N-30D 1 a2071042zn-30d.txt N-30D MAIRS AND POWER GROWTH FUND, INC. ANNUAL REPORT December 31, 2001 W1520 First National Bank Building 332 Minnesota Street St. Paul, Minnesota 55101 651-222-8478 February 7, 2002 TO OUR SHAREHOLDERS: 2001 was a good year for shareholders of Mairs and Power Growth Fund. The Fund registered a return of 6.5% which compares very favorably with a decline of 11.9% for the Standard & Poor's 500 Stock Index and a decline of 5.5% for the Dow Jones Industrial Average. The average stock mutual fund suffered a decline of 10.9%. Our ten year average annual return of 17.3% once again placed us on the WALL STREET JOURNAL list of the fifty best performing mutual funds for the past 10-year period. FORBES magazine, in the February 4th issue, rated mutual funds based on risk-adjusted performance and cost efficiency. The Fund was one of just six domestic stock funds that FORBES rated as Best Buys. The Fund was also cited for continuity of management and its superior 17% annualized return over the past 15 years. BUSINESS WEEK magazine, in the January 28th issue, examined a data base of 3,500 mutual funds and measured the performance of each of these funds by the amount of risk its manager took to achieve these results, over a five year period. Only 150 funds (4.3% of the total) received the highest quality A rating. Mairs and Power Growth Fund as well as Mairs and Power Balanced Fund were on the A list for the second consecutive year. SMART MONEY magazine published by Dow Jones & Co., ran a lead article in the March 2002 issue recommending just ten mutual funds out of a total number of 3,300 diversified stock funds, based on their risk-adjusted returns over the past five years. Management experience, tax-efficiency and low expenses were also considered. The fund was one of the ten recommended and was also featured in the article. The year 2001 marked the first attack on the U.S. homeland in sixty years, the first U.S. economic recession in ten years, and the first time in twenty-seven years that the U.S. stock market experienced a second consecutive year of decline. The American public, as well as their elected representatives, appear to have weathered these events with a sense of renewed confidence in our democratic processes and at least a restrained optimism that better days may lie ahead. The Federal Reserve acted aggressively throughout the year to ease monetary policy in an effort to contain the recession and restore economic growth. The seeds of recovery are in place, which should become evident in the months ahead. The manufacturing sector bore the brunt of the recession caused in part by record inventory liquidation but the purchasing managers' index has now reached the highest level in 14 months which suggests that the inventory cycle is about to turn which should spur growth as the year progresses. Personal income remained solid throughout the year, which provided strong support for the housing and automobile industries as well as many sectors of the retail trade and service industries. The main reason that consumer spending remained resilient has been that job loss has been less than in any previous recession. Even though 1.7 million private sector jobs have been lost, that 1.5% decline is the smallest for any recession on record. 1 Our strong performance in 2001 reflected our longstanding commitment to well-managed companies that frequently have a dominant market share in their respective industries. We also avoided much of the sharp decline in high-profile technology companies, which we had considered to be over-valued. The largest industry sector in our portfolio is health care which continues to benefit from demographic trends as well as an impressive array of new products resulting from a strong commitment to research efforts. We are cautiously optimistic about prospects for 2002, as we believe that a strengthening economy will result in improving corporate earnings that should support firming stock prices. The U.S. economy continues to benefit from strong underlying growth in productivity, which rose at a 3.5% rate in the fourth quarter despite the weak economy. Our citizenry are the most innovative people in the world as well as the most entrepreneurial and are well prepared to meet the challenges ahead. However, we again caution shareholders that the extraordinary returns of the past five and ten year periods are unlikely to be replicated in the years ahead. Mairs and Power Growth Fund has registered an average annual return of 12.3% since its inception 43 years ago and we believe future returns should be measured against that benchmark. George A. Mairs President COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN FUND, S & P 500 INDEX, AND THE CONSUMER PRICE INDEX
MPG S&P CPI ------------------------ ------------------------ ------------------------ 1991 10,000.00 10,000.00 10,000.00 1992 10,784.00 7.84% 10,770.00 7.70% 10,300.00 3.00% 1993 12,170.82 12.86% 11,857.77 10.10% 10,578.10 2.70% 1994 12,856.04 5.63% 12,011.92 1.30% 10,863.71 2.70% 1995 19,196.64 49.32% 16,521.20 37.54% 11,135.30 2.50% 1996 24,264.55 26.40% 20,317.77 22.98% 11,502.77 3.30% 1997 31,216.34 28.65% 27,103.90 33.40% 11,698.31 1.70% 1998 34,141.32 9.37% 34,882.72 28.70% 11,885.49 1.60% 1999 36,586.18 7.16% 42,222.05 21.04% 12,206.39 2.70% 2000 46,274.93 26.48% 38,371.39 -9.12% 12,621.41 3.40% 2001 49,273.54 6.48% 33,805.20 -11.90% 12,823.35 1.60%
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 2001)
1 YEAR 5 YEARS 10 YEARS Mairs and Power Growth Fund +6.5% +15.2% +17.3%
PAST INVESTMENT RESULTS SHOULD NOT BE TAKEN AS NECESSARILY REPRESENTATIVE OF FUTURE PERFORMANCE. 2 FINANCIAL HIGHLIGHTS (SELECTED PER SHARE DATA AND RATIOS -- FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED DECEMBER 31 2001 2000 1999 1998 1997 --------------------------------------------------------- PER SHARE (1) Net asset value, beginning of year $ 53.41 $ 46.46 $ 46.34 $ 43.34 $ 34.74 Investment operations: Net investment income 0.51 0.54 0.43 0.43(*) 0.51 Net realized and unrealized gains on investments 2.95 11.78 2.90 3.61 9.43 --------- ---------- --------- ------------- --------- TOTAL FROM INVESTMENT OPERATIONS 3.46 12.32 3.33 4.04 9.94 Less distributions: Dividends (from net investment income) (0.51) (0.55) (0.47) (0.36) (0.50) Distributions (from capital gains) (2.00) (4.82) (2.74) (0.68) (0.84) --------- ---------- --------- ------------- --------- TOTAL DISTRIBUTIONS (2.51) (5.37) (3.21) (1.04) (1.34) --------- ---------- --------- ------------- --------- NET ASSET VALUE, END OF YEAR $ 54.36 $ 53.41 $ 46.46 $ 46.34 $ 43.34 ========= ========== ========= ============= ========= TOTAL INVESTMENT RETURN 6.5% 26.5% 7.2% 9.4% 28.7% ========= ========== ========= ============= ========= NET ASSETS, END OF YEAR (000'S OMITTED) $679,027 $ 581,668 $ 546,836 $ 580,461 $ 412,591 RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets 0.76% 0.78% 0.79% 0.82% 0.84% Ratio of net investment income to average net assets 0.97% 1.06% 0.83% 0.97% 0.98% Portfolio turnover rate 7.91% 15.34% 5.55% 2.04% 5.07%
(*) Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. (1) All per share amounts have been adjusted to give effect to a two-for-one stock split which was paid on October 10, 2001. 3 STATEMENT OF NET ASSETS DECEMBER 31, 2001
NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) --------- -------------------- ------------ COMMON STOCK 96.4% BASIC INDUSTRIES 11.8% 728,100 BMC Industries, Inc. $1,499,886 324,000 Bemis Company, Inc. 15,934,320 520,000 Ecolab, Inc. 20,930,000 574,000 H. B. Fuller 16,513,980 542,500 The Valspar Corporation 21,483,000 70,000 Weyerhaeuser Company 3,785,600 ------------- 80,146,786 ------------- CAPITAL GOODS 11.1% 533,600 Donaldson Company, Inc. 20,725,024 747,775 Graco Inc. 29,200,614 1,113,600 MTS Systems Corporation 11,258,496 380,000 Pentair, Inc. 13,873,800 ------------- 75,057,934 ------------- CONSUMER CYCLICAL 9.1% 114,000 Arbitron, Inc. * 3,893,100 886,000 Target Corporation 36,370,300 485,800 The Toro Company 21,861,000 ------------- 62,124,400 ------------- CONSUMER STAPLE 10.6% 524,000 General Mills, Inc. 27,253,240 910,000 Hormel Foods 24,451,700 908,000 SUPERVALU, Inc. 20,084,960 ------------- 71,789,900 ------------- DIVERSIFIED 3.7% 213,000 Minnesota Mining & Manufacturing Company 25,178,730 -------------
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NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) --------- -------------------- ------------ COMMON STOCK (CONTINUED) FINANCIAL 16.5% 546,000 St. Paul Companies, Inc. $ 24,007,620 700,000 TCF Financial Corporation 33,586,000 1,040,350 U.S. Bancorp 21,774,525 760,000 Wells Fargo & Company 33,022,000 ------------ 112,390,145 ------------ HEALTH CARE 21.8% 544,000 Baxter International Inc. $ 29,174,720 430,000 Johnson & Johnson 25,413,000 672,000 Medtronic, Inc. 34,413,120 180,000 Merck & Co. 10,584,000 598,000 Pfizer Inc. 23,830,300 315,000 St. Jude Medical, Inc. * 24,459,750 ------------ 147,874,890 ------------ TECHNOLOGY 11.8% 1,446,000 ADC Telecommunications Inc. * 6,651,600 800,000 Ceridian 15,000,000 450,000 Corning Inc. * 4,014,000 957,030 eFunds Corp. * 13,159,163 418,050 Emerson Electric Co. 23,870,655 508,750 Honeywell International Inc. 17,205,925 ------------ 79,901,343 ------------ TOTAL COMMON STOCKS 96.4% (cost $418,857,115) $654,464,128
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NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) --------- -------------------- ------------ SHORT TERM INVESTMENTS 3.1% 16,091,633 First American Prime Obligation Fund Class I $ 16,091,633 5,349,952 Merrill Lynch Institutional Money Market Fund 5,349,952 ------------ TOTAL SHORT TERM INVESTMENTS 3.1% 21,441,585 (cost $21,441,585) ------------ TOTAL INVESTMENTS 99.5% 675,905,713 (cost $440,298,700) OTHER ASSETS AND LIABILITIES (NET) 0.5% 3,120,976 ------------ NET ASSETS: Capital Stock $ 124,910 Additional paid-in capital 443,238,171 Accumulated undistributed net investment income 4,058 Accumulated undistributed net realized gain on investment 52,541 Net unrealized appreciation of investments 235,607,013 ------------ TOTAL NET ASSETS 100% $679,026,689 ============ (Net assets equal to $54.36 per share on 12,490,964 shares outstanding) CAPITAL STOCK (par value $.01 a share) Shares authorized 25,000,000 ============
* Non income producing SEE ACCOMPANYING NOTES. 6 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2001 INVESTMENT INCOME Income: Dividends $10,489,956 Other income 11,350 ----------- TOTAL INCOME $10,501,306 Expenses: Investment advisory fees (NOTE 5) 3,644,247 Administrative fees 449,862 Transfer agent fees 356,100 Custodian fees 122,396 Legal and audit fees 30,455 Other fees and expenses 13,032 ----------- TOTAL EXPENSES 4,616,092 ----------- NET INVESTMENT INCOME 5,885,214 REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4) Net realized gains on investments sold 24,041,922 Unrealized appreciation of investments 11,562,808 ----------- NET GAIN ON INVESTMENTS 35,604,730 ----------- INCREASE IN NET ASSETS FROM OPERATIONS $41,489,944 ===========
SEE ACCOMPANYING NOTES. 7 STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31 2001 2000 ------------------------------ OPERATIONS Net investment income $ 5,885,214 $ 5,461,977 Net realized gains on investments sold 24,041,922 48,190,563 Unrealized appreciation of investments 11,562,808 66,120,705 INCREASE IN NET ASSETS FROM OPERATIONS ------------- ------------- 41,489,944 119,773,245 DISTRIBUTIONS TO SHAREHOLDERS From net investment income (5,988,102) (5,457,049) Short-term gain distributed as ordinary income (1,917,313) -- From net realized gains (22,049,038) (48,206,243) ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (29,954,453) (53,663,292) CAPITAL STOCK TRANSACTIONS Proceeds from shares sold 116,664,500 44,617,224 Reinvestment of distributions from net investment income and net realized gains 27,561,263 49,203,342 Cost of shares redeemed (58,402,984) (125,098,185) ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 85,822,779 (31,277,619) ------------- ------------- TOTAL INCREASE IN NET ASSETS 97,358,270 34,832,334 NET ASSETS Beginning of year 581,668,419 546,836,085 ------------- ------------- End of year (including undistributed investment income of $4,058 and $54,274, respectively) $ 679,026,689 $ 581,668,419 ============= ============= CHANGES IN CAPITAL STOCK Shares sold 2,220,122 903,566 Shares issued for reinvested distributions 504,953 914,972 Shares redeemed (1,125,130) (2,699,294) ------------- ------------- NET INCREASE (DECREASE) IN SHARES 1,599,945 (880,756) ============= =============
SEE ACCOMPANYING NOTES. 8 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 Note 1 -- The Fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, no-load, open-end management investment company. The objective of the Fund is to provide shareholders with a diversified holding of common stocks which appear to offer possibilities for long-term appreciation. Note 2 -- Significant accounting polices of the Fund are as follows: (a) Security valuations for fund investments are furnished by independent pricing services that have been approved by the Board of Directors. Investments in equity securities that are traded on a national securities exchange (or reported on the NASDAQ national market system) are stated at the last quoted sales price if readily available for such securities on each business day. Other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. For securities where quotations are not readily available, or where the last quoted sale price is not considered representative of the value of the security if it were to be sold on that day, the security will be valued at fair value as determined in good faith by the adviser, Mairs and Power, Inc. (b) Security transactions are recorded on the date on which securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income is recorded on the accrual basis. Realized gains and losses are reported on an identified cost basis. (c) The Fund is a "regulated investment company" as defined in Subchapter M of the Internal Revenue Code, as amended. No provision has been made for federal income taxes as it is the intention of the Fund to comply with the provisions of the Internal Revenue Code applicable to investment companies and to make distributions of income and security gains sufficient to relieve it from all or substantially all income taxes. 9 Note 3 -- Purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 2001 aggregated $104,214,935 and $46,181,977, respectively. Note 4 -- Net unrealized appreciation on investments for federal income tax purposes aggregated $235,607,013, of which $253,463,220 related to appreciated investment securities and $17,856,207 related to depreciated investment securities. Aggregate cost of investments for federal income tax purposes was $440,298,700. There is no difference between the book basis and tax basis of distributable earnings at December 31, 2001, and no difference between the book basis and tax basis of dividends paid during the year then ended. Note 5 -- The investment advisory fees were paid to Mairs and Power, Inc., which is owned by individuals who are directors and officers of the Fund, for its services as investment adviser. Investment advisory fees were paid to the adviser pursuant to an advisory agreement approved by the directors of the Fund. The advisory fee is computed each month at an annual rate of .60% of the net asset value of the Fund on the last valuation day of the month. Directors of the Fund not affiliated with Mairs and Power, Inc. received compensation for meetings attended totaling $85,900 in 2001. No compensation was paid to any other director or officer of the Fund. At December 31, 2001, the amount payable by the Fund to Mairs and Power, Inc. was $335,473. Note 6 -- The Board of Directors authorized a two-for-one stock split of the Fund's common stock announced on September 11, 2001. The stock split was in the form of a 100% stock dividend payable October 10, 2001, to shareholders of record on October 9, 2001. The impact of the stock split has been reflected in the financial statements and all share and per share data included herein have been restated. Note 7 -- 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 amount of net assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates. 10 REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Shareholders Mairs and Power Growth Fund, Inc. We have audited the accompanying statement of net assets of Mairs and Power Growth Fund, Inc. (the "Fund") as of December 31, 2001, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2001, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Mairs and Power Growth Fund, Inc. at December 31, 2001, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, MN January 18, 2002 11 SUMMARY OF FINANCIAL INFORMATION This table covers a period of generally rising common stock prices. The results shown should not be considered as a representation of the dividend income or capital gain or loss which may be realized from an investment made in the Fund today.
PER SHARE ---------------------------------------------- DISTRIBU- PERFORMANCE TIONS OF DIVIDENDS OF AN SHARES REALIZED FROM NET ASSUMED OUT- TOTAL NET NET ASSET SECURITIES INVESTMENT INVESTMENT DATES STANDING ASSETS VALUE GAINS INCOME OF $10,000* ------------- ---------- ------------- -------- ---------- ---------- ----------- Dec. 31, 1977 2,115,856 $ 13,145,624 $ 6.215 $ 0.165 $ 9,967 Dec. 31, 1978 1,996,530 $ 13,282,487 $ 6.655 $ 0.175 $ 10,949 Dec. 31, 1979 1,829,270 $ 14,104,765 $ 7.710 $ 0.225 $ 13,078 Dec. 31, 1980 1,681,764 $ 14,540,014 $ 8.645 $ 0.275 $ 15,185 Dec. 31, 1981 1,723,356 $ 13,148,158 $ 7.630 $ 0.370 $ 0.300 $ 14,609 Dec. 31, 1982 1,701,884 $ 16,784,217 $ 9.860 $ 0.290 $ 0.250 $ 20,330 Dec. 31, 1983 1,763,184 $ 18,972,177 $ 10.760 $ 0.350 $ 0.240 $ 23,535 Dec. 31, 1984 1,744,138 $ 17,304,204 $ 9.920 $ 0.380 $ 0.230 $ 23,059 Dec. 31, 1985 1,713,476 $ 21,553,457 $ 12.580 $ 0.430 $ 0.230 $ 31,077 Dec. 31, 1986 1,787,700 $ 22,235,453 $ 12.440 $ 1.370 $ 0.200 $ 34,664 Dec. 31, 1987 1,828,278 $ 19,816,097 $ 10.840 $ 1.145 $ 0.240 $ 33,855 Dec. 31, 1988 1,858,078 $ 20,630,251 $ 11.105 $ 0.605 $ 0.205 $ 37,234 Dec. 31, 1989 1,733,168 $ 22,630,081 $ 13.055 $ 0.915 $ 0.215 $ 47,685 Dec. 31, 1990 1,734,864 $ 22,501,587 $ 12.970 $ 0.350 $ 0.210 $ 49,435 Dec. 31, 1991 1,808,046 $ 31,440,529 $ 17.390 $ 0.790 $ 0.195 $ 70,222 Dec. 31, 1992 1,913,628 $ 34,363,306 $ 17.955 $ 0.580 $ 0.200 $ 75,727 Dec. 31, 1993 2,012,570 $ 39,081,010 $ 19.420 $ 0.610 $ 0.215 $ 85,464 Dec. 31, 1994 2,128,038 $ 41,889,850 $ 19.685 $ 0.490 $ 0.325 $ 90,278 Dec. 31, 1995 2,490,650 $ 70,536,880 $ 28.320 $ 0.755 $ 0.280 $ 134,801 Dec. 31, 1996 4,322,492 $150,161,759 $ 34.740 $ 0.695 $ 0.355 $ 170,394 Dec. 31, 1997 9,521,030 $412,590,619 $ 43.335 $ 0.955 $ 0.390 $ 219,211 Dec. 31, 1998 12,525,664 $580,460,523 $ 46.340 $ 0.680 $ 0.360 $ 239,748 Dec. 31, 1999 11,771,794 $546,836,085 $ 46.455 $ 2.740 $ 0.465 $ 256,918 Dec. 31, 2000 10,891,038 $581,668,419 $ 53.410 $ 4.820 $ 0.545 $ 324,952 Dec. 31, 2001 12,490,964 $679,026,689 $ 54.360 $ 2.000 $ 0.510 $ 345,993
* ASSUMES THE REINVESTMENT OF ALL INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FOR A $10,000 INVESTMENT MADE AT THE BEGINNING OF 1977. The above data has been adjusted to reflect the 2-for-1 stock split paid to shareholders on October 10, 2001. No adjustment has been made for any income tax payable by shareholders on capital gain distributions accepted in shares. This report is not to be used in connection with the offering of shares of the Fund unless accompanied or preceded by an effective Prospectus. Please call or write if you desire further information. AVERAGE ANNUAL TOTAL RETURNS THE AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND (PERIOD ENDED DECEMBER 31, 2001) ARE AS FOLLOWS:
1 YEAR: +6.5% 5 YEARS: +15.2% 10 YEARS: +17.3%
THE TOTAL RETURN DATA REPRESENTS PAST PERFORMANCE, AND THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. 12 DIRECTORS AND OFFICERS Information pertaining to the Directors and Officers of Mairs and Power Growth Fund, Inc. is set forth below. The statement of additional information (SAI) includes additional information about the Funds Directors and is available without charge, upon request, by calling 1-800-304-7404 or can be downloaded from our website at www.mairsandpower.com.
NUMBER OF PORTFOLIOS IN TERM OF OFFICE FUND COMPLEX OTHER NAME, ADDRESS AND (AGE) AND LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST FIVE OVERSEEN BY DIRECTORSHIPS POSITION(S) WITH FUND TIME SERVED(1) YEARS DIRECTOR HELD BY TRUSTEE INTERESTED DIRECTORS AND PRINCIPAL OFFICERS George A. Mairs, III (73) President of the Investment Adviser 2 N/A President Since 1980 Director Since 1980 332 Minnesota Street Suite W1520 St. Paul, MN 55101 William B. Frels (62) Vice President and Treasurer of the Investment Secretary Since 1992 Adviser Director Since 1992 332 Minnesota Street Suite W1520 St. Paul, MN 55101 2 N/A Peter G. Robb (53) Vice President and Secretary of the Investment Vice President Since 1994 Adviser Director Since 1995 332 Minnesota Street Suite W1520 St. Paul, MN 55101 2 N/A INTERESTED PRINCIPAL OFFICER WHO IS NOT A DIRECTOR Lisa J. Hartzell (56) Manager of Mutual Fund Services of the N/A N/A Treasurer Since 1996 Investment Adviser 332 Minnesota Street Suite W1520 St. Paul, MN 55101
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NUMBER OF PORTFOLIOS IN TERM OF OFFICE FUND COMPLEX OTHER NAME, ADDRESS AND (AGE) AND LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST FIVE OVERSEEN BY DIRECTORSHIPS POSITION(S) WITH FUND TIME SERVED(1) YEARS DIRECTOR HELD BY TRUSTEE DISINTERESTED DIRECTORS J. Thomas Simonet (75) Since 1992 Retired Chief Executive Officer, US Bank Trust 2 N/A Director National Association (formerly First Trust 332 Minnesota Street National Association) Suite E1430 St. Paul, MN 55101 Charlton Dietz (70) Since 1997 Retired Senior Vice President, Legal Affairs 2 N/A Director and General Counsel, Minnesota Mining and 30 Seventh Street East Manufacturing Company Suite 3050 St. Paul, MN 55101 Norbert J. Conzemius (60) Since 2000 Retired Chief Executive Officer, Road Rescue 2 N/A Director Incorporated 121 Wildwood Avenue Birchwood, MN 55110 Charles M. Osborne (48) Since 2001 Senior Vice President and Chief Financial 2 N/A Director Officer (1989-1997), Deluxe Corporation; 1 Red Pine Road Director (1992-present), Northstar Guarantee, North Oaks, MN 55127 Inc.; President and Chief Operating Officer (1997-1998), Graco, Inc.; Chief Financial Officer (1998), Vice President and General Manager, MN (1999), Vice President Corporate Human Resources, IA (2000), McLeod USA/Ovation Communications; Director (1999-present), Northstar Photonics; Executive Vice President and Chief Financial Officer (2000), 21 North Main, Inc.; Partner (1999-present), Gateway Alliance.
------- (1) Each Director serves until elected at each annual meeting, or until his successor is appointed. Each Officer is elected annually. 14 MAIRS AND POWER GROWTH FUND, INC. INVESTMENT ADVISER Mairs and Power, Inc. W1520 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101 CUSTODIAN US Bank, N.A. 615 East Michigan Street P. O. Box 701 Milwaukee, Wisconsin 53201 INDEPENDENT AUDITOR Ernst & Young, LLP 1400 Pillsbury Center 200 South Sixth Street Minneapolis, Minnesota 55402 SHAREHOLDER ACCOUNT INFORMATION AND INQUIRIES Call 1-800-304-7404 or write to: (REGULAR MAIL ADDRESS) (OVERNIGHT OR EXPRESS MAIL ADDRESS) ---------------------- ---------------------------------- Mairs and Power Growth Fund Mairs and Power Growth Fund c/o US Bancorp Fund Services, LLC c/o US Bancorp Fund Services, LLC 615 East Michigan Street 3rd Floor P. O. Box 701 615 East Michigan Street Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53201-0701 For Fund literature and information, you can also visit the Fund's web site at: www.mairsandpower.com