-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MG/1A14N3PZFf2dvuOpmP4MqepCjj9ZKNI8vWeGfx8/z0V3DQ+CneKhg/K2XiTRA 739p5lrpRivovhuOwWwexQ== 0001047469-03-009406.txt : 20030320 0001047469-03-009406.hdr.sgml : 20030320 20030320145408 ACCESSION NUMBER: 0001047469-03-009406 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030320 EFFECTIVENESS DATE: 20030320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAIRS & POWER GROWTH FUND INC CENTRAL INDEX KEY: 0000061628 IRS NUMBER: 416019924 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-00802 FILM NUMBER: 03610447 BUSINESS ADDRESS: STREET 1: 332 MINNESOTA ST STE W-2062 STREET 2: FIRST NATIONAL BANK BUILDING CITY: ST PAUL STATE: MN ZIP: 55101 BUSINESS PHONE: 6122228478 MAIL ADDRESS: STREET 1: FIRST NATIONAL BANK BUILDING W-2062 STREET 2: 332 MINNESOTA STREET CITY: ST PAUL STATE: MN ZIP: 55101 FORMER COMPANY: FORMER CONFORMED NAME: MAIRS & POWER FUND INC DATE OF NAME CHANGE: 19680607 N-CSR/A 1 a2106036zn-csra.txt N-CSR/A --------------------------- OMB APPROVAL --------------------------- OMB Number: 3235-0570 Expires: Nov 30,2005 Estimated average burden hours per response.....5.0 --------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-00802 MAIRS AND POWER GROWTH FUND, INC. (Exact name of registrant as specified in charter) 332 MINNESOTA STREET, SUITE W1520, ST. PAUL, MN 55101 (Address of principal executive offices) (Zip Code) GEORGE A. MAIRS, III, PRESIDENT, 332 MINNESOTA STREET, SUITE W1520, ST. PAUL, MN 55101 (Name and address of agent for service) Registrant's telephone number, including area code: 651-222-8478 Date of fiscal year end: 12/31 Date of reporting period: 12/31/2002 Item 1. Report to Stockholders MAIRS AND POWER GROWTH FUND, INC. ANNUAL REPORT DECEMBER 31, 2002 W1520 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET ST. PAUL, MINNESOTA 55101 651-222-8478 February 10, 2003 TO OUR SHAREHOLDERS: Mairs and Power Growth Fund shares registered a decline of 8.1% for 2002 after adjustment for the dividend and capital gain distributions. This compares favorably with declines of 22.1% for the Standard & Poor's 500 Stock Index and 15.0% for the Dow Jones Industrial Average. The average domestic diversified stock fund had a decline of 22.4%. Our ten year average annual return of 15.4% once again placed us on the WALL STREET JOURNAL list of the fifty best performing mutual funds for the past 10-year period and within that list we ranked 4th among the diversified stock funds. Our fifteen year average annual return of 16.1% ranked 4th among all domestic stock funds according to a similar survey in the January 6th issue of BARRON'S. BUSINESS WEEK magazine, in the January 29th issue, examined a database 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 172 funds (5% of the total) received the highest quality A rating. Mairs and Power Growth Fund was on that A list for the third consecutive year. SMART MONEY magazine published by Dow Jones & Co. ran an article in the November 2002 issue recommending "10 Funds for the Next 10 Years." In order to be considered, funds had to have at least a 10 year record and the same manager in place for at least the last five years. Only 193 domestic equity funds qualified. Further consideration was given to consistency of performance and management teams with succession plans in place and strong incentives such as ownership. The Fund ranked in third place among the ten recommended funds. A distinguishing feature of the Fund, which has benefitted both our performance and our survey rankings, has been our very low expense ratio, which was 0.78% of assets in 2002, and compares with the median expense ratio of 1.27% for all diversified stock funds as calculated by fund tracker Lipper Inc. Economic growth weakened in the fourth quarter of 2002 with Gross Domestic Product rising at an annual rate of only 0.7% following a very strong third quarter when the economy grew at a better-than-expected 4% pace. For the entire year, the economy expanded 2.4% which compares rather favorably with the first year of recovery following the last recession a decade ago when the economy grew only 1.5%. Much of the fourth quarter weakness was attributed to continued caution with respect to business spending and a slowdown in consumer spending on durable goods such as automobiles. Recent data suggests that consumer spending is now on a firmer footing and low business inventories will produce a rebound in business spending during the current quarter. The economy is projected to grow 2.8% this year based on the consensus of over 50 economists. Perhaps the major influence holding back more vigorous growth are the stagnant economies of Europe and Japan and the effect this has had on foreign trade. 1 The threat of war has cast a pall over financial markets in recent months both in the U.S. and abroad. Since none of these international issues are subject to simple resolutions, they may well be a cause for investor malaise for an extended period. However, they should not obscure the fact that investment fundamentals have been steadily strengthening. Productivity surged 4.7% for the year which was the largest yearly increase since 1950. This important measure of business efficiency has positive implications for corporate profits as well as workers' incomes. Inflation, which was the scourge of our economy for twenty years, has been largely contained. Excluding volatile food and energy costs, consumer prices rose 1.9% last year, the smallest increase since 1965. The GDP price deflator, a broader index, gained just 0.8% for the year. This has permitted interest rates to fall to the lowest level in 41 years. Corporate earnings have been under pressure during the past two years but are now strengthening due in part to vigorous cost cutting undertaken by management in the wake of the recession. Corporate governance is improving and oversight strengthening as a counterpoint to recent laxness which, in certain instances, resulted in the destruction of shareholder wealth. Currently, we find much of the stock market undervalued based on improving fundamentals and historic relationships between interest rates and stock prices. The President has proposed a growth stimulus package which includes eliminating federal income taxes on dividends since they are already taxed at the corporate level. While congressional action may significantly alter this proposal, any measure of dividend tax relief could have substantial value for shareholders. George A. Mairs, President William B. Frels, Co-manager 2 [CHART] COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE FUND, S & P 500 INDEX, AND THE CONSUMER PRICE INDEX DOLLARS IN THOUSANDS
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Fund 10 11.29 11.92 17.80 22.50 28.95 31.66 33.93 42.91 45.69 41.98 S & P 10 11.01 11.15 15.34 18.87 25.17 32.39 39.20 35.63 31.39 24.45 CPI 10 10.27 10.55 10.81 11.17 11.36 11.54 11.85 12.25 12.45 12.75
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 2002)
1 Year 5 Years 10 Years Mairs and Power Growth Fund -8.1% +7.7% +15.4%
PAST INVESTMENT RESULTS SHOULD NOT BE TAKEN AS NECESSARILY REPRESENTATIVE OF FUTURE PERFORMANCE. PLEASE NOTE THAT THE ABOVE GRAPH AND TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. 3 FINANCIAL HIGHLIGHTS (SELECTED PER SHARE DATA AND RATIOS -- FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED DECEMBER 31 2002 2001 2000 1999 1998 --------------------------------------------------------------- PER SHARE (1) Net asset value, beginning of year $ 54.36 $ 53.41 $ 46.46 $ 46.34 $ 43.34 Investment operations: Net investment income 0.45 0.51 0.54 0.43 0.43(*) Net realized and unrealized gains (losses) on investments (4.86) 2.95 11.78 2.90 3.61 --------- --------- --------- --------- ----------- TOTAL FROM INVESTMENT OPERATIONS (4.41) 3.46 12.32 3.33 4.04 Less distributions: Dividends (from net investment income) (0.45) (0.51) (0.55) (0.47) (0.36) Distributions (from capital gains) (0.24) (2.00) (4.82) (2.74) (0.68) --------- --------- --------- --------- ----------- TOTAL DISTRIBUTIONS (0.69) (2.51) (5.37) (3.21) (1.04) --------- --------- --------- --------- ----------- NET ASSET VALUE, END OF YEAR $ 49.26 $ 54.36 $ 53.41 $ 46.46 $ 46.34 ========= ========= ========= ========= =========== TOTAL INVESTMENT RETURN (8.1)% 6.5% 26.5% 7.2% 9.4% ========= ========= ========= ========= =========== NET ASSETS, END OF YEAR (000'S OMITTED) $850,302 $679,027 $581,668 $546,836 $580,461 RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets 0.78% 0.76% 0.78% 0.79% 0.82% Ratio of net investment income to average net assets 0.93% 0.97% 1.06% 0.83% 0.97% Portfolio turnover rate 1.25% 7.91% 15.34% 5.55% 2.04%
(*) 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. 4 STATEMENT OF NET ASSETS DECEMBER 31, 2002
NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------------- ------------------------------------------------------------------ ----------------- COMMON STOCK 97.0% BASIC INDUSTRIES 11.7% 728,100 BMC Industries, Inc. * $1,143,117 470,000 Bemis Company, Inc. 23,326,100 510,000 Ecolab, Inc. 25,245,000 834,000 H. B. Fuller 21,583,920 642,500 The Valspar Corporation 28,385,650 ----------------- 99,683,787 ----------------- CAPITAL GOODS 11.7% 850,000 Donaldson Company, Inc. 30,600,000 1,131,662 Graco Inc. 32,422,116 1,280,100 MTS Systems Corporation 12,826,602 680,000 Pentair, Inc. 23,494,000 ----------------- 99,342,718 ----------------- CONSUMER CYCLICAL 8.3% 1,330,000 Target Corporation 39,900,000 479,800 The Toro Company 30,659,220 ----------------- 70,559,220 ----------------- CONSUMER STAPLE 10.7% 784,000 General Mills, Inc. 36,808,800 1,370,000 Hormel Foods 31,962,100 1,370,000 SUPERVALU, Inc. 22,618,700 ----------------- 91,389,600 ----------------- DIVERSIFIED 5.8% 840,000 General Electric Company 20,454,000 233,000 3M Company 28,728,900 ----------------- 49,182,900 -----------------
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NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------------- ------------------------------------------------------------------ ----------------- COMMON STOCK (CONTINUED) FINANCIAL 16.1% 680,000 St. Paul Companies, Inc. $23,154,000 950,000 TCF Financial Corporation 41,505,500 1,340,350 U.S. Bancorp 28,442,227 930,000 Wells Fargo & Company 43,589,100 ----------------- 136,690,827 ----------------- HEALTH CARE 21.2% 820,000 Baxter International Inc. 22,960,000 570,000 Johnson & Johnson 30,614,700 940,000 Medtronic, Inc. 42,864,000 385,000 Merck & Co. 21,794,850 1,090,000 Pfizer Inc. 33,321,300 720,000 St. Jude Medical, Inc. * 28,598,400 ----------------- 180,153,250 ----------------- TECHNOLOGY 9.3% 2,100,000 ADC Telecommunications Inc. * 4,389,000 1,180,000 Ceridian 17,015,600 1,200,000 Corning Inc. * 3,972,000 1,287,030 eFunds Corp. * 11,724,843 518,050 Emerson Electric Co. 26,342,843 658,750 Honeywell International Inc. 15,810,000 ----------------- 79,254,286 ----------------- UTILITIES 2.2% 490,000 Verizon Communications 18,987,500 ----------------- TOTAL COMMON STOCKS 97.0% (cost $680,628,998) $825,244,088
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NUMBER MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------------- ------------------------------------------------------------------ ----------------- SHORT TERM INVESTMENTS 2.9% 13,953,745 First American Prime Obligations Fund, Class I $13,953,745 10,510,953 Merrill Lynch Institutional Money Market Fund 10,510,953 ----------------- TOTAL SHORT TERM INVESTMENTS 2.9% 24,464,698 (cost $24,464,698) ----------------- TOTAL INVESTMENTS 99.9% 849,708,786 (cost $705,093,696) OTHER ASSETS AND LIABILITIES (NET) 0.1% 593,153 ----------------- NET ASSETS: Capital stock $ 172,633 Additional paid-in capital 705,339,213 Accumulated undistributed net investment income 59,414 Accumulated undistributed net realized gain on investment 115,589 Net unrealized appreciation of investments 144,615,090 ----------------- TOTAL NET ASSETS 100% $850,301,939 ================= (Net assets equal to $49.26 per share on 17,263,254 shares outstanding) CAPITAL STOCK (par value $.01 a share) Shares authorized 25,000,000 ==================
* Non income producing SEE ACCOMPANYING `NOTES TO FINANCIAL STATEMENTS'. 7 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2002
INVESTMENT INCOME Income: Dividends $13,762,822 Other income 1,110 ------------ TOTAL INCOME $13,763,932 Expenses: Investment management fees (NOTE 5) 4,899,017 Administrative fees 694,068 Transfer agent fees 484,159 Custodian fees 164,493 Legal and audit fees 33,303 Other fees and expenses 15,297 ------------ TOTAL EXPENSES 6,290,337 --------------- NET INVESTMENT INCOME 7,473,595 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 4) Net realized gains on investments sold 4,161,596 Unrealized depreciation of investments (90,991,923) ------------ NET LOSS ON INVESTMENTS (86,830,327) --------------- DECREASE IN NET ASSETS FROM OPERATIONS ($79,356,732) ===============
SEE ACCOMPANYING `NOTES TO FINANCIAL STATEMENTS'. 8 STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31 2002 2001 --------------------------------- OPERATIONS Net investment income $ 7,473,595 $ 5,885,214 Net realized gains on investments sold 4,161,596 24,041,922 Unrealized (depreciation) appreciation of investments (90,991,923) 11,562,808 ---------------- ------------ (DECREASE) INCREASE IN NET ASSETS (79,356,732) 41,489,944 FROM OPERATIONS DISTRIBUTIONS TO SHAREHOLDERS From net investment income (7,418,239) (5,988,102) Short-term gain distributed as ordinary income - (1,917,313) From net realized gains (4,098,548) (22,049,038) ---------------- ------------ TOTAL DISTRIBUTIONS TO SHAREHOLDERS (11,516,787) (29,954,453) CAPITAL STOCK TRANSACTIONS Proceeds from shares sold 360,493,209 116,664,500 Reinvestment of distributions from net investment income and net realized gains 10,523,089 27,561,263 Cost of shares redeemed (108,867,528) (58,402,984) ---------------- ------------ INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 262,148,770 85,822,779 ---------------- ------------ TOTAL INCREASE IN NET ASSETS 171,275,251 97,358,270 NET ASSETS Beginning of year 679,026,689 581,668,419 ---------------- ------------ End of year (including accumulated undistributed net investment income of $59,414 and $4,058, respectively) $850,301,939 $679,026,689 ================ ============ CHANGES IN CAPITAL STOCK Shares sold 6,674,796 2,220,122 Shares issued for reinvested distributions 211,741 504,953 Shares redeemed (2,114,247) (1,125,130) ---------------- ------------ NET INCREASE IN SHARES 4,772,290 1,599,945 ================ ============
SEE ACCOMPANYING `NOTES TO FINANCIAL STATEMENTS'. 9 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 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 procedures established and approved by the adviser, Mairs and Power, Inc. and the Fund's Board of Directors. (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 excise and income taxes. 10 (d) 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. Note 3 -- Purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 2002 aggregated $267,344,229 and $9,733,942, respectively. Note 4 -- Net unrealized appreciation on investments for federal income tax purposes aggregated $144,615,090, of which $202,945,338 related to appreciated investment securities and $58,330,248 related to depreciated investment securities. Aggregate cost of investments for federal income tax purposes was $705,093,696. There is no difference between the book basis and tax basis of distributable earnings at December 31, 2002, and no difference between the book basis and tax basis of dividends paid during the year then ended. Note 5 -- The investment management 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 management fees were paid to the adviser pursuant to an advisory agreement approved by the directors of the Fund. The management 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. At December 31, 2002, the amount payable by the Fund to Mairs and Power, Inc. was $415,444. Directors of the Fund not affiliated with Mairs and Power, Inc. received compensation for meetings attended totaling $107,350 in 2002. No compensation was paid to any other director or officer of the Fund. 11 REPORT OF INDEPENDENT AUDITORS To the Shareholders and Board of Directors of 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, 2002, 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, 2002, by correspondence with the custodian and brokers. 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, 2002, 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 24, 2003 12 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 -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS PERFORMANCE OF OF REALIZED FROM NET AN ASSUMED SHARES TOTAL NET NET ASSET SECURITIES INVESTMENT INVESTMENT OF DATES OUTSTANDING ASSETS VALUE GAINS INCOME $10,000* - ------------- ------------ ------------ --------- -------------- ---------- -------------- Dec. 31, 1978 1,996,530 $ 13,282,487 $ 6.66 $ 0.18 $ 10,985 Dec. 31, 1979 1,829,270 $ 14,104,765 $ 7.71 $ 0.23 $ 13,122 Dec. 31, 1980 1,681,764 $ 14,540,014 $ 8.65 $ 0.28 $ 15,236 Dec. 31, 1981 1,723,356 $ 13,148,158 $ 7.63 $ 0.37 $ 0.30 $ 14,658 Dec. 31, 1982 1,701,884 $ 16,784,217 $ 9.86 $ 0.29 $ 0.25 $ 20,398 Dec. 31, 1983 1,763,184 $ 18,972,177 $ 10.76 $ 0.35 $ 0.24 $ 23,613 Dec. 31, 1984 1,744,138 $ 17,304,204 $ 9.92 $ 0.38 $ 0.23 $ 23,135 Dec. 31, 1985 1,713,476 $ 21,553,457 $ 12.58 $ 0.43 $ 0.23 $ 31,180 Dec. 31, 1986 1,787,700 $ 22,235,453 $ 12.44 $ 1.37 $ 0.20 $ 34,779 Dec. 31, 1987 1,828,278 $ 19,816,097 $ 10.84 $ 1.15 $ 0.24 $ 33,968 Dec. 31, 1988 1,858,078 $ 20,630,251 $ 11.11 $ 0.61 $ 0.21 $ 37,358 Dec. 31, 1989 1,733,168 $ 22,630,081 $ 13.06 $ 0.92 $ 0.22 $ 47,844 Dec. 31, 1990 1,734,864 $ 22,501,587 $ 12.97 $ 0.35 $ 0.21 $ 49,599 Dec. 31, 1991 1,808,046 $ 31,440,529 $ 17.39 $ 0.79 $ 0.20 $ 70,456 Dec. 31, 1992 1,913,628 $ 34,363,306 $ 17.96 $ 0.58 $ 0.20 $ 75,979 Dec. 31, 1993 2,012,570 $ 39,081,010 $ 19.42 $ 0.61 $ 0.22 $ 85,749 Dec. 31, 1994 2,128,038 $ 41,889,850 $ 19.69 $ 0.49 $ 0.33 $ 90,578 Dec. 31, 1995 2,490,650 $ 70,536,880 $ 28.32 $ 0.76 $ 0.28 $ 135,249 Dec. 31, 1996 4,322,492 $150,161,759 $ 34.74 $ 0.70 $ 0.36 $ 170,961 Dec. 31, 1997 9,521,030 $412,590,619 $ 43.34 $ 0.96 $ 0.39 $ 219,941 Dec. 31, 1998 12,525,664 $580,460,523 $ 46.34 $ 0.68 $ 0.36 $ 240,546 Dec. 31, 1999 11,771,794 $546,836,085 $ 46.46 $ 2.74 $ 0.47 $ 257,773 Dec. 31, 2000 10,891,038 $581,668,419 $ 53.41 $ 4.82 $ 0.55 $ 326,033 Dec. 31, 2001 12,490,964 $679,026,689 $ 54.36 $ 2.00 $ 0.51 $ 347,144 Dec. 31, 2002 17,263,254 $850,301,939 $ 49.26 $ 0.24 $ 0.45 $ 318,949
* ASSUMES THE REINVESTMENT OF ALL INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FOR A $10,000 INVESTMENT MADE AT THE BEGINNING OF 1978. 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, 2002) ARE AS FOLLOWS: 1 YEAR: -8.1% 5 YEARS: +7.7% 10 YEARS: +15.4% 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. THE TOTAL RETURNS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. 13 ADDITIONAL SHAREHOLDER INFORMATION DECEMBER 31, 2002 An annual meeting of the Fund's shareholders was held on May 20, 2002. The number of outstanding shares of common stock on record date, April 1, 2002, for the Mairs and Power Growth Fund was 14,282,330. Each matter voted upon at that meeting, as well as the number of votes cast for, against or withheld, and the number of abstentions with respect to such matters, are set forth below. (a) The Fund's shareholders elected the following directors: DIRECTOR'S NAME VOTES FOR VOTES WITHHELD --------------- --------- -------------- George A. Mairs 7,608,180 118,744 William B. Frels 7,610,128 116,796 Peter G. Robb 7,610,450 116,474 J. Thomas Simonet 7,658,611 68,313 Charlton Dietz 7,664,408 62,515 Norbert J. Conzemius 7,670,164 56,760 Charles M. Osborne 7,667,740 59,184 (b) The Fund's shareholders ratified the selection by the Fund's Board of Directors of Ernst & Young LLP as the Fund's independent public accountant for the Fund for the fiscal year ending December 31, 2002. The following votes were cast regarding this matter: VOTES FOR VOTES AGAINST ABSTENTIONS --------- ------------- ----------- 7,556,155 77,827 92,943 (c) There were no other matters voted on or discussed. 14 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 Fund's 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.
POSITION(S) NUMBER OF HELD WITH PORTFOLIOS IN OTHER FUND AND FUND COMPLEX DIRECTORSHIPS LENGTH OF TIME PRINCIPAL OCCUPATION(S) DURING PAST OVERSEEN BY HELD BY TRUSTEE NAME, (AGE) AND ADDRESS(1) SERVED(2) FIVE YEARS DIRECTOR - ---------------------------------------------------------------------------------------------------------------------------- INTERESTED DIRECTORS AND PRINCIPAL OFFICERS George A. Mairs, III (74) President and Chairman of the Investment Adviser 2 N/A Director since 1980 William B. Frels (63) Secretary and President and Treasurer of the 2 N/A Director since Investment Adviser 1992 Peter G. Robb (54) Vice President Vice President and Secretary of the 2 N/A since 1994; Investment Adviser Director since 1995 INTERESTED PRINCIPAL OFFICER WHO IS NOT A DIRECTOR Lisa J. Hartzell (57) Treasurer Manager of Mutual Fund Services of the N/A N/A since 1996 Investment Adviser DISINTERESTED DIRECTORS J. Thomas Simonet (76) Director from Retired Chief Executive Officer, US 2 N/A 332 Minnesota Street 1992 to Sep Bank Trust National Association Suite E1430 2002 (formerly First Trust National St. Paul, MN 55101 Association) Charlton Dietz (71) Director since Retired Senior Vice President, Legal 2 N/A 30 Seventh Street East 1997 Affairs and General Counsel, Minnesota Suite 3050 Mining and Manufacturing Company St. Paul, MN 55101 Norbert J. Conzemius (61) Director since Retired Chief Executive Officer, Road 2 N/A 2000 Rescue Incorporated
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POSITION(S) NUMBER OF HELD WITH PORTFOLIOS IN OTHER FUND AND FUND COMPLEX DIRECTORSHIPS LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST OVERSEEN BY HELD BY TRUSTEE NAME, (AGE) AND ADDRESS(1) TIME SERVED(2) FIVE YEARS DIRECTOR - ---------------------------------------------------------------------------------------------------------------------------- DISINTERESTED DIRECTORS Charles M. Osborne (49) Director * Chief Financial Officer, 2 N/A since 2001 University of Minnesota Foundation (2000 to present); * Executive Vice President and Chief Financial Officer, 21 North Main, Inc. (2000); * Partner, Gateway Alliance (1999-present); * Director, Northstar Photonics (1999-present); * Chief Financial Officer (1998), Vice President and General Manager, MN (1999), Vice President Corporate Human Resources, IA (2000), McLeod USA/Ovation Communications; * President and Chief Operating Officer, Graco, Inc. (1997-1998). Edward C. Stringer (67 ) Director * Shareholder (2002 - present), 2 N/A 2200 First National Bank since Briggs and Morgan, P.A. Building October * Associate Justice, State of St. Paul, MN 55101 2002 Minnesota Supreme Court (1994-2002).
(1) Unless otherwise indicated, the mailing address of each officer and director is: 332 Minnesota Street, Suite W1520, Saint Paul, MN 55101. (2) Each Director serves until elected at each annual meeting, or until his successor is appointed. Each officer is elected annually. 16 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 U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 INDEPENDENT AUDITOR Ernst & Young, LLP Suite1400 220 South Sixth Street Minneapolis, Minnesota 55402 FOR ANY 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 U.S. Bancorp Fund Services, LLC c/o U.S. Bancorp Fund Services, LLC 615 East Michigan Street 3rd Floor P. O. Box 701 615 East Michigan Street Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202 For Fund literature and information, you can also visit the Fund's web site at: www.mairsandpower.com MAIRS AND POWER GROWTH FUND Item 2. Code of Ethics. Omitted pursuant to transition provisions for investment companies with a fiscal period ending on or before July 15, 2003. Item 3. Audit Committee Financial Expert Omitted pursuant to transition provisions for investment companies with a fiscal period ending on or before July 15, 2003. Item 9. Controls and Procedures Omitted pursuant to transition provisions for investment companies with a fiscal period ending on or before March 31, 2003. Item 10. Exhibits (a) Omitted pursuant to transition provisions for investment companies with a fiscal period ending on or before July 15, 2003. (b) Certification required by Rule 30a-2 are attached as exhibits to this form. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) MAIRS AND POWER GROWTH FUND, INC. By (Signature and Title) * /s/ George A. Mairs, III - ------------------------------------- GEORGE A. MAIRS, III, PRESIDENT Date March 4, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. * /s/ George A. Mairs, III - ------------------------------------- GEORGE A. MAIRS, III, PRESIDENT Date March 4, 2003 By (Signature and Title) * /s/ Lisa J. Hartzell - --------------------------------- LISA J. HARTZELL, TREASURER Date March 4, 2003 EX-99.CERT 3 a2106036zex-99_cert.txt EXHIBIT 99.CERT Exhibit 10(b) FORM OF CERTIFICATION FOR FORM N-CSR I, Lisa J. Hartzell, certify that: 1. I have reviewed this report on Form N-CSR of Mairs and Power Growth Fund, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. Date: March 4, 2003 /s/ Lisa J. Hartzell ------------------------------- Lisa J. Hartzell, Treasurer Exhibit 10(b) FORM OF CERTIFICATION FOR FORM N-CSR I, George A. Mairs, III, certify that: 1. I have reviewed this report on Form N-CSR of Mairs and Power Growth Fund, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. Date: March 4, 2003 /s/ George A. Mairs, III ----------------------------------- George A. Mairs, III, President -----END PRIVACY-ENHANCED MESSAGE-----