on any matter not addressed above, please
contact the Fund (NAIC Growth Fund, Inc., 205 E. Wisconsin Avenue, Suite 120,
Milwaukee, Wisconsin 53202, telephone number (414) 765-1107), or the Funds
investment advisor, Sims Capital Management LLC (dave@simscapital.com).