Item 1. Report to Shareholders
T. Rowe Price Mid-Cap Growth Fund
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December 31, 2003
Certified Annual Report
This report is certified under the Sarbanes-Oxley Act of 2002, which requires
that public companies, including mutual funds, affirm that the information
provided in their annual and semiannual shareholder reports fully and fairly
represents their financial position.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Performance Comparison
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This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with benchmarks, which may include a
broad-based market index and a peer group average or index. Market indexes do
not include expenses, which are deducted from fund returns as well as mutual
fund averages and indexes.
[Graphic Omitted]
MID-CAP GROWTH FUND
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As of 12/31/03
Lipper Mid-Cap Growth Funds Index $22,093
Mid-Cap Growth Fund $36,525
S&P MidCap 400 Index $36,829
Lipper
S&P Mid-Cap
MidCap Growth Mid-Cap
400 Funds Growth
Index Index Fund
12/93 $10,000 $10,000 $10,000
12/94 9,642 10,000 10,029
12/95 12,626 13,921 14,136
12/96 15,050 15,794 17,647
12/97 19,904 17,585 20,882
12/98 23,708 19,834 25,476
12/99 27,198 34,456 31,535
12/00 31,960 28,897 33,877
12/01 31,767 22,809 33,545
12/02 27,157 16,315 26,427
12/03 36,829 22,093 36,525
Note: Performance for the Advisor and R Class shares will vary due to their
differing fee structure. See returns table on the following page.
Average Annual Compound Total Return
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Since Inception
Periods Ended 12/31/03 1 Year 5 Years 10 Years Inception Date
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Mid-Cap Growth Fund 38.21% 7.47% 13.83% - -
S&P MidCap 400 Index 35.62 9.21 13.93
Russell Midcap Growth Index 42.71 2.01 9.40
Lipper Mid-Cap Growth
Funds Index 35.42 2.18 8.25
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Mid-Cap Growth Fund-
Advisor Class 37.88 - - 1.24% 3/31/00
S&P MidCap 400 Index 35.62 - - 5.01*
Russell Midcap Growth Index 42.71 - - -12.62*
Lipper Mid-Cap Growth
Funds Index 35.42 - - -14.26*
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Mid-Cap Growth Fund-R Class 37.54 - - 37.58 9/30/02
S&P MidCap 400 Index 35.62 - - 33.48**
Russell Midcap Growth Index 42.71 - - 42.51**
Lipper Mid-Cap Growth
Funds Index 35.42 - - 32.18**
* Benchmark since-inception data are for the time period 3/31/00 to 12/31/03.
** Benchmark since-inception data are for the time period 9/30/02 to 12/31/03.
Returns do not reflect taxes that the shareholder may pay on fund distributions
or the redemption of fund shares. Past performance cannot guarantee future
results.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Dear Shareholders,
We are pleased to report that the Mid-Cap Growth Fund and its Advisor Class and
R Class shares generated excellent returns in 2003, as shown in the table on the
preceding page. Our results modestly trailed the outstanding gain of the
aggressive-growth-oriented Russell Midcap Growth Index, but exceeded the returns
of the broad S&P MidCap 400 Index and the Lipper Mid-Cap Growth Funds Index.
(The performance of the Advisor and R Class shares was somewhat lower due to
their differing cost structures.)
As you know, the fund's objective is to seek long-term capital appreciation by
investing in mid-cap stocks offering the potential for above-average earnings
growth.
[Graphic Omitted]
Major Index Returns
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12-Month Return
S&P 500 Stock Index 29%
S&P MidCap 400 Index 36%
Russell 2000 Index 47%
Nasdaq Composite Index 50%
The Major Index Returns chart shows how various domestic market indexes
performed over the fund's fiscal year. As you can see, the most aggressive
indices, the small-cap Russell 2000 Index and the tech-heavy Nasdaq Composite
Index, produced the most outsized returns in 2003. The broad mid-cap universe,
as measured by the S&P MidCap 400 Index, also delivered strong performance,
ahead of the large-cap dominated S&P 500 Stock Index.
The Top 5 Sectors table shows how our weightings among the fund's top five
sectors changed over the last year. The most significant changes were a
reduction in our exposure to the health care sector, partly the result of profit
taking in the generic drug group. We still consider health care one of the most
fundamentally attractive sectors in which to invest.
Top 5 Sectors
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Percent of Net Assets
12/31/02 12/31/03
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Information Technology 21.1% 22.9%
Health Care 21.3 18.1
Consumer Discretionary 15.0 15.1
Industrials and Business Services 15.5 13.7
Energy 9.1 7.9
For comparison purposes, we have restated the historical weightings to
incorporate changes to the sector and industry classification system.
The Best and Worst Contributors table shows the five largest contributors and
detractors to the fund's performance in 2003. The largest contributors to
performance were institutional pharmacy services provider Omnicare, wireless
services provider Nextel Communications, discount consumer electronics leader
Best Buy, Internet security software provider VeriSign, and biotechnology
company Gilead Sciences. The largest detractors were weight-loss firm Weight
Watchers, financial data processor BISYS Group, biotechnology company Vertex
Pharmaceuticals, laboratory supplies distributor Apogent Technologies, and radio
chain Westwood One.
Best and Worst Contributors
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12 Months Ended 12/31/03
Best Contributors
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Omnicare
Nextel Communications
Best Buy
VeriSign
Gilead Sciences
Worst Contributors
- --------------------------------------------------------------------------------
Weight Watchers
BISYS Group **
Vertex Pharmaceuticals
Apogent Technologies **
Westwood One **
** Position eliminated
Finally, I'm sure you are aware that mutual fund companies have recently come
under scrutiny for their trading policies. The investigations have led to
allegations that executives of several mutual fund companies permitted or
engaged in improper mutual fund trading. In addition, certain intermediaries
that process fund transactions are alleged to have assisted some investors in
executing improper mutual fund trades. I want T. Rowe Price shareholders to know
that we emphatically condemn the abuses that have been revealed or alleged
against other firms in our industry. Our firm has not entered and will not enter
into any agreements with any investors or intermediaries that authorize
after-hours trading or excessive short-term trading in any of our funds. T. Rowe
Price investors can be assured that our firm unequivocally opposes illegal or
inappropriate trading of any nature and has policies and procedures in place
designed to protect the best interests of our long-term shareholders. No T. Rowe
Price executives or portfolio managers or investment personnel of the T. Rowe
Price mutual funds have engaged in any inappropriate trading of T. Rowe Price
mutual funds. You may find out more about our trading policies and the steps we
take to protect your interests by visiting our Web site (troweprice.com). These
policies are also spelled out in your fund's prospectus.
Thank you for your continued support.
Respectfully submitted,
James S. Riepe
Chairman
January 14, 2004
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Financial Highlights For a share outstanding throughout each period
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Mid-Cap Growth class
Year
Ended
12/31/03 12/31/02 12/31/01 12/31/00 12/31/99
NET ASSET VALUE
Beginning of period $ 31.04 $ 39.40 $ 39.79 $ 40.13 $ 34.08
Investment activities
Net investment
income (loss) (0.14) (0.17) (0.13) (0.03) (0.03)
Net realized
and unrealized
gain (loss) 12.00 (8.19) (0.26) 2.96 7.96
Total from
investment
activities 11.86 (8.36) (0.39) 2.93 7.93
Distributions
Net realized gain -- -- -- (3.27) (1.88)
NET ASSET VALUE
End of period $ 42.90 $ 31.04 $ 39.40 $ 39.79 $ 40.13
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Ratios/Supplemental Data
Total return^ 38.21% (21.22)% (0.98)% 7.43% 23.78%
Ratio of total expenses
to average net assets 0.87% 0.88% 0.89% 0.86% 0.87%
Ratio of net investment
income (loss) to average
net assets (0.44)% (0.50)% (0.35)% (0.09)% (0.09)%
Portfolio
turnover rate 30.2% 36.0% 43.0% 53.6% 53.3%
Net assets,
end of period
(in millions) $ 9,874 $ 5,713 $ 6,739 $ 6,589 $ 5,243
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Financial Highlights For a share outstanding throughout each period
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Advisor Class
Year 3/31/00
Ended Through
12/31/03 12/31/02 12/31/01 12/31/00
NET ASSET VALUE
Beginning of period $ 30.94 $ 39.39 $ 39.83 $ 44.13
Investment activities
Net investment
income (loss) (0.17) (0.12)* (0.08) 0.01**
Net realized and
unrealized gain (loss) 11.89 (8.33) (0.36) (1.04)
Total from
investment activities 11.72 (8.45) (0.44) (1.03)
Distributions
Net realized gain - - - (3.27)
NET ASSET VALUE
End of period $ 42.66 $ 30.94 $ 39.39 $ 39.83
---------------------------------------------------
Ratios/Supplemental Data
Total return^ 37.88% (21.45)%* (1.10)% (2.22)%
Ratio of total expenses
to average net assets 1.09% 1.10%* 1.04% 0.70%!
Ratio of net investment
income (loss) to average
net assets (0.64)% (0.69)%* (0.56)% 0.09%!
Portfolio turnover rate 30.2% 36.0% 43.0% 53.6%!
Net assets, end of period
(in thousands) $ 283,115 $ 50,640 $ 16,736 $ 2,303
* Excludes expenses in excess of a 1.10% contractual expense limitation in
effect through 12/31/03.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Financial Highlights For a share outstanding throughout each period
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R Class
Year 9/30/02
Ended Through
12/31/03 12/31/02
NET ASSET VALUE
Beginning of period $ 31.01 $ 28.61
Investment activities
Net investment income (loss) (0.18) (0.07)*
Net realized and unrealized gain (loss) 11.82 2.47**
Total from investment activities 11.64 2.40
NET ASSET VALUE
End of period $ 42.65 $ 31.01
-----------------------
Ratios/Supplemental Data
Total return^ 37.54% 8.39%*
Ratio of total expenses to
average net assets 1.30% 1.40%!*
Ratio of net investment
income (loss) to average
net assets (0.79)% (0.88%)!*
Portfolio turnover rate 30.2% 36.0%!
Net assets, end of period
(in thousands) $ 63,210 $ 108
* Excludes expenses in excess of a 1.40% contractual expense limitation in
effect through 4/30/04.
** The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the fund's aggregate gains and
losses because of the timing of sales and redemptions of fund shares in
relation to fluctuating market values for the investment portfolio.
^ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report December 31, 2003
Portfolio of Investments (ss.) Shares/Par Value
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($ 000s)
COMMON STOCKS 94.2%
CONSUMER DISCRETIONARY 15.1%
Hotels, Restaurants & Leisure 2.1%
Fairmont Hotels 3,000,000 81,420
Starbucks * 1,800,000 59,508
The Cheesecake Factory * 1,700,000 74,851
215,779
Household Durables 0.5%
Garmin 1,000,000 54,480
54,480
Leisure Equipment & Products 1.0%
Brunswick 3,200,000 101,856
101,856
Media 5.4%
Cablevision Systems, Class A * 2,600,000 60,814
Catalina Marketing *! 3,250,000 65,520
Citadel Broadcasting * 3,250,000 72,703
Cox Radio, Class A * 2,600,000 65,598
Entercom Communications * 600,000 31,776
Lamar Advertising, Class A * 2,200,000 82,104
Rogers Communications, Class B 3,200,000 52,800
Scholastic * 1,900,000 64,676
Scripps, Class A 260,000 24,476
XM Satellite Radio Holdings, Class A * 1,400,000 36,904
557,371
Multiline Retail 1.7%
99 Cents Only Stores * 700,000 19,061
Dollar Tree Stores * 2,600,000 78,156
Family Dollar Stores 2,100,000 75,348
172,565
Specialty Retail 4.4%
Best Buy 1,700,000 88,808
O'Reilly Automotive * 2,000,000 76,720
PETsMART 3,100,000 73,780
Ross Stores 3,600,000 95,148
Weight Watchers * 1,000,000 38,370
Williams-Sonoma * 2,100,000 73,017
445,843
Total Consumer Discretionary 1,547,894
CONSUMER STAPLES 2.8%
Beverages 0.8%
Cott * 3,000,000 84,030
84,030
Food & Staples Retailing 1.5%
Shoppers Drug Mart, 144A (CAD) * 1,600,000 37,117
Whole Foods Market * 1,700,000 114,121
151,238
Personal Products 0.5%
Estee Lauder, Class A 1,300,000 51,038
51,038
Total Consumer Staples 286,306
ENERGY 7.9%
Energy Equipment & Services 4.3%
BJ Services * 3,400,000 122,060
Cooper Cameron * 1,600,000 74,560
Diamond Offshore Drilling 3,500,000 71,785
FMC Technologies * 2,850,000 66,405
Smith International * 2,500,000 103,800
438,610
Oil & Gas 3.6%
Devon Energy 400,000 22,904
EOG Resources 2,300,000 106,191
Murphy Oil 1,600,000 104,496
Western Gas Resources 1,150,000 54,337
XTO Energy 2,700,000 76,410
364,338
Total Energy 802,948
FINANCIALS 6.9%
Capital Markets 3.2%
Charles Schwab 3,000,000 35,520
Eaton Vance 2,000,000 73,280
Franklin Resources 300,000 15,618
Investor's Financial Services 1,000,000 38,410
Legg Mason 800,000 61,744
Waddell & Reed Financial, Class A ! 4,225,000 99,119
323,691
Commercial Banks 0.2%
Silicon Valley Bancshares * 500,000 18,035
18,035
Diversified Financial Services 1.1%
CapitalSource * 1,750,000 37,940
Principal Financial Group 2,100,000 69,447
107,387
Insurance 1.9%
Axis Capital Holdings 1,600,000 46,848
Nationwide Financial Services, Class A 1,200,000 39,672
Protective Life 1,600,000 54,144
Willis Group Holdings 1,700,000 57,919
198,583
Thrifts & Mortgage Finance 0.5%
Radian Group 1,100,000 53,625
53,625
Total Financials 701,321
HEALTH CARE 18.1%
Biotechnology 5.3%
Abgenix * 1,500,000 18,690
Alkermes * 1,900,000 25,650
Amylin Pharmaceuticals * 1,250,000 27,775
Biogen Idec * 1,219,700 44,861
Cephalon * 1,400,000 67,774
Gilead Sciences * 1,600,000 93,024
Human Genome Sciences * 1,900,000 25,175
Imclone Systems * 850,000 33,711
MedImmune * 3,500,000 88,900
Millennium Pharmaceuticals * 1,500,000 28,005
Neurocrine Biosciences * 800,000 43,632
Protein Design Labs * 1,400,000 25,060
Vertex Pharmaceuticals * 2,100,000 21,483
543,740
Health Care Equipment & Supplies 1.1%
Edwards Lifesciences * 1,250,000 37,600
Invitrogen * 400,000 28,000
Waters Corporation * 1,400,000 46,424
112,024
Health Care Providers & Services 9.0%
AmerisourceBergen 1,620,100 90,969
Anthem * 1,400,000 105,000
Davita * 1,450,000 56,550
Health Management, Class A 4,200,000 100,800
Laboratory Corporation of America * 2,700,000 99,765
Manor Care 3,600,000 124,452
Omnicare 5,000,000 201,950
Universal Health Services, Class B 1,300,000 69,836
WebMD * 1,000,000 8,990
WellChoice * 500,000 17,250
WellPoint Health Networks * 400,000 38,796
914,358
Pharmaceuticals 2.7%
Andrx * 2,200,000 52,888
Barr Laboratories * 850,000 65,407
IVAX * 3,800,000 90,744
Teva Pharmaceutical ADR 1,200,000 68,052
277,091
Total Health Care 1,847,213
INDUSTRIALS & BUSINESS SERVICES 13.7%
Aerospace & Defense 2.7%
Alliant Techsystems * 1,900,000 109,744
L-3 Communications Holdings * 850,000 43,656
Rockwell Collins 4,100,000 123,123
276,523
Air Freight & Logistics 0.4%
Expeditors International of Washington 1,300,000 48,958
48,958
Airlines 0.4%
JetBlue Airways * 1,500,000 39,780
39,780
Building Products 1.0%
American Standard * 1,000,000 100,700
100,700
Commercial Services & Supplies 5.3%
Apollo Group, Class A * 600,000 40,800
ChoicePoint * 3,600,000 137,124
Education Management * 2,000,000 62,080
Manpower 2,500,000 117,700
Robert Half International * 4,000,000 93,360
Viad 3,700,000 92,500
543,564
Industrial Conglomerates 1.1%
Roper Industries ! 2,250,000 110,835
110,835
Machinery 2.6%
Danaher 950,000 87,162
ITT Industries 1,300,000 96,473
Oshkosh Truck 1,600,000 81,648
265,283
Trading Companies & Distributors 0.2%
Fastenal 400,000 19,976
19,976
Total Industrials & Business Services 1,405,619
INFORMATION TECHNOLOGY 22.9%
Communications Equipment 1.8%
3Com * 1,750,000 14,298
Advanced Fibre Communications * 750,000 15,113
Harris 2,700,000 102,465
QLogic * 700,000 36,120
Research In Motion * 250,000 16,707
184,703
Computer & Peripherals 1.6%
Diebold 1,300,000 70,031
Lexmark International, Class A * 700,000 55,048
Seagate Technology 1,750,000 33,075
158,154
Electronic Equipment & Instruments 1.4%
CDW 1,300,000 75,088
Jabil Circuit * 1,800,000 50,940
Molex, Class A 700,000 20,552
146,580
Internet Software & Services 1.8%
InterActiveCorp * 950,000 32,233
Monster Worldwide * 2,500,000 54,900
VeriSign * 6,000,000 97,800
184,933
IT Services 7.2%
Affiliated Computer Services, Class A * 1,200,000 65,352
BearingPoint * 5,900,000 59,531
Ceridian * 4,200,000 87,948
Certegy 3,100,000 101,680
DST Systems * 2,900,000 121,104
Fiserv * 2,100,000 82,971
Hewitt Associates, Class A *! 2,710,000 81,029
Iron Mountain * 2,200,000 86,988
SunGard Data Systems * 1,700,000 47,107
733,710
Semiconductor & Semiconductor Equipment 4.2%
AMIS Holdings * 2,600,000 47,528
ASML Holding ADS * 2,700,000 54,135
Integrated Circuit Systems * 804,400 22,917
Intersil Holding, Class A 3,500,000 86,975
Microchip Technology 3,100,000 103,416
Novellus Systems * 1,500,000 63,075
Semtech * 2,300,000 52,279
430,325
Software 4.9%
Adobe Systems 1,750,000 68,775
Cadence Design Systems * 4,300,000 77,314
Intuit * 1,500,000 79,365
Macromedia * 3,000,000 53,520
Mercury Interactive * 1,200,000 58,368
Network Associates * 6,500,000 97,760
Red Hat * 1,500,000 28,155
Siebel Systems * 2,500,000 34,675
497,932
Total Information Technology 2,336,337
MATERIALS 3.7%
Chemicals 1.1%
Potash Corp./Saskatchewan 1,300,000 112,424
112,424
Metals & Mining 2.6%
International Steel Group * 1,250,000 48,688
Newmont Mining 2,000,000 97,220
Nucor 2,100,000 117,600
263,508
Total Materials 375,932
TELECOMMUNICATION SERVICES 3.1%
Diversified Telecommunication Services 0.4%
NTL * 550,000 38,363
38,363
Wireless Telecommunication Services 2.7%
Crown Castle International * 4,750,000 52,392
Nextel Communications, Class A * 3,900,000 109,434
Nextel Partners, Class A * 3,000,000 40,350
Triton PCS Holdings, Class A * 1,850,000 10,323
Western Wireless, Class A * 3,800,000 69,768
282,267
Total Telecommunication Services 320,630
Total Common Stocks (Cost $7,158,148) 9,624,200
SHORT-TERM INVESTMENTS 6.4%
Money Market Funds 6.4%
T. Rowe Price Government Reserve
Investment Fund, 0.94%#! 657,953,409 657,953
Total Short-Term Investments (Cost $657,953) 657,953
Total Investments in Securities
100.6% of Net Assets (Cost $7,816,101) $10,282,153
-----------
(ss.) Denominated in U.S. dollars unless otherwise noted
# Seven-day yield
* Non-income producing
! Affiliated company--See Note 2.
144A Security was purchased pursuant to Rule 144A under the Securities Act
of 1933 and may be resold in transactions exempt from registration only
to qualified institutional buyers--total of such securities at
period-end amounts to $18,558,440 and represents 0.2% of net assets
ADR American Depository Receipts
ADS American Depository Shares
CAD Canadian dollar
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report December 31, 2003
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
($ 000s)
Assets
Investments in securities, at value
Affiliated companies (cost $930,330) $ 1,014,456
Other companies (cost $6,885,771) 9,267,697
Total investments in securities 10,282,153
Other assets 54,024
Total assets 10,336,177
Liabilities
Total liabilities 115,492
NET ASSETS $ 10,220,685
------------
Net Assets Consist of:
Undistributed net realized gain (loss) $ (259,111)
Net unrealized gain (loss) 2,466,053
Paid-in-capital applicable to 238,281,023 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 8,013,743
NET ASSETS $ 10,220,685
------------
NET ASSET VALUE PER SHARE
Mid-Cap Growth class
($9,874,359,402/230,162,663 shares outstanding) $ 42.90
------------
Advisor Class
($283,115,190/6,636,186 shares outstanding) $ 42.66
------------
R Class
($63,210,044/1,482,174 shares outstanding) $ 42.65
------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Statement of Operations
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/03
Investment Income (Loss)
Dividend income $ 32,780
Expenses
Investment management 50,889
Shareholder servicing
Mid-Cap Growth class 13,265
Advisor Class 191
R Class 18
Prospectus and shareholder reports
Mid-Cap Growth class 804
Advisor Class 28
R Class 1
Distribution and service (12b-1)
Advisor Class 351
R Class 71
Custody and accounting 316
Registration 277
Directors 40
Legal and audit 39
Miscellaneous 61
Reductions/repayments pursuant to expense limitation
Expenses (reimbursed by) repaid to manager 14
Total expenses 66,365
Expenses paid indirectly (6)
Net expenses 66,359
Net investment income (loss) (33,579)
Statement of Operations
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/03
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 410,154
Foreign currency transactions (177)
Net realized gain (loss) 409,977
Change in net unrealized gain (loss)
Securities 2,138,804
Other assets and liabilities
denominated in foreign currencies 1
Change in net unrealized gain (loss) 2,138,805
Net realized and unrealized gain (loss) 2,548,782
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,515,203
-----------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
($ 000s)
Year
Ended
12/31/03 12/31/02
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (33,579) $ (30,761)
Net realized gain (loss) 409,977 (159,825)
Change in net unrealized gain (loss) 2,138,805 (1,290,959)
Increase (decrease) in net assets from operations 2,515,203 (1,481,545)
Capital share transactions *
Shares sold
Mid-Cap Growth class 3,146,458 2,255,339
Advisor Class 216,462 51,193
R Class 65,652 100
Shares redeemed
Mid-Cap Growth class (1,448,331) (1,805,314)
Advisor Class (31,450) (12,078)
R Class (7,109) -
Increase (decrease) in net assets from
capital share transactions 1,941,682 489,240
Net Assets
Increase (decrease) during period 4,456,885 (992,305)
Beginning of period 5,763,800 6,756,105
End of period $ 10,220,685 $ 5,763,800
------------ ------------
*Share information
Shares sold
Mid-Cap Growth class 86,068 64,994
Advisor Class 5,843 1,570
R Class 1,655 4
Shares redeemed
Mid-Cap Growth class (39,948) (51,996)
Advisor Class (844) (358)
R Class (176) -
Increase (decrease) in shares outstanding 52,598 14,214
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Mid-Cap Growth Fund
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Certified Annual Report December 31, 2003
Notes to Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Mid-Cap Growth Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end
management investment company. The fund seeks to provide long-term capital
appreciation by investing in mid-cap stocks with potential for above-average
earnings growth. The fund has three classes of shares: Mid-Cap Growth Fund
(Mid-Cap Growth class), offered since June 30, 1992, Mid-Cap Growth
Fund--Advisor Class (Advisor Class), offered since March 31, 2000, and Mid-Cap
Growth Fund--R Class (R Class), offered since September 30, 2002. Advisor Class
shares are sold only through brokers and other financial intermediaries, and R
Class shares are available to retirement plans serviced by intermediaries. The
Advisor Class and R Class each operate under separate Board-approved Rule 12b-1
plans, pursuant to which each class compensates financial inter-mediaries for
distribution and certain administrative services. Each class has exclusive
voting rights on matters related solely to that class, separate voting rights on
matters that relate to all classes, and, in all other respects, the same rights
and obligations as the other classes.
The accompanying financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, which
require the use of estimates made by fund management.
Valuation
The fund values its investments and computes its net asset value per share at
the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day
that the NYSE is open for business. Equity securities listed or regularly traded
on a securities exchange or in the over-the-counter market are valued at the
last quoted sale price, or official closing price for certain markets, at the
time the valuations are made. A security that is listed or traded on more than
one exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Listed securities not traded on a particular
day are valued at the mean of the latest bid and ask prices for domestic
securities and the last quoted sale price for international securities.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation.
Other investments and those for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by the T. Rowe Price Valuation Committee,
established by the fund's Board of Directors.
Most foreign markets close before the NYSE. Normally, developments that could
affect the values of securities that occur between the close of a foreign market
and the close of the NYSE will not be reflected in security valuations used by
the fund to compute its share price. However, if developments are so significant
that they will, in the judgment of the fund, clearly and materially affect
security values, such valuations may be adjusted to reflect the estimated fair
value of the securities as of the close of the NYSE, as determined in good faith
by the T. Rowe Price Valuation Committee, established by the fund's Board of
Directors.
Currency Translation
Assets, including investments, and liabilities denominated in foreign currencies
are translated into U.S. dollar values each day at the prevailing exchange rate,
using the mean of the bid and ask prices of such currencies against U.S. dollars
as quoted by a major bank. Purchases and sales of securities, income, and
expenses are translated into U.S. dollars at the prevailing exchange rate on the
date of the transaction. The effect of changes in foreign currency exchange
rates on realized and unrealized security gains and losses is reflected as a
component of security gains and losses.
Class Accounting
The Advisor Class and R Class each pay distribution and administrative expenses
in the form of Rule 12b-1 fees, in an amount not exceeding 0.25% and 0.50%,
respectively, of the class's average daily net assets. Shareholder servicing,
prospectus, and shareholder report expenses incurred by each class are charged
directly to the class to which they relate. Expenses common to all classes,
investment income, and realized and unrealized gains and losses are allocated to
the classes based upon the relative daily net assets of each class. Income
distributions, if any, are declared and paid by each class on an annual basis.
Capital gain distributions, if any, are declared and paid by the fund, typically
on an annual basis.
Rebates and Credits
Subject to best execution, the fund may direct certain security trades to
brokers who have agreed to rebate a portion of the related brokerage commission
to the fund in cash. Commission rebates are included in realized gain on
securities in the accompanying financial statements and totaled $337,000 for the
year ended December 31, 2003. Additionally, the fund earns credits on
temporarily uninvested cash balances at the custodian that reduce the fund's
custody charges. Custody expense in the accompanying financial statements is
presented before reduction for credits, which are reflected as expenses paid
indirectly.
In-Kind Redemptions
In certain circumstances, the fund may distribute portfolio securities rather
than cash as payment for a redemption of fund shares (in-kind redemption). For
financial reporting purposes, the fund recognizes a gain on in-kind redemptions
to the extent the value of the distributed securities on the date of redemption
exceeds the cost of those securities; the fund recognizes a loss if cost exceeds
value. Gains and losses realized on in-kind redemptions are not recognized for
tax purposes, and are reclassified from undistributed realized gain (loss) to
paid-in capital. During the year ended December 31, 2003, the fund realized
$52,741,000 of net gain on $112,246,000 of in-kind redemptions.
Investment Transactions, Investment Income, and Distributions
Income and expenses are recorded on the accrual basis. Dividends received from
mutual fund investments are reflected as dividend income; capital gain
distributions are reflected as realized gain/loss. Dividend income and capital
gain distributions are recorded on the ex-dividend date. Investment transactions
are accounted for on the trade date. Realized gains and losses are reported on
the identified cost basis. Distributions to shareholders are recorded on the
ex-dividend date. Income distributions, if any, are declared and paid on an
annual basis. Capital gain distributions, if any, are typically declared and
paid on an annual basis.
Other
In the normal course of business, the fund enters into contracts that provide
general indemnifications. The fund's maximum exposure under these arrangements
is dependent on claims that may be made against the fund in the future and,
therefore, cannot be estimated; however, based on experience, the risk of
material loss from such claims is considered remote.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Affiliated Companies
The fund may invest in certain securities that are considered affiliated
companies. As defined by the 1940 Act, an affiliated company is one in which the
fund owns 5% or more of the outstanding voting securities. At December 31, 2003,
the value of affiliated companies totaled $1,014,456,000, representing 9.9% of
the value of the fund's investments in securities. For the
year then ended, $8,433,000 (25.7%) of dividend income, and $3,127,000 (0.8%) of
net realized gain reflected in the accompanying financial statements resulted
from the fund's transactions with affiliated companies.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $3,751,272,000 and $2,170,446,000, respectively, for the year ended
December 31, 2003.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and distribute to shareholders all of its taxable income
and gains. Federal income tax regulations differ from generally accepted
accounting principles; therefore, distributions determined in accordance with
tax regulations may differ significantly in amount or character from net
investment income and realized gains for financial reporting purposes. Financial
reporting records are adjusted for permanent book/tax differences to reflect tax
character. Financial records are not adjusted for temporary differences.
There were no distributions in the year ended December 31, 2003. At December 31,
2003, the tax-basis components of net assets were as follows:
- --------------------------------------------------------------------------------
Unrealized appreciation $ 2,654,666,000
Unrealized depreciation (188,791,000)
Net unrealized appreciation (depreciation) 2,465,875,000
Capital loss carryforwards (258,933,000)
Paid-in capital 8,013,743,000
Net assets $ 10,220,685,000
------------------
The fund intends to retain realized gains to the extent of available capital
loss carryforwards for federal income tax purposes. In 2003, the fund utilized
$288,852,000 of capital loss carryforwards. As of December 31, 2003, the fund
had $258,933,000 of capital loss carryforwards that expire in 2010.
For the year ended December 31, 2003, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications to paid-in capital
relate primarily to the current net operating loss and redemptions in kind.
Results of operations and net assets were not affected by these
reclassifications.
- --------------------------------------------------------------------------------
Undistributed net investment income $ 33,579,000
Undistributed net realized gain (52,741,000)
Paid-in capital 19,162,000
At December 31, 2003, the cost of investments for federal income tax purposes
was $7,816,279,000.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (the manager or Price
Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. The
investment management agreement between the fund and the manager provides for an
annual investment management fee, which is computed daily and paid monthly. The
fee consists of an individual fund fee, equal to 0.35 % of the fund's average
daily net assets, and the fund's pro-rata share of a group fee. The group fee is
calculated based on the combined net assets of certain mutual funds sponsored by
Price Associates (the group) applied to a graduated fee schedule, with rates
ranging from 0.48% for the first $1 billion of assets to 0.295% for assets in
excess of $120 billion. The fund's portion of the group fee is determined by the
ratio of its average daily net assets to those of the group. At December 31,
2003, the effective annual group fee rate was 0.32%, and investment management
fee payable totaled $5,636,000.
The Advisor Class and R Class are also subject to a contractual expense
limitation through the limitation dates indicated in the table below. During the
limitation period, the manager is required to waive its management fee and
reimburse a class for any expenses, excluding interest, taxes, brokerage
commissions, and extraordinary expenses, that would otherwise cause the class's
ratio of total expenses to average net assets (expense ratio) to exceed its
expense limitation. Through the repayment date, each class is required to repay
the manager for expenses previously reimbursed and management fees waived
to the extent the class's net assets have grown or expenses have declined
sufficiently to allow repayment without causing the class's expense ratio to
exceed its expense limitation.
- --------------------------------------------------------------------------------
Advisor Class R Class
Expense Limitation 1.10% 1.40%
Limitation Date 12/31/03 4/30/04
Repayment Date 12/31/05 4/30/06
For the year ended December 31, 2003, each class operated below its expense
limitation.
In addition, the fund has entered into service agreements with Price Associates
and two wholly owned subsidiaries of Price Associates (collectively, Price).
Price Associates computes the daily share prices and maintains the financial
records of the fund. T. Rowe Price Services, Inc., provides shareholder and
administrative services in its capacity as the fund's transfer and dividend
disbursing agent. T. Rowe Price Retirement Plan Services, Inc., provides
subaccounting and recordkeeping services for certain retirement accounts
invested in the Mid-Cap Growth class and R Class. Expenses incurred pursuant to
these service agreements totaled $8,692,000 for the year ended December 31,
2003, of which $793,000 was payable at period-end.
Additionally, the fund is one of several mutual funds in which certain college
savings plans managed by Price Associates may invest. As approved by the fund's
Board of Directors, shareholder servicing costs associated with each college
savings plan are borne by the fund in proportion to the average daily value of
its shares owned by the college savings plan. For the year ended December 31,
2003, the fund was charged $155,000 for shareholder servicing costs related to
the college savings plans, of which $122,000 was for services provided by Price
and $13,000 was payable at period-end. At December 31, 2003, approximately 0.3%
of the outstanding shares of the Mid-Cap Growth class were held by college
savings plans.
The fund is also one of several mutual funds sponsored by Price Associates
(underlying Price funds) in which the T. Rowe Price Retirement Funds (Retirement
Funds) may invest. The Retirement Funds do not invest in the underlying Price
funds for the purpose of exercising management or control.
Pursuant to a special servicing agreement, expenses associated with the
operation of the Retirement Funds are borne by each underlying Price fund to the
extent of estimated savings to it and in proportion to the average daily value
of its shares owned by the Retirement Funds. Expenses allocated under this
agreement are reflected as shareholder servicing expense in the accompanying
financial statements. For the year ended December 31, 2003, the fund was
allocated $105,000 of Retirement Funds' expenses, of which $52,000 related to
services provided by Price and $14,000 was payable at period-end. At December
31, 2003, approximately 0.4% of the outstanding shares of the Mid-Cap Growth
class were held by the Retirement Funds.
The fund may invest in the T. Rowe Price Reserve Investment Fund and the T. Rowe
Price Government Reserve Investment Fund (collectively, the Reserve Funds),
open-end management investment companies managed by Price Associates. The
Reserve Funds are offered as cash management options only to mutual funds,
trusts, and other accounts managed by Price Associates and/or its affiliates,
and are not available to the public. The Reserve Funds pay no investment
management fees. During the year ended December 31, 2003, dividend income from
the Reserve Funds totaled $4,975,000.
T. Rowe Price Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Report of Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price Mid-Cap Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of T. Rowe Price Mid-Cap Growth Fund,
Inc. (the "Fund") at December 31, 2003, and the results of its operations, the
changes in its net assets and the financial highlights for each of the fiscal
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2003 by correspondence with the custodians, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 26, 2004
T. Rowe Price Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
Certified Annual Report
Information on Proxy Voting
- --------------------------------------------------------------------------------
A description of the policies and procedures that the T. Rowe Price Mid-Cap
Growth Fund uses to determine how to vote proxies relating to portfolio
securities is available, without charge, upon request by calling 1-800-225-5132.
It also appears in the fund's Statement of Additional Information (Form 485B),
which can be found on the SEC's Web site, www.sec.gov.
T. Rowe Price Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
Certified Annual Report
About the Fund's Directors and Officers
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Directors that meets regularly to review
investments, performance, expenses, and other business matters, and is
responsible for protecting the interests of shareholders. The majority of the
fund's directors are independent of T. Rowe Price Associates, Inc. (T. Rowe
Price); "inside" directors are officers of T. Rowe Price. The Board of Directors
elects the fund's officers, who are listed in the final table. The business
address of each director and officer is 100 East Pratt Street, Baltimore, MD
21202. The Statement of Additional Information includes additional information
about the fund directors and is available without charge by calling a T. Rowe
Price representative at 1-800-225-5132.
Independent Directors
Name
(Date of Birth) Principal Occupation(s) During Past 5 Years
Year Elected * and Directorships of Other Public Companies
Anthony W. Deering Director, Chairman of the Board, President, and
(1/28/45) Chief Executive Officer, The Rouse Company, real
2001 estate developers; Director, Mercantile Bank
(4/03 to present)
Donald W. Dick, Jr. Principal, EuroCapital Advisors, LLC, an
(1/27/43) acquisition and management advisory firm
1992
David K. Fagin Director, Golden Star Resources Ltd., Canyon
(4/9/38) Resources Corp. (5/00 to present), and
1992 Pacific Rim Mining Corp. (2/02 to present);
Chairman and President, Nye Corp.
Karen N. Horn Managing Director and President, Global Private
(9/21/43) Client Services, Marsh Inc.; Managing Director
2003 and Head of International Private Banking,
Bankers Trust; Director, Eli Lilly and Company
F. Pierce Linaweaver President, F. Pierce Linaweaver & Associates,
(8/22/34) Inc., consulting environmental and civil engineers
2001
John G. Schreiber Owner/President, Centaur Capital Partners, Inc., a
(10/21/46) real estate investment company; Senior Advisor
2001 and Partner, Blackstone Real Estate Advisors,
L.P.; Director, AMLI Residential Properties Trust,
Host Marriott Corp., and The Rouse Company
Hubert D. Vos ** Owner/President, Stonington Capital Corp.,
(8/2/33) a private investment company
1992
Paul M. Wythes ** Founding Partner, Sutter Hill Ventures, a venture
(6/23/33) capital limited partnership, providing equity
1992 capital to young high-technology companies
throughout the United States; Director,
Teltone Corp.
* Each independent director oversees 107 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
** Retired from Board of Directors effective December 31, 2003.
Inside Directors
Name
(Date of Birth)
Year Elected *
[Number of T. Rowe Price Principal Occupation(s) During Past 5 Years
Portfolios Overseen] and Directorships of Other Public Companies
James A.C. Kennedy, CFA Director and Vice President, T. Rowe
(8/15/53) Price and T. Rowe Price Group, Inc.
1992
[39]
James S. Riepe Director and Vice President, T. Rowe Price; Vice
(6/25/43) Chairman of the Board, Director, and Vice
1992 President, T. Rowe Price Group, Inc.; Chairman
[107] of the Board and Director, T. Rowe Price Global
Asset Management Limited, T. Rowe Price Global
Investment Services Limited, T. Rowe Price
Investment Services, Inc., T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe Price
Services, Inc.; Chairman of the Board, Director,
President, and Trust Officer, T. Rowe Price Trust
Company; Director, T. Rowe Price International,
Inc.; Chairman of the Board, Mid-Cap Growth Fund
M. David Testa, CFA, CIC Chief Investment Officer, Director, and Vice
(4/22/44) President, T. Rowe Price; Vice Chairman of the
2001 Board, Chief Investment Officer, Director, and
[107] Vice President, T. Rowe Price Group, Inc.;
Chairman of the Board and Director, T. Rowe
Price International, Inc.; Director, T. Rowe
Price Global Asset Management Limited and T. Rowe
Price Global Investment Services Limited; Director
and Vice President, T. Rowe Price Trust Company
* Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Date of Birth)
Title and Fund(s) Served Principal Occupation(s)
Brian W.H. Berghuis, CFA (10/12/58) Vice President, T. Rowe Price and
President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Stephen V. Booth (6/21/61) Vice President, T. Rowe Price, T. Rowe
Vice President, Mid-Cap Growth Fund Price Group, Inc., and T. Rowe Price
Trust Company
Brace C. Brooks, CFA (1/10/67) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Officers (continued)
Name (Date of Birth)
Title and Fund(s) Served Principal Occupation(s)
Joseph A. Carrier (12/30/60) Vice President, T. Rowe Price, T. Rowe
Treasurer, Mid-Cap Growth Fund Price Group, Inc., and T. Rowe Price
Investment Services, Inc.
Anna M. Dopkin, CFA (9/5/67) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Henry M. Ellenbogen (1/21/71) Vice President, T. Rowe Price; formerly
Vice President, Mid-Cap Growth Fund Chief of Staff, U.S. Representative
Peter Deutsch (to 1999); Executive Vice
President, Business Development,
HelloAsia (to 2001)
Roger L. Fiery III, CPA (2/10/59) Vice President, T. Rowe Price, T. Rowe
Vice President, Mid-Cap Growth Fund Price Group, Inc., T. Rowe Price
International, Inc., and T. Rowe Price
Trust Company
Eric M. Gerster, CFA (3/23/71) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Henry H. Hopkins (12/23/42) Director and Vice President, T. Rowe
Vice President, Mid-Cap Growth Fund Price Group, Inc., T. Rowe Price
Investment Services, Inc., T. Rowe Price
Services, Inc., and T. Rowe Price Trust
Company; Vice President, T. Rowe Price,
T. Rowe Price International, Inc., and
T. Rowe Price Retirement Plan
Services, Inc.
Kris H. Jenner, MD, D. Phil. (2/5/62) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Patricia B. Lippert (1/12/53) Assistant Vice President, T. Rowe
Secretary, Mid-Cap Growth Fund Price and T. Rowe Price Investment
Services, Inc.
Robert J. Marcotte (3/6/62) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Joseph M. Milano, CFA (9/14/72) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
Philip W. Ruedi, CFA (7/2/71) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.
John F. Wakeman (11/25/62) Vice President, T. Rowe Price and
Executive Vice President, Mid-Cap T. Rowe Price Group, Inc.
Growth Fund
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Officers (continued)
Name (Date of Birth)
Title and Fund(s) Served Principal Occupation(s)
Julie L. Waples (5/12/70) Vice President, T. Rowe Price
Vice President, Mid-Cap Growth Fund
R. Candler Young (9/28/71) Vice President, T. Rowe Price and
Vice President, Mid-Cap Growth Fund T. Rowe Price Group, Inc.; formerly
Investment Banking Summer Associate,
Goldman Sachs & Company (to 1999)
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Item 2. Code of Ethics.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of this code of
ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the period
covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors/Trustees has determined that Mr. David K.
Fagin qualifies as an audit committee financial expert, as defined in Item 3 of
Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form
N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal accountant were
as follows:
2003 2002
Audit Fees $26,093 $18,296
Audit-Related Fees 1,558 --
Tax Fees 6,776 4,429
All Other Fees 124 315
Audit fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the accountant in
connection with statutory and regulatory filings. Audit-related fees include
amounts reasonably related to the performance of the audit of the registrant's
financial statements, specifically the issuance of a report on internal
controls. Tax fees include amounts related to tax compliance, tax planning, and
tax advice. Other fees include the registrant's pro-rata share of amounts for
agreed-upon procedures in conjunction with service contract approvals by the
registrant's Board of Directors/Trustees.
(e)(1) The registrant's audit committee has adopted a policy whereby audit and
non-audit services performed by the registrant's principal accountant for the
registrant, its investment adviser, and any entity controlling, controlled by,
or under common control with the investment adviser that provides ongoing
services to the registrant require pre-approval in advance at regularly
scheduled audit committee meetings. If such a service is required between
regularly scheduled audit committee meetings, pre-approval may be authorized by
one audit committee member with ratification at the next scheduled audit
committee meeting. Waiver of pre-approval for audit or non-audit services
requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the registrant's principal accountant for non-audit services
rendered to the registrant, its investment adviser, and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant were $719,000 and $671,000, respectively, and
were less than the aggregate fees billed for those same periods by the
registrant's principal accountant for audit services rendered to the T. Rowe
Price Funds.
(h) All non-audit services rendered in (g) above were pre-approved by the
registrant's audit committee. Accordingly, these services were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures within 90
days of this filing and have concluded that the registrant's disclosure controls
and procedures were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is
attached.
(a)(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Mid-Cap Growth Fund, Inc.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date February 20, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James S. Riepe
James S. Riepe
Principal Executive Officer
Date February 20, 2004
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date February 20, 2004