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Price Bond Chief to Step Down; Small-Cap Fund Closing

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Feb. 9, 2004 — T.Rowe Price Group (TROW) said William Reynolds, the director of its fixed-income division, will retire in April. Assistant director Mary Miller will succeed him as head of the unit, which oversees about $55 billion in assets.

Separately, Price said it will close the $5.4-billion T Rowe Price Small Cap Stock Fund (OTCFX) to new investors on February 20 to keep its assets from increasing to the point where they hurt its performance.

Reynolds joined the Baltimore-based firm in 1981 and became director of the fixed-income unit in 1996. The unit’s assets have increased by 80% under Reynolds, the company said.

Miller has been with Price since 1983 and is currently responsible for investment-grade portfolios. In her new position, Miller will continue to run the T Rowe Price Tx Fr Inc Tr Income Fund (PRTAX). Miller’s succession will not affect the unit’s investment approach and “should be seamless,” Reynolds said in a statement.

In the Small-Cap Stock fund, assets grew to $5.2 billion at the end of last year from $3.4 billion a year earlier, company spokesman Steven Norwitz said. The increase included cash inflows of $535 million, much of which entered the fund in the second half of the year. The pace of the inflows concerned the fund’s portfolio manager, Gregory McCrickard, Norwitz added.

The fund returned 32.5% last year, versus 47.3% for the average small-cap blend fund. T. Rowe Price Small Cap’s annualized returns for the five and ten-year periods ended last year have topped its peers.