-----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, KSdVWtaeOGCbMLAeKj3Tg3mYIwo4Dph9Sd3mGZz39CEWWrWP5S1wGIcIH5JJ8950 /mpy51zqALvf9d+utHwwYA== 0001047469-05-004976.txt : 20050228 0001047469-05-004976.hdr.sgml : 20050228 20050228163520 ACCESSION NUMBER: 0001047469-05-004976 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20050228 DATE AS OF CHANGE: 20050228 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: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00802 FILM NUMBER: 05646034 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 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: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-14290 FILM NUMBER: 05646035 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 485APOS 1 a2152514z485apos.txt 485APOS Registration Number 2-14290 FORM N-1A SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ Post-Effective Amendment No. 58 /X/ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/ Amendment No. 58 Mairs and Power Growth Fund, Inc. (Exact Name of Registrant as Specified in Charter) W1520 First National Bank Building 332 Minnesota Street St. Paul, MN 55101-1363 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (651) 222-8478 William B. Frels, President W1520 First National Bank Building 332 Minnesota Street St. Paul, MN 55101-1363 (Name and Address of Agent for Service) with copies to: Christopher C. Cleveland, Esq. Briggs and Morgan, P.A. 2400 IDS Center Minneapolis, MN 55402 It is proposed that this filing will become effective (check appropriate box) / / immediately upon filing pursuant to paragraph (b) / / on (dated) pursuant to paragraph (b) /X/ 60 days after filing pursuant to paragraph (a)(1) / / on (date) pursuant to paragraph (a)(1) / / 75 days after filing pursuant to paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2) of Rule 485 If appropriate, check the following box: / / This post-effective amendment designates a new effective date for a previously filed post-effective amendment. MAIRS AND POWER GROWTH FUND, INC. W1520 FIRST NATIONAL BANK BLDG. 332 MINNESOTA STREET ST. PAUL, MN 55101-1363 1-800-304-7404 OBJECTIVE The objective of the Fund is to provide shareholders with a diversified holding of common stocks which have the potential for above-average long-term appreciation. PROSPECTUS April 29, 2005 ADDITIONAL INFORMATION ABOUT THE FUND This Prospectus, which should be kept for future reference, is designed to set forth the information you should know before you invest. A "Statement of Additional Information" dated April 29, 2005, contains more information about the Fund and has been filed with the Securities and Exchange Commission. It is incorporated by reference into this Prospectus. You may obtain a copy of the Statement without charge, by writing to the Fund or by calling our Customer Service Department at 1-800-304-7404. FEES AND EXPENSES The Fund is offered on a no-load basis, which means that you pay no sales charge for the purchase or sale of Fund shares and no 12b-1 marketing fees. You will, however, incur expenses for investment advisory, management and administrative services, which are included in annual fund operating expenses. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT DETERMINED IF THE INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE, NOR HAS IT APPROVED OR DISAPPROVED THESE SECURITIES. IT IS A CRIMINAL OFFENSE TO PRIVACY POLICY ENCLOSED STATE OTHERWISE. TABLE OF CONTENTS Risk/Return Summary 1 Investment Objective/Goals 1 Principal Investment Strategies 1 Principal Risks of Investing in the Fund 1 Risk/Return Bar Chart and Table 2 Fees and Expenses of the Fund 4 Investment Objective, Principal Investment Strategies, Related Risks, and Disclosure of Portfolio Holdings 5 Management's Discussion of Fund Performance 7 Comparison Chart (Fund, S & P 500 Index and Consumer Price Index) 8 Management of the Fund 9 Types of Accounts 10 Determining Net Asset Value Per Share 11 Purchasing Shares 12 Wiring Instructions 13 Redeeming Shares 14 Signature Guarantee Instructions 15 Frequent Purchases and Redemptions of Fund Shares 16 Exchanging Shares 17 Transferring Registration 17 Income Dividends and Capital Gain Distributions 17 Taxes 18 Other Shareholder Services 19 Condensed Financial Information 21 Privacy Policy 22 Officers and Directors 23 For More Information Back Cover
RISK/RETURN SUMMARY INVESTMENT OBJECTIVE/GOALS The objective of the Mairs and Power Growth Fund (the "Fund") is to provide shareholders with a diversified holding of common stocks which have the potential for above-average long-term appreciation. PRINCIPAL INVESTMENT STRATEGIES We expect that common stocks will continue to be the primary emphasis in the portfolio. Preference is given to holdings in high quality companies characterized by: - - Earnings that are reasonably predictable. - - Return on equity that is above average. - - Market dominance. - - Financial strength. Because we recognize that smaller capitalization companies provide somewhat higher returns over longer time frames, some emphasis is placed on small to medium sized companies, generally located in the Upper Midwest region. These companies may be underowned by institutional investors. The Fund seeks to: - - Keep its assets reasonably fully invested at all times. - - Maintain modest portfolio turnover rates. PRINCIPAL RISKS OF INVESTING IN THE FUND All investments have risks. Although the Fund cannot eliminate all risks, it seeks to moderate risk by investing in a diversified portfolio of equity securities. The Fund is designed for long-term investors. Shareholders should be prepared to accept fluctuations in portfolio value as the Fund seeks to achieve its investment objective. There can be no assurance, of course, that the Fund will achieve its objective. Risks of investing in the Fund include: - - Adverse market conditions (the chance that stock prices in general will fall, sometimes suddenly and sharply). - - Volatility in the market prices of equity securities, which are generally subject to greater price fluctuations than prices of fixed income securities, such as bonds and other debt obligations. - - Fluctuation in equity prices over the short-term due to: - changing market conditions, - interest rate fluctuations, and - various economic and political factors. - - Loss of money is a risk of investing in the Fund. 1 RISK/RETURN BAR CHART AND TABLE The bar chart and table shown below provide an indication of the risks of investing in the Mairs and Power Growth Fund. The bar chart shows changes in the Fund's performance from year to year over a 10-year period. [CHART]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 49.32% 26.40% 28.65% 9.37% 7.16% 26.48% 6.48% -8.12% 26.33% 17.99%
HIGHEST AND LOWEST CALENDAR QUARTERS (FOR THE PAST 10 YEARS) Highest Quarter 2nd Quarter, 1997: + 19.03% Lowest Quarter 3rd Quarter, 1998: - 13.15%
2 RISK/RETURN BAR CHART AND TABLE (continued) AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DECEMBER 31, 2004) The table shows how the Fund's average annual returns before and after taxes for one, five and ten years compare to those of the S & P 500. The unaudited after-tax returns shown in the table are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. How the Fund has performed in the past, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. MAIRS AND POWER GROWTH FUND
(For the periods ended December 31, 2004) 1 YEAR 5 YEARS 10 YEARS ------ ------- -------- Return Before Taxes +17.99% +13.02% +18.03% Return After Taxes on Distributions +17.61% +12.07% +16.94% (assumes you hold the fund shares at the end of the period; no taxable gain or loss on investment) Return After Taxes on Distributions and Sale of Fund +12.18% +10.98% +15.82% Shares (assumes shares purchased at beginning and sold at the end of the period) S & P 500(1) +10.88% -2.29% +12.07% (reflects no deduction for fees, expenses or taxes)
(1) The S & P 500 is the Standard & Poor's Composite Index of 500 Stocks, a widely recognized, broadbased unmanaged index of U.S. common stock prices. 3 FEES AND EXPENSES OF THE FUND THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD SHARES OF THE FUND. SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) Sales charge (load) imposed on purchases None Deferred sales charge (load) None Sales charge (load) imposed on reinvested dividends and other distributions None Redemption fee None Exchange fee None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) FOR THE YEAR ENDED DECEMBER 31, 2004 (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees 0.60% Distribution (12b-1) fees None Other expenses (transfer agent, custodian, accounting, legal, audit, etc.) 0.13% ----- Total Annual Fund Operating Expenses 0.73% =====
The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that : - - You invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. - - Your investment has a 5% return each year. - - All dividends and capital gain distributions are reinvested. - - The Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEAR 5 YEAR 10 YEAR ----------------------------------------- $ 75 $ 234 $ 407 $ 909
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEAR 5 YEAR 10 YEAR ----------------------------------------- $ 75 $ 234 $ 407 $ 909
Although these examples are based on actual expenses in the most recent year, they should not be considered a representation of past or future expenses because actual expenses in future years may be greater or less than those shown. Federal securities regulations require the example to assume an annual rate of return of 5%, but the actual return for the Fund may be more or less than 5%. These examples are for comparison only. 4 INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, RELATED RISKS, AND DISCLOSURE OF PORTFOLIO HOLDINGS This section takes a closer look at the investment objective and principal investment strategies of the Fund and certain risks of investing in the Fund. INVESTMENT OBJECTIVE The objective of the Fund is to provide shareholders with a diversified holding of common stocks which have the potential for above-average long-term appreciation. IMPLEMENTATION OF INVESTMENT OBJECTIVES The Fund intends to achieve its investment objective by giving preference to holdings in high quality companies. The companies in which the Fund seeks to invest generally have the following characteristics: - - Reasonably predictable earnings. - - Above average return on equity. - - Market dominance. - - Financial strength. Because we recognize that smaller capitalization companies provide somewhat higher returns over longer time frames, some emphasis is placed on small to medium sized companies, generally located in our Upper Midwest region. These companies may be underowned by institutional investors. Our strategy is to purchase quality growth stocks at reasonable valuation levels. The intention is to hold these issues for relatively long periods of time to allow the power of compounding to build wealth for our shareholders. However, sales are made from time to time in response to such factors as changing fundamentals and excessive valuation. Assets in the Fund will be reasonably fully invested at all times. Cash equivalent investments (money market funds and other short-term investments) may be held from time to time to provide liquidity to meet redemptions, act as a reserve for future purchases and to better enable the Fund to achieve its objective. Portfolio turnover is expected to be low when compared to other mutual funds. The Fund's portfolio turnover rates for the periods ending December 31, 2004, 2003 and 2002 were 2.87%, 2.41% and 1.25%, respectively. During periods of changing economic, market and political conditions, there may be more portfolio changes than in more stable periods. A higher turnover rate could result in the realization of higher capital gains and losses. A detailed description of the Fund's investment limitations is contained in the Statement of Additional Information. Such limitations are fundamental policies, which means they cannot be changed without the approval of a majority of the Fund's shareholders, as defined in the Statement of Additional Information. It is expected that the Fund will not invest in oil, gas or other mineral leases and real estate limited partnership interests. RISKS All investments have risks. Although the Fund cannot eliminate all risk, it seeks to moderate risk by investing in a diversified portfolio. Long-term investors, for whom the Fund is designed, should be prepared to accept fluctuations in portfolio value as the Fund seeks to achieve its investment objective. There can be no assurance, of course, that the Fund will achieve its objective. Loss of money is a risk of investing in the Fund. 5 INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, RELATED RISKS, AND DISCLOSURE OF PORTFOLIO HOLDINGS (continued) MARKET CONDITIONS The Fund is subject to the general risk of adverse market conditions for equity securities. The market prices of equity securities are generally subject to greater risk than prices of fixed income securities, such as bonds and other debt obligations. Although equity securities have historically demonstrated long-term increases in value, their prices may fluctuate markedly over the short-term due to changing market conditions, interest rate fluctuations and various economic and political factors. FUND MANAGEMENT The Fund's performance depends on the active management by the investment adviser, Mairs and Power, Inc., in selecting and maintaining a portfolio of securities which will achieve the Fund's investment objective. The Fund could underperform compared to other Funds having similar investment objectives. DISCLOSURE OF PORTFOLIO HOLDINGS A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities is available in the Fund's Statement of Additional Information (SAI) dated April 29, 2005. The SAI is available without charge by (i) writing or calling our Customer Service Department at 1-800-304-7404; or (ii) accessing the Fund's website at www.mairsandpower.com and clicking on "Statement of Additional Information" on the 'Fund Reports' page. 6 MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE 2004 IN REVIEW The Fund continues to emphasize the ownership of high quality, growth oriented companies located in the upper Midwest and purchased at what are considered to be reasonable valuation levels. Investments are purchased with the intention of holding them over at least a three to five year time horizon. Thanks to a strong fourth quarter, the Fund turned in a surprisingly good year in terms of both absolute and relative performance. The Fund produced a total investment return of 17.99% compared to lower comparable benchmark returns of 5.3% for the DJIA and 10.9% for the S & P 500 Stock Index. Among other comparable funds, the Lipper universe of 722 multicap core funds showed an average return of 11.1%. Responding to rather stimulative fiscal and monetary policies, the economy continued to perform very well during 2004 showing a 4.4% rate of real GDP growth. This represented the best rate of improvement since 1999. While consumer spending showed steady growth, business spending was clearly a driving force reflecting a past level of under-spending and the continuing need to reduce costs in order to remain competitive. Corporate profits on an operating basis are believed to have risen by more than 20% to near record levels as a percentage of GDP. One of the major surprises of 2004 was the stability shown by longer term interest rates in the face of a strong economy and a somewhat less accommodative Fed policy resulting in rising short-term rates. The absence of upward pressure at the longer end of the curve is thought to have been a direct result of strong foreign demand for dollar denominated debt, resulting from the increasing trade deficit along with the fact that the "core" rate of inflation has remained relatively stable at an annual rate of less than 2%. The Fund is characterized as a multi-cap fund because all the capitalization sizes are represented in the portfolio. Currently, 54% of the portfolio stocks are large capitalization, 36% are mid capitalization and 10% are small capitalization. We have the flexibility to utilize all three and this has been a major factor in producing superior long-term performance. Our five year average annual return of 13.0% compares very favorably with 0.7% for the Dow Jones Industrial Average and -2.3% for the Standard & Poor's 500 Stock Index. This strong relative performance reflects our long-standing concern for realistic stock valuations and our emphasis on well established companies with dominant market shares and growing franchises within their respective industries. The two largest industry sectors in the portfolio are health care (18%) and financial services (16.1%). Health care will continue to benefit from strong demographic trends due to the aging population in both the U.S. and other industrialized countries. The companies in this group have a strong commitment to research and product development, which should ensure future growth trends. Financial services should benefit from a strengthening economy as well as continuing steady growth in personal income. We believe the portfolio is well structured to capitalize on the trends we see unfolding in 2005. 7 [CHART] COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FUND, S & P 500 INDEX AND CONSUMER PRICE INDEX (CPI)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Mairs and Power Growth Fund 10 15 19 24 27 28 36 38 35 44 52 S & P 500 10 14 17 23 29 35 32 28 22 28 31 CPI 10 10 11 11 11 11 12 12 12 12 13
AVERAGE ANNUAL TOTAL RETURNS BEFORE TAXES (FOR PERIODS ENDED DECEMBER 31, 2004)
1 Year 5 Years 10 Years - --------------------------------------------------------------- Mairs and Power Growth Fund +17.99% +13.02% +18.03%
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. 8 MANAGEMENT OF THE FUND INVESTMENT ADVISER The Fund employs Mairs and Power, Inc. as its investment adviser to manage the Fund's investment portfolio. Mairs and Power, Inc. is compensated each month by the Fund. The management fee is computed at an annual rate of 0.60% based upon the Fund's average daily net assets. Mairs and Power, Inc. has managed mutual funds since 1958 and has provided investment counsel services since 1931. Mairs and Power, Inc. is located at W1520 First National Bank Building, 332 Minnesota Street, St. Paul, Minnesota 55101-1363. PORTFOLIO MANAGER William B. Frels, President and Treasurer of Mairs and Power, Inc. is primarily responsible for the day-to-day management of the Fund's portfolio. Mr. Frels assumed this position on June 14, 2004 when George A. Mairs, III resigned as an officer and portfolio manager. Mr. Frels had been co-manager of the Fund since 1999. He is also the manager of the Mairs and Power Balanced Fund and has been an officer and director of Mairs and Power, Inc. since 1992. Mr. Mairs has been an officer and director of Mairs and Power, Inc. since 1961 and continues in his position as Chairman and will remain an active member of the firm's investment committee. Additional information about the portfolio manager's compensation, other accounts managed by the portfolio manager, and the portfolio manager's ownership of securities in the Fund is available in the Fund's SAI dated April 29, 2005. CUSTODY SERVICES U.S. Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202 acts as custodian for the Fund. U.S. Bank controls all securities and cash for the Fund, receives and pays for securities purchased, delivers against payments for securities sold, receives and collects income from investments, makes all payments for Fund expenses and performs other administrative services. U.S. Bank is not affiliated with the Fund or investment adviser. TRANSFER AGENT U.S. Bancorp Fund Services, LLC, a wholly owned subsidiary of U.S. Bancorp, serves as the Fund's transfer agent and dividend disbursing agent. ADMINISTRATION SERVICES Mairs and Power, Inc. provides certain administrative services for the Fund. These services include general administrative services, assistance with regulatory compliance, and coordination of accounting and tax reporting. As compensation for these services, the Fund pays Mairs and Power, Inc. monthly fees computed at an annual rate of 0.01%, based on the Fund's average daily net assets. 9 TYPES OF ACCOUNTS The Fund offers several different types of accounts.
FORM TO USE: TO ESTABLISH THE FOLLOWING TYPES OF ACCOUNTS: - ------------------------------------------------------------------------------------------------------- Purchase Application Form - Accounts for one or more people (single or joint accounts). - Accounts for minor children (UGMA/UTMA - Uniform Gifts/Transfers to Minors Act). Age of majority and other requirements are set by state law. - Trust Accounts. These accounts require pages of the trust document which name the individuals authorized to act. - Retirement Accounts where U.S. Bank, N.A. is not the custodian or trustee. - Accounts opened for an organization such as a corporation, partnership or other entity. These accounts require a corporate resolution or other document to name the individuals authorized to act. IRA Application Form - Traditional IRA. - Roth IRA. - SEP-IRA (Simplified Employee Pension Plan Account). - SIMPLE IRA (Savings Incentive Match Plan for Employees Account). CESA Application Form - CESA (Coverdell Education Savings Account - formerly known as "Education IRA")
U.S. Bank, N.A. is the custodian and trustee for the above retirement and CESA accounts. There is a $15.00 annual custodial fee per account (up to a maximum of two accounts) for these types of retirement accounts. This fee will be automatically charged to your account(s) if not received by the announced due date, usually the last week of September. For further information on retirement and CESA accounts, please ask for the Individual Retirement Account Disclosure Statement & Custodial Account Agreement. You may also call Customer Service at 1-800-304-7404 to ask questions about investing for retirement. 10 DETERMINING NET ASSET VALUE PER SHARE The Fund's share price, also called its net asset value or NAV, is calculated once daily, after the close of trading on the New York Stock Exchange (the "Exchange"), generally 3:00 p.m., Central Time, on each day the Exchange is open for trading. As a result, shares of the Fund will not be priced on the days which the Exchange is closed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The NAV per share is calculated by adding up the total assets of the Fund, subtracting all of its liabilities, or debts, and then dividing by the total number of Fund shares outstanding: Total Assets - Liabilities Net Asset Value = ---------------------------------- Number of Shares Outstanding 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. For securities traded on the NASDAQ national market system, the Fund utilizes the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of the security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask price will be the closing price. If the last price is below the bid, the bid will be the closing price. 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 Fair Valuation Committee (the Committee) appointed by the Fund's Board of Directors. Factors which may be considered by the Committee in determining the fair value of a security are the type of the security; restrictions on the resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; related corporate actions; conversion or exchange rights on the security; information from broker-dealers; and changes in overall market conditions. 11 PURCHASING SHARES THE MAIRS AND POWER GROWTH FUND IS NOT REGISTERED IN ALL 50 STATES. BEFORE YOU BEGIN TO INVEST IN THE MAIRS AND POWER GROWTH FUND, PLEASE MAKE SURE THAT YOU LIVE IN ONE OF THE STATES WHERE THE FUND IS REGISTERED TO SELL SHARES. YOU CAN CALL OUR CUSTOMER SERVICE DEPARTMENT AT 1-800-304-7404 AND INQUIRE ABOUT YOUR STATE OR VISIT OUR WEBSITE AT www.mairsandpower.com. THE FUND DOES NOT OFFER ITS SHARES FOR SALE OUTSIDE OF THE UNITED STATES, NOR IS THE FUND AVAILABLE TO FOREIGN INVESTORS. You may purchase shares of the Fund directly through the Fund's transfer agent, U.S. Bancorp Fund Services, LLC. The price you pay per share will be the NAV computed after the close of trading on the Exchange, generally 3:00 p.m. Central Time. (SEE "DETERMINING NET ASSET VALUE PER SHARE" ON PAGE 11.) Your purchase will have no sales charge or marketing fees included in the price of the Fund shares. Purchase orders received on a day the Exchange is open for trading, prior to the close of trading on that day, will be valued as of the close of trading on that day. Purchase orders received after the close of trading on a day the Exchange is open for trading will be valued as of the close of trading on the next day the Exchange is open. The Fund cannot accept purchase applications: - - that request a particular day or price for your transaction or any other special conditions; - - that omit your social security number or tax identification number, or that do not include a certified social security or tax identification number; - - that omit additional information required by the USA PATRIOT Act (see page 13 for details). An initial purchase must be for at least $2,500 ($1,000 for an IRA account) and each subsequent purchase must be for at least $100, although the Fund reserves the right to waive or change these minimums at its discretion. All applications to purchase shares are subject to acceptance or rejection by authorized officers of the Fund and are not binding until accepted. Applications will not be accepted unless accompanied by payment in U.S. funds. When adding to an existing account, mail your check with the "Invest by Mail" form detached from your confirmation statement. Payment should be made by check drawn on a U.S. bank, savings and loan, or credit union, or sent by wire transfer. Checks should be made payable to "Mairs and Power Growth Fund". Cashier's checks in amounts of less than $10,000 will not be accepted. The Fund will not accept payment in cash, or cash equivalent instruments, such as money orders. Also, to prevent check fraud, the Fund will not accept third party checks, U.S. Treasury checks, credit card checks, traveller's checks, starter checks, bank checks, or checks drawn against a line of credit as investments for the purchase of shares. If your payment is not received or if you pay with a check that does not clear, your purchase will be canceled and a fee of $25 will be charged against your account by the transfer agent. If any loss is sustained by the Fund, this loss will also be charged against your account. The Fund reserves the right to reject applications for the following reasons: - - Applications received without payment. - - Applications that would be considered disadvantageous to shareholders. - - Individuals who previously tried to purchase shares with a bad check. - - Applications that omit information required to verify a shareholder's identity under the USA PATRIOT Act. 12 PURCHASING SHARES (continued) The Fund and its agents reserve the right to cancel or rescind any purchase if they believe: - - An investor has engaged in market timing, excessive trading or fraud. (See "Frequent Purchases and Redemptions of Fund Shares" on page 16. - - Notice has been received of a dispute between the registered or beneficial account owners. - - There is reason to believe that the transaction is fraudulent. - - Instructions are received and are believed not to be genuine. Stock certificates will not ordinarily be issued to you unless you make a request for a certificate in writing. The Fund will invest the entire dollar amount of your purchase order in full and fractional shares. Income dividends and capital gain distributions will be reinvested for you in additional full and fractional shares unless you request that income dividends and/or capital gain distributions are to be paid in cash. The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agents. Deposit in the mail or with such other services, or receipt at the transfer agent's post office box, of purchase applications does not constitute receipt by the transfer agent or the Fund. The USA PATRIOT Act requires financial institutions, including mutual funds, to adopt certain policies and programs to prevent money laundering activities, including procedures to verify the identity of customers opening new accounts. When completing a new Purchase Application Form, you will be required to supply the Fund with information that will assist the Fund in verifying your identity. This includes your full name, date of birth, permanent street address (that is not a P. O. Box address), and your Social Security Number (or Taxpayer Identification Number). Until such verification is made, the account will not be opened. In addition, the Fund may limit additional share purchases or close an account if it is unable to verify a shareholder's identity. As required by law, the Fund may employ various procedures, such as comparing the information to fraud databases or requesting additional information or documentation from you, to ensure that the information supplied by you is correct. Your information will be handled by us as discussed in our privacy notice on page 22. WIRING INSTRUCTIONS You should use the following instructions WIRE TO: when wiring funds for the purchase of Fund U.S. Bank, N.A. shares. ABA Number 075000022 IMPORTANT: To open an account by wire, a completed account application is required before your wire can be accepted. You can CREDIT TO: mail or overnight deliver your account U.S. Bancorp Fund Services, LLC application to the transfer agent. Upon Account 112-952-137 receipt of your completed application, an account will be established for you. The account number assigned will be required as FURTHER CREDIT: part of the instruction that should be given Mairs and Power Growth Fund, Inc. to your bank to send the wire. Your bank must [Shareholder Account Number] include the name of the Fund you are [Shareholder Name/Registration] purchasing, the account number and your name so that monies can be correctly applied. Prior to wiring any funds, you must notify FOR THE TRANSFER AGENT'S U.S. Bancorp Fund Services, LLC at MAILING ADDRESS, PLEASE SEE 1-800-304-7404 to advise them of your intent PAGE 23. to wire funds. This will ensure prompt and accurate credit upon receipt of your wire.
13 REDEEMING SHARES You may redeem for cash all or a portion of your shares in the Fund by instructing U.S. Bancorp Fund Services, LLC, the Fund's transfer agent, at its office in Milwaukee, Wisconsin. IMPORTANT NOTE: YOUR INSTRUCTION FOR REDEMPTION MUST BE IN WRITING. THE FUND DOES NOT OFFER REDEMPTIONS VIA THE TELEPHONE OR FAX. Your shares will be redeemed at the NAV computed after the receipt of an acceptable redemption request by the Fund. The price you receive for your redemption of shares will be the NAV computed after the close of trading on the Exchange on that day, generally 3:00 p.m. Central Time. If your request for redemption of shares is received after the close of trading on that day, your redemption request will be valued as of the close of trading on the next day the Exchange is open. Your redemption request must be in "good order" before your proceeds can be released. This means the following will be required: - - A letter of instruction or a stock assignment signed by all owners of the shares EXACTLY as their names appear in the Fund's shareholder records. You must specify the account number, the number of shares or dollar amount to be redeemed. If certificates have been issued representing shares to be redeemed, they must accompany the letter, which must be signature guaranteed. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" ON PAGE 15). - - A guarantee of the signature of each owner for redemption requests greater than $25,000. Redemption requests less than $25,000 do not require a signature guarantee. However, in order to comply with the signature guarantee limitation level, the Fund will not accept multiple redemption requests for less than $25,000 on the same day. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" ON PAGE 15.) - - In the case of estates, trusts, guardianships, custodianships, corporations and pension and profit-sharing plans, other supporting legal documents are required. - - A guarantee of the signature of each owner if the address of record has been changed within the 15 days preceding any redemption. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" ON PAGE 15.) - - If your redemption request is from an IRA or other retirement plan, you must indicate on the redemption request whether or not to withhold federal income tax. If you fail to indicate an election not to have tax withheld, you will be subject to withholding. - - If your redemption request includes exchanging shares, see "EXCHANGING SHARES" on page 17. If the proceeds of any redemption are requested to be made payable to or sent to an address other than the address of record, the signature(s) on the request must be guaranteed by an eligible signature guarantor. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" PAGE 15.) If any portion of the shares you are redeeming represent an investment made by check, we may delay the payment of the redemption proceeds until our transfer agent is reasonably satisfied that your check has been collected. This may take up to 12 days from the purchase date. We will mail your payment to you for the shares you are redeeming typically within one or two business days. The payment will be mailed no later than the seventh business day after the redemption request is received by the transfer agent or within such shorter period as may 14 REDEEMING SHARES (continued) legally be required. The redemption request must be in good order as stated above. If you wish not to receive your proceeds by mail, the following methods for redemption are also available: - - Proceeds may be received by wire transfer. A $15 wire fee will be applied. If you choose this method, your written request must be signature guaranteed. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" BELOW.) - - Redemption proceeds may also be sent to your bank via electronic transfer through the Automated Clearing House ("ACH") network provided that your bank is a member. You can elect this option by writing to the Fund. You must attach a voided check or deposit slip to your written request and you must have your signature guaranteed. If money is moved by ACH transfer, you will not be charged by the Fund's transfer agent for the service. There is a $100 minimum per ACH transfer. No interest will accrue on amounts represented by uncashed redemption checks. THE FUND RESERVES THE RIGHT TO CLOSE ANY NON-IRA ACCOUNT IN WHICH THE BALANCE FALLS BELOW THE MINIMUM INITIAL INVESTMENT. The right of redemption may be suspended or the date of payment may be postponed as follows: - - During weekend or holiday closings, or when trading is restricted as determined by the Securities and Exchange Commission ("SEC"). - - During any period when an emergency exists as determined by the SEC as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it or to fairly determine the value of its net assets. - - For such a period as the SEC may permit. If the post office cannot deliver your check, or if your check remains uncashed for six months, the Fund reserves the right to reinvest your redemption proceeds in your account at the current NAV. SIGNATURE GUARANTEE INSTRUCTIONS WHERE TO OBTAIN A SIGNATURE GUARANTEE A signature guarantee must be obtained from an eligible signature guarantor such as a U.S. commercial bank, trust company or a broker who is a member of the New York Stock Exchange. The entity providing the signature guarantee must participate in a "Medallion" signature guarantee program. WHEN A SIGNATURE GUARANTEE IS NEEDED You may need to have your signature guaranteed in certain situations such as: - - Redeeming an amount greater than $25,000. - - Redeeming shares in your account after changing your address of record in the last 15 days. - - Sending to or making redemption proceeds payable to any person, address or bank account other than that on record. - - Requesting to wire redemption proceeds. - - Transferring shares from your account to another person or legal entity, or changing the name(s) on your account. - - For joint accounts requiring signature guarantee, each account owner's signature must be separately guaranteed. THE FUND CANNOT ACCEPT GUARANTEES FROM NOTARIES PUBLIC OR ORGANIZATIONS THAT DO NOT PROVIDE REIMBURSEMENT IN THE CASE OF FRAUD. 15 REDEEMING SHARES (continued) In the event of a redemption of shares or an exchange of shares for shares of the Mairs and Power Balanced Fund, the transaction will be treated as a sale of the Fund's shares and any gain (or loss) on the transaction may be reportable as a gain (or loss) on your federal income tax return. Once your redemption order is received and accepted by the Fund, you may not revoke or cancel it. The Fund cannot accept redemptions that request a particular day or price for your transaction or any other special conditions. The redemption value may be worth more or less than the price originally paid for the shares and you may realize a gain or loss on redemption. If you have additional questions regarding the redemption procedure, you should contact our Customer Service Department at 1-800-304-7404. FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES It is the policy of the Fund to discourage short term trading. The Fund is intended for long-term investment purposes only and not for market timing or excessive trading. Market timing may be disadvantageous to the long term performance of the Fund by disrupting portfolio management and increasing fund expenses. The Fund may reject any purchase orders by any investor that may be attributable to market timers or are otherwise excessive or potentially disruptive to the Fund. Purchase orders that are believed to be placed by market timers may be revoked or cancelled by the Fund on the next business day after receipt of the order. Notice will be given to the shareholder within five business days of the purchase order to freeze the account and temporarily suspend services. Trading activity in the Fund's shares is monitored by the Fund's transfer agent and the investment adviser on a daily basis. However, this monitoring cannot detect all short term trading. For example, short term trading in omnibus accounts and retirement plans might not be detected. The Fund will not make any exceptions to its short term trading policy, nor will the Fund grant to any third-party permission to engage in short term trading within the Fund. The Fund's Short Term Trading policy has been approved by the Fund's Board of Directors. 16 EXCHANGING SHARES You may exchange shares between the Fund and the Mairs and Power Balanced Fund. An exchange is treated as a redemption and a purchase, and therefore, you may realize a taxable gain or loss. You should obtain and read the current prospectus for the Mairs and Power Balanced Fund before the exchange is made. There is a $1,000 minimum for all exchanges. If a new account is being opened by exchange, the minimum investment requirements must be met. After the exchange, the account from which the exchange is made must have a remaining balance of at least $2,500 ($1,000 for an IRA account) in order to remain open. The Fund reserves the right to terminate or materially modify the exchange privilege upon 60 days' advance notice to shareholders. Your exchange request must be in writing and signed by all registered account holders. You may download an Exchange Request form from the Mairs and Power Funds' website. TRANSFERRING REGISTRATION If you request a change in your account registration -- such as changing the name(s) on your account or transferring your shares to another person or legal entity -- you must submit your request in writing. A signature guarantee is required. (SEE "SIGNATURE GUARANTEE INSTRUCTIONS" ON PAGE 15.) Please call our Customer Service Department at 1-800-304-7404 for full instructions. INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS Dividends and capital gain distributions are reinvested in additional Fund shares in your account unless you select another option on your Purchase Application Form. The advantage of reinvesting distributions is that you receive dividends and capital gains on an increasing number of shares. This is known as compounding. A capital gain or loss is the difference between the purchase and sale price of a security. If you are investing in an account that is not tax deferred, it may be advantageous to buy shares after the Fund makes its capital gain distribution. If you buy shares before the capital gain distribution, it can cost you money in taxes. To avoid this situation, check with the Fund for its capital gain distribution date. The Fund distributes all of its net investment income to its shareholders in the form of semi-annual dividends. The dividend payments are normally made in June and December. If a capital gain is realized, the Fund will distribute it near year-end in the year in which such gains are realized. Dividends and capital gains which are not reinvested by you are paid to you by check or transmitted to your bank account via the ACH network. If you elect to have dividends or capital gains paid in cash, the Fund will automatically reinvest all distributions under $10 in additional 17 shares of the Fund. If the post office cannot deliver your check, or if your check remains uncashed for six months, your distribution option will be changed to reinvestment. Your distribution check will be reinvested into your account at the Fund's current NAV. All subsequent distributions will be reinvested in shares of the Fund. No interest will accrue on the amount represented by uncashed distribution checks. TAXES The Fund intends to comply, as it did in 2004, with the special provisions of Subchapter M of the Internal Revenue Code that relieve it from federal income tax on net investment income and capital gains currently distributed to shareholders. The Internal Revenue Code requires all regulated investment companies to pay a nondeductible 4% excise tax if less than 98% of ordinary income and 98% of capital gains are paid out to shareholders during the year in which they are earned or realized. The Fund intends to distribute income and capital gains in such a manner as to avoid this excise tax. The Fund's distribution of dividends and capital gains, whether you receive them in cash or reinvest them in additional shares of the Fund, may be subject to federal and state income taxes. Distributions to individual retirement accounts and qualified retirement plans are generally tax-free. Distributions of income and net short-term capital gain are generally taxed as ordinary income. Other capital gains are generally taxed as long-term capital gains. The tax treatment of your capital gain distributions depends on how long the Fund held the securities in its portfolio, not how long you have held your shares of the Fund or whether you reinvested your distributions. If the Fund is notified by the IRS that you are subject to back-up withholding, the Fund will be required to withhold federal taxes at the current federal income tax rate on all taxable distributions payable to you. In January, you will be sent Form 1099-DIV indicating the tax status of any dividend and capital gain distributions made to you during the previous year. This information is also reported to the IRS. Distributions may also be subject to state and local taxes. A portion of the Fund's ordinary dividends should be eligible for the dividends received deduction by corporations. The Fund's dividends and distributions are paid on a per share basis. When the dividend and capital gain payments are made, the value of each share will be reduced by the amount of the payment. If you purchase shares shortly before the payment of a dividend or a capital gain distribution, you will pay the full price for the shares and then receive some portion of the price back as a taxable dividend or capital gain. The above statements are a general summary of current federal income tax law regarding the Fund. You should consult with your own tax adviser regarding federal, state and local tax consequences of an investment in the Fund. 18 OTHER SHAREHOLDER SERVICES The following reports will be sent to you as a shareholder: Account - Sent to you each time you buy or sell Fund shares. Statement will confirm the Confirmation trade date and amount of your transaction. Statements - Semi-annual and annual confirmation statements will also be sent to you detailing the income dividend and capital gain distributions made by the Fund. In addition, the market value of your account at the close of the period will also appear on this statement. Fund Financial - Quarterly and Annual Reports will be mailed to you at the end of February, May, Reports August and November. Included in these reports is the performance of the Fund, a report from the Fund adviser, as well as a listing of the Fund's holdings and other financial statements. - Note: To reduce Fund expenses, the Fund attempts to send only one copy of a financial report to each shareholder with multiple accounts in the Fund. Tax Statements - Generally mailed to you in January. - Will report to you - the previous year's total dividend and capital gain distributions (1099-DIV), - proceeds from the sale of shares (1099-B), if any, and - distributions from IRAs or other retirement accounts (1099-R). Average Cost - Mailed to you by February 15, 2006 if: Statements - you redeemed shares from a NON IRA account in 2005, - you received a 1099-B, and - you opened your account after January 1, 1996. - The statement will show all redemptions reportable for the current tax year and the average cost per share. The purpose of this statement is to provide you with information for the preparation of your tax return. This information is not reported to the IRS and you do not have to use it. You may calculate the cost basis using other methods acceptable to the IRS. - There are certain situations, such as a change of registration or transfer of shares, that may prevent you from receiving a cost basis statement. If you have any questions about your tax cost basis, please contact our Customer Service Department at 1-800-304-7404.
The following services are available to you as a shareholder: Reinvestment Plan - Dividend and capital gain distributions may be reinvested as additional shares of the Fund. Automated Telephone Services - Fund and shareholder account information is available 24 hours per day, seven days a week. - You may obtain share prices and price changes for the Fund, your account balance and last two transactions, dividend distribution information and duplicate account statement. - To use this service, you must first establish a Personal Identification Number (PIN) of your own choosing via the automated telephone service before accessing your account information.
19 OTHER SHAREHOLDER SERVICES (continued) Fund Website: - The following information is available on the web site: www.mairsandpower.com - An overview of Mairs and Power, Inc. - Investment style of Mairs and Power Funds - Fund managers and directors - Daily Fund prices - Fund information - Fund facts - Distribution and tax information - Proxy Voting Record - Fund prospectus and reports - Fund forms and applications - Contact information Automatic Investment Plan - You may make regular monthly or quarterly investments of $100 or (AIP) more through automatic deductions from your bank account. - In order to participate in the plan, your bank must be a member of the Automated Clearing House ("ACH") network. - If your automated withdrawal cannot be completed or is rejected, a $25 fee will be charged to your account. - This option is available for taxable as well as non-taxable (IRA) accounts. To be eligible for using the AIP for an IRA account, you must have earned income. Purchases made in this manner will be applied as current year purchases. To avoid excess contributions into an IRA, please call the Fund at least FIVE days in advance to stop the AIP. - You may change or terminate this privilege at any time by notifying the transfer agent in writing at least five days prior to effective date, or by calling our Customer Service Department at 1-800-304-7404. - To request an Automatic Investment Plan form, please write or call the Fund at 1-800-304-7404, or download an AIP form from the Mairs and Power Funds' website. Systematic Withdrawal Plan - If you own $10,000 or more of our Fund's shares, you may arrange (SWP) to have monthly or quarterly withdrawals of cash by sending a systematic withdrawal request to the Fund. Shares are redeemed from your account to meet the designated payments. - You may change or terminate this privilege at any time by notifying the transfer agent in writing at least five days in advance of the next withdrawal, or by calling our Customer Service Department at 1-800-304-7404. - To request a Systematic Withdrawal Plan form, please write or call the Fund at 1-800-304-7404, or download a SWP form from the Mairs and Power Funds' website.
20 CONDENSED FINANCIAL INFORMATION The following table shows certain important financial information which may help you understand the Fund's financial performance for the past five years. Certain information reflects financial results for a single Fund share outstanding throughout the period. The total investment returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. This information has been derived from financial statements audited by Ernst & Young LLP, independent registered public accounting firm. The financial statements and auditors' report may be found in the Fund's most recent annual report, which you may obtain, without charge, by writing to or calling the Fund at the number listed on the front of this Prospectus. FINANCIAL HIGHLIGHTS (SELECTED PER SHARE DATA AND RATIOS - FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED DECEMBER 31 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------- PER SHARE (1) Net asset value, beginning of year $ 60.90 $ 49.26 $ 54.36 $ 53.41 $ 46.46 Investment operations: Net investment income 0.68 0.54 0.45 0.51 0.54 Net realized and unrealized gains (losses) on investment 10.25 12.40 (4.86) 2.95 11.78 ------------ ------------ ------------ ------------ ------------ TOTAL FROM INVESTMENT OPERATIONS 10.93 12.94 (4.41) 3.46 12.32 Less distributions: Dividends (from net investment income) (0.68) (0.53) (0.45) (0.51) (0.55) Distributions (from capital gains) (0.82) (0.77) (0.24) (2.00) (4.82) ------------ ------------ ------------ ------------ ------------ TOTAL DISTRIBUTIONS (1.50) (1.30) (0.69) (2.51) (5.37) ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE, END OF YEAR $ 70.33 $ 60.90 $ 49.26 $ 54.36 $ 53.41 ============ ============ ============ ============ ============ TOTAL INVESTMENT RETURN 17.99% 26.33% (8.12)% 6.48% 26.48% ============ ============ ============ ============ ============ RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000's omitted) $ 2,058,210 $ 1,307,763 $ 850,302 $ 679,027 $ 581,668 Ratio of expenses to average net assets 0.73% 0.75% 0.78% 0.76% 0.78% Ratio of net investment income to average net assets 1.12% 1.05% 0.93% 0.97% 1.06% Portfolio turnover rate 2.87% 2.41% 1.25% 7.91% 15.34%
(1) All per share amounts for 2000 and 2001 have been adjusted to give effect to a two-for-one stock split, which was paid on October 10, 2001. 21 PRIVACY POLICY Mairs and Power Funds, in having created a relationship with its shareholders, has established a policy which sets forth the commitment of the Funds to maintain a shareholder's private information in a confidential manner, securing personal and financial data. In the normal process of doing business with its shareholders, Mairs and Power Funds collects nonpublic personal information about its shareholders. This information is collected from the application or other forms, correspondence or conversations, including but not limited to, account number and balance, payment history, parties to transactions, cost basis information and other financial information. We do not disclose any nonpublic personal information about our shareholders, past or present, to nonaffiliated third parties, such as consultants or accountants, except as authorized by shareholders or required by law. Third parties that perform administrative services on the Funds' behalf, such as our transfer agent and custodian, will receive nonpublic personal information about our shareholders. These entities will use this information only to provide required services for shareholders and are not permitted to share or use this information for any other purpose. We maintain physical, electronic and procedural safeguards that comply with federal standards to guard our nonpublic personal information. We would not under any circumstances disclose any information, public or nonpublic, about our present or former shareholders to any third parties for the purpose of marketing. In the event that shareholders hold shares of the fund(s) through a financial intermediary, including, but not limited to, a broker-dealer, bank or trust company, the privacy policy of your financial intermediary would govern how nonpublic personal information would be shared with nonaffiliated third parties. 22 OFFICERS AND DIRECTORS William B. Frels President and Director Peter G. Robb Vice-President Jon A. Theobald Secretary Lisa J. Hartzell Treasurer Norbert J. Conzemius Director Charlton Dietz Director Charles M. Osborne Director Edward C. Stringer Director
INVESTMENT ADVISER Mairs and Power, Inc. W1520 First National Bank Building 332 Minnesota Street Saint Paul, MN 55101-1363 CUSTODIAN INDEPENDENT REGISTERED U.S. Bank, N.A. PUBLIC ACCOUNTING FIRM 425 Walnut Street Ernst & Young LLP Cincinnati, OH 45202 Suite 1400 220 South Sixth Street Minneapolis, MN 55402 TRANSFER AGENT REGULAR MAIL ADDRESS EXPRESS (OR OVERNIGHT), CERTIFIED OR REGISTERED MAIL ADDRESS U.S. Bancorp Fund Services, LLC U.S. Bancorp Fund Services, LLC 615 East Michigan Street 3rd Floor P. O. Box 701 615 East Michigan Street Milwaukee, WI 53201-0701 Milwaukee, WI 53202 SHAREHOLDER ACCOUNT INFORMATION AND INQUIRIES 1-800-304-7404 23 MAIRS AND POWER GROWTH FUND, INC. FOR MORE INFORMATION More information about the Fund is available from the follwing sources: STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI provides more details about the Fund and its investment policies and restrictions. A current SAI is on file with the Securities and Exchange Commission (SEC) and is incorporated into this prospectus by reference (which means that it is legally considered part of this prospectus). ANNUAL, SEMI-ANNUAL AND QUARTERLY REPORTS Additional information about the Fund's investments is available in the Fund's annual, semi-annual and quarterly reports to shareholders. In the Fund's annual, semi-annual and quarterly reports, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the period. The Fund's annual, semi-annual and quarterly reports and the SAI are available free of charge on the Fund's website at www.mairsandpower.com. You can also get free copies of annual, semi-annual and quarterly reports and the SAI by contacting the Fund at: MAIRS AND POWER GROWTH FUND, INC. c/o U.S. Bancorp Fund Services LLC P. O. Box 701 Milwaukee, WI 53201-0701 Telephone: 1-800-304-7404 Reports will be sent first class mail within three business days of receipt of request. You may also request other information about the Fund or make shareholder inquiries by calling 1-800-304-7404. Additional information: - Documents filed by the Fund with the SEC are available on the SEC's Internet EDGAR Database site at http://www.sec.gov, where they are listed under "Mairs and Power Growth Fund, Inc." - Information about the Fund, including the SAI, can also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You can also obtain copies by mailing your request and a duplicating fee to the SEC's Public Reference Section, Washington, DC 20549-0102, or by paying a duplicating fee and sending a request by email to: publicinfo@sec.gov. Information about the operation of the Public Reference Room is available by calling the SEC at 1-202-942-8090. The Fund's Investment Company Act file number is 811-802 MAIRS AND POWER GROWTH FUND, INC. STATEMENT OF ADDITIONAL INFORMATION Dated April 29, 2005 Mairs and Power Growth Fund, Inc. (the "Fund") is a no-load mutual fund. The objective of the Fund is to provide shareholders with a diversified holding of common stocks which have the potential for above-average long-term appreciation. This Statement of Additional Information is not a prospectus, but contains information in addition to what is contained in the Fund's Prospectus. It should be read in conjunction with the Prospectus, dated April 29, 2005, which has been filed with the Securities and Exchange Commission. The Fund's Prospectus and most recent annual financial statement may be obtained, without charge, by writing the Fund or calling our Customer Service Department at 1-800-304-7404, or by visiting our website at www.mairsandpower.com. Certain portions of the Prospectus have been incorporated by reference into this Statement of Additional Information, as noted herein. The address of the Fund is Mairs and Power Growth Fund, c/o U.S. Bancorp Fund Services, LLC, P. O. Box 701, Milwaukee, WI 53201-0701. TABLE OF CONTENTS
PAGE The Fund 2 Investment Objective and Policies 2 Investment Limitations 2 Portfolio Turnover 3 Disclosure of Portfolio Holdings 3 Management of the Fund 4 Certain Transactions 6 Compensation 7 Code of Ethics 7 Proxy Voting Policies and Procedures 7 Control Persons and Principal Holders of Securities 8 Investment Adviser 8 Fund Administration Servicing Agreement 9 Transfer Agent, Custodian and Fund Accountant 9 Independent Registered Public Accounting Firm 9 Portfolio Manager 10 Brokerage Allocation and Other Practices 10 Purchasing, Redeeming, and Pricing Fund Shares 11 Taxation 11 Principal Underwriter 11 Calculation of Performance Data 12 Financial Statements 12
1 THE FUND The Fund is an open-ended, diversified management company which was incorporated in Minnesota in 1958. The Fund has authorized capital stock of 100,000,000 shares, $0.01 par value per share. Each share entitles the shareholder to one vote at all meetings of Fund shareholders. Shareholders will participate equally in dividends and capital gains distributions declared by the Fund for each share owned. Fund shares are transferable without restrictions and are redeemable at net asset value. The Fund is not required to hold annual meetings of shareholders until such times as substantial changes are proposed in either the governance or the policies of the Fund. INVESTMENT OBJECTIVE AND POLICIES As discussed in "Investment Objective, Principal Investment Strategies, Related Risks, and Disclosure of Portfolio Holdings" in the Fund's Prospectus, the objective of the Fund is to provide shareholders with a diversified holding of common stocks which have the potential for above-average long-term appreciation. INVESTMENT LIMITATIONS The Fund is subject to the following restrictions which may not be changed without the approval of the holders of a majority of the Fund's outstanding shares. The vote of a majority of the outstanding shares means the vote, at an annual or a special meeting of the shareholders representing (a) 67% or more of the voting shares present at such meeting, if the holders of more than 50% of the outstanding voting shares of the Fund are present or represented by proxy; or (b) more than 50% of the outstanding voting shares of the Fund, whichever is less. The Fund may not: (1) Purchase securities of any issuer if as a result, (a) more than 5% of the value of the total assets of the Fund would then be invested in the securities of a single issuer (other than U.S. Government obligations), or (b) more than 10% of any class of securities, or more than 10% of the outstanding voting securities, of the issuer would then be held by the Fund; (2) Purchase securities of other investment companies if as a result more than 5% of the Fund's total assets would then be (a) invested in the securities of that investment company, or (b) more than 10% of the Fund's assets would then be invested in securities of all investment companies; (3) Concentrate more than 20% of its investments in a particular industry as defined by Standard & Poor's; (4) Purchase or sell real estate, real estate investment trusts, or other interests in real estate which are not readily marketable; (5) Write, purchase or sell puts, calls, or combinations thereof; (6) Make loans (although it may acquire portions of an issuer's publicly distributed securities); 2 (7) Purchase securities on margin or sell short; (8) Borrow money, except that the Fund may borrow from banks up to 5% of its total assets to pay capital gain distributions, to pay income dividends, or to relieve an extraordinary or emergency situation, but not for investment purposes; (9) Mortgage, pledge, hypothecate, or in any manner transfer, as security for indebtedness, any securities owned or held by the Fund; (10) Participate on a joint or a joint and several basis in any trading account in securities; (11) Invest in companies for the purpose of exercising control of management; (12) Act as an underwriter of securities of other issuers; (13) Purchase or retain the securities of any issuer if officers and directors of the Fund or its investment adviser who own individually more than one-half of one percent of the securities of such issuer, together own more than 5% of the securities of such issuer; (14) Purchase or sell commodities or commodity contracts in the ordinary course of its business; or (15) Purchase or sell "restricted securities" in such a way as to become an "underwriter" within the meaning of that term as used in the Securities Act of 1933. PORTFOLIO TURNOVER The annual portfolio turnover rate for the Fund was 2.87% for the year ended December 31, 2004 and 2.41% for the year ended December 31, 2003. The Fund has not placed any limit on its rate of portfolio turnover and securities may be sold without regard to the time they have been held when in the opinion of the investment adviser, Mairs and Power, Inc., investment considerations warrant such action. Portfolio turnover rate is calculated by dividing the lesser of the Fund's annual sales or purchases of portfolio securities (exclusive of securities with maturities of one year or less at the time the Fund acquired them) by the monthly average value of the securities in the Fund's portfolio during the year. DISCLOSURE OF PORTFOLIO HOLDINGS Portfolio holdings are published on a quarterly basis in the Fund's "Report to Shareholders" and mailed to shareholders of record no later than 60 days after the Fund's quarters ending March 31, June 30, September 30 and December 31. The Fund files Form N-CSR for quarters ending June 30 and December 31, and a Form N-Q for quarters ending March 31 and September 30 with the Securities and Exchange Commission (the "Commission"). Form N-CSR includes a complete schedule of portfolio holdings and is filed with the Commission no later than 10 days after mailing the semi-annual and annual reports to shareholders. Form N-Q also includes a complete schedule of portfolio holdings and is filed with the Commission no later than 60 days after the close of the first and third quarters of each fiscal year. Portfolio holdings are available by mail or on the Fund's website no earlier than the date on which the Fund files its Form N-CSR or Form N-Q with the Commission. To view Fund portfolio holdings on the Fund's website, visit www.mairsandpower.com and click on the "Fund Reports" page to access the current quarter's Report. You may also obtain a copy of the Fund's latest quarterly report without charge by calling our Customer Service at 1-800-304-7404. 3 MANAGEMENT OF THE FUND The officers and directors of the Fund and their principal occupations for the last five years are set forth below.
NUMBER OF PORTFOLIOS IN POSITION(S) HELD FUND OTHER WITH THE FUND AND COMPLEX DIRECTORSHIPS NAME (AGE) AND LENGTH OF TIME OVERSEEN BY HELD BY ADDRESS(1) SERVED(2) PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS DIRECTOR TRUSTEE - ---------------------------------------------------------------------------------------------------------------------------- INTERESTED PRINCIPAL OFFICER WHO IS AN DIRECTOR William B. Frels (65) President since - President of the Investment Adviser N/A None June 2004, (2002 to present). Director since - Treasurer of the Investment Adviser 1992 (1996 to present). - Vice President of the Investment Adviser (1994 to 2002). INTERESTED PRINCIPAL OFFICERS WHO ARE NOT DIRECTORS Peter G. Robb (56) Vice President - Vice President and Secretary of the Investment N/A None since 1994 Adviser. Jon A. Theobald (59) Secretary since - Executive Vice President and Chief N/A None 2003 Administrative Officer of the Investment Adviser (2002 to present). - Senior Vice President, U.S. Trust Company (2001 to 2002). - Executive Vice President, Resource Trust Company (1996 to 2001). Lisa J. Hartzell (59) Treasurer since - Manager of Mutual Fund Services of the N/A None 1996 Investment Adviser. - Vice President of the Investment Adviser (July 2004 to present). DISINTERESTED DIRECTORS Charlton Dietz (74) Board Chair - Retired Senior Vice President, Legal Affairs 2 None 30 Seventh Street since July 2004; and General Counsel, 3M. East, Suite 3050 Director since St. Paul, MN 55101 1997 Norbert J. Conzemius Director since - Retired Chief Executive Officer, Road Rescue 2 None (63) 2000 Incorporated. Charles M. Osborne Director since - Chief Financial Officer (May 2004 to present), 2 None (51) 2001 Fair Isaac Corporation. - Chief Financial Officer (2000 to 2004), Vice President (2003 to 2004), University of Minnesota Foundation. - Vice President and General Manager, MN (1999), Vice President Corporate Human Resources, IA (2000), McLeod USA/Ovation Communications. Edward C. Stringer Director since - Attorney (2002 to present), Briggs and Morgan, 2 None (69) 2002 P.A. 2200 IDS Center - Associate Justice, State of Minnesota Supreme 80 South 8th Street Court (1994 to 2002). Minneapolis, MN 55402
(1) Unless otherwise indicated, the mailing address for each officer and director is 332 Minnesota Street, Suite W1520, St. Paul, MN 55101-1363. (2) Each director serves until elected at the next scheduled annual meeting or until his successor is appointed. Each officer is elected annually. 4 All of the above listed persons serve in the same capacities with Mairs and Power Balanced Fund, Inc., an open-end investment company which also retains Mairs and Power, Inc. as its investment adviser. Directors, officers and portfolio managers of the Mairs and Power Funds are subject to mandatory retirement at age 75. The Board of Directors has four standing committees listed below:
NUMBER OF MEETINGS HELD DURING LAST FUNCTIONS MEMBERS FISCAL YEAR - ------------------------------------------------------------------------------------------------------------------ Audit Committee To make recommendations to the Board of Norbert J. Conzemius 4 Directors regarding the selection of an Charlton Dietz (Chairman) independent registered public accounting Charles M. Osborne firm, and to assist the Board of Directors in its oversight of the Fund's financial reporting process. The Audit Committee meets with the independent registered public accounting firm at least annually to review the results of the examination of the Fund's financial statements and any other matters relating to the Fund. Fair Valuation Committee To oversee pricing of the Fund and to William B. Frels (Chairman) 4 research and resolve any pricing Lisa J. Hartzell problems. The Fair Valuation Committee Jon A. Theobald meets on an "as needed" basis. Nominating Committee To consider and recommend nominees for Norbert J. Conzemius 1 directors to the Board to fill vacancies Charlton Dietz (Chairman) when required. Nominations of directors Charles M. Osborne who are not "interested persons" of the Investment Company must be made and approved by the Nominating Committee. The Nominating Committee meets on an "as needed" basis. Disclosure Committee To oversee and act as a final checkpoint William B. Frels (Chairman) 1 with respect to all shareholder Lisa J. Hartzell communications. The Disclosure Committee Jon A. Theobald meets on an "as needed" basis.
Each director attended at least 75% of the Board of Directors meetings and, if a member, of the Audit Committee meetings held during the fiscal year ended December 31, 2004. 5 The following table provides information about the dollar range of common stock owned beneficially as of December 31, 2004 by each director.
DOLLAR RANGE OF AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL EQUITY SECURITIES IN REGISTERED INVESTMENT COMPANIES OVERSEEN BY DIRECTOR IN NAME OF DIRECTOR THE FUND FAMILY OF INVESTMENT COMPANIES ----------------------------------------------------------------------------------------------------- Norbert J. Conzemius over $100,000 over $100,000 Charlton Dietz over $100,000 over $100,000 William B. Frels over $100,000 over $100,000 Charles M. Osborne over $100,000 over $100,000 Edward C. Stringer over $100,000 over $100,000
CERTAIN TRANSACTIONS Since January 1, 2003, no director who is not an interested person of the Fund, or any immediate family member of such a director, has had any direct or indirect interest, the value of which exceeded $60,000, in: (i) the Fund's investment adviser or (ii) any person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with the investment adviser. Since January 1, 2003, no director who is not an interested person of the Fund, or any immediate family member of such a director, has had any material interest or relationship, direct or indirect, in any transaction, or series of similar transactions, in which the amount involved exceeded $60,000 and to which any of the following persons was a party: (i) the Fund, (ii) an officer of the Fund, (iii) the Mairs and Power Balanced Fund, (iv) an officer of the Mairs and Power Balanced Fund, (v) the Fund's investment adviser, (vi) an officer of the Fund's investment adviser, (vii) a person directly or indirectly controlling, controlled by, or under common control with the investment adviser, or (viii) an officer of a person directly or indirectly controlling, controlled by, or under common control with the investment adviser. Since January 1, 2003, no officer of the Fund's investment adviser or any officer of any person directly or indirectly controlling, controlled by, or under common control with the investment adviser, served on the board of directors of any company where a director of the Fund who is not an interested person of the Fund, or immediate family member of the director, was an officer. 6 COMPENSATION The following table provides information about compensation paid to the Fund's directors for the fiscal year ended December 31, 2004. The Fund does not pay remuneration to its officers or to directors who are officers, directors or employees of the investment adviser.
PENSION OR TOTAL COMPENSATION AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM FUND AND COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX PAID NAME OF PERSON, POSITION FROM FUND FUND EXPENSES RETIREMENT TO DIRECTORS - ------------------------------------------------------------------------------------------------------- Norbert J. Conzemius Disinterested Director $34,200 None None $36,000 Charlton Dietz Disinterested Director $34,200 None None $36,000 Charles M. Osborne Disinterested Director $34,200 None None $36,000 Edward C. Stringer Interested Director $34,200 None None $36,000 William B. Frels Interested Director, None None None None President
CODE OF ETHICS The Fund and its investment adviser have adopted codes of ethics under Rule 17j-1 of the Investment Company Act. These codes of ethics permit personnel subject to the codes to invest in securities including securities that may be purchased or held by the Fund. However, the code of ethics have been designed to ensure that the interests of the Fund's shareholders come before the interests of the Fund's managers. The codes contain restrictions on personal investing practices. PROXY VOTING POLICIES AND PROCEDURES The Fund has delegated the authority to vote shares held in its investment portfolio to the investment adviser. Accordingly, the investment adviser is responsible for voting proxies for all voting securities held by the Fund. The investment adviser's policy is to vote in accordance with guidelines established by its Investment Committee. A copy of the investment adviser's proxy voting guidelines is attached as Appendix A. The proxy voting guidelines are reviewed by the investment adviser's Investment Committee and are subject to change. The Chief Investment Officer is responsible for resolving voting decisions that cannot be readily determined by reference to the proxy voting guidelines. Actual proxy voting records of the Fund are filed with the SEC no earlier than June 30th of each year. Proxy voting records may be obtained, without charge by visiting the Fund's website at www.mairsandpower.com and on the Commission's website at www.sec.gov. 7 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES As of February 15, 2005, the only shareholder holding more than 5% of the Fund's outstanding shares was "National Investor Services Corp. For The Exclusive Benefit Of Our Customers" (2,245,105 of shares or 7.25%). As of February 15, 2005, the Fund's officers and directors as a group beneficially owned 0.40% of the Fund's outstanding shares. INVESTMENT ADVISER Mairs and Power, Inc. a Minnesota corporation, is the investment adviser of the Fund. Mairs and Power, Inc.'s shareholders, along with their percentage ownership positions in Mairs and Power, Inc., are listed below. Mr. Frels is an officer and a director of the Fund and Mr. Robb is an officer of the Fund. Ownership positions in the "Other" category are owned by other officers and employees of the investment adviser.
PERCENTAGE OF OUTSTANDING SHARES HELD SHAREHOLDER AS OF FEBRUARY 15, 2005 ----------- ----------------------- William B. Frels 32.5% George A. Mairs, III 31.8% Peter G. Robb 23.8% Other 11.9%
Mairs and Power, Inc. has served as an investment advisory firm since 1931 and has furnished continuous investment supervision to the Fund since 1958. Mairs and Power, Inc. currently provides similar services to one other mutual fund, Mairs and Power Balanced Fund, Inc., the net assets of which as of December 31, 2004 were $90,669,337. Mairs and Power, Inc. serves as investment adviser to the Fund under the terms of an Amended and Restated Agreement for Investment Counsel Service effective July 13, 2004 (the Investment Advisory Agreement). The Investment Advisory Agreement must be approved annually by the Board of Directors of the Fund, including a majority of those directors who are not parties to such contract or "interested persons" of any such party as defined in the Investment Company Act of 1940. The independent directors of the Fund reviewed the level of fees charged by the investment adviser, the level and quality of service provided by the investment adviser, and the expenses incurred by the Fund. After careful review and consideration, the Investment Advisory Agreement was approved by the Board of Directors of the Fund, including a majority of the directors who were not parties to such agreement or interested persons of any such party, by casting their votes in person at a meeting called for such purpose. The Agreement may be terminated at any time, without penalty, on 60 days' written notice by the Fund's Board of Directors, by the holders of a majority of the Fund's outstanding voting shares or by the Investment Adviser. The Agreement automatically terminates in the event of its assignment (as defined in the Investment Company Act of 1940 and the rules thereunder). Mairs and Power, Inc. conducts investment research and supervises investment accounts for individuals, trusts, pension and profit sharing funds, charitable and educational institutions. It is not a broker and does not sell securities. As compensation for its services to the Fund, the investment adviser receives monthly compensation from the Fund . The management fee is computed at an annual rate of 0.60% based upon the Fund's average daily net assets. The ratio of the management fee to average net assets in 2004 was 0.60%; the ratio of total expenses to average net assets was 0.73%. 8 Management fees paid by the Fund to Mairs and Power, Inc. amounted to $9,789,187 in 2004, $6,161,035 in 2003 and $4,899,017 in 2002. Under the terms of the Investment Advisory Agreement, the investment adviser agrees to render research, statistical and advisory services to the Fund, pay for office rental, executive salaries and executive expenses and pay all expenses related to the distribution and sale of Fund shares. All other expenses, such as brokerage commissions, fees charged by the Securities and Exchange Commission, custodian and transfer agent fees, legal and auditing fees, directors fees, taxes, premiums on fidelity bonds, supplies, and all other miscellaneous expenses are borne by the Fund. FUND ADMINISTRATION SERVICING AGREEMENT Mairs and Power, Inc. provides certain administrative services for the Fund pursuant to a Fund Administration Servicing Agreement. These services include general administrative services, assistance with regulatory compliance, and coordination of accounting and tax reporting. As compensation for its services to the Fund, the Investment Adviser receives monthly compensation from the Fund. The Fund Administration fee is computed at an annual rate of 0.01% based upon the Fund's average daily net assets. In 2004, the Fund paid Mairs and Power, Inc. $101,953 for administrative services. TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, P. O. Box 701, Milwaukee, Wisconsin 53201-0701 acts as the Fund's transfer agent and dividend disbursing agent. For these services, the Fund paid U.S. Bancorp Fund Services $680,911 in 2004, $532,199 in 2003 and $484,159 for 2002. U.S. Bancorp Fund Services also serves as fund accountant for the Fund. For these services, the Fund paid U.S. Bancorp Fund Services $149,604 in 2004, $106,895 in 2003 and $92,701 for 2002. Custodial services for the Fund are performed by U.S. Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, pursuant to the terms of a Custodial Agreement reviewed annually by the Board of Directors. As custodian, U.S. Bank, N.A controls all securities and cash for the Fund, receives and pays for securities purchased, delivers against payment for securities sold, receives and collects income from investments, makes all payments for Fund expenses and performs other administrative services, as directed in writing by authorized officers of the Fund. For these services, the Fund paid U.S. Bank, N.A $336,663 in 2004, $211,845 in 2003 and $164,493 in 2002. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP, Suite 1400, 220 South Sixth Street, Minneapolis, Minnesota 55402 is the independent registered public accounting firm to the Fund, and is subject to annual appointment by the Board of Directors. Ernst & Young LLP conducts an annual audit of the Fund's financial statements and performs tax and accounting advisory services. 9 PORTFOLIO MANAGER OTHER ACCOUNTS MANAGED William B. Frels, the portfolio manager of the Fund, is also primarily responsible for the day-to-day management of other accounts managed by Mairs and Power, Inc. The number of other accounts managed by Mr. Frels and the total assets managed in these other accounts are as follows: - Mr. Frels is portfolio manager of the Mairs and Power Balanced Fund, Inc. As of December 31, 2004, the total assets under management in this fund were $90,669,337; - Mr. Frels is the portfolio manager for 18 pooled investment advisory accounts. As of December 31, 2004, the total assets under management in these accounts were $367,353,023. - Mr. Frels is the portfolio manager for 109 individual investment advisory accounts. As of December 31, 2004, the total assets under management in these accounts were $211,803,387. In one of the accounts described above, the advisory fee is based on a percentage of assets under management plus a bonus payment based on the performance of the account. The total assets under management in this account as of December 31, 2004 were $75,291,398. Advisory fees for all of the other accounts are based on a percentage of assets under management. There are no material conflicts of interest in connection with the portfolio manager's management of the Fund's investments and the investments of the other accounts described above. COMPENSATION The Fund does not pay any salary, bonus, deferred compensation, pension or retirement plan on behalf of the portfolio manager or any other employee of Mairs and Power, Inc. The portfolio manager of the Fund receives compensation from the investment adviser, Mairs and Power, Inc. Compensation consists of a fixed salary and bonuses based on the profitability of the firm. The portfolio manager also participates in the profit sharing plan of the investment adviser. Contributions are made annually and are within the limitations of the Internal Revenue Service Rules and Regulations. OWNERSHIP OF SECURITIES As of December 31, 2004, Mr. Frels beneficially owned between $500,001 - $1,000,000 of the shares in the Fund. BROKERAGE ALLOCATION AND OTHER PRACTICES Subject to policies established by the Board of Directors of the Fund, the investment adviser is responsible for the Fund's portfolio decisions and the placing of orders to effect the Fund's portfolio transactions. With respect to such transactions, the investment adviser seeks to obtain the best net results for the Fund taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution and operational facilities of the firm involved. While the investment adviser generally seeks reasonably competitive commission rates, the Fund will not necessarily be paying the lowest commission or spread available. The Fund has no obligation to deal with any broker or dealer in the execution of its portfolio transactions. The broker-dealers used by the Fund have no affiliation with the Fund, its investment adviser, or any of their officers or directors. 10 Investment decisions for the Fund are made independently from those for the Mairs and Power Balanced Fund, Inc., also managed by Mairs and Power, Inc. When these funds are simultaneously engaged in the purchase or sale of the same securities, the transactions are averaged as to price and allocated as to amount in accordance with a formula deemed equitable to each fund. In some cases this system may adversely affect the price paid or received by the Fund, or the size of the position obtainable for the Fund. Decisions with respect to allocations of portfolio brokerage will be made by the investment adviser. Portfolio transactions are normally placed with broker-dealers which provide the Fund's investment adviser with research and statistical assistance. Recognizing the value of these factors, the Fund may pay brokerage commissions in excess of those which another broker might charge for effecting the same transaction, even though the research services furnished by brokers through whom the Fund effects securities transactions may benefit other clients of Mairs and Power, Inc. For the year 2004, the Fund paid $937,093 in brokerage fees on purchase and sale of portfolio securities. All of this amount was paid to brokers or dealers who supplied research services to the investment adviser. Total brokerage fees for 2003 and 2002 amounted to $510,301 and $547,055, respectively. PURCHASING, REDEEMING, AND PRICING FUND SHARES The purchase, redemption, and pricing of the Fund's shares are subject to the procedures described in "Purchasing Shares," "Redeeming Shares," "Determining Net Asset Value Per Share" and "Frequent Purchases and Redemptions of Funds Shares" in the Fund's Prospectus, which is incorporated herein by reference. TAXATION The Fund intends to comply, as it did in 2004, with the special provisions of Subchapter M of the Internal Revenue Code that relieves it from federal income tax on net investment income and capital gains currently distributed to shareholders. The Internal Revenue Code requires all regulated investment companies to pay a nondeductible 4% excise tax if less than 98% of ordinary income and less than 98% of capital gains are paid out to shareholders during the year in which they are earned or realized. The Fund intends to distribute income and capital gains in such a manner as to avoid this excise tax. PRINCIPAL UNDERWRITER The Fund is the sole distributor of its mutual fund shares. 11 CALCULATION OF PERFORMANCE DATA The Fund may publish its total return information from time to time. Quotations of the Fund's average annual total rate of return, the Fund's average annual total return (after taxes on distributions), and the Fund's average annual total return (after taxes on distributions and redemptions), will be expressed in terms of the average annual compounded rate of return on a hypothetical investment in the Fund over periods of one, five and ten years. The after-tax performance is calculated using the highest individual marginal federal income tax rates in effect on the reinvestment date. The calculation applies the ordinary income rate for ordinary income distributions, the short-term capital gain rate for short-term capital gain distributions, and the long-term capital gain rate for long-term capital gain distributions. Performance data will reflect the deduction of a proportional share of Fund expenses (on an annual basis), and will assume that all dividends and capital gains distributions are reinvested when paid. Performance information reflects only the performance of a hypothetical investment in the Fund during the particular time periods on which the calculations are based. Such information should not be considered as representative of the performance of the Fund in the future. Performance of the Fund will vary based not only on the current market value of the securities held in its portfolio, but also on changes in its expenses and amount of assets. FINANCIAL STATEMENTS The Fund's financial statements, including a listing of portfolio securities as of December 31, 2004, are included in the Fund's Annual Report to Shareholders for the year ended December 31, 2004 and are incorporated herein by reference. The financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm, Suite 1400, 220 South Sixth Street, Minneapolis, Minnesota 55402, as set forth in their report appearing in the Annual Report and incorporated herein by reference. Additional copies of the Annual Report may be obtained, without charge, by writing or calling the Fund, or by visiting the Fund's website at www.mairsandpower.com. 12 Appendix A MAIRS AND POWER FUNDS PROXY VOTING POLICIES AND PROCEDURES Effective 07/01/03 A. Mairs and Power has adopted and implemented these proxy voting guidelines having in mind our overriding goal of ensuring that all proxies are voted in the best interest of the Fund and its Shareholders. B. The person at Mairs and Power responsible for monitoring corporate actions, making voting decisions and ensuring that proxies are submitted in a timely manner is Mr. Ronald Kaliebe, Vice President. Whenever Mr. Kaliebe identifies proposals which are controversial or non-routine in nature, such proposals will be reviewed on a case-by-case basis and he will enlist the guidance of the full Mairs and Power Investment Committee, which includes Mr. George A. Mairs, III, Mr. William B. Frels, Mr. Peter G. Robb, Mr. John K. Butler and Mr. Jon A. Theobald, in addition to Mr. Kaliebe. C. As a general rule, it is the policy of Mairs and Power to vote in favor of management on all proxy statement proposals considered to be non-controversial and routine in nature. In this regard, the following types of proposals are generally considered to be in this category: 1. Election of directors and related compensation issues. 2. Appointment of independent auditors. 3. New employee incentive plans or amendments to existing incentive plans involving the issuance of new common shares representing less than 10% of the then number of common shares outstanding. 4. Stock splits and/or dividends and requests to increase the number of authorized but unissued common shares outstanding. 5. A variety of proposals involving such issues as charitable contributions, cumulative voting, employment, political activities, etc. all of which are deemed to be a prerogative of management. D. Proposals considered to be controversial and/or non-routine in nature will require special case-by-case consideration by the Mairs and Power Investment Committee in order to determine the voting decision which will be in the best interest of the Fund and its Shareholders. Examples of such proposals would include the following: 1. Amendments to the articles of incorporation and corporate by-laws. Appendix A 2. Acquisition or merger related proposals. 3. Any proposal related to a change in control be it friendly or unfriendly or any proposal designed to prevent or discourage unfriendly takeovers (i.e. poison pill proposals). 4. New incentive plans or amendments to existing incentive plans that would have the potential to increase the number of the then outstanding common shares by 10% or more. 5. All other controversial or non-routine proposals not specifically mentioned above. E. Conflicts of interest - It is the responsibility of Mr. Kaliebe, in consultation with the full Mairs and Power Investment Committee, to identify and determine the materiality of any potential conflicts between the interests of Mairs and Power and those of the Fund and its Shareholders. Due to the size and nature of Mairs and Power's business, it is anticipated that material conflicts of interest will rarely occur. Whenever a material conflict of interest does exist, it will be addressed in one of the following ways: 1. The proxy will be voted according to the predetermined voting policy set forth hereinabove, provided that the proposal at issue is not one which the policy requires to be considered on a case-by-case basis, and provided further that exercising the predetermined policy may not result in a vote in favor of management of a Company where the conflict involved is the fact that Mairs and Power does business with the Company. 2. In conflict situations which cannot be addressed using the predetermined voting policy, guidance will be sought from the Fund's Board of Directors. The proxy will be voted as directed by the Fund's Board of Directors following full disclosure of the conflict and a determination as to what vote will be in the best interest of the Fund and its Shareholders. F. Mairs and Power will make its proxy voting record for the Mairs and Power Funds available to Fund shareholders on its website beginning with the twelve month period ending June 30, 2004 and annually thereafter. The proxy voting information, which will mirror what is required to be filed with the SEC via Form N-PX, will be made available on the Mairs and Power website as soon as is reasonably practicable after filing Form N-PX with the SEC. PART C. OTHER INFORMATION Item 23. Exhibits (a) Amended and Restated Articles of Incorporation, dated April 8, 1991. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 53, filed on April 26, 2000. (a)(1) Articles of Amendment to Amended and Restated Articles of Incorporation Article VI, dated June 8, 1998. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 53, filed on April 26, 2000. (b) Amended and Restated By-laws. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 53, filed on April 26, 2000. (c) None. (d) Amended and Restated Agreement for Investment Counsel Service, effective July 13, 2004. Filed herewith. (e) None. (f) None. (g) Custodian Agreement entered into between the Fund and Firstar Trust Company on April 15, 1996. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 53, filed on April 26, 2000. (g)(1) Amendment to the Custodian Agreement entered into between the Fund and U.S. Bank N.A. (f/k/a Firstar Trust Company) dated December 1, 2004. Filed herewith. (h) Transfer Agent Agreement entered into between the Fund and Firstar Trust Company on April 15, 1996. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 55, filed on April 26, 2002. (h)(1) Amendment to the Transfer Agent Agreement entered into between the Fund and U.S. Bancorp Fund Services LLC (f/k/a Firstar Trust Company) dated April 2, 2002. Filed herewith. (h)(2) Fund Accounting Servicing Agreement entered into between the Fund and Firstar Trust Company on April 15, 1996. Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 55, filed on April 26, 2002. (h)(3) Blue Sky Compliance Servicing Agreement entered into between the Fund and Firstar Trust Company on April 15, 1996. . Incorporated by reference to Registrant's Registration Statement on Form N-1A, No. 2-14290, Post-Effective Amendment No. 55, filed on April 26, 2002. (h)(4) Amendment to the Blue Sky Compliance Servicing Agreement entered into between the Fund and U.S. Bancorp Fund Services LLC (f/k/a Firstar Trust Company) dated July 1, 2004. Filed herewith. (h)(5) Blue Sky Registration Agreement entered into between the Fund and Quaser Distributors, LLC, on July 1, 2004. Filed herewith. (h)(6) Fund Administration Servicing Agreement entered into between the Fund and Mairs and Power, Inc. on January 5, 2005. Filed herewith. (i) None. (j) Consent of Independent Registered Public Accounting Firm. Filed herewith. (k) None. (l) None. (m) None. (n) None. (o) None. (p) Mairs and Power Growth Fund, Inc. Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940, dated September 15, 2004. Filed herewith. (p)(1) Mairs and Power, Inc. Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940, dated September 15, 2004. Filed herewith. Item 24. Persons Controlled By or Under Common Control with Registrant None Item 25. Indemnification The Fund's Amended and Restated Articles of Incorporation state that a director of the corporation shall have no personal liability to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director to the full extent such immunity is permitted from time to time under the Minnesota Business Corporation Act, as now enacted or hereafter amended, except as prohibited by the Investment Company Act of 1940, as amended. Section 302A.521 of the Minnesota Business Corporation Act provides that a Minnesota corporation shall indemnify any director, officer or employee of the corporation made or threatened to be made a party to a proceeding, by reason of the former or present official capacity of the person, against judgments, penalties, fines, settlements and reasonable expenses incurred by the person in connection with the proceeding, provided that certain statutory standards are met. "Proceeding" means a threatened, pending or completed civil, criminal, administrative, arbitration or investigative proceeding, including one by or in the right of the corporation. Indemnification is required under Section 302A.521 only if the person (i) has not been indemnified by any other organization with respect to the same acts or omissions, (ii) acted in good faith, (iii) received no improper personal benefit, (iv) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful, and (v) reasonably believed that the conduct was in the best interest of the corporation. Item 26. Business and Other Connections of Investment Adviser None. Item 27. Principal Underwriters None. Item 28. Location of Accounts and Records Custodian: U.S. Bank, N.A. 425 Walnut Street Cincinnati, Ohio 45202 Transfer Agent: Overnight Deliveries U.S. Bancorp Mutual Fund Services, LLC 3rd Floor, 615 East Michigan Street Milwaukee, Wisconsin 53202 Transfer Agent: Mailing Address U.S. Bancorp Mutual Fund Services, LLC 615 East Michigan Street P. O. Box 701 Milwaukee, Wisconsin 53201-0701 Investment Adviser: Mairs and Power, Inc. W1520 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101
Item 29. Management Services None. Item 30. Undertakings Inapplicable. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Fund certifies that it meets all of the requirements for effectiveness of the registration statement under Rule 485 (b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of St. Paul, and State of Minnesota on the 28th day of February, 2005. MAIRS AND POWER GROWTH FUND, INC. /s/ William B. Frels ------------------------------------------------- William B. Frels President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated. /s/ William B. Frels President and Director - ---------------------------- (Principal Executive Officer) February 28, 2005 William B. Frels /s/ Lisa J. Hartzell Treasurer - ---------------------------- (Principal Financial and Lisa J. Hartzell Accounting Officer) February 28, 2005 /s/ Norbert J. Conzemius - ---------------------------- Norbert J. Conzemius Director February 28, 2005 /s/ Charlton Dietz - ---------------------------- Charlton Dietz Director February 28, 2005 /s/ Charles M. Osborne - ---------------------------- Charles M. Osborne Director February 28, 2005 /s/ Edward C. Stringer - ---------------------------- Edward C. Stringer Director February 28, 2005
EXHIBIT INDEX
ITEM DESCRIPTION - ---- ----------- (d) Amended and Restated Agreement for Investment Counsel Service effective July 13, 2004. (g)(1) Amendment to the Custody Agreement entered into between the Fund and U.S. Bank N.A. (f/k/a Firstar Trust Company) dated December 1, 2004. (h)(1) Amendment to the Transfer Agent Servicing Agreement entered into between the Fund and U.S. Bancorp Fund Services LLC (f/k/a Firstar Trust Company) dated April 2, 2002. (h)(4) Amendment to Blue Sky Compliance Servicing Agreement entered into between the Fund and U.S. Bancorp Fund Services LLC (f/k/a Firstar Trust Company) dated July 1, 2004. (h)(5) Blue Sky Registration Agreement entered into between the Fund and Quaser Distributors, LLC, on July 1, 2004. (h)(6) Fund Administration Servicing Agreement entered into between the Fund and Mairs and Power, Inc. on January 5, 2005. (j) Consent of Independent Registered Public Accounting Firm. (p) Mairs and Power Growth Fund, Inc. Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940, dated September 15, 2004. (p)(1) Mairs and Power, Inc. Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940, dated September 15, 2004.
EX-99.(D) 2 a2152514zex-99_d.txt EX-99(D) Exhibit 99.(d) AMENDED AND RESTATED AGREEMENT FOR INVESTMENT COUNSEL SERVICE THIS AGREEMENT between MAIRS AND POWER, INC., a Minnesota Corporation, (the "Adviser"), and MAIRS AND POWER GROWTH FUND, INC., a Minnesota Corporation, (the "Fund") is hereby restated effective July 13, 2004, and replaces the original agreement dated March 21, 1972 as amended May 17, 1982. That in consideration of the mutual covenants herein contained and the performance herein required, the Fund and the Adviser hereby mutually agree as follows: 1. APPOINTMENT OF ADVISER. The Fund hereby appoints and employs the Adviser to act as investment adviser for the Fund for the term, with the duties, and subject to the conditions as provided in this Contract, and the Adviser hereby accepts such appointment and employment. 2. DUTIES OF ADVISER. The Adviser shall furnish to the Fund such management, investment advisory, statistical and research facilities and services as may be required from time to time by the Fund. The duties of the Adviser under this Contract shall not prevent the Adviser from rendering similar services to other persons, firms, trusts, corporations or other entities. It is recognized the officers of the Adviser may and probably will serve as officers of the Fund. They shall receive no compensation as officers nor as directors of the Fund, their compensation being limited to that which they receive from the Adviser. The propriety of officers of the Adviser acting as officers and directors of the Fund is fully recognized hereby and it is ratified and confirmed by the Fund and all its shareholders. The Fund hereby agrees to indemnify the Adviser for any loss or liability which may be imposed upon the Adviser or its officers or directors by reason of any act or acts that are performed by them or any of them in the performance of this service or the within agreement as long as such act or acts shall have been performed in good faith, but nothing in this agreement shall be construed as protecting or purporting to protect the Adviser against any liability to the Fund or its security holders to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties under this Contract. 3. ALLOCATION OF EXPENSES. The Adviser will assume all executive salaries and executive expenses and office rent, and the Adviser will absorb all such expenses and not charge the same since the same are included in its fees for management of the Fund. All other expenses of operating and maintaining the Fund including but not limited to attorneys and accountants fees, official fees of the Securities and Exchange Commission and Minnesota Securities Commission, printing, stationery, mimeographing and postage expenses, and premiums on fidelity bonds and insurance, and other like expenses will be paid by the Fund directly to the recipient thereof. The Adviser will assume all expenses of distribution, sales or promotion of the Fund. 4. COMPENSATION OF THE ADVISER. The Fund shall pay to the Adviser for its investment advisory services a fee, calculated for each day that this Contract is in effect, of 1/365 of 0.60% of the daily closing net asset value of the Fund (or 1/366 of such rate in a leap year). The fee shall be payable in arrears on the last day of each month during which this Contract is in effect. In the event that the total expenses incurred by the Fund in any fiscal year, excluding interest, taxes, brokerage commissions and extraordinary litigation costs, but including payments to the Adviser, shall exceed 1 1/2% of the first $30 million dollars and 1% of the balance of the average value of the net assets of the Fund during said fiscal year, based upon computations of such value made as of the close of business on the last valuation day of each month during such fiscal year, then the Adviser agrees to bear, to the extent of compensation paid to the Adviser by the Fund, such excess expenses. 5. EFFECTIVE DATE, DURATION AND TERMINATION OF THIS CONTRACT. (a) This amended and restated Contract amends the Contract between the Adviser and the Fund dated March 21, 1972, as amended May 17, 1982, on the effective date hereof which shall be at the commencement of business on July 13, 2004. (b) This Contract shall remain in effect (unless terminated as hereinafter provided) until July 1, 2005 and from year to year thereafter; provided that this Contract shall continue in effect after July 1, 2005 only as long as (1) such continuance is specifically approved at least annually by either (A) the Board of Directors of the Fund, or (B) "vote of a majority of the outstanding voting securities" (as defined in Section 2(a)(42) of the Investment Company Act of 1940) of the Fund, and (2) the terms of this Contract are approved at least annually by the vote of a majority of the Directors of the Fund, who are not parties to the Contract or "interested persons" of any such party (as such terms are used in Section 15(c) of the Investment Company Act of 1940) cast in person at a meeting called for the purpose of voting on such approval. (c) This Contract may be terminated at any time without the payment of any penalty by vote of the Board of Directors of the Fund or by "vote of a majority of the outstanding voting securities" (as defined in Section 2(a)(42) of the Investment Company Act of 1940) of the Fund, or by the Adviser, in each case upon sixty calendar days' prior written notice to the other party to the Contract. (d) This Contract shall terminate automatically in the event of its "assignment" (as defined in Section 2(a)(4) of the Investment Company Act of 1940). 2 6. AMENDMENTS. This Contract may be amended at any time or from time to time by an instrument in writing signed by a duly authorized officer of the Fund and by the Adviser, but no amendment to this Contract shall be effective until (1) such amendment is approved by the affirmative "vote of a majority of the outstanding voting securities" (as defined in Section 2(a)(42) of the Investment Company Act of 1940), and (2) the terms of such amendment are approved by the vote of a majority of the Directors of the Fund, who are not parties to the Contract or "interested persons" of any such party (as such terms are used in Section 15(c) of the Investment Company Act of 1940), cast in person at a meeting called for the purpose of voting on such approval. MAIRS AND POWER GROWTH FUND, INC. By /s/ William B. Frels ------------------------------- President MAIRS AND POWER, INC. By /s/ William B. Frels ------------------------------- President By /s/ Peter G. Robb ------------------------------- Vice President and Secretary 3 EX-99.(G)(1) 3 a2152514zex-99_g1.txt EX-99.(G)(1) Exhibit 99.(g)(1) MAIRS & POWER FUNDS AMENDMENT TO THE CUSTODY AGREEMENT THIS AMENDMENT dated as of December 1, 2004, to the Custody Agreement, dated as of April 15, 1996 (the "Agreement"), is entered by and between MAIRS & POWER GROWTH FUND, INC., a Minnesota corporation (the "Company") and U.S. BANK, N.A., a national banking association (the "Custodian"). RECITALS WHEREAS, the parties have entered into a Custody Agreement; and WHEREAS, the Company and USBFS desire to amend said Agreement; and WHEREAS, Article XIV, Section 14.4 of the Agreement allows for its amendment by a written instrument executed by both parties. NOW, THEREFORE, the parties agree as follows: The fee schedule of the Agreement are hereby superceded and replaced with the fee schedule attached hereto. Except to the extent supplemented hereby, the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year first written above. MAIRS & POWER GROWTH FUND, INC. U.S. BANK, N.A. By: /s/ William B. Frels By: /s/ Joe D. Redwine -------------------------------- -------------------------------- Title: President Title: Senior Vice President ----------------------------- ----------------------------- FEE SCHEDULE MAIRS & POWER GROWTH FUND, INC. DECEMBER 1, 2004 DOMESTIC CUSTODY SERVICES ANNUAL FEE SCHEDULE COMPLEX ANNUAL FEE BASED UPON TOTAL ASSETS UNDER MANAGEMENT*: 1 basis points on the first $500 million 0.75 basis points on the next $500 million 0.5 basis point on the balance Minimum annual fee per fund - N/A PORTFOLIO TRANSACTION FEES $ 5.00 per disbursement (waived if U.S. Bancorp is Administrator) $ 7.00 per US Bank repurchase agreement transaction $ 9.00 per book entry security (depository or Federal Reserve system) and non-US Bank repurchase agrmt $25.00 per portfolio transaction processed through our New York custodian definitive security (physical) $ 8.00 per principal paydown $15.00 per option/future contract written, exercised or expired $50.00 per Cedel/Euroclear transaction $15.00 per mutual fund trade $15.00 per Fed Wire $15.00 per margin variation Fed wire $ 6.00 per short sale A transaction is a purchase/sale of a security, free receipt/free delivery, maturity, tender or exchange. Overdrafts - charged to the account at prime interest rate plus 2. Plus out-of-pocket expenses, and extraordinary expenses based upon complexity, including items such as shipping fees or transfer fees. Fees are billed monthly. EX-99.(H)(1) 4 a2152514zex-99_h1.txt EX-99.(H)(1) Exhibit 99.(h)(1) MAIRS AND POWER GROWTH FUND, INC. AMENDMENT TO THE TRANSFER AGENT SERVICING AGREEMENT THIS ADDENDUM dated April 2, 2002 to the Transfer Agent Servicing Agreement (the "Agreement") dated April 15, 1996, by and between Mairs and Power Growth Fund, Inc. organized in the state of Minnesota (the "Fund") and U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability company and successor party in interest to Firstar Mutual Fund Services, LLC (hereinafter referred to as "USBFS"), hereby amends the Agreement as set forth below. Section 7 PROPRIETARY AND CONFIDENTIAL INFORMATION of the Agreement shall be replaced in its entirety with the following: USBFS agrees on behalf of itself and its directors, officers, and employees to treat confidentially and as proprietary information of the Mairs and Power Growth Fund, Inc. all records and other information relative to the Mairs and Power Growth Fund, Inc. and prior, present, or potential shareholders (and clients of said shareholders) and not to use such records and information for any purpose other than the performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Mairs and Power Growth Fund, Inc., which approval shall not be unreasonably withheld and may not be withheld where USBFS may be exposed to civil or criminal contempt proceedings for failure to comply after being requested to divulge such information by duly constituted authorities, or when so requested by Mairs and Power Growth Fund, Inc.. Notwithstanding the above, USBFS will adhere to the privacy policies adopted by the Mairs and Power Growth Fund, Inc. pursuant to Title V of the Graham-Leach Bliley Act (the "Act") as may be modified from time to time. Further, USBFS will not share any nonpublic personal information concerning any of the Mairs and Power Growth Fund, Inc.'s shareholders to any third party unless specifically directed by the Mairs and Power Growth Fund, Inc. or allowed under one of the exceptions noted under the Act. Mairs and Power Growth Fund, Inc. U.S. Bancorp Fund Services, LLC By: George A. Mairs By: /s/ Michael R. McVoy ------------------------------ ----------------------------- Print Name: George A. Mairs III Print Name: Michael R. McVoy --------------------- --------------------- Title: President Title: Senior Vice President --------------------------- -------------------------- EX-99.(H)(4) 5 a2152514zex-99_h4.txt EX-99.(H)(4) Exhibit 99.(h)(4) AMENDMENT TO BLUE SKY COMPLIANCE SERVICING AGREEMENT This Amendment ("Amendment") is made as of the lst of July 2004 between MAIRS AND POWER GROWTH FUND, INC. (the "Fund") and U.S. BANCORP FUND SERVICES, LLC (formerly known as Firstar Mutual Fund Services, LLC and before that, Firstar Trust Company) ("USBFS"). The parties hereby amend the Blue Sky Compliance Servicing Agreement dated as of May 1, 1997 (the "Agreement"), as set forth below. Unless otherwise provided, capitalized terms used herein shall have the same meanings given to such terms in the Agreement. 1. Effective January 1, 2002, the name Firstar Mutual Fund Services, LLC (formerly Firstar Trust Company) was changed to U.S. Bancorp Fund Services, LLC. Accordingly, all references to Firstar Mutual Fund Services, LLC or Firstar Trust Company in this Agreement should be replaced with U.S. Bancorp Fund Services, LLC. 2. Schedule A of the Agreement is amended and replaced with Schedule A attached hereto. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the day and year first written above. MAIRS AND POWER GROWTH FUND, INC. U.S. BANCORP FUND SERVICES, LLC By: William B. Frels By: Joe C. Neuberger ------------------------- --------------------------- Joe C. Neuberger Title: President Title: Senior Vice President ---------------------- ------------------------- SCHEDULE A TO THE BLUE SKY COMPLIANCE SERVICING AGREEMENT FEE SCHEDULE ANNUAL FEE $250 per permit (new and/or renewal) per year PLUS OUT-OF-POCKET EXPENSES INCLUDING, BUT NOT LIMITED TO: - State regulatory filing fees - Postage - Programming - Stationery - Retention of Records - Special Reports - Auditing and Legal Expenses - All other out-of-pocket expenses Notwithstanding the above, all fees and out-of-pocket expenses connected with the initial state registration and notifying the states listed below of any sales within their states shall be paid for by USBFS until June 30, 2005 or until the expiration of the initial registration if sooner. EXCEPTION: Any expenses incurred for sales made above a state's minimum, will be paid for by the Fund according to the above schedule. STATES EXCLUDED FROM ABOVE FEE SCHEDULE (WITH NOTED EXCEPTION) UNTIL JUNE 30, 2005 OR UNTIL THE EXPIRATION OF THE INITIAL REGISTRATION IF SOONER - Arkansas - Nevada - Delaware - Oklahoma - Iowa - Puerto Rico - Louisiana - Rhode Island - Massachusetts - South Carolina - Montana - Tennessee - North Carolina - Utah - Nebraska - Wyoming - New Mexico Effective: July 1, 2004 EX-99.(H)(5) 6 a2152514zex-99_h5.txt EX-99.(H)(5) Exhibit 99.(h)(5) BLUE SKY REGISTRATION AGREEMENT THIS AGREEMENT effective as of the 1ST DAY OF JULY, 2004, by and AMONG MAIRS AND POWER GROWTH FUND, INC. and MAIRS AND POWER BALANCED FUND, INC., (collectively the "Funds"), both Minnesota corporations, and QUASAR DISTRIBUTORS, LLC, a Delaware limited liability company ("Quasar"). WHEREAS, the Funds are registered under the Investment Company Act of 1940, as amended ("1940 Act"), as an open-end diversified management companies, and are authorized to issue shares of common stock; WHEREAS, each Fund desires to retain Quasar as an agent in connection with the Blue Sky registration of the Shares of the Funds; WHEREAS, Quasar is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, Quasar is willing to act as an agent for the Funds on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 1. APPOINTMENT OF QUASAR. Each Fund hereby appoints Quasar as its agent for the Blue Sky registration of certain Shares of the Funds, subject to the terms and for the period set forth in this Agreement. Quasar hereby accepts such appointment and agrees to act hereunder. 2. SERVICES AND DUTIES OF QUASAR. (a) Quasar agrees to serve as agent for the Blue Sky registration of Shares of the Funds in compliance with state securities laws, or other jurisdictions as may be mutually agreed upon by each Fund and Quasar. (b) The services furnished by Quasar hereunder are not to be deemed exclusive and Quasar shall be free to furnish similar services to others so long as its services under this Agreement are not impaired thereby. Quasar and each Fund recognizes that from time to time officers and employees of Quasar may serve as directors, trustees, officers and employees of other entities (including investment companies), that such other entities may include the name of Quasar as part of their name and that Quasar or its affiliates may enter into distribution, administration, fund accounting, transfer agent or other agreements with such other entities. 1 3. DUTIES AND REPRESENTATIONS OF THE FUNDS. (a) Each Fund represents that it is duly organized and in good standing under the law of its jurisdiction of incorporation and registered as an open-end management investment company under the 1940 Act. Each Fund agree that it will act in material conformity with its Articles of Incorporation, By-Laws, its Registration Statement as may be amended from time to time and resolutions and other instructions of its Board. Each Fund agrees to comply in all material respects with the 1933 Act, the 1940 Act, and all other applicable federal and state laws and regulations. Each Fund represents and warrants that this Agreement has been duly authorized by all necessary action by the Funds under the 1940 Act, state law and each Fund's Articles of Incorporation and By-Laws. (b) The Funds agree to advise Quasar promptly in writing: (i) of any correspondence or other communication by the SEC or its staff relating to the Fund, including requests by the SEC for amendments to the Registration Statement or Prospectus; (ii) in the event of the issuance by the SEC of any stop-order suspending the effectiveness of the Registration Statement then in effect or the initiation of any proceeding for that purpose; (iii) of the happening of any event which makes untrue any statement of a material fact made in the Prospectus or which requires the making of a change in such Prospectus in order to make the statements therein not misleading; and (iv) of all actions taken by the SEC with respect to any amendments to any Registration Statement or Prospectus, which may from time to time be filed with the SEC. 4. COMPENSATION. As compensation for the services performed and the expenses assumed by Quasar under this Agreement Quasar shall be entitled to the fees and expenses set forth in Schedule A to this Agreement which are payable promptly after the last day of each month. Such fees shall be paid to Quasar by the Funds. 5. EXPENSES. (a) The Funds shall bear all costs and expenses in connection with registration of the Shares with the SEC and related compliance with state securities laws as contemplated under the Blue Sky Compliance Servicing Agreement with U.S. Bancorp Fund Services, LLC, as amended. (b) Quasar shall bear the expenses of registration or qualification of Quasar as a dealer or broker under federal or state laws and the expenses of continuing such registration or qualification. Quasar does not assume responsibility for any expenses not expressly assumed hereunder. 2 6. INDEMNIFICATION. (a) Each Fund shall indemnify and hold harmless Quasar and its respective affiliates, officers, directors, agents, employees and controlling persons from all direct or indirect liabilities, losses or costs (including reasonable attorneys' fees) arising from, related to or otherwise connected with any breach by the Funds of any provision of this Agreement. (b) Quasar shall indemnify and hold harmless each Fund and its affiliates, officers, directors, agents, employees and controlling persons from and against any and all direct or indirect liabilities, losses or costs (including reasonable attorneys' fees) arising from, related to or otherwise connected with any breach by Quasar of any provision of this Agreement. (c) The Agreement of the parties in this Paragraph to indemnify each other is conditioned upon the party entitled to indemnification (the "Indemnified Party") notifying the other party (the "Indemnifying Party") promptly after the summons or other first legal process for any claim as to which indemnity may be sought is served on the Indemnified Party, unless failure to give such notice does not prejudice the Indemnifying Party. The Indemnified Party shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting from it, provided that counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be approved by the Indemnified Party (which approval shall not unreasonably be withheld), and that the Indemnified Party may participate in such defense at its expense. The failure of the Indemnified Party to give notice as provided in this subparagraph (c) shall not relieve the Indemnifying Party from any liability other than its indemnity obligation under this Paragraph. No Indemnifying Party, in the defense of any such claim or litigation, shall, without the written consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term the giving by the claimant or plaintiff to the Indemnified Party of a release from all liability in respect to such claim or litigation. 7. OBLIGATIONS OF THE FUNDS. This Agreement is executed by and on behalf of the Funds and the obligations of the Funds hereunder are not binding upon any of the directors, officers or shareholders of the Funds individually but are binding only upon each Funds. 8. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original agreement but all of which counterparts shall together constitute but one and the same instrument. 9. GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles. To the extent that the applicable laws of the State of Wisconsin, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the SEC thereunder. 3 10. DURATION AND TERMINATION. (a) This Agreement shall become effective with respect to the Funds as of the date hereof. Unless sooner terminated as provided herein, this Agreement shall continue in effect for one year from the date hereof. Either party may terminate this agreement on 60 days' written notice 11. CONFIDENTIALITY. Quasar agrees on behalf of its employees to treat all records relative to the Funds and prior, present or potential shareholders of the Funds as confidential, and not to use such records for any purpose other than performance of Quasar's responsibilities and duties under this Agreement, except after notification and prior approval by the Funds, which approval shall not be unreasonably withheld, and may not be withheld where Quasar may be exposed to civil or criminal proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, when subject to governmental or regulatory audit or investigation, or when so requested by the Funds. Records and information which have become known to the public through no wrongful act of Quasar or any of its employees, agents or representatives shall not be subject to this paragraph. 12. MISCELLANEOUS. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors. As used in this Agreement, the terms "majority of the outstanding voting securities," "interested person," and "assignment" shall have the same meaning as such terms have in the 1940 Act. 13. NOTICE. Any notice required or permitted to be given by any party to the others shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service or 3 days after sent by registered or certified mail, postage prepaid, return receipt requested or on the date sent and confirmed received by facsimile transmission to the other parties' respective addresses set forth below: Notice to Quasar shall be sent to: Quasar Distributors, LLC Attn; President 615 East Michigan Street Milwaukee, WI 53202 4 notice to the Funds shall be sent to: Mairs and Power Growth Fund, Inc. Mairs and Power Balanced Fund, Inc. W1520 First National Bank Building 332 Minnesota Street Saint Paul, MN 55101-1363 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated as of the day and year first above written. MAIRS AND POWER GROWTH FUND, INC. QUASAR DISTRIBUTORS, LLC By: /s/ William B. Frels By: /s/ James R. Schoenike ------------------------- -------------------------- James R. Schoenike Title: President Title: President ---------------------- ----------------------- MAIRS AND POWER BALANCED FUND, INC. By: /s/ William B. Frels ------------------------- Title: President ---------------------- 5 SCHEDULE A TO THE BLUE SKY REGISTRATION AGREEMENT BY AND AMONG MAIRS AND POWER GROWTH FUND, INC. MAIRS AND POWER BALANCED FUND, INC. AND QUASAR DISTRIBUTORS, LLC FEES STATE REGISTRATION FEES AND OTHER OUT-OF-POCKET EXPENSES RELATED TO QUASAR - No charge. EX-99.(H)(6) 7 a2152514zex-99_h6.txt EX-99.(H)(6) Exhibit 99.(h)(6) FUND ADMINISTRATION SERVICING AGREEMENT THIS AGREEMENT is made and entered into on this 5th day of January, 2005, by and between Mairs and Power Growth Fund, Inc., a corporation organized under the laws of the State of Minnesota (the "Fund"), and Mairs and Power, Inc. (the "Administrator"). WHEREAS, the Fund is an open-ended management investment company registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"); and WHEREAS, the Fund and the Administrator desire to enter into this Agreement to set forth the terms and conditions under which the Administrator provides fund administration services for the benefit of the Fund. NOW, THEREFORE, the Fund and the Administrator do mutually promise and agree as follows: I. APPOINTMENT OF ADMINISTRATOR The Fund hereby appoints the Administrator as administrator of the Fund on the terms and conditions set forth in this Agreement, and the Administrator hereby accepts such appointment and agrees to perform the duties and responsibilities set forth in this Agreement in consideration of the compensation provided for herein. II. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR The Administrator shall perform the following duties and responsibilities on behalf of the Fund: A. GENERAL FUND MANAGEMENT 1. Act as liaison among all Fund service providers. 2. Provide appropriate personnel, office facilities, information technology, record keeping and other resources as necessary for the Administrator to perform its duties and responsibilities under this Agreement. 3. Coordinate board activities by: a. Assisting in establishing meeting agendas. b. Preparing board reports based on financial and administrative data. c. Securing and monitoring director and officers liability coverage. 4. Coordinate shareholder meetings by: a. Assisting in the preparation and mailing of shareholder communications, including proxy materials. b. Assisting with the scheduling and conduct of shareholder meetings. 5. Assist in the overall operations of the Fund. B. COMPLIANCE 1. Investment Company Act Compliance a. Assist in updating and monitoring compliance with the Fund's policies and procedures adopted pursuant to Rule 38a-l of the Investment Company Act (the "Fund's Policies and Procedures"). b. Employ the services of a person to act in the capacity of Chief Compliance Officer of the Fund, who shall be responsible for administering the Fund's Policies and Procedures. c. Periodically monitor compliance with Investment Company Act requirements, including: (1) Asset diversification tests (2) Total return and yield calculations (3) Maintenance of books and records under Rule 31a-3 (4) Code of ethics d. Periodically monitor Fund's compliance with the policies and investment limitations of the Fund as set forth in its prospectus and statement of additional information. 2. SEC Registration and Reporting a. Assist in updating the prospectus and statement of additional information. b. Assist in preparing annual, semiannual and quarterly reports to shareholders. c. Assist in preparing and filing all forms required to be filed by the Fund with the SEC, including: (1) Form N-lA (2) Form N-SAR (3) Form N-CSR (4) Form 24f-2 (5) Form N-Q (6) Form N-PX (7) Schedule 13G 3 IRS Compliance a. Periodically monitor the Fund's status as a registered investment company under Subchapter M: 2 (1) Asset diversification requirements (2) Qualifying income requirements (3) Distribution requirements b. Calculate required distributions to shareholders. C. FINANCIAL REPORTING AND AUDITS 1. Supervise the Fund's custodian and accountants in the maintenance of the Fund's general ledger and in the preparation of the Fund's financial statements, including oversight of expense accruals and payments, the determination of the Fund's net asset value, and the declaration and payment of dividends and other distributions to shareholders. 2. Provide financial data required for the Fund's prospectus and statement of additional information and quarterly and semi-annual reports to shareholders. 3. Provide information to the Fund's independent auditors to facilitate the audit process. 4. Prepare financial and statistical reports, as requested by the board. D. TAX REPORTING 1. Assist with the preparation and filing of appropriate federal and state tax returns including forms 1120/8610 with any necessary schedules. 2. Prepare state income breakdowns where relevant. 3. File 1099 Miscellaneous for payments to directors and other service providers. 4. Calculate eligible dividend income. III. COMPENSATION The Fund agrees to pay the Administrator for performance of the duties listed in this Agreement the fees and out-of-pocket expenses set forth in the attached Schedule A. These fees may be changed from time to time, subject to mutual written agreement between the Fund and the Administrator. The Fund agrees to pay all fees and reimbursable expenses within ten (10) business days following the mailing of the billing notice. 3 IV. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY A. The Administrator shall exercise reasonable care in the performance of its duties under this Agreement. The Administrator shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which this Agreement relates, including losses resulting from failure of computing or communication equipment or power supplies beyond the Administrator's control, except a loss resulting from the Administrator's refusal or failure to comply with the terms of this Agreement or from bad faith, negligence, or willful misconduct on its part in the performance of its duties under this Agreement. The Administrator shall take all reasonable steps to minimize service interruptions and will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such interruptions at the expense of the Administrator. The Administrator agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of data processing equipment to the extent appropriate equipment is available. Representatives of the Fund shall be entitled to inspect the Administrator's premises and operating capabilities at any time during regular business hours of the Administrator, upon reasonable notice to the Administrator. The Fund shall indemnify and hold the Administrator harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which the Administrator may sustain or incur or which may be asserted against the Administrator by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to the Administrator by any duly authorized officer of the Fund. B. The Administrator shall indemnify and hold the Fund harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which may be asserted against the Fund by any person arising out of any action taken or omitted to be taken by the Administrator as a result of the Administrator's refusal or failure to comply with the terms of this Agreement, its bad faith, negligence, or willful misconduct. C. If a party hereto (the "Indemnifying Party") is asked to indemnify or hold the other party hereto harmless (the "Indemnified Party"), the Indemnifying Party shall be fully and promptly advised of all pertinent facts concerning the situation in question, and the Indemnified Party will use all reasonable care to notify the Indemnifying Party promptly concerning any situation which presents or appears likely to present the likelihood of a claim for indemnification against the 4 Indemnifying Party. The Indemnifying Party shall have the option to defend the Indemnified Party against any claim which may be the subject of this indemnification. In the event that the Indemnifying Party so elects, it will so notify the Indemnified Party and thereupon the Indemnifying Party shall take over complete defense of the claim, and the Indemnified Party shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The Indemnified Party shall in no case confess any claim or make any compromise in any case in which the Indemnifying Party will be asked to indemnify the Indemnified Party except with the Indemnifying Party's prior written consent. V. CONFIDENTIALITY The Administrator shall maintain in strict confidence all information relating to the Fund's business which is received by the Administrator during the course of rendering any service hereunder. VI. DATA NECESSARY TO PERFORM SERVICE The Fund and its agents shall furnish to the Administrator the data necessary to perform the services described herein at times and in such form as mutually agreed upon. VII. RECORDS The Administrator shall keep records relating to the services to be performed hereunder, in the form and manner, and for such period as it may deem advisable and is agreeable to the Fund but not inconsistent with the rules and regulations of appropriate government authorities, including Section 31 of the Investment Company Act and the rules thereunder. The Administrator agrees that all such records prepared or maintained by the Administrator relating to the services to be performed by the Administrator hereunder are the property of the Fund and will be preserved, maintained, and made available in accordance with the Investment Company Act and the rules thereunder, and will be promptly surrendered to the Fund on and in accordance with its request. VIII. TERMS OF AGREEMENT This Agreement shall become effective as of the date hereof and, unless sooner terminated as provided herein, shall continue automatically in effect for successive annual periods. The Agreement may be terminated by either party upon giving sixty (60) days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties. IX. DUTIES IN THE EVENT OF TERMINATION If a successor to any of the Administrator's duties or responsibilities hereunder is designated by the Fund by written notice to the Administrator, the Administrator will promptly transfer to such successor all relevant books, records, correspondence, and other data established or maintained by the Administrator under this Agreement in a form reasonably acceptable to the Fund and will cooperate in the transfer of such duties and responsibilities, including provision 5 for assistance from the Administrator's personnel in the establishment of books, records, and other data by such successor. X. CHOICE OF LAW This Agreement shall be construed in accordance with the laws of the State of Minnesota. XI NOTICES Notices of any kind to be given by either party to the other party shall be in writing and shall be duly given if mailed or delivered to the attention of an officer of the relevant party at such party's principal business address or at such other location as such party may designate. In witness whereof, the parties have duly executed this Agreement as of the day and year first above written. MAIRS AND POWER GROWTH FUND, INC. MAIRS AND POWER, INC. By: /s/ William B. Frels By: /s/ George A. Mairs --------------------------------- ----------------------------------- Its: President Its: Chairman -------------------------------- ---------------------------------- 6 SCHEDULE A FEES AND EXPENSES PAYABLE UNDER FUND ADMINISTRATION SERVICING AGREEMENT
PAYMENT PERIOD AMOUNT OF FEES - -------------- -------------- Payable in arrears within 10 days Computed at an annual rate of 0.01% after the end of each month. based upon the Fund's average daily net assets.
In addition to the fees set forth above, the Administrator shall be entitled to reimbursement of out-of-pocket expenses incurred directly in providing the services under the Agreement. Examples of such direct expenses include filing, mailing and printing costs for prospectuses, shareholder reports and SEC filings. 7 EX-99.(J) 8 a2152514zex-99_j.txt EX-99(J) Exhibit 99(j) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the references to our firm under the captions "Condensed Financial Information" and "Officers and Directors" in the Mairs and Power Growth Fund, Inc. Prospectus and "Table of Contents," "Independent Registered Public Accounting Firm," and "Financial Statements" in the Mairs and Power Growth Fund, Inc. Statement of Additional Information. We also consent to the incorporation by reference of our report dated January 19, 2005, in the Statement of Additional Information, Prospectus, and Registration Statement (Form N-1A) of Mairs and Power Growth Fund, Inc., filed with the Securities and Exchange Commission in this Post-Effective Amendment No. 58 under the Securities Act of 1933 (Registration No. 2-14290) and Amendment No. 58 under the Investment Company Act of 1940 (Registration No. 811-802). /s/ Ernst & Young LLP Minneapolis, Minnesota February 25, 2005 EX-99.(P) 9 a2152514zex-99_p.txt EX-99.(P) Exhibit 99.(p) MAIRS AND POWER GROWTH FUND, INC. CODE OF ETHICS In accordance with Rule 17j-1 and Rule 204A-1 under the Investment Company Act of 1940 (the "Act"), Mairs and Power, Inc. has adopted the following code of ethics. 1. All access persons, namely the Fund's officers and advisory persons, shall be familiar with Rule 17j-1 and Rule 204A-1 under the Act and be governed by the spirit they represent. Access persons shall act at all times with openness, honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships. Any material relationship or transaction that reasonably could be expected to give rise to such a conflict of interest shall be reported to the Chief Compliance Officer. 2. No access person, in connection with the purchase or sale, directly or indirectly, by such person of a security held or to be acquired by the Fund shall (a) employ any device, scheme or artifice to defraud the Fund; (b) make to the Fund any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (c) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Fund; or (d) engage in any manipulative practice with respect to the Fund. 3. Access persons shall be required to submit an initial list of covered security holdings and the related accounts holding these securities within 10 days of becoming an access person. The list shall include all covered securities where the access person had any direct or indirect beneficial ownership interest and the date the list was submitted. The list of holdings must be current as of a date not more than 45 days prior to the individual becoming an access person. Subsequent covered security lists shall be submitted no less frequently than annually thereafter. Holdings in the Fund must be included in both the initial list and in subsequent annual lists. 4. No access person, or a person acting on his or her behalf, shall act in such a way as to benefit materially from the knowledge that the Fund has taken or is considering taking an investment position in a security, where such an action by the Fund is likely to influence the market price of that security. In such cases, all access persons are prohibited from executing personal transactions on a day during which the Fund has a pending "buy" or "sell" order in that same security until that order is executed or withdrawn. In addition, each Fund portfolio manager is prohibited from buying or selling a security within at least seven calendar days before and after the Fund that he on she manages trades in that security. All trades by access persons in securities either held by the Fund or being considered for purchase by the Fund require preclearance authorization before execution. Such trades shall be executed only during the last half hour of trading so as not to inhibit Fund transactions. Preclearance forms shall note the time that the trade was executed. Preclearance is also specifically required for the purchase of any IPO's and/or private placements. 5. Access persons (other than directors who are not "interested persons" within the meaning of section 2(a)(19) of the Act) are required to report all transactions within 30 days of the end of each calendar quarter. A director who is not an "interested person" will not be required to report transactions, except where such director knew or, in the ordinary course of fulfilling his or her official duties as a director of the Fund, should have known that during the 15-day period immediately preceding or after the date of the transaction in a security by the director such security is or was purchased or sold by the Fund or such purchase or sale by the Fund is or was considered by the Fund or its investment advisor. The quarterly report shall include the date, description or security, amount, number of shares, type of transaction (buy or sell), price and broker used. A signed statement by each access person will be required on a quarterly basis even if no personal trades were executed during the previous three-month period. A copy of each report shall be kept for a period of at least five years following the end of the fiscal year in which it is made, the first two years in an easily accessible place. 6. Preclearance of purchases or redemptions of shares of the Fund is not required, nor do such transactions need to be included in the quarterly report of security transactions described in #5 above. However, access persons are required to submit to the Chief Compliance Officer of the Fund a copy of all Fund confirmations for trades made by said access person within ten days of the date of the confirmation. 7. It shall be the responsibility of the Chief Compliance Officer designated by the Board to report quarterly to the Board of Directors any violations of this code. Access persons who observe any violations of the Code must promptly report them to the Chief Compliance Officer. The Chief Compliance Officer shall provide the Board at least annually with a written report attesting to a full review of compliance activities and detailing any violations that have taken place since the last report. Violations shall be recorded, with an appropriate course of action, and kept for at least five years following the end of the fiscal year in which the violations occurs. 8. The Fund shall identify each access person, supply each access person with a copy of this code, and any amendments thereto, and shall inform such persons of their duty to report covered security holdings and transactions. Each access person shall acknowledge receipt in writing. 9. A copy of this code of ethics shall be kept in an easily accessible place. Code of Ethics revised 2/1/00 Code of Ethics approved by Board of Directors 4/14/00 Code of Ethics revised and approved by Board of Directors 9/15/04 Access Persons page revised 7/21/04 Access Persons and Acknowledgement Page Mairs and Power Growth Fund, Inc. Code of Ethics Policy The following persons are identified as access persons with regard to Mairs and Power, Inc., or either of the Funds which it advises. I have read and understand the foregoing procedures and will comply in all respects with such procedures.
NAME DATE HIRE DATE - --------------------------- ----------------------- 01/01/52 George A. Mairs, III - --------------------------- ----------------------- 06/15/92 William B.Frels - --------------------------- ----------------------- 04/01/94 Peter G. Robb - --------------------------- ----------------------- 02/13/84 Rosemary C. Schultz - --------------------------- ----------------------- 07/30/90 Michelle L. Maltby - --------------------------- ----------------------- 02/17/93 Lisa J. Hartzell - --------------------------- ----------------------- 09/15/95 Beverly A. Coulthart - --------------------------- ----------------------- 02/05/96, temporary Geraldine M. Sundberg 10/01/96, permanent - --------------------------- ----------------------- 03/30/98 Manana Bro - --------------------------- ----------------------- 07/29/98 Janice L. Ledman - --------------------------- ----------------------- 01/18/99 John K. Butler
- --------------------------- ----------------------- 11/8/99, temporary Jane M. Rossini 12/27/99, permanent - --------------------------- ----------------------- 12/31/01 Ronald L. Kaliebe - --------------------------- ----------------------- 02/19/02 Jon A. Theobald - --------------------------- ----------------------- 06/17/03 Susan K. Crawford - --------------------------- ----------------------- 09/15/03 Connie L. Spreigl - --------------------------- ----------------------- 12/29/03 Loreen E. Blood - --------------------------- ----------------------- 06/28/04 Mark L. Henneman
Code of Ethics revised 2/1/00 Code of Ethics approved by Board of Directors 4/14/00 Code of Ethics revised and approved by Board of Directors 9/15/04 Access Persons page revised 7/21/04 EX-99.(P)(1) 10 a2152514zex-99_p1.txt EX-99.(P)(1) Exhibit 99.(p)(1) MAIRS AND POWER, INC. CODE OF ETHICS In accordance with Rule 17j-1 and Rule 204A-1 under the Investment Company Act of 1940 (the "Act"), Mairs and Power, Inc. has adopted the following code of ethics. 1. All access persons, namely officers and advisory persons of Mairs and Power, Inc. or either of the Funds which it advises (the "Funds"), shall be familiar with Rule 17j-1 and Rule 204A-1 under the Act and be governed by the spirit they represent. Access persons shall act at all times with openness, honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships. Any material relationship or transaction that reasonably could be expected to give rise to such a conflict of interest shall be reported to the Chief Compliance Officer. 2. No access person, in connection with the purchase or sale, directly or indirectly, by such person of a security held or to be acquired by the Fund shall (a) employ any device, scheme or artifice to defraud the Fund; (b) make to the Fund any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (c) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Fund; or (d) engage in any manipulative practice with respect to the Fund. 3. Access persons shall be required to submit an initial list of covered security holdings and the related accounts holding these securities within 10 days of becoming an access person. The list shall include all covered securities where the access person had any direct or indirect beneficial ownership interest and the date the list was submitted. The list of holdings must be current as of a date not more than 45 days prior to the individual becoming an access person. Subsequent covered security lists shall be submitted no less frequently than annually thereafter. Holdings in either of the Funds must be included in both the initial list and in subsequent annual lists. 4. No access person, or a person acting on his or her behalf, shall act in such a way as to benefit materially from the knowledge that the Fund has taken or is considering taking an investment position in a security, where such an action by the Fund is likely to influence the market price of that security. In such cases, all access persons are prohibited from executing personal transactions on a day during which the Fund has a pending "buy" or "sell" order in that same security until that order is executed or withdrawn. In addition, each Fund portfolio manager is prohibited from buying or selling a security within at least seven calendar days before and after the Fund that he or she manages trades in that security. All trades by access persons in securities either held by the Fund or being considered for purchase by the Fund require preclearance authorization before execution. Such trades shall be executed only during the last half hour of trading so as not to inhibit Fund transactions. Preclearance forms shall note the time that the trade was executed. Preclearance is also specifically required for the purchase of any IPO's and/or private placements. 5. Access persons (other than directors who are not "interested persons" within the meaning of section 2(a)(l9) of the Act) are required to report all transactions within 30 days of the end of each calendar quarter. A director who is not an "interested person" will not be required to report transactions, except where such director knew or, in the ordinary course of fulfilling his or her official duties as a director of the Fund, should have known that during the 15-day period immediately preceding or after the date of the transaction in a security by the director such security is or was purchased or sold by the Fund or such purchase or sale by the Fund is or was considered by the Fund or its investment advisor. The quarterly report shall include the date, description of security, amount, number of shares, type of transaction (buy or sell), price and broker used. A signed statement by each access person will be required on a quarterly basis even if no personal trades were executed during the previous three-month period. A copy of each report shall be kept for a period of at least five years following the end of the fiscal year in which it is made, the first two years in an easily accessible place. 6. Preclearance of purchases or redemptions of shares of the Funds is not required, nor do such transactions need to be included in the quarterly report of security transactions described in #5 above. However, access persons are required to submit to the Chief Compliance Officer of the Funds a copy of all Fund confirmations for trades made by said access person within ten days of the date of the confirmation. 7. It shall be the responsibility of the Chief Compliance Officer designated by the Board to report quarterly to the Board of Directors any violations of this code. Access persons who observe any violations of the Code must promptly report them to the Chief Compliance Officer. The Chief Compliance Officer shall provide the Board at least annually with a written report attesting to a full review of compliance activities and detailing any violations that have taken place since the last report. Violations shall be recorded, with an appropriate course of action, and kept for at least five years following the end of the fiscal year in which the violations occurs. 8. The Fund shall identify each access person, supply each access person with a copy of this code, and any amendments thereto, and shall inform such persons of their duty to report covered security holdings and transactions. Each access person shall acknowledge receipt in writing. 9. A copy of this code of ethics shall be kept in an easily accessible place. Code of Ethics revised 2/1/00 Code of Ethics approved by Board of Directors 4/14/00 Code of Ethics revised and approved by Board of Directors 9/15/04 Access Persons page revised 7/21/04 Access Persons and Acknowledgement Page Mairs and Power, Inc. Code of Ethics Policy The following persons are identified as access persons with regard to Mairs and Power, Inc., or either of the Funds which it advises. I have read and understand the foregoing procedures and will comply in all respects with such procedures.
NAME DATE HIRE DATE - --------------------------- ----------------------- 01/01/52 George A. Mairs, III - --------------------------- ----------------------- 06/15/92 William B. Frels - --------------------------- ----------------------- 04/01/94 Peter G. Robb - --------------------------- ----------------------- 02/13/84 Rosemary C. Schultz - --------------------------- ----------------------- 07/30/90 Michelle L. Maltby - --------------------------- ----------------------- 02/17/93 Lisa J. Hartzell - --------------------------- ----------------------- 09/15/95 Beverly A. Coulthart - --------------------------- ----------------------- 02/05/96, temporary Geraldine M. Sundberg 10/01/96, permanent - --------------------------- ----------------------- 03/30/98 Manana Bro - --------------------------- ----------------------- 07/29/98 Janice L. Ledman - --------------------------- ----------------------- 01/18/99 John K. Butler - --------------------------- ----------------------- 11/8/99, temporary Jane M. Rossini 12/27/99, permanent - --------------------------- ----------------------- 12/31/01 Ronald L. Kaliebe
- --------------------------- ----------------------- 02/19/02 Jon A. Theobald - --------------------------- ----------------------- 06/17/03 Susan K. Crawford - --------------------------- ----------------------- 09/15/04 Connie L. Spreigl - --------------------------- ----------------------- 12/29/03 Loreen E. Blood - --------------------------- ----------------------- 06/28/04 Mark L. Henneman
Code of Ethics revised 2/1/00 Code of Ethics approved by Board of Directors 4/14/00 Code of Ethics revised and approved by Board of Directors 9/15/04 Access Persons page revised 7/21/04 -----END PRIVACY-ENHANCED MESSAGE-----