-----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, WUOIeXyiWfQnT60fPHkhgDRyWuuTAGLCFYT5+CqFBYKB6rFNjP1DJRfRGfoWipgr CgAcRl4Sit50rA+ln/zrGg== 0001047469-03-029880.txt : 20030905 0001047469-03-029880.hdr.sgml : 20030905 20030905101148 ACCESSION NUMBER: 0001047469-03-029880 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030905 EFFECTIVENESS DATE: 20030905 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-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00802 FILM NUMBER: 03882747 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-CSRS 1 a2117892zn-csrs.txt N-CSRS 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: 12/31/2003 --------------------------------------- Date of reporting period: 06/30/2003 -------------------------------------- Item 1. Report to Stockholders MAIRS AND POWER GROWTH FUND, INC. 2ND QUARTER REPORT June 30, 2003 (unaudited) W1520 First National Bank Building 332 Minnesota Street St. Paul, Minnesota 55101 651-222-8478 August 20, 2003 TO OUR SHAREHOLDERS: Mairs and Power Growth Fund shares had a return of 10.5% for the six month period ending June 30 after adjustment for the June dividend. This compares with returns of 11.8% for the Standard & Poor's 500 Stock Index and 9.0% for the Dow Jones Industrial Average. The average domestic stock fund had a return of 12.9%. Our ten year average return of 16.1% once again placed us on the WALL STREET JOURNAL list of the fifty best performing mutual funds for the past ten years and within that list we ranked seventh among the diversified stock funds. Our fifteen year average annual return of 16.0% ranked 3rd among all diversified stock funds according to a similar study in the July 7th issue of BARRONS. MONEY magazine, published by Time, Inc., devoted much of its August issue to "The Best 100 Mutual Funds." This was the sixth year this survey has appeared and the Fund has been included in each of those years. Economic growth continued at an improved pace in the second quarter with Gross Domestic Product rising at an annual rate of 2.4%, significantly better than the 1.4% rate in the first quarter. The quarter ended on a strong note with June being the best month of the period. Economists are projecting stronger growth during the second half of the year based on very stimulative monetary and fiscal policy. The Federal Reserve is intent on providing the framework for growth and in June lowered the federal funds rate to 1%, the lowest level since 1958. Retail sales have shown moderate improvement, housing markets remain robust, and a continuing high level of mortgage refinancing is providing liquidity for personal spending. The government index of leading economic indicators has shown pronounced strength recently and the WALL STREET JOURNAL survey of leading economists shows expectations of 3.5% or more growth in the second half. That optimism was validated by the most recent Federal Reserve survey of business conditions which revealed strength throughout most of the country and broad improvement in the long-ailing manufacturing sector. 1 Perhaps the most important economic event of the year took place on May 28th when President Bush signed into law a $350 billion tax reduction over ten years which lowers tax rates for virtually all tax payers. For investors, it was an event of historic significance because it substantially lowers taxes on equity capital. Dividend income, which previously had been taxed at rates as high as 39%, is now taxed at a maximum rate of 15%. Additionally, capital gains are also taxed at 15% which equalizes the attractiveness of both dividends and capital gains. Consequently, many companies are now reviewing their dividend payout policies in light of this change and several have already announced plans to increase dividends. We regard these changes as very beneficial to shareholders. The stock market has staged a strong recovery since March and is now reflecting greater confidence in improved prospects for the economy as well as corporate earnings, which exceeded expectations in the second quarter and are now approaching record levels achieved just prior to the onset of the 2001 recession. Productivity rose at an annual rate of 5.7% during the quarter which augurs well for stronger earnings throughout the year. The major area of investor concern continues to be slow business spending which may well continue until economic growth becomes more visible. We continue to find valuation levels to be attractive in many areas of the stock market and therefore continue to maintain a positive stance on prospects for the balance of the year. George A. Mairs, President William B. Frels, Co-manager 2 PERFORMANCE INFORMATION COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE FUND, S & P 500 INDEX, AND THE CONSUMER PRICE INDEX FROM 12-31-93 TO 06-30-03 [CHART] GROWTH FUND
12/31/1993 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002 6/30/2003 Fund $ 10,000 $ 10,563 $ 15,773 $ 19,937 $ 25,650 $ 28,053 $ 30,062 $ 38,022 $ 40,484 $ 37,196 $ 41,114 S & P $ 10,000 $ 10,130 $ 13,933 $ 17,135 $ 22,858 $ 29,418 $ 35,607 $ 32,360 $ 28,509 $ 22,208 $ 24,829 CPI $ 10,000 $ 10,270 $ 10,527 $ 10,874 $ 11,059 $ 11,236 $ 11,539 $ 11,932 $ 12,123 $ 12,413 $ 12,687
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING JUNE 30, 2003)
1 YEAR 5 YEARS 10 YEARS - ----------------------------------------------------------------------------------------------------- Mairs and Power Growth Fund 3.7% 8.4% 16.1%
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)
SIX MONTHS ENDED YEAR ENDED 12/31 06/30/03 2002 2001 2000 1999 1998 -------------- ------------ ------------ ------------ ------------ ------------ (UNAUDITED) PER SHARE (1) Net asset value, beginning of year $ 49.26 $ 54.36 $ 53.41 $ 46.46 $ 46.34 $ 43.34 Investment operations: Net investment income 0.25 0.45 0.51 0.54 0.43 0.43(*) Net realized and unrealized gains (losses) on investments 4.94 (4.86) 2.95 11.78 2.90 3.61 -------------- ------------ ------------ ------------ ------------ ------------ TOTAL FROM INVESTMENT OPERATIONS 5.19 (4.41) 3.46 12.32 3.33 4.04 Less distributions: Dividends (from net investment income) (0.20) (0.45) (0.51) (0.55) (0.47) (0.36) Distributions (from capital gains) (0.00) (0.24) (2.00) (4.82) (2.74) (0.68) -------------- ------------ ------------ ------------ ------------ ------------ TOTAL DISTRIBUTIONS (0.20) (0.69) (2.51) (5.37) (3.21) (1.04) -------------- ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE, END OF PERIOD $ 54.25 $ 49.26 $ 54.36 $ 53.41 $ 46.46 $ 46.34 ============== ============ ============ ============ ============ ============ TOTAL INVESTMENT RETURN 10.5% (8.1)% 6.5% 26.5% 7.2% 9.4% ============== ============ ============ ============ ============ ============ NET ASSETS, END OF PERIOD (000'S OMITTED) $ 1,023,500 $ 850,302 $ 679,027 $ 581,668 $ 546,836 $ 580,461 RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets 0.38% 0.78% 0.76% 0.78% 0.79% 0.82% Ratio of net investment income to average net assets 0.52% 0.93% 0.97% 1.06% 0.83% 0.97% Portfolio turnover rate 1.49% 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 JUNE 30, 2003 (UNAUDITED)
NUMBER OF MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------- --------------------------------------------------- -------------- COMMON STOCK 96.9% BASIC INDUSTRIES 11.1% 728,100 BMC Industries, Inc. * $ 393,174 640,000 Bemis Company, Inc. 29,952,000 1,020,000 Ecolab, Inc. 26,112,000 1,095,000 H. B. Fuller 24,111,900 770,000 The Valspar Corporation 32,509,400 --------------- 113,078,474 --------------- CAPITAL GOODS 11.7% 850,000 Donaldson Company, Inc. 37,782,500 1,131,662 Graco Inc. 36,213,184 1,280,100 MTS Systems Corporation 18,868,674 700,000 Pentair, Inc. 27,342,000 --------------- 120,206,358 --------------- CONSUMER CYCLICAL 8.6% 1,380,000 Target Corporation 52,219,200 887,600 The Toro Company 35,282,100 --------------- 87,501,300 --------------- CONSUMER STAPLE 11.6% 860,000 General Mills, Inc. 40,772,600 1,500,000 Hormel Foods 35,550,000 567,200 International Multifoods Corp. * 12,994,552 1,400,000 SUPERVALU, Inc. 29,848,000 --------------- 119,165,152 --------------- DIVERSIFIED 6.0% 840,000 General Electric Company 24,091,200 293,000 3M Company 37,791,140 --------------- 61,882,340 ---------------
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NUMBER OF MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------- --------------------------------------------------- --------------- COMMON STOCK (CONTINUED) FINANCIAL 14.9% 720,000 St. Paul Companies, Inc. $ 26,287,200 980,000 TCF Financial Corporation 39,043,200 1,460,000 U.S. Bancorp 35,770,000 1,010,000 Wells Fargo & Company 50,904,000 --------------- 152,004,400 --------------- HEALTH CARE 21.2% 850,000 Baxter International Inc. 22,100,000 610,000 Johnson & Johnson 31,537,000 1,070,000 Medtronic, Inc. 51,327,900 425,000 Merck & Co. 25,733,750 1,160,000 Pfizer Inc. 39,614,000 590,000 St. Jude Medical, Inc. * 33,925,000 410,000 Techne Corp. * 12,439,400 --------------- 216,677,050 --------------- TECHNOLOGY 9.9% 2,100,000 ADC Telecommunications Inc. * 4,888,800 1,390,000 Ceridian * 23,588,300 1,200,000 Corning Inc. * 8,868,000 1,287,030 eFunds Corp. * 14,839,456 570,000 Emerson Electric Co. 29,127,000 760,000 Honeywell International Inc. 20,406,000 --------------- 101,717,556 --------------- UTILITIES 1.9% 490,000 Verizon Communications 19,330,500 --------------- TOTAL COMMON STOCKS 96.9% $ 991,563,130 (cost $765,152,181)
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NUMBER OF MARKET VALUE OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - --------- -------------------------------------------------- -------------- SHORT TERM INVESTMENTS 3.1% 21,759,507 First American Prime Obligations Fund, Class I $ 21,759,507 10,575,665 Merrill Lynch Institutional Money Market Fund 10,575,665 --------------- TOTAL SHORT TERM INVESTMENTS 3.1% 32,335,172 (cost $32,335,172) --------------- TOTAL INVESTMENTS 100.0% 1,023,898,302 (cost $797,487,353) OTHER ASSETS AND LIABILITIES (NET) 0.0% (397,933) --------------- NET ASSETS: Capital stock $ 188,667 Additional paid-in capital 786,082,939 Accumulated undistributed net investment income 991,851 Accumulated undistributed net realized gain on investment 9,825,963 Net unrealized appreciation of investments 226,410,949 TOTAL NET ASSETS 100% $ 1,023,500,369 (Net assets equal to $54.25 per share on 18,866,676 =============== 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 SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED) INVESTMENT INCOME Income: Dividends $ 8,107,945 Other income 158 --------------- TOTAL INCOME $ 8,108,103 Expenses: Investment management fees (NOTE 5) 2,696,430 Administrative fees 347,035 Transfer agent fees 251,173 Custodian fees 94,319 Legal and audit fees 16,764 Other fees and expenses 10,181 --------------- TOTAL EXPENSES 3,415,902 --------------- NET INVESTMENT INCOME 4,692,201 REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4) Net realized gains on investments sold 9,710,384 Unrealized appreciation of investments 81,795,858 --------------- NET GAIN ON INVESTMENTS 91,506,242 --------------- INCREASE IN NET ASSETS FROM OPERATIONS $ 96,198,443 ===============
SEE ACCOMPANYING 'NOTES TO FINANCIAL STATEMENTS'. 8 STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED 06/30/03 YEAR ENDED (UNAUDITED) 12/31/02 ----------------- ----------------- OPERATIONS Net investment income $ 4,692,201 $ 7,473,595 Net realized gains on investments sold 9,710,384 4,161,596 Unrealized appreciation (depreciation) of investments 81,795,858 (90,991,923) ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 96,198,443 (79,356,732) DISTRIBUTIONS TO SHAREHOLDERS From net investment income (3,759,764) (7,418,239) Short-term gain distributed as ordinary income - - From net realized gains (9) (4,098,548) ----------------- ----------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,759,773) (11,516,787) CAPITAL STOCK TRANSACTIONS Proceeds from shares sold 118,752,467 360,493,209 Reinvestment of distributions from net investment income and net realized gains 3,410,550 10,523,089 Cost of shares redeemed (41,403,258) (108,867,528) ----------------- ----------------- INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 80,759,759 262,148,770 ----------------- ----------------- TOTAL INCREASE IN NET ASSETS 173,198,429 171,275,251 NET ASSETS Beginning of year 850,301,939 679,026,689 ----------------- ----------------- End of period (including accumulated undistributed net investment income of $991,851 and $59,414, respectively) $ 1,023,500,369 $ 850,301,939 ================= ================= CHANGES IN CAPITAL STOCK Shares sold 2,367,850 6,674,796 Shares issued for reinvested distributions 62,453 211,741 Shares redeemed (826,881) (2,114,247) ----------------- ----------------- NET INCREASE IN SHARES 1,603,422 4,772,290 ================= =================
SEE ACCOMPANYING 'NOTES TO FINANCIAL STATEMENTS'. 9 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 (UNAUDITED) 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 are stated at the last quoted sales price if readily available for such securities on each business day. Equity securities reported on the NASDAQ national market system use the NASDAQ Official Closing Price (NOCP), as approved by the SEC on March 18, 2003. 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 six months ended June 30, 2003 aggregated $87,930,233 and $13,117,433, respectively. Note 4 -- Net unrealized appreciation on investments for federal income tax purposes aggregated $226,410,949, of which $263,989,898 related to appreciated investment securities and $37,578,950 related to depreciated investment securities. Aggregate cost of investments for federal income tax purposes was $797,487,353. There is no difference between the book basis and tax basis (estimated) of dividends paid during the six-month period ended June 30, 2003. For federal income tax purposes, the components of distributable income as of December 31, 2002 were: Accumulated undistributed net investment income $ 59,414 Accumulated undistributed net realized gain on investment 115,589 Net unrealized appreciation of investments 144,615,090 ------------- $ 144,790,093
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% based on the Fund's average daily net assets. At June 30, 2003, the amount payable by the Fund to Mairs and Power, Inc. was $497,863. Directors of the Fund not affiliated with Mairs and Power, Inc. received compensation for meetings attended totaling $53,200 in 2003. No compensation was paid to any other director or officer of the Fund. 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- TIONS OF DIVIDENDS PERFORMANCE SHARES REALIZED FROM NET OF AN ASSUMED OUT- TOTAL NET NET ASSET SECURITIES INVESTMENT INVESTMENT OF DATES STANDING ASSETS VALUE GAINS INCOME $10,000* - ------------- --------------- --------------- --------------- --------------- --------------- --------------- Dec. 31, 1979 1,829,270 $ 14,104,765 $ 7.71 - $ 0.23 $ 11,945 Dec. 31, 1980 1,681,764 $ 14,540,014 $ 8.65 - $ 0.28 $ 13,869 Dec. 31, 1981 1,723,356 $ 13,148,158 $ 7.63 $ 0.37 $ 0.30 $ 13,343 Dec. 31, 1982 1,701,884 $ 16,784,217 $ 9.86 $ 0.29 $ 0.25 $ 18,569 Dec. 31, 1983 1,763,184 $ 18,972,177 $ 10.76 $ 0.35 $ 0.24 $ 21,495 Dec. 31, 1984 1,744,138 $ 17,304,204 $ 9.92 $ 0.38 $ 0.23 $ 21,060 Dec. 31, 1985 1,713,476 $ 21,553,457 $ 12.58 $ 0.43 $ 0.23 $ 28,383 Dec. 31, 1986 1,787,700 $ 22,235,453 $ 12.44 $ 1.37 $ 0.20 $ 31,660 Dec. 31, 1987 1,828,278 $ 19,816,097 $ 10.84 $ 1.15 $ 0.24 $ 30,921 Dec. 31, 1988 1,858,078 $ 20,630,251 $ 11.11 $ 0.61 $ 0.21 $ 34,007 Dec. 31, 1989 1,733,168 $ 22,630,081 $ 13.06 $ 0.92 $ 0.22 $ 43,552 Dec. 31, 1990 1,734,864 $ 22,501,587 $ 12.97 $ 0.35 $ 0.21 $ 45,150 Dec. 31, 1991 1,808,046 $ 31,440,529 $ 17.39 $ 0.79 $ 0.20 $ 64,137 Dec. 31, 1992 1,913,628 $ 34,363,306 $ 17.96 $ 0.58 $ 0.20 $ 69,165 Dec. 31, 1993 2,012,570 $ 39,081,010 $ 19.42 $ 0.61 $ 0.22 $ 78,058 Dec. 31, 1994 2,128,038 $ 41,889,850 $ 19.69 $ 0.49 $ 0.33 $ 82,454 Dec. 31, 1995 2,490,650 $ 70,536,880 $ 28.32 $ 0.76 $ 0.28 $ 123,118 Dec. 31, 1996 4,322,492 $ 150,161,759 $ 34.74 $ 0.70 $ 0.36 $ 155,627 Dec. 31, 1997 9,521,030 $ 412,590,619 $ 43.34 $ 0.96 $ 0.39 $ 200,214 Dec. 31, 1998 12,525,664 $ 580,460,523 $ 46.34 $ 0.68 $ 0.36 $ 218,971 Dec. 31, 1999 11,771,794 $ 546,836,085 $ 46.46 $ 2.74 $ 0.47 $ 234,652 Dec. 31, 2000 10,891,038 $ 581,668,419 $ 53.41 $ 4.82 $ 0.55 $ 296,790 Dec. 31, 2001 12,490,964 $ 679,026,689 $ 54.36 $ 2.00 $ 0.51 $ 316,008 Dec. 31, 2002 17,263,254 $ 850,301,939 $ 49.26 $ 0.24 $ 0.45 $ 290,341 Jun. 30, 2003 18,866,676 $ 1,023,500,369 $ 54.25 - $ 0.20 $ 320,924
*ASSUMES THE REINVESTMENT OF ALL INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FOR A $10,000 INVESTMENT MADE AT THE BEGINNING OF 1979. 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 JUNE 30, 2003) ARE AS FOLLOWS: 1 YEAR: +3.7% 5 YEARS: +8.4% 10 YEARS: +16.1%
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. 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 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 PRINCIPAL OCCUPATION(S) DURING PAST FIVE OVERSEEN BY HELD BY NAME, (AGE) AND ADDRESS(1) TIME SERVED(2) YEARS DIRECTOR TRUSTEE - --------------------------------------------------------------------------------------------------------------------------------- INTERESTED PRINCIPAL OFFICERS WHO ARE NOT DIRECTORS George A. Mairs, III (75) President - Chairman of the Investment Adviser N/A N/A since 1980 Peter G. Robb (54) Vice President - Vice President and Secretary of the N/A N/A since 1994 Investment Adviser Jon A. Theobald (57) Secretary - Executive Vice President and Chief N/A N/A since 2003 Administrative Officer of the Investment Adviser (2002 to present); - Senior Vice President, U.S. Trust Company (2001 - 2002); - Executive Vice President, Resource Trust Company (1996 - 2001). Lisa J. Hartzell (58) Treasurer - Manager of Mutual Fund Services of the N/A N/A since 1996 Investment Adviser DISINTERESTED DIRECTORS Charlton Dietz (72) Director - Retired Senior Vice President, Legal 2 N/A 30 Seventh Street East since 1997 Affairs and General Counsel, Minnesota Suite 3050 Mining and Manufacturing Company St. Paul, MN 55101 Norbert J. Conzemius (61) Director - Retired Chief Executive Officer, Road 2 N/A since 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 FIVE OVERSEEN BY HELD BY NAME, (AGE) AND ADDRESS(1) TIME SERVED(2) YEARS DIRECTOR TRUSTEE - --------------------------------------------------------------------------------------------------------------------------------- DISINTERESTED DIRECTORS (continued) Charles M. Osborne (50) Director - Chief Financial Officer, University of 2 N/A since 2001 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. INTERESTED DIRECTORS WHO ARE NOT OFFICERS William B. Frels (63) Director - President and Treasurer of the 2 N/A since 1992 Investment Adviser Edward C. Stringer (68) Director - Shareholder (2002 - present), Briggs 2 N/A 2200 First National Bank since 2002 and Morgan, P.A. Building - Associate Justice, State of Minnesota St. Paul, MN 55101 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. 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 U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 INDEPENDENT AUDITOR Ernst & Young, LLP Suite 1400 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 Item 2. Code of Ethics. Not applicable to semi-annual report. Item 3. Audit Committee Financial Expert Not applicable to semi-annual report. Item 4. Principal Accountant Fees and Services Not applicable to semi-annual report. Item 5. Audit Committee of Listed Registrant Not applicable to semi-annual report. Item 6. Reserved Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not applicable to registrant. Item 8. Reserved Item 9. Controls and Procedures a) The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time period specified by the SEC's rules and forms. b) There was no change in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits (a) Code of Ethics Not applicable to semi-annual report. (b) Certifications required by Rule 30a-2(a). under the Investment Company Act of 1940. Attached as exhibits 10(b).1 and 10(b).2 to this form. (c) Certifications required by 18 U.S.C. 1350. Attached as exhibit 10(c). 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 - -------------------------------------------------------------------------------- GEORGE A. MAIRS, III, PRESIDENT Date September 5, 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. By (Signature and Title) * /s/ George A. Mairs - -------------------------------------------------------------------------------- GEORGE A. MAIRS, III, PRESIDENT (PRINCIPAL EXECUTIVE OFFICER) Date September 5, 2003 ---------------------------------------------------------------------------- By (Signature and Title) * /s/ Lisa J. Hartzell - -------------------------------------------------------------------------------- LISA J. HARTZELL, TREASURER (PRINCIPAL FINANCIAL OFFICER) Date September 5, 2003 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-10.(B)1 3 a2117892zex-10_b1.txt EXHIBIT 10.(B),1 Exhibit 10(b).1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, George A. Mairs, President of Mairs and Power Growth Fund, Inc., 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; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 5, 2003 ------------------------- /s/ George A. Mairs ----------------------------------------- George A. Mairs, President EX-10.(B)2 4 a2117892zex-10_b2.txt EXHIBIT 10.(B).2 Exhibit 10(b).2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Lisa J. Hartzell, Treasurer of Mairs and Power Growth Fund, Inc., 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; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 5, 2003 --------------------------- /s/ Lisa J. Hartzell ----------------------------------------- Lisa J. Hartzell, Treasurer EX-10.(C) 5 a2117892zex-10_c.txt EXHIBIT 99.10(C) Exhibit 10(c) CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350), the undersigned officers of Mairs and Power Growth Fund, Inc. (the "Fund") do hereby certify, to the best of each such officer's knowledge, that: 1. The N-CSR of Mairs and Power Growth Fund, Inc. (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Fund. /s/ George A. Mairs - ----------------------------------------- George A. Mairs, III President Date: September 5, 2003 /s/ Lisa J. Hartzell - ----------------------------------------- Lisa J. Hartzell Treasurer Date: September 5, 2003 A signed original of this written statement required by section 906 has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----