-----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, V83WDCMmm/wxTTTyk4nDe5eBvlxyVs1euzfoRUgvfS3+RsSGPequVNO4+EEvjQ4c KAethkoA7j3NeHmyNLC35A== 0001206774-04-000560.txt : 20040528 0001206774-04-000560.hdr.sgml : 20040528 20040528120021 ACCESSION NUMBER: 0001206774-04-000560 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040712 FILED AS OF DATE: 20040528 EFFECTIVENESS DATE: 20040528 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: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-00802 FILM NUMBER: 04837315 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 DEF 14A 1 d14731.txt SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant /X/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2) /X/ Definitive Proxy Statement / / Definite Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 MAIRS AND POWER GROWTH FUND, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(I) (1) and 0-11. (1) Title of each class of securities to which transaction applies: ________________________________________________________________________ (2) Aggregate number of securities to which transaction applies: ________________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ________________________________________________________________________ (4) Proposed maximum aggregate value of transaction: ________________________________________________________________________ (5) Total fee paid: ________________________________________________________________________ / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ________________________________________________________________________ (2) Form, Schedule or Registration Statement No.: ________________________________________________________________________ (3) Filing Party: ________________________________________________________________________ (4) Date Filed: ________________________________________________________________________ MAIRS AND POWER GROWTH FUND, INC. MAIRS AND POWER BALANCED FUND, INC. W1520 First National Bank Building 332 Minnesota Street Saint Paul, MN 55101 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS To the shareholders of Mairs and Power Growth Fund, Inc. and Mairs and Power Balanced Fund, Inc.: NOTICE IS HEREBY GIVEN, that a combined Special Meeting of Shareholders (the "Meeting") of Mairs and Power Growth Fund, Inc. (the "Growth Fund") and Mairs and Power Balanced Fund, Inc. (the "Balanced Fund") will be held in the Communications Center, Lower Level, First National Bank Building, 332 Minnesota Street, Saint Paul, Minnesota 55101, on July 12, 2004, at 11:00 a.m., Saint Paul time, for the following purposes: 1. To elect five directors to the Board of Directors of each fund; 2. To amend the Articles of Incorporation of the Growth Fund to increase the total number of authorized shares from 25,000,000 to 100,000,000; 3. To approve an amended and restated Agreement for Investment Counsel Service for each fund; 4. To ratify the selection of Ernst & Young LLP as independent auditors of each fund for the fiscal year ending December 31, 2004; and 5. To transact such other business as may properly come before the Meeting or any adjournment thereof. This is a combined Notice and Proxy Statement for the Growth Fund and Balanced Fund. The shareholders of the Growth Fund and the Balanced Fund will be asked to vote separately. If you own shares in each fund, you will need to complete a proxy card for each fund. The Board of Directors of each fund has established May 17, 2004 as the record date for determining shareholders entitled to notice of, and to vote at the Meeting. The transfer books of the funds will not be closed for the Meeting. The minute book for each fund will be available at the Meeting for inspection by its shareholders. We urge you to vote in advance of the Meeting by using the following methods: o By Mail. Please complete, date and sign your proxy card before mailing it in the enclosed postage-paid envelope. o By Internet. Have your proxy card available. Go to the website on the proxy card. Enter your control number from your proxy card. Follow the simple instructions found on the web site. o By Telephone. Have your proxy card available. Call the toll free number on the proxy card. Enter your control number from your proxy card. Follow the simple instructions. If you have any questions before you vote, please contact us at 1-800-304-7404 and request the Customer Service Department. The Proxy is being solicited by the Boards of Directors of the funds. Your attendance at the Meeting, whether in person or by Proxy, is important to ensure a quorum. Any shareholder who executes and returns a Proxy may revoke it at any time prior to the voting of the Proxies at the Meeting by giving written notice to the Secretary of the respective fund, by executing a later-dated Proxy, or by attending the Meeting and giving oral notice to the Secretary of the respective fund. Thank you for your participation. BY ORDER OF THE BOARD OF DIRECTORS /s/ JON A. THEOBALD Jon A. Theobald, Secretary Mairs and Power Growth Fund, Inc. Mairs and Power Balanced Fund, Inc. Saint Paul, Minnesota June 1, 2004 - -------------------------------------------------------------------------------- YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE FUNDS. IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED BY THE TIME OF THE MEETING. - -------------------------------------------------------------------------------- MAIRS AND POWER GROWTH FUND, INC. MAIRS AND POWER BALANCED FUND, INC. W1520 First National Bank Building 332 Minnesota Street Saint Paul, MN 55101 -------------------- PROXY STATEMENT FOR 2004 SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JULY 12, 2004 -------------------- INTRODUCTION This Proxy Statement is furnished in connection with the solicitation of Proxies by the Boards of Directors of Mairs and Power Growth Fund, Inc. (the "Growth Fund") and Mairs and Power Balanced Fund, Inc. (the "Balanced Fund") for use at the funds' combined Special Meeting of Shareholders (the "Meeting"), to be held in the Communications Center, Lower Level, First National Bank Building, 332 Minnesota Street, Saint Paul, Minnesota, on July 12, 2004, at 11:00 a.m., Saint Paul time, and at any adjournment thereof, for the following purposes: 1. To elect five directors to the Board of Directors of each fund; 2. To amend the Articles of Incorporation of the Growth Fund to increase the total number of authorized shares from 25,000,000 to 100,000,000; 3. To approve an amended and restated Agreement for Investment Counsel Service for each fund; 4. To ratify the selection of Ernst & Young LLP as independent auditors of each fund for the fiscal year ending December 31, 2004; and 5. To transact such other business as may properly come before the Meeting or any adjournment thereof. This is a combined Proxy Statement for the Growth Fund and the Balanced Fund. The shareholders of the Growth Fund and the Balanced Fund will be asked to vote separately. Shareholders of the Growth Fund will vote on proposals 1, 2, 3 and 4. Shareholders of the Balanced Fund will vote on proposals 1, 3 and 4. If you own shares in each fund, you will need to complete a proxy card for each fund. The Board of Directors of each fund knows of no business which will be presented at the Meeting other than the matters referred to above. However, if any other matters are properly presented at the Meeting, it is intended that the persons named in the Proxy will vote on such matters in accordance with their judgment. If the enclosed Proxy is executed and returned, it nevertheless may be revoked at any time before it has been voted by a later-dated Proxy or a vote in person at the Meeting. Shares represented by properly executed Proxies received on behalf of each fund will be voted at the Meeting (unless revoked prior to their vote) in the manner specified therein. If no instructions are specified in a signed Proxy returned to a fund, the shares represented thereby will be voted FOR each of the proposals listed above. 1 This Proxy Statement, the accompanying Notice of Special Meeting of Shareholders and the accompanying Proxy are first being mailed to shareholders on or about June 1, 2004. The presence at the Meeting, in person or by Proxy, of at least a majority of the total number of shares of each fund's issued and outstanding common stock is necessary to constitute a quorum for the transaction of business at the Meeting. All votes will be tabulated by the inspector of election for the Meeting, who will separately tabulate affirmative and negative votes, abstentions, and broker non-votes. For purposes of determining the presence of a quorum, abstentions and broker non-votes will be treated as shares that are present but which have not been voted in favor of the particular matter. Broker non-votes are Proxies received from brokers or nominees who have not received instructions from the beneficial owner or other persons entitled to vote, and who do not have discretionary power to vote on a particular matter. Accordingly, shareholders whose shares are held in street name are urged to forward their voting instructions promptly. On May 17, 2004 (the "Record Date"), each fund had the number of outstanding shares of common stock shown in the table below. Only holders of shares of common stock of a fund at the close of business on the Record Date are entitled to receive notice of, and to vote at, the Meeting. Each such share of common stock of a fund is entitled to one vote per share on each matter that comes before the Meeting for that fund. Number of Shares Fund Outstanding On Record Date - ------------------------------------------------------------------------- Mairs and Power Growth Fund, Inc. 24,168,571 Mairs and Power Balanced Fund, Inc. 1,305,553 2 1. PROPOSAL FOR ELECTION OF DIRECTORS Nominees for Election as Director The following table sets forth certain information regarding the nominees for election as director of each fund. All of the directors elected at the Meeting will serve until the next meeting of the respective fund's shareholders and until their respective successors shall be elected and qualified. The funds are not required to hold annual meetings and may elect not to have a shareholders' meeting unless a matter arises which requires shareholder approval. All nominees for director have agreed to serve if elected. However, if any nominee should become unavailable for election, each fund's Proxy confers discretionary power to vote in favor of a substitute nominee or nominees. The business experience during the past five years and background of the nominees, each of whom currently serves as a director of both funds, is described below:
- --------------------------------------------------------------------------------------------------------------------- Number of Portfolios in Fund Other Position(s) with complex Directorships Name, Age and Fund and Length of Overseen Held by Address * Time Served Principal Occupation(s) During Past Five Years by Director Director - --------------------------------------------------------------------------------------------------------------------- INDEPENDENT DIRECTORS - --------------------------------------------------------------------------------------------------------------------- Charlton Dietz Director since 1997 o Retired Senior Vice President, 2 None (73) Legal Affairs and General Counsel, 30 7th St E 3M. Ste 3050 St. Paul, MN 55101 - --------------------------------------------------------------------------------------------------------------------- Norbert J. Director since 2000 o Retired Chief Executive Officer, 2 None Conzemius (62) Road Rescue Incorporated. - --------------------------------------------------------------------------------------------------------------------- Charles M. Osborne Director since 2001 o Chief Financial Officer (May 2 None (50) 2004 to present), Fair Isaac Corporation; o Chief Financial Officer (2000 to 2004), Vice President (2003 to 2004), University of Minnesota Foundation . o Vice President and General Manager, MN (1999), Vice President Corporate Human Resources, IA (2000), McLeod USA/Ovation Communications. - --------------------------------------------------------------------------------------------------------------------- INTERESTED DIRECTOR WHO IS A PRINCIPAL OFFICER - --------------------------------------------------------------------------------------------------------------------- William B. Frels** Director since 1992 o President of the Investment 2 None (64) President of the Adviser (2002 to present). Treasurer Balanced Fund of the Investment Adviser (1996 to since 1992 present). o Vice President of the Investment Adviser (1994 to 2002). - ---------------------------------------------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------------------------------------------- Number of Portfolios in Fund Other Position(s) with complex Directorships Name, Age and Fund and Length of Overseen Held by Address * Time Served Principal Occupation(s) During Past Five Years by Director Director - --------------------------------------------------------------------------------------------------------------------- INTERESTED DIRECTOR WHO IS NOT A PRINCIPAL OFFICER - --------------------------------------------------------------------------------------------------------------------- Edward C. Director since 2002 o Attorney (2002 to present), 2 None Stringer*** (69) Briggs and Morgan, P.A. 2200 IDS Center, o Associate Justice, State of 80 South 8th Minnesota Supreme Court (1994 - 2002). Street, Minneapolis, MN 55402 - ---------------------------------------------------------------------------------------------------------------------
* Unless otherwise stated, the address for each Director is 332 Minnesota Street, Ste. W1520, St. Paul, MN 55101-1363. ** Mr. Frels is an "interested person" of each fund, within the meaning of section 2(a)(19) of the Investment Company Act, by virtue of his employment by, or equity interest in, the funds' investment adviser. See "The Adviser." *** Mr. Stringer is an "interested person" of each fund, within the meaning of section 2(a)(19) of the Investment Company Act, by virtue of his employment by the law firm of Briggs and Morgan, legal counsel to the funds. Vote Required The affirmative vote of a majority of the shares of a fund represented at the Meeting in person or by Proxy is required to elect a director. Committees Each fund has an Audit Committee consisting of three directors, Messrs. Conzemius, Dietz and Osborne, none of whom is an "interested person" of the funds within the meaning of the Investment Company Act. The role of the Audit Committee is to make recommendations to the Board of Directors regarding the selection of auditors, and to assist the Board of Directors in its oversight of the funds' financial reporting process. The Audit Committee meets with the independent auditors at least annually to review the results of the examination of the funds' financial statements and any other matters relating to the funds. The Board of Directors of each fund has adopted an Audit Committee Charter, a copy of which is available on the funds' website at www.mairsandpower.com. Each fund has a Fair Valuation Committee consisting of three officers, Mr. George A. Mairs, III, President of the Mairs and Power Growth Fund, Ms. Lisa Hartzell, Treasurer of the Funds and Mr. Frels, all of whom are "interested persons" of the funds within the meaning of the Investment Company Act. The role of the Fair Valuation Committee is to oversee pricing of the funds' shares and to research and resolve any pricing problems. The Fair Valuation Committee meets on an "as needed" basis. 4 Each fund has a Nominating Committee consisting of three directors, Messrs. Conzemius, Dietz and Osborne, none of whom is an "interested person" of the funds within the meaning of the Investment Company Act. The role of the Nominating Committee is to consider and recommend nominees for directors to the Board to fill vacancies when required. Nominations of directors who are not "interested persons" must be made and approved by the Nominating Committee. The Nominating Committee meets on an "as needed" basis. During the fiscal year ended December 31, 2003, the Board of Directors of the funds held four meetings, the Audit Committee held two meetings, the Fair Valuation Committee held two meetings and the Nominating Committee held no meetings. Each director attended at least 75% of the Board of Directors meetings and, if a member, of the committee meetings held during the fiscal year ended December 31, 2003. Certain Transactions Since January 1, 2003, (a) there has not been any transaction or series of similar transactions to which either of the funds was a party in which the amount involved exceeds $60,000 and in which any director, executive officer, holder of more than five percent of the shares of a fund or any member of the immediate family of any of the foregoing persons had a direct or indirect material interest, and (b) none of the executive officers, directors or any member of their immediate families have been indebted to either of the funds in amounts in excess of $60,000. Director Compensation The following directors were paid director's fees in the following amounts during the year ended December 31, 2003. The total compensation received by directors of the Growth Fund for service during 2003 was $106,400, and the total compensation received by directors of the Balanced Fund for service during 2003 was $5,600. The amounts set forth below represent the total payments made by each fund to its directors last year. Growth Fund Balanced Fund ----------- ------------- Norbert J. Conzemius $ 26,600 $ 1,400 Charlton Dietz 26,600 1,400 Charles M. Osborne 26,600 1,400 Edward C. Stringer 26,600 1,400 5 Stock Ownership by Nominees The following table provides information about the dollar range of common stock of each fund owned beneficially as of May 17, 2004 by each nominee for director. See "Security Ownership" for more detailed share ownership information.
- ------------------------------------------------------------------------------------------------------------- Dollar Range of Aggregate Dollar Range of Equity Securities in the Funds Equity Securities In All Funds ------------------------------ Overseen or to be Overseen by Name of Director Director or Nominee in Family or Nominee Growth Fund Balanced Fund of Investment Company - ------------------------------------------------------------------------------------------------------------- Norbert J. Conzemius over $100,000 over $100,000 over $100,000 Charlton Dietz over $100,000 $10,000 - $50,000 over $100,000 William B. Frels over $100,000 over $100,000 over $100,000 Charles M. Osborne over $100,000 over $100,000 over $100,000 Edward C. Stringer over $100,000 none over $100,000 - -------------------------------------------------------------------------------------------------------------
Nominating Process The Board of Directors for each fund has adopted a Nominating Committee Charter, a copy of which is available on the funds' website at www.mairsandpower.com. The Nominating Committee will consider director candidates recommended by shareholders of the funds, provided that such recommendations are made in writing to the Secretary of the funds at the address set forth on the cover of this proxy statement. Recommendations must be received at a reasonable time before the Nominating Committee selects nominees and the proxy materials are printed and mailed for the next meeting of shareholders. The Nominating Committee evaluates the composition of each fund's Board of Directors and the need for additional or replacement directors. The Nominating Committee will give consideration to candidates recommended by the funds' officers and directors, by personnel associated with the Investment Adviser, and by shareholders. Candidates may be evaluated based on information supplied by the candidate as well as information obtained through independent investigations. There are no vacancies on the Boards at this time. 6 II. PROPOSAL TO ADOPT AN AMENDMENT TO THE ARTICLES OF INCORPORATION OF MAIRS AND POWER GROWTH FUND, INC. On April 20, 2004, the Board of Directors of the Growth Fund adopted a resolution to amend Article VI of the Growth Fund's Amended and Restated Articles of Incorporation to increase the total number of authorized shares to 100,000,000 shares, $.01 par value per share, from the 25,000,000 shares, $.01 par value per share, currently authorized, subject to shareholder approval. If approved by the shareholders of the Growth Fund, Article VI of the Amended and Restated Articles of Incorporation will be amended to read as follows: "The total authorized number of shares in this corporation shall be one hundred million (100,000,000) shares which shall have a par value of one cent ($.01) per share." On May 17, 2004, there were 24,168,571 shares of common stock of the Growth Fund outstanding. The Board of Directors believes that increasing the number of authorized shares will benefit the Growth Fund by ensuring that a sufficient number of shares is available to respond to future demand by investors. The proposed amendment will also ensure that shares are available, if needed, for issuance in connection with stock splits and stock dividends, although the Board of Directors has no present intention of declaring such dividends. Increasing the number of authorized shares will allow the Growth Fund to issue additional shares without delay and without the expense and necessity of holding a special shareholders' meeting in the future. The newly authorized shares will be available for issuance without further action by the shareholders except as required by Minnesota law and the Investment Company Act. Under the Articles of Incorporation, the Growth Fund is authorized to issue only a single class of common stock. The additional shares will be identical to the common stock the Growth Fund now has authorized. Vote Required Approval of this proposal will require the affirmative vote of a majority of the outstanding shares of the Growth Fund. If the shareholders of the Growth Fund do not approve the amendment to the Articles of Incorporation, the Growth Fund will be unable to sell shares and will be closed to all investors. Unless a sufficient number of shares becomes available as a result of redemptions, the Growth Fund might be unable to make dividend reinvestments for existing shareholders, and would be forced to pay dividends in cash. 7 III. PROPOSAL TO AMEND AND RESTATE THE AGREEMENTS FOR INVESTMENT COUNSEL SERVICE Mairs and Power, Inc. (the "Investment Adviser") has served as investment adviser to the Growth Fund since its inception in 1958 and to the Balanced Fund since its inception in 1961. The Investment Adviser serves pursuant to a separate Agreement for Investment Counsel Service for each fund (the "Advisory Agreements"). The current Advisory Agreements were entered into March 21, 1972 and amended May 17, 1982. The Investment Adviser's address is W-1520 First National Bank Building, 332 Minnesota Street, Saint Paul, Minnesota 55101. Shareholders are being asked to approve an amendment to each Advisory Agreement to clarify the method by which the advisory fees are calculated. The proposed amendment to the Advisory Agreements was approved by the Board of Directors for each fund at a meeting held on April 20, 2004. Copies of the amended and restated Advisory Agreements for the Growth Fund and Balanced Fund are attached as Appendix A and Appendix B, respectively. If shareholders approve the amendments, the Advisory Agreements, as amended and restated, will become effective July 13, 2004 and will remain in effect until July 1, 2005 and from year-to-year thereafter, if approved annually by the Board of Directors in accordance with the Investment Company Act. Amendment The first paragraph of Section 4 of each Advisory Agreement is being amended to clarify the method by which the advisory fees are calculated. As proposed, the first paragraph of Section 4 will read as follows: 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. Previously, this paragraph read as follows: The Adviser shall for its services as such receive a fee to be paid by the Fund payable monthly, the same to be based upon and equal to one twentieth (1/20) of one (1) percent of the net asset value of the Fund on the last valuation date of each month as defined by the By-laws of the Fund. Amended Section 4 does not change the rate of compensation paid to the Investment Adviser, which remains at an annual rate of 0.60% of the net asset value. Old Section 4 contained an ambiguity regarding the method of calculating the fee. The new paragraph defines precisely how the calculation is made, and is consistent with industry practice and the actual method used by the Growth Fund and the Balanced Fund. 8 The Advisory Agreement for each fund contains an annual limitation on total expenses of 1.5% of the first $30,000,000 and 1% of the balance of the average value of the net assets of the fund. For this purpose, total expenses exclude interest, taxes, brokerage commissions and extraordinary litigation costs, but include payments to the Investment Adviser for services under the Advisory Agreement. For services rendered under the Advisory Agreements during the fiscal year ended December 31, 2003, the Growth Fund paid the Investment Adviser $6,161,035 and the Balanced Fund paid the Investment Adviser $313,452. The Investment Adviser will continue to provide investment advisory services to each fund, including making decisions regarding the acquisition, holding or disposition of portfolio securities. All services under the Advisory Agreements must be provided in accordance with the provisions of the Investment Company Act and any rules or regulations thereunder, the Securities Act of 1933 and any rules or regulations thereunder, the Internal Revenue Code, any other applicable provision of law, the funds' Articles of Incorporation and Bylaws, and the investment policies of each fund as disclosed in the fund's registration statement filed with the Securities and Exchange Commission, as amended from time to time. Under the Advisory Agreements, the Investment Adviser will continue to provide, at its expense, office space, facilities and equipment for carrying out its agreed upon duties. In addition, the Investment Adviser assumes all expenses of distribution, sales and promotion of the funds. The Advisory Agreement for each fund provides that it may be terminated by the fund's Board of Directors, a majority of the outstanding voting securities of the fund, or the Investment Adviser at any time, without penalty, by giving the other party 60 days' written notice. The Advisory Agreements also provide that the funds will indemnify the Investment Adviser for any loss or liability which may be imposed on the Investment Adviser or its officers or directors by reason of any acts performed by them under the Advisory Agreements, as long as the acts were performed in good faith. The indemnification does not cover liability resulting from willful misfeasance, bad faith or gross negligence in the performance of the Investment Adviser's duties, or by reason of reckless disregard of the Investment Adviser's obligations and duties under the Advisory Agreements. For additional information concerning the Investment Adviser, see "The Investment Adviser" below. 9 Vote Required Approval of the amendment to the Advisory Agreement with respect to each fund requires the vote of a majority of the outstanding voting securities, as defined in the Investment Company Act, of that fund. A "majority of the outstanding voting securities" of a fund, as defined in the Investment Company Act, means the lesser of (a) 67% or more of the shares of the fund present at the Meeting if the owners of more than 50% of the shares of the fund entitled to vote at the Meeting are present in person or by proxy, or (b) more than 50% of the outstanding shares of the fund entitled to vote at the Meeting. If the shareholders of a fund do not approve the amendment, the fund would operate under the amended Advisory Agreement on an interim basis and would seek shareholder approval for a new agreement. Previous Renewal of Advisory Agreements At a meeting on December 9, 2003 the Board of Directors for each fund met with the officers of the Investment Adviser to discuss the renewal of the Advisory Agreements for an additional one-year term. Among the topics considered were: o the investment performance of the funds, over one-five-and ten-year periods, as compared to a variety of benchmarks. o the value of the continuity of investment managers. o the expense ratios for the funds, as compared to their peers. o the fee rates under the Advisory Agreements, which have not been increased. o the other terms of the Advisory Agreements. Based upon consideration of the foregoing factors, the Board of Directors for each fund unanimously approved the renewal of each Advisory Agreement. 10 IV. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS Shareholders are being asked to ratify the selection of Ernst & Young LLP as the independent auditors for each fund. The Audit Committee of each fund has recommended the appointment of Ernst & Young LLP as the independent auditors for each fund for the fiscal year ending December 31, 2004. Ernst & Young LLP, together with its predecessor firms has acted as independent auditor for the funds since their inception. A representative of Ernst & Young LLP is expected to be present at the Meeting and will be provided with an opportunity to make a statement if he or she desires, and will be available to answer appropriate questions. Vote Required The affirmative vote of a majority of the shares of a fund represented at the Meeting in person or by Proxy is required to ratify the independent auditors. If shareholders do not ratify the independent auditors, the funds may nonetheless engage Ernst & Young LLP, or they may seek a different firm of independent auditors. Audit Fees The aggregate fees billed by Ernst & Young LLP for professional services rendered for the audit of the funds' annual financial statements and for review of distributions to shareholders for the fiscal years ended December 31, 2002 and December 31, 2003 were as follows: Growth Fund Balanced Fund ----------- ------------- 2002 $24,200 $16,600 2003 $27,480 $24,980 Audit-Related Fees The funds did not engage Ernst & Young LLP for audit-related professional services for the fiscal years ended December 31, 2002 and December 31, 2003. 11 Tax Fees The aggregate fees billed by Ernst & Young LLP for services rendered for the preparation of tax returns for the fiscal years ended December 31, 2002 and December 31, 2003 were as follows: Growth Fund Balanced Fund ----------- ------------- 2002 $3,424 $3,424 2003 $3,638 $3,638 All OtherFees Ernst & Young LLP did not bill for any other services, other than those described above. Pre-Approval Policies and Independence The Audit Committee has a policy of approving the engagement of the independent auditor before the independent auditor is engaged to render audit and non-audit services for the funds. The Audit Committee has pre-approved tax-related non-audit services in an amount not to exceed $5,000 for the fiscal year ending December 31, 2004. The Audit Committee did not rely on the waiver from the pre-approval requirement available under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X with respect to any of the services provided by the funds' independent auditor for the fiscal years ended December 31, 2002 and December 31, 2003. The aggregate fees billed for all non-audit services rendered by Ernst & Young LLP to the funds, the Investment Adviser, and any entity controlling, controlled by, or under common control with the Investment Adviser that provides ongoing services to the funds was $18,602 for the fiscal year ending December 31, 2002 and $10,058 for the fiscal year ending December 31, 2003. The Audit Committee considered the compatibility of these non-audit services with maintaining the independence of Ernst & Young LLP. 12 SECURITY OWNERSHIP The following table provides information about the beneficial ownership of the common stock of each fund as of May 17, 2004 by (i) each person known to a fund to be the beneficial owner of 5% or more of its common stock, (ii) each director and nominee for director, and (iii) by all directors and officers of a fund as a group. All of the shares of a fund over which a person directly or indirectly, had or shared voting or investment power have been deemed beneficially owned in accordance with Rule 13d-3 of the Securities Exchange Act of 1934.
Shares of Percentage Shares of Percentage Name the Growth Fund(1) Owned the Balanced Fund(1) Owned - --------------------------------------------------------------------------------------------------------- Wilmington Trust Co., Trustee, 110,556 8.5% St. Paul Electrical Construction Workers 401(k) Wells Fargo Bank MN NA FBO 67,107 5.1% Retirement Plan Services National Investor Services 1,470,403 6.1% Corp. for the Exclusive Benefit of Our Customers Norbert J. Conzemius 10,918 * 10,215 * Charlton Dietz 3,923(2) * 287 * William B. Frels 29,511(3) * 5,420(4) * Charles M. Osborne 11,516(5) * 5,208(6) * Edward C. Stringer 4,763 * * All directors and officers as a 158,998(7) * 30,007(8) 2.3% group (9 persons) - -----------------------
* Indicates an amount less than 1%. (1) Unless otherwise indicated, the beneficial owner has sole voting and investment power. (2) Includes 680 shares held by Mr. Dietz as custodian under the Uniform Gifts to Minors Act. (3) Includes 1,194 shares held by members of Mr. Frels' immediate family, 1,881 shares held by Mr. Frels as custodian under the Uniform Gifts to Minors Act and 26,436 shares held by accounts in which Mr. Frels serves as a trustee. Does not include 72,622 shares held by a profit sharing trust in which Messrs. Mairs, Frels and Robb are trustees with shared voting power. (4) Includes 279 shares held by members of Mr. Frels' immediate family, 279 shares held by Mr. Frels as custodian under the Uniform Gifts to Minors Act and 3,444 shares held by accounts in which Mr. Frels serves as a trustee. Does not include 4,268 shares held by a profit sharing trust in which Messrs. Mairs, Frels and Robb are trustees with shared voting power. (5) Includes 1,038 shares held by members of Mr. Osborne's immediate family and 1,734 shares held in trust of which Mr. Osborne is a trustee. (6) Includes 906 shares held by members of Mr. Osborne's immediate family and 1,359 shares held in trust of which Mr. Osborne is a trustee. 13 (7) Includes 72,622 shares held by a profit sharing trust in which Messrs. Mairs, Frels and Robb are trustees with shared voting power. (8) Includes 4,268 shares held by by a profit sharing trust in which Messrs. Mairs, Frels and Robb are trustees with shared voting power. THE INVESTMENT ADVISER Mairs and Power, Inc., a Minnesota corporation (the "Investment Adviser"), provides investment advisory services to each fund and other institutional and individual accounts, and is registered as an investment adviser under the Investment Advisers Act of 1940. The Investment Adviser's address is W1520 First National Bank Building, 332 Minnesota Street, Saint Paul, Minnesota 55101. Officers and directors of the Investment Adviser and their respective ownership positions in the Investment Adviser's common stock are: George A. Mairs, III 34.3% William B. Frels 33.6% Peter G. Robb 24.4% Others 7.7% The Investment Adviser has been the investment adviser for the funds since their inception. The Investment Adviser performs this service under the terms of the Advisory Agreements between the Investment Adviser and each fund. The Advisory Agreements are approved annually by the Board of Directors of each fund in accordance with the Investment Company Act. For a description of the Advisory Agreements, including the factors considered by the Board of Directors in connection with the most recent approval of the Advisory Agreements, see "Proposal to Amend and Restate the Agreements for Investment Counsel Service" above. Under the terms of the Advisory Agreements, the Investment Adviser agrees to pay all executive salaries, office rental, and other expenses considered incidental to providing investment services to each fund. Each fund agrees to pay the Investment Adviser a monthly fee computed at an annual rate of 0.60% of the net assets of the fund. For services rendered during the fiscal year ended December 31, 2003, the Growth Fund paid the Investment Adviser $6,161,035 and the Balanced Fund paid the Investment Adviser $314,452. The Advisory Agreements may be terminated at any time with respect to a fund, without penalty, on 60 days' written notice by the fund's Board of Directors, by the holders of a majority of the outstanding voting securities of the fund or by the Investment Adviser. The Agreements automatically terminate in the event of its assignment (as defined in the Investment Company Act and the rules promulgated thereunder). The Advisory Agreement may be amended at any time with respect to a fund so long as: (i) such amendment is approved by an affirmative vote of a majority of the outstanding voting securities of the fund, as defined in Section 2(a)(42) of the Investment Company Act; and (ii) the terms of such amendment are approved by the vote of a majority of those directors who are not interested persons of the fund or the Investment Adviser, voting in person at a meeting called for the purpose of voting on such approval. 14 P MANAGEMENT OF THE FUNDS The following persons are officers of the Funds who have been elected to serve until July 2004, and until their successors are elected and qualified.
Name Age Office - ------------------------------------------------------------------------------------- George A. Mairs, III * 75 President, Mairs and Power Growth Fund William B. Frels 64 President, Mairs and Power Balanced Fund Peter G. Robb 55 Vice President, Mairs and Power Balanced Fund and Mairs and Power Growth Fund Jon A. Theobald 58 Secretary, Mairs and Power Balanced Fund and Mairs and Power Growth Fund Lisa J. Hartzell 59 Treasurer, Mairs and Power Balanced Fund and Mairs and Power Growth Fund
* As of June 14, 2004, Mr. Mairs intends to resign as President and portfolio manager of the Growth Fund. William B. Frels, co-manager of the Growth Fund since 1999, will be named the President of the Growth Fund. For information regarding the principal occupation during the past five years of Mr. Frels, see "Proposal for Election of Directors." George A. Mairs, III. Mr. Mairs has served as Chairman of the Board of the Investment Adviser since February 2002. From 1993 to 2002, Mr. Mairs served as President of the Investment Adviser. Lisa J. Hartzell. Ms. Hartzell has been Treasurer of both Funds and the manager of Mutual Fund Services since May 1996. Peter G. Robb. Mr. Robb has served as Vice President of the Investment Adviser since June 1994 and Secretary of the Investment Adviser since June 1996. Jon A. Theobald. Mr. Theobald has been Executive Vice President and Chief Administrative Officer of the Investment Adviser since February 2002. From 2001 to 2002, Mr. Theobald served as Senior Vice President of U.S. Trust Company, and from 1996 to 2001, he served as Executive Vice President of Resource Trust Company. Officers of the funds receive no direct compensation from the funds for their services. U.S. Bancorp Fund Services LLC, 615 East Michigan Street, P.O. Box 701, Milwaukee, Wisconsin, 53201 acts as the funds' transfer agent, dividend disbursing agent and fund accountant. U.S. Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202 provides custodial services for the funds. 15 OTHER MATTERS TO COME BEFORE THE MEETING The Board of Directors does not intend to present any other business at the Meeting. If, however, any other matters are properly brought before the Meeting, the persons named as proxies will vote on such other matters in accordance with their judgment. SUBMISSION OF SHAREHOLDER PROPOSALS AND SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS The funds do not hold regular annual shareholders' meetings, but will hold special meetings as required or deemed desirable. Consequently, the date of the next special shareholders meeting (if any) cannot be provided. Shareholders wishing to submit proposals for consideration for inclusion in a proxy statement for a subsequent shareholders' meeting should send their written proposals to the Secretary of the funds at the address set forth on the cover of this proxy statement. To receive consideration, proposals must be received a reasonable time before the funds print and mail proxy materials for a meeting. Shareholders may send communications to the Board of Directors for the funds by following the procedures described on the funds' website at WWW.MAIRSANDPOWER.COM. EXPENSES OF SOLICITATION The cost of this solicitation of Proxies will be paid by each fund. It is anticipated that the Proxies will be solicited by mail, internet or telephone, except that solicitation personally or by telephone may also be made by the Investment Adviser's employees who will receive no additional compensation for their services in connection with the solicitation. ANNUAL REPORT A copy of the 2003 Annual Report to Shareholders of each fund has previously been sent to shareholders. Shareholders may receive additional copies of the Annual Report for the Growth Fund and for the Balanced Fund without charge by calling (800) 304-7404 or by writing to U.S. Bancorp Mutual Fund Services, P. O. Box 701, Milwaukee, Wisconsin 53201-0701. No part of either fund's 2003 Annual Report to Shareholders is incorporated herein and no part thereof is to be considered proxy soliciting material. BY ORDER OF THE BOARD OF DIRECTORS /S/ JON A. THEOBALD Jon A. Theobald, Secretary Mairs and Power Growth Fund, Inc. Mairs and Power Balanced Fund, Inc. Saint Paul, Minnesota June 1, 2004 16 Appendix A 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 amended and 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. 17 Appendix A 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 18 Appendix A 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). 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_______________________________ President MAIRS AND POWER, INC. By ______________________________ President By ______________________________ Vice President 19 Appendix B AMENDED AND RESTATED AGREEMENT FOR INVESTMENT COUNSEL SERVICE THIS AGREEMENT between MAIRS AND POWER, INC., a Minnesota corporation (the "Adviser"), and MAIRS AND POWER BALANCED FUND, INC., a Minnesota corporation formerly known as Mairs and Power Income Fund, Inc. (the "Fund"), is hereby amended and 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 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 officer 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. 20 Appendix B 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 21 Appendix B 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). 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 BALANCED FUND, INC. By _____________________ President MAIRS AND POWER, INC. By _____________________ President By _____________________ Vice President 22 This page is intentionally left blank. This page is intentionally left blank. This page is intentionally left blank. Mairs and Power Growth Fund, Inc. Mairs and Power Balanced Fund, Inc. ----------------------------------------------- Urgent Proxy Information =============================================== The Special Meeting of Shareholders for the Mairs and Power Funds will be held on July 12, 2004. Your vote is needed to help establish a quorum for the conduct of business. Your vote is important, no matter how large or small your holdings may be. It is important that we receive your vote as soon as possible. You may vote by mail, by internet or by telephone. --------------------------------------------------- Remember, voting is quick and easy. Everything you need is enclosed. ---------------------------------------------------
Please fill in the box(es) as shown using black or blue ink or number 2 pencil.|X| PLEASE DO NOT USE FINE POINT PENS. The Board of Directors recommends a vote FOR: Please vote by filling in the boxes below. WITHHOLD 1. PROPOSAL TO ELECT FIVE DIRECTORS FOR AUTHORITY Nominees: (01) Norbert J. Conzemius, (02) Charlton Dietz, all directors, (03) William B. Frels, (04) Charles M. Osborne, except as (05) Edward C. Stringer. marked to the contrary at left. INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided. _______________________________________________________________ [ ] [ ] 2. NOT APPLICABLE 3. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF MAIRS AND POWER GROWTH FOR AGAINST ABSTAIN FUND, INC. [ ] [ ] [ ] 4. PROPOSAL TO TO AMEND THE AGREEMENT FOR INVESTMENT COUNSEL SERVICE OF MAIRS FOR AGAINST ABSTAIN AND POWER GROWTH FUND, INC. [ ] [ ] [ ] 5. PROPOSAL TO RATIFY ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR AGAINST ABSTAIN [ ] [ ] [ ] 6. THIS PROXY CONFERS DISCRETIONARY AUTHORITY UPON THE PROXIES TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND AT ANY ADJOURNMENT THEREOF. THE BOARD OF DIRECTORS KNOWS OF NO OTHER MATTERS THAT WILL BE PRESENTED AT THE MEETING FOR A SHAREHOLDER VOTE. (To be signed on other side)
UNLESS OTHERWISE SPECIFIED, THE PROXIES ARE APPOINTED TO VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 3, 4 and 5 IDENTIFIED ON THE REVERSE SIDE HEREOF. 3 EASY WAYS TO VOTE YOUR PROXY 1. Automate Touch Tone Voting: Call toll-free 1-xxx-xxx-xxxx 2. On the Internet at www.proxyweb.com; or 3. Return this proxy card using the enclosed postage-paid envelope. ***CONTROL NUMBER: 999 999 999 999 99*** MAIRS AND POWER GROWTH FUND, INC. W1520 First National Bank Bldg. 332 Minnesota Street St. Paul, MN 55101 PROXY CARD PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR SPECIAL MEETING OF SHAREHOLDERS JULY 12, 2004 The undersigned, having duly received the Notice of Special Meeting of Shareholders and the Proxy Statement dated June 1, 2004, hereby appoints Charlton Dietz and William B. Frels or either of them the true and lawful attorneys, agents and proxies of the undersigned (with the power of substitution and revocation) to represent the undersigned and to vote, as designated below, all shares of Mairs and Power Growth Fund, Inc. held of record by the undersigned on May 17, 2004, at the annual meeting of shareholders to be held July 12, 2004 in the Communications Center, Lower Level, First National Bank Building, 332 Minnesota Street, St. Paul, Minnesota at 11:00 a.m., and at any adjournments thereof. If voting by mail, please mark, date, sign and return this proxy in the enclosed envelope. Date: , 2004 ---------------------------------------------- ---------------------------------------------- Signature(s) Please sign exactly as name appears on this card. When shares are held by joint tenants, both should sign. (When signing as attorney, administrator, trustee, guardian or corporate officer, please so indicate and give your full title. If a corporation or partnership please sign in full corporate or partnership name by an authorized person.) -----END PRIVACY-ENHANCED MESSAGE-----