PAGE 1
Registration Nos. 002-65539/811-2958
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Post-Effective Amendment No. 60 / X /
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 / X /
Amendment No. 52 / X /
Fiscal Year Ended October 31, 1995
__________________________________________
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
____________________________________________________
(Exact Name of Registrant as Specified in Charter)
100 East Pratt Street, Baltimore, Maryland 21202
__________________________________________ __________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 410-547-2000
____________
Henry H. Hopkins
100 East Pratt Street
Baltimore, Maryland 21202
_______________________________________
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering March 1, 1996
_____________
It is proposed that this filing will become effective (check
appropriate box):
/ / immediately upon filing pursuant to paragraph (b)
/X/ on March 1, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
PAGE 2
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933+
_________________________________________________________________
Pursuant to Section 24f-2 of the Investment Company Act of 1940,
the Registrant has registered an indefinite number of securities
under the Securities Act of 1933 and intends to file a 24f-2
Notice by December 31, 1996.
+Not applicable, as no securities are being registered by this
Post-Effective Amendment No. 60 to the Registration Statement.
PAGE 3
The Registration Statement of the T. Rowe Price
International Funds, Inc. on Form N-1A (File No. 2-65539) is
hereby amended under the Securities Act of 1933 to update the
Registrant's financial statements, make other changes in the
Registrant's Prospectus and Statement of Additional Information,
and to satisfy the annual amendment requirement of Rule 8b-16
under the Investment Company Act of 1940.
This Amendment consists of the following:
Cross Reference Sheet
Part A of Form N-1A, Revised Prospectus
Part B of Form N-1A, Statement of Additional Information
Part C of Form N-1A, Other Information
Opinion of Counsel
Accountants' Consent
PAGE 4
T. ROWE PRICE INTERNATIONAL STOCK FUND
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
T. ROWE PRICE EUROPEAN STOCK FUND
T. ROWE PRICE NEW ASIA FUND
T. ROWE PRICE JAPAN FUND
T. ROWE PRICE LATIN AMERICA FUND
T. ROWE PRICE EMERGING MARKETS STOCK FUND
T. ROWE PRICE GLOBAL STOCK FUND
CROSS REFERENCE SHEET
N-1A Item No. Location
_____________ ________
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Transaction and Fund
Expenses
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Transaction and
Registrant Fund Expenses; Fund,
Market, and Risk
Characteristics;
Organization and
Management;
Understanding Fund
Performance;
Investment Policies
and Practices
Item 5. Management of the Fund Transaction and Fund
Expenses; Fund,
Market, and Risk
Characteristics;
Organization and
Management
Item 6. Capital Stock and Other Distributions and
Securities Taxes; Organization
and Management
Item 7. Purchase of Securities Being Pricing Shares and
Offered Receiving Sale
Proceeds; Transaction
Procedures and Special
Requirements; Meeting
Requirements for New
Accounts; Shareholder
Services
PAGE 5
Item 8. Redemption or Repurchase Pricing Shares and
Receiving Sale
Proceeds; Transaction
Procedures and Special
Requirements;
Exchanging and
Redeeming Shares;
Shareholder Services
Item 9. Pending Legal Proceedings +
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History +
Item 13. Investment Objectives and Investment Objectives
Policies and Policies; Risk
Factors; Investment
Programs; Portfolio
Management Practices;
Investment
Restrictions;
Investment Performance
Item 14. Management of the Registrant Management of Funds
Item 15. Control Persons and Principal Principal Holders of
Holders of Securities Securities
Item 16. Investment Advisory and Other Investment Management
Services Services; Custodian;
Independent
Accountants, Legal
Counsel
Item 17. Brokerage Allocation Portfolio
Transactions; Code of
Ethics
Item 18. Capital Stock and Other Dividends and
Securities Distributions; Capital
Stock
Item 19. Purchase, Redemption and Redemptions in Kind;
Pricing of Securities Being Pricing of Securities;
Offered Net Asset Value Per
Share; Federal and
State Registration of
Shares
Item 20. Tax Status Tax Status
Item 21. Underwriters Distributor for Funds
Item 22. Calculation of Yield Quotations
of Money Market Funds +
PAGE 6
Item 23. Financial Statements Incorporated by
Reference from Annual
and Semi-Annual
Reports
PART C
Information required to be included in Part C is set forth under
the appropriate item, so numbered, in Part C to this Registration
Statement
___________________________________
+ Not applicable or negative answer
PAGE 7
The printed version of this prospectus appears in a dual column
format.
PAGE 8
Facts at a Glance
Investment Goal
Capital appreciation through investment in foreign companies or,
for the Global Stock Fund, investment in a mix of foreign and
U.S. companies.
Strategy
Global Stock Fund.
Invests primarily in well-established foreign and U.S. companies.
International Stock Fund.
Invests worldwide primarily in well-established, non-U.S.
companies.
International Discovery Fund.
Invests primarily in rapidly growing small- and medium-sized,
non-U.S. companies.
European Stock Fund.
Invests primarily in companies domiciled in Europe.
Japan Fund.
Invests primarily in Japanese companies.
New Asia Fund.
Invests primarily in companies in Asia and the Pacific Basin,
excluding Japan.
Emerging Markets Stock Fund.
Invests primarily in companies located in less developed
"emerging market" countries.
Latin America Fund.
Invests primarily in companies located in Latin America.
Risk/Reward:
Each fund's share price will fluctuate with changes in market,
economic, and foreign currency exchange conditions, as well as
with changes in portfolio company prospects. Generally, funds
investing in a single country, single or multiple emerging
markets, or principally in smaller companies represent higher
risk and potential reward than those with greater geographic
diversification and an orientation toward established companies
and more mature economies and markets.
Investor Profile
Those seeking higher appreciation potential over time and greater
diversification for their equity investments who can accept the
price declines associated with investing in stocks as well as the
special risks that accompany international investing.
Fees and Charges
100% no load. Redemption fees on three funds: the International
Discovery, Latin America, and Emerging Markets Stock Funds impose
a 2% redemption fee, payable to the funds, on shares held less
than one year. No sales charges; free telephone exchange; no 12b-
1 marketing fees.
Investment Manager
PAGE 9
Rowe Price-Fleming International, Inc. ("Price-Fleming"), was
founded in 1979 as a joint venture between T. Rowe Price
Associates, Inc. and Robert Fleming Holdings Ltd. As of December
31, 1995, Price-Fleming managed over $22.2 billion in foreign
stocks and bonds through its offices in Baltimore, London, Tokyo,
and Hong Kong.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, OR
ANY STATE SECURITIES COMMISSION, PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
T. Rowe Price
International Equity Funds
T. Rowe Price
International Funds, Inc.
March 1, 1996
Prospectus
Contents
1
About the Funds
Transaction and Fund Expenses
Financial Highlights
Fund, Market, and Risk
Characteristics
2
About Your Account
Pricing Shares and Receiving Sale Proceeds
Distributions and Taxes
Transaction Procedures and Special Requirements
3
More About the Funds
Organization and Management
Understanding Performance Information
Investment Policies and Practices
4
Investing With T. Rowe Price
Account Requirements and Transaction Information
Opening a New Account
Purchasing Additional Shares
Exchanging and Redeeming
Shareholder Services
This prospectus contains information you should know before
investing. Please keep it for future reference. A Statement of
Additional Information about the funds, dated March 1, 1996 has
been filed with the Securities and Exchange Commission and is
PAGE 10
incorporated by reference in this prospectus. To obtain a free
copy, call 1-800-638-5660.
1
About the Funds
Transaction and Fund Expenses
These tables should help you understand the kinds of expenses you
will bear directly or indirectly as a fund shareholder.
The first part of the table, "Shareholder Transaction Expenses,"
shows that you pay no sales charges. All the money you invest in
the fund goes to work for you, subject to the fees explained
below. "Annual Fund Expenses" provides an estimate of how much it
will cost to operate each fund (other than Global Stock Fund) for
each year, based on 1995 fiscal year expenses (and any expense
limitations shown in Table 3). These are costs you pay
indirectly, because they are deducted from the funds' total
assets before the daily share price is calculated and before
dividends and other distributions are made. In other words, you
will not see these expenses on your account statement.
_________________________________________________________________
Fund Expenses
Shareholder Transaction Expenses
International International European
Stock Discovery Stock Japan
_________________________________________________________________
Sales load
"charge" on
purchases None None None None
_________________________________________________________________
Sales load
"charge" on
reinvested
dividends None None None None
_________________________________________________________________
Redemption
fees None 2%a None None
_________________________________________________________________
Exchange
fees None None None None
_________________________________________________________________
PAGE 11
Emerging
New Latin Markets Global
Asia America Stock Stock
_________________________________________________________________
Sales load
"charge" on
purchases None None None None
_________________________________________________________________
Sales load
"charge" on
reinvested
dividends None None None None
_________________________________________________________________
Redemption
fees None 2%a 2%a None
_________________________________________________________________
Exchange
fees None None None None
_________________________________________________________________
Annual Fund Expenses Percentage of Fiscal 1995 Average Net
Assets
International International European
Stock Discovery Stock Japan
_________________________________________________________________
Management fee 0.69% 1.09% 0.84% 0.84%
_________________________________________________________________
Marketing
fees (12b-1) None None None None
_________________________________________________________________
Total other
(Shareholder
servicing,
custodial,
auditing, etc.) 0.22% 0.37% 0.36% 0.54%
_________________________________________________________________
Total fund
expenses 0.91% 1.46% 1.20% 1.38%
_________________________________________________________________
PAGE 12
Emerging
Markets Global
Stock Stock
New Latin (after (after
Asia America reduction)breduction)c
_________________________________________________________________
Management fee 0.84% 1.09% 0.00%b 0.65%c
_________________________________________________________________
Distribution
fee (12b-1) None None None None
_________________________________________________________________
Total other
(Shareholder
servicing,
custodial,
auditing, etc.) 0.31% 0.73% 1.75%b 0.65%
_________________________________________________________________
Total fund
expenses 1.15% 1.82% 1.75%b 1.30%c
_________________________________________________________________
a On shares purchased and held for less than one year (details
under "Contingent Redemption Fees" in "Pricing Shares and
Receiving Sale Proceeds").
b Had Price-Fleming not agreed to waive management fees and bear
certain expenses in accordance with an expense limitation
agreement, the Emerging Markets Stock Fund's management fee,
other expenses, and total expense ratio would have been 1.09%,
2.44%, and 3.53%, respectively.
c Figures based on projected 1996 fiscal year expenses. Had
Price-Fleming not agreed to waive management fees and bear
certain expenses in accordance with an expense limitation
agreement, the Global Stock Fund's management fee and total
expense ratios would have been 0.69% and 1.34%, respectively.
"Note: The fund charges a $5 fee for wire redemptions under
$5,000, subject to change without notice; and a small account
fee, when applicable (see "Small Account Fee" under "Transaction
Procedures and Special Requirements").
Table 1
The main types of expenses, which all mutual funds may charge
against fund assets, are:
PAGE 13
o
A management fee:
the percent of fund assets paid to the fund's investment manager.
Each fund's fee comprises both a group fee, 0.34% as of September
30, 1995, and an individual fund fee, as follows: International
Stock and Global Stock Funds 0.35%; European Stock, Japan, and
New Asia Funds 0.50%; International Discovery, Latin America,
and Emerging Markets Stock Funds 0.75%. Because the investment
programs of the funds are more costly to implement and maintain,
their management fees are higher than those paid by most U.S.
investment companies.
o
"Other" administrative expenses:
primarily the servicing of shareholder accounts, such as
providing statements, reports, disbursing dividends, as well as
custodial services. For the year ended October 31, 1995, the
funds paid the fees shown in Table 4 to T. Rowe Price Services,
Inc., for transfer and dividend disbursing functions and
shareholder services; T. Rowe Price Retirement Plan Services,
Inc., for recordkeeping services for certain retirement plans;
and to T. Rowe Price for accounting services.
o
Marketing or distribution fees:
an annual charge ("12b-1") to existing shareholders to defray the
cost of selling shares to new shareholders. T. Rowe Price funds
do not levy 12b-1 fees.
For further details on fund expenses, please see "Organization
and Management."
o
Hypothetical example:
Assume you invest $1,000, the fund returns 5% annually, expense
ratios remain as listed previously, and you close your account at
the end of the time periods shown. Your expenses would be:
The table at right is just an example; actual expenses can be
higher or lower than those shown.
Fund 1 Year 3 Years 5 Years 10 Years
International Stock $ 9 $29 $50 $112
International Discovery 15 46 80 175
European Stock 12 38 66 145
Japan 14 44 76 166
New Asia 12 37 63 140
Latin America 18 57 99 214
Emerging Markets Stock 18 55 95 206
Global Stock 13 41 71 157
Table 2
PAGE 14
Table 3 sets forth expense ratio limitations and the periods for
which they are effective. For each, Price-Fleming has agreed to
waive management fees and bear certain expenses which would cause
the fund's ratio of expenses to average net assets to exceed the
indicated percentage limitations. The expenses borne by Price-
Fleming are subject to reimbursement by the fund through the
indicated reimbursement date, but no reimbursement will be made
if it would result in the fund's expense ratio exceeding its
specific limit.
_________________________________________________________________
Expense Ratio Limitations
Limitation Expense Ratio Reimbursement
Period Limitation Date
_________________________________________________________________
Emerging Markets
Stock March 30, 1995- 1.75% October 31, 1998
October 31, 1996
_________________________________________________________________
Global Stock December 28, 1995- 1.30% October 31, 1999
October 31, 1997
_________________________________________________________________
Table 3
Service Fees Paid
Transfer Subaccounting Accounting
Agent Services
International Stock"$5,148,000 "$2,340,000" "$130,000 "
International
Discovery "691,000" "3,000" "125,000"
European Stock "713,000" "21,000" "100,000 "
Japan "346,000" "4,000" "100,000"
New Asia "3,130,000" "126,000" "110,000"
Latin America "628,000" "8,000" "108,000"
Emerging Markets
Stocka "27,000" "-0-" "58,000
a Fees listed are for the period beginning March 31, 1995
through October 31, 1995.
Note: "Global Stock Fund commenced operations on December 29,
1995, and is expected to pay transfer agent fees of approximately
$30,000 to T. Rowe Price Services, Inc. for the fiscal period
ending October 31, 1996, and fees for recordkeeping services for
retirement plans and accounting services of approximately $0 and
$83,334, respectively, the same period to T. Rowe Price
Retirement Plan Services, Inc. and T. Rowe Price,
respectively."
Table 2
PAGE 15
Financial Highlights
The following table provides information about each fund's
financial history. It is based on a single share outstanding
throughout each fiscal year. The respective table is part of
each fund's financial statements which are included in each
fund's annual report, and are incorporated by reference into the
Statement of Additional Information. This document is available
to shareholders upon request. The financial statements in the
annual report have been audited by the funds' independent
accountants whose respective unqualified reports cover the
periods shown.
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Ended Period (Loss) ments ties Income Gain butions
_________________________________________________________________
Stocka
1986 $9.04 $0.11 5.23 $5.34 $(0.11)$(1.38)$(1.49)
1987 12.89 0.12 0.74 0.86 (0.23) (4.98)(5.21)
1988 8.54 0.16 1.36 1.52 (0.16) (0.93)(1.09)
1989 8.97 0.16 1.94 2.10 (0.16) (0.67)(0.83)
1990 10.24 0.22 (1.13) (0.91) (0.16) (0.36)(0.52)
1991 8.81 0.15 1.22 1.37 (0.15) (0.49) (0.64)
1992 9.54 0.14 (0.47) (0.33) (0.16) (0.16) (0.32)
1993n 8.89 0.10 2.75 2.85 -- -- --
1994 11.74 0.09 1.30 1.39 (0.09) (0.20) (0.29)
1995 12.84 0.18 (0.19) (0.01) (0.12) (0.62) (0.74)
_________________________________________________________________
PAGE 16
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Value, (Includes Net Average to Aver- Turn-
Period End of Reinvested Assets ($ Net age Net over
Ended Period Dividends) Thousands) Assets Assets Rate
_________________________________________________________________
Stocka
1986 $12.89 61.3% $790,020 1.10% 0.89% 56.4%
1987 8.54 8.0% 642,463 1.14% 0.93% 76.5%
1988 8.97 17.9% 630,114 1.16% 1.78% 42.4%
1989 10.24 23.7% 970,214 1.10% 1.63% 47.8%
1990 8.81 (8.9%) 1,030,848 1.09% 2.16% 47.1%
1991 9.54 15.9% 1,476,309 1.10% 1.51% 45.0%
1992 8.89 (3.5%) 1,949,631 1.05% 1.49% 37.8%
1993n 11.74 32.1% 3,746,055 1.01%m 1.52%m 29.8%m
1994 12.84 12.0% 6,205,713 0.96% 1.11% 22.9%
1995 12.09 0.4% 6,385,905 0.91%q 1.56% 17.8%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Ended Period (Loss) ments ties Income Gain butions
_________________________________________________________________
Discovery
1989b $10.00 $0.14c $ 4.03 $4.17 $(0.13) $(0.10)$(0.23)
1990 13.94 0.14c (1.91) (1.77) (0.15) (0.27) (0.42)
1991 11.75 0.13c 1.24 1.37 (0.13) -- (0.13)
1992 12.99 0.13c (1.31) (1.18) (0.13) -- (0.13)
1993n 11.68 0.07c 4.41 4.48 -- -- --
1994 16.16 0.04 1.52 1.56 (0.07) (0.02) (0.09)
1995 17.63 0.10 (2.38) (2.28) (0.06) (0.87) (0.93)
_________________________________________________________________
PAGE 17
End of Period
Ratio
of
Ratio Net
of Invest-
Redemp- Net Total Expenses ment Port-
tion Fees Asset Return to Income folio
Added to Value, (Includes Net Average to Aver-Turn-
Period Paid-in- End of ReinvestedAssets ($ Net age Netover
Ended Capital Period Dividends)Thousands)Assets Assets Rate
_________________________________________________________________
Discovery
1989b -- $13.94 41.8%c $ 61,166 1.50%cm 0.76%cm38.3%m
1990 -- 11.75 (12.8%)c 136,660 1.50%c 1.10%c 44.0%
1991 -- 12.99 11.7%c 166,819 1.50%c 1.03%c 56.3%
1992 -- 11.68 (9.1%)c 166,362 1.50%c 1.07%c 38.0%
1993n -- 16.16 38.4%c 329,001 1.50%cm 0.81%cm71.8%m
1994 -- 17.63 9.7% 503,442 1.50% 0.38% 57.4%
1995 $0.01 14.43 (13.1)% 325,374 1.50%q 0.55% 43.5%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Ended Period (Loss) ments ties Income Gain butions
_________________________________________________________________
European Stock
1990d $10.00 $0.24e $(0.56) $(0.32) $(0.20) -- $(0.20)
1991 9.48 0.10 0.59 0.69 (0.08) -- (0.08)
1992 10.09 0.14 (0.70) (0.56) (0.17) -- (0.17)
1993n 9.36 0.12 1.89 2.01 -- -- --
1994 11.37 0.14 1.26 1.40 (0.04) $(0.01)(0.05)
1995 12.72 0.20 1.60 1.80 (0.12) (0.05)(0.17)
_________________________________________________________________
PAGE 18
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Value, (Includes Net Average to Aver- Turn-
Period End of Reinvested Assets ($ Net age Net over
Ended Period Dividends) Thousands) Assets Assets Rate
_________________________________________________________________
European Stock
1990d $9.48 (3.2%)e $ 99,447 1.75%em 2.30%em 34.9%m
1991 10.09 7.3% 103,977 1.71% 1.04% 57.7%
1992 9.36 (5.6%) 173,798 1.48% 1.23% 52.0%
1993n 11.37 21.5% 265,784 1.35%m 1.79%m 21.3%m
1994 12.72 12.4% 337,498 1.25% 1.19% 24.5%
1995 14.35 14.4% 490,573 1.20% 1.75% 17.2%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Ended Period (Loss) ments ties Income Gain butions
_________________________________________________________________
Japan
1992f $10.00 $(0.01)g $(1.35) $(1.36) -- -- --
1993n 8.64 (0.05)g 2.99 2.94 -- -- --
1994 11.58 (0.06)g 0.97 0.91 -- $(0.85) $(0.85)
1995 11.64 (0.04) (1.40) (1.44)$(0.04)(0.81) (0.81)
_________________________________________________________________
PAGE 19
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Value, (Includes Net Average to Aver- Turn-
Period End of Reinvested Assets ($ Net age Net over
Ended Period Dividends) Thousands) Assets Assets Rate
_________________________________________________________________
Japan
1992f $ 8.64 (13.4%)g $ 45,792 1.50%g (0.22)%g 41.6%
1993n 11.58 33.7%g 87,163 1.50%gm (0.58)%gm 61.4%m
1994 11.64 9.3%g 203,303 1.50%g (0.68)%g 61.5%
1995 9.39 (12.9)% 181,383 1.50% (0.48)% 62.4%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Ended Period (Loss) ments ties Income Gain butions
_________________________________________________________________
New Asiaj
1990h $5.00 $0.04i $0.04 $0.08 $(0.04) -- $(0.04)
1991 5.04 0.10i 0.87 0.97 (0.10) -- (0.10)
1992 5.91 0.10 0.56 0.66 (0.10) $(0.13) (0.23)
1993n 6.34 0.03 3.51 3.54 -- -- --
1994 9.88 0.06 0.36 0.42 (0.04) (0.19) (0.23)
1995 10.07 0.08 (1.07) (0.99) (0.07) (0.89) (0.96)
_________________________________________________________________
PAGE 20
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Value, (Includes Net Average to Aver- Turn-
Period End of Reinvested Assets ($ Net age Net over
Ended Period Dividends) Thousands) Assets Assets Rate
_________________________________________________________________
New Asiaj
1990h $5.04 1.6%i $ 10,986 1.75%im 2.10%im 3.2%m
1991 5.91 19.3%i 102,922 1.75%i 1.75%i 49.0%
1992 6.34 11.2% 314,504 1.51% 1.64% 36.3%
1993n 9.88 55.8% 1,650,450 1.29%m 1.02%m 40.4%m
1994 10.07 4.1% 2,302,841 1.22% 0.85% 63.2%
1995 8.12 (9.7)% 1,908,893 1.15% 0.97% 63.7%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from Redemp-
Value, Invest- (Loss) Invest- tion Fees Net Net
Begin- ment on ment Added to Invest- Real-
Period ning of Income Invest- Activi- Paid-in- ment lized
Ended Period (Loss) ments ties Capital Income Gain
_________________________________________________________________
Latin America
1994k $10.00 $(0.03) $ 0.29l $ 0.26 $0.06 -- --
1995 10.32 0.05 (3.92) (3.87) 0.04 -- --
_________________________________________________________________
PAGE 21
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Total Value, (Includes Net Averageto Aver- Turn-
PeriodDistri- End of Reinvested Assets ($ Net age Net over
Ended butions Period Dividends)Thousands) Assets Assets Rate
_________________________________________________________________
Latin America
1994k -- $10.32 3.2% $198,435 1.99%m (0.35)%m 12.2%m
1995 -- 6.49 (37.1)% 148,600 1.82% 0.76% 18.9%
_________________________________________________________________
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from Redemp-
Value, Invest- (Loss) Invest- tion Fees Net Net
Begin- ment on ment Added to Invest- Real-
Period ning of Income Invest- Activi- Paid-in- ment lized
Ended Period (Loss) ments ties Capital Income Gain
_________________________________________________________________
Emerging Markets Stock
1995o $10.00 $0.02p $0.44r $0.46 $0.02 -- --
_________________________________________________________________
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Total Value, (Includes Net Averageto Aver- Turn-
PeriodDistri- End of Reinvested Assets ($ Net age Net over
Ended butions Period Dividends)Thousands) Assets Assets Rate
_________________________________________________________________
Emerging Markets Stock
1995o -- $10.48 4.8%p $14,399 1.75%mp 0.54%mp 28.8%m
_________________________________________________________________
PAGE 22
a All per-share figures reflect the 2-for-1 stock split
effective August 31, 1987.
b For the period December 30, 1988 (commencement of
operations) to December 31, 1989.
c Excludes expenses in excess of a 1.50% voluntary expense
limitation in effect through December 31, 1993.
d For the period February 28, 1990 (commencement of
operations) to December 31, 1990.
e Excludes expenses in excess of a 1.75% voluntary expense
limitation in effect through December 31, 1991.
f For the period December 30, 1991 (commencement of
operations) to December 31, 1992.
g Excludes expenses in excess of a 1.50% voluntary expense
limitation in effect through October 31, 1995.
h For the period September 28, 1990 (commencement of
operations) to December 31, 1990.
i Excludes expenses in excess of a 1.75% voluntary expense
limitation in effect through December 31, 1992.
j All per share figures reflect the 2-for-1 stock split
effective May 27, 1994.
k For the period December 29, 1993 (commencement of
operations) to October 31, 1994.
l 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.
m Annualized.
n For the ten months ended October 31, 1993. Fiscal year-end
changed from December 31 to October 31.
o For the period March 31, 1995 (commencement of operations)
to October 31, 1995.
p Excludes expenses in excess of a 1.75% voluntary expense
limitation in effect through October 31, 1996.
q Beginning in fiscal 1995, includes expenses paid indirectly.
r 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 the fund's
shares in relation to fluctuating market values for the
investment portfolio.
_________________________________________________________________
Table 5
PAGE 23
Fund, Market, and Risk Characteristics: What to Expect
To help you decide whether an international or global equity fund
is appropriate for you, this section takes a closer look at their
investment objectives and approach.
Why invest in an international fund?
There are three main reasons:
o
Expanded investment opportunities. More than half of the world's
total stock market capitalization and two-thirds of global GNP
consists of non-U.S. stocks and companies.
o
The potential for higher long-term returns. For example, foreign
stocks represented by the Morgan Stanley EAFE Index (Europe,
Australia, Far East) outperformed U.S. stocks measured by the S&P
500 Stock Index in all but two rolling 10-year periods from 1981
through 1995. Of course, during this time there were shorter
periods when U.S. stocks outperformed.
o
Potentially reduced overall volatility for an all U.S. stock
portfolio. Since foreign stock markets tend to move
independently of the U.S. market and each other, spreading
investments across a number of markets can help smooth out
fluctuations in the returns of your total equity holdings.
Why invest in a global fund?
While essentially providing the three benefits noted above,
global funds generally offer a more conservative way to
participate in international equity markets. By investing a
portion of assets in U.S. stocks, which often move counter to
foreign stocks and are not subject to currency risk, global funds
temper the greater volatility that tends to be associated with a
fund investing exclusively in foreign equity securities.
What are the funds' objectives and investment programs?
Global Stock Fund.
The fund's objective is long-term growth of capital through
investments primarily in common stocks of established companies
throughout the world, including the U.S. The fund will diversify
broadly by investing in a variety of industries in developed,
newly industrialized, and emerging markets. Normally, the fund
will invest in at least five countries, one of which will be the
U.S. While the fund can purchase stocks without regard to a
company's market capitalization, investments will generally be
concentrated in established large and, to a lesser extent,
medium-sized companies. The percentage of the fund's assets
invested in U.S. and foreign stocks will vary over time in
accordance with the managers outlook.
PAGE 24
International Stock Fund.
The fund's objective is long-term growth of capital through
investments primarily in common stocks of established, non-U.S.
companies. The fund expects to invest substantially all of its
assets outside the U.S. and to diversify broadly among countries
throughout the world--developed, newly industrialized, and
emerging.
International Discovery Fund.
Depending on conditions, the International Discovery Fund's
portfolio should be comprised of at least 10 countries and 100
different companies.
This fund's objective is long-term growth of capital through
investments primarily in common stocks of rapidly growing, small-
to medium-sized non-U.S. companies. Such companies may be found
in both developed and emerging markets. Traditionally, they are
more dynamic and offer greater growth potential than larger
companies, but they are often overlooked or undervalued by
investors. Smaller companies are generally riskier than their
larger counterparts because they may have limited product lines,
capital, and managerial resources. Their securities may trade
less frequently and with greater price swings.
European Stock Fund.
The fund's objective is long-term growth of capital through
investments primarily in common stocks of both large and small
European companies. Current income is a secondary objective. The
fund seeks to take advantage of opportunities arising from such
trends as privatization, the reduction of trade barriers, and the
potential growth of the emerging economies of Eastern Europe.
Normally, at least five countries will be represented in the
portfolio, and investments may be made in any of the countries
listed below, as well as others as their markets develop.
Primary Emphasis:
France Spain
Germany Sweden
Holland Switzerland
Italy United Kingdom
Others:
Austria Luxembourg Hungary
Belgium Norway Poland
Denmark Portugal Slovakia
Finland Czech Republic Turkey
Ireland Greece Russia
Israel
Japan Fund.
Japanese stocks represent approximately one-quarter of the
world's stock market capitalization.
PAGE 25
This fund's objective is long-term growth of capital through
investments in common stocks of large and small companies
domiciled or with primary operations in Japan. Assets will
normally be invested across a wide range of industries and
companies (both small and large). While a single-country fund may
normally be considered more risky than a multi-country fund,
Japan has a highly developed and diverse economy which accounts
for approximately 17% of the world's output.
Investors should be aware that the U.S. dollar has fallen in
value against the Japanese yen for many years, increasing returns
on Japanese investments for U.S. investors. There is no assurance
this currency trend will continue, and its reversal would
adversely affect the fund's total return.
Note:
For special pricing and transaction information about the Japan
Fund, please see "Pricing Shares and Receiving Sale Proceeds."
New Asia Fund.
Investors should keep in mind that recent growth rates among
Southeast Asian economies and fund returns may not be
sustainable.
The fund's objective is long-term growth of capital through
investment in large and small companies domiciled or with primary
operations in Asia, excluding Japan. The fund may also invest in
Pacific Rim countries such as Australia and New Zealand.
Countries in which the fund may invest include those listed in
the following paragraph as well as others in the region, such as
China and Pakistan, as their markets become more accessible.
Investments will represent a minimum of five countries.
Australia Indonesia Philippines Taiwan
Hong Kong Malaysia Singapore Thailand
India New Zealand South Korea
Economic growth among the Southeast Asia economies has
outstripped that in both Europe and Japan in recent years, and
the region's rising prosperity has been reflected in generally
strong investment returns.
Emerging Markets Stock Fund.
The fund's objective is long-term growth of capital through
investment primarily in common stocks of large and small
companies domiciled, or with primary operations, in emerging
markets. An emerging market includes any country defined as
emerging or developing by the International Bank for
Reconstruction and Development (World Bank), International
Finance Corporation, or the United Nations. The fund's
PAGE 26
investments are expected to be diversified geographically across
emerging markets in Latin America, Asia, Europe, Africa and Mid
East.
Countries in which the fund may invest are listed below and
others will be added as opportunities develop:
Asia: Latin America: Europe: Africa and
the Middle
East:
China Argentina Portugal South Africa
Indonesia Brazil Hungary Nigeria
Korea Chile Turkey Zimbabwe
Malaysia Colombia Poland Botswana
Thailand Mexico Russia Jordan
India Venezuela Czech Republic Tunisia
Philippines Peru Slovakia Morocco
Taiwan Belize Greece Egypt
Hong Kong Baltic States Israel
Singapore Austria
Sri Lanka
Pakistan
Mauritius
This fund is intended for investors with long-term investment
horizons who are looking for an aggressive approach to
international investing. Many emerging countries are experiencing
substantial economic and political restructurings, and their
developing financial markets offer the potential for significant
capital appreciation. Many of these countries are moving from
one-party rule to a multi-party democracy; from agrarian to
industrialized economies; and from nationalized to free market,
privatized industries. These transactions are proceeding smoothly
in some markets but not in others. There is no guarantee
favorable trends will continue. Companies in emerging markets
that successfully navigate these changes offer investors the
prospect for earnings growth far more rapid than that typically
generated by companies in more mature, developed markets.
Investors in this fund, however, should be comfortable with the
risks of international investing and be prepared for substantial
share price volatility.
Latin America Fund.
The Latin America Fund is registered as "non-diversified." This
means it may invest a greater portion of assets in a single
company and own more of the company's voting securities than is
permissible for a "diversified" fund.
PAGE 27
The fund's objective is long-term growth of capital through
investment primarily in common stocks of companies domiciled, or
with primary operations, in Latin America. Initially the fund
will focus on Mexico, Brazil, Chile, Argentina, Venezuela, and
Colombia, and the portfolio is normally expected to invest in at
least four countries. Other countries will be added as
opportunities arise and conditions permit.
The fund expects to make substantial investments (at times more
than 25% of total assets) in the telephone companies of various
Latin America countries. These utilities play a critical role in
a country's economic development, but their stocks could be
adversely affected if trends favoring development were to be
reversed.
The Latin American countries in general have less developed
economies than other regions in which Price-Fleming invests and
may continue to be subject to the effects of unpredictable
political and economic conditions. A number of countries have
legacies of political instability, hyperinflation, and currency
devaluations versus the dollar (which would adversely affect
returns to U.S. investors).
What securities can the funds invest in other than common stocks?
Each of the funds expects to invest substantially all of its
assets in common stocks. However, the funds may also invest in a
variety of other equity-related securities, such as preferred
stocks, warrants and convertible securities, as well as corporate
and governmental debt securities, when considered consistent with
the funds' investment objectives and program. The funds may also
engage in a variety of investment management practices, such as
buying and selling futures and options. Under normal market
conditions, the funds' investments in securities other than
common stocks are limited to no more than 35% of total assets.
However, for temporary defensive purposes, the funds may invest
all or a significant portion of their assets in U.S. government
and corporate debt obligations. The funds, (other than Global
Stock Fund), will not purchase any debt security which at the
time of purchase is rated below-investment-grade. The Global
Stock Fund can invest up to 5% of its assets in below investment
grade debt securities. This would not prevent a fund from
retaining a security downgraded to below investment grade after
purchase.
What are the major risks associated with international and global
investing and these funds?
Stock prices of foreign and U.S. companies are subject to many
of the same influences, such as general economic conditions,
PAGE 28
company and industry earnings prospects, and investor psychology.
However, investing in foreign securities also involves additional
risks which can increase the potential for the losses in the
funds. These risks can be significantly magnified for investments
in emerging markets. Global investing seeks to temper the risks
of pure international investing by placing a portion of assets in
U.S. securities, which are not directly subject to currency
risk.
Exchange rate movements can be large and can last for extended
periods.
o
Currency fluctuations.
Transactions in foreign securities are conducted in local
currencies, so dollars must often be exchanged for another
currency when a stock is bought or sold or a dividend is paid.
Likewise, share price quotations and total return information
reflect conversion into dollars. Fluctuations in foreign exchange
rates can significantly increase or decrease the dollar value of
a foreign investment, boosting or offsetting its local market
return. For example, if a French stock rose 10% in price during a
year, but the U.S. dollar gained 5% against the french franc
during that time, the U.S. investor's return would be reduced to
5%. This is because the franc would "buy" fewer dollars at the
end of the year than at the beginning, or, conversely, a dollar
would buy more francs.
o
Costs.
It is more expensive for U.S. investors to trade in foreign
markets than in the U.S. Mutual funds offer a very efficient way
for individuals to invest abroad, but the overall expense ratios
of international funds are usually somewhat higher than those of
typical domestic stock funds.
o
Political and economic factors.
While certain countries have made progress in economic growth,
liberalization, fiscal discipline, and political and social
stability, there is no assurance these trends will continue.
The economies, markets, and political structures of a number of
the countries in which each fund can invest do not compare
favorably with the United States and other mature economies in
terms of wealth and stability. Therefore, investments in these
countries will be riskier and more subject to erratic and abrupt
price movements. This is especially true for emerging markets
such as those found in Latin America, China, and certain Asian
countries, Eastern Europe, and Africa. However, even investment
in countries with highly developed economies is subject to risk.
PAGE 29
For example, the Japanese stock market historically has
experienced wide swings in value.
Some economies are less well developed (for example, Latin
America, Eastern Europe, African and certain Asian countries),
overly reliant on particular industries, and more vulnerable to
the ebb and flow of international trade, trade barriers, and
other protectionist or retaliatory measures (for example, Japan,
Southeast Asia, Latin America, Eastern Europe, and Africa). This
makes investment in such markets significantly riskier than in
other countries. Some countries, particularly in Latin America
and Africa, are grappling with severe inflation and high levels
of national debt. Investments in countries that have recently
begun moving away from central planning and state-owned
industries toward free markets, such as Eastern Europe, China,
and Africa, should be regarded as speculative.
Certain countries have histories of instability and upheaval (for
example, Latin America and Africa) with respect to their internal
politics that could cause their governments to act in a
detrimental or hostile manner toward private enterprise or
foreign investment. Such actions, for example, nationalizing a
company or industry, expropriating assets, or imposing punitive
taxes, could have a severe effect on security prices and impair a
fund's ability to repatriate capital or income. Significant
external risks, including war, currently affect some countries.
Governments in many emerging market countries participate to some
degree in their economies and securities markets.
o
Legal, regulatory, and operational.
For more details on potential risks of foreign investments,
please see "Investment Policies and Practices."
Certain countries lack uniform accounting, auditing, and
financial reporting standards, have less governmental supervision
of financial markets than in the U.S., do not honor legal rights
enjoyed in the U.S., and have settlement practices, such as
delays, which could subject the fund to risks of loss not
customary in the U.S. In addition, securities markets in these
countries have substantially lower trading volumes than U.S.
markets, resulting in less liquidity and more volatility than
experienced in the U.S.
o
Pricing.
Portfolio securities may be listed on foreign exchanges that are
open on days (such as Saturdays) when the funds do not compute
their prices. As a result, the fund's net asset value may be
significantly affected by trading on days when shareholders
PAGE 30
cannot make transactions. (For specific information on the Tokyo
Stock Exchange, please see "Pricing Shares and Receiving Sale
Proceeds.")
What can I expect in terms of price volatility?
Each fund's share price will fluctuate. When you sell your
shares, you may lose money.
Like U.S. stock investments, common stocks of foreign companies
offer investors a way to build capital over time. Nevertheless,
the long-term rise of foreign stock prices as a group has been
punctuated by periodic declines. Share prices of even the best
managed, most profitable corporations, whether U.S. or foreign,
are subject to market risk, which means they can fluctuate
widely.
In less well developed stock markets, such as those in Latin
America, Eastern Europe, Africa, and certain Asian countries,
volatility may be heightened by actions of a few major investors.
For example, substantial increases or decreases in cash flows of
mutual funds investing in these markets could significantly
affect local stock prices and, therefore, fund share prices.
How does the portfolio manager try to reduce risk?
The principal tools are intensive research and diversification;
currency hedging techniques are used from time to time.
o
In addition to conducting on-site research in portfolio countries
and companies, Price-Fleming has close ties with investment
analysts based throughout the world.
o
Diversification significantly reduces but does not eliminate
risk. The impact on a fund's share price from a drop in the price
of a particular stock is reduced substantially by investing in a
portfolio with dozens of different companies. Likewise, the
impact of unfavorable developments in a particular country is
reduced in the multi-country funds because investments are spread
among many countries.
Portfolio managers keep close watch on individual investments as
well as on political and economic trends in each country and
region. Holdings are adjusted according to the manager's analysis
and outlook.
o
While currency translation does affect the shorter-run returns
provided by foreign stocks, its influence on longer-term results
generally has been outweighed by price trends on local stock
exchanges.
As a result, under normal conditions, the funds do not engage in
extensive hedging programs. However, when foreign exchange rates
PAGE 31
are expected to be unfavorable for U.S. investors, fund managers
can hedge the risk through use of currency forwards and options.
In a general sense, these tools allow a manager to exchange
currencies in the future at a rate specified in the present. (For
more details, please see "Foreign Currency Transactions" under
"Investment Policies and Practices.") If the manager's forecast
is wrong, the hedge may cause a loss. Also, it may be difficult
or not practical to hedge currency risk in many emerging
countries.
What are some of the opportunities represented by major overseas
markets?
o
Europe:
Market deregulation, privatization, and lower trade barriers have
expanded the range of investment opportunities. The emergence of
capitalist economics in Eastern Europe could, over the long term,
open previously inaccessible markets and also provide a lower-
cost, skilled labor pool, which may further stimulate European
economies.
o
Asia:
No longer solely dependent on the Japanese "engine" for growth,
the newly industrialized countries of the Pacific Rim are powered
by worldwide exports and, increasingly, by strong inter-regional
demand. In addition, China's move toward a more capitalistic
economy has positive implications for the entire region's future.
o
Japan:
Although its growth rate has slowed, the longer-term outlook
for Japan's economy is positive. In addition to its productive
labor force, technological expertise, and commitment to capital
investment, Japan's shift to a more domestic-oriented economy
could promote future growth and create new investment
opportunities.
o
Latin America:
After years of stagnation, some countries here are experiencing
rising growth rates that reflect lower trade barriers,
privatization of industry, progress on reducing inflation, and
restructuring of national debt burdens.
o
Emerging markets:
A number of countries in Latin America, Eastern Europe, Asia, and
Africa are emerging from economic periods of stagnation and offer
the potential for growth exceeding that of the United States and
other developed countries. The emerging market countries
PAGE 32
initiating market-based economic reforms could benefit from
significant amounts of capital inflows.
How can I decide which fund is most appropriate for me?
The fund or funds you select should not be relied upon as a
complete investment program, nor be used for short-term trading
purposes.
First, be sure that your investment objective is the same as the
funds': capital appreciation over time. If you will need the
money you plan to invest in the near future, the fund is not
suitable.
Second, your decision should take into account whether you have
any other foreign stock investments. If not, you may wish to
invest in the most diversified funds to gain the broadest
exposure to opportunities overseas. If you are supplementing
existing holdings, you may wish to narrow your focus to a region
or country-specific fund.
Third, consider your risk tolerance and the risk profile of the
various funds.
_________________________________________________________________
International Funds Comparison Chart
Fund Geographic Type of Risk Profile
Emphasis Company (Relative to
Each Other)
_________________________________________________________________
Global Stock Worldwide Large, Most
(including U.S.) well Conservative
established
_________________________________________________________________
International Worldwide Large, Relatively
Stock (excluding U.S.) well Conservative
established
_________________________________________________________________
International Worldwide Small to Aggressive
Discovery (excluding U.S.) medium-sized
_________________________________________________________________
European Stock Europe (including All sizes Moderate
Eastern Europe)
_________________________________________________________________
New Asia Far East and All sizes Aggressive
Pacific Basin
(excluding Japan)
_________________________________________________________________
Japan Japan All sizes Moderate
_________________________________________________________________
PAGE 33
Emerging Markets Currently All sizes Very
Stock Latin America, Aggressive
the Far East,
Europe, Africa,
and the Middle
East
_________________________________________________________________
Latin America Currently Mexico, All sizes Very
Brazil, Chile, Aggressive
Argentina,
Venezuela,
Colombia
_________________________________________________________________
Table 6
Is there other information I need to review before making a
decision?
Be sure to review the "Investment Policies and Practices"
section, which discusses the following: Types of Portfolio
Securities (common and preferred stocks, convertible securities
and warrants, fixed income securities, hybrid instruments,
passive foreign investment companies, and private placements);
and Types of Management Practices (cash position, borrowing money
and transferring assets, foreign currency transactions, futures
and options, lending of portfolio securities, and portfolio
turnover).
2
About Your Account
Pricing Shares and Receiving Sale Proceeds
Here are some procedures you should know when investing in a T.
Rowe Price international fund.
How and when shares are priced
The various ways you can buy, sell, and exchange shares are
explained at the end of this prospectus and on the New Account
Form. These procedures may differ for institutional and employer-
sponsored retirement accounts.
The share price (also called "net asset value" or NAV per share)
for each fund, except the Japan Fund, is calculated at 4 p.m. ET
each day the New York Stock Exchange is open for business. The
share price for the Japan Fund is calculated at 4 p.m. ET each
day the New York Stock Exchange and the Tokyo Stock Exchange are
both open for business. To calculate the NAV, a fund's assets are
valued and totaled, liabilities are subtracted, and the balance,
called net assets, is divided by the number of shares
outstanding.
PAGE 34
The calculation of each fund's net asset value normally will not
take place contemporaneously with the determination of the value
of the fund's portfolio securities. Events affecting the values
of portfolio securities that occur between the time their prices
are determined and the time each fund's net asset value is
calculated will not be reflected in the fund's net asset value
unless Price-Fleming, under the supervision of the fund's Board
of Directors, determines that the particular event should be
taken into account in computing the fund's net asset value.
When filling out the New Account Form, you may wish to give
yourself the widest range of options for receiving proceeds from
a sale.
How your purchase, sale, or exchange price is determined
If we receive your request in correct form before 4 p.m. ET, your
transaction will be priced at that day's NAV. If we receive it
after 4 p.m., it will be priced at the next business day's NAV.
We cannot accept orders that request a particular day or price
for your transaction or any other special conditions.
Note:
The time at which transactions and shares are priced and the time
until which orders are accepted may be changed in case of an
emergency or if the New York Stock Exchange closes at a time
other than 4 p.m. ET.
Japan Fund: Pricing and Transactions.
The fund will not process orders on any other day when either the
New York or Tokyo Stock Exchange is closed. Orders received on
such days will be priced on the next day the fund computes its
net asset value. As such, you may experience a delay in
purchasing or redeeming fund shares.
Exchanges.
If you wish to exchange into the Japan Fund on a day the New York
Stock Exchange is open but the Tokyo Stock Exchange is closed,
the exchange out of the other T. Rowe Price fund will be
processed on that day but Japan Fund shares will not be purchased
until the day the Japan Fund reopens. If you wish to exchange out
of the Japan Fund on a day when the New York Stock Exchange is
open but the Tokyo Stock Exchange is closed, the exchange will be
delayed until the Japan Fund reopens.
The Tokyo Stock Exchange is scheduled to be closed on the
following weekdays: In 1996--January 1, 2, 3, 15; February 12;
March 20; April 29; May 3, 6; September 16, 23; October 10;
November 4; and December 23, 31. In 1997--January 1, 2, 3, 15;
February 11; March 20; April 29; May 5; July 21; September 15,
23; October 10; November 24; and December 23. If the Tokyo Stock
Exchange closes on dates not listed, the fund will not be priced
on those dates.
PAGE 35
How you can receive the proceeds from a sale
If for some reason we cannot accept your request to sell
shares, we will contact you.
If your request is received by 4 p.m. ET in correct form,
proceeds are usually sent on the next business day. Proceeds can
be sent to you by mail, or to your bank account by ACH transfer
or bank wire. Proceeds sent by ACH transfer should be credited
the second day after the sale. ACH (Automated Clearing House) is
an automated method of initiating payments from and receiving
payments in your financial institution account. ACH is a payment
system supported by over 20,000 banks, savings banks, and credit
unions, which electronically exchange the transactions primarily
through the Federal Reserve Banks. Proceeds sent by bank wire
should be credited to your account the next business day.
Exception:
o
Under applicable tax law, the funds may be required to limit
their gains from hedging in foreign currency forwards, futures,
and options. Although the funds are expected to comply with such
limits, the extent to which these limits apply is subject to tax
regulations as yet unissued. Hedging may also result in the
application of the mark-to-market and straddle provisions of the
Internal Revenue Code. These provisions could result in an
increase (or decrease) in the amount of taxable dividends paid by
the funds and could affect whether dividends paid by the funds
are classified as capital gains or ordinary income.
Contingent Redemption Fees (Latin America, International
Discovery, and Emerging Markets Stock Funds).
The funds can experience substantial price fluctuations and
are intended for long-term investors. Short-term "market timers"
who engage in frequent purchases and redemptions can disrupt the
funds' investment programs and create additional transaction
costs that are borne by all shareholders. For these reasons,
these funds each assess a 2% fee on redemptions (including
exchanges) of fund shares held for less than one year.
Redemption fees will be paid to the fund to help offset
transaction costs. The fund will use the "first-in, first-out"
(FIFO) method to determine the one-year holding period. Under
this method, the date of the redemption or exchange will be
compared with the earliest purchase date of shares held in the
account. If this holding period is less than one year, the fee
will be assessed.
In determining "one year" the funds will use the anniversary
date of a transaction. Thus, shares purchased on March 1, 1996,
for example, will be subject to the fee if they are redeemed
PAGE 36
prior to March 1, 1997. If they are redeemed on or after March 1,
1997, they will not be subject to the fee.
The fee does not apply to any shares purchased through
reinvestment of dividends or to shares held in retirement plans
such as 401(k), 403(b), 457, Keogh, SEP-IRA, profit sharing, and
money purchase pension accounts. The fee does apply to shares
held in IRA accounts and to shares purchased through automatic
investment plans (described under "Shareholder Services").
Useful Information on Distributions and Taxes
Dividends and Other Distributions
All net investment income and realized capital gains are
distributed to shareholders.
Dividend and capital gain distributions are reinvested in
additional fund shares in your account unless you select another
option on your New Account Form. The advantage of reinvesting
distributions arises from compounding; that is, you receive
income dividends and capital gain distributions on a rising
number of shares.
Distributions not reinvested are paid by check or transmitted to
your bank account via ACH. If the Post Office cannot deliver your
check, or if your check remains uncashed for six months, a fund
reserves the right to reinvest your distribution check in your
account at the then current NAV and to reinvest all subsequent
distributions in shares of the fund.
Income dividends
o
The funds declare and pay dividends (if any) annually.
o
The dividends of each fund (other than Global Stock Fund) will
not be eligible for the 70% deduction for dividends received by
corporations, if, as expected, none of the funds' income consists
of dividends paid by U.S. corporations. The dividends of the
Global Stock Fund will be eligible for the 70% deduction for
dividends received by corporations only to the extent the fund's
income consists of dividends paid by U.S. corporations.
Capital gains
o
A capital gain or loss is the difference between the purchase and
sale price of a security.
o
If a fund has net capital gains for the year (after subtracting
any capital losses), they are usually declared and paid in
December to shareholders of record on a specified date that
month.
PAGE 37
Tax Information
You will be sent timely information for your tax filing needs.
You need to be aware of the possible tax consequences when:
o
A fund makes a distribution to your account, or
o
You sell fund shares, including an exchange from one fund to
another.
Taxes on fund redemptions.
When you sell shares in any fund, you may realize a gain or loss.
An exchange from one fund to another is still a sale for tax
purposes.
In January, you will be sent Form 1099-B, indicating the date
and amount of each sale you made in the fund during the prior
year. This information will also be reported to the IRS. For
accounts opened new or by exchange in 1983 or later we will
provide you the gain or loss of the shares you sold during the
year, based on the "average cost" method. This information is not
reported to the IRS, and you do not have to use it. You may
calculate the cost basis using other methods acceptable to the
IRS, such as "specific identification."
To help you maintain accurate records, we send you a
confirmation immediately following each transaction (except for
systematic purchases and redemptions) and a year-end statement
detailing all your transactions in each fund account during the
year.
Taxes on fund distributions.
Capital gain distributions are taxable whether reinvested in
additional shares or received in cash.
The following summary does not apply to retirement accounts, such
as IRAs, which are tax-deferred until you withdraw money from
them.
In January, you will be sent Form 1099-DIV indicating the tax
status of any dividend and capital gain distribution made to you.
This information will also be reported to the IRS. All
distributions made by the funds are taxable to you for the year
in which they were paid. The only exception is that distributions
declared during the last three months of the year and paid in
January are taxed as though they were paid by December 31. You
will be sent any additional information you need to determine
your taxes on fund distributions, such as the portion of your
dividend, if any, that may be exempt from state income taxes.
Short-term capital gains are taxable as ordinary income and long-
term gains are taxable at the applicable long-term gain rate. The
gain is long- or short-term depending on how long the fund held
PAGE 38
the securities, not how long you held shares in the fund. If you
realize a loss on the sale or exchange of fund shares held six
months or less, your short-term loss recognized is reclassified
to long-term to the extent of any long-term capital gain
distribution received.
Distributions resulting from the sale of certain foreign
currencies and debt securities, to the extent of foreign exchange
gains, are taxed as ordinary income or loss. If the fund pays
nonrefundable taxes to foreign governments during the year, the
taxes will reduce the fund's dividends, but will still be
included in your taxable income. However, you may be able to
claim an offsetting credit or deduction on your tax return for
your portion of foreign taxes paid by the fund.
Tax effect of buying shares before a capital gain distribution.
If you buy shares shortly before or on the "record date"--the
date that establishes you as the person to receive the upcoming
distribution--you will receive, in the form of a taxable
distribution, a portion of the money you just invested. Therefore
you may also wish to find out a fund's record date(s) before
investing. Of course, a fund's share price may, at any time,
reflect undistributed capital gains or unrealized
appreciation.
Note:
For information on the tax consequences of passive foreign
investment companies and hedging, please see "Investment Policies
and Practices."
Transaction Procedures and Special Requirements
Purchase Conditions
Following these procedures helps assure timely and accurate
transactions.
Nonpayment.
If your payment is not received or you pay with a check or ACH
transfer that does not clear, your purchase will be canceled. You
will be responsible for any losses or expenses incurred by the
fund or transfer agent, and the fund can redeem shares you own in
this or another identically registered T. Rowe Price fund as
reimbursement. The fund and its agents have the right to reject
or cancel any purchase, exchange, or redemption due to
nonpayment.
U.S. dollars.
All purchases must be paid for in U.S. dollars; checks must be
drawn on U.S. banks.
Sale (Redemption) Conditions
10-day hold.
If you sell shares that you just purchased and paid by check or
ACH transfer, the fund will process your redemption but will
generally delay sending you the proceeds for up to 10 calendar
PAGE 39
days to allow the check or transfer to clear. If your redemption
request was sent by mail or mailgram, proceeds will be mailed no
later than the seventh calendar day following receipt unless the
check or ACH transfer has not cleared. If, during the clearing
period, we receive a check drawn against your bond or money
market account, it will be returned marked "uncollected." (The
10-day hold does not apply to the following: purchases paid for
by bank wire; cashier's, certified, or treasurer's checks; or
automatic purchases through your paycheck.)
Telephone, Tele*AccessR, and PC*AccessR transactions.
These exchange and redemption services are established
automatically when you sign the New Account Form unless you check
the box which states that you do not want these services. Each
fund uses reasonable procedures (including shareholder identity
verification) to confirm that instructions given by telephone are
genuine and are not liable for acting on these instructions. If
these procedures are not followed, it is the opinion of certain
regulatory agencies that a fund may be liable for any losses that
may result from acting on the instructions given. A confirmation
is sent promptly after the telephone transaction. All
conversations are recorded.
Redemptions over $250,000.
Large sales can adversely affect a portfolio manager's ability to
implement a fund's investment strategy by causing the premature
sale of securities that would otherwise be held. If in any 90-day
period, you redeem (sell) more than $250,000, or your sale
amounts to more than 1% of the fund's net assets, the fund has
the right to delay sending your proceeds for up to five business
days after receiving your request, or to pay the difference
between the redemption amount and the lesser of the two
previously mentioned figures with securities from the fund.
Excessive Trading
T. Rowe Price may bar excessive traders from purchasing shares.
Frequent trades involving either substantial fund assets, or a
substantial portion of your account or accounts controlled by
you, can disrupt management of the fund and raise its expenses.
We define "excessive trading" as exceeding one purchase and sale
involving the same fund within any 120-day period.
For example, you are in fund A. You can move substantial assets
from fund A to fund B, and, within the next 120 days, sell your
shares in fund B to return to fund A or move to fund C.
If you exceed the number of trades described above, you may be
barred indefinitely from further purchases of T. Rowe Price
funds.
PAGE 40
Three types of transactions are exempt from excessive trading
guidelines: 1) trades solely between money market funds; 2)
redemptions that are not part of exchanges; and 3) systematic
purchases or redemptions (see "Shareholder Services").
Keeping Your Account Open
Due to the relatively high cost to a fund of maintaining small
accounts, we ask you to maintain an account balance of at least
$1,000. If your balance is below $1,000 for three months or
longer, we have the right to close your account after giving you
60 days in which to increase your balance.
Small Account Fee
Because of the disproportionately high costs of servicing
accounts with low balances, the fund will automatically deduct a
$10 fee from nonretirement accounts with balances falling below a
minimum level. The valuation of accounts and the deduction is
expected to take place during the last five business days of
September. The fee will be deducted from accounts with balances
below $2,000, except for UGMA/UTMA accounts, for which the limit
is $500. The fee will be waived for any investor whose aggregate
T. Rowe Price Mutual Fund investments total $25,000 or more.
Accounts employing automatic investing (e.g., payroll deduction,
automatic purchase from a bank account, etc.) are also exempt
from the charge. The fee will not apply to IRAs and other
retirement plan accounts. (A separate custodial fee may apply to
IRAs and other retirement plan accounts.)
Signature Guarantees
A signature guarantee is designed to protect you and the T. Rowe
Price funds from fraud by verifying your signature.
You may need to have your signature guaranteed in certain
situations, such as:
o
Written requests 1) to redeem over $50,000 or 2) to wire
redemption proceeds.
o
Remitting redemption proceeds to any person, address, or bank
account not on record.
o
Transferring redemption proceeds to a T. Rowe Price fund account
with a different registration (name/ownership) from yours.
o
Establishing certain services after the account is opened.
o
You can obtain a signature guarantee from most banks, savings
institutions, broker/dealers, and other guarantors acceptable to
T. Rowe Price. We cannot accept guarantees from notaries public
or organizations that do not provide reimbursement in the case of
fraud.
PAGE 41
3
More About the Funds
Organization and Management
How are the funds organized?
The T. Rowe Price International Funds, Inc. currently consists of
twelve series, each representing a separate class of shares and
having different objectives and investment policies. The twelve
series and the years in which each was established are as
follows: International Stock Fund, 1979; International Bond Fund,
1986; International Discovery Fund, 1988; European Stock Fund,
New Asia Fund, Global Government Bond Fund, 1990; Japan Fund,
1991; Short-Term Global Income Fund, 1992; Latin America Fund,
1993; Emerging Markets Bond Fund, 1994; Emerging Markets Stock
Fund and Global Stock Fund, 1995. (The Short-Term Global Income,
Global Government Bond, International Bond, and Emerging Markets
Bond Funds are described in a separate prospectus.) The
Corporation's Charter provides that the Board of Directors may
issue additional series of shares and/or additional classes of
shares for each series.
What is meant by "shares"?
As with all mutual funds, investors purchase shares when they
put money in a fund. These shares are part of a fund's authorized
capital stock, but share certificates are not issued.
Each share and fractional share entitles the shareholder to:
o
Receive a proportional interest in the fund's capital gain
distributions; and
o
Cast one vote per share on certain fund matters, including the
election of fund directors/trustees, changes in fundamental
policies, or approval of changes in a fund's management contract.
Do T. Rowe Price funds have annual shareholder meetings?
The funds are not required to hold annual meetings and do not
intend to do so except when certain matters, such as a change in
a fund's fundamental policies, are to be decided. In addition,
shareholders representing at least 10% of all eligible votes may
call a special meeting if they wish for the purpose of voting on
the removal of any fund director(s)/trustee(s). If a meeting is
held and you cannot attend, you can vote by proxy. Before the
meeting, the fund will send you proxy materials that explain the
issues to be decided and include a voting card for you to mail
back.
Who runs the funds?
All decisions regarding the purchase and sale of fund
investments are made by Price-Fleming--specifically by the fund's
portfolio manager.
PAGE 42
General Oversight.
The funds are governed by a Board of Directors that meets
regularly to review the funds' investments, performance,
expenses, and other business affairs. The Board elects the
funds' officers. The policy of the fund is that a majority of the
Board members will be independent of Price-Fleming.
Investment Manager.
Flemings is a diversified investment organization which
participates in a global network of regional investment offices
in New York, London, Zurich, Geneva, Tokyo, Hong Kong, Manila,
Kuala Lumpur, Seoul, Taipei, Bombay, Jakarta, Singapore, Bangkok,
and Johannesburg.
Price-Fleming is responsible for selection and management of each
fund's portfolio investments. Price-Fleming's U.S. office is
located at 100 East Pratt Street, Baltimore, Maryland 21202.
Price-Fleming has offices in Baltimore, London, Tokyo, and Hong
Kong.
Price-Fleming was incorporated in Maryland in 1979 as a joint
venture between T. Rowe Price and Robert Fleming Holdings Limited
(Flemings).
T. Rowe Price, Flemings, and Jardine Fleming are owners of Price-
Fleming. The common stock of Price-Fleming is 50% owned by a
wholly owned subsidiary of T. Rowe Price, 25% by a subsidiary of
Flemings and 25% by Jardine Fleming Group Limited (Jardine
Fleming). (Half of Jardine Fleming is owned by Flemings and half
by Jardine Matheson Holdings Limited.) T. Rowe Price has the
right to elect a majority of the Board of Directors of Price-
Fleming, and Flemings has the right to elect the remaining
directors, one of whom will be nominated by Jardine Fleming.
Portfolio Management.
Each fund has an Investment Advisory Group that has day-to-day
responsibility for managing the portfolio and developing and
executing each fund's investment program. The members of each
advisory group are listed below.
Global Stock Fund.
Martin G. Wade, Christopher D. Alderson, Peter B. Askew, Richard
J. Bruce, Mark J. T. Edwards, John R. Ford, Robert C. Howe, James
B. M. Seddon, Robert W. Smith, Benedict R. F. Thomas, and David
J. L. Warren.
International Stock and International Discovery Funds.
Martin G. Wade, Christopher D. Alderson, Peter B. Askew, Richard
J. Bruce, Mark J. T. Edwards, John R. Ford, Robert C. Howe, James
B. M. Seddon, Benedict R. F. Thomas, and David J. L. Warren.
PAGE 43
European Stock Fund.
Martin G. Wade, Richard J. Bruce, Mark J. T. Edwards, John R.
Ford, and James B. M. Seddon.
Japan Fund.
Martin G. Wade, Christopher D. Alderson, and David J. L. Warren.
New Asia Fund.
Martin G. Wade, Robert C. Howe, Benedict R. F. Thomas, and David
J. L. Warren.
Latin America Fund.
Martin G. Wade, Mark J. T. Edwards, and John R. Ford.
Emerging Markets Stock Fund.
Martin G. Wade and Richard J. Bruce.
Martin Wade joined Price-Fleming in 1979 and has 25 years of
experience with the Fleming Group in research, client service,
and investment management. (Fleming Group includes Robert Fleming
and/or Jardine Fleming.) Christopher Alderson joined Price-
Fleming in 1988, and has eight years of experience with the
Fleming Group in research, and portfolio management. Peter Askew
joined Price-Fleming in 1988 and has 19 years of experience
managing multi-currency fixed income portfolios. Richard Bruce
joined Price-Fleming in 1991 and has six years of experience in
investment management with the Fleming Group in Tokyo. Mark
Edwards joined Price-Fleming in 1986 and has 13 years of
experience in financial analysis. John Ford joined Price-Fleming
in 1982 and has 14 years of experience with the Fleming Group in
research and portfolio management. Robert Howe joined Price-
Fleming in 1986 and has 13 years of experience in economic
research, company research and portfolio management. James Seddon
joined Price-Fleming in 1987 and has nine years of experience in
portfolio management. Robert Smith joined T. Rowe Price in 1992
and has eight years of experience in financial analysis. Benedict
Thomas joined Price-Fleming in 1988 and has five years of
portfolio management experience. David Warren joined Price-
Fleming in 1984 and has 14 years of experience in equity
research, fixed income research, and portfolio management.
Portfolio Transactions.
Decisions with respect to the purchase and sale of a fund's
portfolio securities on behalf of each fund are made by Price-
Fleming. The funds' Board of Directors has authorized Price-
Fleming to utilize affiliates of Flemings and Jardine Fleming in
the capacity of broker in connection with the execution of a
fund's portfolio transactions if Price-Fleming believes that
doing so would result in an economic advantage (in the form of
lower execution costs or otherwise) being obtained by the fund.
PAGE 44
Marketing.
T. Rowe Price Investment Services, Inc., a wholly owned
subsidiary of T. Rowe Price, distributes (sells) shares of these
and all other T. Rowe Price funds.
Shareholder Services.
T. Rowe Price Services, Inc., another wholly owned subsidiary,
acts as the funds' transfer and dividend disbursing agent and
provides shareholder and administrative services. Services for
certain types of retirement plans are provided by T. Rowe Price
Retirement Plan Services, Inc., also a wholly owned subsidiary.
The address for each is 100 East Pratt St., Baltimore, MD 21202.
How are fund expenses determined?
The management agreement spells out the expenses to be paid by
each fund. In addition to the management fee, the funds pay for
the following: shareholder service expenses; custodial,
accounting, legal, and audit fees; costs of preparing and
printing prospectuses and reports sent to shareholders;
registration fees and expenses; proxy and annual meeting expenses
(if any); and director/trustee fees and expenses.
The Management Fee.
This fee has two parts--an "individual fund fee" (discussed under
"Transaction and Fund Expenses") which reflects a fund's
particular investment management costs, and a "group fee." The
group fee, which is designed to reflect the benefits of the
shared resources of the T. Rowe Price investment management
complex, is calculated daily based on the combined net assets of
all T. Rowe Price funds (except Equity Index and the Spectrum
Funds and any institutional or private label mutual funds). The
group fee schedule (shown below) is graduated, declining as the
asset total rises, so shareholders benefit from the overall
growth in mutual fund assets.
0.480% First $1 billion 0.350% Next $2 billion
0.450% Next $1 billion 0.340% Next $5 billion
0.420% Next $1 billion 0.330% Next $10 billion
0.390% Next $1 billion 0.320% Next $10 billion
0.370% Next $1 billion 0.310% Thereafter
0.360% Next $2 billion
The funds' portion of the group fee is determined by the ratio of
its daily net assets to the daily net assets of all the Price
funds described previously. Based on combined Price funds' assets
of approximately $48.6 billion at December 31, 1995, the group
fee was 0.34%.
Research and Administration.
Certain administrative support is provided by T. Rowe Price,
which receives from Price-Fleming a fee of .15% of the market
PAGE 45
value of all assets in equity accounts, .15% of the market value
of all assets in active fixed income accounts, and .035% of the
market value of all assets in passive fixed income accounts under
Price-Fleming's management. Additional investment research and
administrative support for equity investments is provided to
Price-Fleming Investment Management Limited (FIM) and Jardine
Fleming Investment Holdings Limited (JFIH) for which each
receives from Price-Fleming a fee of .075% of the market value of
all assets in equal accounts under Price-Fleming's management.
FIM and JFIH are wholly owned subsidiaries of Flemings and
Jardine Fleming, respectively. JFIH receives a fee of .075% of
the market value of all assets in active fixed income accounts
and .0175% of such market value in passive fixed income accounts
under Price-Fleming's management.
Understanding Performance Information
This section should help you understand the terms used to
describe fund performance. You will come across them in
shareholder reports you receive from us, in our newsletter, The
Price Report, in Insights articles, in T. Rowe Price
advertisements, and in the media.
Total Return
Total return is the most widely used performance measure.
Detailed performance information is included in the annual and
semiannual shareholder reports which are available to
shareholders free of charge.
This tells you how much an investment in a fund has changed in
value over a given time period. It reflects any net increase or
decrease in the share price and assumes that all dividends and
capital gains (if any) paid during the period were reinvested in
additional shares. Including reinvested distributions means that
total return numbers include the effect of compounding, i.e., you
receive income and capital gain distributions on a rising number
of shares.
Advertisements for a fund may include cumulative or compound
average annual total return figures, which may be compared with
various indices, other performance measures, or other mutual
funds.
Cumulative Total Return
This is the actual rate of return on an investment for a
specified period. A cumulative return does not indicate how much
the value of the investment may have fluctuated between the
beginning and the end of the period specified.
Average Annual Total Return
This is always hypothetical. Working backward from the actual
cumulative return, it tells you what constant year-by-year return
would have produced the actual, cumulative return. By smoothing
PAGE 46
out all the variations in annual performance, it gives you an
idea of the investment's annual contribution to your portfolio
provided you held it for the entire period in question.
Investment Policies and Practices
Fund managers have considerable leeway in choosing investment
strategies and selecting securities they believe will help the
funds achieve their objectives.
This section takes a detailed look at some of the types of
securities the funds may hold in their portfolios and the various
kinds of investment practices that may be used in day-to-day
portfolio management. The funds' investment program is subject to
further restrictions and risks described in the "Statement of
Additional Information."
Shareholder approval is required to substantively change a fund's
objectives and certain investment restrictions noted in the
following section as "fundamental policies." The managers also
follow certain "operating policies" which can be changed without
shareholder approval. However, significant changes are discussed
with shareholders in fund reports. A fund adheres to applicable
investment restrictions and policies at the time it makes an
investment. A later change in circumstances will not require the
sale of an investment if it was proper at the time it was made.
The fund's holdings of certain kinds of investments cannot exceed
maximum percentages of total assets, which are set forth herein.
For instance, each fund is not permitted to invest more than 10%
of total assets in hybrid instruments. While these restrictions
provide a useful level of detail about a fund's investment
program, investors should not view them as an accurate gauge of
the potential risk of such investments. For example, in a given
period, a 5% investment in hybrid instruments could have
significantly more than a 5% impact on a fund's share price. The
net effect of a particular investment depends on its volatility
and the size of its overall return in relation to the performance
of all the funds' other investments.
Changes in a fund's holdings, a fund's performance, and the
contribution of various investments are discussed in the
shareholder reports sent to you.
Types of Portfolio Securities
In seeking to meet their investment objective, the funds may
invest in any type of security whose investment characteristics
are consistent with the fund's investment program. The following
pages describe the principal types of portfolio securities and
investment management practices of the funds.
PAGE 47
Fundamental policy:
With the exception of Latin America Fund, a fund will not
purchase a security if, as a result, with respect to 75% of its
total assets, more than 5% of its total assets would be invested
in securities of a single issuer or more than 10% of the
outstanding voting securities of the issuer would be held by one
fund.
Nondiversified Status - Latin America Fund.
The fund is registered as a nondiversified mutual fund. This
means that the fund may invest a greater portion of its assets
in, and own a greater amount of the voting securities of, a
single company than a diversified fund which may subject the fund
to greater risk with respect to its portfolio securities.
However, because the fund intends to qualify as a "regulated
investment company" under the Internal Revenue Code, it must
invest so that, at the end of each calendar quarter, with
respect to 50% of its total assets, not more than 5% of its
assets are invested in the securities of a single issuer.
Common and Preferred Stocks.
Stocks represent shares of ownership in a company. Generally,
preferred stock has a specified dividend and ranks after bonds
and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After
other claims are satisfied, common stockholders participate in
company profits on a pro rata basis; profits may be paid out in
dividends or reinvested in the company to help it grow. Increases
and decreases in earnings are usually reflected in a company's
stock price, so common stocks generally have the greatest
appreciation and depreciation potential of all corporate
securities. While most preferred stocks pay a dividend, the fund
may purchase preferred stock where the issuer has omitted, or is
in danger of omitting, payment of its dividend. Such investments
would be made primarily for their capital appreciation potential.
Convertible Securities and Warrants.
The funds may invest in debt or preferred equity securities
convertible into or exchangeable for equity securities.
Traditionally, convertible securities have paid dividends or
interest at rates higher than common stocks but lower than
nonconvertible securities. They generally participate in the
appreciation or depreciation of the underlying stock into which
they are convertible, but to a lesser degree. In recent years,
convertibles have been developed which combine higher or lower
current income with options and other features. Warrants are
options to buy a stated number of shares of common stock at a
specified price anytime during the life of the warrants
(generally, two or more years).
PAGE 48
Fixed Income Securities.
The funds may invest in any type of investment-grade security.
The Global Stock Fund may also invest up to 5% of its total
assets in below-investment-grade bonds, commonly referred to as
"junk" bonds. Such securities would be purchased in companies
which meet the investment criteria for the fund. The price of a
bond fluctuates with changes in interest rates, rising when
interest rates fall and falling when interest rates rise. Junk
bond prices can be much more volatile and have a greater risk of
default than investment-grade bonds.
Hybrid Instruments.
Hybrids can have volatile prices and limited liquidity and their
use by a fund may not be successful.
These instruments (a type of potentially high-risk derivative)
can combine the characteristics of securities, futures, and
options. For example, the principal amount, redemption, or
conversion terms of a security could be related to the market
price of some commodity, currency, or securities index. Such
securities may bear interest or pay dividends at below market (or
even relatively nominal) rates. Under certain conditions, the
redemption value of such an investment could be zero.
Operating policy:
Each fund may invest up to 10% of its total assets in hybrid
instruments.
Passive Foreign Investment Companies.
Each fund may purchase the securities of certain foreign
investment funds or trusts called passive foreign investment
companies. Such trusts have been the only or primary way to
invest in certain countries. In addition to bearing their
proportionate share of the trust's expenses (management fees and
operating expenses) shareholders will also indirectly bear
similar expenses of such trusts. Capital gains on the sale of
such holdings are considered ordinary income regardless of how
long the fund held its investment. In addition, the fund may be
subject to corporate income tax and an interest charge on certain
dividends and capital gains earned from these investments,
regardless of whether such income and gains are distributed to
shareholders.
To avoid such tax and interest, each Price-Fleming fund intends
to treat these securities as sold on the last day of its fiscal
year and recognize any gains for tax purposes at that time;
losses will not be recognized. Such gains will be considered
ordinary income, which the fund will be required to distribute
even though it has not sold the security.
PAGE 49
Private Placements.
These securities are sold directly to a small number of
investors, usually institutions. Unlike public offerings, such
securities are not registered with the SEC. Although certain of
these securities may be readily sold, for example, under Rule
144A, others may be illiquid and their sale may involve
substantial delays and additional costs.
Operating policy:
Each fund will not invest more than 15% of its net assets in
illiquid securities. As part of this limit, the funds will not
invest more than 10% in certain restricted securities.
Types of Management Practices
Cash reserves provide flexibility and serve as a short-term
defense during periods of unusual market volatility.
Cash Position.
Each fund will hold a certain portion of its assets in U.S. and
foreign dollar-denominated money market securities, including
repurchase agreements, in the two highest rating categories,
maturing in one year or less. For temporary, defensive purposes,
a fund may invest without limitation in such securities. This
reserve position provides flexibility in meeting redemptions,
expenses, and the timing of new investments, and serves as a
short-term defense during periods of unusual market volatility.
Borrowing Money and Transferring Assets.
Each fund can borrow money from banks as a temporary measure for
emergency purposes, to facilitate redemption requests, or for
other purposes consistent with the funds' investment objectives
and program. Such borrowings may be collateralized with fund
assets, subject to restrictions.
Fundamental policy:
Borrowings may not exceed 33 1/3% of total fund assets.
Operating policies:
A fund may not transfer as collateral any portfolio securities
except as necessary in connection with permissible borrowings or
investments, and then such transfers may not exceed 33 1/3% of a
fund's total assets. A fund may not purchase additional
securities when borrowings exceed 5% of total assets.
Foreign Currency Transactions.
The funds will normally conduct their foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or
through entering into forward contracts to purchase or sell
foreign currencies. The funds will generally not enter into a
forward contract with a term greater than one year.
The funds will generally enter into forward foreign currency
exchange contracts only under two circumstances. First, when a
PAGE 50
fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, it may desire to
"lock in" the U.S. dollar price of the security. Second, when
Price-Fleming believes that the currency of a particular foreign
country may suffer or enjoy a substantial movement against
another currency, it may enter into a forward contract to sell or
buy the former foreign currency (or another currency which acts
as a proxy for that currency) approximating the value of some or
all of the fund's portfolio securities denominated in such
foreign currency. Under certain circumstances, a fund may commit
a substantial portion or the entire value of its portfolio to the
consummation of these contracts. Price-Fleming will consider the
effect such a commitment of its portfolio to forward contracts
would have on the investment program of the fund and the
flexibility of the fund to purchase additional securities.
Although forward contracts will be used primarily to protect the
fund from adverse currency movements, they also involve the risk
that anticipated currency movements will not be accurately
predicted and a fund's total return could be adversely affected
as a result.
There are certain markets where it is not possible to engage in
effective foreign currency hedging. This may be true, for
example, for the currencies of various Latin American countries
and other emerging markets where the foreign exchange markets are
not sufficiently developed to permit hedging activity to take
place.
Futures and Options.
Futures are used to manage risk; options give the investor the
option to buy or sell an asset at a predetermined price in the
future.
Futures (a type of potentially high-risk derivative) are often
used to manage risk, because they enable the investor to buy or
sell an asset in the future at an agreed upon price. Options
(another type of potentially high-risk derivative) give the
investor the right, but not the obligation, to buy or sell an
asset at a predetermined price in the future. The funds may buy
and sell futures and options contracts for a number of reasons
including: to manage its exposure to changes in securities prices
and foreign currencies; as an efficient means of adjusting
overall exposure to certain markets; in an effort to enhance
income; and to protect the value of portfolio securities. The
funds may purchase, sell, or write call and put options on
securities, financial indices, and foreign currencies.
Futures contracts and options may not always be successful
hedges; their prices can be highly volatile. Using them could
lower a fund's total return, and the potential loss from the use
PAGE 51
of futures can exceed the fund's initial investment in such
contracts.
Operating policies:
Futures: Initial margin deposits and premiums on options used for
non-hedging purposes will not equal more than 5% of a fund's net
asset value. Options on securities: The total market value of
securities against which a fund has written call or put options
may not exceed 25% of its total assets. The fund will not commit
more than 5% of its total assets to premiums when purchasing call
or put options.
Tax Consequences of Hedging.
Under applicable tax law, the funds may be required to limit
their gains from hedging in foreign currency forwards, futures,
and options. Although the funds are expected to comply with such
limits, the extent to which these limits apply is subject to tax
regulations as yet unissued. Hedging may also result in the
application of the mark-to-market and straddle provisions of the
Internal Revenue Code. These provisions could result in an
increase (or decrease) in the amount of taxable dividends paid by
the funds and could affect whether dividends paid by the funds
are classified as capital gains or ordinary income.
Lending of Portfolio Securities.
Like other mutual funds, the funds may lend securities to broker-
dealers, other institutions, or other persons to earn additional
income. The principal risk is the potential insolvency of the
broker-dealer or other borrower. In this event, a fund could
experience delays in recovering its securities and possibly
capital losses.
Fundamental policy:
The value of loaned securities may not exceed 33 1/3% of a fund's
total assets.
Portfolio Turnover.
Turnover is an indication of frequency. The funds will not
generally trade in securities for short-term profits, but when
circumstances warrant, securities may be purchased and sold
without regard to the length of time held. The funds' portfolio
turnover rates for the previous three fiscal periods are shown in
Table 7. The portfolio turnover rate for the Global Stock Fund is
not expected to exceed 100% during its first year of operation.
Portfolio Turnover Rates
1/1/93- 11/1/93- 11/1/94-
10/31/93 10/31/94 10-31-95
International Stock Fund 29.80%* 22.90% 17.80%
International Discovery Fund 71.80%* 57.40% 43.50%
European Stock Fund 21.30%* 24.50% 17.20%
PAGE 52
Japan Fund 61.40%* 61.50% 62.40%
New Asia Fund 40.40%* 63.20% 63.70%
Latin America Fund ** 12.20%* 18.90%
Emerging Markets Stock Fund ** ** 28.80%*
*Annualized.
**Prior to commencement of fund operations.
Table 7
European Stock, Japan, New Asia, Latin America and Emerging
Markets Stock Funds
Location of Company.
In determining the domicile or nationality of a company, the
funds would primarily consider the following factors: whether
the company is organized under the laws of a particular country;
or, whether the company derives a significant proportion (at
least 50%) of its revenues or profits from goods produced or
sold, investments made, or services performed in the country or
has at least 50% of its assets situated in that country.
Each of these funds will invest at least 65% of its total assets
in companies located (as defined above) in the respective
countries or regions indicated.
International Stock, International Discovery, and Global Stock
Funds.
Each fund will invest at least 65% of its total assets in a
manner which reflects its international or global character,
respectively. In the case of the international funds, this
requires that the funds invest in at least three countries
outside of the U.S. For the global fund, this means that the fund
must invest in at least three countries, one of which may include
the U.S.
PAGE 53
PAGE 1
4 Investing with T. Rowe Price
Account Requirements and Transaction
Information
________________________
Always verify your
transactions by carefully
reviewing the
confirmation we send
you. Please report any
discrepancies to
Shareholder Services. Tax Identification Number
We must have your correct social security
or corporate tax identification number on a
signed New Account Form or W-9 Form.
Otherwise, federal law requires the funds
to withhold a percentage (currently 31%) of
your dividends, capital gain distributions,
and redemptions, and may subject you to an
IRS fine. If this information is not
received within 60 days after your account
is established, your account may be
redeemed, priced at the NAV on the date of
redemption.
Unless you request otherwise, one
shareholder report will be mailed to
multiple account owners with the same tax
identification number and same zip code and
to shareholders who have requested that
their account be combined with someone
else's for financial reporting.
_________________________
T. Rowe Price Trust
Company
1-800-492-7670
1-410-625-6585 Employer-Sponsored Retirement Plans and
Institutional Accounts
Transaction procedures in the following
sections may not apply to employer-
sponsored retirement plans and
institutional accounts. For procedures
regarding employer-sponsored retirement
plans, please call T. Rowe Price Trust
Company or consult your plan administrator.
For institutional account procedures,
please call your designated account manager
or service representative.
Opening a New Account: $2,500 minimum
initial investment; $1,000 for retirement
PAGE 2
or gifts or transfers to minors (UGMA/UTMA)
accounts
Account Registration
If you own other T. Rowe Price funds, be
sure to register any new account just like
your existing accounts so you can exchange
among them easily. (The name and account
type would have to be identical.)
________________________
Regular Mail
T. Rowe Price
Account Services
P.O. Box 17300
Baltimore, MD
21298-9353
Mailgram, Express,
Registered, or Certified
Mail
T. Rowe Price
Account Services
10090 Red Run Blvd.
Owings Mills, MD 21117 By Mail
Please make your check payable to T. Rowe
Price Funds (otherwise it will be returned)
and send your check together with the New
Account Form to the address at left. We do
not accept third party checks, except for
IRA Rollover checks, to open new accounts.
By Wire
o Call Investor Services for an account
number and give the following wire
address to your bank:
Morgan Guaranty Trust Co. of New York
ABA# 021000238
T. Rowe Price [fund name]
AC-00153938
account name(s), and account number
o Complete a New Account Form and mail it
to one of the appropriate addresses
listed on the previous page.
Note: No services will be established and
IRS penalty withholding may occur until a
signed New Account Form is received.
Also, retirement plans cannot be opened
by wire.
By Exchange
PAGE 3
Call Shareholder Services or use
Tele*Access or PC*Access (see "Automated
Services" under "Shareholder Services").
The new account will have the same
registration as the account from which you
are exchanging. Services for the new
account may be carried over by telephone
request if preauthorized on the existing
account. (See explanation of "Excessive
Trading" under "Transaction Procedures.")
In Person
Drop off your New Account Form at any of
the locations listed on the cover and
obtain a receipt.
Purchasing Additional Shares: $100 minimum
purchase; $50 minimum for retirement plans
and Automatic Asset Builder
By ACH Transfer
Use Tele*Access, PC*Access, or call
Investor Services if you have established
electronic transfers using the ACH network.
By Wire
Call Shareholder Services or use the wire
address in "Opening a New Account."
________________________
Regular Mail
T. Rowe Price Funds
Account Services
P.O. Box 89000
Baltimore, MD
21289-1500
(For Mailgrams,
Express, Registered,
or Certified Mail,
see previous section.)
By Mail
o Make your check payable to T. Rowe Price
Funds (otherwise it may be returned).
o Mail the check to us at the address shown
at left with either a fund reinvestment
slip or a note indicating the fund you
want to buy and your fund account number.
o Remember to provide your account
number and the fund name on your
check.
PAGE 4
By Automatic Asset Builder
Fill out the Automatic Asset Builder
section on the New Account or Shareholder
Services Form.
Exchanging and Redeeming Shares
By Phone
Call Shareholder Services. If you find our
phones busy during unusually volatile
markets, please consider placing your order
by Tele*Access, PC*Access (if you have
previously authorized telephone services),
mailgram or by express mail. For exchange
policies, please see "Transaction
Procedures and Special Requirements--
Excessive Trading."
Redemption proceeds can be mailed to your
account address, sent by ACH transfer, or
wired to your bank (provided your bank
information is already on file). For
charges, see "Electronic Transfers--By
Wire" under "Shareholder Services".
_________________________
For Mailgram,
Express, Registered,
or Certified mail,
see addresses under
"Opening a New Account."
By Mail
For each account involved, provide the
account name, number, fund name, and
exchange or redemption amount. For
exchanges, be sure to indicate any fund you
are exchanging out of and the fund or funds
you are exchanging into. Please mail to the
appropriate address below or as indicated
at left. T. Rowe Price requires the
signatures of all owners exactly as
registered, and possibly a signature
guarantee (see "Transaction Procedures and
Special Requirements--Signature
Guarantees").
Regular Mail
For nonretirement For employer-sponsored
and IRA accounts: retirement accounts:
T. Rowe Price T. Rowe Price Trust
Account Services Company
P.O. Box 89000 P.O. Box 89000
PAGE 5
Baltimore, MD Baltimore, MD
21289-0220 21289-0300
Redemptions from employer-sponsored
retirement accounts must be in writing;
please call T. Rowe Price Trust Company or
your plan administrator for instructions.
IRA distributions may be requested in
writing or by telephone; please call
Shareholder Services to obtain an IRA
Distribution Form or an IRA Shareholder
Services Form to authorize the telephone
redemption service.
Rights Reserved By the Fund
The fund and its agents reserve the right
to waive or lower investment minimums; to
accept initial purchases by telephone or
mailgram; to cancel or rescind any purchase
or exchange (for example, if an account has
been restricted due to excessive trading or
fraud) upon notice to the shareholder
within five business days of the trade or
if the written confirmation has not been
received by the shareholder, whichever is
sooner; to freeze any account and suspend
account services when notice has been
received of a dispute between the
registered or beneficial account owners or
there is reason to believe a fraudulent
transaction may occur; to otherwise modify
the conditions of purchase and any services
at any time; or to act on instructions
believed to be genuine.
_______________________
Shareholder Services
1-800-225-5132
1-410-625-6500 Shareholder Services
Many services are available to you as a T.
Rowe Price shareholder; some you receive
automatically and others you must authorize
on the New Account Form. By signing up for
services on the New Account Form rather
than later, you avoid having to complete a
separate form and obtain a signature
guarantee. This section reviews some of the
principal services currently offered. Our
Services Guide contains detailed
descriptions of these and other services.
If you are a new T. Rowe Price investor,
PAGE 6
you will receive a Services Guide with our
Welcome Kit.
_________________________
Investor Services
1-800-638-5660
1-410-547-2308 Note: Corporate and other entity accounts
require an original or certified resolution
to establish services and to redeem by
mail. For more information, call Investor
Services.
Retirement Plans
We offer a wide range of plans for
individuals and institutions, including
large and small businesses: IRAs, SEP-IRAs,
Keoghs (profit sharing, money purchase
pension), 401(k), and 403(b)(7). For
information on IRAs, call Investor
Services. For information on all other
retirement plans, please call our Trust
Company at 1-800-492-7670.
Exchange Service
You can move money from one account to an
existing identically registered account, or
open a new identically registered account.
Remember, exchanges are purchases and sales
for tax purposes. (Exchanges into a state
tax-free fund are limited to investors
living in states where the funds are
registered.) Some of the T. Rowe Price
funds may impose a redemption fee of .50%
to 2%, payable to such funds, on shares
held for less than one year, or in some
funds, six months.
Automated Services
_________________________
Tele*Access
1-800-638-2587
1-410-625-7676 Tele*Access. 24-hour service via toll-free
number provides information on fund yields
and prices, dividends, account balances,
and your latest transaction as well as the
ability to request prospectuses, account
and tax forms, duplicate statements,
checks, and to initiate purchase,
redemption and exchange orders in your
accounts (see "Electronic Transfers"
below).
PC*Access. 24-hour service via dial-up
PAGE 7
modem provides the same information as
Tele*Access, but on a personal computer.
Please call Investor Services for an
information guide.
Telephone and Walk-In Services
Buy, sell, or exchange shares by calling
one of our service representatives or by
visiting one of our investor center
locations whose addresses are listed on the
cover.
Electronic Transfers
By ACH. With no charges to pay, you can
initiate a purchase or redemption for as
little as $100 or as much as $100,000
between your bank account and fund account
using the ACH network. Enter instructions
via Tele*Access, PC*Access or call
Shareholder Services.
By Wire. Electronic transfers can also be
conducted via bank wire. There is currently
a $5 fee for wire redemptions under $5,000,
and your bank may charge for incoming or
outgoing wire transfers regardless of size.
Checkwriting (Not available for equity
funds, or the High Yield Fund or Emerging
Markets Bond Fund)
You may write an unlimited number of free
checks on any money market fund, and most
bond funds, with a minimum of $500 per
check. Keep in mind, however that a check
results in a redemption; a check written on
a bond fund will create a taxable event
which you and we must report to the IRS.
Automatic Investing ($50 minimum)
You can invest automatically in several
different ways, including:
o Automatic Asset Builder. You instruct us
to move $50 or more from your bank
account, or you can instruct your
employer to send all or a portion of your
paycheck to the fund or funds you
designate.
Note: If you are moving money from
your bank account, and if the date you
select for your transactions falls on a
PAGE 8
Sunday or Monday holiday, your order will
be priced on the second business day
following this date.
o Automatic Exchange. You can set up
systematic investments from one fund
account into another, such as from a
money fund into a stock fund.
_________________________
Discount Brokerage is a
division of T. Rowe Price
Investment Services, Inc.
Discount Brokerage
You can trade stocks, bonds, options,
precious metals, and other securities at a
savings over regular commission rates. Call
Investor Services for information.
Note: If you buy or sell T. Rowe Price
Funds through anyone other than T. Rowe
Price, such as broker-dealers or banks, you
may be charged transaction or service fees
by those institutions. No such fees are
charged by T. Rowe Price Investment
Services or the fund for transactions
conducted directly with the fund.
PAGE 54
Prospectus
T. Rowe Price International Equity Funds
T. Rowe Price International Funds, Inc.
March 1, 1996
A choice of international, global, and regional stock funds for
investors seeking to diversify beyond U.S. borders.
Invest With Confidence
To Open an Account
Investor Services
1-800-638-5660
1-410-547-2308
For Existing Accounts
Shareholder Services
1-800-225-5132
1-410-625-6500
For Yields and Prices
Tele*AccessR
1-800-638-2587
1-410-625-7676
24 hours, 7 days
Investor Centers
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
To help you achieve your financial goals, T. Rowe Price offers a
wide range of stock, bond, and money market investments, as well
as convenient services and timely, informative reports.
Invest With Confidence
PAGE 55
The printed version of this prospectus appears in a dual column
format.
PAGE 56
Facts at a Glance
Investment Goal
To provide capital appreciation through investment primarily in
established companies based outside the United States.
Strategy
Invests worldwide primarily in well-established, non-U.S.
companies.
Risk/Reward:
The fund's share price will fluctuate with changes in market,
economic, and foreign currency exchange conditions. High
potential risk and reward.
Investor Profile
Those seeking higher appreciation potential over time and greater
diversification for their equity investments who can accept the
price declines associated with investing in stocks as well as the
special risks that accompany international investing.
Fees and Charges
100% no load. No sales charges; free telephone exchange; no 12b-1
marketing fees.
Investment Manager
Rowe Price-Fleming International, Inc. ("Price-Fleming"), was
founded in 1979 as a joint venture between T. Rowe Price
Associates, Inc. and Robert Fleming Holdings Ltd. As of December
31, 1995, Price-Fleming managed over $22.2 billion in foreign
stocks and bonds through its offices in Baltimore, London, Tokyo,
and Hong Kong.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, OR
ANY STATE SECURITIES COMMISSION, PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
T. Rowe Price
International Funds, Inc.
March 1, 1996
Prospectus
Contents
1
About the Fund
Transaction and Fund Expenses
Financial Highlights
Fund, Market, and Risk
Characteristics
2
About Your Account
Pricing Shares and Receiving Sale Proceeds
Distributions and Taxes
PAGE 57
Transaction Procedures and Special Requirements
3
More About the Fund
Organization and Management
Understanding Performance Information
Investment Policies and Practices
4
Investing With T. Rowe Price
Meeting Requirements for New Accounts
Opening a New Account
Purchasing Additional Shares
Exchanging and Redeeming
Shareholder Services
This prospectus contains information you should know before
investing. Please keep it for future reference. A Statement of
Additional Information about the funds, dated March 1, 1996 has
been filed with the Securities and Exchange Commission and is
incorporated by reference in this prospectus. To obtain a free
copy, call 1-800-638-5660.
1
About the Fund
Transaction and Fund Expenses
In Table 1 below, "Shareholder Transactions Expenses," shows
that you pay no sales charges. All the money you invest in the
fund goes to work for you, subject to the fees explained below.
"Annual Fund Expenses" shows how much it will cost to operate the
fund for a year, based on 1995 fiscal year expenses. These are
costs you pay indirectly, because they are deducted from the
fund's total assets before the daily share price is calculated
and before dividends and other distributions are made. In other
words, you will not see these expenses on your account
statement.
These tables should help you understand the kinds of expenses you
will bear directly or indirectly as a fund shareholder.
For the fiscal year ended October 31, 1995, fees paid by the
fund included the following: $5,147,000 to T. Rowe Price
Services, Inc. for transfer and dividend disbursing functions and
shareholder services; $234,000 to T. Rowe Price Retirement Plan
Services, Inc. for recordkeeping services for certain retirement
plans; and $130,000 to T. Rowe Price for accounting services.
PAGE 58
Shareholder Transaction Expenses
Annual Fund Expenses Percentage of Fiscal
1995 Average Net Assets
"Sales charge "load"
on purchases" None Management
fee 0.69%
"Sales charge "load"
on reinvested
dividends" None
Marketing
fees (12b-1)None
Redemption fees None "Total other
(Shareholder servicing,
custodial, auditing,
etc.)" 0.22%
Exchange fees None
Total fund
expenses 0.91%
"Note: The fund charges a $5 fee for wire redemptions under
$5,000, subject to change without notice; and a small account
fee, when applicable (see "Small Account Fee" under "Transaction
Procedures and Special Requirements").
Table 1
The main types of expenses, which all mutual funds may charge
against fund assets, are:
o
A management fee:
the percent of fund assets paid to the fund's investment
manager. The fund's fee comprises a group fee, discussed later,
and an individual fund fee of 0.35%.
o
"Other" administrative expenses:
primarily the servicing of shareholder accounts, such as
providing statements, reports, disbursing dividends, as well as
custodial services.
o
Marketing or distribution fees:
an annual charge ("12b-1") to existing shareholders to defray the
cost of selling shares to new shareholders. T. Rowe Price funds
do not levy 12b-1 fees.
For further details on fund expenses, please see "Organization
and Management."
PAGE 59
o
Hypothetical example:
Assume you invest $1,000, the fund returns 5% annually, expense
ratios remain as listed previously, and you close your account at
the end of the time periods shown. Your expenses would be:
The table at right is just an example; actual expenses can be
higher or lower than those shown.
1 year 3 years 5 years 10 years
$9 $29 $50 $112
Table 2
Financial Highlights
The following table provides information about the fund's
financial history. It is based on a single share outstanding
throughout each fiscal year. The table is part of the fund's
financial statements which are included in the fund's Annual
Report and are incorporated by reference into the Statement of
Additional Information. This document is available to
shareholders upon request. The financial statements in the annual
report have been audited by Price Waterhouse LLP, independent
accountants, whose unqualified report covers the most recent
five-year period.
Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset Net ized Gain from
Value, Invest- (Loss) Invest- Net Net
Begin- ment on ment Invest- Real- Total
Period ning of Income Invest- Activi- ment lized Distri-
Endeda Period (Loss) ments ties Income Gain butions
_________________________________________________________________
1986 $9.04 $0.11 5.23 $5.34 $(0.11)$(1.38)$(1.49)
1987 12.89 0.12 0.74 0.86 (0.23) (4.98)(5.21)
1988 8.54 0.16 1.36 1.52 (0.16) (0.93)(1.09)
1989 8.97 0.16 1.94 2.10 (0.16) (0.67)(0.83)
1990 10.24 0.22 (1.13) (0.91) (0.16) (0.36)(0.52)
1991 8.81 0.15 1.22 1.37 (0.15) (0.49) (0.64)
1992 9.54 0.14 (0.47) (0.33) (0.16) (0.16) (0.32)
1993b 8.89 0.10 2.75 2.85 -- -- --
1994 11.74 0.09 1.30 1.39 (0.09) (0.20) (0.29)
1995 12.84 0.18 (0.19) (0.01) (0.12) (0.62) (0.74)
_________________________________________________________________
PAGE 60
End of Period
Ratio
of
Ratio Net
of Invest-
Net Total Expenses ment Port-
Asset Return to Income folio
Value, (Includes Net Average to Aver- Turn-
Period End of Reinvested Assets ($ Net age Net over
Endeda Period Dividends) Thousands) Assets Assets Rate
_________________________________________________________________
1986 $12.89 61.3% $790,020 1.10% 0.89% 56.4%
1987 8.54 8.0% 642,463 1.14% 0.93% 76.5%
1988 8.97 17.9% 630,114 1.16% 1.78% 42.4%
1989 10.24 23.7% 970,214 1.10% 1.63% 47.8%
1990 8.81 (8.9%) 1,030,848 1.09% 2.16% 47.1%
1991 9.54 15.9% 1,476,309 1.10% 1.51% 45.0%
1992 8.89 (3.5%) 1,949,631 1.05% 1.49% 37.8%
1993b 11.74 32.1% 3,746,055 1.01%c 1.52%c 29.8%c
1994 12.84 12.0% 6,205,713 0.96% 1.11% 22.9%
1995 12.09 0.4% 6,385,905 0.91%d 1.56% 17.8%
_________________________________________________________________
a All per-share figures reflect the 2-for-1 stock split effective
August 31, 1987.
b For the ten months ended October 31, 1993. Fiscal year-end
changed from December 31 to October 31.
c Annualized.
d Beginning in fiscal 1995, includes expenses paid indirectly.
Table 3
Fund, Market, and Risk Characteristics: What to Expect
To help you decide whether this fund is appropriate for you, this
section takes a closer look at its investment objectives and
approach.
Why invest in an international fund?
There are three main reasons:
o
Expanded investment opportunities. More than half of the world's
total stock market capitalization and two-thirds of global GNP
consists of non-U.S. stocks and companies.
o
The potential for higher long-term returns. For example,
foreign stocks represented by the Morgan Stanley EAFE Index
(Europe, Australia, Far East) outperformed U.S. stocks measured
by the S&P 500 Stock Index in all but two rolling 10-year periods
from 1981 through 1995. Of course, during this time there were
shorter periods when U.S. stocks outperformed.
PAGE 61
o
Potentially reduced overall volatility for an all U.S. stock
portfolio. Since foreign stock markets tend to move
independently of the U.S. market and each other, spreading
investments across a number of markets can help smooth out
fluctuations in the returns of your total equity holdings.
What is the fund's objective and investment program?
The fund's objective is long-term growth of capital through
investments primarily in common stocks of established, non-U.S.
companies. The fund expects to invest substantially all of its
assets outside the U.S. and to diversify broadly among countries
throughout the world--developed, newly industrialized, and
emerging.
What securities can the funds invest in other than common stocks?
The fund expects to invest substantially all of its assets in
common stocks. However, the fund may also invest in a variety of
other equity-related securities, such as preferred stocks,
warrants and convertible securities, as well as corporate and
governmental debt securities, when considered consistent with the
fund's investment objectives and program. The fund may also
engage in a variety of investment management practices, such as
buying and selling futures and options. Under normal market
conditions, the fund's investment in securities other than common
stocks is limited to no more than 35% of total assets. However,
for temporary defensive purposes, the fund may invest all or a
significant portion of its assets in U.S. Government and
corporate debt obligations. The fund will not purchase any debt
security which at the time of purchase is rated below investment
grade. This would not prevent the fund from retaining a security
downgraded to below investment grade after purchase.
What are the major risks associated with international investing
and this fund?
Exchange rate movements can be large and can last for extended
periods.
Stock prices of foreign and U.S. companies are subject to many of
the same influences, such as general economic conditions, company
and industry earnings prospects, and investor psychology.
However, investing in foreign securities also involves additional
risks which can increase the potential for the losses in the
funds. These risks can be significantly magnified for investments
in emerging markets.
o
Currency fluctuations.
Transactions in foreign securities are conducted in local
currencies, so dollars must often be exchanged for another
currency when a stock is bought or sold or a dividend is paid.
Likewise, share price quotations and total return information
PAGE 62
reflect conversion into dollars. Fluctuations in foreign exchange
rates can significantly increase or decrease the dollar value of
a foreign investment, boosting or offsetting its local market
return. For example, if a French stock rose 10% in price during a
year, but the U.S. dollar gained 5% against the french franc
during that time, the U.S. investor's return would be reduced to
5%. This is because the franc would "buy" fewer dollars at the
end of the year than at the beginning, or, conversely, a dollar
would buy more francs.
o
Costs.
It is more expensive for U.S. investors to trade in foreign
markets than in the U.S. Mutual funds offer a very efficient way
for individuals to invest abroad, but the overall expense ratios
of international funds are usually somewhat higher than those of
typical domestic stock funds.
While certain countries have made progress in economic growth,
liberalization, fiscal discipline, and political and social
stability, there is no assurance these trends will continue.
o
Political and economic factors.
The economies, markets, and political structures of a number of
the countries in which each fund can invest do not compare
favorably with the United States and other mature economies in
terms of wealth and stability. Therefore, investments in these
countries will be riskier and more subject to erratic and abrupt
price movements. This is especially true for emerging markets
such as those found in Latin America, China, and certain Asian
countries, Eastern Europe, and Africa. However, even investment
in countries with highly developed economies is subject to risk.
For example, the Japanese stock market historically has
experienced wide swings in value.
Some economies are less well developed (for example, Latin
America, Eastern Europe, African and certain Asian countries),
overly reliant on particular industries, and more vulnerable to
the ebb and flow of international trade, trade barriers, and
other protectionist or retaliatory measures (for example, Japan,
Southeast Asia, Latin America, Eastern Europe, and Africa). This
makes investment in such markets significantly riskier than in
other countries. Some countries, particularly in Latin America
and Africa, are grappling with severe inflation and high levels
of national debt. Investments in countries that have recently
begun moving away from central planning and state-owned
industries toward free markets, such as Eastern Europe, China,
and Africa, should be regarded as speculative.
PAGE 63
Certain countries have histories of instability and upheaval (for
example, Latin America and Africa) with respect to their internal
politics that could cause their governments to act in a
detrimental or hostile manner toward private enterprise or
foreign investment. Such actions, for example, nationalizing a
company or industry, expropriating assets, or imposing punitive
taxes, could have a severe effect on security prices and impair a
fund's ability to repatriate capital or income. Significant
external risks, including war, currently affect some countries.
Governments in many emerging market countries participate to some
degree in their economies and securities markets.
For more details on potential risks of foreign investments,
please see "Investment Policies and Practices."
o
Legal, regulatory, and operational.
Certain countries lack uniform accounting, auditing, and
financial reporting standards, have less governmental supervision
of financial markets than in the U.S., do not honor legal rights
enjoyed in the U.S., and have settlement practices, such as
delays, which could subject the fund to risks of loss not
customary in the U.S. In addition, securities markets in these
countries have substantially lower trading volumes than U.S.
markets, resulting in less liquidity and more volatility than
experienced in the U.S.
o
Pricing.
Portfolio securities may be listed on foreign exchanges that are
open days (such as Saturdays) when the funds do not compute their
prices. As a result, the fund's net asset value may be
significantly affected by trading on days when shareholders
cannot make transactions.
What can I expect in terms of price volatility?
The fund's share price will fluctuate; when you sell your shares,
you may lose money.
Like U.S. stock investments, common stocks of foreign companies
offer investors a way to build capital over time. Nevertheless,
the long-term rise of foreign stock prices as a group has been
punctuated by periodic declines. Share prices of even the best
managed, most profitable corporations, whether U.S. or foreign,
are subject to market risk, which means they can fluctuate
widely.
In less well developed stock markets, such as those in Latin
America, Eastern Europe, Africa, and certain Asian countries,
volatility may be heightened by actions of a few major investors.
For example, substantial increases or decreases in cash flows of
PAGE 64
mutual funds investing in these markets could significantly
affect local stock prices and, therefore, fund share prices.
How does the portfolio manager try to reduce risk?
The principal tools are intensive research and diversification;
currency hedging techniques are used from time to time.
o
In addition to conducting on-site research in portfolio countries
and companies, Price-Fleming has close ties with investment
analysts based throughout the world.
o
Diversification significantly reduces but does not eliminate
risk. The impact on a fund's share price from a drop in the price
of a particular stock is reduced substantially by investing in a
portfolio with dozens of different companies. Likewise, the
impact of unfavorable developments in a particular country is
reduced in the multi-country funds because investments are spread
among many countries.
Portfolio managers keep close watch on individual investments as
well as on political and economic trends in each country and
region. Holdings are adjusted according to the manager's analysis
and outlook.
o
While currency translation does affect the shorter-run returns
provided by foreign stocks, its influence on longer-term results
generally has been outweighed by price trends on local stock
exchanges.
As a result, under normal conditions, the funds do not engage in
extensive hedging programs. However, when foreign exchange rates
are expected to be unfavorable for U.S. investors, fund managers
can hedge the risk through use of currency forwards and options.
In a general sense, these tools allow a manager to exchange
currencies in the future at a rate specified in the present. (For
more details, please see "Foreign Currency Transactions" under
"Investment Policies and Practices.") If the manager's forecast
is wrong, the hedge may cause a loss. Also, it may be difficult
or not practical to hedge currency risk in many emerging
countries.
What are some of the opportunities represented by major overseas
markets?
o
Europe:
Market deregulation, privatization, and lower trade barriers have
expanded the range of investment opportunities. The emergence of
capitalist economics in Eastern Europe could, over the long term,
open previously inaccessible markets and also provide a lower-
PAGE 65
cost, skilled labor pool, which may further stimulate European
economies.
o
Asia:
No longer solely dependent on the Japanese "engine" for growth,
the newly industrialized countries of the Pacific Rim are powered
by worldwide exports and, increasingly, by strong inter-regional
demand. In addition, China's move toward a more capitalistic
economy has positive implications for the entire region's future.
o
Japan:
Although its growth rate has slowed, the longer-term outlook for
Japan's economy is positive. In addition to its productive labor
force, technological expertise, and commitment to capital
investment, Japan's shift to a more domestic-oriented economy
could promote future growth and create new investment
opportunities.
o
Latin America:
After years of stagnation, some countries here are experiencing
rising growth rates that reflect lower trade barriers,
privatization of industry, progress on reducing inflation, and
restructuring of national debt burdens.
o
Emerging markets:
A number of countries in Latin America, Eastern Europe, Asia, and
Africa are emerging from economic periods of stagnation and offer
the potential for growth exceeding that of the United States and
other developed countries. The emerging market countries
initiating market-based economic reforms could benefit from
significant amounts of capital inflows.
How can I decide if the fund may be appropriate for me?
The fund should not represent your complete investment program
nor be used for short-term trading purposes.
First, be sure that your investment objective is the same as the
fund's: capital appreciation over time. If you will need the
money you plan to invest in the near future, the fund is not
suitable.
Second, your decision should take into account whether you have
any other foreign stock investments.
Third, consider your risk tolerance and the risk profile of the
fund.
Is there other information I need to review before making a
decision?
Be sure to review the "Investment Policies and Practices"
section, which discusses the following: Types of Portfolio
Securities (common and preferred stocks, convertible securities
PAGE 66
and warrants, fixed income securities, hybrid instruments,
passive foreign investment companies, and private placements);
and Types of Management Practices (cash position, borrowing money
and transferring assets, foreign currency transactions, futures
and options, tax consequences of hedging, and portfolio
turnover).
2
About Your Account
Pricing Shares and Receiving Sale Proceeds
Here are some procedures you should know when investing in a T.
Rowe Price international fund.
How and when shares are priced
The various ways you can buy, sell, and exchange shares are
explained at the end of this prospectus and on the New Account
Form. These procedures may differ for institutional and employer-
sponsored retirement accounts.
The share price (also called "net asset value" or NAV per share)
for each fund, except the Japan Fund, is calculated at 4 p.m. ET
each day the New York Stock Exchange is open for business. To
calculate the NAV, a fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets,
is divided by the number of shares outstanding.
The calculation of each fund's net asset value normally will not
take place contemporaneously with the determination of the value
of the fund's portfolio securities. Events affecting the values
of portfolio securities that occur between the time their prices
are determined and the time each fund's net asset value is
calculated will not be reflected in the fund's net asset value
unless Price-Fleming, under the supervision of the fund's Board
of Directors, determines that the particular event should be
taken into account in computing the fund's net asset value.
When filling out the New Account Form, you may wish to give
yourself the widest range of options for receiving proceeds from
a sale.
How your purchase, sale, or exchange price is determined
If we receive your request in correct form before 4 p.m. ET, your
transaction will be priced at that day's NAV. If we receive it
after 4 p.m., it will be priced at the next business day's NAV.
We cannot accept orders that request a particular day or price
for your transaction or any other special conditions.
Note:
The time at which transactions and shares are priced and the time
until which orders are accepted may be changed in case of an
emergency or if the New York Stock Exchange closes at a time
other than 4 p.m. ET.
How you can receive the proceeds from a sale
PAGE 67
If for some reason we cannot accept your request to sell
shares, we will contact you.
If your request is received by 4 p.m. ET in correct form,
proceeds are usually sent on the next business day. Proceeds can
be sent to you by mail, or to your bank account by ACH transfer
or bank wire. Proceeds sent by ACH transfer should be credited
the second day after the sale. ACH (Automated Clearing House) is
an automated method of initiating payments from and receiving
payments in your financial institution account. ACH is a payment
system supported by over 20,000 banks, savings banks, and credit
unions, which electronically exchange the transactions primarily
through the Federal Reserve Banks. Proceeds sent by bank wire
should be credited to your account the next business day.
Exception:
o
Under certain circumstances and when deemed to be in the fund's
best interests, your proceeds may not be sent for up to five
business days after receiving your sale or exchange request. If
you were exchanging into a bond or money fund, your new
investment would not begin to earn dividends until the sixth
business day.
Useful Information on Distributions and Taxes
Dividends and Other Distributions
All net investment income and realized capital gains are
distributed to shareholders.
Dividend and capital gain distributions are reinvested in
additional fund shares in your account unless you select another
option on your New Account Form. The advantage of reinvesting
distributions arises from compounding; that is, you receive
income dividends and capital gain distributions on a rising
number of shares.
Distributions not reinvested are paid by check or transmitted to
your bank account via ACH. If the Post Office cannot deliver your
check, or if your check remains uncashed for six months, a fund
reserves the right to reinvest your distribution check in your
account at the then current NAV and to reinvest all subsequent
distributions in shares of the fund.
Income dividends
o
The fund declares and pay dividends (if any) annually.
o
The dividends of the fund will not be eligible for the 70%
deduction for dividends received by corporations, if, as
expected, none of the funds' income consists of dividends paid by
U.S. corporations.
Capital gains
PAGE 68
o
A capital gain or loss is the difference between the purchase and
sale price of a security.
o
If the fund has net capital gains for the year (after subtracting
any capital losses), they are usually declared and paid in
December to shareholders of record on a specified date that
month.
Tax Information
You will be sent timely information for your tax filing needs.
You need to be aware of the possible tax consequences when:
o
The fund makes a distribution to your account, or
o
You sell fund shares, including an exchange from one fund to
another.
Taxes on fund redemptions.
When you sell shares in any fund, you may realize a gain or loss.
An exchange from one fund to another is still a sale for tax
purposes.
In January, you will be sent Form 1099-B, indicating the date
and amount of each sale you made in the fund during the prior
year. This information will also be reported to the IRS. For
accounts opened new or by exchange in 1983 or later we will
provide you the gain or loss of the shares you sold during the
year, based on the "average cost" method. This information is not
reported to the IRS, and you do not have to use it. You may
calculate the cost basis using other methods acceptable to the
IRS, such as "specific identification."
To help you maintain accurate records, we send you a
confirmation immediately following each transaction (except for
systematic purchases and redemptions) and a year-end statement
detailing all your transactions in each fund account during the
year.
Taxes on fund distributions.
Capital gain distributions are taxable whether reinvested in
additional shares or received in cash.
The following summary does not apply to retirement accounts, such
as IRAs, which are tax-deferred until you withdraw money from
them.
In January, you will be sent Form 1099-DIV indicating the tax
status of any dividend and capital gain distribution made to you.
This information will also be reported to the IRS. All
distributions made by the funds are taxable to you for the year
in which they were paid. The only exception is that distributions
declared during the last three months of the year and paid in
PAGE 69
January are taxed as though they were paid by December 31. You
will be sent any additional information you need to determine
your taxes on fund distributions, such as the portion of your
dividend, if any, that may be exempt from state income taxes.
Short-term capital gains are taxable as ordinary income and long-
term gains are taxable at the applicable long-term gain rate. The
gain is long- or short-term depending on how long the fund held
the securities, not how long you held shares in the fund. If you
realize a loss on the sale or exchange of fund shares held six
months or less, your short-term loss recognized is reclassified
to long-term to the extent of any long-term capital gain
distribution received.
Distributions resulting from the sale of certain foreign
currencies and debt securities, to the extent of foreign exchange
gains, are taxed as ordinary income or loss. If the fund pays
nonrefundable taxes to foreign governments during the year, the
taxes will reduce the fund's dividends, but will still be
included in your taxable income. However, you may be able to
claim an offsetting credit or deduction on your tax return for
your portion of foreign taxes paid by the fund.
Tax effect of buying shares before a capital gain distribution.
If you buy shares shortly before or on the "record date"--the
date that establishes you as the person to receive the upcoming
distribution--you will receive, in the form of a taxable
distribution, a portion of the money you just invested. Therefore
you may also wish to find out the fund's record date(s) before
investing. Of course, the fund's share price may, at any time,
reflect undistributed capital gains or unrealized
appreciation.
Note:
For information on the tax consequences of passive foreign
investment companies and hedging, please see "Investment Policies
and Practices."
Transaction Procedures and Special Requirements
Purchase Conditions
Following these procedures helps assure timely and accurate
transactions.
Nonpayment.
If your payment is not received or you pay with a check or ACH
transfer that does not clear, your purchase will be canceled. You
will be responsible for any losses or expenses incurred by the
fund or transfer agent, and the fund can redeem shares you own in
this or another identically registered T. Rowe Price fund as
reimbursement. The fund and its agents have the right to reject
or cancel any purchase, exchange, or redemption due to
nonpayment.
PAGE 70
U.S. dollars.
All purchases must be paid for in U.S. dollars; checks must be
drawn on U.S. banks.
Sale (Redemption) Conditions
10-day hold.
If you sell shares that you just purchased and paid by check
or ACH transfer, the fund will process your redemption but will
generally delay sending you the proceeds for up to 10 calendar
days to allow the check or transfer to clear. If your redemption
request was sent by mail or mailgram, proceeds will be mailed no
later than the seventh calendar day following receipt unless the
check or ACH transfer has not cleared. If, during the clearing
period, we receive a check drawn against your bond or money
market account, it will be returned marked "uncollected." (The
10-day hold does not apply to the following: purchases paid for
by bank wire; cashier's, certified, or treasurer's checks; or
automatic purchases through your paycheck.)
Telephone, Tele*AccessR, and PC*AccessR transactions.
These exchange and redemption services are established
automatically when you sign the New Account Form unless you check
the box which states that you do not want these services. Each
fund uses reasonable procedures (including shareholder identity
verification) to confirm that instructions given by telephone are
genuine and are not liable for acting on these instructions. If
these procedures are not followed, it is the opinion of certain
regulatory agencies that a fund may be liable for any losses that
may result from acting on the instructions given. A confirmation
is sent promptly after the telephone transaction. All
conversations are recorded.
Redemptions over $250,000.
Large sales can adversely affect a portfolio manager's ability to
implement a fund's investment strategy by causing the premature
sale of securities that would otherwise be held. If in any 90-day
period, you redeem (sell) more than $250,000, or your sale
amounts to more than 1% of the fund's net assets, the fund has
the right to delay sending your proceeds for up to five business
days after receiving your request, or to pay the difference
between the redemption amount and the lesser of the two
previously mentioned figures with securities from the fund.
Excessive Trading
T. Rowe Price may bar excessive traders from purchasing shares.
Frequent trades involving either substantial fund assets, or a
substantial portion of your account or accounts controlled by
you, can disrupt management of the fund and raise its expenses.
We define "excessive trading" as exceeding one purchase and sale
involving the same fund within any 120-day period.
PAGE 71
For example, you are in fund A. You can move substantial assets
from fund A to fund B, and, within the next 120 days, sell your
shares in fund B to return to fund A or move to fund C.
If you exceed the number of trades described above, you may be
barred indefinitely from further purchases of T. Rowe Price
funds.
Three types of transactions are exempt from excessive trading
guidelines: 1) trades solely between money market funds; 2)
redemptions that are not part of exchanges; and 3) systematic
purchases or redemptions (see "Shareholder Services").
Keeping Your Account Open
Due to the relatively high cost to a fund of maintaining small
accounts, we ask you to maintain an account balance of at least
$1,000. If your balance is below $1,000 for three months or
longer, we have the right to close your account after giving you
60 days in which to increase your balance.
Small Account Fee
Because of the disproportionately high costs of servicing
accounts with low balances, the fund will automatically deduct a
$10 fee from nonretirement accounts with balances falling below a
minimum level. The valuation of accounts and the deduction is
expected to take place during the last five business days of
September. The fee will be deducted from accounts with balances
below $2,000, except for UGMA/UTMA accounts, for which the limit
is $500. The fee will be waived for any investor whose aggregate
T. Rowe Price Mutual Fund investments total $25,000 or more.
Accounts employing automatic investing (e.g., payroll deduction,
automatic purchase from a bank account, etc.) are also exempt
from the charge. The fee will not apply to IRAs and other
retirement plan accounts. (A separate custodial fee may apply to
IRAs and other retirement plan accounts.)
Signature Guarantees
A signature guarantee is designed to protect you and the T. Rowe
Price funds from fraud by verifying your signature.
You may need to have your signature guaranteed in certain
situations, such as:
o
Written requests 1) to redeem over $50,000 or 2) to wire
redemption proceeds.
o
Remitting redemption proceeds to any person, address, or bank
account not on record.
o
Transferring redemption proceeds to a T. Rowe Price fund account
with a different registration (name/ownership) from yours.
PAGE 72
o
Establishing certain services after the account is opened.
o
You can obtain a signature guarantee from most banks, savings
institutions, broker/dealers, and other guarantors acceptable to
T. Rowe Price. We cannot accept guarantees from notaries public
or organizations that do not provide reimbursement in the case of
fraud.
3
More About the Fund
Organization and Management
How is the fund organized?
T. Rowe Price International Funds, Inc. currently consists of
twelve series, each representing a separate class of shares and
having different objectives and investment policies. The twelve
series and the years in which each was established are as
follows: International Stock Fund, 1979; International Bond Fund,
1986; International Discovery Fund, 1988; European Stock Fund,
New Asia Fund, Global Government Bond Fund, 1990; Japan Fund,
1991; Short-Term Global Income Fund, 1992; Latin America Fund,
1993; Emerging Markets Bond Fund, 1994; Emerging Markets Stock
Fund and Global Stock Fund, 1995. (The Short-Term Global Income,
Global Government Bond, International Bond, and Emerging Markets
Bond Funds are described in a separate prospectus.) The
Corporation's Charter provides that the Board of Directors may
issue additional series of shares and/or additional classes of
shares for each series.
What is meant by "shares"?
As with all mutual funds, investors purchase shares when they
put money in a fund. These shares are part of a fund's authorized
capital stock, but share certificates are not issued.
Each share and fractional share entitles the shareholder to:
o
Receive a proportional interest in the fund's capital gain
distributions; and
o
Cast one vote per share on certain fund matters, including the
election of fund directors/trustees, changes in fundamental
policies, or approval of changes in a fund's management contract.
Do T. Rowe Price funds have annual shareholder meetings?
The funds are not required to hold annual meetings and do not
intend to do so except when certain matters, such as a change in
a fund's fundamental policies, are to be decided. In addition,
shareholders representing at least 10% of all eligible votes may
call a special meeting if they wish for the purpose of voting on
the removal of any fund director(s)/trustee(s). If a meeting is
PAGE 73
held and you cannot attend, you can vote by proxy. Before the
meeting, the fund will send you proxy materials that explain the
issues to be decided and include a voting card for you to mail
back.
Who runs the fund?
All decisions regarding the purchase and sale of fund
investments are made by Price-Fleming--specifically by the fund's
portfolio manager.
General Oversight.
The funds are governed by a Board of Directors that meets
regularly to review the funds' investments, performance,
expenses, and other business affairs. The Board elects the funds'
officers. The policy of the fund is that a majority of the Board
members will be independent of Price-Fleming.
Investment Manager
Flemings is a diversified investment organization which
participates in a global network of regional investment offices
in New York, London, Zurich, Geneva, Tokyo, Hong Kong, Manila,
Kuala Lumpur, Seoul, Taipei, Bombay, Jakarta, Singapore, Bangkok,
and Johannesburg.
Price-Fleming is responsible for selection and management of each
fund's portfolio investments. Price-Fleming's U.S. office is
located at 100 East Pratt Street, Baltimore, Maryland 21202.
Price-Fleming has offices in Baltimore, London, Tokyo, and Hong
Kong.
Price-Fleming was incorporated in Maryland in 1979 as a joint
venture between T. Rowe Price and Robert Fleming Holdings Limited
(Flemings).
T. Rowe Price, Flemings, and Jardine Fleming are owners of Price-
Fleming. The common stock of Price-Fleming is 50% owned by a
wholly owned subsidiary of T. Rowe Price, 25% by a subsidiary of
Flemings and 25% by Jardine Fleming Group Limited (Jardine
Fleming). (Half of Jardine Fleming is owned by Flemings and half
by Jardine Matheson Holdings Limited.) T. Rowe Price has the
right to elect a majority of the Board of Directors of Price-
Fleming, and Flemings has the right to elect the remaining
directors, one of whom will be nominated by Jardine Fleming.
Portfolio Management.
The fund has an Investment Advisory Group that has day-to-day
responsibility for managing the portfolio and developing and
executing the fund's investment program. The members of the
advisory group are: Martin G. Wade, Christopher D. Alderson,
Peter B. Askew, Richard J. Bruce, Mark J. T. Edwards, John R.
Ford, Robert C. Howe, James B. M. Seddon, Benedict R. F. Thomas,
and David J. L. Warren.
PAGE 74
Martin Wade joined Price-Fleming in 1979 and has 26 years of
experience with the Fleming Group in research, client service and
investment management. (Fleming Group includes Robert Fleming
and/or Jardine Fleming.) Christopher Alderson joined Price-
Fleming in 1988, and has nine years of experience with the
Fleming Group in research and portfolio management. Peter Askew
joined Price-Fleming in 1988 and has 20 years of experience
managing multi-currency fixed income portfolios. Richard Bruce
joined Price-Fleming in 1991 and has seven years of experience in
investment management with the Fleming Group in Tokyo. Mark
Edwards joined Price-Fleming in 1986 and has 14 years of
experience in financial analysis. John Ford joined Price-Fleming
in 1982 and has 15 years of experience with the Fleming Group in
research and portfolio management. Robert Howe joined Price-
Fleming in 1986 and has 14 years of experience in economic
research, company research and portfolio management. James Seddon
joined Price-Fleming in 1987 and has nine years of portfolio
management experience. Benedict Thomas joined Price-Fleming in
1988 and has six years of portfolio management experience. David
Warren joined Price-Fleming in 1984 and has 15 years of
experience in equity research, fixed income research and
portfolio management.
Portfolio Transactions.
Decisions with respect to the purchase and sale of the fund's
portfolio securities on behalf of each fund are made by Price-
Fleming. The fund's Board of Directors has authorized Price-
Fleming to utilize affiliates of Flemings and Jardine Fleming in
the capacity of broker in connection with the execution of a
fund's portfolio transactions if Price-Fleming believes that
doing so would result in an economic advantage (in the form of
lower execution costs or otherwise) being obtained by the fund.
Marketing.
T. Rowe Price Investment Services, Inc., a wholly owned
subsidiary of T. Rowe Price, distributes (sells) shares of these
and all other T. Rowe Price funds.
Shareholder Services.
T. Rowe Price Services, Inc., another wholly owned subsidiary,
acts as the funds' transfer and dividend disbursing agent and
provides shareholder and administrative services. Services for
certain types of retirement plans are provided by T. Rowe Price
Retirement Plan Services, Inc., also a wholly owned subsidiary.
The address for each is 100 East Pratt St., Baltimore, MD 21202.
How are fund expenses determined?
The management agreement spells out the expenses to be paid by
each fund. In addition to the management fee, the funds pay for
the following: shareholder service expenses; custodial,
accounting, legal, and audit fees; costs of preparing and
PAGE 75
printing prospectuses and reports sent to shareholders;
registration fees and expenses; proxy and annual meeting expenses
(if any); and director/trustee fees and expenses.
The Management Fee.
This fee has two parts--an "individual fund fee" (discussed under
"Transaction and Fund Expenses") which reflects a fund's
particular investment management costs, and a "group fee." The
group fee, which is designed to reflect the benefits of the
shared resources of the T. Rowe Price investment management
complex, is calculated daily based on the combined net assets of
all T. Rowe Price funds (except Equity Index and the Spectrum
Funds and any institutional or private label mutual funds). The
group fee schedule (shown below) is graduated, declining as the
asset total rises, so shareholders benefit from the overall
growth in mutual fund assets.
0.480% First $1 billion 0.350% Next $2 billion
0.450% Next $1 billion 0.340% Next $5 billion
0.420% Next $1 billion 0.330% Next $10 billion
0.390% Next $1 billion 0.320% Next $10 billion
0.370% Next $1 billion 0.310% Thereafter
0.360% Next $2 billion
The funds' portion of the group fee is determined by the ratio
of its daily net assets to the daily net assets of all the Price
funds described previously. Based on combined Price funds' assets
of approximately $47.3 billion at December 31, 1995, the group
fee was 0.34%.
Research and Administration.
Certain administrative support is provided by T. Rowe Price,
which receives from Price-Fleming a fee of .15% of the market
value of all assets in equity accounts, .15% of the market value
of all assets in active fixed income accounts, and .035% of the
market value of all assets in passive fixed income accounts under
Price-Fleming's management. Additional investment research and
administrative support for equity investments is provided to
Price-Fleming by Fleming Investment Management Limited (FIM) and
Jardine Fleming Investment Holdings Limited (JFIH) for which each
receives from Price-Fleming a fee of .075% of the market value of
all assets in equity accounts under Price-Fleming's management.
FIM and JFIH are wholly owned subsidiaries of Flemings and
Jardine Fleming, respectively. JFIH receives a fee of .075% of
the market value of all assets in active fixed income accounts
and .0175% of such market value in passive fixed income accounts
under Price-Fleming's management.
Understanding Performance Information
PAGE 76
This section should help you understand the terms used to
describe fund performance. You will come across them in
shareholder reports you receive from us, in our newsletter, The
Price Report, in Insights articles, in T. Rowe Price
advertisements, and in the media.
Total Return
Total return is the most widely used performance measure.
Detailed performance information is included in the funds' annual
and semiannual shareholder reports.
This tells you how much an investment in the fund has changed in
value over a given time period. It reflects any net increase or
decrease in the share price and assumes that all dividends and
capital gains (if any) paid during the period were reinvested in
additional shares. Including reinvested distributions means that
total return numbers include the effect of compounding, i.e., you
receive income and capital gain distributions on a rising number
of shares.
Advertisements for the fund may include cumulative or compound
average annual total return figures, which may be compared with
various indices, other performance measures, or other mutual
funds.
Cumulative Total Return
This is the actual rate of return on an investment for a
specified period. A cumulative return does not indicate how much
the value of the investment may have fluctuated between the
beginning and the end of the period specified.
Average Annual Total Return
This is always hypothetical. Working backward from the actual
cumulative return, it tells you what constant year-by-year return
would have produced the actual, cumulative return. By smoothing
out all the variations in annual performance, it gives you an
idea of the investment's annual contribution to your portfolio
provided you held it for the entire period in question.
Investment Policies and Practices
Fund managers have considerable leeway in choosing investment
strategies and selecting securities they believe will help the
fund achieve its objective.
This section takes a detailed look at some of the types of
securities the fund may hold in its portfolio and the various
kinds of investment practices that may be used in day-to-day
portfolio management. The fund's investment program is subject to
further restrictions and risks described in the "Statement of
Additional Information."
Shareholder approval is required to substantively change a fund's
objectives and certain investment restrictions noted in the
PAGE 77
following section as "fundamental policies." The managers also
follow certain "operating policies" which can be changed without
shareholder approval. However, significant changes are discussed
with shareholders in fund reports. The fund adheres to applicable
investment restrictions and policies at the time it makes an
investment. A later change in circumstances will not require the
sale of an investment if it was proper at the time it was made.
The fund's holdings of certain kinds of investments cannot exceed
maximum percentages of total assets, which are set forth herein.
For instance, the fund is not permitted to invest more than 10%
of total assets in hybrid instruments. While these restrictions
provide a useful level of detail about a fund's investment
program, investors should not view them as an accurate gauge of
the potential risk of such investments. For example, in a given
period, a 5% investment in hybrid instruments could have
significantly more than a 5% impact on a fund's share price. The
net effect of a particular investment depends on its volatility
and the size of its overall return in relation to the performance
of all the fund's other investments.
Changes in the fund's holdings, the fund's performance, and the
contribution of various investments are discussed in the
shareholder reports sent to you.
Types of Portfolio Securities
In seeking to meet its investment objective, the fund may invest
in any type of security whose investment characteristics are
consistent with the fund's investment program. The following
pages describe the principal types of portfolio securities and
investment management practices of the fund.
Fundamental policy:
The fund will not purchase a security if, as a result, with
respect to 75% of its total assets, more than 5% of its total
assets would be invested in securities of a single issuer or more
than 10% of the voting securities of the issuer would be held by
the fund.
Common and Preferred Stocks.
Stocks represent shares of ownership in a company. Generally,
preferred stock has a specified dividend and ranks after bonds
and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After
other claims are satisfied, common stockholders participate in
company profits on a pro rata basis; profits may be paid out in
dividends or reinvested in the company to help it grow. Increases
and decreases in earnings are usually reflected in a company's
stock price, so common stocks generally have the greatest
appreciation and depreciation potential of all corporate
PAGE 78
securities. While most preferred stocks pay a dividend, the fund
may purchase preferred stock where the issuer has omitted, or is
in danger of omitting, payment of its dividend. Such investments
would be made primarily for their capital appreciation potential.
Convertible Securities and Warrants.
The funds may invest in debt or preferred equity securities
convertible into or exchangeable for equity securities.
Traditionally, convertible securities have paid dividends or
interest at rates higher than common stocks but lower than
nonconvertible securities. They generally participate in the
appreciation or depreciation of the underlying stock into which
they are convertible, but to a lesser degree. In recent years,
convertibles have been developed which combine higher or lower
current income with options and other features. Warrants are
options to buy a stated number of shares of common stock at a
specified price anytime during the life of the warrants
(generally, two or more years).
Fixed Income Securities.
The fund may invest in any type of investment-grade security.
Such securities would be purchased in companies which meet the
investment criteria for the fund. The price of a bond fluctuates
with changes in interest rates, rising when interest rates fall
and falling when interest rates rise.
Hybrid Instruments.
Hybrids can have volatile prices and limited liquidity and their
use by a fund may not be successful.
These instruments (a type of potentially high-risk derivative)
can combine the characteristics of securities, futures, and
options. For example, the principal amount, redemption, or
conversion terms of a security could be related to the market
price of some commodity, currency, or securities index. Such
securities may bear interest or pay dividends at below market (or
even relatively nominal) rates. Under certain conditions, the
redemption value of such an investment could be zero.
Operating policy:
The fund may invest up to 10% of its total assets in hybrid
instruments.
Passive Foreign Investment Companies.
Each fund may purchase the securities of certain foreign
investment funds or trusts called passive foreign investment
companies. Such trusts have been the only or primary way to
invest in certain countries. In addition to bearing their
proportionate share of the trust's expenses (management fees and
operating expenses) shareholders will also indirectly bear
similar expenses of such trusts. Capital gains on the sale of
such holdings are considered ordinary income regardless of how
long the fund held its investment. In addition, the fund may be
PAGE 79
subject to corporate income tax and an interest charge on certain
dividends and capital gains earned from these investments,
regardless of whether such income and gains are distributed to
shareholders.
To avoid such tax and interest, each Price-Fleming fund intends
to treat these securities as sold on the last day of its fiscal
year and recognize any gains for tax purposes at that time;
losses will not be recognized. Such gains will be considered
ordinary income, which the fund will be required to distribute
even though it has not sold the security.
Private Placements.
These securities are sold directly to a small number of
investors, usually institutions. Unlike public offerings, such
securities are not registered with the SEC. Although certain of
these securities may be readily sold, for example, under Rule
144A, others may be illiquid and their sale may involve
substantial delays and additional costs.
Operating policy:
The fund will not invest more than 15% of its net assets in
illiquid securities. As part of this limit, the fund will not
invest more than 10% in certain restricted securities.
Types of Management Practices
Cash reserves provide flexibility and serve as a short-term
defense during periods of unusual market volatility.
Cash Position.
The fund will hold a certain portion of its assets in U.S. and
foreign dollar-denominated money market securities, including
repurchase agreements, in the two highest rating categories,
maturing in one year or less. For temporary, defensive purposes,
the fund may invest without limitation in such securities. This
reserve position provides flexibility in meeting redemptions,
expenses, and the timing of new investments, and serves as a
short-term defense during periods of unusual market volatility.
Borrowing Money and Transferring Assets.
The fund can borrow money from banks as a temporary measure for
emergency purposes, to facilitate redemption requests, or for
other purposes consistent with the fund's investment objectives
and program. Such borrowings may be collateralized with fund
assets, subject to restrictions.
Fundamental policy:
Borrowings may not exceed 33 1/3% of total fund assets.
Operating policies:
The fund may not transfer as collateral any portfolio securities
except as necessary in connection with permissible borrowings or
investments, and then such transfers may not exceed 33 1/3% of
PAGE 80
the fund's total assets. The fund may not purchase additional
securities when borrowings exceed 5% of total assets.
Foreign Currency Transactions.
The fund will normally conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or
through entering into forward contracts to purchase or sell
foreign currencies. The fund will generally not enter into a
forward contract with a term greater than one year.
The fund will generally enter into forward foreign currency
exchange contracts only under two circumstances. First, when a
fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, it may desire to
"lock in" the U.S. dollar price of the security. Second, when
Price-Fleming believes that the currency of a particular foreign
country may suffer or enjoy a substantial movement against
another currency, it may enter into a forward contract to sell or
buy the former foreign currency (or another currency which acts
as a proxy for that currency) approximating the value of some or
all of the fund's portfolio securities denominated in such
foreign currency. Under certain circumstances, a fund may commit
a substantial portion or the entire value of its portfolio to the
consummation of these contracts. Price-Fleming will consider the
effect such a commitment of its portfolio to forward contracts
would have on the investment program of the fund and the
flexibility of the fund to purchase additional securities.
Although forward contracts will be used primarily to protect the
fund from adverse currency movements, they also involve the risk
that anticipated currency movements will not be accurately
predicted and a fund's total return could be adversely affected
as a result.
There are certain markets where it is not possible to engage in
effective foreign currency hedging. This may be true, for
example, for the currencies of various Latin American countries
and other emerging markets where the foreign exchange markets are
not sufficiently developed to permit hedging activity to take
place.
Futures and Options.
Futures are used to manage risk; options give the investor the
option to buy or sell an asset at a predetermined price in the
future.
Futures (a type of potentially high-risk derivative) are often
used to manage risk, because they enable the investor to buy or
sell an asset in the future at an agreed upon price. Options
(another type of potentially high-risk derivative) give the
PAGE 81
investor the right, but not the obligation, to buy or sell an
asset at a predetermined price in the future. The funds may buy
and sell futures and options contracts for a number of reasons
including: to manage its exposure to changes in securities prices
and foreign currencies; as an efficient means of adjusting
overall exposure to certain markets; in an effort to enhance
income; and to protect the value of portfolio securities. The
funds may purchase, sell, or write call and put options on
securities, financial indices, and foreign currencies.
Futures contracts and options may not always be successful
hedges; their prices can be highly volatile. Using them could
lower a fund's total return, and the potential loss from the use
of futures can exceed the fund's initial investment in such
contracts.
Operating policies:
Futures: Initial margin deposits and premiums on options used for
non-hedging purposes will not equal more than 5% of a fund's net
asset value. Options on securities: The total market value of
securities against which a fund has written call or put options
may not exceed 25% of its total assets. The fund will not commit
more than 5% of its total assets to premiums when purchasing call
or put options.
Tax Consequences of Hedging.
Under applicable tax law, the fund may be required to limit its
gains from hedging in foreign currency forwards, futures and
options. Although the fund is expected to comply with such
limits, the extent to which these limits apply is subject to tax
regulations as yet unissued. Hedging may also result in the
application of the mark-to-market and straddle provisions of the
Internal Revenue Code. These provisions could result in an
increase (or decrease) in the amount of taxable dividends paid by
the fund and could affect whether dividends paid by the fund are
classified as capital gains or ordinary income.
Lending of Portfolio Securities.
Like other mutual funds, the fund may lend securities to broker-
dealers, other institutions, or other persons to earn additional
income. The principal risk is the potential insolvency of the
broker-dealer or other borrower. In this event, the fund could
experience delays in recovering its securities and possibly
capital losses.
Fundamental policy:
The value of loaned securities may not exceed 33 1/3% of a fund's
total assets.
Portfolio Turnover.
Turnover is an indication of frequency. The fund will not
generally trade in securities for short-term profits, but when
circumstances warrant, securities may be purchased and sold
PAGE 82
without regard to the length of time held. The fund's portfolio
turnover rates for the fiscal years ended October 31, 1993, 1994,
and 1995 were 29.8% (annualized), 22.9%, and 178.8%,
respectively.
PAGE 83
PAGE 1
4 Investing with T. Rowe Price
Account Requirements and Transaction
Information
________________________
Always verify your
transactions by carefully
reviewing the
confirmation we send
you. Please report any
discrepancies to
Shareholder Services. Tax Identification Number
We must have your correct social security
or corporate tax identification number on a
signed New Account Form or W-9 Form.
Otherwise, federal law requires the funds
to withhold a percentage (currently 31%) of
your dividends, capital gain distributions,
and redemptions, and may subject you to an
IRS fine. If this information is not
received within 60 days after your account
is established, your account may be
redeemed, priced at the NAV on the date of
redemption.
Unless you request otherwise, one
shareholder report will be mailed to
multiple account owners with the same tax
identification number and same zip code and
to shareholders who have requested that
their account be combined with someone
else's for financial reporting.
_________________________
T. Rowe Price Trust
Company
1-800-492-7670
1-410-625-6585 Employer-Sponsored Retirement Plans and
Institutional Accounts
Transaction procedures in the following
sections may not apply to employer-
sponsored retirement plans and
institutional accounts. For procedures
regarding employer-sponsored retirement
plans, please call T. Rowe Price Trust
Company or consult your plan administrator.
For institutional account procedures,
please call your designated account manager
or service representative.
Opening a New Account: $2,500 minimum
initial investment; $1,000 for retirement
PAGE 2
or gifts or transfers to minors (UGMA/UTMA)
accounts
Account Registration
If you own other T. Rowe Price funds, be
sure to register any new account just like
your existing accounts so you can exchange
among them easily. (The name and account
type would have to be identical.)
________________________
Regular Mail
T. Rowe Price
Account Services
P.O. Box 17300
Baltimore, MD
21298-9353
Mailgram, Express,
Registered, or Certified
Mail
T. Rowe Price
Account Services
10090 Red Run Blvd.
Owings Mills, MD 21117 By Mail
Please make your check payable to T. Rowe
Price Funds (otherwise it will be returned)
and send your check together with the New
Account Form to the address at left. We do
not accept third party checks, except for
IRA Rollover checks, to open new accounts.
By Wire
o Call Investor Services for an account
number and give the following wire
address to your bank:
Morgan Guaranty Trust Co. of New York
ABA# 021000238
T. Rowe Price [fund name]
AC-00153938
account name(s), and account number
o Complete a New Account Form and mail it
to one of the appropriate addresses
listed on the previous page.
Note: No services will be established and
IRS penalty withholding may occur until a
signed New Account Form is received.
Also, retirement plans cannot be opened
by wire.
By Exchange
PAGE 3
Call Shareholder Services or use
Tele*Access or PC*Access (see "Automated
Services" under "Shareholder Services").
The new account will have the same
registration as the account from which you
are exchanging. Services for the new
account may be carried over by telephone
request if preauthorized on the existing
account. (See explanation of "Excessive
Trading" under "Transaction Procedures.")
In Person
Drop off your New Account Form at any of
the locations listed on the cover and
obtain a receipt.
Purchasing Additional Shares: $100 minimum
purchase; $50 minimum for retirement plans
and Automatic Asset Builder
By ACH Transfer
Use Tele*Access, PC*Access, or call
Investor Services if you have established
electronic transfers using the ACH network.
By Wire
Call Shareholder Services or use the wire
address in "Opening a New Account."
________________________
Regular Mail
T. Rowe Price Funds
Account Services
P.O. Box 89000
Baltimore, MD
21289-1500
(For Mailgrams,
Express, Registered,
or Certified Mail,
see previous section.)
By Mail
o Make your check payable to T. Rowe Price
Funds (otherwise it may be returned).
o Mail the check to us at the address shown
at left with either a fund reinvestment
slip or a note indicating the fund you
want to buy and your fund account number.
o Remember to provide your account
number and the fund name on your
check.
PAGE 4
By Automatic Asset Builder
Fill out the Automatic Asset Builder
section on the New Account or Shareholder
Services Form.
Exchanging and Redeeming Shares
By Phone
Call Shareholder Services. If you find our
phones busy during unusually volatile
markets, please consider placing your order
by Tele*Access, PC*Access (if you have
previously authorized telephone services),
mailgram or by express mail. For exchange
policies, please see "Transaction
Procedures and Special Requirements--
Excessive Trading."
Redemption proceeds can be mailed to your
account address, sent by ACH transfer, or
wired to your bank (provided your bank
information is already on file). For
charges, see "Electronic Transfers--By
Wire" under "Shareholder Services".
_________________________
For Mailgram,
Express, Registered,
or Certified mail,
see addresses under
"Opening a New Account."
By Mail
For each account involved, provide the
account name, number, fund name, and
exchange or redemption amount. For
exchanges, be sure to indicate any fund you
are exchanging out of and the fund or funds
you are exchanging into. Please mail to the
appropriate address below or as indicated
at left. T. Rowe Price requires the
signatures of all owners exactly as
registered, and possibly a signature
guarantee (see "Transaction Procedures and
Special Requirements--Signature
Guarantees").
Regular Mail
For nonretirement For employer-sponsored
and IRA accounts: retirement accounts:
T. Rowe Price T. Rowe Price Trust
Account Services Company
P.O. Box 89000 P.O. Box 89000
PAGE 5
Baltimore, MD Baltimore, MD
21289-0220 21289-0300
Redemptions from employer-sponsored
retirement accounts must be in writing;
please call T. Rowe Price Trust Company or
your plan administrator for instructions.
IRA distributions may be requested in
writing or by telephone; please call
Shareholder Services to obtain an IRA
Distribution Form or an IRA Shareholder
Services Form to authorize the telephone
redemption service.
Rights Reserved By the Fund
The fund and its agents reserve the right
to waive or lower investment minimums; to
accept initial purchases by telephone or
mailgram; to cancel or rescind any purchase
or exchange (for example, if an account has
been restricted due to excessive trading or
fraud) upon notice to the shareholder
within five business days of the trade or
if the written confirmation has not been
received by the shareholder, whichever is
sooner; to freeze any account and suspend
account services when notice has been
received of a dispute between the
registered or beneficial account owners or
there is reason to believe a fraudulent
transaction may occur; to otherwise modify
the conditions of purchase and any services
at any time; or to act on instructions
believed to be genuine.
_______________________
Shareholder Services
1-800-225-5132
1-410-625-6500 Shareholder Services
Many services are available to you as a T.
Rowe Price shareholder; some you receive
automatically and others you must authorize
on the New Account Form. By signing up for
services on the New Account Form rather
than later, you avoid having to complete a
separate form and obtain a signature
guarantee. This section reviews some of the
principal services currently offered. Our
Services Guide contains detailed
descriptions of these and other services.
If you are a new T. Rowe Price investor,
PAGE 6
you will receive a Services Guide with our
Welcome Kit.
_________________________
Investor Services
1-800-638-5660
1-410-547-2308 Note: Corporate and other entity accounts
require an original or certified resolution
to establish services and to redeem by
mail. For more information, call Investor
Services.
Retirement Plans
We offer a wide range of plans for
individuals and institutions, including
large and small businesses: IRAs, SEP-IRAs,
Keoghs (profit sharing, money purchase
pension), 401(k), and 403(b)(7). For
information on IRAs, call Investor
Services. For information on all other
retirement plans, please call our Trust
Company at 1-800-492-7670.
Exchange Service
You can move money from one account to an
existing identically registered account, or
open a new identically registered account.
Remember, exchanges are purchases and sales
for tax purposes. (Exchanges into a state
tax-free fund are limited to investors
living in states where the funds are
registered.) Some of the T. Rowe Price
funds may impose a redemption fee of .50%
to 2%, payable to such funds, on shares
held for less than one year, or in some
funds, six months.
Automated Services
_________________________
Tele*Access
1-800-638-2587
1-410-625-7676 Tele*Access. 24-hour service via toll-free
number provides information on fund yields
and prices, dividends, account balances,
and your latest transaction as well as the
ability to request prospectuses, account
and tax forms, duplicate statements,
checks, and to initiate purchase,
redemption and exchange orders in your
accounts (see "Electronic Transfers"
below).
PC*Access. 24-hour service via dial-up
PAGE 7
modem provides the same information as
Tele*Access, but on a personal computer.
Please call Investor Services for an
information guide.
Telephone and Walk-In Services
Buy, sell, or exchange shares by calling
one of our service representatives or by
visiting one of our investor center
locations whose addresses are listed on the
cover.
Electronic Transfers
By ACH. With no charges to pay, you can
initiate a purchase or redemption for as
little as $100 or as much as $100,000
between your bank account and fund account
using the ACH network. Enter instructions
via Tele*Access, PC*Access or call
Shareholder Services.
By Wire. Electronic transfers can also be
conducted via bank wire. There is currently
a $5 fee for wire redemptions under $5,000,
and your bank may charge for incoming or
outgoing wire transfers regardless of size.
Checkwriting (Not available for equity
funds, or the High Yield Fund or Emerging
Markets Bond Fund)
You may write an unlimited number of free
checks on any money market fund, and most
bond funds, with a minimum of $500 per
check. Keep in mind, however that a check
results in a redemption; a check written on
a bond fund will create a taxable event
which you and we must report to the IRS.
Automatic Investing ($50 minimum)
You can invest automatically in several
different ways, including:
o Automatic Asset Builder. You instruct us
to move $50 or more from your bank
account, or you can instruct your
employer to send all or a portion of your
paycheck to the fund or funds you
designate.
Note: If you are moving money from
your bank account, and if the date you
select for your transactions falls on a
PAGE 8
Sunday or Monday holiday, your order will
be priced on the second business day
following this date.
o Automatic Exchange. You can set up
systematic investments from one fund
account into another, such as from a
money fund into a stock fund.
_________________________
Discount Brokerage is a
division of T. Rowe Price
Investment Services, Inc.
Discount Brokerage
You can trade stocks, bonds, options,
precious metals, and other securities at a
savings over regular commission rates. Call
Investor Services for information.
Note: If you buy or sell T. Rowe Price
Funds through anyone other than T. Rowe
Price, such as broker-dealers or banks, you
may be charged transaction or service fees
by those institutions. No such fees are
charged by T. Rowe Price Investment
Services or the fund for transactions
conducted directly with the fund.
PAGE 84
Prospectus
T. Rowe Price International Stock Fund
T. Rowe Price
International Funds, Inc.
March 1, 1996
An international stock fund for investors seeking to diversify
beyond U.S. borders.
Invest With Confidence
To Open an Account
Investor Services
1-800-638-5660
1-410-547-2308
For Existing Accounts
Shareholder Services
1-800-225-5132
1-410-625-6500
For Yields and Prices
Tele*AccessR
1-800-638-2587
1-410-625-7676
24 hours, 7 days
Investor Centers
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
To help you achieve your financial goals, T. Rowe Price offers a
wide range of stock, bond, and money market investments, as well
as convenient services and timely, informative reports.
Invest With Confidence
PAGE 85
PAGE 1
STATEMENT OF ADDITIONAL INFORMATION
T. Rowe Price International Funds, Inc.
International Stock Fund
International Discovery Fund
European Stock Fund
Japan Fund
New Asia Fund
Latin America Fund
Emerging Markets Stock Fund
Global Stock Fund
and
Institutional International Funds, Inc.
Foreign Equity Fund
(the "Funds")
This Statement of Additional Information is not a
prospectus but should be read in conjunction with the Funds'
prospectus dated March 1, 1996, which may be obtained from
T. Rowe Price Investment Services, Inc., 100 East Pratt Street,
Baltimore, Maryland 21202.
If you would like a prospectus for a Fund of which you
are not a shareholder, please call 1-800-638-5660. A prospectus
with more complete information, including management fees and
expenses will be sent to you. Please read it carefully before
you invest or send money.
The date of this Statement of Additional Information is
March 1, 1996.
PAGE 2
TABLE OF CONTENTS
Page Page
Call and Put Options . . . Investment Performance .
Capital Stock . . . . . . . Investment Programs . . .
Code of Ethics . . . . . . Investment Restrictions .
Custodian . . . . . . . . . Legal Counsel . . . . . .
Dealer Options . . . . . . Lending of Portfolio
Distributor for Funds . . . Securities . . . . . . .
Dividends . . . . . . . . . Management of Funds . . .
Federal and State Net Asset Value Per
Registration of Shares . . Share . . . . . . . . .
Foreign Currency Portfolio Management
Transactions . . . . . . . Practices . . . . . . .
Foreign Futures and Portfolio Transactions .
Options . . . . . . . . . Pricing of Securities . .
Futures Contracts . . . . . Principal Holders of
Hybrid Instruments . . . . Securities . . . . . . .
Illiquid or Restricted Repurchase Agreements . .
Securities . . . . . . . . Risk Factors of Foreign
Independent Accountants . . Investing . . . . . . .
Investment Management Tax Status . . . . . . .
Services . . . . . . . . . Taxation of Foreign
Investment Objectives and Shareholders . . . . . .
Policies . . . . . . . . . Warrants . . . . . . . .
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of
each Fund's investment objectives and policies discussed in the
prospectus. Unless otherwise specified, the investment program
and restrictions of each Fund are not fundamental policies. The
operating policies of each Fund are subject to change by its
Board of Directors without shareholder approval. However,
shareholders will be notified of a material change in an
operating policy. The fundamental policies of each Fund may not
be changed without the approval of at least a majority of the
outstanding shares of each Fund or, if it is less, 67% of the
shares represented at a meeting of shareholders at which the
holders of 50% or more of the shares are represented.
Throughout this Statement of Additional Information,
"the Fund" is intended to refer to each Fund listed on the cover
page, unless otherwise indicated.
PAGE 3
INVESTMENT PROGRAMS
All Funds
The Funds' investment manager, Rowe Price-Fleming
International, Inc. ("Price-Fleming"), one of America's largest
managers of no-load international mutual fund assets, regularly
analyzes a broad range of international equity and fixed income
markets in order to assess the degree of risk and level of return
that can be expected from each market. Based upon its current
assessment, Price-Fleming believes long-term growth of capital
may be achieved by investing in marketable securities of non-
United States companies which have the potential for growth of
capital. Of course, there can be no assurance that Price-
Fleming's forecasts of expected return will be reflected in the
actual returns achieved by the Funds.
Each Fund's share price will fluctuate with market,
economic and foreign exchange conditions, and your investment may
be worth more or less when redeemed than when purchased. The
Funds should not be relied upon as a complete investment program,
nor used to play short-term swings in the stock or foreign
exchange markets. The Funds are subject to risks unique to
international investing. See discussion under "Risk Factors of
Foreign Investing" beginning on page __. Further, there is no
assurance that the favorable trends discussed below will
continue, and the Funds cannot guarantee they will achieve their
objectives.
International Stock, Foreign Equity, and Global Stock
Funds
It is the present intention of Price-Fleming to invest
in companies based in (or governments of or within) the Far East
(for example, Japan, Hong Kong, Singapore, and Malaysia), Europe
(for example, United Kingdom, Germany, Hungary, Poland,
Netherlands, France, Spain, and Switzerland), South Africa,
Australia, Canada, Latin America, and such other areas and
countries as Price-Fleming may determine from time to time. The
Global Stock Fund may also invest in companies based in the U.S.
In determining the appropriate distribution of
investments among various countries and geographic regions,
Price-Fleming ordinarily considers the following factors:
prospects for relative economic growth between foreign countries;
expected levels of inflation; government policies influencing
business conditions; the outlook for currency relationships; and
the range of individual investment opportunities available to
international investors.
PAGE 4
In analyzing companies for investment, Price-Fleming
ordinarily looks for one or more of the following
characteristics: an above-average earnings growth per share;
high return on invested capital; healthy balance sheet; sound
financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product
development and marketing; efficient service; pricing
flexibility; strength of management; and general operating
characteristics which will enable the companies to compete
successfully in their market place. While current dividend
income is not a prerequisite in the selection of portfolio
companies, the companies in which the Fund invests normally will
have a record of paying dividends, and will generally be expected
to increase the amounts of such dividends in future years as
earnings increase.
It is expected that the Fund's investments will
ordinarily be traded on exchanges located at least in the
respective countries in which the various issuers of such
securities are principally based.
International Discovery Fund
It is the present intention of Price-Fleming to invest
primarily in smaller (i.e. small to medium size) companies based
in developed and selected emerging countries located in the
Pacific Basin, Western Europe, Latin America and such other areas
and countries as Price-Fleming may determine from time to time.
Price-Fleming believes that such smaller companies may have the
potential for greater, more dynamic growth than larger firms,
which may have reached a period of maturity and more gradual
growth. It is generally easier for a company to grow from a
smaller base. In addition, smaller companies are often more
flexible and responsive to customers, and to changes in
competitive conditions. Medium size companies also display such
characteristics to a certain extent. However, there are also
special risks associated with investing in smaller companies.
In selecting portfolio investments, Price-Fleming will
consider: a company's growth prospects, including the potential
for superior appreciation due to growth in earnings, relative
valuation of its securities, and any risk associated with
investment; the industry in which the company operates, with a
view to identification of global developments within industries,
international investment trends, and social, economic or
political movements affecting a particular industry; the country
in which the company is based, as well as historical and
anticipated foreign currency exchange rate fluctuations; and the
feasibility of gaining access to the securities market in a
PAGE 5
country and of implementing the necessary custodial arrangements.
The investment program of the Fund has been developed in the
belief that research-based investment in a diversified portfolio
of equity securities of companies in a number of foreign
countries will give shareholders a chance to participate on a
global basis in the opportunities available in the growing
foreign securities markets.
The countries in which the Fund will seek investments
include those listed below. The Fund may not invest in all the
countries listed, and it may invest in other countries as well,
when such investments are consistent with the Fund's investment
objective and policies. Countries designated with a number sign
(#) are emerging, or less developed, countries which for purposes
of this prospectus are defined as countries with a low or middle-
income economy as determined by the World Bank.
Pacific Basin Western Europe Other
Australia Austria Argentina#
Hong Kong Belgium Brazil#
South Korea Denmark Canada
Japan Finland Chile#+
Malaysia# France Hungary#
Philippines# Germany India#+
New Zealand Greece# Mexico#
Singapore# Ireland Turkey#
Taiwan#+ Italy Colombia#+
Thailand# Luxembourg Venezuela#
Indonesia# Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
_________________________________________________________________
+ Indicates countries in which the Fund effectively may
invest only or primarily through investment funds
subject to the provisions of the Investment Company Act
of 1940 relating to the purchase of securities of
investment companies. See "Investment Restrictions
Operating Policy No. 3."
The Fund also will seek to invest in leading companies
in other emerging countries as their securities markets and
banking systems develop, including People's Republic of China,
the Czech Republic, Slovakia, Israel, Jordan, Morocco, Nigeria,
Pakistan, Poland, Peru and Vietnam, at such time as investment in
PAGE 6
these countries becomes feasible. It may not be feasible for the
Fund currently to invest in all of these countries due to
restricted access to their securities markets or inability to
implement satisfactory custodial arrangements.
European Stock Fund
Market deregulation, privatization, and lowered barriers
to foreign investment have led to greater investment
opportunities in Western Europe and the potential for greater
investment in Eastern Europe. Economic and political reforms in
Eastern Europe may increase the investment and growth
possibilities for all of Europe. The Fund intends to invest in
companies based in any Western or Eastern European country, as
well as Russia and the countries of the former Soviet Union.
European markets for investment include:
Primary Secondary Developing
France Austria Czech Republic
Germany Belgium Greece
Holland Denmark Hungary
Italy Finland Poland
Spain Ireland Russia
Sweden Luxembourg Slovakia
Switzerland Norway Turkey
United Kingdom Portugal
_________________________________________________________________
Other Eastern European markets may become available at
any time.
In seeking its objectives, the Fund will invest
primarily in established European companies participating in
markets and sectors which have superior long-term growth
potential. Individual stocks will be evaluated on various
criteria, including earnings history and prospects, book value,
degree of price leverage, and price/earnings ratio. Both large
and small capitalization companies will be candidates for the
portfolio.
Japan Fund
The Japan Fund invests primarily in common stocks of
Japanese companies participating in markets and sectors which are
believed to have attractive long-term growth potential. These
may include the export sector, where many Japanese companies are
world leaders in their industries. They may also include the
consumer sector--the fastest-growing segment of Japan's economy--
where companies are working to meet growing domestic demand for
consumer goods and services.
PAGE 7
The Fund has the flexibility to invest in both large and
small companies, as deemed appropriate by Price-Fleming. This
allows the Fund to benefit from the proven growth potential of
established companies, as well as the enhanced growth potential
of smaller companies. In making specific stock selections,
Price-Fleming takes into account, among other factors, a
company's size, financial condition, marketing and technical
strengths, and competitive position within its industry. The
Fund's portfolio will normally be broadly diversified across
industries and companies. Such broad diversification should help
reduce volatility.
New Asia Fund
Price-Fleming believes the rapidly growing economies in
Asia and the Pacific Basin, including Australia and New Zealand,
offer attractive opportunities for investment.
In contrast to Japan's more developed economy, the newly
industrialized nations of this region are in an earlier, more
dynamic growth stage of their development. Price-Fleming
believes that the continued growth opportunities exist due to
structural changes taking place throughout the region.
o The relaxation of trade barriers and the freer
movement of capital are increasing the flow of
commerce within the region and fostering economic
independence. At the same time, growing trade with
Japan, the United States and Europe is fueling
rapid economic development.
o Rising labor costs in more developed countries are
making the large, lower-cost work force of Asia and
the Pacific Basin increasingly attractive,
resulting in the dramatic growth of manufacturing
industries.
o As capital investment increases, many of the Asian
and Pacific Basin countries are developing more
efficient capital markets for investment.
The Fund may invest in the countries listed below, as
well as other Asian and Pacific Basin countries and regions, such
as China, Sri Lanka, Pakistan and Indochina, as their markets
become more accessible.
PAGE 8
Australia Philippines#
Hong Kong Singapore#
India+# South Korea
Indonesia# Taiwan+#
Malaysia# Thailand#
New Zealand
_________________________________________________________________
+ Indicates countries in which the Fund effectively may
invest only or primarily through investment funds
subject to the provisions of the Investment Company Act
of 1940 relating to the purchase of securities of
investment companies. See "Investment Restrictions
Operating Policy No. 3."
# Countries designated with a number sign (#) are emerging
or less developed countries.
Other Asian and Pacific Basin markets may become
available at any time.
Latin America Fund
Price-Fleming believes that the economic revitalization
of the Latin American region will provide attractive investment
opportunities.
After the "lost years" of the 1970's and early 80's when
economic stagnation and hyperinflation became commonplace,
certain of the governments of the region have embarked on a
process of transformation:
o rolling back the dominance of the state in favor of
the private sector, encouraging privatizations of
state owned companies, removing price controls and
controlling public expenditure; and
o lowering tariff barriers, promoting trade and
encouraging both free trade blocks and investment
by foreigners.
As economies have been stabilized, capital flows into
the region have picked up leading to increased investment and a
revival of growth. Although countries such as Chile, Mexico and
Argentina have made considerable progress, this economic catch-up
is still at an early stage, while in countries such as Brazil and
Peru the process is just beginning.
The Fund may invest in the countries listed below,
together with other countries in the region as their markets
PAGE 9
become accessible. The Latin America region includes Mexico,
Central America, South America and the islands of the Caribbean.
Argentina# Mexico#
Brazil# Peru#
Chile+# Venezuela#
Colombia+#
_________________________________________________________________
+ Indicates countries in which the Fund effectively may
invest only or primarily through investment funds
subject to the provisions of the Investment Company Act
of 1940 relating to the purchase of securities of
investment companies. See "Investment Restrictions
Operating Policy No. 3."
# Countries designated with a number sign (#) are emerging
or less developed countries.
Emerging Markets Stock Fund
The fund's objective is long-term growth of capital
through investment primarily in common stocks of large and small
companies domiciled, or with primary operations, in emerging
markets. An emerging market includes any country defined as
emerging or developing by the International Bank for
Reconstruction and Development (World Bank), International
Finance Corporation, or the United Nations. The fund's
investments are expected to be diversified geographically across
emerging markets in Latin America, the Far East, Europe, and
Africa.
Countries in which the fund may invest are listed below
and others will be added as opportunities develop:
Africa and the
Far East: Latin America: Europe: Middle East:
China Argentina Portugal South Africa
Indonesia Brazil Hungary Nigeria
Korea Chile Turkey Zimbabwe
Malaysia Colombia Poland Botswana
Thailand Mexico Russia Jordan
India Venezuela Czech Republic Tunisia
Philippines Peru Slovakia Morocco
Taiwan Belize Greece Egypt
Hong Kong Baltic States Israel
Singapore Austria
Sri Lanka
Pakistan
Mauritius
PAGE 10
This fund is intended for investors with long-term
investment horizons who are looking for an aggressive approach to
international investing. Most emerging countries are experiencing
substantial economic and political restrictions, and their
developing financial markets offer the potential for significant
capital appreciation. Many of these countries are moving from
one-party rule to a multi-party democracy; from agrarian to
industrialized economies; and from nationalized to free market,
privatized industries. These transitions are proceeding smoothly
in some markets but not in others. Obviously, there is no
guarantee favorable trends will continue. Companies in emerging
markets that successfully navigate these changes offer investors
the prospect for earnings growth far more rapid than that
typically generated by companies in more mature, developed
markets. However, investors in this fund should be comfortable
with the risks of international investing and be prepared for
substantial share price volatility.
Risk Factors of Foreign Investing
There are special risks when investing in the Funds.
Some risks are inherent in any international mutual fund while
others relate more to the countries in which the Funds will
invest. Many of the risks are more pronounced for investments in
developing or emerging countries, such as many of the countries
of Southeast Asia, Latin America, Eastern Europe and the Middle
East. Although there is no universally accepted definition, a
developing country is generally considered to be a country which
is in the initial stages of its industrialization cycle with a
per capita gross national product of less than $8,000.
General. Investors should understand that all
investments have a risk factor. There can be no guarantee
against loss resulting from an investment in the Funds, and there
can be no assurance that the Funds' investment policies will be
successful, or that its investment objectives will be attained.
The Funds are designed for individual and institutional investors
seeking to diversify beyond the United States in actively
researched and managed portfolios, and are intended for long-term
investors who can accept the risks entailed when investing in
foreign securities.
Political and Economic Factors. Individual foreign
economies of certain countries may differ favorably or
unfavorably from the United States' economy in such respects as
growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments
position. The internal politics of certain foreign countries are
PAGE 11
not as stable as in the United States. For example, in 1991, the
existing government in Thailand was overthrown in a military
coup. In 1992, there were two military coup attempts in
Venezuela and in 1992 the President of Brazil was impeached. In
1994-1995, the Mexican peso plunged in value setting off a severe
crisis in the Mexican economy. In addition, significant external
political risks currently affect some foreign countries. Both
Taiwan and China still claim sovereignty of one another and there
is a demilitarized border between North and South Korea.
Governments in certain foreign countries continue to
participate to a significant degree, through ownership interest
or regulation, in their respective economies. Action by these
governments could have a significant effect on market prices of
securities and payment of dividends. The economies of many
foreign countries are heavily dependent upon international trade
and are accordingly affected by protective trade barriers and
economic conditions of their trading partners. The enactment by
these trading partners of protectionist trade legislation could
have a significant adverse effect upon the securities markets of
such countries.
Currency Fluctuations. The Funds will invest in
securities denominated in various currencies. Accordingly, a
change in the value of any such currency against the U.S. dollar
will result in a corresponding change in the U.S. dollar value of
the Funds' assets denominated in that currency. Such changes
will also affect the Funds' income. Generally, when a given
currency appreciates against the dollar (the dollar weakens) the
value of the Funds' securities denominated in that currency will
rise. When a given currency depreciates against the dollar (the
dollar strengthens) the value of the Funds' securities
denominated in that currency would be expected to decline.
Investment and Repatriation of Restrictions. Foreign
investment in the securities markets of certain foreign countries
is restricted or controlled in varying degrees. These
restrictions may limit and at times preclude investment in
certain of such countries and may increase the cost and expenses
of the Funds. Investments by foreign investors are subject to a
variety of restrictions in many developing countries. These
restrictions may take the form of prior governmental approval,
limits on the amount or type of securities held by foreigners,
and limits on the types of companies in which foreigners may
invest. Additional or different restrictions may be imposed at
any time by these or other countries in which the Funds invest.
In addition, the repatriation of both investment income and
capital from several foreign countries is restricted and
controlled under certain regulations, including in some cases the
PAGE 12
need for certain government consents. For example, capital
invested in Chile normally cannot be repatriated for one year.
Market Characteristics. It is contemplated that most
foreign securities, other than Latin American securities, will be
purchased in over-the-counter markets or on stock exchanges
located in the countries in which the respective principal
offices of the issuers of the various securities are located, if
that is the best available market. Foreign stock markets are
generally not as developed or efficient as, and may be more
volatile than, those in the United States. While growing in
volume, they usually have substantially less volume than U.S.
markets and the Funds' portfolio securities may be less liquid
and subject to more rapid and erratic price movements than
securities of comparable U.S. companies. Equity securities may
trade at price/earnings multiples higher than comparable United
States securities and such levels may not be sustainable. Fixed
commissions on foreign stock exchanges are generally higher than
negotiated commissions on United States exchanges, although the
Funds will endeavor to achieve the most favorable net results on
their portfolio transactions. There is generally less government
supervision and regulation of foreign stock exchanges, brokers
and listed companies than in the United States. Moreover,
settlement practices for transactions in foreign markets may
differ from those in United States markets. Such differences may
include delays beyond periods customary in the United States and
practices, such as delivery of securities prior to receipt of
payment, which increase the likelihood of a "failed settlement."
Failed settlements can result in losses to a Fund.
Investment Funds. The Funds may invest in investment
funds which have been authorized by the governments of certain
countries specifically to permit foreign investment in securities
of companies listed and traded on the stock exchanges in these
respective countries. The Funds' investment in these funds is
subject to the provisions of the 1940 Act. If the Funds invest
in such investment funds, the Funds' shareholders will bear not
only their proportionate share of the expenses of the Funds
(including operating expenses and the fees of the investment
manager), but also will bear indirectly similar expenses of the
underlying investment funds. In addition, the securities of
these investment funds may trade at a premium over their net
asset value.
Information and Supervision. There is generally less
publicly available information about foreign companies comparable
to reports and ratings that are published about companies in the
United States. Foreign companies are also generally not subject
to uniform accounting, auditing and financial reporting
standards, practices and requirements comparable to those
PAGE 13
applicable to United States companies. It also may be more
difficult to keep currently informed of corporate actions which
affect the prices of portfolio securities.
Taxes. The dividends and interest payable on certain of
the Funds' foreign portfolio securities may be subject to foreign
withholding taxes, thus reducing the net amount of income
available for distribution to the Funds' shareholders. A
shareholder otherwise subject to United States federal income
taxes may, subject to certain limitations, be entitled to claim a
credit or deduction for U.S. federal income tax purposes for his
or her proportionate share of such foreign taxes paid by the
Funds. (See "Tax Status," page __.)
Costs. Investors should understand that the expense
ratios of the Funds can be expected to be higher than investment
companies investing in domestic securities since the cost of
maintaining the custody of foreign securities and the rate of
advisory fees paid by the Funds are higher.
Small Companies. Small companies may have less
experienced management and fewer management resources than larger
firms. A smaller company may have greater difficulty obtaining
access to capital markets, and may pay more for the capital it
obtains. In addition, smaller companies are more likely to be
involved in fewer market segments, making them more vulnerable to
any downturn in a given segment. Some of these factors may also
apply, to a lesser extent, to medium size companies. Some of the
smaller companies in which the Funds will invest may be in major
foreign markets; others may be leading companies in emerging
countries outside the major foreign markets. Securities analysts
generally do not follow such securities, which are seldom held
outside of their respective countries and which may have
prospects for long-term investment returns superior to the
securities of well-established and well-known companies. Direct
investment in such securities may be difficult for United States
investors because, among other things, information relating to
such securities is often not readily available. Of course, there
are also risks associated with such investments, and there is no
assurance that such prospects will be realized.
Other. With respect to certain foreign countries,
especially developing and emerging ones, there is the possibility
of adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitations on the
removal of funds or other assets of the Funds, political or
social instability, or diplomatic developments which could affect
investments by U.S. persons in those countries.
PAGE 14
International Stock, International Discovery, European Stock,
Emerging Markets Stock, Global Stock, and Foreign Equity Funds
Eastern Europe and Russia. Changes occurring in Eastern
Europe and Russia today could have long-term potential
consequences. As restrictions fall, this could result in rising
standards of living, lower manufacturing costs, growing consumer
spending, and substantial economic growth. However, investment
in the countries of Eastern Europe and Russia is highly
speculative at this time. Political and economic reforms are too
recent to establish a definite trend away from centrally-planned
economies and state owned industries. In many of the countries
of Eastern Europe and Russia, there is no stock exchange or
formal market for securities. Such countries may also have
government exchange controls, currencies with no recognizable
market value relative to the established currencies of western
market economies, little or no experience in trading in
securities, no financial reporting standards, a lack of a banking
and securities infrastructure to handle such trading, and a legal
tradition which does not recognize rights in private property.
In addition, these countries may have national policies which
restrict investments in companies deemed sensitive to the
country's national interest. Further, the governments in such
countries may require governmental or quasi-governmental
authorities to act as custodian of a Fund's assets invested in
such countries and these authorities may not qualify as a foreign
custodian under the Investment Company Act of 1940 and exemptive
relief from such Act may be required. All of these
considerations are among the factors which could cause
significant risks and uncertainties to investment in Eastern
Europe and Russia. Each Fund will only invest in a company
located in, or a government of, Eastern Europe and Russia, if it
believes the potential return justifies the risk. To the extent
any securities issued by companies in Eastern Europe and Russia
are considered illiquid, each Fund will be required to include
such securities within its 15% restriction on investing in
illiquid securities.
Japan
The Japan Fund's concentration of its investments in
Japan means the Fund will be more dependent on the investment
considerations discussed above and may be more volatile than a
fund which is broadly diversified geographically. To the extent
any of the other funds also invests in Japan, such investments
will be subject to these same factors. Additional factors
relating to Japan include the following:
PAGE 15
Japan has experienced earthquakes and tidal waves of
varying degrees of severity, and the risks of such phenomena, and
damage resulting therefrom, continue to exist. Japan also has
one of the world's highest population densities. A significant
percentage of the total population of Japan is concentrated in
the metropolitan areas of Tokyo, Osaka and Nagoya.
Energy. Japan has historically depended on oil for most
of its energy requirements. Almost all of its oil is imported,
the majority from the Middle East. In the past, oil prices have
had a major impact on the domestic economy, but more recently
Japan has worked to reduce its dependence on oil by encouraging
energy conservation and use of alternative fuels. In addition, a
restructuring of industry, with emphasis shifting from basic
industries to processing and assembly type industries, has
contributed to the reduction of oil consumption. However, there
is no guarantee this favorable trend will continue.
Foreign Trade. Overseas trade is important to Japan's
economy. Japan has few natural resources and must export to pay
for its imports of these basic requirements. Japan's principal
export markets are the U.S., Canada, the United Kingdom, the
Federal Republic of Germany, Australia, Korea, Taiwan, Hong Kong
and the People's Republic of China. The principal sources of its
imports are the U.S., South East Asia and the Middle East.
Because of the concentration of Japanese exports in highly
visible products such as automobiles, machine tools and
semiconductors and the large trade surpluses ensuing therefrom,
Japan has had difficult relations with its trading partners,
particularly the U.S., where the trade imbalance is the greatest.
It is possible trade sanctions or other protectionist measures
could impact Japan adversely in both the short- and long-term.
Latin America
The Latin America Fund's concentration of its
investments in Latin America means the Fund will be more
dependent on the investment considerations described above and
can be expected to be more volatile than a fund which is more
broadly diversified geographically. To the extent any of the
other funds also invests in Latin America, such investments will
be subject to these same factors. Additional factors relating to
Latin America include the following:
Inflation. Most Latin American countries have
experienced, at one time or another, severe and persistent levels
of inflation, including, in some cases, hyperinflation. This
has, in turn, led to high interest rates, extreme measures by
governments to keep inflation in check and a generally
debilitating effect on economic growth. Although inflation in
PAGE 16
many countries has lessened, there is no guarantee it will remain
at lower levels.
Political Instability. The political history of certain
Latin American countries has been characterized by political
uncertainty, intervention by the military in civilian and
economic spheres, and political corruption. Such developments,
if they were to reoccur, could reverse favorable trends toward
market and economic reform, privatization and removal of trade
barriers and result in significant disruption in securities
markets.
Foreign Currency. Certain Latin American countries may
have managed currencies which are maintained at artificial levels
to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive
and negative effect on foreign investors. For example, in late
1994 the value of the Mexican peso lost more than one-third of
its value relative to the dollar. Certain Latin American
countries also may restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no
significant foreign exchange market for certain currencies and it
would, as a result, be difficult for the Fund to engage in
foreign currency transactions designed to protect the value of
the Fund's interests in securities denominated in such
currencies.
Sovereign Debt. A number of Latin American countries
are among the largest debtors of developing countries. There
have been moratoria on, and reschedulings of, repayment with
respect to these debts. Such events can restrict the flexibility
of these debtor nations in the international markets and result
in the imposition of onerous conditions on their economies.
In addition to the investments described in the Fund's
prospectus, the Fund may invest in the following:
Types of Securities
Hybrid Instruments
Hybrid Instruments (a type of potentially high risk
derivative) have recently been developed and combine the elements
of futures contracts or options with those of debt, preferred
equity or a depository instrument (hereinafter "Hybrid
Instruments"). Often these Hybrid Instruments are indexed to the
price of a commodity, particular currency, or a domestic or
foreign debt or equity securities index. Hybrid Instruments may
take a variety of forms, including, but not limited to, debt
PAGE 17
instruments with interest or principal payments or redemption
terms determined by reference to the value of a currency or
commodity or securities index at a future point in time,
preferred stock with dividend rates determined by reference to
the value of a currency, or convertible securities with the
conversion terms related to a particular commodity.
The risks of investing in Hybrid Instruments reflect a
combination of the risks from investing in securities, options,
futures and currencies, including volatility and lack of
liquidity. Reference is made to the discussion of futures,
options, and forward contracts herein for a discussion of these
risks. Further, the prices of the Hybrid Instrument and the
related commodity or currency may not move in the same direction
or at the same time. Hybrid Instruments may bear interest or pay
preferred dividends at below market (or even relatively nominal)
rates. Alternatively, Hybrid Instruments may bear interest at
above market rates but bear an increased risk of principal loss
(or gain). In addition, because the purchase and sale of Hybrid
Instruments could take place in an over-the-counter market or in
a private transaction between the Fund and the seller of the
Hybrid Instrument, the creditworthiness of the contra party to
the transaction would be a risk factor which the Fund would have
to consider. Hybrid Instruments also may not be subject to
regulation of the Commodities Futures Trading Commission
("CFTC"), which generally regulates the trading of commodity
futures by U.S. persons, the SEC, which regulates the offer and
sale of securities by and to U.S. persons, or any other
governmental regulatory authority.
Illiquid or Restricted Securities
Restricted securities may be sold only in privately
negotiated transactions or in a public offering with respect to
which a registration statement is in effect under the Securities
Act of 1933 (the "1933 Act"). Where registration is required,
the Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to
sell a security under an effective registration statement. If,
during such a period, adverse market conditions were to develop,
the Fund might obtain a less favorable price than prevailed when
it decided to sell. Restricted securities will be priced at fair
value as determined in accordance with procedures prescribed by
the Fund's Board of Directors. If through the appreciation of
illiquid securities or the depreciation of liquid securities, the
Fund should be in a position where more than 15% of the value of
its net assets are invested in illiquid assets, including
restricted securities, the Fund will take appropriate steps to
protect liquidity.
PAGE 18
Notwithstanding the above, the Fund may purchase
securities which, while privately placed, are eligible for
purchase and sale under Rule 144A under the 1933 Act. This rule
permits certain qualified institutional buyers, such as the Fund,
to trade in privately placed securities even though such
securities are not registered under the 1933 Act. Price-Fleming
under the supervision of the Fund's Board of Directors, will
consider whether securities purchased under Rule 144A are
illiquid and thus subject to the Fund's restriction of investing
no more than 15% of its net assets in illiquid securities. A
determination of whether a Rule 144A security is liquid or not is
a question of fact. In making this determination, Price-Fleming
will consider the trading markets for the specific security
taking into account the unregistered nature of a Rule 144A
security. In addition, Price-Fleming could consider the (1)
frequency of trades and quotes, (2) number of dealers and
potential purchases, (3) dealer undertakings to make a market,
and (4) the nature of the security and of marketplace trades
(e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). The liquidity
of Rule 144A securities would be monitored, and if as a result of
changed conditions it is determined that a Rule 144A security is
no longer liquid, the Fund's holdings of illiquid securities
would be reviewed to determine what, if any, steps are required
to assure that the Fund does not invest more than 15% of its net
assets in illiquid securities. Investing in Rule 144A securities
could have the effect of increasing the amount of the Fund's
assets invested in illiquid securities if qualified institutional
buyers are unwilling to purchase such securities.
Warrants
The Fund may invest in warrants. Warrants are pure
speculation in that they have no voting rights, pay no dividends
and have no rights with respect to the assets of the corporation
issuing them. Warrants basically are options to purchase equity
securities at a specific price valid for a specific period of
time. They do not represent ownership of the securities, but
only the right to buy them. Warrants differ from call options in
that warrants are issued by the issuer of the security which may
be purchased on their exercise, whereas call options may be
written or issued by anyone. The prices of warrants do not
necessarily move parallel to the prices of the underlying
securities.
There are, of course, other types of securities that
are, or may become available, which are similar to the foregoing
and the Fund may invest in these securities.
PAGE 19
Portfolio Management Practices
All Funds, except Foreign Equity Fund
Lending of Portfolio Securities
Securities loans are made to broker-dealers or
institutional investors or other persons, pursuant to agreements
requiring that the loans be continuously secured by collateral at
least equal at all times to the value of the securities lent
marked to market on a daily basis. The collateral received will
consist of cash, U.S. government securities, letters of credit or
such other collateral as may be permitted under its investment
program. While the securities are being lent, the Fund will
continue to receive the equivalent of the interest or dividends
paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. The
Fund has a right to call each loan and obtain the securities on
five business days' notice or, in connection with securities
trading on foreign markets, within such longer period of time
which coincides with the normal settlement period for purchases
and sales of such securities in such foreign markets. The Fund
will not have the right to vote securities while they are being
lent, but it will call a loan in anticipation of any important
vote. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in
receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should
the borrower fail financially. Loans will only be made to firms
deemed by Price-Fleming to be of good standing and will not be
made unless, in the judgment of Price-Fleming, the consideration
to be earned from such loans would justify the risk.
All Funds
Other Lending/Borrowing
Subject to approval by the Securities and Exchange
Commission and certain state regulatory agencies, the Fund may
make loans to, or borrow funds from, other mutual funds sponsored
or advised by T. Rowe Price or Price-Fleming (collectively,
"Price Funds"). The Fund has no current intention of engaging in
these practices at this time.
Repurchase Agreements
The Fund may enter into a repurchase agreement through
which an investor (such as the Fund) purchases a security (known
as the "underlying security") from a well-established securities
PAGE 20
dealer or a bank that is a member of the Federal Reserve System.
Any such dealer or bank will be on T. Rowe Price's approved list.
At that time, the bank or securities dealer agrees to repurchase
the underlying security at the same price, plus specified
interest. Repurchase agreements are generally for a short period
of time, often less than a week. Repurchase agreements which do
not provide for payment within seven days will be treated as
illiquid securities. The Fund will only enter into repurchase
agreements where (i) the underlying securities are of the type
(excluding maturity limitations) which the Fund's investment
guidelines would allow it to purchase directly, (ii) the market
value of the underlying security, including interest accrued,
will be at all times equal to or exceed the value of the
repurchase agreement, and (iii) payment for the underlying
security is made only upon physical delivery or evidence of book-
entry transfer to the account of the custodian or a bank acting
as agent. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund could experience both
delays in liquidating the underlying security and losses,
including: (a) possible decline in the value of the underlying
security during the period while the Fund seeks to enforce its
rights thereto; (b) possible subnormal levels of income and lack
of access to income during this period; and (c) expenses of
enforcing its rights.
Options
Options are a type of potentially high-risk derivative.
Writing Covered Call Options
The Fund may write (sell) American or European style
"covered" call options and purchase options to close out options
previously written by a Fund. In writing covered call options,
the Fund expects to generate additional premium income which
should serve to enhance the Fund's total return and reduce the
effect of any price decline of the security or currency involved
in the option. Covered call options will generally be written on
securities or currencies which, in Price-Fleming's opinion, are
not expected to have any major price increases or moves in the
near future but which, over the long term, are deemed to be
attractive investments for the Fund.
A call option gives the holder (buyer) the "right to
purchase" a security or currency at a specified price (the
exercise price) at expiration of the option (European style) or
at any time until a certain date (the expiration date) (American
style). So long as the obligation of the writer of a call option
continues, he may be assigned an exercise notice by the broker-
dealer through whom such option was sold, requiring him to
PAGE 21
deliver the underlying security or currency against payment of
the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the
writer effects a closing purchase transaction by repurchasing an
option identical to that previously sold. To secure his
obligation to deliver the underlying security or currency in the
case of a call option, a writer is required to deposit in escrow
the underlying security or currency or other assets in accordance
with the rules of a clearing corporation.
The Fund will write only covered call options. This
means that the Fund will own the security or currency subject to
the option or an option to purchase the same underlying security
or currency, having an exercise price equal to or less than the
exercise price of the "covered" option, or will establish and
maintain with its custodian for the term of the option, an
account consisting of cash, U.S. government securities or other
liquid high-grade debt obligations having a value equal to the
fluctuating market value of the optioned securities or
currencies.
Portfolio securities or currencies on which call options
may be written will be purchased solely on the basis of
investment considerations consistent with the Fund's investment
objective. The writing of covered call options is a conservative
investment technique believed to involve relatively little risk
(in contrast to the writing of naked or uncovered options, which
the Fund will not do), but capable of enhancing the Fund's total
return. When writing a covered call option, a Fund, in return
for the premium, gives up the opportunity for profit from a price
increase in the underlying security or currency above the
exercise price, but conversely retains the risk of loss should
the price of the security or currency decline. Unlike one who
owns securities or currencies not subject to an option, the Fund
has no control over when it may be required to sell the
underlying securities or currencies, since it may be assigned an
exercise notice at any time prior to the expiration of its
obligation as a writer. If a call option which the Fund has
written expires, the Fund will realize a gain in the amount of
the premium; however, such gain may be offset by a decline in the
market value of the underlying security or currency during the
option period. If the call option is exercised, the Fund will
realize a gain or loss from the sale of the underlying security
or currency. The Fund does not consider a security or currency
covered by a call to be "pledged" as that term is used in the
Fund's policy which limits the pledging or mortgaging of its
assets.
PAGE 22
The premium received is the market value of an option.
The premium the Fund will receive from writing a call option will
reflect, among other things, the current market price of the
underlying security or currency, the relationship of the exercise
price to such market price, the historical price volatility of
the underlying security or currency, and the length of the option
period. Once the decision to write a call option has been made,
Price-Fleming, in determining whether a particular call option
should be written on a particular security or currency, will
consider the reasonableness of the anticipated premium and the
likelihood that a liquid secondary market will exist for those
options. The premium received by the Fund for writing covered
call options will be recorded as a liability of the Fund. This
liability will be adjusted daily to the option's current market
value, which will be the latest sale price at the time at which
the net asset value per share of the Fund is computed (close of
the New York Stock Exchange), or, in the absence of such sale,
the latest asked price. The option will be terminated upon
expiration of the option, the purchase of an identical option in
a closing transaction, or delivery of the underlying security or
currency upon the exercise of the option.
Closing transactions will be effected in order to
realize a profit on an outstanding call option, to prevent an
underlying security or currency from being called, or, to permit
the sale of the underlying security or currency. Furthermore,
effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with
either a different exercise price or expiration date or both. If
the Fund desires to sell a particular security or currency from
its portfolio on which it has written a call option, or purchased
a put option, it will seek to effect a closing transaction prior
to, or concurrently with, the sale of the security or currency.
There is, of course, no assurance that the Fund will be able to
effect such closing transactions at favorable prices. If the
Fund cannot enter into such a transaction, it may be required to
hold a security or currency that it might otherwise have sold.
When the Fund writes a covered call option, it runs the risk of
not being able to participate in the appreciation of the
underlying securities or currencies above the exercise price, as
well as the risk of being required to hold on to securities or
currencies that are depreciating in value. This could result in
higher transaction costs. The Fund will pay transaction costs in
connection with the writing of options to close out previously
written options. Such transaction costs are normally higher than
those applicable to purchases and sales of portfolio securities.
Call options written by the Fund will normally have
expiration dates of less than nine months from the date written.
The exercise price of the options may be below, equal to, or
PAGE 23
above the current market values of the underlying securities or
currencies at the time the options are written. From time to
time, the Fund may purchase an underlying security or currency
for delivery in accordance with an exercise notice of a call
option assigned to it, rather than delivering such security or
currency from its portfolio. In such cases, additional costs may
be incurred.
The Fund will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or
more than the premium received from the writing of the option.
Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying
security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by
appreciation of the underlying security or currency owned by the
Fund.
In order to comply with the requirements of several
states, the Fund will not write a covered call option if, as a
result, the aggregate market value of all portfolio securities or
currencies covering call or put options exceeds 25% of the market
value of the Fund's net assets. Should these state laws change
or should the Fund obtain a waiver of its application, the Fund
reserves the right to increase this percentage. In calculating
the 25% limit, the Fund will offset, against the value of assets
covering written calls and puts, the value of purchased calls and
puts on identical securities or currencies with identical
maturity dates.
Writing Covered Put Options
The Fund may write American or European style covered
put options and purchase options to close out options previously
written by the Fund. A put option gives the purchaser of the
option the right to sell, and the writer (seller) has the
obligation to buy, the underlying security or currency at the
exercise price during the option period (American style) or at
the expiration of the option (European style). So long as the
obligation of the writer continues, he may be assigned an
exercise notice by the broker-dealer through whom such option was
sold, requiring him to make payment of the exercise price against
delivery of the underlying security or currency. The operation
of put options in other respects, including their related risks
and rewards, is substantially identical to that of call options.
The Fund would write put options only on a covered
basis, which means that the Fund would maintain in a segregated
account cash, U.S. government securities or other liquid high-
grade debt obligations in an amount not less than the exercise
PAGE 24
price or the Fund will own an option to sell the underlying
security or currency subject to the option having an exercise
price equal to or greater than the exercise price of the
"covered" option at all times while the put option is
outstanding. (The rules of a clearing corporation currently
require that such assets be deposited in escrow to secure payment
of the exercise price.) The Fund would generally write covered
put options in circumstances where Price-Fleming wishes to
purchase the underlying security or currency for the Fund's
portfolio at a price lower than the current market price of the
security or currency. In such event the Fund would write a put
option at an exercise price which, reduced by the premium
received on the option, reflects the lower price it is willing to
pay. Since the Fund would also receive interest on debt
securities or currencies maintained to cover the exercise price
of the option, this technique could be used to enhance current
return during periods of market uncertainty. The risk in such a
transaction would be that the market price of the underlying
security or currency would decline below the exercise price less
the premiums received. Such a decline could be substantial and
result in a significant loss to the Fund. In addition, the Fund,
because it does not own the specific securities or currencies
which it may be required to purchase in exercise of the put,
cannot benefit from appreciation, if any, with respect to such
specific securities or currencies. In order to comply with the
requirements of several states, the Fund will not write a covered
put option if, as a result, the aggregate market value of all
portfolio securities or currencies covering put or call options
exceeds 25% of the market value of the Fund's net assets. Should
these state laws change or should the Fund obtain a waiver of its
application, the Fund reserves the right to increase this
percentage. In calculating the 25% limit, the Fund will offset,
against the value of assets covering written puts and calls, the
value of purchased puts and calls on identical securities or
currencies with identical maturity dates.
Purchasing Put Options
The Fund may purchase American or European style put
options. As the holder of a put option, the Fund has the right
to sell the underlying security or currency at the exercise price
at any time during the option period (American style) or at the
expiration of the option (European style). The Fund may enter
into closing sale transactions with respect to such options,
exercise them or permit them to expire. The Fund may purchase
put options for defensive purposes in order to protect against an
anticipated decline in the value of its securities or currencies.
An example of such use of put options is provided below.
PAGE 25
The Fund may purchase a put option on an underlying
security or currency (a "protective put") owned by the Fund as a
defensive technique in order to protect against an anticipated
decline in the value of the security or currency. Such hedge
protection is provided only during the life of the put option
when the Fund, as the holder of the put option, is able to sell
the underlying security or currency at the put exercise price
regardless of any decline in the underlying security's market
price or currency's exchange value. For example, a put option
may be purchased in order to protect unrealized appreciation of a
security or currency where Price-Fleming deems it desirable to
continue to hold the security or currency because of tax
considerations. The premium paid for the put option and any
transaction costs would reduce any capital gain otherwise
available for distribution when the security or currency is
eventually sold.
The Fund may also purchase put options at a time when
the Fund does not own the underlying security or currency. By
purchasing put options on a security or currency it does not own,
the Fund seeks to benefit from a decline in the market price of
the underlying security or currency. If the put option is not
sold when it has remaining value, and if the market price of the
underlying security or currency remains equal to or greater than
the exercise price during the life of the put option, the Fund
will lose its entire investment in the put option. In order for
the purchase of a put option to be profitable, the market price
of the underlying security or currency must decline sufficiently
below the exercise price to cover the premium and transaction
costs, unless the put option is sold in a closing sale
transaction.
To the extent required by the laws of certain states,
the Fund may not be permitted to commit more than 5% of its
assets to premiums when purchasing put and call options. Should
these state laws change or should the Fund obtain a waiver of its
application, the Fund may commit more than 5% of its assets to
premiums when purchasing call and put options. The premium paid
by the Fund when purchasing a put option will be recorded as an
asset of the Fund. This asset will be adjusted daily to the
option's current market value, which will be the latest sale
price at the time at which the net asset value per share of the
Fund is computed (close of New York Stock Exchange), or, in the
absence of such sale, the latest bid price. This asset will be
terminated upon expiration of the option, the selling (writing)
of an identical option in a closing transaction, or the delivery
of the underlying security or currency upon the exercise of the
option.
PAGE 26
Purchasing Call Options
The Fund may purchase American or European style call
options. As the holder of a call option, the Fund has the right
to purchase the underlying security or currency at the exercise
price at any time during the option period (American style) or at
the expiration of the option (European style). The Fund may
enter into closing sale transactions with respect to such
options, exercise them or permit them to expire. The Fund may
purchase call options for the purpose of increasing its current
return or avoiding tax consequences which could reduce its
current return. The Fund may also purchase call options in order
to acquire the underlying securities or currencies. Examples of
such uses of call options are provided below.
Call options may be purchased by the Fund for the
purpose of acquiring the underlying securities or currencies for
its portfolio. Utilized in this fashion, the purchase of call
options enables the Fund to acquire the securities or currencies
at the exercise price of the call option plus the premium paid.
At times the net cost of acquiring securities or currencies in
this manner may be less than the cost of acquiring the securities
or currencies directly. This technique may also be useful to the
Fund in purchasing a large block of securities or currencies that
would be more difficult to acquire by direct market purchases.
So long as it holds such a call option rather than the underlying
security or currency itself, the Fund is partially protected from
any unexpected decline in the market price of the underlying
security or currency and in such event could allow the call
option to expire, incurring a loss only to the extent of the
premium paid for the option.
To the extent required by the laws of certain states,
the Fund may not be permitted to commit more than 5% of its
assets to premiums when purchasing call and put options. Should
these state laws change or should the Fund obtain a waiver of its
application, the Fund may commit more than 5% of its assets to
premiums when purchasing call and put options. The Fund may also
purchase call options on underlying securities or currencies it
owns in order to protect unrealized gains on call options
previously written by it. A call option would be purchased for
this purpose where tax considerations make it inadvisable to
realize such gains through a closing purchase transaction. Call
options may also be purchased at times to avoid realizing losses.
Dealer (Over-the-Counter) Options
The Fund may engage in transactions involving dealer
options. Certain risks are specific to dealer options. While
the Fund would look to a clearing corporation to exercise
PAGE 27
exchange-traded options, if the Fund were to purchase a dealer
option, it would rely on the dealer from whom it purchased the
option to perform if the option were exercised. Failure by the
dealer to do so would result in the loss of the premium paid by
the Fund as well as loss of the expected benefit of the
transaction.
Exchange-traded options generally have a continuous
liquid market while dealer options have none. Consequently, the
Fund will generally be able to realize the value of a dealer
option it has purchased only by exercising it or reselling it to
the dealer who issued it. Similarly, when the Fund writes a
dealer option, it generally will be able to close out the option
prior to its expiration only by entering into a closing purchase
transaction with the dealer to which the Fund originally wrote
the option. While the Fund will seek to enter into dealer
options only with dealers who will agree to and which are
expected to be capable of entering into closing transactions with
the Fund, there can be no assurance that the Fund will be able to
liquidate a dealer option at a favorable price at any time prior
to expiration. Until the Fund, as a covered dealer call option
writer, is able to effect a closing purchase transaction, it will
not be able to liquidate securities (or other assets) or
currencies used as cover until the option expires or is
exercised. In the event of insolvency of the contra party, the
Fund may be unable to liquidate a dealer option. With respect to
options written by the Fund, the inability to enter into a
closing transaction may result in material losses to the Fund.
For example, since the Fund must maintain a secured position with
respect to any call option on a security it writes, the Fund may
not sell the assets which it has segregated to secure the
position while it is obligated under the option. This
requirement may impair a Fund's ability to sell portfolio
securities or currencies at a time when such sale might be
advantageous.
The Staff of the SEC has taken the position that
purchased dealer options and the assets used to secure the
written dealer options are illiquid securities. The Fund may
treat the cover used for written OTC options as liquid if the
dealer agrees that the Fund may repurchase the OTC option it has
written for a maximum price to be calculated by a predetermined
formula. In such cases, the OTC option would be considered
illiquid only to the extent the maximum repurchase price under
the formula exceeds the intrinsic value of the option.
Accordingly, the Fund will treat dealer options as subject to the
Fund's limitation on unmarketable securities. If the SEC changes
its position on the liquidity of dealer options, the Fund will
change its treatment of such instrument accordingly.
PAGE 28
Futures Contracts
Futures are a type of potentially high-risk derivative.
Transactions in Futures
The Fund may enter into futures contracts (a type of
potentially high risk derivative), including stock index,
interest rate and currency futures ("futures or futures
contracts").
Stock index futures contracts may be used to provide a
hedge for a portion of the Fund's portfolio, as a cash management
tool, or as an efficient way for Price-Fleming to implement
either an increase or decrease in portfolio market exposure in
response to changing market conditions. The Fund may, purchase
or sell futures contracts with respect to any stock index.
Nevertheless, to hedge the Fund's portfolio successfully, the
Fund must sell futures contacts with respect to indices or
subindices whose movements will have a significant correlation
with movements in the prices of the Fund's portfolio securities.
Interest rate or currency futures contracts may be used
as a hedge against changes in prevailing levels of interest rates
or currency exchange rates in order to establish more definitely
the effective return on securities or currencies held or intended
to be acquired by the Fund. In this regard, the Fund could sell
interest rate or currency futures as an offset against the effect
of expected increases in interest rates or currency exchange
rates and purchase such futures as an offset against the effect
of expected declines in interest rates or currency exchange
rates.
The Fund will enter into futures contracts which are
traded on national or foreign futures exchanges, and are
standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading in the United States
are regulated under the Commodity Exchange Act by the CFTC.
Futures are traded in London at the London International
Financial Futures Exchange in Paris at the MATIF and in Tokyo at
the Tokyo Stock Exchange. Although techniques other than the
sale and purchase of futures contracts could be used for the
above-referenced purposes, futures contracts offer an effective
and relatively low cost means of implementing the Fund's
objectives in these areas.
Regulatory Limitations
The Fund will engage in futures contracts and options
thereon only for bona fide hedging, yield enhancement, and risk
PAGE 29
management purposes, in each case in accordance with rules and
regulations of the CFTC and applicable state law.
The Fund may not purchase or sell futures contracts or
related options if, with respect to positions which do not
qualify as bona fide hedging under applicable CFTC rules, the sum
of the amounts of initial margin deposits and premiums paid on
those portions would exceed 5% of the net asset value of the Fund
after taking into account unrealized profits and unrealized
losses on any such contracts it has entered into; provided,
however, that in the case of an option that is in-the-money at
the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation. For purposes of this policy
options on futures contracts and foreign currency options traded
on a commodities exchange will be considered "related options".
This policy may be modified by the Board of Directors without a
shareholder vote and does not limit the percentage of the Fund's
assets at risk to 5%.
In accordance with the rules of the State of California,
the Fund will apply the above 5% test without excluding the value
of initial margin and premiums paid for bona fide hedging
positions.
The Fund's use of futures contracts will not result in
leverage. Therefore, to the extent necessary, in instances
involving the purchase of futures contracts or the writing of
call or put options thereon by the Fund, an amount of cash, U.S.
government securities or other liquid, high-grade debt
obligations, equal to the market value of the futures contracts
and options thereon (less any related margin deposits), will be
identified in an account with the Fund's custodian to cover (such
as owning an offsetting position) the position, or alternative
cover will be employed. Assets used as cover or held in an
identified account cannot be sold while the position in the
corresponding option or future is open, unless they are replaced
with similar assets. As a result, the commitment of a large
portion of a Fund's assets to cover or identified accounts could
impede portfolio management or the Fund's ability to meet
redemption requests or over current obligations.
If the CFTC or other regulatory authorities adopt
different (including less stringent) or additional restrictions,
the Fund would comply with such new restrictions.
Trading in Futures Contracts
A futures contract provides for the future sale by one
party and purchase by another party of a specified amount of a
specific financial instrument (e.g., units of a stock index) for
PAGE 30
a specified price, date, time and place designated at the time
the contract is made. Brokerage fees are incurred when a futures
contract is bought or sold and margin deposits must be
maintained. Entering into a contract to buy is commonly referred
to as buying or purchasing a contract or holding a long position.
Entering into a contract to sell is commonly referred to as
selling a contract or holding a short position.
Unlike when the Fund purchases or sells a security, no
price would be paid or received by the Fund upon the purchase or
sale of a futures contract. Upon entering into a futures
contract, and to maintain the Fund's open positions in futures
contracts, the Fund would be required to deposit with its
custodian in a segregated account in the name of the futures
broker an amount of cash, U.S. government securities, suitable
money market instruments, or liquid, high-grade debt securities,
known as "initial margin." The margin required for a particular
futures contract is set by the exchange on which the contract is
traded, and may be significantly modified from time to time by
the exchange during the term of the contract. Futures contracts
are customarily purchased and sold on margins that may range
upward from less than 5% of the value of the contract being
traded.
If the price of an open futures contract changes (by
increase in the case of a sale or by decrease in the case of a
purchase) so that the loss on the futures contract reaches a
point at which the margin on deposit does not satisfy margin
requirements, the broker will require an increase in the margin.
However, if the value of a position increases because of
favorable price changes in the futures contract so that the
margin deposit exceeds the required margin, the broker will pay
the excess to the Fund.
These subsequent payments, called "variation margin," to
and from the futures broker, are made on a daily basis as the
price of the underlying assets fluctuate making the long and
short positions in the futures contract more or less valuable, a
process known as "marking to the market." The Fund expects to
earn interest income on its margin deposits.
Although certain futures contracts, by their terms,
require actual future delivery of and payment for the underlying
instruments, in practice most futures contracts are usually
closed out before the delivery date. Closing out an open futures
contract purchase or sale is effected by entering into an
offsetting futures contract sale or purchase, respectively, for
the same aggregate amount of the identical securities and the
same delivery date. If the offsetting purchase price is less
than the original sale price, the Fund realizes a gain; if it is
PAGE 31
more, the Fund realizes a loss. Conversely, if the offsetting
sale price is more than the original purchase price, the Fund
realizes a gain; if it is less, the Fund realizes a loss. The
transaction costs must also be included in these calculations.
There can be no assurance, however, that the Fund will be able to
enter into an offsetting transaction with respect to a particular
futures contract at a particular time. If the Fund is not able
to enter into an offsetting transaction, the Fund will continue
to be required to maintain the margin deposits on the futures
contract.
For example, one contract in the Financial Times Stock
Exchange 100 Index future is a contract to buy 25 pounds sterling
multiplied by the level of the UK Financial Times 100 Share Index
on a given future date. Settlement of a stock index futures
contract may or may not be in the underlying security. If not in
the underlying security, then settlement will be made in cash,
equivalent over time to the difference between the contract price
and the actual price of the underlying asset at the time the
stock index futures contract expires.
Special Risks of Transactions in Futures Contracts
Volatility and Leverage. The prices of futures
contracts are volatile and are influenced, among other things, by
actual and anticipated changes in the market and interest rates,
which in turn are affected by fiscal and monetary policies and
national and international political and economic events.
Most United States futures exchanges limit the amount of
fluctuation permitted in futures contract prices during a single
trading day. The daily limit establishes the maximum amount that
the price of a futures contract may vary either up or down from
the previous day's settlement price at the end of a trading
session. Once the daily limit has been reached in a particular
type of futures contract, no trades may be made on that day at a
price beyond that limit. The daily limit governs only price
movement during a particular trading day and therefore does not
limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices
have occasionally moved to the daily limit for several
consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and subjecting
some futures traders to substantial losses.
Because of the low margin deposits required, futures
trading involves an extremely high degree of leverage. As a
result, a relatively small price movement in a futures contract
may result in immediate and substantial loss, as well as gain, to
the investor. For example, if at the time of purchase, 10% of
PAGE 32
the value of the futures contract is deposited as margin, a
subsequent 10% decrease in the value of the futures contract
would result in a total loss of the margin deposit, before any
deduction for the transaction costs, if the account were then
closed out. A 15% decrease would result in a loss equal to 150%
of the original margin deposit, if the contract were closed out.
Thus, a purchase or sale of a futures contract may result in
losses in excess of the amount invested in the futures contract.
However, the Fund would presumably have sustained comparable
losses if, instead of the futures contract, it had invested in
the underlying financial instrument and sold it after the
decline. Furthermore, in the case of a futures contract
purchase, in order to be certain that the Fund has sufficient
assets to satisfy its obligations under a futures contract, the
Fund earmarks to the futures contract money market instruments
equal in value to the current value of the underlying instrument
less the margin deposit.
Liquidity. The Fund may elect to close some or all of
its futures positions at any time prior to their expiration. The
Fund would do so to reduce exposure represented by long futures
positions or short futures positions. The Fund may close its
positions by taking opposite positions which would operate to
terminate the Fund's position in the futures contracts. Final
determinations of variation margin would then be made, additional
cash would be required to be paid by or released to the Fund, and
the Fund would realize a loss or a gain.
Futures contracts may be closed out only on the exchange
or board of trade where the contracts were initially traded.
Although the Fund intends to purchase or sell futures contracts
only on exchanges or boards of trade where there appears to be an
active market, there is no assurance that a liquid market on an
exchange or board of trade will exist for any particular contract
at any particular time. In such event, it might not be possible
to close a futures contract, and in the event of adverse price
movements, the Fund would continue to be required to make daily
cash payments of variation margin. However, in the event futures
contracts have been used to hedge the underlying instruments, the
Fund would continue to hold the underlying instruments subject to
the hedge until the futures contracts could be terminated. In
such circumstances, an increase in the price of underlying
instruments, if any, might partially or completely offset losses
on the futures contract. However, as described below, there is
no guarantee that the price of the underlying instruments will,
in fact, correlate with the price movements in the futures
contract and thus provide an offset to losses on a futures
contract.
PAGE 33
Hedging Risk. A decision of whether, when, and how to
hedge involves skill and judgment, and even a well-conceived
hedge may be unsuccessful to some degree because of unexpected
market behavior, market or interest rate trends. There are
several risks in connection with the use by the Fund of futures
contracts as a hedging device. One risk arises because of the
imperfect correlation between movements in the prices of the
futures contracts and movements in the prices of the underlying
instruments which are the subject of the hedge. Price-Fleming
will, however, attempt to reduce this risk by entering into
futures contracts whose movements, in its judgment, will have a
significant correlation with movements in the prices of the
Fund's underlying instruments sought to be hedged.
Successful use of futures contracts by the Fund for
hedging purposes is also subject to Price-Fleming's ability to
correctly predict movements in the direction of the market. It
is possible that, when the Fund has sold futures to hedge its
portfolio against a decline in the market, the index, indices, or
instruments underlying futures might advance and the value of the
underlying instruments held in the Fund's portfolio might
decline. If this were to occur, the Fund would lose money on the
futures and also would experience a decline in value in its
underlying instruments. However, while this might occur to a
certain degree, Price-Fleming believes that over time the value
of the Fund's portfolio will tend to move in the same direction
as the market indices used to hedge the portfolio. It is also
possible that if the Fund were to hedge against the possibility
of a decline in the market (adversely affecting the underlying
instruments held in its portfolio) and prices instead increased,
the Fund would lose part or all of the benefit of increased value
of those underlying instruments that it has hedged, because it
would have offsetting losses in its futures positions. In
addition, in such situations, if the Fund had insufficient cash,
it might have to sell underlying instruments to meet daily
variation margin requirements. Such sales of underlying
instruments might be, but would not necessarily be, at increased
prices (which would reflect the rising market). The Fund might
have to sell underlying instruments at a time when it would be
disadvantageous to do so.
In addition to the possibility that there might be an
imperfect correlation, or no correlation at all, between price
movements in the futures contracts and the portion of the
portfolio being hedged, the price movements of futures contracts
might not correlate perfectly with price movements in the
underlying instruments due to certain market distortions. First,
all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors might close
PAGE 34
futures contracts through offsetting transactions, which could
distort the normal relationship between the underlying
instruments and futures markets. Second, the margin requirements
in the futures market are less onerous than margin requirements
in the securities markets, and as a result the futures market
might attract more speculators than the securities markets do.
Increased participation by speculators in the futures market
might also cause temporary price distortions. Due to the
possibility of price distortion in the futures market and also
because of the imperfect correlation between price movements in
the underlying instruments and movements in the prices of futures
contracts, even a correct forecast of general market trends by
Price-Fleming might not result in a successful hedging
transaction over a very short time period.
Options on Futures Contracts
The Fund may purchase and sell options on the same types
of futures in which it may invest.
Options on futures are similar to options on underlying
instruments except that options on futures give the purchaser the
right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a
short position if the option is a put), rather than to purchase
or sell the futures contract, at a specified exercise price at
any time during the period of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the
option to the holder of the option will be accompanied by the
delivery of the accumulated balance in the writer's futures
margin account which represents the amount by which the market
price of the futures contract, at exercise, exceeds (in the case
of a call) or is less than (in the case of a put) the exercise
price of the option on the futures contract. Purchasers of
options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put
options on stock index futures, the Fund may write or purchase
call and put options on stock indices. Such options would be
used in a manner similar to the use of options on futures
contracts. From time to time, a single order to purchase or sell
futures contracts (or options thereon) may be made on behalf of
the Fund and other T. Rowe Price Funds. Such aggregated orders
would be allocated among the Funds and the other T. Rowe Price
Funds in a fair and non-discriminatory manner.
PAGE 35
Special Risks of Transactions in Options on Futures Contracts
The risks described under "Special Risks of Transactions
on Futures Contracts" are substantially the same as the risks of
using options on futures. In addition, where the Fund seeks to
close out an option position by writing or buying an offsetting
option covering the same index, underlying instrument or contract
and having the same exercise price and expiration date, its
ability to establish and close out positions on such options will
be subject to the maintenance of a liquid secondary market.
Reasons for the absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient
trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing
transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or
series of options, or underlying instruments; (iv) unusual or
unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or a clearing
corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that
exchange (or in the class or series of options) would cease to
exist, although outstanding options on the exchange that had been
issued by a clearing corporation as a result of trades on that
exchange would continue to be exercisable in accordance with
their terms. There is no assurance that higher than anticipated
trading activity or other unforeseen events might not, at times,
render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by
an exchange of special procedures which may interfere with the
timely execution of customers' orders.
Additional Futures and Options Contracts
Although the Fund has no current intention of engaging
in futures or options transactions other than those described
above, it reserves the right to do so. Such futures and options
trading might involve risks which differ from those involved in
the futures and options described above.
Foreign Futures and Options
Participation in foreign futures and foreign options
transactions involves the execution and clearing of trades on or
subject to the rules of a foreign board of trade. Neither the
National Futures Association nor any domestic exchange regulates
activities of any foreign boards of trade, including the
PAGE 36
execution, delivery and clearing of transactions, or has the
power to compel enforcement of the rules of a foreign board of
trade or any applicable foreign law. This is true even if the
exchange is formally linked to a domestic market so that a
position taken on the market may be liquidated by a transaction
on another market. Moreover, such laws or regulations will vary
depending on the foreign country in which the foreign futures or
foreign options transaction occurs. For these reasons, customers
who trade foreign futures or foreign options contracts, it may
not be afforded certain of the protective measures provided by
the Commodity Exchange Act, the CFTC's regulations and the rules
of the National Futures Association and any domestic exchange,
including the right to use reparations proceedings before the
Commission and arbitration proceedings provided by the National
Futures Association or any domestic futures exchange. In
particular, funds received from the Fund for foreign futures or
foreign options transactions may not be provided the same
protections as funds received in respect of transactions on
United States futures exchanges. In addition, the price of any
foreign futures or foreign options contract and, therefore, the
potential profit and loss thereon may be affected by any variance
in the foreign exchange rate between the time the Fund's order is
placed and the time it is liquidated, offset or exercised.
Foreign Currency Transactions
A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are principally traded in the
interbank market conducted directly between currency traders
(usually large, commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions
are charged at any stage for trades.
The Fund may enter into forward contracts for a variety
of purposes in connection with the management of the foreign
securities portion of its portfolio. The Fund's use of such
contracts would include, but not be limited to, the following:
First, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency,
it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for
a fixed amount of dollars, of the amount of foreign currency
involved in the underlying security transactions, the Fund will
be able to protect itself against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and
the subject foreign currency during the period between the date
PAGE 37
the security is purchased or sold and the date on which payment
is made or received.
Second, when Price-Fleming believes that one currency
may experience a substantial movement against another currency,
including the U.S. dollar, it may enter into a forward contract
to sell or buy the amount of the former foreign currency,
approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency. Alternatively,
where appropriate, the Fund may hedge all or part of its foreign
currency exposure through the use of a basket of currencies or a
proxy currency where such currency or currencies act as an
effective proxy for other currencies. In such a case, the Fund
may enter into a forward contract where the amount of the foreign
currency to be sold exceeds the value of the securities
denominated in such currency. The use of this basket hedging
technique may be more efficient and economical than entering into
separate forward contracts for each currency held in the Fund.
The precise matching of the forward contract amounts and the
value of the securities involved will not generally be possible
since the future value of such securities in foreign currencies
will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered
into and the date it matures. The projection of short-term
currency market movement is extremely difficult, and the
successful execution of a short-term hedging strategy is highly
uncertain. Under normal circumstances, consideration of the
prospect for currency parities will be incorporated into the
longer term investment decisions made with regard to overall
diversification strategies. However, Price-Fleming believes that
it is important to have the flexibility to enter into such
forward contracts when it determines that the best interests of
the Fund will be served.
The Fund may enter into forward contacts for any other
purpose consistent with the Fund's investment objective and
program. However, the Fund will not enter into a forward
contract, or maintain exposure to any such contract(s), if the
amount of foreign currency required to be delivered thereunder
would exceed the Fund's holdings of liquid, high-grade debt
securities and currency available for cover of the forward
contract(s). In determining the amount to be delivered under a
contract, the Fund may net offsetting positions.
At the maturity of a forward contract, the Fund may sell
the portfolio security and make delivery of the foreign currency,
or it may retain the security and either extend the maturity of
the forward contract (by "rolling" that contract forward) or may
initiate a new forward contract.
PAGE 38
If the Fund retains the portfolio security and engages
in an offsetting transaction, the Fund will incur a gain or a
loss (as described below) to the extent that there has been
movement in forward contract prices. If the Fund engages in an
offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward
prices decline during the period between the Fund's entering into
a forward contract for the sale of a foreign currency and the
date it enters into an offsetting contract for the purchase of
the foreign currency, the Fund will realize a gain to the extent
the price of the currency it has agreed to sell exceeds the price
of the currency it has agreed to purchase. Should forward prices
increase, the Fund will suffer a loss to the extent of the price
of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange
contracts will generally be limited to the transactions described
above. However, the Fund reserves the right to enter into
forward foreign currency contracts for different purposes and
under different circumstances. Of course, the Fund is not
required to enter into forward contracts with regard to its
foreign currency-denominated securities and will not do so unless
deemed appropriate by Price-Fleming. It also should be realized
that this method of hedging against a decline in the value of a
currency does not eliminate fluctuations in the underlying prices
of the securities. It simply establishes a rate of exchange at a
future date. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the
hedged currency, at the same time, they tend to limit any
potential gain which might result from an increase in the value
of that currency.
Although the Fund values its assets daily in terms of
U.S. dollars, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. It will
do so from time to time, and investors should be aware of the
costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at
which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the Fund at one
rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
PAGE 39
Federal Tax Treatment of Options, Futures Contracts and Forward
Foreign Exchange Contracts
The Fund may enter into certain option, futures, and
forward foreign exchange contracts, including options and futures
on currencies, which may be treated as Section 1256 contracts or
straddles.
Transactions which are considered Section 1256 contracts
will be considered to have been closed at the end of the Fund's
fiscal year and any gains or losses will be recognized for tax
purposes at that time. Such gains or losses from the normal
closing or settlement of such transactions will be characterized
as 60% long-term capital gain or loss and 40% short-term capital
gain or loss regardless of the holding period of the instrument.
The Fund will be required to distribute net gains on such
transactions to shareholders even though it may not have closed
the transaction and received cash to pay such distributions.
Options, futures and forward foreign exchange contracts,
including options and futures on currencies, which offset a
foreign dollar denominated bond or currency position may be
considered straddles for tax purposes, in which case a loss on
any position in a straddle will be subject to deferral to the
extent of unrealized gain in an offsetting position. The holding
period of the securities or currencies comprising the straddle
will be deemed not to begin until the straddle is terminated.
For securities offsetting a purchased put, this adjustment of the
holding period may increase the gain from sales of securities
held less than three months. The holding period of the security
offsetting an "in-the-money qualified covered call" option on an
equity security will not include the period of time the option is
outstanding.
Losses on written covered calls and purchased puts on
securities, excluding certain "qualified covered call" options on
equity securities, may be long-term capital loss, if the security
covering the option was held for more than twelve months prior to
the writing of the option.
In order for the Fund to continue to qualify for federal
income tax treatment as a regulated investment company, at least
90% of its gross income for a taxable year must be derived from
qualifying income; i.e., dividends, interest, income derived from
loans of securities, and gains from the sale of securities or
currencies. Pending tax regulations could limit the extent that
net gain realized from option, futures or foreign forward
exchange contracts on currencies is qualifying income for
purposes of the 90% requirement. In addition, gains realized on
the sale or other disposition of securities, including option,
PAGE 40
futures or foreign forward exchange contracts on securities or
securities indexes and, in some cases, currencies, held for less
than three months, must be limited to less than 30% of the Fund's
annual gross income. In order to avoid realizing excessive gains
on securities or currencies held less than three months, the Fund
may be required to defer the closing out of option, futures or
foreign forward exchange contracts beyond the time when it would
otherwise be advantageous to do so. It is anticipated that
unrealized gains on Section 1256 option, futures and foreign
forward exchange contracts, which have been open for less than
three months as of the end of the Fund's fiscal year and which
are recognized for tax purposes, will not be considered gains on
securities or currencies held less than three months for purposes
of the 30% test.
INVESTMENT RESTRICTIONS
Fundamental policies of each Fund may not be changed
without the approval of the lesser of (1) 67% of a Fund's shares
present at a meeting of shareholders if the holders of more than
50% of the outstanding shares are present in person or by proxy
or (2) more than 50% of a Fund's outstanding shares. Other
restrictions, in the form of operating policies, are subject to
change by the Funds' Board of Directors without shareholder
approval. Any investment restriction which involves a maximum
percentage of securities or assets shall not be considered to be
violated unless an excess over the percentage occurs immediately
after, and is caused by, an acquisition of securities or assets
of, or borrowings by, the Fund.
Fundamental Policies
As a matter of fundamental policy, the Fund may not:
(1) Borrowing. Borrow money except that the Fund may
(i) borrow for non-leveraging, temporary or
emergency purposes and (ii) engage in reverse
repurchase agreements and make other investments or
engage in other transactions, which may involve a
borrowing, in a manner consistent with the Fund's
investment objective and program, provided that the
combination of (i) and (ii) shall not exceed 33
1/3% of the value of the Fund's total assets
(including the amount borrowed) less liabilities
(other than borrowings) or such other percentage
permitted by law. Any borrowings which come to
exceed this amount will be reduced in accordance
with applicable law. The Fund may borrow from
PAGE 41
banks, other Price Funds or other persons to the
extent permitted by applicable law.
(2) Commodities. Purchase or sell physical
commodities; except that it may enter into futures
contracts and options thereon;
(3) Industry Concentration. Purchase the securities of
any issuer if, as a result, more than 25% of the
value of the Fund's total assets would be invested
in the securities of issuers having their principal
business activities in the same industry;
(4) Loans. Make loans, although the Fund may (i) lend
portfolio securities and participate in an
interfund lending program with other Price Funds
provided that no such loan may be made if, as a
result, the aggregate of such loans would exceed 33
1/3% of the value of the Fund's total assets;
(ii) purchase money market securities and enter
into repurchase agreements; and (iii) acquire
publicly-distributed or privately-placed debt
securities and purchase debt;
Foreign Equity Fund
Loans. Make loans, although the Fund may (i)
participate in an interfund lending program with
other Price Funds provided that no such loan may be
made if, as a result, the aggregate of such loans
would exceed 33 1/3% of the value of the Fund's
total assets; (ii) purchase money market securities
and enter into repurchase agreements; and (iii)
acquire publicly- distributed or privately-placed
debt securities and purchase debt;
All Funds
(5) Real Estate. Purchase or sell real estate,
including limited partnership interests therein,
unless acquired as a result of ownership of
securities or other instruments (but this shall not
prevent the Fund from investing in securities or
other instruments backed by real estate or
securities of companies engaged in the real estate
business);
(6) Senior Securities. Issue senior securities except
in compliance with the Investment Company Act of
1940; or
PAGE 42
(7) Underwriting. Underwrite securities issued by
other persons, except to the extent that the Fund
may be deemed to be an underwriter within the
meaning of the Securities Act of 1933 in connection
with the purchase and sale of its portfolio
securities in the ordinary course of pursuing its
investment program.
For All Funds, Except Latin America Fund
(8) Percent Limit on Assets Invested in Any One Issuer.
Purchase a security if, as a result, with respect
to 75% of the value of a Fund's total assets, more
than 5% of the value of its total assets would be
invested in the securities of any one issuer (other
than obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities); and
(9) Percent Limit on Share Ownership of Any One Issuer.
Purchase a security if, as a result, with respect
to 75% of the value of a Fund's total assets, more
than 10% of the outstanding voting securities of
any issuer would be held by the Fund (other than
obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities).
NOTES
The following notes should be read in connection
with the above-described fundamental policies. The
notes are not fundamental policies.
With respect to investment restrictions (1) and
(4), the Fund will not borrow from or lend to any
other T. Rowe Price Fund (defined as any other
mutual fund managed be for which T. Rowe Price acts
as adviser) unless each Fund applies for and
receives an exemptive order from the SEC or the SEC
issues rules permitting such transactions. The
Fund has no current intention of engaging in any
such activity and there is no assurance the SEC
would grant any order requested by the Fund or
promulgate any rules allowing the transactions.
With respect to investment restriction (2), the
Fund does not consider currency contracts or hybrid
investments to be commodities.
PAGE 43
For purposes of investment restriction (3), U.S.,
state or local governments, or related agencies or
instrumentalities, are not considered an industry.
Industries are determined by reference to the
classifications of industries set forth in the
Fund's semi-annual and annual reports.
For purposes of investment restriction (4), the
Fund will consider the acquisition of a debt
security to include the execution of a note or
other evidence of an extension of credit with a
term of more than nine months.
Operating Policies
As a matter of operating policy, the Fund may not:
(1) Borrowing. The Fund will not purchase additional
securities when money borrowed exceeds 5% of its
total assets;
(2) Control of Portfolio Companies. Invest in
companies for the purpose of exercising management
or control;
(3) Futures Contracts. Purchase a futures contract or
an option thereon if, with respect to positions in
futures or options on futures which do not
represent bona fide hedging, the aggregate initial
margin and premiums on such positions would exceed
5% of the Fund's net asset value.
(4) Illiquid Securities. Purchase illiquid securities
and securities of unseasoned issuers if, as a
result, more than 15% of its net assets would be
invested in such securities, provided that the
Fund will not invest more than 10% of its total
assets in restricted securities;
(5) Investment Companies. Purchase securities of
open-end or closed-end investment companies except
in compliance with the Investment Company Act of
1940 and applicable state law. Duplicate fees may
result from such purchases;
(6) Margin. Purchase securities on margin, except (i)
for use of short-term credit necessary for
clearance of purchases of portfolio securities and
(ii) it may make margin deposits in connection
PAGE 44
with futures contracts or other permissible
investments;
(7) Mortgaging. Mortgage, pledge, hypothecate or, in
any manner, transfer any security owned by the
Fund as security for indebtedness except as may be
necessary in connection with permissible
borrowings or investments and then such
mortgaging, pledging or hypothecating may not
exceed 33 1/3% of the Fund's total assets at the
time of borrowing or investment;
(8) Oil and Gas Programs. Purchase participations or
other direct interests or enter into leases with
respect to, oil, gas, or other mineral exploration
or development programs;
(9) Options, Etc. Invest in puts, calls, straddles,
spreads, or any combination thereof, except to the
extent permitted by the prospectus and Statement
of Additional Information;
(10) Ownership of Portfolio Securities by Officers and
Directors. Purchase or retain the securities of
any issuer if, those officers and directors of the
Fund, and of its investment manager, who each own
beneficially more than .5% of the outstanding
securities of such issuer, together own
beneficially more than 5% of such securities;
(11) Short Sales. Effect short sales of securities;
(12) Unseasoned Issuers. Purchase a security (other
than obligations issued or guaranteed by the U.S.,
any state or local government, or any foreign
government, their agencies or instrumentalities)
if, as a result, more than 5% of the value of the
Fund's total assets would be invested in the
securities issuers which at the time of purchase
had been in operation for less than three years
(for this purpose, the period of operation of any
issuer shall include the period of operation of
any predecessor or unconditional guarantor of such
issuer). This restriction does not apply to
securities of pooled investment vehicles or
mortgage or asset-backed securities; or
(13) Warrants. Invest in warrants if, as a result
thereof, more than 2% of the value of the net
assets of the Fund would be invested in warrants
PAGE 45
which are not listed on the New York Stock
Exchange, the American Stock Exchange, or a
recognized foreign exchange, or more than 5% of
the value of the net assets of the Fund would be
invested in warrants whether or not so listed.
For purposes of these percentage limitations, the
warrants will be valued at the lower of cost or
market and warrants acquired by the Funds in units
or attached to securities may be deemed to be
without value.
In addition to the restrictions described above, some
foreign countries limit, or prohibit, all direct foreign
investment in the securities of their companies. However, the
governments of some countries have authorized the organization of
investment funds to permit indirect foreign investment in such
securities. For tax purposes these funds may be known as Passive
Foreign Investment Companies. Each Fund is subject to certain
percentage limitations under the 1940 Act and certain states
relating to the purchase of securities of investment companies,
and may be subject to the limitation that no more than 10% of the
value of the Fund's total assets may be invested in such
securities.
INVESTMENT PERFORMANCE
Total Return Performance
Each Fund's calculation of total return performance
includes the reinvestment of all capital gain distributions and
income dividends for the period or periods indicated, without
regard to tax consequences to a shareholder in each Fund. Total
return is calculated as the percentage change between the
beginning value of a static account in each Fund and the ending
value of that account measured by the then current net asset
value, including all shares acquired through reinvestment of
income and capital gains dividends. The results shown are
historical and should not be considered indicative of the future
performance of each Fund. Each average annual compound rate of
return is derived from the cumulative performance of each Fund
over the time period specified. The annual compound rate of
return for each Fund over any other period of time will vary from
the average.
PAGE 46
Cumulative Performance Percentage Change
1 Yr. 5 Yrs. 10 Yrs. Since
Ended Ended Ended Inception-
10/31/95 10/31/95 10/31/95 10/31/95
International Stock Fund
T. Rowe Price International
Stock Fund 0.38% 60.08% 322.71% 725.51%
(5/9/80)++
S&P 500 26.44 121.58 321.85 799.90+++
Dow Jones Industrial
Average 24.92 125.44 383.13 919.93+++
Lipper International Funds
Average -1.09 53.21 252.05 530.31
EAFE Index -0.07 42.16 276.53 680.21+++
CPI 2.68 14.98 41.21 85.85
Financial Times Actuaries
World Index++++ 8.15 66.22 N/A N/A
+++ 6/30/80-10/31/95
++++ Inception date of Index is 12/31/85
International Discovery Fund
T. Rowe Price International
Discovery Fund -13.06% 22.94% 65.51%
(12/30/88)
S&P 500 26.44 121.58 158.37+++
Dow Jones Industrial
Average 24.92 125.44 173.04+++
Lipper International Small
Co. Funds Average -2.75 N/A N/A
EAFE Index -0.07 42.16 26.42+++
CPI 2.68 14.98 27.55+++
+++ 12/31/88-10/31/95
PAGE 47
European Stock Fund
T. Rowe Price European
Stock Fund 14.41% 55.69% 53.20%
(2/28/90)
S&P 500 26.44 121.58 107.65
Dow Jones Industrial
Average 24.92 125.44 115.09
Lipper European Region
Funds Average 9.33 42.45 38.74
EAFE Index -0.07 42.16 27.34
CPI 2.68 14.98 20.08
+++ 2/13/90-10/31/95
Japan Fund
T. Rowe Price Japan Fund -12.87% 28.48%* 10.24%
(12/30/91)
Morgan Stanley Pacific
Basin Index -11.03 44.89 17.63+++
Morgan Stanley Capital
International World
Index 10.03 51.96 41.14+++
EAFE Index -0.07 52.09 32.05+++
S&P 500 26.44 50.96 55.20+++
Topix Index -10.95 10.34 -17.70+++
Nikkei Average -11.68 5.29 -23.19+++
Morgan Stanley Japan
Index -12.98 39.98 8.98+++
Lipper Japanese Funds
Average -11.26 30.52 1.64+++
* 3 Years Ended 10/31/95
+++ 12/31/91-10/31/95
Latin America Fund
T. Rowe Price Latin
America Fund -37.11% -35.10%
(12/29/93)
S&P 500 26.44 31.01+++
Lipper Latin American
Funds Average -38.94 -33.31+++
MSCI EMF Latin America
Index -33.00 -19.46+++
+++ 12/31/93-10/31/95
PAGE 48
New Asia Fund
T. Rowe Price New Asia
Fund -9.70% 91.99% 97.56%
(9/28/90)
S&P 500 26.44 121.58 120.64+++
Dow Jones Industrial
Average 24.92 125.44 125.29+++
Lipper Pacific Ex Japan
Funds Average -10.49 110.07 121.86+++
EAFE Index -0.07 42.16 64.35+++
CPI 2.68 14.98 15.83+++
+++ 9/30/90-10/31/95
Emerging Markets Stock Fund
T. Rowe Price Emerging
Markets Stock Fund 4.80%
(3/31/95)
S&P 500 17.83
Dow Jones 16.08
Lipper Emerging Mkts
Funds Average 5.84
MSCI Emerging Market
Free Index 4.26
CPI 1.52
Annualized returns do not apply, fund is less than a year old.
Foreign Equity Fund
Foreign Equity Fund 0.64% 60.80% 62.38%
(9/7/89)
S&P 500 26.44 121.58 99.44+++
Dow Jones Industrial
Average 24.92 125.44 110.42+++
Lipper International Funds
Average -1.09 53.21 53.48+++
EAFE Index -0.07 42.16 24.80+++
CPI 2.68 14.98 23.35+++
Financial Times Actuaries
Euro-Pacific Index -1.08 39.21 22.23+++
+++ 8/31/89-10/31/95
PAGE 49
Average Annual Compound Rates of Return
1 Yr. 5 Yrs. 10 Yrs. Since
Ended Ended Ended Inception-
10/31/95 10/31/95 10/31/95 10/31/95
International Stock Fund
T. Rowe Price International
Stock Fund 0.38% 9.87% 15.51% 14.61%
(5/9/80)
S&P 500 26.44 17.25 15.48 15.40+++
Dow Jones Industrial
Average 24.92 17.65 17.06 16.35+++
Lipper International Funds
Average -1.09 8.71 13.12 12.46+++
EAFE Index -0.07 7.29 14.18 14.33+++
CPI 2.68 2.83 3.51 4.12+++
Financial Times Actuaries
World Index++++ 8.15 10.70 N/A N/A
+++ 6/30/80-10/31/95
++++ Index began 12/31/85
International Discovery Fund
T. Rowe Price International
Discovery Fund -13.06% 4.22% 7.65%
(12/30/88)
S&P 500 26.44 17.25 14.90+++
Dow Jones Industrial
Average 24.92 17.65 15.83+++
Lipper International Small
Co. Funds Average -2.75 N/A N/A
EAFE Index -0.07 7.29 3.49+++
CPI 2.68 2.83 3.63+++
Morgan Stanley Capital
International World Index10.03 11.02 7.53+++
+++ 12/31/88-10/31/95
PAGE 50
European Stock Fund
T. Rowe Price European
Stock Fund 14.41% 9.26% 7.81%
(2/28/90)
S&P 500 26.44 17.25 13.75
Dow Jones Industrial
Average 24.92 17.65 14.46
Lipper European Region
Funds Average 9.33 6.70 5.74
EAFE Index -0.07 7.29 4.35
CPI 2.68 2.83 3.28
Morgan Stanley Capital
International Europe
Index 13.68 11.16 9.68
+++ 2/13/90-10/31/95
Japan Fund
T. Rowe Price Japan Fund -12.87% 8.71* 2.57%
(12/20/91)
Morgan Stanley Pacific
Basin Index -11.03 13.16 4.33+++
Morgan Stanley Capital
International World
Index 10.03 14.97 9.41+++
EAFE Index -0.07 15.00 7.52+++
S&P 500 26.44 14.71 12.15+++
Topix Index -10.95 3.33 -4.96+++
Morgan Stanley Japan -12.98 11.86 2.27+++
Index
Lipper Japanese Funds
Average -11.26 9.24 0.38+++
* 3 Years Ended 10/31/95
+++ 12/31/91-10/31/95
Latin America Fund
T. Rowe Price Latin
America Fund -37.11% -20.95%
(12/29/93)
S&P 500 26.44 15.87+++
Lipper Latin American
Funds Average -38.94 -19.91+++
MSCI EMF Latin
America Index -33.00 -11.13+++
PAGE 51
New Asia Fund
T. Rowe Price New Asia
Fund -9.70% 13.93% 14.31%
(9/28/90)
S&P 500 26.44 17.25 16.84+++
Dow Jones Industrial
Average 24.92 17.65 17.32+++
Lipper Pacific Ex Japan
Funds Average -10.49 15.78 16.17+++
EAFE Index -0.07 7.29 10.26+++
CPI 2.68 2.83 2.93+++
Financial Times
Actuaries Pacific
Excluding Japan -1.11 20.56 19.92+++
+++ 9/30.90-10/31/95
Foreign Equity Fund
Foreign Equity Fund 0.64% 9.97% 8.21%
(9/7/89)
S&P 500 26.44 17.25 11.85+++
Dow Jones Industrial
Average 24.92 17.65 12.82+++
Lipper International Funds
Average -1.09 8.71 6.92+++
EAFE Index -0.07 7.29 3.66+++
CPI 2.68 2.83 3.46+++
Financial Times Actuaries
Euro-Pacific Index -1.08 6.84 3.31+++
+++ 8/31/89-10/31/95
Other Sources of Information
From time to time, in reports and promotional
literature: (1) each Fund's total return performance or P/E ratio
may be compared to any one or combination of the following: (i)
the Standard & Poor's 500 Stock Index and Dow Jones Industrial
Average so that you may compare the Fund's results with those of
a group of unmanaged securities widely regarded by investors as
representative of the U.S. stock market in general; (ii) other
groups of mutual funds, including T. Rowe Price Funds, tracked
by: (A) Lipper Analytical Services, Inc., a widely used
independent research firm which ranks mutual funds by overall
performance, investment objectives, and assets which includes the
Lipper Pacific Region Average which tracks the average
performance of funds which concentrate investments in equity
PAGE 52
securities whose primary trading markets or operations are in the
Western Pacific basin region, or a single country within this
region; (B) Morningstar, Inc., another widely used independent
research firm which rates mutual funds by overall performance,
investment objective, and assets; or (C) other financial or
business publications, such as Business Week, Money Magazine,
Forbes and Barron's, which provide similar information; (iii) The
Financial Times (a London based international financial
newspaper)-Actuaries World Indices, including Europe and sub
indices comprising this Index (a wide range of comprehensive
measures of stock price performance for the major stock markets
as well as for regional areas, broad economic sectors and
industry groups); (iv) Morgan Stanley Capital International
Indices, including the EAFE Index, Pacific Basin Index, Japan
Index, U.K. index and Pacific Ex Japan Index which is a widely-
recognized series of indices in international market performance;
(v) Hoarve Govette Small Cap Index and Datastream, as sources for
United Kingdom Small Cap Stocks; (vi) the International Finance
Corporation (an affiliate of the World Bank established to
encourage economic development in less developed countries),
World Bank, OECD (Organization for Economic Co-Operation and
Development) and IMF (International Monetary Fund) as a source of
economic statistics; (vii) the Nikkei Average, a generally
accepted benchmark for performance of the Japanese stock market;
(viii) indices of stocks comparable to those in which each Fund
invests including the Topix Index, which reflects the performance
of the First Section of the Tokyo Stock Exchange and the Japan
Small-Tokyo Stock Exchange Section 2; (ix) the Wilshire Small
Growth Index, as a source for U.S. small company average annual
returns; (x) IFCI Composite 100, IFCI Latin America 100, IFCI
Asia 100, and the IFCI Europe/Mideast 100 may each be used as a
source to represent total return on an investment of $100 in each
index at various points in time; and (xi) the performance of U.S.
government and corporate bonds, notes and bills. (The purpose of
these comparisons would be to illustrate historical trends in
different market sectors so as to allow potential investors to
compare different investment strategies.); (2) the Consumer Price
Index (measure for inflation) may be used to assess the real rate
of return from an investment in each Fund; (3) other U.S. or
foreign government statistics such as GNP, and net import and
export figures derived from governmental publications, e.g. The
Survey of Current Business, may be used to illustrate investment
attributes of the Fund or the general economic, business,
investment, or financial environment in which the Fund operates;
(4) the effect of tax-deferred compounding on each Fund's
investment returns, or on returns in general, may be illustrated
by graphs, charts, etc. where such graphs or charts would
compare, at various points in time, the return from an investment
in each Fund (or returns in general) on a tax-deferred basis
(assuming reinvestment of capital gains and dividends and
PAGE 53
assuming one or more tax rates) with the return on a taxable
basis; and (5) the sectors or industries in which each Fund
invests may be compared to relevant indices or surveys (e.g. S&P
Industry Surveys) in order to evaluate each Fund's historical
performance or current or potential value with respect to the
particular industry or sector. In connection with (4) above,
information derived from the following chart may be used:
IRA Versus Taxable Return
Assuming 9% annual rate of return, $2,000 annual
contribution and 28% tax bracket.
Year Taxable Tax Deferred
____ _______ ____________
10 $ 28,700 $ 33,100
15 51,400 64,000
20 82,500 111,500
25 125,100 184,600
30 183,300 297,200
IRAs
An IRA is a long-term investment whose objective is to
accumulate personal savings for retirement. Due to the long-term
nature of the investment, even slight differences in performance
will result in significantly different assets at retirement.
Mutual funds, with their diversity of choice, can be used for IRA
investments. Generally, individuals may need to adjust their
underlying IRA investments as their time to retirement and
tolerance for risk changes.
Other Features and Benefits
Each Fund is a member of the T. Rowe Price Family of
Funds and may help investors achieve various long-term investment
goals, such as investing money for retirement, saving for a down
payment on a home, or paying college costs. To explain how the
Fund could be used to assist investors in planning for these
goals and to illustrate basic principles of investing, various
worksheets and guides prepared by T. Rowe Price Associates, Inc.
("T. Rowe Price") and/or T. Rowe Price Investment Services, Inc.
may be made available. These currently include: the Asset Mix
Worksheet which is designed to show shareholders how to reduce
their investment risk by developing a diversified investment
plan: the College Planning Guide which discusses various aspects
of financial planning to meet college expenses and assists
parents in projecting the costs of a college education for their
children; the Retirement Planning Kit (also available in a PC
PAGE 54
version) which includes a detailed workbook to determine how much
money you may need for retirement and suggests how you might
invest to reach your goal; the Retirees Financial Guide which
includes a detailed workbook to determine how much money you can
afford to spend and still preserve your purchasing power and
suggest how you might invest to reach your goal; and Tax
Considerations for Investors discusses the tax advantages of
annuities and municipal bonds and now to access whether they are
suitable for your portfolio, reviews pros and cons of placing
assets in a gift to minors account and summarizes the benefits
and types of tax-deferred retirement plans currently available;
and the Personal Strategy Planner simplifies investment decision
making by helping investors define personal financial goals,
establish length of time the investor intends to invest,
determine risk "comfort zone" and select diversified investment
risk. From time to time, other worksheets and guides may be made
available as well. Of course, an investment in the Fund cannot
guarantee that such goals will be met.
To assist investors in understanding the different
returns and risk characteristics of various investments, the
aforementioned guides will include presentation of historical
returns of various investments using published indices. An
example of this is shown on the next page.
Historical Returns for Different Investments
Annualized returns for periods ended 12/31/95
50 years 20 years 10 years 5 years
Small-Company Stocks 13.8% 19.6% 11.9% 24.5%
Large-Company Stocks 11.9 14.6 14.8 16.6
Foreign Stocks N/A 15.1 13.9 9.7
Long-Term Corporate Bonds 5.7 10.5 11.2 12.1
Intermediate-Term U.S.
Gov't. Bonds 5.9 9.7 9.1 8.8
Treasury Bills 4.8 7.3 5.5 4.3
U.S. Inflation 4.4 5.2 3.5 2.8
Sources: Ibbotson Associates, Morgan Stanley. Foreign stocks
reflect performance of The Morgan Stanley Capital International
EAFE Index, which includes some 1,000 companies representing the
stock markets of Europe, Australia, New Zealand, and the Far
PAGE 55
East. This chart is for illustrative purposes only and should
not be considered as performance for, or the annualized return
of, any T. Rowe Price Fund. Past performance does not guarantee
future results.
Also included will be various portfolios demonstrating how
these historical indices would have performed in various
combinations over a specified time period in terms of return. An
example of this is shown on the next page.
Performance of Retirement Portfolios*
Asset Mix Average Annualized Value
Returns 20 Years of
Ended 12/31/95 $10,000
Investment
After Period
________________ __________________ ____________
Nominal Real BestWorst
Portfolio Growth IncomeSafety ReturnReturn** YearYear
I. Low
Risk 40% 40% 20% 11.8% 6.5% 24.9% 0.1% $ 92,675
II. Moderate
Risk 60% 30% 10% 13.1% 7.9% 29.1% -1.8%$116,826
III. High
Risk 80% 20% 0% 14.3% 9.1% 33.4% -5.2%$145,611
Source: T. Rowe Price Associates; data supplied by Lehman
Brothers, Wilshire Associates and Ibbotson Associates.
* Based on actual performance for the 20 years ended 1995 of
stocks (85% Wilshire 5000 and 15% Europe, Australia, Far
East [EAFE] Index), bonds (Lehman Brothers Aggregate Bond
Index from 1976-95 and 30-day Treasury bills from January
1976 through December 1995. Past performance does not
guarantee future results. Figures include changes in
principal value and reinvested dividends and assume the same
asset mix is maintained each year. This exhibit is for
illustrative purposes only and is not representative of the
performance of any T. Rowe Price fund.
** Based on inflation rate of 5.2% for the 20-year period ended
12/31/95.
PAGE 56
Insights
From time to time, Insights, a T. Rowe Price publication
of reports on specific investment topics and strategies, may be
included in the Fund's fulfillment kit. Such reports may include
information concerning: calculating taxable gains and losses on
mutual fund transactions, coping with stock market volatility,
benefiting from dollar cost averaging, understanding
international markets, investing in high-yield "junk" bonds,
growth stock investing, conservative stock investing, value
investing, investing in small companies, tax-free investing,
fixed income investing, investing in mortgage-backed securities,
as well as other topics and strategies.
Other Publications
From time to time, in newsletters and other publications
issued by T. Rowe Price Investment Services, Inc., reference may
be made to economic, financial and political developments in the
U.S. and abroad and their effect on securities prices. Such
discussions may take the form of commentary on these developments
by T. Rowe Price mutual fund portfolio managers and their views
and analysis on how such developments could affect investments in
mutual funds.
Redemptions in Kind
In the unlikely event a shareholder in any of the
International Funds were to receive an in kind redemption of
portfolio securities of a Fund, brokerage fees could be incurred
by the shareholder in subsequent sale of such securities.
Issuance of Fund Shares for Securities
Transactions involving issuance of a Fund's shares for
securities or assets other than cash will be limited to (1) bona
fide reorganizations; (2) statutory mergers; or (3) other
acquisitions of portfolio securities that: (a) meet the
investment objectives and policies of the Fund; (b) are acquired
for investment and not for resale except in accordance with
applicable law; (c) have a value that is readily ascertainable
via listing on or trading in a recognized United States or
international exchange or market; and (d) are not illiquid.
MANAGEMENT OF FUNDS
The officers and directors of the Funds are listed
below. Unless otherwise noted, the address of each is 100 East
Pratt Street, Baltimore, Maryland 21202. Except as indicated,
PAGE 57
each has been an employee of T. Rowe Price for more than five
years. In the list below, the Funds' directors who are
considered "interested persons" of T. Rowe Price or the Fund as
defined under Section 2(a)(19) of the Investment Company Act of
1940 are noted with an asterisk (*). These directors are
referred to as inside directors by virtue of their officership,
directorship, and/or employment with T. Rowe Price.
LEO C. BAILEY, Director--Retired; Address: 3396 South Placita
Fabula, Green Valley, Arizona 85614
ANTHONY W. DEERING, Director--Director, President and Chief
Executive Officer, The Rouse Company, real estate developers,
Columbia, Maryland; Advisory Director, Kleinwort, Benson (North
America) Corporation, a registered broker-dealer; Address: 10275
Little Patuxent Parkway, Columbia, Maryland 21044
DONALD W. DICK, JR., Director--Principal, Eurocapital Advisors,
LLC, an acquisition and management advisory Firm (from 7/95-to
present), Principal, Overseas Partners, Inc., a financial
investment firm (5/89-6/95); formerly (6/65-3/89) Director and
Vice President-Consumer Products Division, McCormick & Company,
Inc., international food processors; Director, Waverly, Inc.,
Baltimore, Maryland; Address: 600 Harbor Blvd. - 1018, Weehawken,
New Jersey 07087
ADDISON LANIER, Director--Financial management; President and
Director, Thomas Emery's Sons, Inc., and Emery Group, Inc.;
Director, Scinet Development and Holdings, Inc.; Address: 441
Vine Street, #2310, Cincinnati, Ohio 45202-2913
(c)PAUL M. WYTHES, Director--Founding General Partner, Sutter
Hill Ventures, a venture capital limited partnership, providing
equity capital to young high technology companies throughout the
United States; Director, Teltone Corporation, Interventional
Technologies Inc. and Stuart Medical, Inc.; Address: 755 Page
Mill Road, Suite A200, Palo Alto, California 94304
*M. DAVID TESTA, Chairman of the Board--Chairman of the Board,
Price-Fleming; Managing Director, T. Rowe Price; Vice President
and Director, T. Rowe Price Trust Company; Chartered Financial
Analyst; Chartered Investment Counselor
*MARTIN G. WADE, President and Director--President and
Director, Price-Fleming; Director, Robert Fleming Holdings
Limited; Address: 25 Copthall Avenue, London, EC2R 7DR,
England
CHRISTOPHER D. ALDERSON, Vice President--Vice President, Price-
Fleming
(a)PETER B. ASKEW, Executive Vice President--Executive Vice
President, Price-Fleming
(a)RICHARD J. BRUCE, Vice President--Vice President of Price-
Fleming; formerly (1985-1990) Investment Manager, Jardine Fleming
Investment Advisers, Tokyo
(a)ROBERT P. CAMPBELL, Vice President--Vice President, T. Rowe
Price and Price-Fleming; formerly (4/80-5/90) Vice President and
PAGE 58
Director, Private Finance, New York Life Insurance Company, New
York, New York
(a)MARK J. T. EDWARDS, Vice President--Vice President, Price-
Fleming
JOHN R. FORD, Vice President--Vice President, Price-Fleming
HENRY H. HOPKINS, Vice President--Vice President, Price-Fleming
and T. Rowe Price Retirement Plan Services, Inc.; Managing
Director, T. Rowe Price; Vice President and Director, T. Rowe
Price Investment Services, Inc., T. Rowe Price Services, Inc. and
T. Rowe Price Trust Company
ROBERT C. HOWE, Vice President--Vice President, Price-Fleming and
T. Rowe Price
(a)STEPHEN ILOTT, Vice President--Vice President, Price-Fleming;
formerly (1988-1991) portfolio management, Fixed Income
Portfolios Group, Robert Fleming Holdings Limited, London
GEORGE A. MURNAGHAN, Vice President--Vice President, Price-
Fleming, T. Rowe Price, T. Rowe Price Trust Company, and T. Rowe
Price Investment Services, Inc.
JAMES S. RIEPE, Vice President--Managing Director and Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc. and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
(a)CHRISTOPHER ROTHERY, Vice President--Employee, Price-Fleming;
formerly (1987-1989) employee of Robert Fleming Holdings Limited,
London
(b)R. TODD RUPPERT, Vice President--Vice President, T. Rowe
Price, T. Rowe Price Trust Company and T. Rowe Price Retirement
Plan Services, Inc.
JAMES B. M. SEDDON, Vice President--Vice President, Price-Fleming
(a)CHARLES P. SMITH, Vice President--Managing Director, T. Rowe
Price; Vice President, Price-Fleming
(a)BENEDICT R. F. THOMAS, Vice President--Vice President, Price-
Fleming
(a)PETER VAN DYKE, Vice President--Managing Director, T. Rowe
Price; Vice President, Price-Fleming
DAVID J. L. WARREN, Vice President--Vice President, Price-Fleming
WILLIAM F. WENDLER, II, Vice President--Vice President, Price-
Fleming, T. Rowe Price and T. Rowe Price Investment Services,
Inc.
(a)(b)EDWARD A. WIESE, Vice President--Vice President, T. Rowe
Price, Price-Fleming and T. Rowe Price Trust Company
LENORA V. HORNUNG, Secretary--Vice President, T. Rowe Price
PATRICIA S. BUTCHER, Assistant Secretary--Assistant Vice
President, T. Rowe Price and T. Rowe Price Investment Services,
Inc.
CARMEN F. DEYESU, Treasurer--Vice President, T. Rowe Price, T.
Rowe Price Services, Inc., and T. Rowe Price Trust Company
DAVID S. MIDDLETON, Controller--Vice President, T. Rowe Price, T.
Rowe Price Services, Inc., and T. Rowe Price Trust Company
PAGE 59
(a)ANN B. CRANMER, Vice President--Vice President, Price-
Fleming
ROGER L. FIERY, III, Assistant Vice President--Vice President,
Price-Fleming and T. Rowe Price
(a)LEAH P. HOLMES, Assistant Vice President--Vice President,
Price-Fleming and Assistant Vice President T. Rowe Price
EDWARD T. SCHNEIDER, Assistant Vice President--Vice President, T.
Rowe Price Services, Inc.
INGRID I. VORDEMBERGE, Assistant Vice President--Employee, T.
Rowe Price
(a) Mr. Askew is a Executive Vice President of the
International Funds only. Messrs. Bruce, Campbell,
Edwards, Ilott, Rothery, Smith, Thomas, VanDyke, and Wiese
are Vice Presidents of the International Funds only.
Mmes. Cranmer and Holmes are Assistant Vice Presidents of
the International Funds only.
(b) Mr. Wiese is a Executive Vice President, and Mr. Ruppert
is a Vice President of the Foreign Equity Fund.
(c) Effective January 24, 1996, Paul M. Wythes was elected to
the Board of T. Rowe Price International Funds, Inc.
COMPENSATION TABLE
_________________________________________________________________
Pension or Total Compensation
Retirement from Fund and
Name of Aggregate Benefits Fund Complex
Person, Compensation Accrued as Paid to
Position from Fund(a)Part of Fund(b) Directors(c)
_________________________________________________________________
International Stock
Leo C. Bailey, $11,330 N/A $70,083
Director
Anthony W. Deering, 11,330 N/A 68,250
Director
Donald W. Dick, 11,330 N/A 70,083
Director
Addison Lanier, 11,330 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
PAGE 60
_________________________________________________________________
International Discovery
Leo C. Bailey, $3,317 N/A $70,083
Director
Anthony W. Deering, 3,317 N/A 68,250
Director
Donald W. Dick, 3,317 N/A 70,083
Director
Addison Lanier, 3,317 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
European Stock
Leo C. Bailey, $2,935 N/A $70,083
Director
Anthony W. Deering, 2,935 N/A 68,250
Director
Donald W. Dick, 2,935 N/A 70,083
Director
Addison Lanier, 2,935 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
Japan
Leo C. Bailey, $1,901 N/A $70,083
Director
Anthony W. Deering, 1,901 N/A 68,250
Director
PAGE 61
Donald W. Dick, 1,901 N/A 70,083
Director
Addison Lanier, 1,901 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
New Asia
Leo C. Bailey, $9,578 N/A $70,083
Director
Anthony W. Deering, 9,578 N/A 68,250
Director
Donald W. Dick, 9,578 N/A 70,083
Director
Addison Lanier, 9,578 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
Latin America
Leo C. Bailey, $1,917 N/A $70,083
Director
Anthony W. Deering, 1,917 N/A 68,250
Director
Donald W. Dick, 1,917 N/A 70,083
Director
Addison Lanier, 1,917 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
PAGE 62
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
Emerging Markets Stock(e)
Leo C. Bailey, $741 N/A $70,083
Director
Anthony W. Deering, 741 N/A 68,250
Director
Donald W. Dick, 741 N/A 70,083
Director
Addison Lanier, 741 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
_________________________________________________________________
Foreign Equity
Leo C. Bailey, $5,437 N/A $70,083
Director
Anthony W. Deering, 5,437 N/A 68,250
Director
Donald W. Dick, 5,437 N/A 70,083
Director
Addison Lanier, 5,437 N/A 70,083
Director
M. David Testa, -- N/A --
Chairman of the Board(d)
Martin G. Wade, -- N/A --
Director(d)
(a) Amounts in this Column are for the period November 1, 1994
through October 31, 1995.
(b) Not applicable. The Fund does not pay pension or retirement
benefits to officers or directors/trustees of the Fund.
(c)Amounts in this column are for calendar year 1995.
PAGE 63
(d) Any director/trustee of the Fund who is an officer or
employee of T. Rowe Price receives no renumeration from the
Fund.
(e) Emerging Markets Stock Fund opened March 31, 1995.
Compensation based on April 1, 1995 through October 31, 1995.
The Funds' Executive Committee, comprised of Messrs.
Testa and Wade, have been authorized by the Board of Directors to
exercise all of the powers of the Board to manage the Funds in
the intervals between meetings of the Board, except the powers
prohibited by statute from being delegated.
PRINCIPAL HOLDERS OF SECURITIES
As of the date of the prospectus, the officers and
directors of the Funds, as a group, owned less than 1% of the
outstanding shares of each Fund.
As of January 31, 1996, the following shareholder
beneficially owned more than 5% of the outstanding shares of the
International Stock, New Asia, Japan and European Stock Funds,
respectively: Charles Schwab & Co. Inc., Reinvestment Account,
Attn.: Mutual Fund Dept., 101 West Montgomery Street, San
Francisco, California 94104-4122. Each of the following
shareholders beneficially owned more than 5% of the outstanding
shares of the Foreign Equity Fund: Continental Bank N.A., c/o
Robert Kramer, 231 S. Lasalle Street, Chicago, Illinois 60604-
1407.
INVESTMENT MANAGEMENT SERVICES
Services
Under the Management Agreement, Price-Fleming provides
each Fund with discretionary investment services. Specifically,
Price-Fleming is responsible for supervising and directing the
investments of each Fund in accordance with the Fund's investment
objective, program, and restrictions as provided in its
prospectus and this Statement of Additional Information. Price-
Fleming is also responsible for effecting all security
transactions on behalf of each Fund, including the negotiation of
commissions and the allocation of principal business and
portfolio brokerage. In addition to these services, Price-
Fleming provides the Funds with certain corporate administrative
services, including: maintaining the Funds' corporate existence,
corporate records, and registering and qualifying Fund shares
under federal and state laws; monitoring the financial,
accounting, and administrative functions of each Fund;
PAGE 64
maintaining liaison with the agents employed by each Fund such as
the Fund's custodian and transfer agent; assisting each Fund in
the coordination of such agents' activities; and permitting
Price-Fleming's employees to serve as officers, directors, and
committee members of each Fund without cost to the Fund.
The Management Agreement also provides that Price-
Fleming, its directors, officers, employees, and certain other
persons performing specific functions for each Fund will only be
liable to the Fund for losses resulting from willful misfeasance,
bad faith, gross negligence, or reckless disregard of duty.
Under the Management Agreement, Price-Fleming is
permitted to utilize the services or facilities of others to
provide it or the Funds with statistical and other factual
information, advice regarding economic factors and trends, advice
as to occasional transactions in specific securities, and such
other information, advice or assistance as Price-Fleming may deem
necessary, appropriate, or convenient for the discharge of its
obligations under the Management Agreement or otherwise helpful
to the Funds.
Certain administrative support is provided by T. Rowe
Price which receives from Price-Fleming a fee of .15% of the
market value of all assets in equity accounts, .15% of the market
value of all assets in active fixed income accounts and .035% of
the market value of all assets in passive fixed income accounts
under Price-Fleming's management.
Price-Fleming has entered into separate letters of
agreement with Fleming Investment Management Limited ("FIM") and
Jardine Fleming Investment Holdings Limited ("JFIH"), wherein FIM
and JFIH have agreed to render investment research and
administrative support to Price-Fleming. FIM is a wholly-owned
subsidiary of Robert Fleming Asset Management Limited which is a
wholly-owned subsidiary of Robert Fleming Holdings Limited
("Robert Fleming Holdings"). JFIH is an indirect wholly-owned
subsidiary of Jardine Fleming Group Limited. Under the letters
of agreement, these companies will provide Price-Fleming with
research material containing statistical and other factual
information, advice regarding economic factors and trends, advice
on the allocation of investments among countries and as between
debt and equity classes of securities, and research and
occasional advice with respect to specific companies. For these
services, FIM and JFIH each receives a fee of .075% of the market
value of all assets in equity accounts under Price-Fleming's
management. JFIH receives a fee of .075% of the market value of
all assets in active fixed income accounts and .0175% of such
market value in passive fixed income accounts under Price-
Fleming's management.
PAGE 65
Robert Fleming personnel have extensive research
resources throughout the world. A strong emphasis is placed on
direct contact with companies in the research universe. Robert
Fleming personnel, who frequently speak the local language, have
access to the full range of research products available in the
market place and are encouraged to produce independent work
dedicated solely to portfolio investment management, which adds
value to that generally available.
All Funds, except Foreign Equity Fund
Management Fee
Each Fund pays Price-Fleming a fee ("Fee") which
consists of two components: a Group Management Fee ("Group Fee")
and an Individual Fund Fee ("Fund Fee"). The Fee is paid monthly
to Price-Fleming on the first business day of the next succeeding
calendar month and is calculated as described below.
The monthly Group Fee ("Monthly Group Fee") is the sum
of the daily Group Fee accruals ("Daily Group Fee Accruals") for
each month. The Daily Group Fee Accrual for any particular day
is computed by multiplying the Price Funds' group fee accrual as
determined below ("Daily Price Funds' Group Fee Accrual") by the
ratio of each Fund's net assets for that day to the sum of the
aggregate net assets of the Price Funds for that day. The Daily
Price Funds' Group Fee Accrual for any particular day is
calculated by multiplying the fraction of one (1) over the number
of calendar days in the year by the annualized Daily Price Funds'
Group Fee Accrual for that day as determined in accordance with
the following schedule:
Price Funds'
Annual Group Base Fee
Rate for Each Level of Assets
_________________________________
0.480% First $1 billion
0.450% Next $1 billion
0.420% Next $1 billion
0.390% Next $1 billion
0.370% Next $1 billion
0.360% Next $2 billion
0.350% Next $2 billion
0.340% Next $5 billion
0.330% Next $10 billion
0.320% Next $10 billion
0.310% Thereafter
PAGE 66
For the purpose of calculating the Group Fee, the Price
Funds include all the mutual funds distributed by T. Rowe Price
Investment Services, Inc. (excluding T. Rowe Price Equity Index
Fund, T. Rowe Price Spectrum Fund, Inc. and any institutional or
private label mutual funds). For the purpose of calculating the
Daily Price Funds' Group Fee Accrual for any particular day, the
net assets of each Price Fund are determined in accordance with
the Funds' prospectus as of the close of business on the previous
business day on which the Fund was open for business.
The monthly Fund Fee ("Monthly Fund Fee") is the sum of
the daily Fund Fee accruals ("Daily Fund Fee Accruals") for each
month. The Daily Fund Fee Accrual for any particular day is
computed by multiplying the fraction of one (1) over the number
of calendar days in the year by the Fund Fee Rate of 0.35% each
for the Global Stock and International Stock Funds, 0.50% each
for the European Stock, Japan and New Asia Funds, 0.75% each for
the International Discovery, Latin America, and Emerging Markets
Stock Funds, and multiplying this product by the net assets of
the Fund for that day, as determined in accordance with the
Funds' prospectus as of the close of business on the previous
business day on which the Fund was open for business.
The following chart sets forth the total management fees
if any, paid to Price-Fleming by the Funds, during the last three
years:
International Stock International Discovery Japan
1995 $41,829,000 1995 $4,381,000 1995 $1,523,000
1994 $35,176,000 1994 $5,142,000 1994 $1,289,000
1993 $14,955,000 1993 $1,983,000 1993 $ 458,000
European Stock New Asia Latin America
1995 $3,547,000 1995 $16,864,000 1995 $1,765,000
1994 $2,710,000 1994 $17,320,000 1994 $1,195,000
1993 $1,422,000 1993 $ 4,937,000 1993 *
Emerging Market Stock
1995 -0-
1994 *
1993 *
*Prior to commencement of Fund operations.
PAGE 67
Limitation on Fund Expenses
The Management Agreement between each Fund and Price-
Fleming provides that each Fund will bear all expenses of its
operations not specifically assumed by Price-Fleming. However,
in compliance with certain state regulations, Price-Fleming will
reimburse each Fund for certain expenses which in any year exceed
the limits prescribed by any state in which the Fund's shares are
qualified for sale. Presently, the most restrictive expense
ratio limitation imposed by any state is 2.5% of the first $30
million of a Fund's average daily net assets, 2% of the next $70
million of the average daily net assets, and 1.5% of net assets
in excess of $100 million. For the purpose of determining
whether a Fund is entitled to reimbursement, the expenses of each
Fund are calculated on a monthly basis. If the Fund is entitled
to reimbursement, that month's management fee will be reduced or
postponed, with any adjustment made after the end of the year.
Emerging Markets Stock Fund
In the interest of limiting the expenses of the Fund
during its initial period of operations, Price-Fleming agreed to
bear any expenses through October 31, 1996, which would cause the
Fund's ratio of expenses to average net assets to exceed 1.75%.
Expenses paid or assumed under this agreement are subject to
reimbursement to Price-Fleming by the Fund whenever the Fund's
expense ratio is below 1.75%; however, no reimbursement will be
made after October 31, 1998, or if it would result in the expense
ratio exceeding 1.75%. The Management Agreement also provides
that one or more additional expense limitation periods (of the
same or different time periods) may be implemented after the
expiration of the current one on October 31, 1996, and that with
respect to any such additional limitation period, the Fund's may
reimburse Price-Fleming, provided the reimbursement does not
result in the Fund's aggregate expenses exceeding the additional
expense limitation or any applicable state expense limitation.
Global Stock Fund
In the interest of limiting the expenses of the Fund
during its initial period of operations, Price-Fleming agreed to
bear any expenses through October 31, 1997, which would cause the
Fund's ratio of expenses to average net assets to exceed 1.30%.
Expenses paid or assumed under this agreement are subject to
reimbursement to Price-Fleming by the Fund whenever the Fund's
expense ratio is below 1.30%; however, no reimbursement will be
made after October 31, 1999, or if it would result in the expense
ratio exceeding 1.30%. The Management Agreement also provides
that one or more additional expense limitation periods (of the
same or different time periods) may be implemented after the
PAGE 68
expiration of the current one on October 21, 1997, and that with
respect to any such additional limitation period, the Fund's may
reimburse Price-Fleming, provided the reimbursement does not
result in the Fund's aggregate expenses exceeding the additional
expense limitation or any applicable state expense limitation.
For information concerning past expense limitations and
the effect on the accrual, payment, and reimbursement of fees and
expenses, please see the Funds' annual report.
T. Rowe Price Spectrum Fund, Inc. (International Stock Fund)
The Fund is a party to a Special Servicing Agreement
("Agreement") between and among T. Rowe Price Spectrum Fund, Inc.
("Spectrum Fund"), T. Rowe Price, T. Rowe Price Services, Inc.
and various other T. Rowe Price funds which, along with the Fund,
are funds in which Spectrum Fund invests (collectively all such
funds "Underlying Price Funds").
The Agreement provides that, if the Board of Directors
of any Underlying Price Fund determines that such Underlying
Fund's share of the aggregate expenses of Spectrum Fund is less
than the estimated savings to the Underlying Price Fund from the
operation of Spectrum Fund, the Underlying Price Fund will bear
those expenses in proportion to the average daily value of its
shares owned by Spectrum Fund, provided further that no
Underlying Price Fund will bear such expenses in excess of the
estimated savings to it. Such savings are expected to result
primarily from the elimination of numerous separate shareholder
accounts which are or would have been invested directly in the
Underlying Price Funds and the resulting reduction in shareholder
servicing costs. Although such cost savings are not certain, the
estimated savings to the Underlying Price Funds generated by the
operation of Spectrum Fund are expected to be sufficient to
offset most, if not all, of the expenses incurred by Spectrum
Fund.
Foreign Equity Fund
For its services to the Fund under the Management
Agreement, Price-Fleming is paid an annual fee, in monthly
installments, based on the Fund's average daily net assets at the
rate of .70%. For the years 1995, 1994, and 1993, Price-Fleming
received from the Fund management fees totaling $8,673,000,
$5,137,000, and $2,064,000 (10 months ended October 31, 1993),
respectively.
PAGE 69
DISTRIBUTOR FOR FUNDS
T. Rowe Price Investment Services, Inc. ("Investment
Services"), a Maryland corporation formed in 1980 as a wholly-
owned subsidiary of T. Rowe Price, serves as the Funds'
distributor. Investment Services is registered as a broker-
dealer under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
offering of each Fund's shares is continuous.
Investment Services is located at the same address as
the Funds and T. Rowe Price -- 100 East Pratt Street, Baltimore,
Maryland 21202.
Investment Services serves as distributor to the Funds
pursuant to an Underwriting Agreement ("Underwriting Agreement"),
which provides that each Fund will pay all fees and expenses in
connection with: registering and qualifying its shares under the
various state "blue sky" laws; preparing, setting in type,
printing, and mailing its prospectuses and reports to
shareholders; and issuing its shares, including expenses of
confirming purchase orders.
The Underwriting Agreement provides that Investment
Services will pay all fees and expenses in connection with:
printing and distributing prospectuses and reports for use in
offering and selling Fund shares; preparing, setting in type,
printing, and mailing all sales literature and advertising;
Investment Services' federal and state registrations as a
broker-dealer; and offering and selling Fund shares, except for
those fees and expenses specifically assumed by each Fund.
Investment Services' expenses are paid by T. Rowe Price.
Investment Services acts as the agent of each Fund in
connection with the sale of its shares in all states in which the
shares are qualified and in which Investment Services is
qualified as a broker-dealer. Under the Underwriting Agreement,
Investment Services accepts orders for Fund shares at net asset
value. No sales charges are paid by investors or the Funds.
CUSTODIAN
State Street Bank and Trust Company (the "Bank") is the
custodian for certain of the Funds' U.S. securities and cash, but
it does not participate in the Funds' investment decisions.
Portfolio securities purchased in the U.S. are maintained in the
custody of the Bank and may be entered into the Federal Reserve
Book Entry System, or the security depository system of the
PAGE 70
Depository Trust Corporation. State Street Bank's main office is
at 225 Franklin Street, Boston, Massachusetts 02110. The Funds
have entered into a Custodian Agreement with The Chase Manhattan
Bank, N.A., London, pursuant to which portfolio securities are
maintained in the custody of various foreign branches of The
Chase Manhattan Bank and such other custodians, including foreign
banks and foreign securities depositories in accordance with
regulations under the Investment Company Act of 1940. The
address for The Chase Manhattan Bank, N.A., London is Woolgate
House, Coleman Street, London, EC2P 2HD, England.
CODE OF ETHICS
The Funds' investment adviser (Price-Fleming) has a
written Code of Ethics which requires all employees to obtain
prior clearance before engaging in any personal securities
transactions. In addition, all employees must report their
personal securities transactions within ten days of their
execution. Employees will not be permitted to effect
transactions in a security: If there are pending client orders in
the security; the security has been purchased or sold by a client
within seven calendar days; the security is being considered for
purchase for a client; the security is subject to internal
trading restrictions. In addition, employees are prohibited from
engaging in short-term trading (e.g., purchases and sales
involving the same security within 60 days. Any material
violation of the Code of Ethics is reported to the Board of the
Fund. The Board also reviews the administration of the Code of
Ethics on an annual basis.
PORTFOLIO TRANSACTIONS
Investment or Brokerage Discretion
Decisions with respect to the purchase and sale of
portfolio securities on behalf of the Funds are made by Price-
Fleming. Price-Fleming is also responsible for implementing
these decisions, including the allocation of portfolio brokerage
and principal business and the negotiation of commissions.
How Brokers and Dealers are Selected
Equity Securities
In purchasing and selling each Fund's portfolio
securities, it is Price-Fleming's policy to obtain quality
execution at the most favorable prices through responsible
broker-dealers and, in the case of agency transactions, at
PAGE 71
competitive commission rates where such rates are negotiable.
However, under certain conditions, a Fund may pay higher
brokerage commissions in return for brokerage and research
services. In selecting broker-dealers to execute a Fund's
portfolio transactions, consideration is given to such factors as
the price of the security, the rate of the commission, the size
and difficulty of the order, the reliability, integrity,
financial condition, general execution and operational
capabilities of competing brokers and dealers, their expertise in
particular markets and the brokerage and research services they
provide to Price-Fleming or the Funds. It is not the policy of
Price-Fleming to seek the lowest available commission rate where
it is believed that a broker or dealer charging a higher
commission rate would offer greater reliability or provide better
price or execution.
Transactions on stock exchanges involve the payment of
brokerage commissions. In transactions on stock exchanges in the
United States, these commissions are negotiated. Traditionally,
commission rates have generally not been negotiated on stock
markets outside the United States. In recent years, however, an
increasing number of overseas stock markets have adopted a system
of negotiated rates, although a number of markets continue to be
subject to an established schedule of minimum commission rates.
It is expected that equity securities will ordinarily be
purchased in the primary markets, whether over-the-counter or
listed, and that listed securities may be purchased in the
over-the-counter market if such market is deemed the primary
market. In the case of securities traded on the over-the-counter
markets, there is generally no stated commission, but the price
usually includes an undisclosed commission or markup. In
underwritten offerings, the price includes a disclosed, fixed
commission or discount.
Fixed Income Securities
For fixed income securities, it is expected that
purchases and sales will ordinarily be transacted with the
issuer, the issuer's underwriter, or with a primary market maker
acting as principal on a net basis, with no brokerage commission
being paid by the Fund. However, the price of the securities
generally includes compensation which is not disclosed
separately. Transactions placed though dealers who are serving
as primary market makers reflect the spread between the bid and
asked prices.
With respect to equity and fixed income securities,
Price-Fleming may effect principal transactions on behalf of the
Funds with a broker or dealer who furnishes brokerage and/or
PAGE 72
research services, designate any such broker or dealer to receive
selling concessions, discounts or other allowances or otherwise
deal with any such broker or dealer in connection with the
acquisition of securities in underwritings. The prices the Fund
pays to underwriters of newly-issued securities usually include a
concession paid by the issuer to the underwriter. Price-Fleming
may receive research services in connection with brokerage
transactions, including designations in fixed price offerings.
Price-Fleming may cause a Fund to pay a broker-dealer
who furnishes brokerage and/or research services a commission for
executing a transaction that is in excess of the commission
another broker-dealer would have received for executing the
transaction if it is determined that such commission is
reasonable in relation to the value of the brokerage and/or
research services which have been provided. In some cases,
research services are generated by third parties but are provided
to Price-Fleming by or through broker-dealers.
Descriptions of Research Services Received from Brokers and
Dealers
Price-Fleming receives a wide range of research services
from brokers and dealers covering investment opportunities
throughout the world, including information on the economies,
industries, groups of securities, individual companies,
statistics, political developments, technical market action,
pricing and appraisal services, and performance analyses of all
the countries in which a Fund's portfolio is likely to be
invested. Price-Fleming cannot readily determine the extent to
which commissions charged by brokers reflect the value of their
research services, but brokers occasionally suggest a level of
business they would like to receive in return for the brokerage
and research services they provide. To the extent that research
services of value are provided by brokers, Price-Fleming may be
relieved of expenses which it might otherwise bear. In some
cases, research services are generated by third parties but are
provided to Price-Fleming by or through brokers.
Commissions to Brokers who Furnish Research Services
Certain broker-dealers which provide quality execution
services also furnish research services to Price-Fleming. Price-
Fleming has adopted a brokerage allocation policy embodying the
concepts of Section 28(e) of the Securities Exchange Act of 1934,
which permits an investment adviser to cause its clients to pay a
broker which furnishes brokerage or research services a higher
commission than that which might be charged by another broker
which does not furnish brokerage or research services, or which
furnishes brokerage or research services deemed to be of lesser
PAGE 73
value, if such commission is deemed reasonable in relation to the
brokerage and research services provided by the broker, viewed in
terms of either that particular transaction or the overall
responsibilities of the adviser with respect to the accounts as
to which it exercises investment discretion. Accordingly, Price-
Fleming may assess the reasonableness of commissions in light of
the total brokerage and research services provided by each
particular broker.
Miscellaneous
Research services furnished by brokers through which
Price-Fleming effects securities transactions may be used in
servicing all accounts managed by Price-Fleming. Conversely,
research services received from brokers which execute
transactions for a particular Fund will not necessarily be used
by Price-Fleming exclusively in connection with the management of
that Fund.
Some of Price-Fleming's other clients have investment
objectives and programs similar to those of the Funds. Price-
Fleming may occasionally make recommendations to other clients
which result in their purchasing or selling securities
simultaneously with the Funds. As a result, the demand for
securities being purchased or the supply of securities being sold
may increase, and this could have an adverse effect on the price
of those securities. It is Price-Fleming's policy not to favor
one client over another in making recommendations or in placing
orders. Price-Fleming frequently follows the practice of
grouping orders of various clients for execution which generally
results in lower commission rates being attained. In certain
cases, where the aggregate order is executed in a series of
transactions at various prices on a given day, each participating
client's proportionate share of such order reflects the average
price paid or received with respect to the total order. Price-
Fleming has established a general investment policy that it will
ordinarily not make additional purchases of a common stock of a
company for its clients (including the T. Rowe Price Funds) if,
as a result of such purchases, 10% or more of the outstanding
common stock of such company would be held by its clients in the
aggregate.
None of the Funds allocates business to any broker-
dealer on the basis of its sales of the Fund's shares. However,
this does not mean that broker-dealers who purchase Fund shares
for their clients will not receive business from the Fund.
PAGE 74
Transactions with Related Brokers and Dealers
As provided in the Investment Management Agreement
between each Fund and Price-Fleming, Price-Fleming is responsible
not only for making decisions with respect to the purchase and
sale of the Fund's portfolio securities, but also for
implementing these decisions, including the negotiation of
commissions and the allocation of portfolio brokerage and
principal business. It is expected that Price-Fleming will often
place orders for a Fund's portfolio transactions with broker-
dealers through the trading desks of certain affiliates of Robert
Fleming Holdings Limited ("Robert Fleming"), an affiliate of
Price-Fleming. Robert Fleming, through Copthall Overseas
Limited, a wholly-owned subsidiary, owns 25% of the common stock
of Price-Fleming. Fifty percent of the common stock of Price-
Fleming is owned by TRP Finance, Inc., a wholly-owned subsidiary
of T. Rowe Price, and the remaining 25% is owned by Jardine
Fleming Holdings Limited, a subsidiary of Jardine Fleming Group
Limited ("JFG"). JFG is 50% owned by Robert Fleming and 50%
owned by Jardine Matheson Holdings Limited. The affiliates
through whose trading desks such orders may be placed include
Fleming Investment Management Limited ("FIM"), and Robert Fleming
& Co. Limited ("RF&Co."). FIM and RF&Co. are wholly-owned
subsidiaries of Robert Fleming. These trading desks will operate
under strict instructions from the Fund's portfolio manager with
respect to the terms of such transactions. Neither Robert
Fleming, JFG, nor their affiliates will receive any commission,
fee, or other remuneration for the use of their trading desks,
although orders for a Fund's portfolio transactions may be placed
with affiliates of Robert Fleming and JFG who may receive a
commission.
The Board of Directors of the Funds has authorized
Price-Fleming to utilize certain affiliates of Robert Fleming and
JFG in the capacity of broker in connection with the execution of
each Fund's portfolio transactions, provided that Price-Fleming
believes that doing so will result in an economic advantage (in
the form of lower execution costs or otherwise) being obtained
for each Fund. These affiliates include Jardine Fleming
Securities Limited ("JFS"), a wholly-owned subsidiary of JFG,
RF&Co., Jardine Fleming Australia Securities Limited, and Robert
Fleming, Inc. (a New York brokerage firm).
The above-referenced authorization was made in
accordance with Section 17(e) of the Investment Company Act of
1940 (the "1940 Act") and Rule 17e-1 thereunder which require the
Funds' independent directors to approve the procedures under
which brokerage allocation to affiliates is to be made and to
monitor such allocations on a continuing basis. Except with
respect to tender offers, it is not expected that any portion of
PAGE 75
the commissions, fees, brokerage, or similar payments received by
the affiliates of Robert Fleming in such transactions will be
recaptured by the Funds. The directors have reviewed and from
time to time may continue to review whether other recapture
opportunities are legally permissible and available and, if they
appear to be, determine whether it would be advisable for a Fund
to seek to take advantage of them.
The following amounts and percentages were paid to JFS
during the year 1995:
Total Aggregate Aggregate
Brokerage Brokerage Dollar
Fund Commissions Commissions Amount
______ ______________ ____________ ________
International Stock $ 6,029,012 9% 7%
International Discovery 1,548,256 23% 19%
New Asia 10,230,880 21% 21%
Japan 781,356 23% 26%
Latin America 293,894 3% 5%
Emerging Markets Stock 25,786 36% 31%
Foreign Equity 2,077,591 9% 8%
The following amounts and percentages were paid to RF&Co
during the year 1995:
Total Aggregate Aggregate
Brokerage Brokerage Dollar
Fund Commissions Commissions Amount
______ ______________ ____________ ________
International Stock $236,915 4% 6%
European Stock 28,980 10% 12%
International Discovery 30,702 2% 4%
Emerging Markets Stock 4,869 7% 8%
Japan 59,539 8% 3%
Latin America 10,135 3% 5%
Foreign Equity 46,833 2% 4%
The following amounts and percentages were paid to Ord
Minnett during the year 1995:
PAGE 76
Total Aggregate Aggregate
Brokerage Brokerage Dollar
Fund Commissions Commissions Amount
______ ______________ ____________ ________
International Stock $174,136 3% 2%
International Discovery 30,612 2% 2%
New Asia 336,088 3% 4%
Foreign Equity 49,051 2% 2%
In accordance with the written procedures adopted
pursuant to Rule 17e-1, the independent directors of each Fund
reviewed the 1995 transactions with affiliated brokers and
determined that such transactions resulted in an economic
advantage to the Funds either in the form of lower execution
costs or otherwise.
Other
The amounts shown below involved trades with brokers
acting as agents or underwriters, in which such brokers received
total commissions, including discounts received in connection
with underwritings for the fiscal years ended 1995, 1994, and
1993:
Fund 1995 1994 1993
______ ____ ____ ____
International Stock $ 6,029,012 $ 9,684,485 $5,419,000
International Discovery 1,548,256 2,042,917 1,277,000
European Stock 290,226 219,614 182,000
Japan 781,356 1,284,041 412,000
New Asia 10,230,880 13,086,017 6,642,000
Foreign Equity 2,077,591 1,913,957 853,000
Latin America 293,894 447,402 --
Emerging Markets Stock 72,181 -- --
The percentage of total portfolio transactions, placed
with firms which provided research, statistical, or other
services to T. Rowe Price in connection with the management of
the Funds, or in some cases, to the Funds for the fiscal year
ended 1995, 1994, and 1993, are shown below:
PAGE 77
Fund 1995 1994 1993
______ ____ ____ ____
International Stock 85% 83% 76%
International Discovery 73% 82% 81%
European Stock 90% 98% 99%
Japan 69% 64% 73%
New Asia 75% 77% 72%
Foreign Equity 86% 85% 79%
Latin America 97% 99% --
Emerging Markets Stock 58% -- --
The portfolio turnover rates for the following Funds for
the fiscal year ended October 31, 1995, October 31, 1994, and the
ten-month fiscal year ended October 31, 1993, are as follows:
Fund 1995 1994 1993
______ _____ ____ ____
International Stock 17.8% 22.9% 29.8%*
International Discovery 43.5% 57.4% 71.8%*
European Stock 17.2% 24.5% 21.3%*
Japan 62.4% 61.5% 61.4%*
New Asia 63.7% 63.2% 40.4%*
Foreign Equity 18.8% 22.0% 27.4%*
Latin America 18.9% 12.2%** --
Emerging Markets Stock 28.8%# -- --
* For the ten-month fiscal year ended October 31, 1994.
** From the commencement of operations December 29, 1993 to
October 31, 1994
# From the commencement of operations March 31, 1995 to October
31, 1995
PRICING OF SECURITIES
Equity securities listed or regularly traded on a
securities exchange (including NASDAQ) are valued at the last
quoted sales price at the time the valuations are made. A
security which 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. Other equity securities and
those listed securities that are not traded on a particular day
generally are valued at a price within the limits of the latest
bid and asked prices deemed by the Board of Directors or by
persons delegated by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-
counter market and are valued at a price deemed best to reflect
PAGE 78
fair value as provided by dealers who make markets in these
securities or by an independent pricing service. Short-term debt
securities are valued at their cost in local currency which, when
combined with accrued interest, approximates fair value.
For purposes of determining each Fund's net asset value
per share, the U.S. dollar value of all assets and liabilities
initially expressed in foreign currencies is determined by using
the mean of the bid and offer prices of such currencies against
U.S. dollars provided by a major bank.
Assets and liabilities 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 or
under the supervision of the officers of the Funds, as authorized
by the Board of Directors.
Trading in the portfolio securities of each Fund may
take place in various foreign markets on certain days (such as
Saturday) when the Funds are not open for business and do not
calculate their net asset values. In addition, trading in a
Fund's portfolio securities may not occur on days when the Fund
is open. The calculation of each Fund's net asset value normally
will not take place contemporaneously with the determination of
the value of the Fund's portfolio securities. Events affecting
the values of portfolio securities that occur between the time
their prices are determined and the time each Fund's net asset
value is calculated will not be reflected in the Fund's net asset
value unless Price-Fleming, under the supervision of the Fund's
Board of Directors, determines that the particular event should
be taken into account in computing the Fund's net asset value.
NET ASSET VALUE PER SHARE
The purchase and redemption price of each Fund's shares
is equal to that Fund's net asset value per share or share price.
Each Fund determines its net asset value per share by subtracting
its liabilities (including accrued expenses and dividends
payable) from its total assets (the market value of the
securities the Fund holds plus cash and other assets, including
income accrued but not yet received) and dividing the result by
the total number of shares outstanding. The net asset value per
share of each Fund, other than the Japan Fund, is calculated as
of the close of trading on the New York Stock Exchange ("NYSE")
every day the NYSE is open for trading. The net asset value per
share of the Japan Fund is calculated as of the close of trading
on the NYSE each day the NYSE and the Tokyo Stock Exchange
("TSE") are both open. The NYSE is closed on the following days:
PAGE 79
New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
The TSE is scheduled to be closed on the following week days in
1996: January 1, 2, 3, 15; February 12; March 20; April 29; May
3, 6; September 16, 23; October 10; November 4; and December 23,
31, as well as the following weeks days in 1997: January 1, 2, 3,
15; February 11; March 20; April 29; May 5; July 21; September
15, 23; October 10; November 24; and December 23. If the TSE
closes on any additional or different dates, the Japan Fund will
be closed on such dates.
Determination of net asset value (and the offering,
sale, redemption and repurchase of shares) for a Fund may be
suspended at times (a) during which the NYSE is closed, other
than customary weekend and holiday closings, or in the case of
the Japan Fund, either the NYSE or TSE is closed, (b) during
which trading on any of such Exchanges is restricted (c) during
which an emergency exists as a result of which disposal by a Fund
of securities owned by it is not reasonably practicable or it is
not reasonably practicable for the Fund fairly to determine the
value of its net assets, or (d) during which a governmental body
having jurisdiction over the Fund may by order permit such a
suspension for the protection of the Fund's shareholders;
provided that applicable rules and regulations of the Securities
and Exchange Commission (or any succeeding governmental
authority) shall govern as to whether the conditions prescribed
in (b), (c) or (d) exist.
DIVIDENDS
Unless you elect otherwise, dividends and capital gain
distributions will be reinvested on the reinvestment date using
the NAV per share of that date. The reinvestment date normally
precedes the payment date by about 10 days although the exact
timing is subject to change.
TAX STATUS
Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986,
as amended ("Code").
Dividends and distributions paid by the Funds (other
than Global Stock Fund) are not eligible for the dividends-
received deduction for corporate shareholders, if as expected,
none of the Fund's income consists of dividends paid by United
States corporations. Income dividends paid by the Global Stock
Fund are eligible for the dividends--received deduction for
PAGE 80
corporate shareholders, only to the extent the Global Stock
Fund's income consists of dividends paid by United States
corporations. Capital gain distributions paid from these Funds
are never eligible for this deduction. For tax purposes, it does
not make any difference whether dividends and capital gain
distributions are paid in cash or in additional shares. Each
Fund must declare dividends by December 31 of each year equal to
at least 98% of ordinary income (as of December 31) and capital
gains (as of October 31) in order to avoid a federal excise tax
and distribute within 12 months 100% of ordinary income and
capital gains as of December 31 to avoid federal income tax.
Foreign currency gains and losses, including the portion
of gain or loss on the sale of debt securities attributable to
foreign exchange rate fluctuations are taxable as ordinary
income. If the net effect of these transactions is a gain, the
ordinary income dividend paid by the fund will be increased. If
the result is a loss, the income dividend paid by the fund will
be decreased, or to the extent such dividend has already been
paid a portion may be reclassified as a return of capital.
Adjustments, to reflect these gains and losses will be made at
the end of each Fund's taxable year.
At the time of your purchase, each Fund's net asset
value may reflect undistributed income, capital gains or net
unrealized appreciation or depreciation of securities held by
each Fund. A subsequent distribution to you of such amounts,
although constituting a return of your investment, would be
taxable either as dividends or capital gain distributions. For
federal income tax purposes, each Fund is permitted to carry
forward its net realized capital losses, if any, for eight years,
and realize net capital gains up to the amount of such losses
without being required to pay taxes on, or distribute such gains.
On October 31, 1995, the books of each Fund indicated that each
Fund's aggregate net assets included undistributed net income,
net realized capital gains or losses, and unrealized appreciation
or depreciation which are listed below.
Net Realized
Undistributed Capital Unrealized
Fund Net Income Gains (Losses) Appreciation
European Stock $ 7,440,000 $ 7,731,000 $ 87,580,000
International Stock 91,242,000 35,091,000 691,498,000
Foreign Equity 20,836,000 17,187,000 95,608,000
PAGE 81
Net Realized
Undistributed Capital Unrealized
Fund Net Income Gains (Losses) Depreciation
Latin America $ 1,226,000 ($15,291,000) $64,992,000
New Asia 17,116,000 (41,030,000) $11,000
Japan -- (2,717,000) 13,556,000
Emerging Markets
Stock $35,000 (45,000) 721,000
International
Discovery 2,048,000 (8,883,000) 13,775,000
Income received by each Fund from sources within various
foreign countries may be subject to foreign income taxes withheld
at the source. Under the Code, if more than 50% of the value of
a Fund's total assets at the close of its taxable year comprise
securities issued by foreign corporations or governments, the
Fund may file an election with the Internal Revenue Service to
"pass through" to the Fund's shareholders the amount of any
foreign income taxes paid by the Fund. Pursuant to this
election, shareholders will be required to: (i) include in gross
income, even though not actually received, their respective pro
rata share of foreign taxes paid by the Fund; (ii) treat their
pro rata share of foreign taxes as paid by them; and (iii) either
deduct their pro rata share of foreign taxes in computing their
taxable income, or use it as a foreign tax credit against U.S.
income taxes (but not both). No deduction for foreign taxes may
be claimed by a shareholder who does not itemize deductions.
Each Fund intends to meet the requirements of the Code
to "pass through" to its shareholders foreign income taxes paid,
but there can be no assurance that a Fund will be able to do so.
Each shareholder will be notified within 60 days after the close
of each taxable year of a Fund, if that Fund will "pass through"
foreign taxes paid for that year, and, if so, the amount of each
shareholder's pro rata share (by country) of (i) the foreign
taxes paid, and (ii) the Fund's gross income from foreign
sources. Of course, shareholders who are not liable for federal
income taxes, such as retirement plans qualified under Section
401 of the Code, will not be affected by any such "pass through"
of foreign tax credits.
If, in any taxable year, a Fund should not qualify as a
regulated investment company under the Code: (i) the Fund would
be taxed at normal corporate rates on the entire amount of its
taxable income without deduction for dividends or other
distributions to shareholders; (ii) the Fund's distributions to
the extent made out of the Fund's current or accumulated earnings
and profits would be taxable to shareholders as ordinary
dividends (regardless of whether they would otherwise have been
PAGE 82
considered capital gain dividends), and the Funds may qualify for
the 70% deduction for dividends received by corporations; and
(iii) foreign tax credits would not "pass through" to
shareholders.
Taxation of Foreign Shareholders
The Code provides that dividends from net income (which
are deemed to include for this purpose each shareholder's pro
rata share of foreign taxes paid by each Fund - see discussion of
"pass through" of the foreign tax credit to U.S. shareholders),
will be subject to U.S. tax. For shareholders who are not
engaged in a business in the U.S., this tax would be imposed at
the rate of 30% upon the gross amount of the dividend in the
absence of a Tax Treaty providing for a reduced rate or exemption
from U.S. taxation. Distributions of net long-term capital gains
realized by each Fund are not subject to tax unless the foreign
shareholder is a nonresident alien individual who was physically
present in the U.S. during the tax year for more than 182 days.
CAPITAL STOCK
The T. Rowe Price International Funds, Inc. (the
"International Corporation") was organized in 1979, as a Maryland
corporation under the name T. Rowe Price International Fund, Inc.
("the Old Corporation"). Pursuant to the Annual Meeting of
Shareholders held on April 22, 1986, an Agreement and Plan of
Reorganization and Liquidation was adopted in order to convert
the Old Corporation from a Maryland corporation to a
Massachusetts Business Trust, named the T. Rowe Price
International Trust ("the Trust"). This conversion became
effective on May 1, 1986. Pursuant to the Annual Meeting of
Shareholders held on April 19, 1990, an Agreement and Plan of
Reorganization and Liquidation was adopted in order to convert
the Trust from a Massachusetts Business Trust to a Maryland
corporation. This conversion become effective May 1, 1990. The
Institutional International Funds, Inc. (the "Institutional
Corporation") was organized in 1989, as a Maryland corporation.
Each Corporation is registered with the Securities and Exchange
Commission under the 1940 Act as a diversified, open-end
investment company, commonly known as a "mutual fund."
Currently, the International Corporation consists of
twelve series, each of which represents a separate class of the
Corporation's shares and has different objectives and investment
policies. The International Bond Fund was added as a separate
series of the Trust in 1986, and the designation of the existing
series of the Trust was, at that time, changed to the
International Stock Fund. In 1988 and 1990, respectively, the
PAGE 83
International Discovery and European Stock Funds were added as
separate series of the Trust. Effective May 1, 1990, all series
of the Trust became series of the Corporation. In the same year,
after the May 1, 1990 reorganization, the New Asia and Global
Government Bond Funds were added as separate series of the
Corporation. The Japan, Short-Term Global Income, Latin America,
Emerging Markets Bond Funds, were added as separate series of the
Corporation in 1991, 1992, 1993, and 1994, respectively. The
Emerging Markets Stock, and Global Stock Funds were both added as
separate series of the Corporation in 1995. The Short-Term
Global Income, Global Government Bond, International Bond, and
Emerging Markets Bond Funds are described in a separate Statement
of Additional Information. Currently, the Institutional
Corporation consists of one series, which was added in 1990 to
the Corporation. Each Charter also provides that the Board of
Directors may issue additional series of shares.
Each Funds' Charter authorizes the Board of Directors to
classify and reclassify any and all shares which are then
unissued, including unissued shares of capital stock into any
number of classes or series, each class or series consisting of
such number of shares and having such designations, such powers,
preferences, rights, qualifications, limitations, and
restrictions, as shall be determined by the Board subject to the
Investment Company Act and other applicable law. The shares of
any such additional classes or series might therefore differ from
the shares of the present class and series of capital stock and
from each other as to preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemption, subject to
applicable law, and might thus be superior or inferior to the
capital stock or to other classes or series in various
characteristics. The Board of Directors may increase or decrease
the aggregate number of shares of stock or the number of shares
of stock of any class or series that each Fund has authorized to
issue without shareholder approval.
Each share of each series has equal voting rights with
every other share of every other series, and all shares of all
series vote as a single group except where a separate vote of any
class or series is required by the 1940 Act, the laws of the
State of Maryland, the Corporation's Articles of Incorporation,
the By-Laws of the Corporation, or as the Board of Directors may
determine in its sole discretion. Where a separate vote is
required with respect to one or more classes or series, then the
shares of all other classes or series vote as a single class or
series, provided that, as to any matter which does not affect the
interest of a particular class or series, only the holders of
shares of the one or more affected classes or series is entitled
to vote. The preferences, rights, and other characteristics
PAGE 84
attaching to any series of shares, including the present series
of capital stock, might be altered or eliminated, or the series
might be combined with another series, by action approved by the
vote of the holders of a majority of all the shares of all series
entitled to be voted on the proposal, without any additional
right to vote as a series by the holders of the capital stock or
of another affected series.
Shareholders are entitled to one vote for each full
share held (and fractional votes for fractional shares held) and
will vote in the election of or removal of directors (to the
extent hereinafter provided) and on other matters submitted to
the vote of shareholders. There will normally be no meetings of
shareholders for the purpose of electing directors unless and
until such time as less than a majority of the directors holding
office have been elected by shareholders, at which time the
directors then in office will call a shareholders' meeting for
the election of directors. Except as set forth above, the
directors shall continue to hold office and may appoint successor
directors. Voting rights are not cumulative, so that the holders
of more than 50% of the shares voting in the election of
directors can, if they choose to do so, elect all the directors
of the Fund, in which event the holders of the remaining shares
will be unable to elect any person as a director. As set forth
in the By-Laws of the Corporation, a special meeting of
shareholders of the Corporation shall be called by the Secretary
of the Corporation on the written request of shareholders
entitled to cast at least 10% of all the votes of the
Corporation, entitled to be cast at such meeting. Shareholders
requesting such a meeting must pay to the Corporation the
reasonably estimated costs of preparing and mailing the notice of
the meeting. The Corporation, however, will otherwise assist the
shareholders seeking to hold the special meeting in communicating
to the other shareholders of the Corporation to the extent
required by Section 16(c) of the 1940 Act.
FEDERAL AND STATE REGISTRATION OF SHARES
Each Fund's shares are registered for sale under the
Securities Act of 1933, and the Funds or their shares are
registered under the laws of all states which require
registration, as well as the District of Columbia and Puerto
Rico.
PAGE 85
LEGAL COUNSEL
Shereff, Friedman, Hoffman, & Goodman, LLP, whose
address is 919 Third Avenue, New York, New York 10022, is legal
counsel to the Funds.
INDEPENDENT ACCOUNTANTS
All Funds All Funds
Price Waterhouse LLP, 7 St. Paul Street, Suite 1700,
Baltimore, Maryland 21202, are independent accountants to each
Fund.
The financial statements of the International Stock,
International Discovery, European Stock, Japan, Latin America,
New Asia, and Foreign Equity Funds for the year ended October 31,
1995, and the report of independent accountants are included in
each Fund's Annual Report for the year ended October 31, 1995. A
copy of each Annual Report accompanies this Statement of
Additional Information. The following financial statements and
the report of independent accountants appearing in each Annual
Report for the year ended October 31, 1995, are incorporated into
this Statement of Additional Information by reference:
ANNUAL REPORT REFERENCES:
INTERNATIONAL
STOCK FUND
______________
Report of Independent Accountants 19
Statement of Net Assets, October 31, 1995 7-13
Statement of Operations, year ended October 31, 1995 14
Statement of Changes in Net Assets, years ended
October 31, 1995 and October 31, 1994 15
Notes to Financial Statements, October 31, 1995 16-18
Financial Highlights 18
PAGE 86
INTERNATIONAL
DISCOVERY FUND
_________________
Report of Independent Accountants 23
Statement of Net Assets, October 31, 1995 7-16
Statement of Operations, year ended October 31, 1995 17
Statement of Changes in Net Assets, years ended
October 31, 1995 and October 31, 1994 18
Notes to Financial Statements, October 31, 1995 19-21
Financial Highlights 22
EUROPEAN
STOCK FUND
_____________
Report of Independent Accountants 16
Statement of Net Assets, October 31, 1995 5-10
Statement of Operations, year ended October 31, 1995 11
Statement of Changes in Net Assets, years ended
October 31, 1995 and October 31, 1994 12
Notes to Financial Statements, October 31, 1995 13-14
Financial Highlights 15
JAPAN FUND
_____________
Report of Independent Accountants 13
Statement of Net Assets, October 31, 1995 5-6
Statement of Operations, year ended October 31, 1995 7
Statement of Changes in Net Assets, years ended
October 31, 1995 and October 31, 1994 8
Notes to Financial Statements, October 31, 1995 9-11
Financial Highlights 12
LATIN AMERICA
FUND
_______________
Report of Independent Accountants 13
Statement of Net Assets, October 31, 1995 5-7
Statement of Operations, October 31, 1995 8
Statement of Changes in Net Assets, year ended
October 31, 1995 and from December 29, 1993
(Commencement of Operations) to October 31, 1994 9
Notes to Financial Statements, October 31, 1995 10-11
Financial Highlights 12
PAGE 87
EMERGING MARKETS
STOCK FUND
_________________
Report of Independent Accountants 14
Statement of Net Assets, October 31, 1995 5-7
Statement of Operations, from March 31, 1995
(Commencement of Operations) to October 31, 1995 8
Statement of Changes in Net Assets, from March 31, 1995
(Commencement of Operations) to October 31, 1995 9
Notes to Financial Statements, October 31, 1995 10-12
Financial Highlights 13
NEW ASIA
FUND ANNUAL
REPORT PAGE
___________
Report of Independent Accountants 15
Portfolio of Investments, October 31, 1995 6-9
Statement of Assets and Liabilities, October 31, 1995 9
Statement of Operations, year ended October 31, 1995 10
Statement of Changes in Net Assets, years ended
October 31, 1995 and October 31, 1994 11
Notes to Financial Statements, October 31, 1995 12-13
Financial Highlights 14
FOREIGN EQUITY
FUND ANNUAL
REPORT PAGE
_______________
Report of Independent Accountants 24
Statement of Net Assets, October 31, 1995 9-18
Statement of Operations, year ended
October 31, 1995 19
Statement of Changes in Net Assets, years
ended October 31, 1995 and October 31, 1994 20
Notes to Financial Statements, October 31, 1995 21-22
Financial Highlights 23
PAGE 86
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements.
International Stock, International Discovery, European
Stock, New Asia, Japan, Latin America, and Emerging Markets
Stock Funds
Condensed Financial Information (Financial Highlights) for
the Funds is included in Part A of the Registration
Statement.
Statement of Net Assets, Statement of Operations, and
Statement of Changes in Net Assets of the International
Stock, International Discovery, European Stock, New Asia,
Japan, Latin America and Emerging Markets Stock Funds are
included in each Fund's Annual Report to Shareholders, the
pertinent portions of which are incorporated by reference in
Part B of the Registration Statement.
Global Stock Fund:
Inapplicable.
(b) Exhibits.
(1)(a) Articles of Amendment and Restatement of T. Rowe
Price International Funds, Inc., dated February 16,
1990 (electronically filed with Amendment No. 42
dated February 28, 1994)
(1)(b) Articles Supplementary of T. Rowe Price
International Funds, Inc., dated March 4, 1991
(1)(c) Articles of Amendment of T. Rowe Price International
Funds, Inc., dated May 1, 1991
(1)(d) Articles Supplementary of T. Rowe Price
International Funds, Inc., dated October 18, 1991
(1)(e) Articles Supplementary of T. Rowe Price
International Funds, Inc., dated May 4, 1992
(electronically filed with Amendment No. 44 dated
December 22, 1994)
PAGE 87
(1)(f) Articles Supplementary of T. Rowe Price
International Funds, Inc., dated November 4, 1993
(electronically filed with Amendment No. 41 dated
December 16, 1993)
(1)(g) Articles Supplementary of T. Rowe Price
International Funds, Inc. dated February 18, 1994
(electronically filed with Amendment No. 42 dated
February 28, 1994)
(1)(h) Articles Supplementary of T. Rowe Price
International Funds, Inc. dated November 2, 1994
(electronically filed with Amendment No. 44 dated
December 22, 1994)
(1)(i) Articles Supplementary of T. Rowe Price
International Funds, Inc. dated January 25, 1995
(electronically filed with Amendment No. 49 dated
March 22, 1995)
(1)(j) Articles Supplementary of T. Rowe Price
International Funds, Inc. dated October 11, 1995
(electronically filed with Amendment No. 50 dated
October 12, 1995)
(2) By-Laws of Registrant, as amended to May 1, 1991 and
September 30, 1993 (electronically filed with
Amendment No. 41 dated December 16, 1993)
(3) Inapplicable
(4)(a) Specimen Stock Certificate for International Bond
Fund (filed with Amendment No. 10)
(4)(b) Specimen Stock Certificate for International Stock
Fund (filed with Amendment No. 10)
(4)(c) Specimen Stock Certificate for International
Discovery Fund (filed with Amendment No. 14)
(4)(d) Specimen Stock Certificate for European Stock Fund
(filed with Amendment No. 18)
(4)(e) Specimen Stock Certificate for New Asia Fund (filed
with Amendment No. 21)
PAGE 88
(4)(f) Specimen Stock Certificate for Global Government
Bond Fund (filed with Amendment No. 24)
(4)(g) T. Rowe Price Japan Fund and T. Rowe Price Short-
Term Global Income Fund. See Article FIFTH, Capital
Stock, Paragraphs (A)-(E) of the Articles of
Amendment and Restatement electronically filed with
Amendment No. 19, Article II, Shareholders, Sections
2.01-2.11 and Article VIII, Capital Stock, Sections
8.01-8.06 of the Bylaws (filed with Amendment No.
19)
(5)(a) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price International Bond Fund,
dated May 1, 1990 (electronically filed with
Amendment No. 42 dated February 28, 1994)
(5)(b) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price International Stock Fund,
dated May 1, 1990 (electronically filed with
Amendment No. 42 dated February 28, 1994)
(5)(c) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price International Discovery
Fund, dated May 1, 1991 (electronically filed with
Amendment No. 42 dated February 28, 1994)
(5)(d) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price European Stock Fund, dated
May 1, 1990 (electronically filed with Amendment No.
42 dated February 28, 1994)
(5)(e) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price New Asia Fund, dated May 1,
1991 (electronically filed with Amendment No. 42
dated February 28, 1994)
(5)(f) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Global Government Bond Fund,
dated November 7, 1990 (electronically filed with
Amendment No. 42 dated February 28, 1994)
PAGE 89
(5)(g) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Japan Fund, dated November
6, 1991 (electronically filed with Amendment No. 42
dated February 28, 1994)
(5)(h) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Short-Term Global Income
Fund, dated April 23, 1992 (electronically filed
with Amendment No. 42 dated February 28, 1994)
(5)(i) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Latin America Fund, dated
November 3, 1993 (electronically filed with
Amendment No. 41 dated December 16, 1993)
(5)(j) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Emerging Markets Bond Fund,
dated November 2, 1994 (electronically filed with
Amendment No. 44 dated December 22, 1994)
(5)(k) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Emerging Markets Stock Fund,
dated January 25, 1995 (electronically filed with
Amendment No. 49 dated March 22, 1995)
(5)(l) Investment Management Agreement between Registrant
and Rowe Price-Fleming International, Inc., on
behalf of T. Rowe Price Global Stock Fund, dated
November 1, 1995 (electronically filed with
Amendment No. 51 dated December 20, 1995)
(6) Underwriting Agreement between Registrant and T.
Rowe Price Investment Services, Inc., dated May 1,
1990 (electronically filed with Amendment No. 42
dated February 28, 1994)
(7) Inapplicable
PAGE 90
(8)(a) Custodian Agreement between T. Rowe Price Funds and
State Street Bank and Trust Company dated September
28, 1987, as amended June 24, 1988, October 19,
1988, February 22, 1989, July 19, 1989, September
15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990,
July 18, 1990, October 15, 1990, February 13, 1991,
March 6, 1991, September 12, 1991, November 6, 1991,
April 23, 1992, September 2, 1992, November 3, 1992,
December 16, 1992, December 21, 1992, January 28,
1993, April 22, 1993, September 16, 1993, November
3, 1993, March 1, 1994, April 21, 1994, July 27,
1994, September 21, 1994, November 1, 1994, November
2, 1994, January 25, 1995, September 20, 1995,
November 1, 1995, and December 11, 1995
(8)(b) Global Custody Agreement between The Chase Manhattan
Bank, N.A. and T. Rowe Price Funds, dated January 3,
1994, as amended April 18, 1994, August 15, 1994,
November 28, 1994, May 31, 1995, and November 1,
1995
(9)(a) Transfer Agency and Service Agreement between T.
Rowe Price Services, Inc. and T. Rowe Price Funds,
dated January 1, 1996
(9)(b) Agreement between T. Rowe Price Associates, Inc. and
T. Rowe Price Funds for Fund Accounting Services,
dated January 1, 1996
(9)(c) Agreement between T. Rowe Price Retirement Plan
Services, Inc. and the Taxable Funds, dated January
1, 1996
(10) Opinion of Counsel, dated February 6, 1996
(11) Consent of Independent Accountants
(12) Inapplicable
(13) Inapplicable
(14) Inapplicable
(15) Inapplicable
(16)(a) Total Return Performance Methodology
PAGE 91
(16)(b) T. Rowe Price Global Government Bond Fund; T. Rowe
Price International Bond Fund; and T. Rowe Price
Short-Term Global Income Fund. The Registrant
hereby incorporates by reference the methodology
used in calculating the performance information
included in Post-Effective Amendment No. 34 and
Amendment No. 12 of the T. Rowe Price New Income
Fund, Inc. (SEC. File Nos. 2-48848 and 811-2396)
dated April 27, 1988.
(17) Financial Data Schedules for T. Rowe Price
International Discovery Fund, T. Rowe Price
International Stock Fund, T. Rowe Price European
Stock Fund, T. Rowe Price New Asia Fund, T. Rowe
Price Japan Fund, and T. Rowe Price Latin America
Fund and Emerging Markets Stock Fund as of October
31, 1995. Financial Data Schedule for T. Rowe Price
Global Stock Fund as of December 20, 1995.
Item 25. Persons Controlled by or Under Common Control With
Registrant.
None.
Item 26. Number of Holders of Securities
As of January 31, 1996, there were 267,385 shareholders in
the T. Rowe Price International Stock Fund.
As of January 31, 1996, there were 29,982 shareholders in
the T. Rowe Price International Discovery Fund.
As of January 31, 1996, there were 38,260 shareholders in
the T. Rowe Price European Stock Fund.
As of January 31, 1996, there were 166,776 shareholders in
the T. Rowe Price New Asia Fund.
As of January 31, 1996, there were 2,176 shareholders in the
T. Rowe Price Global Government Bond Fund.
As of January 31, 1996, there were 30,669 shareholders in
the T. Rowe Price International Bond Fund.
As of January 31, 1996, there were 2,352 shareholders in the
T. Rowe Price Short-Term Global Income Fund.
PAGE 92
As of January 31, 1996, there were 18,716 shareholders in
the T. Rowe Price Japan Fund.
As of January 31, 1996, there were 25,303 shareholders in
the T. Rowe Price Latin America Fund.
As of January 31, 1996, there were 766 shareholders in the
T. Rowe Price Emerging Markets Bond Fund.
As of January 31, 1996, there were 3,843 shareholders in the
T. Rowe Price Emerging Markets Stock Fund.
As of January 31, 1996, there were 178 shareholders in the
T. Rowe Price Global Stock Fund.
Item 27. Indemnification
The Registrant maintains comprehensive Errors and Omissions
and Officers and Directors insurance policies written by the
Evanston Insurance Company, The Chubb Group and ICI Mutual.
These policies provide coverage for the named insureds, which
include T. Rowe Price Associates, Inc. ("Price Associates"), Rowe
Price-Fleming International, Inc., T. Rowe Price Investment
Services, Inc., T. Rowe Price Services, Inc., T. Rowe Price Trust
Company, T. Rowe Price Stable Asset Management, Inc., RPF
International Bond Fund and forty-one other investment companies,
namely, T. Rowe Price Growth Stock Fund, Inc., T. Rowe Price New
Horizons Fund, Inc., T. Rowe Price New Era Fund, Inc., T. Rowe
Price New Income Fund, Inc., T. Rowe Price Prime Reserve Fund,
Inc., T. Rowe Price Tax-Free Income Fund, Inc., T. Rowe Price
Tax-Exempt Money Fund, Inc., T. Rowe Price Growth & Income Fund,
Inc., T. Rowe Price Tax-Free Short-Intermediate Fund, Inc., T.
Rowe Price Short-Term Bond Fund, Inc., T. Rowe Price High Yield
Fund, Inc., T. Rowe Price Tax-Free High Yield Fund, Inc., T. Rowe
Price New America Growth Fund, T. Rowe Price Equity Income Fund,
T. Rowe Price GNMA Fund, T. Rowe Price Capital Appreciation Fund,
T. Rowe Price State Tax-Free Income Trust, T. Rowe Price
California Tax-Free Income Trust, T. Rowe Price Science &
Technology Fund, Inc., T. Rowe Price Small-Cap Value Fund, Inc.,
Institutional International Funds, Inc., T. Rowe Price U.S.
Treasury Funds, Inc., T. Rowe Price Index Trust, Inc., T. Rowe
Price Spectrum Fund, Inc., T. Rowe Price Balanced Fund, Inc., T.
Rowe Price Short-Term U.S. Government Fund, Inc., T. Rowe Price
Mid-Cap Growth Fund, Inc., T. Rowe Price OTC Fund, Inc., T. Rowe
Price Tax-Free Insured Intermediate Bond Fund, Inc., T. Rowe
Price Dividend Growth Fund, Inc., T. Rowe Price Blue Chip Growth
Fund, Inc., T. Rowe Price Summit Funds, Inc., T. Rowe Price
PAGE 93
Summit Municipal Funds, Inc., T. Rowe Price Equity Series, Inc.,
T. Rowe Price International Series, Inc., T. Rowe Price Fixed
Income Series, Inc., T. Rowe Price Personal Strategy Funds, Inc.,
T. Rowe Price Value Fund, Inc., T. Rowe Price Capital Opportunity
Fund, Inc., T. Rowe Price Corporate Income Fund, Inc., and T.
Rowe Price Health Sciences Fund, Inc. The Registrant and the
forty-one investment companies listed above with the exception of
Institutional International Funds, Inc., will be collectively
referred to as the Price Funds. The investment manager for the
Price Funds, except for T. Rowe Price International Funds, Inc.
and T. Rowe Price International Series, Inc., is the Manager.
Price-Fleming is the manager to T. Rowe Price International
Funds, Inc., T. Rowe Price International Series, Inc. and
Institutional International Funds, Inc. and is 50% owned by TRP
Finance, Inc., a wholly-owned subsidiary of the Manager, 25%
owned by Copthall Overseas Limited, a wholly-owned subsidiary of
Robert Fleming Holdings Limited, and 25% owned by Jardine Fleming
Holdings Limited. In addition to the corporate insureds, the
policies also cover the officers, directors, and employees of
each of the named insureds. The premium is allocated among the
named corporate insureds in accordance with the provisions of
Rule 17d-1(d)(7) under the Investment Company Act of 1940.
Article X, Section 10.01 of the Registrant's By-Laws
provides as follows:
Section 10.01. Indemnification and Payment of Expenses
in Advance: The Corporation shall indemnify any individual
("Indemnitee") who is a present or former director, officer,
employee, or agent of the Corporation, or who is or has been
serving at the request of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, who,
by reason of his position was, is, or is threatened to be
made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter collectively
referred to as a "Proceeding") against any judgments,
penalties, fines, settlements, and reasonable expenses
(including attorneys' fees) incurred by such Indemnitee in
connection with any Proceeding, to the fullest extent that
such indemnification may be lawful under Maryland law. The
Corporation shall pay any reasonable expenses so incurred by
such Indemnitee in defending a Proceeding in advance of the
final disposition thereof to the fullest extent that such
advance payment may be lawful under Maryland law. Subject
to any applicable limitations and requirements set forth in
PAGE 94
the Corporation's Articles of Incorporation and in these By-
Laws, any payment of indemnification or advance of expenses
shall be made in accordance with the procedures set forth in
Maryland law.
Notwithstanding the foregoing, nothing herein shall
protect or purport to protect any Indemnitee against any
liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of
his office ("Disabling Conduct").
Anything in this Article X to the contrary
notwithstanding, no indemnification shall be made by the
Corporation to any Indemnitee unless:
(a) there is a final decision on the merits by a court
or other body before whom the Proceeding was
brought that the Indemnitee was not liable by
reason of Disabling Conduct; or
(b) in the absence of such a decision, there is a
reasonable determination, based upon a review of
the facts, that the Indemnitee was not liable by
reason of Disabling Conduct, which determination
shall be made by:
(i) the vote of a majority of a quorum of
directors who are neither "interested
persons" of the Corporation as defined in
Section 2(a)(19) of the Investment Company
Act of 1940, nor parties to the Proceeding;
or
(ii) an independent legal counsel in a written
opinion.
Anything in this Article X to the contrary
notwithstanding, any advance of expenses by the Corporation
to any Indemnitee shall be made only upon the undertaking by
such Indemnitee to repay the advance unless it is ultimately
determined that such Indemnitee is entitled to
indemnification as above provided, and only if one of the
following conditions is met:
(a) the Indemnitee provides a security for his
undertaking; or
PAGE 95
(b) the Corporation shall be insured against losses
arising by reason of any lawful advances; or
(c) there is a determination, based on a review of
readily available facts, that there is reason to
believe that the Indemnitee will ultimately be
found entitled to indemnification, which
determination shall be made by:
(i) a majority of a quorum of directors who are
neither "interested persons" of the
Corporation as defined in Section 2(a)(19) of
the Investment Company Act, nor parties to
the Proceeding; or
(ii) an independent legal counsel in a written
opinion.
Section 10.02 of the Registrant's By-Laws provides as
follows:
Section 10.02. Insurance of Officers, Directors,
Employees and Agents: To the fullest extent permitted by
applicable Maryland law and by Section 17(h) of the
Investment Company Act, as from time to time amended, the
Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or
agent of the Corporation, or who is or was serving at the
request of the Corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against any liability asserted
against him and incurred by him in or arising out of his
position, whether or not the Corporation would have the
power to indemnify him against such liability.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
PAGE 96
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Manager.
M. David Testa, who is Chairman of the Board of the Manager,
is presently a Director and Managing Director of Price
Associates; Director and Vice President of T. Rowe Price Trust
Company; Director and President of T. Rowe Price (Canada), Inc.;
and Director of T. Rowe Price Real Estate Group, Inc.
George J. Collins, a Director of the Manager, is Chief
Executive Officer, President, and a Managing Director of Price
Associates; Director of Review Management Corp., T. Rowe Price
(Canada), Inc., T. Rowe Price Real Estate Group, Inc., T. Rowe
Price Recovery Fund Associates, Inc., T. Rowe Price Retirement
Plan Services, Inc., T. Rowe Price Stable Asset Management, Inc.,
and T. Rowe Price Trust Company; Director and President of T.
Rowe Price New Frontiers Associates, Inc., TRP Suburban, Inc.,
and Tower Venture, Inc.; Director and Chairman of the Board of
TRP Finance, Inc.; and Director and Vice President of TRP
Suburban Second, Inc.
D. William J. Garrett, a Director of the Manager, is Chairman of
Robert Fleming Securities Limited, a Director of Robert Fleming
Holdings Limited ("Robert Fleming Holdings"), a parent of the
Manager which is a United Kingdom holding company duly organized
and existing under the laws of the United Kingdom, Robert Fleming
Management Services Limited, Robert Fleming Management Services
Limited, Robert Fleming & Co. Limited, and Fleming Investments
Limited. Mr. Garrett also serves as Director and/or officer of
other companies related to or affiliated with the above listed
companies.
P. John Manser, a Director of the Manager, is Chief Executive of
Robert Fleming Holdings, Chairman of Robert Fleming & Co.
Limited, Director of Jardine Fleming Group Limited, Robert
Fleming Management Services Limited, Fleming Investment
Management Limited, Robert Fleming Asset Management Limited,
PAGE 97
Jardine Fleming Holdings Limited, and Robert Fleming Asset
Management Limited and also serves as a director of the U.K.
Securities and Investments Board. Mr. Manser also serves as
Director and/or officer of other companies related to or
affiliated with the above listed companies.
James S. Riepe, a Director of the Manager, and T. Rowe Price;
Chairman of the Board, T. Rowe Price Services, Inc., T. Rowe
Price Retirement Plan Services, Inc., T. Rowe Price (Canada),
Inc., and T. Rowe Price Stable Asset Management, Inc.; President
and Director, T. Rowe Price Investment Services, Inc., T. Rowe
Price Insurance Agency, Inc., T. Rowe Price Investment Services,
Inc., T. Rowe Price Management, Inc., T. Rowe Price Real Estate
Group, Inc., TRP Distribution, Inc., and Review Management Corp.;
Director, Rhone-Poulenc Rorer, Inc.; Director, Chairman of the
Board and President of T. Rowe Price Realty Income Fund I
Management, Inc., T. Rowe Price Realty Income Fund II Management,
Inc., T. Rowe Price Realty Income Fund III Management, Inc., and
T. Rowe Price Realty Income Fund IV Management, Inc.; Trust
Officer, Chairman of the Board and President of T. Rowe Price
Trust Company; Director and Vice President of TRP Suburban
Second, Inc.
George A. Roche, a Vice President and a Director of the
Manager, is Chief Financial Officer and a Managing Director of
Price Associates; Chairman of the Board and President of T. Rowe
Price Associates Frontiers, Inc.; Director of T. Rowe Price
Management, Inc., TRP Finance, Inc., and T. Rowe Price Strategic
Partners Associates, Inc.; Director and Vice President of T. Rowe
Price New Frontiers Associates, Inc., TRP Suburban, Inc., Tower
Venture, Inc., and T. Rowe Price Threshold Fund Associates, Inc.;
Director and President of TRP Suburban Second, Inc.
Alan H. Smith, a Director of the Manager, is Managing Director of
Jardine Fleming Group Limited and Jardine Fleming Holdings
Limited, Chairman of Jardine Fleming Investment Management
Limited, Jardine Fleming & Company Limited and Jardine Fleming
Securities Limited and a Director of Robert Fleming Holdings.
Mr. Smith also serves as Director and/or officer of other
companies related to or affiliated with the above listed
companies.
Henry C. T. Strutt, a Director of the Manager, is Managing
Director and General Manager of Jardine Fleming Holdings Ltd. and
Director of Robert Fleming Holdings Ltd.
PAGE 98
Alvin M. Younger, Jr., the Secretary and Treasurer of the
Manager, is a Managing Director and the Secretary and Treasurer
of Price Associates; Secretary and Treasurer of Review Management
Corp., T. Rowe Price (Canada), Inc., T. Rowe Price Associates
Frontiers, Inc., T. Rowe Price Insurance Agency, Inc., T. Rowe
Price Investment Services, Inc., T. Rowe Price Management, Inc.,
T. Rowe Price Real Estate Group, Inc., T. Rowe Price Recovery
Fund Associates, Inc., T. Rowe Price Retirement Plan Services,
Inc., T. Rowe Price Services, Inc., T. Rowe Price Stable Asset
Management, Inc., T. Rowe Price Strategic Partners Associates,
Inc., T. Rowe Price Threshold Fund Associates, Inc., T. Rowe
Price Trust Company, and TRP Distribution, Inc.; Director, Vice
President, Secretary and Treasurer of the T. Rowe Price New
Frontiers Associates, Inc., TRP Suburban Second, Inc., TRP
Suburban, Inc., and Tower Venture, Inc.; Director and Treasurer
of the T. Rowe Price Realty Income Fund I Management, Inc., T.
Rowe Price Realty Income Fund II Management, Inc., T. Rowe Price
Realty Income Fund III Management, Inc., and T. Rowe Price Realty
Income Fund IV Management, Inc.; Director of the TRP Finance,
Inc.
Martin G. Wade, Director and President of the Manager;
Director, Robert Fleming Holdings Limited.
With the exception of Christopher D. Alderson, Peter B. Askew,
Mark Bickford-Smith, Richard J. Bruce, Ann B. Cranmer, Mark J. T.
Edwards, John R. Ford, Christopher Rothery, James B. M. Seddon,
Benedict R. F. Thomas, David J. L. Warren, and Martin G. Wade,
all officers of the Manager are officers and/or employees of
Price Associates and may also be officers and/or directors of one
or more subsidiaries of Price Associates and/or one or more of
the registered investment companies which Price Associates or the
Manager serves as investment adviser. Mr. Ilott is an employee
of Fleming Investment Management Limited, an investment adviser
registered under the Investment Advisers Act of 1940. Ms.
Cranmer is an employee of Fleming Investment Management Limited.
Mr. Wade, who is Director and President of the Manager, is also a
Non-Executive Director of Robert Fleming Holdings.
RPFI International Partners, L.P., is a Delaware limited
partnership organized in 1985 for the purpose of investing in a
diversified group of small and medium-sized non-U.S. companies.
The Manager is the general partner of this partnership, and
certain institutional investors, including advisory clients of
the Manager, are its limited partners.
PAGE 99
See also "Management of Fund," in the Registrant's Statement of
Additional Information.
Item 29. Principal Underwriters.
(a) The principal underwriter for the Registrant is
Investment Services. Investment Services acts as the principal
underwriter for the other seventy-one Price Funds. Investment
Services is a wholly-owned subsidiary of the Manager, is
registered as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities
Dealers, Inc. Investment Services has been formed for the
limited purpose of distributing the shares of the Price Funds and
will not engage in the general securities business. Since the
Price Funds are sold on a no-load basis, Investment Services will
not receive any commissions or other compensation for acting as
principal underwriter.
(b) The address of each of the directors and officers of
Investment Services listed below is 100 East Pratt Street,
Baltimore, Maryland 21202.
Positions and
Name and Principal Positions and Offices Offices With
Business Address With Underwriter Registrant
__________________ ______________________ ______________
James Sellers Riepe President and Director Vice President
Henry Holt Hopkins Vice President and Vice President
Director
Charles E. Vieth Vice President and None
Director
Mark E. Rayford Director None
Patricia M. Archer Vice President None
Edward C. Bernard Vice President None
Joseph C. Bonasorte Vice President None
Meredith C. Callanan Vice President None
Laura H. Chasney Vice President None
Victoria C. Collins Vice President None
Christopher W. Dyer Vice President None
Forrest R. Foss Vice President None
James W. Graves Vice President None
Andrea G. Griffin Vice President None
David J. Healy Vice President None
Joseph P. Healy Vice President None
Walter J. Helmlinger Vice President None
Eric G. Knauss Vice President None
PAGE 100
Douglas G. Kremer Vice President None
Sharon Renae Krieger Vice President None
Keith Wayne Lewis Vice President None
David L. Lyons Vice President None
Sarah McCafferty Vice President None
Maurice Albert Minerbi Vice President None
Nancy M. Morris Vice President None
George A. Murnaghan Vice President None
Steven Ellis Norwitz Vice President None
Kathleen M. O'Brien Vice President None
Pamela D. Preston Vice President None
Lucy Beth Robins Vice President None
John Richard Rockwell Vice President None
Monica R. Tucker Vice President None
William F. Wendler, II Vice President None
Terri L. Westren Vice President None
Jane F. White Vice President None
Thomas R. Woolley Vice President None
Alvin M. Younger, Jr. Secretary and None
Treasurer
Mark S. Finn Controller None
Richard J. Barna Assistant Vice President None
Catherine L. Berkenkemper Assistant Vice President None
Ronae M. Brock Assistant Vice President None
Brenda E. Buhler Assistant Vice President None
Patricia S. Butcher Assistant Vice President Assistant
Secretary
John A. Galateria Assistant Vice President None
Janelyn A. Healey Assistant Vice President None
Keith J. Langrehr Assistant Vice President None
C. Lillian Matthews Assistant Vice President None
Janice D. McCrory Assistant Vice President None
Sandra J. McHenry Assistant Vice President None
JeanneMarie B. Patella Assistant Vice President None
Kristin E. Seeberger Assistant Vice President None
Arthur J. Silber Assistant Vice President None
Nolan L. North Assistant Treasurer None
Barbara A. VanHorn Assistant Secretary None
(c) Not applicable. Investment Services will not receive
any compensation with respect to its activities as underwriter
for the Price Funds since the Price Funds are sold on a no-load
basis.
PAGE 101
Item 30. Location of Accounts and Records.
All accounts, books, and other documents required to be
maintained by T. Rowe Price International Funds, Inc. under
Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder will be maintained by T. Rowe Price International
Funds, Inc. at its offices at 100 East Pratt Street, Baltimore,
Maryland 21202. Transfer, dividend disbursing, and shareholder
service activities are performed by T. Rowe Price Services, Inc.,
at 100 East Pratt Street, Baltimore, Maryland 21202. Custodian
activities for T. Rowe Price International Funds, Inc. are
performed at State Street Bank and Trust Company's Service Center
(State Street South), 1776 Heritage Drive, Quincy, Massachusetts
02171. Custody of Fund portfolio securities which are purchased
outside the United States is maintained by The Chase Manhattan
Bank, N.A., London in its foreign branches or with other U.S.
banks. The Chase Manhattan Bank, N.A., London is located at
Woolgate House, Coleman Street, London EC2P 2HD, England.
Item 31. Management Services.
Registrant is not a party to any management related service
contract, other than as set forth in the Prospectus.
Item 32. Undertakings.
(a) Inapplicable.
(b) The Global Stock Fund will file, within four to six
months from the effective date of its registration
statement, a post-effective amendment using financial
statements which need not be certified.
(c) If requested to do so by the holders of at least 10% of
all votes entitled to be cast, the Registrant will call
a meeting of shareholders for the purpose of voting on
the question of removal of a director or directors and
will assist in communications with other shareholders
to the extent required by Section 16(c).
(d) Each series of the Registrant agrees to furnish, upon
request and without charge, a copy of its latest Annual
Report to each person to whom its prospectus is
delivered.
PAGE 102
Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant certifies that it meets all of the requirements
for effectiveness of this registration statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Baltimore,
State of Maryland, this 7th day of February, 1996.
T. ROWE PRICE INTERNATIONAL FUNDS,
INC.
/s/M. David Testa
By: M. David Testa,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by
the following persons in the capacities and on the dates
indicated:
SIGNATURE TITLE DATE
_________ ______ _____
/s/M. David Testa Chairman of the Board February 7, 1996
M. David Testa (Chief Executive Officer)
/s/Carmen F. Deyesu Treasurer February 7, 1996
Carmen F. Deyesu (Chief Financial Officer)
/s/Martin G. Wade President and Director February 7, 1996
Martin G. Wade
* Director February 7, 1996
Leo C. Bailey
* Director February 7, 1996
Anthony W. Deering
* Director February 7, 1996
Donald W. Dick, Jr.
* Director February 7, 1996
Addison Lanier
*
Paul M. Wythes Director February 7, 1996
PAGE 103
*/s/Henry H. Hopkins, Attorney-In-Fact
Henry H. Hopkins, Attorney-In-Fact
The Custodian Agreement dated September 28, 1987, as
amended, between State Street Bank and Trust Company and T. Rowe
Price Funds should be inserted here.
PAGE 1
CUSTODIAN CONTRACT
Between
STATE STREET BANK AND TRUST COMPANY
and
EACH OF THE PARTIES INDICATED
ON APPENDIX A
DATED: SEPTEMBER 28, 1987
FRF 07/87
PAGE 2
TABLE OF CONTENTS
1. Employment of Custodian and Property to be Held By It1
2. Duties of the Custodian with Respect to Property of the Fund
Held by the Custodian in the United States. . . 2
2.1 Holding Securities . . . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . 2
1) Sale . . . . . . . . . . . . . . . . . . 2
2) Repurchase Agreement . . . . . . . . . . 2
3) Securities System . . . . . . . . . . . . 3
4) Tender Offer . . . . . . . . . . . . . . 3
5) Redemption by Issuer . . . . . . . . . . 3
6) Transfer to Issuer, Nominee, Exchange . . 3
7) Sale to Broker . . . . . . . . . . . . . 3
8) Exchange or Conversion . . . . . . . . . 4
9) Warrants, Rights . . . . . . . . . . . . 4
10) Loans of Securities . . . . . . . . . . . 4
11) Borrowings . . . . . . . . . . . . . . . 4
12) Options . . . . . . . . . . . . . . . . . 5
13) Futures . . . . . . . . . . . . . . . . . 5
14) In-Kind Distributions . . . . . . . . . . 5
15) Miscellaneous . . . . . . . . . . . . . . 5
16) Type of Payment . . . . . . . . . . . . . 6
2.3 Registration of Securities . . . . . . . . . 6
2.4 Bank Accounts . . . . . . . . . . . . . . . . 7
2.5 Sale of Shares and Availability of Federal Funds7
2.6 Collection of Income, Dividends . . . . . . . 7
2.7 Payment of Fund Monies . . . . . . . . . . . 8
1) Purchases . . . . . . . . . . . . . . . . 8
2) Exchanges . . . . . . . . . . . . . . . . 9
3) Redemptions . . . . . . . . . . . . . . . 9
4) Expense and Liability . . . . . . . . . . 9
5) Dividends . . . . . . . . . . . . . . . . 9
6) Short Sale Dividend . . . . . . . . . . . 10
7) Loan . . . . . . . . . . . . . . . . . . 10
8) Miscellaneous . . . . . . . . . . . . . . 10
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . 10
2.9 Appointment of Agents . . . . . . . . . . . . 10
2.10 Deposit of Securities in Securities System . 10
1) Account of Custodian . . . . . . . . . . 11
2) Records . . . . . . . . . . . . . . . . . 11
3) Payment of Fund Monies, Delivery of
Securities . . . . . . . . . . . . . . 11
4) Reports . . . . . . . . . . . . . . . . . 12
5) Annual Certificate . . . . . . . . . . . 12
6) Indemnification . . . . . . . . . . . . . 12
2.11 Fund Assets Held in the Custodian's Direct Paper
System . . . . . . . . . . . . . . . . . . 13
2.12 Segregated Account . . . . . . . . . . . . . 14
PAGE 3
2.13 Ownership Certificates for Tax Purposes . . . 15
2.14 Proxies . . . . . . . . . . . . . . . . . . . 15
2.15 Communications Relating to Fund Portfolio
Securities . . . . . . . . . . . . . . . . 15
2.16 Reports to Fund by Independent Public
Accountants . . . . . . . . . . . . . . . . 16
3. Duties of the Custodian with Respect to Property
of the Fund Held Outside of the United States . 16
3.1 Appointment of Foreign Sub-Custodians . . . . 16
3.2 Assets to be Held . . . . . . . . . . . . . . 17
3.3 Foreign Securities Depositories . . . . . . . 17
3.4 Segregation of Securities . . . . . . . . . . 17
3.5 Access of Independent Accountants of the Fund 17
3.6 Reports by Custodian . . . . . . . . . . . . 18
3.7 Transactions in Foreign Assets of the Fund . 18
3.8 Responsibility of Custodian, Sub-Custodian and
Fund . . . . . . . . . . . . . . . . . . . 18
3.9 Monitoring Responsibilities . . . . . . . . . 19
3.10 Branches of U.S. Banks . . . . . . . . . . . 19
4. Payments for Repurchases or Redemptions and Sales of
Shares of the Fund . . . . . . . . . . . . . . . 19
5. Proper Instructions . . . . . . . . . . . . . . . 20
6. Actions Permitted Without Express Authority . . . 21
7. Evidence of Authority, Reliance on Documents . . . 21
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income . . . . . . . . . . . . . . . . . . . 22
9. Records, Inventory . . . . . . . . . . . . . . . . 22
10. Opinion of Fund's Independent Accountant . . . . . 23
11. Compensation of Custodian . . . . . . . . . . . . 23
12. Responsibility of Custodian . . . . . . . . . . . 23
13. Effective Period, Termination and Amendment . . . 25
14. Successor Custodian . . . . . . . . . . . . . . . 26
15. Interpretive and Additional Provisions . . . . . . 28
16. Notice . . . . . . . . . . . . . . . . . . . . . . 28
17. Bond . . . . . . . . . . . . . . . . . . . . . . . 28
18. Confidentiality . . . . . . . . . . . . . . . . . 29
19. Exemption from Liens . . . . . . . . . . . . . . . 29
20. Massachusetts Law to Apply . . . . . . . . . . . . 29
21. Prior Contracts . . . . . . . . . . . . . . . . . 29
22. The Parties . . . . . . . . . . . . . . . . . . . 30
23. Governing Documents . . . . . . . . . . . . . . . 30
24. Subcustodian Agreement . . . . . . . . . . . . . . 30
25. Directors and Trustees . . . . . . . . . . . . . . 30
26. Massachusetts Business Trust . . . . . . . . . . . 30
27. Successors of Parties . . . . . . . . . . . . . . 31
PAGE 4
CUSTODIAN CONTRACT
This Contract by and between State Street Bank and Trust
Company, a Massachusetts trust company, having its principal
place of business at 225 Franklin Street, Boston, Massachusetts,
02110 (hereinafter called the "Custodian"), and each fund which
is listed on Appendix A (as such Appendix may be amended from
time to time) and which evidences its agreement to be bound
hereby by executing a copy of this Contract (each such fund
individually hereinafter called the "Fund," whose definition may
be found in Section 22),
WITNESSETH: That in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as
follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of
its assets, including securities it desires to be held in places
within the United States ("domestic securities") and securities
it desires to be held outside the United States ("foreign
securities") pursuant to the Governing Documents of the Fund.
The Fund agrees to deliver to the Custodian all securities and
cash now or hereafter owned or acquired by it, and all payments
of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for
such new or treasury shares of capital stock ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian
shall not be responsible for any property of the Fund held or
received by the Fund and not delivered to the Custodian.
With respect to domestic securities, upon receipt of "Proper
Instructions" (within the meaning of Article 5), the Custodian
shall from time to time employ one or more sub-custodians located
in the United States, but only in accordance with an applicable
vote by the Board of Directors/Trustees of the Fund, and provided
that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of
any sub-custodian so employed than any such sub-custodian has to
the Custodian, and further provided that the Custodian shall not
release the sub-custodian from any responsibility or liability
unless mutually agreed upon by the parties in writing. With
respect to foreign securities and other assets of the Fund held
outside the United States, the Custodian shall employ Chase
Manhattan Bank, N.A., as a sub-custodian for the Fund in
accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund
Held By the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and
physically segregate for the account of the Fund all
PAGE 5
non-cash property, to be held by it in the United States,
including all domestic securities owned by the Fund, other
than (a) securities which are maintained pursuant to Section
2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein
as "Securities System," and (b) commercial paper of an
issuer for which the Custodian acts as issuing and paying
agent ("Direct Paper") which is deposited and/or maintained
in the Direct Paper System of the Custodian pursuant to
Section 2.11.
2.2 Delivery of Securities. The Custodian shall release
and deliver domestic securities owned by the Fund held by
the Custodian or in a Securities System account of the
Custodian or in the Custodian's Direct Paper book entry
system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by mutual agreement of
the parties, and only in the following cases:
1) Sale. Upon sale of such securities for the
account of the Fund and receipt of payment
therefor;
2) Repurchase Agreement. Upon the receipt of payment
in connection with any repurchase agreement
related to such securities entered into by the
Fund;
3) Securities System. In the case of a sale effected
through a Securities System, in accordance with
the provisions of Section 2.10 hereof;
4) Tender Offer. To the depository agent or other
receiving agent in connection with tender or other
similar offers for portfolio securities of the
Fund;
5) Redemption by Issuer. To the issuer thereof or
its agent when such securities are called,
redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) Transfer to Issuer, Nominee. Exchange. To the
issuer thereof, or its agent, for transfer into
the name of the Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or
nominee name of any sub-custodian appointed
pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units and bearing the same
interest rate, maturity date and call provisions,
PAGE 6
if any; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) Sale to Broker or Dealer. Upon the sale of such
securities for the account of the Fund, to the
broker or its clearing agent or dealer, against a
receipt, for examination in accordance with
"street delivery" custom; provided that in any
such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as
may arise from the Custodian's failure to act in
accordance with its duties as set forth in
Section 12.
8) Exchange or Conversion. For exchange or
conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization,
split-up of shares, change of par value or
readjustment of the securities of the issuer of
such securities, or pursuant to provisions for
conversion contained in such securities, or
pursuant to any deposit agreement provided that,
in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
9) Warrants, Rights. In the case of warrants, rights
or similar securities, the surrender thereof in
the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or
temporary securities for definitive securities;
provided that, in any such case, the new
securities and cash, if any, are to be delivered
to the Custodian;
10) Loans of Securities. For delivery in connection
with any loans of securities made by the Fund, but
only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and
the Fund, which may be in the form of cash,
obligations issued by the United States
government, its agencies or instrumentalities, or
such other property as mutually agreed by the
parties, except that in connection with any loans
for which collateral is to be credited to the
Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or
responsible for the delivery of securities owned
by the Fund prior to the receipt of such
collateral, unless the Custodian fails to act in
accordance with its duties set forth in
Article 12;
PAGE 7
11) Borrowings. For delivery as security in
connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed, except where
additional collateral is required to secure a
borrowing already made, subject to Proper
Instructions, further securities may be released
for that purpose;
12) Options. For delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing
Corporation, any registered national securities
exchange, any similar organization or
organizations, or the Investment Company Act of
1940, regarding escrow or other arrangements in
connection with transactions by the Fund;
13) Futures. For delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act,
relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, any similar organization or
organizations, or the Investment Company Act of
1940, regarding account deposits in connection
with transactions by the Fund;
14) In-Kind Distributions. Upon receipt of
instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be
described from time to time in the Fund's
currently effective prospectus and statement of
additional information ("prospectus"), in
satisfaction of requests by holders of Shares for
repurchase or redemption;
15) Miscellaneous. For any other proper corporate
purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a
resolution of the Board of Directors/Trustees or
of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities to
be delivered, setting forth the purpose for which
such delivery is to be made, declaring such
PAGE 8
purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of
such securities shall be made; and
16) Type of Payment. In any or all of the above
cases, payments to the Fund shall be made in cash,
by a certified check upon or a treasurer's or
cashier's check of a bank, by effective bank wire
transfer through the Federal Reserve Wire System
or, if appropriate, outside of the Federal Reserve
Wire System and subsequent credit to the Fund's
Custodian account, or, in case of delivery through
a stock clearing company, by book-entry credit by
the stock clearing company in accordance with the
then current street custom, or such other form of
payment as may be mutually agreed by the parties,
in all such cases collected funds to be promptly
credited to the Fund.
2.3 Registration of Securities. Domestic securities held
by the Custodian (other than bearer securities) shall be
registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless
the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered
investment companies having the same investment adviser as
the Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.9 or in the name or nominee
name of any sub-custodian appointed pursuant to Article 1.
All securities accepted by the Custodian on behalf of the
Fund under the terms of this Contract shall be in "street
name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in
the name of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and
shall hold in such account or accounts, subject to the
provisions hereof all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund
in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds
held by the Custodian for the Fund may be deposited for the
Fund's credit in the Banking Department of the Custodian or
in such other banks or trust companies as the Custodian may
in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of
Directors/Trustees of the Fund. Such funds shall be
PAGE 9
deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that
capacity.
2.5 Sale of Shares and Availability of Federal Funds. Upon
mutual agreement between the Fund and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for
Shares of the Fund which are deposited into the Fund's
account.
2.6 Collection of Income, Dividends. The Custodian shall
collect on a timely basis all income and other payments with
respect to United States registered securities held
hereunder to which the Fund shall be entitled either by law
or pursuant to custom in the securities business, and shall
collect on a timely basis all income and other payments with
respect to United States bearer securities if, on the date
of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such income
or other payments, as collected, to the Fund's custodian
account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on
securities held hereunder. The Custodian will also receive
and collect all stock dividends, rights and other items of
like nature as and when they become due or payable. Income
due the Fund on United States securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty
or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is
properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper
Instructions,
which may be continuing instructions when deemed appropriate
by mutual agreement of the parties, the Custodian shall pay
out monies of the Fund in the following cases only:
1) Purchases. Upon the purchase of domestic
securities, options, futures contracts or options
on futures contracts for the account of the Fund
but only (a) against the delivery of such
securities, or evidence of title to such options,
futures contracts or options on futures contracts,
to the Custodian (or any bank, banking firm or
trust company doing business in the United States
or abroad which is qualified under the Investment
PAGE 10
Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian
as its agent for this purpose in accordance with
Section 2.9 hereof) registered in the name of the
Fund or in the name of a nominee of the Fund or of
the Custodian referred to in Section 2.3 hereof or
in other proper form for transfer; (b) in the case
of a purchase effected through a Securities
System, in accordance with the conditions set
forth in Section 2.10 hereof or (c) in the case of
a purchase involving the Direct Paper System, in
accordance with the conditions set forth in
Section 2.11; or (d) in the case of repurchase
agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer
which is a member of NASD, (i) against delivery of
the securities either in certificate form or
through an entry crediting the Custodian's account
at the Federal Reserve Bank with such securities
or (ii) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the
Custodian along with written evidence of the
agreement by the Custodian to repurchase such
securities from the Fund. All coupon bonds
accepted by the Custodian shall have the coupons
attached or shall be accompanied by a check
payable on coupon payable date for the interest
due on such date.
2) Exchanges. In connection with conversion,
exchange or surrender of securities owned by the
Fund as set forth in Section 2.2 hereof;
3) Redemptions. For the redemption or repurchase of
Shares issued by the Fund as set forth in Article
4 hereof;
4) Expense and Liability. For the payment of any
expense or liability incurred by the Fund,
including but not limited to the following
payments for the account of the Fund: interest,
taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund
whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
5) Dividends. For the payment of any dividends or
other distributions to shareholders declared
pursuant to the Governing Documents of the Fund;
6) Short Sale Dividend. For payment of the amount of
dividends received in respect of securities sold
short;
7) Loan. For repayment of a loan upon redelivery of
pledged securities and upon surrender of the
PAGE 11
note(s), if any, evidencing the loan;
8) Miscellaneous. For any other proper purpose, but
only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Board of Directors/Trustees or of the
Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary
or an Assistant Secretary, specifying the amount
of such payment, setting forth the purpose for
which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be
made.
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where payment
for purchase of domestic securities for the account of the
Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written
instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any time
remove) any other bank or trust company, which is itself
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian, as its agent to carry out
such of the provisions of this Article 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain domestic securities
owned by the Fund in a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal
agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and
regulations, if any, and subject to the following
provisions:
1) Account of Custodian. The Custodian may keep
domestic securities of the Fund in a Securities
System provided that such securities are
represented in an account ("Account") of the
Custodian in the Securities System which shall not
include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
PAGE 12
for customers;
2) Records. The records of the Custodian, with
respect to domestic securities of the Fund which
are maintained in a Securities System, shall
identify by book-entry those securities belonging
to the Fund;
3) Payment of Fund Monies, Delivery of Securities.
Subject to Section 2.7, the Custodian shall pay
for domestic securities purchased for the account
of the Fund upon (i) receipt of advice from the
Securities System that such securities have been
transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to
reflect such payment and transfer for the account
of the Fund. Subject to Section 2.2, the
Custodian shall transfer domestic securities sold
for the account of the Fund upon (i) receipt of
advice from the Securities System that payment for
such securities has been transferred to the
Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies
of all advices from the Securities System of
transfers of domestic securities for the account
of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be provided to
the Fund at its request. The Custodian shall
furnish the Fund confirmation of each transfer to
or from the account of the Fund in the form of a
written advice or notice and shall furnish to the
Fund copies of daily transaction sheets reflecting
each day's transactions in the Securities System
for the account of the Fund;
4) Reports. The Custodian shall provide the Fund
with any report obtained by the Custodian on the
Securities System's accounting system, internal
accounting control and procedures for safeguarding
domestic securities deposited in the Securities
System, and further agrees to provide the Fund
with copies of any documentation it has relating
to its arrangements with the Securities Systems as
set forth in this Agreement or as otherwise
required by the Securities and Exchange
Commission;
5) Annual Certificate. The Custodian shall have
received the initial or annual certificate, as the
case may be, required by Article 13 hereof;
6) Indemnification. Anything to the contrary in this
Contract notwithstanding, the Custodian shall be
liable to the Fund for any loss or expense,
PAGE 13
including reasonable attorneys fees, or damage to
the Fund resulting from use of the Securities
System by reason of any failure by the Custodian
or any of its agents or of any of its or their
employees or agents or from failure of the
Custodian or any such agent to enforce effectively
such rights as it may have against the Securities
System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the
Custodian with respect to any claim against the
Securities System or any other person which the
Custodian may have as a consequence of any such
loss, expense or damage if and to the extent that
the Fund has not been made whole for any such
loss, expense or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper
System. The Custodian may deposit and/or maintain
securities owned by the Fund in the Direct Paper System of
the Custodian subject to the following provisions:
1) No transaction relating to securities in the
Direct Paper System will be effected in the
absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in
the Direct Paper System only if such securities
are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the Fund which are maintained in the
Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased
for the account of the Fund upon the making of an
entry on the records of the Custodian to reflect
such payment and transfer of securities to the
account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation
of each transfer to or from the account of the
Fund, in the form of a written advice or notice,
of Direct Paper on the next business day following
such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's
transaction in the Securities System for the
account of the Fund;
PAGE 14
6) The Custodian shall provide the Fund with any
report on its system of internal accounting
control as the Fund may reasonably request from
time to time;
2.12 Segregated Account. The Custodian shall, upon receipt
of Proper Instructions, which may be of a continuing nature
where deemed appropriate by mutual agreement of the parties,
establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts
may be transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian
and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes
of segregating cash or government securities in connection
with options purchased, sold or written by the Fund or
commodity futures contracts or options thereon purchased or
sold by the Fund, (iii) for the purposes of compliance by
the Fund with the procedures required by Investment Company
Act Release No. 10666, or any subsequent release, rule or
policy, of the Securities and Exchange Commission relating
to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Directors/Trustees or of the
Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in
connection with transfers of such securities.
2.14 Proxies. If the securities are registered other than
in the name of the Fund or a nominee of the Fund, the
Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the
PAGE 15
registered holder of such securities, all proxies, without
indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Fund such proxies,
all proxy soliciting materials and all notices relating to
such securities.
2.15 Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Fund all
written information (including, without limitation, pendency
of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the domestic
securities being held for the Fund by the Custodian, an
agent appointed under Section 2.9, or sub-custodian
appointed under Section 1. With respect to tender or
exchange offers, the Custodian shall transmit promptly to
the Fund all written information received by the Custodian,
an agent appointed under Section 2.9, or sub-custodian
appointed under Section 1 from issuers of the domestic
securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian of such
desired action at least 72 hours (excluding holidays and
weekends) prior to the time such action must be taken under
the terms of the tender, exchange offer, or other similar
transaction, and it will be the responsibility of the
Custodian to timely transmit to the appropriate person(s)
the Fund's notice. Where the Fund does not notify the
Custodian of its desired action within the aforesaid 72 hour
period, the Custodian shall use its best efforts to timely
transmit the Fund's notice to the appropriate person.
2.16 Reports to Fund by Independent Public Accountants. The
Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with reports by independent public
accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including
domestic securities deposited and/or maintained in a
Securities System, relating to the services provided by the
Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may reasonably
be required by the Fund to provide reasonable assurance that
any material inadequacies existing or arising since the
prior examination would be disclosed by such examination.
The reports must describe any material inadequacies
disclosed and, if there are no such inadequacies, the
reports shall so state.
PAGE 16
3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Custodian
is authorized and instructed to employ Chase Manhattan Bank,
N.A, ("Chase") as sub-custodian for the Fund's securities,
cash and other assets maintained outside of the United
States ("foreign assets") all as described in the
Subcustodian Agreement between the Custodian and Chase.
Upon receipt of "Proper Instructions", together with a
certified resolution of the Fund's Board of
Directors/Trustees, the Custodian and the Fund may agree to
designate additional proper institutions and foreign
securities depositories to act as sub-custodians of the
Fund's foreign assets. Upon receipt of Proper Instructions
from the Fund, the Custodian shall cease the employment of
any one or more of such sub-custodians for maintaining
custody of the Fund's foreign assets.
3.2 Assets to be Held. The Custodian shall limit the
foreign assets maintained in the custody of foreign sub-
custodians to foreign assets specified under the terms of
the Subcustodian Agreement between the Custodian and Chase.
3.3 Foreign Securities Depositories. Except as may
otherwise be agreed upon in writing by the Custodian and the
Fund, foreign assets of the Fund shall be maintained in
foreign securities depositories only through arrangements
implemented by the banking institutions serving as sub-
custodians pursuant to the terms hereof.
3.4 Segregation of Securities. The Custodian shall
identify on its books as belonging to the Fund, the foreign
assets of the Fund held by Chase and by each foreign sub-
custodian.
3.5 Access of Independent Accountants of the Fund. Upon
request of the Fund, the Custodian will use its best efforts
(subject to applicable law) to arrange for the independent
accountants, officers or other representatives of the Fund
or the Custodian to be afforded access to the books and
records of Chase and any banking or other institution
employed as a sub-custodian for the Fund by Chase or the
Custodian insofar as such books and records relate to the
performance of Chase or such banking or other institution
under any agreement with the Custodian or Chase. Upon
request of the Fund, the Custodian shall furnish to the Fund
such reports (or portions thereof) of Chase's external
auditors as are available to the Custodian and which relate
directly to Chase's system of internal accounting controls
applicable to Chase's duties as a subcustodian or which
relate to the internal accounting controls of any
subcustodian employed by Chase with respect to foreign
assets of the Fund.
PAGE 17
3.6 Reports by Custodian. The Custodian will supply to the
Fund from time to time, as mutually agreed upon, statements
in respect of the foreign assets of the Fund held pursuant
to the terms of the Subcustodian Agreement between the
Custodian and Chase, including but not limited, to an
identification of entities having possession of the Fund's
foreign assets and advices or notifications of any transfers
of foreign assets to or from each custodial account
maintained by any sub-custodian on behalf of the Fund
indicating, as to foreign assets acquired for the Fund, the
identity of the entity having physical possession of such
foreign assets.
3.7 Transactions in Foreign Assets of the Fund. All
transactions with respect to the Fund's foreign assets shall
be in accordance with, and subject to, the provisions of the
Subcustodian Agreement between Chase and the Custodian.
3.8 Responsibility of Custodian, Sub-Custodian, and Fund.
Notwithstanding anything to the contrary in this Custodian
Contract, the Custodian shall not be liable to the Fund for
any loss, damage, cost, expense, liability or claim arising
out of or in connection with the maintenance of custody of
the Fund's foreign assets by Chase or by any other banking
institution or securities depository employed pursuant to
the terms of any Subcustodian Agreement between Chase and
the Custodian, except that the Custodian shall be liable for
any such loss, damage, cost, expense, liability or claim to
the extent provided in the Subcustodian Agreement between
Chase and the Custodian or attributable to the failure of
the Custodian to exercise the standard of care set forth in
Article 12 hereof in the performance of its duties under
this Contract or such Subcustodian Agreement. At the
election of the Fund, the Fund shall be entitled to be
subrogated to the rights of the Custodian under the
Subcustodian Agreement with respect to any claims arising
thereunder against Chase or any other banking institution or
securities depository employed by Chase if and to the extent
that the Fund has not been made whole therefor. As between
the Fund and the Custodian, the Fund shall be solely
responsible to assure that the maintenance of foreign
securities and cash pursuant to the terms of the
Subcustodian Agreement complies with all applicable rules,
regulations, interpretations and orders of the Securities
and Exchange Commission, and the Custodian assumes no
responsibility and makes no representations as to such
compliance.
3.9 Monitoring Responsibilities. With respect to the
Fund's foreign assets, the Custodian shall furnish annually
to the Fund, during the month of June, information
concerning the sub-custodians employed by the Custodian.
PAGE 18
Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial
approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian
learns of a material adverse change in the financial
condition of a sub-custodian.
3.10 Branches of U.S. Banks. Except as otherwise set forth
in this Contract, the provisions of this Article 3 shall not
apply where the custody of the Fund's assets is maintained
in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment
Company Act of 1940 which meets the qualification set forth
in Section 26(a) of said Act. The appointment of any such
branch as a sub-custodian shall be governed by Section 1 of
this Contract.
4. Payments for Repurchases or Redemptions and Sales of Shares
of the Fund
From such funds as may be available for the purpose but
subject to the limitations of the Governing Documents of the Fund
and any applicable votes of the Board of Directors/Trustees of
the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares of the
Fund, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholder. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian
shall honor checks drawn on the Custodian by a holder of Shares,
which checks have been furnished by the Fund to the holder of
Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to
time between the Fund and the Custodian.
The Custodian shall receive from the distributor for the
Fund's Shares or from the Transfer Agent of the Fund and deposit
as received into the Fund's account such payments as are received
for Shares of the Fund issued or sold from time to time by the
Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for
Shares of the Fund.
5. Proper Instructions
Proper Instructions as used herein means a writing signed or
initialled by one or more person or persons as the Board of
Directors/Trustees shall have from time to time authorized. Each
such writing shall set forth the specific transaction or type of
transaction involved, including a specific statement of the
purpose for which such action is requested, or shall be a blanket
instruction authorizing specific transactions of a repeated or
PAGE 19
routine nature. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Directors/Trustees of the Fund
accompanied by a detailed description of procedures approved by
the Board of Directors/Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or
electronic devices provided that the Board of Directors/Trustees
and the Custodian are satisfied that such procedures afford
adequate safeguards for the Fund's assets.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express
authority from the Fund:
1) make payments to itself or others for minor
expenses of handling securities or other similar
items relating to its duties under this Contract,
provided that all such payments shall be accounted
for to the Fund;
2) surrender securities in temporary form for
securities in definitive form;
3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments on
the same day as received; and
4) in general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of the
Fund except as otherwise directed by the Board of
Directors/Trustees of the Fund.
7. Evidence of Authority, Reliance on Documents
The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other
instrument or paper reasonably and in good faith believed by it
to be genuine and to have been properly executed by or on behalf
of the Fund in accordance with Article 5 hereof. The Custodian
may receive and accept a certified copy of a vote of the Board of
Directors/Trustees of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or
(b) of any determination or of any action by the Board of
Directors/Trustees pursuant to the Governing Documents of the
Fund as described in such vote, and such vote may be considered
as in full force and effect until receipt by the Custodian of
written notice to the contrary. So long as and to the extent
that it is in the exercise of the standard of care set forth in
Article 12 hereof, the Custodian shall not be responsible for the
title, validity or genuineness of any property or evidence of
title thereto received by it or delivered by it pursuant to this
PAGE 20
Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party
or parties.
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary
information to the person or persons appointed by the Board of
Directors/Trustees of the Fund to keep the books of account of
the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do
so by the Fund, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Fund
as described in the Fund's currently effective prospectus and
shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various
components. The calculations of the net asset value per share
and the daily income of the Fund shall be made at the time or
times and in the manner described from time to time in the Fund's
currently effective prospectus.
9. Records, Inventory
The Custodian shall create and maintain all records relating
to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the
Fund. All such records shall be the property of the Fund and
shall at all times during the regular business hours of the
Custodian be open for inspection and audit by duly authorized
officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission, and, in the
event of termination of this Agreement, will be delivered in
accordance with Section 14 hereof. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities
owned by the Fund and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall
be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations. The Custodian shall
conduct a periodic inventory of all securities and other property
subject to this Agreement and provide to the Fund a periodic
reconciliation of the vaulted position of the Fund to the
appraised position of the Fund. The Custodian will promptly
report to the Fund the results of the reconciliation, indicating
any shortages or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or discrepancies.
PAGE 21
10. Opinion of Fund's Independent Accountant
The Custodian shall cooperate with the Fund's independent
public accountants in connection with the annual and other audits
of the books and records of the Fund and take all reasonable
action, as the Fund may from time to time request, to provide
from year to year the necessary information to such accountants
for the expression of their opinion without any qualification as
to the scope of their examination, including but not limited to,
any opinion in connection with the preparation of the Fund's Form
N-lA, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other
requirements of such Commission.
11. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation
for its services and expenses as Custodian, as agreed upon from
time to time between the Fund and the Custodian.
12. Responsibility of Custodian
Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Contract, but shall be kept
indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence.
In order for the indemnification provision contained in this
Section to apply, it is understood that if in any case the Fund
may be asked to indemnify or save the Custodian harmless, the
Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that the Custodian will use all reasonable care to
identify and notify the Fund promptly concerning any situation
which presents or appears likely to present the probability of
such a claim for indemnification against the Fund. The Fund,
shall have the option to defend the Custodian against any claim
which may be the subject of this indemnification, and in the
event that the Fund so elects, it will so notify the Custodian,
and thereupon the Fund shall take over complete defense of the
claim and the Custodian shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall in no
case confess any claim or make any compromise in any case in
which the Fund will be asked to indemnify the Custodian except
with the Fund's prior written consent. Nothing herein shall be
construed to limit any right or cause of action on the part of
the Custodian under this Contract which is independent of any
right or cause of action on the part of the Fund. The Custodian
shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Fund or such other counsel as may be
agreed to by the parties) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. Notwithstanding the foregoing, the responsibility
PAGE 22
of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with
respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in
the Custodian or its nominee assigned to the Fund being liable
for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or
securities for any purpose or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the
account of the Fund shall be security therefor and should the
Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's
assets to the extent necessary to obtain reimbursement, provided
that the Custodian gives the Fund reasonable notice to repay such
cash or securities advanced, however, such notice shall not
preclude the Custodian's right to assert any lien under this
provision.
13. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either
party by an instrument in writing delivered or mailed, postage
prepaid to the other party, such termination to take effect not
sooner than sixty (60) days after the date of such delivery or
mailing in the case of a termination by the Fund, and not sooner
than 180 days after the date of such delivery or mailing in the
case of a termination by the Custodian; provided, however that
the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Directors/Trustees of
the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary
or an Assistant Secretary that the Board of Directors/Trustees
has reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company
Act of 1940, as amended and that the Custodian shall not act
under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the
Board of Directors/Trustees has approved the initial use of the
Direct Paper System and the receipt of an annual certificate of
PAGE 23
the Secretary or an Assistant Secretary that the Board of
Directors/Trustees has reviewed the use by the Fund of the Direct
Paper System; provided further, however, that the Fund shall not
amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the
Governing Documents of the Fund, and further provided, that the
Fund may at any time by action of its Board of Directors/Trustees
(i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event
at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements, provided that the Custodian
shall not incur any costs, expenses or disbursements specifically
in connection with such termination unless it has received prior
approval from the Fund, which approval shall not be unreasonably
withheld.
14. Successor Custodian
If a successor custodian shall be appointed by the Board of
Directors/Trustees of the Fund, the Custodian shall, upon
termination, deliver to such successor custodian at the office of
the Custodian, duly endorsed and in the form for transfer, all
securities, funds and other properties then held by it hereunder
and shall transfer to an account of the successor custodian all
of the Fund's securities held in a Securities System. The
Custodian shall also use its best efforts to assure that the
successor custodian will continue any subcustodian agreement
entered into by the Custodian and any subcustodian on behalf of
the Fund.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified copy
of a vote of the Board of Directors/Trustees of the Fund, deliver
at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of
Directors/Trustees shall have been delivered to the Custodian on
or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank
or trust company, which is a "bank" as defined in the Investment
Company Act of 1940, doing business in Boston, Massachusetts, of
its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not
PAGE 24
less than $25,000,000, all securities, funds and other properties
held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this
Contract and to transfer to an account of such successor
custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to procure the
certified copy of the vote referred to or of the Board of
Directors/Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this
Contract relating to the duties and obligations of the Custodian
shall remain in full force and effect. If while this Contract is
in force the Fund shall be liquidated pursuant to law, the
Custodian shall distribute, either in cash or (if the Fund so
orders) in the portfolio securities and other assets of the Fund,
pro rata among the holders of shares of the Fund as certified by
the Transfer Agent, the property of the Fund which remains after
paying or satisfying all expenses and liabilities of the Fund.
Section 12 hereof shall survive any termination of this Contract.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the
Custodian and the Fund may from time to time agree on such
provisions interpretive of or in addition to the provisions of
this Contract as may in their joint opinion be consistent with
the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
Governing Documents of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
16. Notice
Any notice shall be sufficiently given when sent by
registered or certified mail, or by such other means as the
parties shall agree, to the other party at the address of such
party set forth above or at such other address as such party may
from time to time specify in writing to the other party.
17. Bond
The Custodian shall, at all times, maintain a bond in such
form and amount as is acceptable to the Fund which shall be
issued by a reputable fidelity insurance company authorized to do
business in the place where such bond is issued against larceny
PAGE 25
and embezzlement, covering each officer and employee of the
Custodian who may, singly or jointly with others, have access to
securities or funds of the Fund, either directly or through
authority to receive and carry out any certificate instruction,
order request, note or other instrument required or permitted by
this Agreement. The Custodian agrees that it shall not cancel,
terminate or modify such bond insofar as it adversely affects the
Fund except after written notice given to the Fund not less than
10 days prior to the effective date of such cancellation,
termination or modification. The Custodian shall furnish to the
Fund a copy of each such bond and each amendment thereto.
18. Confidentiality
The Custodian agrees to treat all records and other
information relative to the Fund and its prior, present or future
shareholders as confidential, and the Custodian, on behalf of
itself and its employees, agrees to keep confidential all such
information except, after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
19. Exemption from Liens
The securities and other assets held by the Custodian for
the Fund shall be subject to no lien or charge of any kind in
favor of the Custodian or any person claiming through the
Custodian, but nothing herein shall be deemed to deprive the
Custodian of its right to invoke any and all remedies available
at law or equity to collect amounts due it under this Agreement.
Neither the Custodian nor any sub-custodian appointed pursuant to
Section 1 hereof shall have any power or authority to assign,
hypothecate, pledge or otherwise dispose of any securities held
by it for the Fund, except upon the direction of the Fund, duly
given as herein provided, and only for the account of the Fund.
20. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
21. Prior Contracts
Without derogating any of the rights established by such
contracts, this Contract supersedes and terminates, as of the
date hereof, all prior contracts between the Fund and the
Custodian relating to the custody of the Fund's assets.
22. The Parties
All references herein to "the Fund" are to each of the funds
listed on Appendix A individually, as if this Contract were
between such individual fund and the Custodian. In the case of a
series fund or trust, all references to "the Fund" are to the
individual series or portfolio of such fund or trust, or to such
fund or trust on behalf of the individual series or portfolio, as
PAGE 26
appropriate. Any reference in this Contract to "the parties"
shall mean the Custodian and such other individual Fund as to
which the matter pertains.
23. Governing Documents.
The term "Governing Documents" means the Articles of
Incorporation, Agreement of Trust, By-Laws and Registration
Statement filed under the Securities Act of 1933, as amended from
time to time.
24. Subcustodian Agreement.
Reference to the "Subcustodian Agreement" between the
Custodian and Chase shall mean any such agreement which shall be
in effect from time to time between Chase and the Custodian with
respect to foreign assets of the Fund.
25. Directors and Trustees.
It is understood and is expressly stipulated that neither
the holders of shares in the Fund nor any Directors or Trustees
of the Fund shall be personally liable hereunder.
26. Massachusetts Business Trust
With respect to any Fund which is a party to this Contract
and which is organized as a Massachusetts business trust, the
term Fund means and refers to the trustees from time to time
serving under the applicable trust agreement (Declaration of
Trust) of such Trust as the same may be amended from time to
time. It is expressly agreed that the obligations of any such
Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the
Trust, personally, but bind only the trust property of the Trust,
as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Contract has been authorized by
the trustees and signed by an authorized officer of the Trust,
acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed
to have been made by any of them but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
27. Successors of Parties.
This Contract shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective
successors.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed as
of the dates indicated below.
DATED: September 28, 1987
__________________
PAGE 27
STATE STREET BANK AND TRUST
COMPANY
ATTEST:
/s/Kathleen M. Kubit By/s/Charles Cassidy
_____________________ _________________________________
Assistant Secretary Vice President
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Stock Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
PAGE 28
(SIGNATURES CONTINUED)
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Money Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Bond Fund
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
DATED: September 28, 1987
___________________
ATTEST:
/s/Nancy J. Wortman By/s/Carmen F. Deyesu
____________________________ __________________________________
PAGE 29
Appendix A
The following Funds are parties to this Agreement and have
so indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price California Tax-Free Income Trust on behalf of
the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Institutional Trust on behalf of the
Tax-Exempt Reserve Portfolio
T. Rowe Price International Trust on behalf of the
T. Rowe Price International Bond Fund and
T. Rowe Price International Stock Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price State Tax-Free Income Trust on behalf of the
Maryland Tax-Free Bond Fund,
New York Tax-Free Bond Fund and
New York Tax-Free Money Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
T. Rowe Price U.S. Treasury Money Fund, Inc.
PAGE 30
AMENDMENT NO. 1 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
THIS AGREEMENT, made as of this 24th day of June, 1988, by
and between: T. Rowe Price Growth Stock Fund, Inc., T. Rowe Price
New Horizons Fund, Inc., T. Rowe Price New Era Fund, Inc., T.
Rowe Price New Income Fund, Inc., T. Rowe Price Prime Reserve
Fund, Inc., T. Rowe Price International Trust, T. Rowe Price U.S.
Treasury Money Fund, Inc., T. Rowe Price Growth & Income Fund,
Inc., T. Rowe Price Tax-Exempt Money Fund, Inc., T. Rowe Price
Tax-Free Income Fund, Inc., T. Rowe Price Tax-Free Short-
Intermediate Fund, Inc., T. Rowe Price Short-Term Bond Fund,
Inc., T. Rowe Price High Yield Fund, Inc., T. Rowe Price Tax-Free
High Yield Fund, Inc., T. Rowe Price New America Growth Fund, T.
Rowe Price Equity Income Fund, T. Rowe Price GNMA Fund, T. Rowe
Price Capital Appreciation Fund, T. Rowe Price Institutional
Trust, T. Rowe Price State Tax-Free Income Trust, T. Rowe Price
California Tax-Free Income Trust, T. Rowe Price Science &
Technology Fund, Inc., (hereinafter together called the "Funds"
and individually "Fund") and State Street Bank and Trust Company,
a Massachusetts trust,
W I T N E S S E T H:
It is mutually agreed that the Custodian Contract made by
the parties on the 28th day of September, 1987, is hereby amended
by adding thereto the T. Rowe Price Small-Cap Value Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE NEW HORIZONS FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE NEW ERA FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
PAGE 31
(SIGNATURES CONTINUED)
T. ROWE PRICE NEW INCOME FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE PRIME RESERVE FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE INTERNATIONAL TRUST
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
/s/Henry H.Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE GROWTH & INCOME FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
PAGE 32
(SIGNATURES CONTINUED)
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE HIGH YIELD FUND, INC.
/s/ Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE NEW AMERICA GROWTH FUND
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE EQUITY INCOME FUND
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE GNMA FUND
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE CAPITAL APPRECIATION FUND
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE INSTITUTIONAL TRUST
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
PAGE 33
(SIGNATURES CONTINUED)
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/William Blackwell
______________________________________________
By:
PAGE 34
AMENDMENT NO. 2 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, between State Street Bank and Trust Company and
each of the Parties listed on Appendix A thereto is hereby
further amended, as of October 19, 1988, by adding thereto the T.
Rowe Price International Discovery Fund, Inc., a separate series
of T. Rowe Price International Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
PAGE 35
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Guy R. Sturgeon
______________________________________________
By:
PAGE 36
AMENDMENT NO. 3 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988 and October 19, 1988, between State Street Bank and
Trust Company and each of the Parties listed on Appendix A
thereto is hereby further amended, as of February 22, 1989, by
adding thereto the T. Rowe Price International Equity Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
PAGE 37
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/K. Donelson
______________________________________________
By:
PAGE 38
AMENDMENT NO. 4 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988 and February 22, 1989, between
State Street Bank and Trust Company and each of the Parties
listed on Appendix A thereto is hereby further amended, as of
July 19, 1989, by adding thereto the Institutional International
Funds, Inc., on behalf of the Foreign Equity Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
PAGE 39
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
/s/Henry H. Hopkins
______________________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________________
By:
PAGE 40
AMENDMENT NO. 5 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, and July 19,
1989 between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of September 15, 1989, by adding thereto the T. Rowe Price
U.S. Treasury Funds, Inc., on behalf of the U.S. Treasury
Intermediate Fund and the U.S. Treasury Long-Term Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
PAGE 41
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
/s/Henry H. Hopkins
____________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
____________________________________
By:
PAGE 42
AMENDMENT NO. 6 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989
and September 15, 1989, between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is
hereby further amended, as of December 15, 1989, by restating
Section 2.15 as follows:
2.15 Communications Relating to Fund Portfolio Securities. The
Custodian shall transmit promptly to the Fund all written
information (including, without limitation, pendency of calls and
maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put
options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of the domestic securities being held for the Fund by the
Custodian, an agent appointed under Section 2.9, or sub-custodian
appointed under Section 1. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all
written information received by the Custodian, an agent appointed
under Section 2.9, or sub-custodian appointed under Section 1
from issuers of the domestic securities whose tender or exchange
is sought and from the party (or his agents) making the tender or
exchange offer. If the Fund desires to take action with respect
to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian of such desired
action at least 48 hours (excluding holidays and weekends) prior
to the time such action must be taken under the terms of the
tender, exchange offer, or other similar transaction, and it will
be the responsibility of the Custodian to timely transmit to the
appropriate person(s) the Fund's notice. Where the Fund does not
notify the custodian of its desired action within the aforesaid
48 hour period, the Custodian shall use its best efforts to
timely transmit the Fund's notice to the appropriate person. It
is expressly noted that the parties may negotiate and agree to
alternative procedures with respect to such 48 hour notice period
on a selective and individual basis.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
PAGE 43
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
PAGE 44
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U. S. TREASURY FUNDS, INC.
U. S. Treasury Intermediate Fund
U. S. Treasury Long-Term Fund
/s/Carmen F. Deyesu
_________________________________________
By: Carmen F. Deyesu,
Treasurer
STATE STREET BANK AND TRUST COMPANY
/s/ E. D. Hawkes, Jr.
_________________________________________
By: E. D. Hawkes, Jr.
Vice President
PAGE 45
Amendment No. 7 filed on Form SE January 25, 1990 with
International Trust (CIK 313212) Post Effective Amendment No. 17.
PAGE 46
AMENDMENT NO. 8 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, and December 20,
1989, between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of January 25, 1990, by adding thereto the T. Rowe Price
European Stock Fund, a separate series of T. Rowe Price
International Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 47
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
/s/Henry H. Hopkins
_________________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
_________________________________________
By:
PAGE 48
AMENDMENT NO. 9 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
and January 25, 1990 between State Street Bank and Trust Company
and each of the Parties listed on Appendix A thereto is hereby
further amended, as of February 21, 1990, by adding thereto the
T. Rowe Price Index Trust, Inc., on behalf of the T. Rowe Price
Equity Index Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 49
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins
Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________
By:
PAGE 50
AMENDMENT NO. 10 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, between State Street Bank
and Trust Company and each of the Parties listed on Appendix A
thereto is hereby further amended, as of June 12, 1990, by adding
thereto the T. Rowe Price Spectrum Fund, Inc., on behalf of the
Spectrum Growth Fund and the Spectrum Income Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 51
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________
By:
PAGE 52
AMENDMENT NO. 11 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, and June 12, 1990 between
State Street Bank and Trust Company and each of the Parties
listed on Appendix A thereto is hereby further amended, as of
July 18, 1990, by adding thereto the T. Rowe Price New Asia Fund,
a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
PAGE 53
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/ Guy R. Sturgeon
______________________________________
By: Guy R. Sturgeon
PAGE 54
AMENDMENT NO. 12 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, and July 18,
1990 between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of October 15, 1990, by adding thereto the T. Rowe Price
Global Government Bond Fund, a separate series of the T. Rowe
Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 55
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/ Guy R. Sturgeon
______________________________________
By:
PAGE 56
AMENDMENT NO. 13 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, and October 15, 1990, between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is
hereby further amended, as of February 13, 1991, by adding
thereto the Virginia Tax-Free Bond Fund and New Jersey Tax-Free
Bond Fund, two separate series of the T. Rowe Price State Tax-
Free Income Trust
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
PAGE 57
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/ Guy Sturgeon
______________________________________
By: Vice President
PAGE 58
AMENDMENT NO. 14 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, and February 13, 1991, between State
Street Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of March 6,
1991, by adding thereto the T. Rowe Price Balanced Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 59
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________
By:
PAGE 60
AMENDMENT NO. 15 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, and March 6, 1991,
between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of September 12, 1991, by adding thereto the T. Rowe Price
Adjustable Rate U.S. Government Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
PAGE 61
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S.
GOVERNMENT FUND, INC.
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
PAGE 62
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________
By:
PAGE 63
AMENDMENT NO. 16 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991 and
September 12, 1991, between State Street Bank and Trust Company
and each of the Parties listed on Appendix A thereto is hereby
further amended, as of November 6, 1991, by adding thereto the T.
Rowe Price Japan Fund, a separate series of the T. Rowe Price
International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
PAGE 64
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S.
GOVERNMENT FUND, INC.
PAGE 65
/s/Henry H. Hopkins
_____________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
______________________________________
By:
PAGE 66
AMENDMENT NO. 17 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991 and November 6, 1991, between State Street
Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of April 23,
1992, by adding thereto the T. Rowe Price Mid-Cap Growth Fund,
Inc. and T. Rowe Price Short-Term Global Income Fund, a separate
series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
PAGE 67
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
PAGE 68
/s/Henry H. Hopkins
_________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
____________________________________
By:
PAGE 69
AMENDMENT NO. 18 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, and April 23, 1992, between
State Street Bank and Trust Company and each of the Parties
listed on Appendix A thereto is hereby further amended, as of
September 2, 1992, by adding thereto the T. Rowe Price OTC Fund,
a series of the T. Rowe Price OTC Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
PAGE 70
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
PAGE 71
/s/Henry H. Hopkins
__________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
__________________________________
By:
PAGE 72
AMENDMENT NO. 19 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, and
September 2, 1992, between State Street Bank and Trust Company
and each of the Parties listed on Appendix A thereto is hereby
further amended, as of November 3, 1992, by adding thereto the T.
Rowe Price Tax-Free Insured Intermediate Bond Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
PAGE 73
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
PAGE 74
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
/s/Henry H. Hopkins
_________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
_________________________________________
By:
PAGE 75
AMENDMENT NO. 20 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, and November 3, 1992, between State Street Bank and
Trust Company and each of the Parties listed on Appendix A
thereto is hereby further amended, as of December 16, 1992, by
adding thereto the T. Rowe Price Dividend Growth Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
PAGE 76
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
PAGE 77
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins
_________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
_________________________________________
By:
PAGE 78
AMENDMENT NO. 21 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, and December 16, 1992, between State
Street Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of December 21,
1992, by adding thereto the Maryland Short-Term Tax-Free Bond
Fund, an additional series to the T. Rowe Price State Tax-Free
Income Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
PAGE 79
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
PAGE 80
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins
_________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
_________________________________________
By:
PAGE 81
AMENDMENT NO. 22 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, and December 21,
1992, between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of January 28, 1993, by adding thereto the Georgia Tax-Free
Bond Fund and the Florida Insured Intermediate Tax-Free Fund,
additional series to the T. Rowe Price State Tax-Free Income
Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
PAGE 82
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
PAGE 83
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins
_________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
_________________________________________
By:
PAGE 84
AMENDMENT NO. 23 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
and January 28, 1993, between State Street Bank and Trust Company
and each of the Parties listed on Appendix A thereto is hereby
further amended, as of April 22, 1993, by adding thereto the T.
Rowe Price Blue Chip Growth Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
PAGE 85
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
PAGE 86
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
/s/Henry H. Hopkins
_________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
__________________________________________
By:
PAGE 87
AMENDMENT NO. 24 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, between State Street Bank and
Trust Company and each of the Parties listed on Appendix A
thereto is hereby further amended, as of September 16, 1993, by
adding thereto the T. Rowe Price Summit Funds, Inc. and T. Rowe
Price Summit Municipal Funds, Inc.
Notwithstanding anything to the contrary herein, it is
understood that the T. Rowe Price Summit Funds, Inc. and T. Rowe
Price Summit Municipal Funds, Inc. (collectively referred to as
the "Funds") shall not be responsible for paying any of the fees
or expenses set forth herein but that, in accordance with the
Investment Management Agreement, dated September 16, 1993,
between the Funds and T. Rowe Price Associates, Inc. ("T. Rowe
Price"), the Funds will require T. Rowe Price to pay all such
fees and expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
PAGE 88
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
PAGE 89
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 90
AMENDMENT NO. 25 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, and September 16, 1993, between
State Street Bank and Trust Company and each of the Parties
listed on Appendix A thereto is hereby further amended, as of
November 3, 1993, by adding thereto the T. Rowe Price Latin
America Fund, a separate series of the T. Rowe Price
International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
PAGE 91
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
PAGE 92
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 93
AMENDMENT NO. 26 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, and
November 3, 1993, between State Street Bank and Trust Company and
each of the Parties listed on Appendix A thereto is hereby
further amended, as of March 1, 1994, by adding thereto the T.
Rowe Price Equity Income Portfolio and T. Rowe Price New America
Growth Portfolio, two separate series of the T. Rowe Price Equity
Series, Inc. and T. Rowe Price International Stock Portfolio, a
separate series of the T. Rowe Price International Series, Inc.
Notwithstanding anything to the contrary herein, it is
understood that the T. Rowe Price Equity Series, Inc. and T. Rowe
Price International Series, Inc. (collectively referred to as the
"Funds") shall not be responsible for paying any of the fees or
expenses set forth herein but that, in accordance with the
Investment Management Agreements, dated March 1, 1994, between
the Funds and T. Rowe Price Associates, Inc. and Rowe Price-
Fleming International, Inc. (collectively referred to as "T. Rowe
Price"), the Funds will require T. Rowe Price to pay all such
fees and expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
PAGE 94
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
PAGE 95
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
PAGE 96
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 97
AMENDMENT NO. 27 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, and March 1, 1994, between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is
hereby further amended, as of April 21, 1994, by adding thereto
the T. Rowe Price Limited-Term Bond Portfolio, a separate series
of the T. Rowe Price Fixed Income Series, Inc.
Notwithstanding anything to the contrary herein, it is
understood that the T. Rowe Price Fixed Income Series, Inc.
(referred to as the "Fund") shall not be responsible for paying
any of the fees or expenses set forth herein but that, in
accordance with the Investment Management Agreement, dated April
21, 1994, between the Fund and T. Rowe Price Associates, Inc.
(referred to as "T. Rowe Price"), the Fund will require T. Rowe
Price to pay all such fees and expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
PAGE 98
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
PAGE 99
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
PAGE 100
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 101
AMENDMENT NO. 28 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, and April 21, 1994, between State Street
Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of July 27,
1994, by adding thereto the T. Rowe Price Personal Strategy
Balanced Fund, T. Rowe Price Personal Strategy Growth Fund, and
T. Rowe Price Personal Strategy Income Fund, three separate
series of the T. Rowe Price Personal Strategy Funds, Inc.
Notwithstanding anything to the contrary herein, it is
understood that the T. Rowe Price Personal Strategy Funds, Inc.
(collectively referred to as the "Funds") shall not be
responsible for paying any of the fees or expenses set forth
herein but that, in accordance with the Investment Management
Agreements, dated July 27, 1994, between the Funds and T. Rowe
Price Associates, Inc. (referred to as "T. Rowe Price"), the
Funds will require T. Rowe Price to pay all such fees and
expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
PAGE 102
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
PAGE 103
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
PAGE 104
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 105
AMENDMENT NO. 29 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, and April 21, 1994, between State Street
Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of July 27,
1994, by adding thereto the T. Rowe Price Personal Strategy
Balanced Strategy Balanced Portfolio, a separate series of the T.
Rowe Price Equity Series, Inc.
Notwithstanding anything to the contrary herein, it is
understood that the T. Rowe Price Personal Strategy Balanced
Portfolio, a separate series of the T. Rowe Price Equity Series,
Inc. (referred to as the "Fund) shall not be responsible for
paying any of the fees or expenses set forth herein but that, in
accordance with the Investment Management Agreement, dated July
27, 1994, between the Fund and T. Rowe Price Associates, Inc.
(referred to as "T. Rowe Price"), the Fund will require T. Rowe
Price to pay all such fees and expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
PAGE 106
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
PAGE 107
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
PAGE 108
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/
________________________________________
By:
PAGE 109
AMENDMENT NO. 30 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, and July 27, 1994 between
State Street Bank and Trust Company and each of the Parties
listed on Appendix A thereto is hereby further amended, as of
September 21, 1994, by adding thereto the T. Rowe Price Value
Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
PAGE 110
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
PAGE 111
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
PAGE 112
T. ROWE PRICE VALUE FUND, INC.
/s/Henry H. Hopkins
________________________________________
By:Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
________________________________________
By:Carol C. Ayotte, Vice President
PAGE 113
AMENDMENT NO. 31 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, and September
21, 1994 between State Street Bank and Trust Company and each of
the Parties listed on Appendix A thereto is hereby further
amended, as of November 1, 1994, by adding thereto the T. Rowe
Price Virginia Short-Term Tax-Free Bond Fund, a separate series
of the T. Rowe Price State Tax-Free Income Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
PAGE 114
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
PAGE 115
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
PAGE 116
T. ROWE PRICE VALUE FUND, INC.
/s/Henry H. Hopkins
________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
________________________________________
By:Carol C. Ayotte, Vice President
PAGE 117
AMENDMENT NO. 32 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, September 21,
1994, and November 1, 1994 between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is
hereby further amended, as of November 2, 1994, by adding thereto
the T. Rowe Price Capital Opportunity Fund, Inc. and the T. Rowe
Price Emerging Markets Bond Fund, a separate series of the T.
Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
PAGE 118
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
PAGE 119
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
PAGE 120
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
/s/Henry H. Hopkins
________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
________________________________________
By:Carol C. Ayotte, Vice President
PAGE 121
AMENDMENT NO. 33 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, September 21,
1994, November 1, 1994, and November 2, 1994 between State Street
Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of January 25,
1995, by adding thereto the T. Rowe Price Emerging Markets Stock
Fund, a separate series of the T. Rowe Price International Funds,
Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
PAGE 122
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
PAGE 123
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
PAGE 124
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
/s/Henry H. Hopkins
_____________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
_____________________________________________
By: Carol C. Ayotte, Vice President
PAGE 125
AMENDMENT NO. 34 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, September 21,
1994, November 1, 1994, November 2, 1994, and January 25, 1995,
between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended,
as of September 20, 1995, by adding thereto the T. Rowe Price
Corporate Income Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
PAGE 126
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
PAGE 127
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC., now known as T. ROWE PRICE SHORT-
TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
PAGE 128
T. ROWE PRICE CORPORATE INCOME FUND, INC.
/s/Henry H. Hopkins
_____________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
_____________________________________________
By: Carol C. Ayotte, Vice President
PAGE 129
AMENDMENT NO. 35 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, September 21,
1994, November 1, 1994, November 2, 1994, January 25, 1995, and
September 20, 1995, between State Street Bank and Trust Company
and each of the Parties listed on Appendix A thereto is hereby
further amended, as of October 11, 1995, by adding thereto the T.
Rowe Price Global Stock Fund, a separate series of the T. Rowe
Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
PAGE 130
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
PAGE 131
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC., now known as T. ROWE PRICE SHORT-
TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
PAGE 132
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
/s/Henry H. Hopkins
_____________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
_____________________________________________
By: Carol C. Ayotte, Vice President
PAGE 133
AMENDMENT NO. 36 TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19,
1989, September 15, 1989, December 15, 1989, December 20, 1989,
January 25, 1990, February 21, 1990, June 12, 1990, July 18,
1990, October 15, 1990, February 13, 1991, March 6, 1991,
September 12, 1991, November 6, 1991, April 23, 1992, September
2, 1992, November 3, 1992, December 16, 1992, December 21, 1992,
January 28, 1993, April 22, 1993, September 16, 1993, November 3,
1993, March 1, 1994, April 21, 1994, July 27, 1994, September 21,
1994, November 1, 1994, November 2, 1994, January 25, 1995,
September 20, 1995, and October 11, 1995 between State Street
Bank and Trust Company and each of the Parties listed on
Appendix A thereto is hereby further amended, as of December 11,
1995, by adding thereto the T. Rowe Price Health Sciences Fund,
Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
PAGE 134
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
PAGE 135
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC., now known as T. ROWE PRICE SHORT-
TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
PAGE 136
T. ROWE PRICE VALUE FUND, INC.
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
/s/Henry H. Hopkins
_____________________________________________
By: Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Carol C. Ayotte
_____________________________________________
By: Carol C. Ayotte, Vice President
The Global Custody Agreement dated January 3, 1994, as
amended, between The Chase Manhattan Bank, N.A. and T. Rowe Price
Funds should be inserted here.
PAGE 1
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective January 3, 1994, and is between
THE CHASE MANHATTAN BANK, N.A. (the "Bank") and EACH OF THE
ENTITIES LISTED ON SCHEDULE A HERETO, Individually and Separately
(each individually, the "Customer").
1. Customer Accounts.
The Bank agrees to establish and maintain the following
accounts ("Accounts"):
(a) A custody account in the name of the Customer
("Custody Account") for any and all stocks, shares, bonds,
debentures, notes, mortgages or other obligations for the payment
of money, bullion, coin and any certificates, receipts, warrants
or other instruments representing rights to receive, purchase or
subscribe for the same or evidencing or representing any other
rights or interests therein and other similar property whether
certificated or uncertificated as may be received by the Bank or
its Subcustodian (as defined in Section 3) for the account of the
Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit
Account") for any and all cash in any currency received by the
Bank or its Subcustodian for the account of the Customer, which
cash shall not be subject to withdrawal by draft or check.
The Customer warrants its authority to: 1) deposit the cash
and Securities ("Assets") received in the Accounts and 2) give
Instructions (as defined in Section 11) concerning the Accounts.
The Bank may deliver securities of the same class in place of
those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer,
additional Accounts may be established and separately accounted
for as additional Accounts under the terms of this Agreement.
2. Maintenance of Securities and Cash at Bank and Subcustodian
Locations.
Unless Instructions specifically require another location
acceptable to the Bank:
(a) Securities will be held in the country or other
jurisdiction in which the principal trading market for such
Securities is located, where such Securities are to be presented
for payment or where such Securities are acquired; and
PAGE 2
(b) Cash will be credited to an account in a country or
other jurisdiction in which such cash may be legally deposited or
is the legal currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest
or non-interest bearing accounts as may be available for the
particular currency. To the extent Instructions are issued and
the Bank can comply with such Instructions, the Bank is
authorized to maintain cash balances on deposit for the Customer
with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in
non-interest bearing accounts as the Customer may direct, if
acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the
custody of an institution other than the established
Subcustodians as defined in Section 3 (or their securities
depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. Subcustodians and Securities Depositories.
The Bank may act under this Agreement through the
subcustodians listed in Schedule B of this Agreement with which
the Bank has entered into subcustodial agreements
("Subcustodians"). The Customer authorizes the Bank to hold
Assets in the Accounts in accounts which the Bank has established
with one or more of its branches or Subcustodians. The Bank and
Subcustodians are authorized to hold any of the Securities in
their account with any securities depository in which they
participate.
The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by
the Bank of any amendment to Schedule B. Upon request by the
Customer, the Bank will identify the name, address and principal
place of business of any Subcustodian of the Customer's Assets
and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such
Subcustodian.
4. Use of Subcustodian.
(a) The Bank will identify such Assets on its books as
belonging to the Customer.
(b) A Subcustodian will hold such Assets together with
assets belonging to other customers of the Bank in accounts
identified on such Subcustodian's books as special custody
accounts for the exclusive benefit of customers of the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will
be subject only to the instructions of the Bank or its agent.
PAGE 3
Any Securities held in a securities depository for the account of
a Subcustodian will be subject only to the instructions of such
Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian
for holding its customer's assets shall provide that such assets
will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of such Subcustodian or its
creditors except for a claim for payment for safe custody or
administration, and that the beneficial ownership of such assets
will be freely transferable without the payment of money or value
other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or
arrangement made by the Customer with any particular
Subcustodian.
5. Deposit Account Transactions.
(a) The Bank or its Subcustodians will make payments from
the Deposit Account upon receipt of Instructions which include
all information required by the Bank.
(b) In the event that any payment to be made under this
Section 5 exceeds the funds available in the Deposit Account, the
Bank, in its discretion, may advance the Customer such excess
amount which shall be deemed a loan payable on demand, bearing
interest at the rate customarily charged by the Bank on similar
loans.
(c) If the Bank credits the Deposit Account on a payable
date, or at any time prior to actual collection and
reconciliation to the Deposit Account, with interest, dividends,
redemptions or any other amount due, the Customer will promptly
return any such amount upon oral or written notification: (i)
that such amount has not been received in the ordinary course of
business or (ii) that such amount was incorrectly credited. If
the Customer does not promptly return any amount upon such
notification, the Bank shall be entitled, upon oral or written
notification to the Customer, to reverse such credit by debiting
the Deposit Account for the amount previously credited. The Bank
or its Subcustodian shall have no duty or obligation to institute
legal proceedings, file a claim or a proof of claim in any
insolvency proceeding or take any other action with respect to
the collection of such amount, but may act for the Customer upon
Instructions after consultation with the Customer.
6. Custody Account Transactions.
(a) Securities will be transferred, exchanged or delivered
by the Bank or its Subcustodian upon receipt by the Bank of
Instructions which include all information required by the Bank.
Settlement and payment for Securities received for, and delivery
of Securities out of, the Custody Account may be made in
PAGE 4
accordance with the customary or established securities trading
or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the
expectation of receiving later payment and free delivery.
Delivery of Securities out of the Custody Account may also be
made in any manner specifically required by Instructions
acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the
Accounts on a contractual settlement date with cash or Securities
with respect to any sale, exchange or purchase of Securities.
Otherwise, such transactions will be credited or debited to the
Accounts on the date cash or Securities are actually received by
the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the
Accounts in its discretion if the related transaction
fails to settle within a reasonable period, determined
by the Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this
Section 6 are returned by the recipient thereof, the
Bank may reverse the credits and debits of the
particular transaction at any time.
7. Actions of the Bank.
The Bank shall follow Instructions received regarding assets
held in the Accounts. However, until it receives Instructions to
the contrary, the Bank will:
(a) Present for payment any Securities which are called,
redeemed or retired or otherwise become payable and all coupons
and other income items which call for payment upon presentation,
to the extent that the Bank or Subcustodian is actually aware of
such opportunities.
(b) Execute in the name of the Customer such ownership and
other certificates as may be required to obtain payments in
respect of Securities.
(c) Exchange interim receipts or temporary Securities for
definitive Securities.
(d) Appoint brokers and agents for any transaction
involving the Securities, including, without limitation,
affiliates of the Bank or any Subcustodian.
(e) Issue statements to the Customer, at times mutually
agreed upon, identifying the Assets in the Accounts.
PAGE 5
The Bank will send the Customer an advice or notification of
any transfers of Assets to or from the Accounts. Such
statements, advices or notifications shall indicate the identity
of the entity having custody of the Assets. Unless the Customer
sends the Bank a written exception or objection to any Bank
statement within ninety (90) days of receipt, the Customer shall
be deemed to have approved such statement. The Bank shall, to
the extent permitted by law, be released, relieved and discharged
with respect to all matters set forth in such statement or
reasonably implied therefrom as though it had been settled by the
decree of a court of competent jurisdiction in an action where
the Customer and all persons having or claiming an interest in
the Customer or the Customer's Accounts were parties if: (a) the
Customer has failed to provide a written exception or objection
to any Bank statement within ninety (90) days of receipt and
where the Customer's failure to so provide a written exception or
objection within such ninety (90) day period has limited the
Bank's (i) access to the records, materials and other information
required to investigate the Customer's exception or objection,
and (ii) ability to recover from third parties any amounts for
which the Bank may become liable in connection with such
exception or objection, or (b) where the Customer has otherwise
explicitly approved any such statement.
All collections of funds or other property paid or
distributed in respect of Securities in the Custody Account shall
be made at the risk of the Customer. The Bank shall have no
liability for any loss occasioned by delay in the actual receipt
of notice by the Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Securities in the
Custody Account in respect of which the Bank has agreed to take
any action under this Agreement.
8. Corporate Actions; Proxies.
Whenever the Bank receives information concerning the
Securities which requires discretionary action by the beneficial
owner of the Securities (other than a proxy), such as
subscription rights, bonus issues, stock repurchase plans and
rights offerings, or legal notices or other material intended to
be transmitted to securities holders ("Corporate Actions"), the
Bank will give the Customer notice of such Corporate Actions to
the extent that the Bank's central corporate actions department
has actual knowledge of a Corporate Action in time to notify its
customers.
When a rights entitlement or a fractional interest resulting
from a rights issue, stock dividend, stock split or similar
Corporate Action is received which bears an expiration date, the
Bank will endeavor to obtain Instructions from the Customer or
its Authorized Person, but if Instructions are not received in
time for the Bank to take timely action, or actual notice of such
Corporate Action was received too late to seek Instructions, the
PAGE 6
Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or
take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.
The Bank will deliver proxies to the Customer or its
designated agent pursuant to special arrangements which may have
been agreed to in writing. Such proxies shall be executed in the
appropriate nominee name relating to Securities in the Custody
Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and
where bearer Securities are involved, proxies will be delivered
in accordance with Instructions.
9. Nominees.
Securities which are ordinarily held in registered form may
be registered in a nominee name of the Bank, Subcustodian or
securities depository, as the case may be. The Bank may without
notice to the Customer cause any such Securities to cease to be
registered in the name of any such nominee and to be registered
in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by
the issuer, the Bank may allot the called portion to the
respective beneficial holders of such class of security pro rata
or in any other manner that is fair, equitable and practicable.
The Customer agrees to hold the Bank, Subcustodians, and their
respective nominees harmless from any liability arising directly
or indirectly from their status as a mere record holder of
Securities in the Custody Account.
10. Authorized Persons.
As used in this Agreement, the term "Authorized Person"
means employees or agents including investment managers as have
been designated by written notice from the Customer or its
designated agent to act on behalf of the Customer under this
Agreement. Such persons shall continue to be Authorized Persons
until such time as the Bank receives Instructions from the
Customer or its designated agent that any such employee or agent
is no longer an Authorized Person.
11. Instructions.
The term "Instructions" means instructions of any Authorized
Person received by the Bank, via telephone, telex, TWX, facsimile
transmission, bank wire or other teleprocess or electronic
instruction or trade information system acceptable to the Bank
which the Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing
or authentication pursuant to terms and conditions which the Bank
may specify. Unless otherwise expressly provided, all
PAGE 7
Instructions shall continue in full force and effect until
canceled or superseded.
Any Instructions delivered to the Bank by telephone shall
promptly thereafter be confirmed in writing by an Authorized
Person (which confirmation may bear the facsimile signature of
such Person), but the Customer will hold the Bank harmless for
the failure of an Authorized Person to send such confirmation in
writing, the failure of such confirmation to conform to the
telephone instructions received or the Bank's failure to produce
such confirmation at any subsequent time. The Bank may
electronically record any Instructions given by telephone, and
any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any
testkeys, identification codes or other security devices which
the Bank shall make available to the Customer or its Authorized
Persons.
12. Standard of Care; Liabilities.
(a) The Bank shall be responsible for the performance of
only such duties as are set forth in this Agreement or expressly
contained in Instructions which are consistent with the
provisions of this Agreement. Notwithstanding anything to the
contrary in this Agreement:
(i) The Bank will use reasonable care with respect to
its obligations under this Agreement and the
safekeeping of Assets. The Bank shall be liable to the
Customer for any loss which shall occur as the result
of the failure of a Subcustodian to exercise reasonable
care with respect to the safekeeping of such Assets to
the same extent that the Bank would be liable to the
Customer if the Bank were holding such Assets in New
York. In the event of any loss to the Customer by
reason of the failure of the Bank or its Subcustodian
to utilize reasonable care, the Bank shall be liable to
the Customer only to the extent of the Customer's
direct damages, and shall in no event be liable for any
special or consequential damages.
(ii) The Bank will not be responsible for any act,
omission, default or for the solvency of any broker or
agent which it or a Subcustodian appoints unless such
appointment was made negligently or in bad faith or for
any loss due to the negligent act of such broker or
agent except to the extent that such broker or agent
(other than a Subcustodian) performs in a negligent
manner which is the cause of the loss to the Customer
and the Bank failed to exercise reasonable care in
monitoring such broker's or agent's performance where
Customer has requested and Bank has agreed to accept
such monitoring responsibility.
PAGE 8
(iii) The Bank shall be indemnified by, and
without liability to the Customer for any action taken
or omitted by the Bank whether pursuant to Instructions
or otherwise within the scope of this Agreement if such
act or omission was in good faith, without negligence.
In performing its obligations under this Agreement, the
Bank may rely on the genuineness of any document which
it believes in good faith to have been validly
executed.
(iv) The Customer agrees to pay for and hold the Bank
harmless from any liability or loss resulting from the
imposition or assessment of any taxes or other
governmental charges, and any related expenses with
respect to income from or Assets in the Accounts,
except to the extent that the Bank has failed to
exercise reasonable care in performing any obligations
which the Bank may have agreed to assume (in addition
to those stated in this Agreement) with respect to
taxes and such failure by the Bank is the direct cause
of such imposition or assessment of such taxes, charges
or expenses.
(v) The Bank shall be entitled to rely, and may act,
upon the advice of counsel (who may be counsel for the
Customer) on all legal matters and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice; provided, that the Bank gives
(to the extent practicable) prior notice to Customer of
Bank's intention to so seek advice of counsel and an
opportunity for consultation with Customer on the
proposed contact with counsel.
(vi) The Bank represents and warrants that it currently
maintain a banker's blanket bond which provides
standard fidelity and non-negligent loss coverage with
respect to the Securities and Cash which may be held by
Subcustodians pursuant to this Agreement. The Bank
agrees that if at any time it for any reason
discontinues such coverage, it shall immediately give
sixty (60) days' prior written notice to the Customer.
The Bank need not maintain any insurance for the
benefit of the Customer.
(vii) Without limiting the foregoing, the Bank
shall not be liable for any loss which results from:
(1) the general risk of investing, or (2) investing or
holding Assets in a particular country including, but
not limited to, losses resulting from nationalization,
expropriation or other governmental actions; regulation
of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market
PAGE 9
conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other
for any loss due to forces beyond their control
including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection,
revolution, nuclear fusion, fission or radiation, or
acts of God.
(b) Consistent with and without limiting the first
paragraph of this Section 12, it is specifically acknowledged
that the Bank shall have no duty or responsibility to:
(i) question Instructions or make any suggestions to
the Customer or an Authorized Person regarding such
Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Securities;
(iii) advise the Customer or an Authorized Person
regarding any default in the payment of principal or
income of any security other than as provided in
Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an
Authorized Person regarding the financial condition of
any broker, agent (other than a Subcustodian) or other
party to which Securities are delivered or payments are
made pursuant to this Agreement;
(v) review or reconcile trade confirmations received
from brokers. The Customer or its Authorized Persons
(as defined in Section 10) issuing Instructions shall
bear any responsibility to review such confirmations
against Instructions issued to and statements issued by
the Bank.
(c) The Customer authorizes the Bank to act under this
Agreement notwithstanding that the Bank or any of its divisions
or affiliates may have a material interest in a transaction, or
circumstances are such that the Bank may have a potential
conflict of duty or interest including the fact that the Bank or
any of its affiliates may provide brokerage services to other
customers, act as financial advisor to the issuer of Securities,
act as a lender to the issuer of Securities, act in the same
transaction as agent for more than one customer, have a material
interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. Fees and Expenses.
PAGE 10
The Customer agrees to pay the Bank for its services under
this Agreement such amount as may be agreed upon in writing,
together with the Bank's reasonable out-of-pocket or incidental
expenses, including, but not limited to, reasonable legal fees.
The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under
any provision of this Agreement upon notice to the Customer.
14. Miscellaneous.
(a) Foreign Exchange Transactions. Pursuant to
Instructions, which may be standing Instructions, to facilitate
the administration of the Customer's trading and investment
activity, the Bank is authorized to enter into spot or forward
foreign exchange contracts with the Customer or an Authorized
Person for the Customer and may also provide foreign exchange
through its subsidiaries or Subcustodians. The Bank may
establish rules or limitations concerning any foreign exchange
facility made available. In all cases where the Bank, its
subsidiaries, affiliates or Subcustodians enter into a foreign
exchange contract related to Accounts, the terms and conditions
of the then current foreign exchange contract of the Bank, its
subsidiary, affiliate or Subcustodian and, to the extent not
inconsistent, this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer
certifies that it is a resident of the United States and agrees
to notify the Bank of any changes in residency. The Bank may
rely upon this certification or the certification of such other
facts as may be required to administer the Bank's obligations
under this Agreement. The Customer will indemnify the Bank
against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(c) Access to Records. The Bank shall allow the Customer's
independent public accountants, officers and advisers reasonable
access to the records of the Bank relating to the Assets as is
required in connection with their examination of books and
records pertaining to the Customer's affairs. Subject to
restrictions under applicable law, the Bank shall also obtain an
undertaking to permit the Customer's independent public
accountants reasonable access to the records of any Subcustodian
which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and
records.
(d) Governing Law; Successors and Assigns. This Agreement
shall be governed by the laws of the State of New York and shall
not be assignable by either party, but shall bind the successors
in interest of the Customer and the Bank.
PAGE 11
(e) Entire Agreement; Applicable Riders. Customer
represents that the Assets deposited in the Accounts are (Check
one):
X * Employee Benefit Plan or other assets subject to the
Employee Retirement Income
Security Act of 1974, as amended ("ERISA");
X ** Mutual Fund assets subject to certain Securities
and Exchange Commission
("SEC") rules and regulations;
X *** Neither of the above.
With respect to each Customer, this Agreement consists
exclusively of this document together with Schedules A, B,
Exhibits I - _______ and the following Rider(s) to the
extent indicated on Schedule A hereto opposite the name of
the Customer under the column headed "Applicable Riders to
Agreement":
X ERISA
X MUTUAL FUND
SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this
Agreement supersedes any other agreements, whether written or
oral, between the parties. Any amendment to this Agreement must
be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions
of this Agreement are held invalid, illegal or enforceable in any
respect on the basis of any particular circumstances or in any
jurisdiction, the validity, legality and enforceability of such
provision or provisions under other circumstances or in other
jurisdictions and of the remaining provisions will not in any way
____________________
* With respect to each Customer listed on Schedule A
hereto under the heading "ERISA Trusts".
** With respect to each Customer listed on Schedule A
hereto under the heading "Investment
Companies/Portfolios Registered under the Investment
Company Act of 1940".
*** With respect to certain of the Customers listed on
Schedule A hereto under the heading "Separate Accounts"
as indicated on Schedule A.
be affected or impaired.
PAGE 12
(g) Waiver. Except as otherwise provided in this
Agreement, no failure or delay on the part of either party in
exercising any power or right under this Agreement operates as a
waiver, nor does any single or partial exercise of any power or
right preclude any other or further exercise, or the exercise of
any other power or right. No waiver by a party of any provision
of this Agreement, or waiver of any breach or default, is
effective unless in writing and signed by the party against whom
the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be
effective when actually received. Any notices or other
communications which may be required under this Agreement are to
be sent to the parties at the following addresses or such other
addresses as may subsequently be given to the other party in
writing:
Bank: The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Investor Services
Telephone: (718) 242-3455
Facsimile: (718) 242-1374
Copy to: The Chase Manhattan Bank, N.A.
Woolgate House
Coleman Street
London EC2P 2HD England
Attention: Global Investor Services
Telephone: 44-71-962-5000
Facsimile: 44-71-962-5377
Telex: 8954681CMBG
Customer: Name of Customer from Schedule A
c/o T. Rowe Price
100 East Pratt Street
Baltimore, MD 21202
Attention: Treasurer
Telephone: (410) 625-6658
Facsimile: (410) 547-0180
(i) Termination. This Agreement may be terminated by the
Customer or the Bank by giving ninety (90) days written notice to
the other, provided that such notice to the Bank shall specify
the names of the persons to whom the Bank shall deliver the
Assets in the Accounts. If notice of termination is given by the
Bank, the Customer shall, within ninety (90) days following
receipt of the notice, deliver to the Bank Instructions
specifying the names of the persons to whom the Bank shall
deliver the Assets. In either case the Bank will deliver the
Assets to the persons so specified, after deducting any amounts
which the Bank determines in good faith to be owed to it under
PAGE 13
Section 13. If within ninety (90) days following receipt of a
notice of termination by the Bank, the Bank does not receive
Instructions from the Customer specifying the names of the
persons to whom the Bank shall deliver the Assets, the Bank, at
its election, may deliver the Assets to a bank or trust company
doing business in the State of New York to be held and disposed
of pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold the Assets until Instructions
are provided to the Bank.
(j) Entire Agreement. This Agreement, including the
Schedules and Riders hereto, embodies the entire agreement and
understanding of the parties in respect of the subject matter
contained in this Agreement. This Agreement supersedes all other
custody or other agreements between the parties with respect to
such subject matter, which prior agreements are hereby terminated
effective as of the date hereof and shall have no further force
or effect.
EACH OF THE CUSTOMERS, INDIVIDUALLY
AND SEPARATELY LISTED ON SECTION I OF
SCHEDULE A HERETO
/s/Carmen F. Deyesu
By:________________________________
Carmen F. Deyesu
Treasurer & Vice President
EACH OF THE CUSTOMERS, INDIVIDUALLY
AND SEPARATELY LISTED ON SECTION II OF
SCHEDULE A HERETO
/s/Alvin M. Younger
By:____________________________________
Alvin M. Younger
Treasurer
EACH OF THE CUSTOMERS, INDIVIDUALLY
AND SEPARATELY LISTED ON SECTION III OF
SCHEDULE A HERETO
/s/Alvin M. Younger
By:___________________________________
Alvin M. Younger
Treasurer
PAGE 14
THE CHASE MANHATTAN BANK, N.A.
/s/Alan Naughton
By:_________________________________
Alan Naughton
Vice President
STATE OF )
: ss.
COUNTY OF )
On this day of , 19 , before me
personally came , to me known, who
being by me duly sworn, did depose and say that he/she resides in
at ;
that he/she is of
, the entity
described in and which executed the foregoing instrument; that
he/she knows the seal of said entity, that the seal affixed to
said instrument is such seal, that it was so affixed by order of
said entity, and that he/she signed his/her name thereto by like
order.
__________________________________
Sworn to before me this
day of , 19 .
________________________________
Notary
PAGE 15
STATE OF )
: ss.
COUNTY OF )
On this day of
,19 , before me personally came , to
me known, who being by me duly sworn, did depose and say that
he/she resides in
at ; that
he/she is a Vice President of THE CHASE MANHATTAN BANK, (National
Association), the corporation described in and which executed the
foregoing instrument; that he/she knows the seal of said
corporation, that the seal affixed to said instrument is such
corporate seal, that it was so affixed by order of the Board of
Directors of said corporation, and that he/she signed his/her
name thereto by like order.
___________________________________
Sworn to before me this
day of , 19 .
___________________________________
Notary
PAGE 16
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all
COMPANY ACT OF 1940 Customers listed under
Section I of this
Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
PAGE 17
Schedule A
Page 2 of 2
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all
T. Rowe Price Trust Company, as Customers under Section
Trustee for the Johnson Matthey II of this Schedule A.
Salaried Employee Savings Plan
Common Trust Funds
T. Rowe Price Trust Company, as Trustee
for the International Common Trust Fund
on behalf of the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable
to the Customer listed
RPFI International Partners, L.P. under Section III of
this Schedule A.
PAGE 18
ERISA Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
Each of the Entities Listed on Schedule A Hereto
effective January 3, 1994
Customer represents that the Assets being placed in the
Bank's custody are subject to ERISA. It is understood that in
connection therewith the Bank is a service provider and not a
fiduciary of the plan and trust to which the assets are related.
The Bank shall not be considered a party to the underlying plan
and trust and the Customer hereby assumes all responsibility to
assure that Instructions issued under this Agreement are in
compliance with such plan and trust and ERISA.
This Agreement will be interpreted as being in compliance
with the Department of Labor Regulations Section 2550.404b-1
concerning the maintenance of indicia of ownership of plan assets
outside of the jurisdiction of the district courts of the United
States.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
As used in this Agreement, the term Subcustodian and the
term securities depositories include a branch of the Bank,
a branch of a qualified U.S. bank, an eligible foreign
custodian, or an eligible foreign securities depository,
where such terms shall mean:
(a) "qualified U.S. bank" shall mean a U.S. bank as
described in paragraph (a)(2)(ii)(A)(1) of the
Department of Labor Regulations Section 2550.404b-1;
(b) "eligible foreign custodian" shall mean a banking
institution incorporated or organized under the laws
of a country other than the United States which is
supervised or regulated by that country's government
or an agency thereof or other regulatory authority in
the foreign jurisdiction having authority over banks;
and
(c) "eligible foreign securities depository" shall mean a
securities depository or clearing agency,
incorporated or organized under the laws of a country
other than the United States, which is supervised or
regulated by that country's government or an agency
thereof or other regulatory authority in the foreign
jurisdiction having authority over such depositories
or clearing agencies and which is described in
paragraph (c)(2) of the Department of Labor
Regulations Section 2550.404b-1.
Section 4. Use of Subcustodian.
PAGE 19
Subsection (d) of this section is modified by deleting the
last sentence.
Section 5. Deposit Account Payments.
Subsection (b) is amended to read as follows:
(b) In the event that any payment made under this Section
5 exceeds the funds available in the Deposit Account, such
discretionary advance shall be deemed a service provided
by the Bank under this Agreement for which it is entitled
to recover its costs as may be determined by the Bank in
good faith.
Section 10. Authorized Persons.
Add the following paragraph at the end of Section 10:
Customer represents that: a) Instructions will only be issued
by or for a fiduciary pursuant to Department of Labor
Regulation Section 404b-1 (a)(2)(i) and b) if Instructions
are to be issued by an investment manager, such entity will
meet the requirements of Section 3(38) of ERISA and will have
been designated by the Customer to manage assets held in the
Customer Accounts ("Investment Manager"). An Investment
Manager may designate certain of its employees to act as
Authorized Persons under this Agreement.
Section 14(a). Foreign Exchange Transactions.
Add the following paragraph at the end of Subsection 14(a):
Instructions to execute foreign exchange transactions with
the Bank, its subsidiaries, affiliates or Subcustodians will
include (1) the time period in which the transaction must be
completed; (2) the location i.e., Chase New York, Chase
London, etc. or the Subcustodian with whom the contract is to
be executed and (3) such additional information and
guidelines as may be deemed necessary; and, if the
Instruction is a standing Instruction, a provision allowing
such Instruction to be overridden by specific contrary
Instructions.
PAGE 20
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
Each of the Entities Listed on Schedule A Hereto
effective January 3, 1994
Customer represents that the Assets being placed in the
Bank's custody are subject to the Investment Company Act of 1940
(the Act), as the same may be amended from time to time.
Except to the extent that the Bank has specifically agreed to
comply with a condition of a rule, regulation, interpretation
promulgated by or under the authority of the SEC or the Exemptive
Order applicable to accounts of this nature issued to the Bank
(Investment Company Act of 1940, Release No. 12053, November 20,
1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that
the maintenance of Assets under this Agreement complies with such
rules, regulations, interpretations or exemptive order
promulgated by or under the authority of the Securities Exchange
Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in
this Agreement shall mean a branch of a qualified U.S. bank,
an eligible foreign custodian or an eligible foreign
securities depository, which are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank
as defined in Rule 17f-5 under the Investment Company Act of
1940;
(b) "eligible foreign custodian" shall mean (i) a banking
institution or trust company incorporated or organized under
the laws of a country other than the United States that is
regulated as such by that country's government or an agency
thereof and that has shareholders' equity in excess of $200
million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary
of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other
than the United States and that has shareholders' equity in
excess of $100 million in U.S. currency (or a foreign
currency equivalent thereof)(iii) a banking institution or
trust company incorporated or organized under the laws of a
country other than the United States or a majority owned
direct or indirect subsidiary of a qualified U.S. bank or
bank holding company that is incorporated or organized under
the laws of a country other than the United States which has
such other qualifications as shall be specified in
Instructions and approved by the Bank; or (iv) any other
PAGE 21
entity that shall have been so qualified by exemptive order,
rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a
securities depository or clearing agency, incorporated or
organized under the laws of a country other than the United
States, which operates (i) the central system for handling
securities or equivalent book-entries in that country, or
(ii) a transnational system for the central handling of
securities or equivalent book-entries.
The Customer represents that its Board of Directors has
approved each of the Subcustodians listed in Schedule B to this
Agreement and the terms of the subcustody agreements between the
Bank and each Subcustodian, which are attached as Exhibits I
through of Schedule B, and further represents that its
Board has determined that the use of each Subcustodian and the
terms of each subcustody agreement are consistent with the best
interests of the Fund(s) and its (their) shareholders. The Bank
will supply the Customer with any amendment to Schedule B for
approval. As requested by the Bank, the Customer will supply the
Bank with certified copies of its Board of Directors
resolution(s) with respect to the foregoing prior to placing
Assets with any Subcustodian so approved.
Section 11. Instructions.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions
made pursuant to Section 5 and 6 of this Agreement may be
made only for the purposes listed below. Instructions must
specify the purpose for which any transaction is to be made
and Customer shall be solely responsible to assure that
Instructions are in accord with any limitations or
restrictions applicable to the Customer by law or as may be
set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at
prices as confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or
otherwise become payable;
(c) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan or
merger, consolidation, reorganization, recapitalization or
readjustment;
(d) Upon conversion of Securities pursuant to their terms
into other securities;
(e) Upon exercise of subscription, purchase or other similar
rights represented by Securities;
(f) For the payment of interest, taxes, management or
supervisory fees, distributions or operating expenses;
PAGE 22
(g) In connection with any borrowings by the Customer
requiring a pledge of Securities, but only against receipt of
amounts borrowed;
(h) In connection with any loans, but only against receipt
of adequate collateral as specified in Instructions which
shall reflect any restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock
of the Customer and the delivery to, or the crediting to the
account of, the Bank, its Subcustodian or the Customer's
transfer agent, such shares to be purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the
Customer against delivery to the Bank, its Subcustodian or
the Customer's transfer agent of such shares to be so
redeemed;
(k) For delivery in accordance with the provisions of any
agreement among the Customer, the Bank and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under
covered call options, provided, however, that such Securities
shall be released only upon payment to the Bank of monies for
the premium due and a receipt for the Securities which are to
be held in escrow. Upon exercise of the option, or at
expiration, the Bank will receive from brokers the Securities
previously deposited. The Bank will act strictly in
accordance with Instructions in the delivery of Securities to
be held in escrow and will have no responsibility or
liability for any such Securities which are not returned
promptly when due other than to make proper request for such
return;
(m) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from
Securities or related transactions;
(n) For other proper purposes as may be specified in
Instructions issued by an officer of the Customer which shall
include a statement of the purpose for which the delivery or
payment is to be made, the amount of the payment or specific
Securities to be delivered, the name of the person or persons
to whom delivery or payment is to be made, and a
certification that the purpose is a proper purpose under the
instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in
Section 14(i).
PAGE 23
Section 12. Standard of Care; Liabilities.
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its
opinion, after due inquiry, the established procedures to be
followed by each of its branches, each branch of a qualified
U.S. bank, each eligible foreign custodian and each eligible
foreign securities depository holding the Customer's
Securities pursuant to this Agreement afford protection for
such Securities at least equal to that afforded by the Bank's
established procedures with respect to similar securities
held by the Bank and its securities depositories in New York.
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall
furnish the Customer such reports (or portions thereof) of
the Bank's system of internal accounting controls applicable
to the Bank's duties under this Agreement. The Bank shall
endeavor to obtain and furnish the Customer with such similar
reports as it may reasonably request with respect to each
Subcustodian and securities depository holding the Customer's
assets.
GLOBAL CUSTODY AGREEMENT
WITH
DATE
SPECIAL TERMS AND CONDITIONS RIDER
PAGE 24
January, 1994 Schedule B
SUB-CUSTODIANS EMPLOYED BY
THE CHASE MANHATTAN BANK, N.A. LONDON, GLOBAL CUSTODY
COUNTRY SUB-CUSTODIAN CORRESPONDENT BANK
ARGENTINA The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
Main Branch N.A. Buenos Aires
25 De Mayo 130/140
Buenos Aires
ARGENTINA
AUSTRALIA The Chase Manhattan Bank, The Chase
Australia Limited Manhattan Bank
36th Floor Australia Limited
World Trade Centre Sydney
Jamison Street
Sydney
New South Wales 2000
AUSTRALIA
AUSTRIA Creditanstalt - Bankvereln Credit Lyonnais
Schottengasse 6 Vienna
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered Bank Standard Chartered
18-20 Motijheel C.A. Bank Dhaka
Box 536,
Dhaka-1000
BANGLADESH
BELGIUM Generale Bank Credit Lyonnais
3 Montagne Du Parc Bank Brussels
1000 Bruxelles
BELGIUM
BOTSWANA Standard Chartered Bank Standard Chartered
Botswana Ltd. Bank Botswana Ltd.
4th Floor Commerce House Gaborone
The Mall
Gaborone
BOTSWANA
BRAZIL Banco Chase Manhattan, S.A. Banco Chase
Chase Manhattan Center Manhattan S.A.
Rua Verbo Divino, 1400 Sao Paulo
Sao Paulo, SP 04719-002
BRAZIL
PAGE 25
CANADA The Royal Bank of Canada Toronto Dominion
Royal Bank Plaza Bank
Toronto Toronto
Ontario M5J 2J5
CANADA
Canada Trust Toronto Dominion
Canada Trust Tower Bank
BCE Place Toronto
161 Bay at Front
Toronto
Ontario M5J 2T2
CANADA
CHILE The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
Agustinas 1235 N.A.
Casilla 9192 Santiago
Santiago
CHILE
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia
Sociedad Fiduciaria S.A. Sociedad
Av. Jimenez No 8-89 Fiduciaria
Santafe de Bogota, DC Santafe de Bogota
COLOMBIA
CZECH Ceskoslovenska Obchodni Ceskoslovenska
REPUBLC Banka, A.S. Obchodni Banka,
Na Prikoope 14 A.S.
115 20 Praha 1 Praha
CZECH REPUBLIC
DENMARK Den Danske Bank Den Danske Bak
2 Holmens Kanala DK 1091 Copenhagen
Copenhagen
DENMARK
EUROBONDS Cedel S.A. ECU:Lloyds Bank
67 Boulevard Grande Duchesse PLC
Charlotte International
LUXEMBOURG Banking Dividion
A/c The Chase Manhattan London
Bank, N.A. For all other
London currencies: see
A/c No. 17817 relevant country
EURO CDS First Chicago Clearing ECU:Lloyds Bank
Centre PLC
27 Leadenhall Street Banking Division
London EC3A 1AA London
UNITED KINGDOM For all other
currencies: see
relevant country
PAGE 26
FINLAND Kansallis-Osake-Pankki Kanasallis-Osake-
Aleksanterinkatu 42 Pankki
00100 Helsinki 10
FINLAND
FRANCE Banque Paribas Societe Generale
Ref 256 Paris
BP 141
3, Rue D'Antin
75078 Paris
Cedex 02
FRANCE
GERMANY Chase Bank A.G. Chase Bank A.G.
Alexanderstrasse 59 Frankfurt
Postfach 90 01 09
60441 Frankfurt/Main
GERMANY
GREECE National Bank of Greece S.A. National Bank of
38 Stadiou Street Greece S.A. Athens
Athens A/c Chase
GREECE Manhattan Bank,
N.A., London
A/c No.
040/7/921578-68
HONG KONG The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
40/F One Exchange Square N.A.
8, Connaught Place Hong Kong
Central, Hong Kong
HONG KONG
HUNGARY Citibank Budapest Rt. Citibank Budapest
Vaci Utca 19-21 Rt.
1052 Budapest V Budapest
HUNGARY
INDIA The Hongkong and Shanghai The Hongkong and
Banking Corporation Limited Shanghai
52/60 Mahatma Gandhi Road Banking
Bombay 400 001 Corporation
INDIA Limited
Bombay
INDONESIA The Hongkong and Shanghai The Chase
Banking Corporation Limited Manhattan Bank,
World Trade Center N.A.
J1. Jend Sudirman Kav. 29-31 Jakarta
Jakarta 10023
INDONESIA
PAGE 27
IRELAND Bank of Ireland Allied Irish Bank
International Financial Dublin
Services Centre
1 Hargourmaster Place
Dublin 1
IRELAND
ISRAEL Bank Leumi Le-Israel B.M. Bank Leumi Le-
19 Herzi Street Israel B.M.
65136 Tel Aviv Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
Piazza Meda 1 N.A.
20121 Milan Milan
ITALY
JAPAN The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
1-3 Marunouchi 1-Chome N.A.
Chiyoda-Ku Tokyo
Tokyo 100
JAPAN
JORDAN Arab Bank Limited Arab Bank Limited
P.O. Box 950544-5 Amman
Amman
Shmeisani
JORDAN
LUXEMBOURG Banque Generale du Banque Generale du
Luxembourg S.A. Luxembourg S.A.
27 Avenue Monterey Luxembourg
LUXEMBOURG
MALAYSIA The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
Pernas International N.A.
Jalan Sultan Ismail Kuala Lumpur
50250, Kuala Lumpur
MALAYSIA
MEXICO The Chase Manhattan Bank, No correspondent
(Equities) N.A. Bank
Hamburgo 213, Piso 7
06660 Mexico D.F.
MEXICO
(Government Banco Nacional de Mexico, Banque Commerciale
Bonds) Avenida Juarez No. 104 - 11 du Maroc
Piso Casablanca
06040 Mexico D.F.
MEXICO
PAGE 28
NETHERLANDS ABN AMRO N.V. Credit Lyonnais
Securities Centre Bank Nederland
P.O. Box 3200 N.V.
4800 De Breda Rotterdam
NETHERLANDS
NEW ZEALAND National Nominees Limited National Bank of
Level 2 BNZ Tower New Zealand
125 Queen Street Wellington
Auckland
NEW ZEALAND
NORWAY Den Norske Bank Den Norske Bank
Kirkegaten 21 Oslo
Oslo 1
NORWAY
PAKISTAN Citibank N.A. Citibank N.A.
State Life Building No.1 Karachi
I.I. Chundrigar Road
Karachi
PAKISTAN
PERU Citibank, N.A. Citibank N.A.
Camino Real 457 Lima
CC Torre Real - 5th Floor
San Isidro, Lima 27
PERU
PHILIPPINES The Hongkong and Shanghai The Hongkong and
Banking Corporation Limited Shaghai Banking
Hong Kong Bank Centre 3/F Corporation
San Miguel Avenue Limited
Ortigas Commercial Centre Manila
Pasig Metro Manila
PHILIPPINES
POLAND Bank Polska Kasa Opieki S.A. Bank Potska Kasa
6/12 Nowy Swiat Str Opieki S.A.
00-920 Warsaw Warsaw
POLAND
PORTUGAL Banco Espirito Santo & Banco Pinto &
Comercial de Lisboa Sotto Mayor
Servico de Gestaode Titulos Avenida Fontes
R. Mouzinho da Silvelra, 36 Pereira de Melo
r/c 1000 Lisbon
1200 Lisbon
PORTUGAL
PAGE 29
SHANGHAI The Hongkong and Shanghai The Chase
(CHINA) Banking Corporation Limited Manhattan Bank,
Shanghai Branch N.A.
Corporate Banking Centre Hong Kong
Unit 504, 5/F Shanghai
Centre
1376 Hanjing Xi Lu
Shanghai
THE PEOPLE'S REPUBLIC OF
CHINA
SCHENZHEN The Hongkong and Shanghai The Chase
(CHINA) Banking Corporation Limited Manhattan Bank,
1st Floor N.A.
Central Plaza Hotel Hong Kong
No. 1 Chun Feng Lu
Shenzhen
THE PEOPLE'S REPUBLIC OF
CHINA
SINGAPORE The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
Shell Tower N.A.
50 Raffles Place Singapore
Singapore 0104
SINGAPORE
SOUTH KOREA The Hongkong & Shanghai The Hongkong &
Banking Corporation Limited Shanghai Banking
6/F Kyobo Building Corporation
#1 Chongro, 1-ka Chongro-Ku, Limited
Seoul Seoul
SOUGH KOREA
SPAIN The Chase Manhattan Bank, Banco Zaragozano,
N.A. S.A.
Calle Peonias 2 Madrid
7th Floor
La Piovera
28042 Madrid
SPAIN
URUGUAY The First National Bank of The First National
Boston Bank of Boston
Zabala 1463 Montevideo
Montevideo
URUGUAY
U.S.A The Chase Manhattan Bank, The Chase
N.A. Manhattan Bank,
1 Chase Manhattan Plaza N.A.
New York New York
NY 10081
U.S.A.
PAGE 30
VENEZUELA Citibank N.A. Citibank N.A.
Carmelitas a Altagracia Caracas
Edificio Citibank
Caracas 1010
VENEZUELA
PAGE 31
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of April 18, 1994 (the
"Amendment Agreement") to the Global Custody Agreement, effective
January 3, 1994 (the "Custody Agreement") by and between each of
the Entities listed in Attachment A hereto, separately and
individually (each such entity referred to hereinafter as the
"Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank").
Terms defined in the Custody Agreement are used herein as therein
defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its
global custodian and the bank wishes to accept such appointment
pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody
Agreement ("Schedule A") shall be amended to add each
Customer listed in Attachment A hereto. The revised
Schedule A incorporating these changes in the form
attached hereto as Attachment B shall supersede the
existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all
respects by all the terms and conditions of the Custody
Agreement and shall be fully liable thereunder as a
"Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the
Custody Agreement is in full force and effect and as so
amended is hereby ratified, approved and confirmed by the
Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be
construed in accordance with and governed by the law of
the State of New York without regard to its conflict of
law principles.
PAGE 32
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By:________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By: ______________________________
Carmen F. Deyesu
Treasurer
PAGE 33
Attachment A
LIST OF CUSTOMERS
T. Rowe Price International Series, Inc. on behalf of the
T. Rowe Price International Stock Portfolio
T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of
T. Rowe Price Limited-Term Bond Portfolio
PAGE 34
Attachment B
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT The Mutual Fund Rider is
COMPANIES/PORTFOLIOS applicable to all Customers
REGISTERED UNDER THE listed under Section I
INVESTMENT COMPANY ACT OF 1940 of this Schedule A.
PAGE 35
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price New America Growth Fund, Inc.
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all Customers
T. Rowe Price Trust Company, under Section II of this
as Trustee for the Johnson Schedule A.
Matthey Salaried Employee
Savings Plan
PAGE 36
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
PAGE 37
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of August 15, 1994 (the
"Amendment Agreement") to the Global Custody Agreement, effective
January 3, 1994, as amended (the "Custody Agreement") by and
between each of the Entities listed in Attachment A hereto,
separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A.
(the "Bank"). Terms defined in the Custody Agreement are used
herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its
global custodian and the Bank wishes to accept such appointment
pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody
Agreement ("Schedule A") shall be amended to add each Customer
listed in Attachment A hereto. The revised Schedule A
incorporating these changes in the form attached hereto as
Attachment B shall supersede the existing Schedule A in its
entirety.
2. Agreement. The Customer agrees to be bound in all
respects by all the terms and conditions of the Custody Agreement
and shall be fully liable thereunder as a "Customer" as defined
in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby,
the Custody Agreement is in full force and effect and as so
amended is hereby ratified, approved and confirmed by the
Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be
construed in accordance with and governed by the law of the State
of New York without regard to its conflict of law principles.
PAGE 38
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By:_________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By:_________________________________
Carmen F. Deyesu
Treasurer
PAGE 39
Attachment A
LIST OF CUSTOMERS
T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
PAGE 40
Attachment B
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT The Mutual Fund Rider is
COMPANIES/PORTFOLIOS applicable to all Customers
REGISTERED UNDER THE listed under Section I
INVESTMENT COMPANY ACT OF 1940 of this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
PAGE 41
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all Customers
T. Rowe Price Trust Company, under Section II of this
as Trustee for the Johnson Schedule A.
Matthey Salaried Employee
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
PAGE 42
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of November 28, 1994 (the
"Amendment Agreement") to the Global Custody Agreement, effective
January 3, 1994, as amended (the "Custody Agreement") by and
between each of the Entities listed in Attachment A hereto,
separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A.
(the "Bank"). Terms defined in the Custody Agreement are used
herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its
global custodian and the Bank wishes to accept such appointment
pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody
Agreement ("Schedule A") shall be amended to add each Customer
listed in Attachment A hereto. The revised Schedule A
incorporating these changes in the form attached hereto as
Attachment B shall supersede the existing Schedule A in its
entirety.
2. Agreement. The Customer agrees to be bound in all
respects by all the terms and conditions of the Custody Agreement
and shall be fully liable thereunder as a "Customer" as defined
in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby,
the Custody Agreement is in full force and effect and as so
amended is hereby ratified, approved and confirmed by the
Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be
construed in accordance with and governed by the law of the State
of New York without regard to its conflict of law principles.
PAGE 43
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By:_________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By:_________________________________
Carmen F. Deyesu
Treasurer
PAGE 44
Attachment A
LIST OF CUSTOMERS
T. Rowe Price Value Fund, Inc.
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
PAGE 45
Attachment B
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT The Mutual Fund Rider is
COMPANIES/PORTFOLIOS applicable to all Customers
REGISTERED UNDER THE listed under Section I
INVESTMENT COMPANY ACT OF 1940 of this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
PAGE 46
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all Customers
T. Rowe Price Trust Company, under Section II of this
as Trustee for the Johnson Schedule A.
Matthey Salaried Employee
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
PAGE 47
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of May 31, 1995 (the
"Amendment Agreement") to the Global Custody Agreement, effective
January 3, 1994, as amended (the "Custody Agreement") by and
between each of the Entities listed in Attachment A hereto,
separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A.
(the "Bank"). Terms defined in the Custody Agreement are used
herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its
global custodian and the Bank wishes to accept such appointment
pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody
Agreement ("Schedule A") shall be amended to add and delete
certain Customers as specified in Attachment A hereto. The
revised Schedule A incorporating these changes in the form
attached hereto as Attachment B shall supersede the existing
Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all
respects by all the terms and conditions of the Custody Agreement
and shall be fully liable thereunder as a "Customer" as defined
in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby,
the Custody Agreement is in full force and effect and as so
amended is hereby ratified, approved and confirmed by the
Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be
construed in accordance with and governed by the law of the State
of New York without regard to its conflict of law principles.
PAGE 48
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By:_________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By:_________________________________
Carmen F. Deyesu
Treasurer
PAGE 49
Attachment A
LIST OF CUSTOMERS
Add the following Fund:
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
Delete the following Fund:
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
PAGE 50
Attachment B
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT The Mutual Fund Rider is
COMPANIES/PORTFOLIOS applicable to all Customers
REGISTERED UNDER THE listed under Section I
INVESTMENT COMPANY ACT OF 1940 of this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
PAGE 51
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all Customers
T. Rowe Price Trust Company, under Section II of this
as Trustee for the Johnson Schedule A.
Matthey Salaried Employee
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
PAGE 52
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of November 1, 1995 (the
"Amendment Agreement") to the Global Custody Agreement, effective
January 3, 1994, as amended (the "Custody Agreement") by and
between each of the Entities listed in Attachment A hereto,
separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A.
(the "Bank"). Terms defined in the Custody Agreement are used
herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its
global custodian and the Bank wishes to accept such appointment
pursuant to the terms of the Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody
Agreement ("Schedule A") shall be amended to add and delete
certain Customers as specified in Attachment A hereto. The
revised Schedule A incorporating these changes in the form
attached hereto as Attachment B shall supersede the existing
Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all
respects by all the terms and conditions of the Custody Agreement
and shall be fully liable thereunder as a "Customer" as defined
in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby,
the Custody Agreement is in full force and effect and as so
amended is hereby ratified, approved and confirmed by the
Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be
construed in accordance with and governed by the law of the State
of New York without regard to its conflict of law principles.
PAGE 53
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan R. Naughton
By:_________________________________
Alan R. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By:_________________________________
Carmen F. Deyesu
Treasurer
PAGE 54
Attachment A
LIST OF CUSTOMERS
Add the following Funds:
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Stock Fund
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Health & Life Sciences Fund, Inc.
PAGE 55
Attachment B
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT The Mutual Fund Rider is
COMPANIES/PORTFOLIOS applicable to all Customers
REGISTERED UNDER THE listed under Section I
INVESTMENT COMPANY ACT OF 1940 of this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
T. Rowe Price Health & Life Sciences Fund, Inc.
PAGE 56
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Corporate Income Fund, Inc.
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is
applicable to all Customers
T. Rowe Price Trust Company, under Section II of this
as Trustee for the Johnson Schedule A.
Matthey Salaried Employee
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
The Transfer Agency and Service Agreement between T. Rowe
Price Services, Inc. and T. Rowe Price Funds, dated January 1,
1996.
PAGE 1
TRANSFER AGENCY AND SERVICE AGREEMENT
between
T. ROWE PRICE SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
PAGE 2
TABLE OF CONTENTS
Page
Article A Terms of Appointment . . . . . . . . . . . . . 2
Article B Duties of Price Services . . . . . . . . . . . 2
1. Receipt of Orders/Payments . . . . . . . . 3
2. Written Redemptions . . . . . . . . . . . 4
3. Transfers . . . . . . . . . . . . . . . . 5
4. Confirmations . . . . . . . . . . . . . . 6
5. Returned Checks and ACH Debits . . . . . . 6
6. Redemptions of Shares under Ten Day Hold . 6
7. Dividends, Distributions and Other
Corporate Actions . . . . . . . . . . . . 8
8. Unclaimed Payments and Certificates . . . 9
9. Books and Records . . . . . . . . . . . . 9
10. Authorized Issued and Outstanding Shares 11
11. Tax Information . . . . . . . . . . . . 11
12. Information to be Furnished to the Fund 12
13. Correspondence . . . . . . . . . . . . . 12
14. Lost or Stolen Securities . . . . . . . 12
15. Telephone Services . . . . . . . . . . . 12
16. Proxies . . . . . . . . . . . . . . . . 13
17. Form N-SAR . . . . . . . . . . . . . . . 13
18. Cooperation With Accountants . . . . . . 13
19. Blue Sky . . . . . . . . . . . . . . . . 13
20. Other Services . . . . . . . . . . . . . 14
21. Fees and Out-of-Pocket Expenses . . . . 14
Article C Representations and Warranties of the Price
Services . . . . . . . . . . . . . . . . . . 15
Article D Representations and Warranties of the Fund . 16
Article E Standard of Care/Indemnification . . . . . . 17
Article F Dual Interests . . . . . . . . . . . . . . . 19
Article G Documentation . . . . . . . . . . . . . . . . 19
Article H References to Price Services . . . . . . . . 20
Article I Compliance with Governmental Rules and
Regulations . . . . . . . . . . . . . . . . . 21
Article J Ownership of Software and Related Material . 21
PAGE 3
Article K Quality Service Standards . . . . . . . . . . 21
Article L As of Transactions . . . . . . . . . . . . . 21
Article M Term and Termination of Agreement . . . . . . 24
Article N Notice . . . . . . . . . . . . . . . . . . . 25
Article O Assignment . . . . . . . . . . . . . . . . . 25
Article P Amendment/Interpretive Provisions . . . . . . 25
Article Q Further Assurances . . . . . . . . . . . . . 25
Article R Maryland Law to Apply . . . . . . . . . . . . 26
Article S Merger of Agreement . . . . . . . . . . . . . 26
Article T Counterparts . . . . . . . . . . . . . . . . 26
Article U The Parties . . . . . . . . . . . . . . . . . 26
Article V Directors, Trustees, Shareholders and
Massachusetts Business Trust . . . . . . . . 26
Article W Captions . . . . . . . . . . . . . . . . . . 27
PAGE 4
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the first day of January, 1996, by and
between T. ROWE PRICE SERVICES, INC., a Maryland corporation
having its principal office and place of business at 100 East
Pratt Street, Baltimore, Maryland 21202 ("Price Services"), and
EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each such
Fund individually hereinafter referred to as "the Fund", whose
definition may be found in Article U);
WHEREAS, the Fund desires to appoint Price Services as its
transfer agent, dividend disbursing agent and agent in connection
with certain other activities, and Price Services desires to
accept such appointment;
WHEREAS, Price Services represents that it is registered
with the Securities and Exchange Commission as a Transfer Agent
under Section 17A of the Securities Exchange Act of 1934 ("'34
Act") and will notify each Fund promptly if such registration is
revoked or if any proceeding is commenced before the Securities
and Exchange Commission which may lead to such revocation;
WHEREAS, certain of the Funds are named investment options
under various tax-sheltered retirement plans including, but not
limited to, individual retirement accounts, simplified employee
PAGE 5
pension plans, deferred compensation plans, 403(b) plans, and
profit sharing, thrift, and money purchase pension plans for
self-employed individuals and professional partnerships and
corporations, (collectively referred to as "Retirement Plans");
WHEREAS, Price Services has the capability of providing
special services, on behalf of the Funds, for the accounts of
shareholders participating in these Retirement Plans ("Retirement
Accounts").
WHEREAS, Price Services may subcontract or jointly contract
with other parties, on behalf of the Funds to perform certain of
the functions and services described herein including services to
Retirement Plans and Retirement Accounts. Price Services may
also enter into, on behalf of the Funds, certain banking
relationships to perform various banking services including, but
not limited to, check deposits, check disbursements, automated
clearing house transactions ("ACH") and wire transfers. Subject
to guidelines mutually agreed upon by the Funds and Price
Services, excess balances, if any, resulting from these banking
relationships will be invested and the income therefrom will be
used to offset fees which would otherwise be charged to the Funds
under this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
PAGE 6
A. Terms of Appointment
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Price Services to
act, and Price Services agrees to act, as the Fund's transfer
agent, dividend disbursing agent and agent in connection with:
(1) the Fund's authorized and issued shares of its common stock
or shares of beneficial interest (all such stock and shares to be
referred to as "Shares"); (2) any accumulation, open-account or
similar plans provided to the shareholders of the Fund
("Shareholders"), including, without limitation, any periodic
investment plan or periodic withdrawal program; and (3) certain
Retirement Plan and Retirement Accounts as agreed upon by the
parties.
The parties to the Agreement hereby acknowledge that from
time to time, Price Services and T. Rowe Price Trust Company may
enter into contracts ("Other Contracts") with employee benefit
plans and/or their sponsors for the provision of certain plan
participant services to Retirement Plans and Retirement Accounts.
Compensation paid to Price Services pursuant to this Agreement
is with respect to the services described herein and not with
respect to services provided under Other Contracts.
PAGE 7
B. Duties of Price Services
Price Services agrees that it will perform the following
services:
1. Receipt of Orders/Payments
Receive for acceptance, orders/payments for the
purchase of Shares and promptly deliver payment and
appropriate documentation thereof to the authorized
custodian of the Fund (the "Custodian"). Upon receipt of
any check or other instrument drawn or endorsed to it as
agent for, or identified as being for the account of, the
Fund, Price Services will process the order as follows:
o Examine the check to determine if the check conforms to
the Funds' acceptance procedures (including certain
third-party check procedures). If the check conforms,
Price Services will endorse the check and include the
date of receipt, will process the same for payment, and
deposit the net amount to the parties agreed upon
designated bank account prior to such deposit in the
Custodial account, and will notify the Fund and the
Custodian, respectively, of such deposits (such
notification to be given on a daily basis of the total
amount deposited to said accounts during the prior
business day);
PAGE 8
o Open a new account, if necessary, and credit the
account of the investor with the number of Shares to be
purchased according to the price of the Fund's Shares
in effect for purchases made on that date, subject to
any instructions which the Fund may have given to Price
Services with respect to acceptance of orders for
Shares relating to payments so received by it;
o Maintain a record of all unpaid purchases and report
such information to the Fund daily;
o Process periodic payment orders, as authorized by
investors, in accordance with the payment procedures
for pre-authorized checking ("PAC") and ACH purchases
mutually agreed upon by both parties;
o Receive monies from Retirement Plans and determine the
proper allocation of such monies to the Retirement
Accounts based upon instructions received from
Retirement Plan participants or Retirement Plan
administrators ("Administrators"); and
o Process telephone orders for purchases of Fund shares
from the Shareholder's bank account (via wire or ACH)
to the Fund in accordance with procedures mutually
agreed upon by both parties.
PAGE 9
Upon receipt of funds through the Federal Reserve Wire
System that are designated for purchases in Funds which declare
dividends at 12:00 p.m. (or such time as set forth in the Fund's
current prospectus), Price Services shall promptly notify the
Fund and the Custodian of such deposit.
2. Redemptions
Receive for acceptance redemption requests, including
telephone redemptions and requests received from
Administrators for distributions to participants or their
designated beneficiaries or for payment of fees due the
Administrator or such other person, including Price
Services, and deliver the appropriate documentation thereof
to the Custodian. Price Services shall receive and stamp
with the date of receipt, all requests for redemptions of
Shares (including all certificates delivered to it for
redemption) and shall process said redemption requests as
follows, subject to the provisions of Section 7 hereof:
o Examine the redemption request and, for written
redemptions, the supporting documentation, to determine
that the request is in good order and all requirements
have been met;
PAGE 10
o Notify the Fund on the next business day of the total
number of Shares presented and covered by all such
requests;
o As set forth in the prospectus of the Fund, and in any
event, on or prior to the seventh (7th) calendar day
succeeding any such request for redemption, Price
Services shall, from funds available in the accounts
maintained by Price Services as agent for the Funds,
pay the applicable redemption price in accordance with
the current prospectus of the Fund, to the investor,
participant, beneficiary, Administrator or such other
person, as the case may be;
o If any request for redemption does not comply with the
Fund's requirements, Price Services shall promptly
notify the investor of such fact, together with the
reason therefore, and shall effect such redemption at
the price in effect at the time of receipt of all
appropriate documents;
o Make such withholdings as may be required under
applicable Federal tax laws;
o In the event redemption proceeds for the payment of
fees are to be wired through the Federal Reserve Wire
System or by bank wire, Price Services shall cause such
PAGE 11
proceeds to be wired in Federal funds to the bank
account designated; and
o Process periodic redemption orders as authorized by the
investor in accordance with the periodic withdrawal
procedures for Systematic Withdrawal Plan ("SWP") and
systematic ACH redemptions mutually agreed upon by both
parties.
Procedures and requirements for effecting and accepting
redemption orders from investors by telephone, Tele*Access,
computer, Mailgram, or written instructions shall be
established by mutual agreement between Price Services and
the Fund consistent with the Fund's current prospectus.
3. Transfers
Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions and
documentation and examine such instructions for conformance
with appropriate procedures and requirements. In this
regard, Price Services, upon receipt of a proper request for
transfer, including any transfer involving the surrender of
certificates of Shares, is authorized to transfer, on the
records of the Fund, Shares of the Fund, including
cancellation of surrendered certificates, if any, to credit
a like amount of Shares to the transferee and to
PAGE 12
countersign, issue and deliver new certificates, if
requested, for those Funds issuing certificates.
4. Confirmations
Mail all confirmations and other enclosures requested
by the Fund to the shareholder, and in the case of
Retirement Accounts, to the Administrators, as may be
required by the Funds or by applicable Federal or state law.
5. Returned Checks and ACH Debits
In order to minimize the risk of loss to the Fund by
reason of any check being returned unpaid, Price Services
will promptly identify and follow-up on any check or ACH
debit returned unpaid. For items returned, Price Services
may telephone the investor and/or redeposit the check or
debit for collection or cancel the purchase, as deemed
appropriate. Price Services and the Funds will establish
procedures for the collection of money owed the Fund from
investors who have caused losses due to these returned
items.
6. Redemption of Shares under Ten Day Hold
o Uncollected Funds
Shares purchased by personal, corporate, or
governmental check, or by ACH will be considered
PAGE 13
uncollected until the tenth calendar date following the
trade date of the trade ("Uncollected Funds");
o Good Funds
Shares purchased by treasurer's, cashier, certified, or
official check, or by wire transfer will be considered
collected immediately ("Good Funds"). Absent
information to the contrary (i.e., notification from
the payee institution), Uncollected Funds will be
considered Good Funds on the tenth calendar day
following trade date.
o Redemption of Uncollected Funds
o Shareholders making telephone requests for
redemption of shares purchased with Uncollected
Funds will be given two options:
1. The Shareholder will be permitted to exchange
to a money market fund to preserve principal until
the payment is deemed Good Funds,
2. The redemption can be processed utilizing the
same procedures for written redemptions described
below.
o If a written redemption request is made for shares
where any portion of the payment for said shares
is in Uncollected Funds, and the request is in
PAGE 14
good order, Price Services will promptly obtain
the information relative to the payment necessary
to determine when the payment becomes Good Funds.
The redemption will be processed in accordance
with normal procedures, and the proceeds will be
held until confirmation that the payment is Good
Funds. On the seventh (7th) calendar day after
trade date, and each day thereafter until either
confirmation is received or the tenth (10th)
calendar day, Price Services will call the paying
institution to request confirmation that the check
or ACH in question has been paid. On the tenth
calendar day after trade date, the redemption
proceeds will be released, regardless of whether
confirmation has been received.
o Checkwriting Redemptions.
o Daily, all checkwriting redemptions $10,000 and
over reported as Uncollected Funds or insufficient
funds will be reviewed. An attempt will be made
to contact the shareholder to make good the funds
(through wire, exchange, transfer). Generally by
12:00 p.m. the same day, if the matter has not
been resolved, the redemption request will be
PAGE 15
rejected and the check returned to the
Shareholder.
o All checkwriting redemptions under $10,000
reported as Uncollected or insufficient funds will
be rejected and the check returned to the
Shareholder.
o Confirmations of Available Funds
The Fund expects that situations may develop whereby it
would be beneficial to determine if a person who has
placed an order for Shares has sufficient funds in his
or her checking account to cover the payment for the
Shares purchased. When this situation occurs, Price
Services may call the bank in question and request that
it confirm that sufficient funds to cover the purchase
are currently credited to the account in question.
Price Services will maintain written documentation or a
recording of each telephone call which is made under
the procedures outlined above. None of the above
procedures shall preclude Price Services from inquiring
as to the status of any check received by it in payment
for the Fund's Shares as Price Services may deem
appropriate or necessary to protect both the Fund and
PAGE 16
Price Services. If a conflict arises between Section 2
and this Section 7, Section 7 will govern.
7. Dividends, Distributions and Other Corporate Actions
o The Fund will promptly inform Price Services of the
declaration of any dividend, distribution, stock split
or any other distributions of a similar kind on account
of its Capital Stock.
o Price Services shall act as Dividend Disbursing Agent
for the Fund, and as such, shall prepare and make
income and capital gain payments to investors. As
Dividend Disbursing Agent, Price Services will on or
before the payment date of any such dividend or
distribution, notify the Custodian of the estimated
amount required to pay any portion of said dividend or
distribution which is payable in cash, and the Fund
agrees that on or about the payment date of such
distribution, it shall instruct the Custodian to make
available to Price Services sufficient funds for the
cash amount to be paid out. If an investor is entitled
to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits will be
made to his or her account.
PAGE 17
8. Unclaimed Payments and Certificates
In accordance with procedures agreed upon by both
parties, report abandoned property to appropriate state and
governmental authorities of the Fund. Price Services shall,
90 days prior to the annual reporting of abandoned property
to each of the states, make reasonable attempts to locate
Shareholders for which (a) checks or share certificates have
been returned; (b) for which accounts have aged outstanding
checks; or (c) accounts with unissued shares that have been
coded with stop mail and meet the dormancy period guidelines
specified in the individual states. Price Services shall
make reasonable attempts to contact shareholders for those
accounts which have significant aged outstanding checks and
those checks meet a specified dollar threshold.
9. Books and Records
Maintain records showing for each Shareholder's
account, Retirement Plan or Retirement Account, as the case
may be, the following:
o Names, address and tax identification number;
o Number of Shares held;
o Certain historical information regarding the
account of each Shareholder, including dividends
PAGE 18
and distributions distributed in cash or invested
in Shares;
o Pertinent information regarding the establishment
and maintenance of Retirement Plans and Retirement
Accounts necessary to properly administer each
account;
o Information with respect to the source of
dividends and distributions allocated among income
(taxable and nontaxable income), realized short-
term gains and realized long-term gains;
o Any stop or restraining order placed against a
Shareholder's account;
o Information with respect to withholdings on
domestic and foreign accounts;
o Any instructions from a Shareholder including, all
forms furnished by the Fund and executed by a
Shareholder with respect to (i) dividend or
distribution elections, and (ii) elections with
respect to payment options in connection with the
redemption of Shares;
o Any correspondence relating to the current
maintenance of a Shareholder's account;
PAGE 19
o Certificate numbers and denominations for any
Shareholder holding certificates;
o Any information required in order for Price
Services to perform the calculations contemplated
under this Agreement.
Price Services shall maintain files and furnish
statistical and other information as required under this
Agreement and as may be agreed upon from time to time by
both parties or required by applicable law. However, Price
Services reserves the right to delete, change or add any
information to the files maintained; provided such
deletions, changes or additions do not contravene the terms
of this Agreement or applicable law and do not materially
reduce the level of services described in this Agreement.
Price Services shall also use its best efforts to obtain
additional statistical and other information as each Fund
may reasonably request for additional fees as may be agreed
to by both parties.
Any such records maintained pursuant to Rule 31a-1
under the Investment Company Act of 1940 ("the Act") will be
preserved for the periods and maintained in a manner
prescribed in Rule 31a-2 thereunder. Disposition of such
records after such prescribed periods shall be as mutually
PAGE 20
agreed upon by the Fund and Price Services. The retention
of such records, which may be inspected by the Fund at
reasonable times, shall be at the expense of the Fund. All
records maintained by Price Services in connection with the
performance of its duties under this Agreement will remain
the property of the Fund and, in the event of termination of
this Agreement, will be delivered to the Fund as of the date
of termination or at such other time as may be mutually
agreed upon.
All books, records, information and data pertaining to
the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of
this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except after
prior notification to and approval by the other party
hereto, which approval shall not be unreasonably withheld
and may not be withheld where Price Services or the Fund may
be exposed to civil or criminal contempt proceedings for
failure to comply; when requested to divulge such
information by duly constituted governmental authorities; or
after so requested by the other party hereto.
PAGE 21
10. Authorized Issued and Outstanding Shares
Record the issuance of Shares of the Fund and maintain,
pursuant to Rule 17Ad-10(e) of the '34 Act, a record of the
total number of Shares of the Fund which are authorized,
issued and outstanding, based upon data provided to it by
the Fund. Price Services shall also provide the Fund on a
regular basis the total number of Shares which are
authorized and issued and outstanding. Price Services shall
have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance
of any laws relating to the issuance or sale of such Shares.
11. Tax Information
Prepare and file with the Internal Revenue Service and
with other appropriate state agencies and, if required, mail
to investors, those returns for reporting dividends and
distributions paid as required to be so filed and mailed,
and shall withhold such sums required to be withheld under
applicable Federal income tax laws, rules, and regulations.
Additionally, Price Services will file and, as applicable,
mail to investors, any appropriate information returns
required to be filed in connection with Retirement Plan
processing, such as 1099R, 5498, as well as any other
appropriate forms that the Fund or Price Services may deem
PAGE 22
necessary. The Fund and Price Services shall agree to
procedures to be followed with respect to Price Services'
responsibilities in connection with compliance with back-up
withholding and other tax laws.
12. Information to be Furnished to the Fund
Furnish to the Fund such information as may be agreed
upon between the Fund and Price Services including any
information that the Fund and Price Services agree is
necessary to the daily operations of the business.
13. Correspondence
Promptly and fully answer correspondence from
shareholders and Administrators relating to Shareholder
Accounts, Retirement Accounts, transfer agent procedures,
and such other correspondence as may from time to time be
mutually agreed upon with the Funds. Unless otherwise
instructed, copies of all correspondence will be retained by
Price Services in accordance with applicable law and
procedures.
14. Lost or Stolen Securities
Pursuant to Rule 17f-1 of the '34 Act, report to the
Securities Information Center and/or the FBI or other
appropriate person on Form X-17-F-1A all lost, stolen,
missing or counterfeit securities. Provide any other
PAGE 23
services relating to lost, stolen or missing securities as
may be mutually agreed upon by both parties.
15. Telephone Services
Maintain a Telephone Servicing Staff of representatives
("Representatives") sufficient to timely respond to all
telephonic inquiries reasonably foreseeable. The
Representatives will also effect telephone purchases,
redemptions, exchanges, and other transactions mutually
agreed upon by both parties, for those Shareholders who have
authorized telephone services. The Representatives shall
require each Shareholder effecting a telephone transaction
to properly identify himself/herself before the transaction
is effected, in accordance with procedures agreed upon
between by both parties. Procedures for processing
telephone transactions will be mutually agreed upon by both
parties. Price Services will also be responsible for
providing Tele*Access, PC*Access and such other Services as
may be offered by the Funds from time to time. Price
Services will maintain a special Shareholder Servicing staff
to service certain Shareholders with substantial
relationships with the Funds.
PAGE 24
16. Proxies
Monitor the mailing of proxy cards and other material
supplied to it by the Fund in connection with Shareholder
meetings of the Fund and shall coordinate the receipt,
examination and tabulation of returned proxies and the
certification of the vote to the Fund.
17. Form N-SAR
Maintain such records, if any, as shall enable the Fund
to fulfill the requirements of Form N-SAR.
18. Cooperation With Accountants
Cooperate with each Fund's independent public
accountants and take all reasonable action in the
performance of its obligations under the Agreement to assure
that the necessary information is made available to such
accountants for the expression of their opinion without any
qualification as to the scope of their examination,
including, but not limited to, their opinion included in
each such Fund's annual report on Form N-SAR and annual
amendment to Form N-1A.
19. Blue Sky
Provide to the Fund or its agent, on a daily, weekly,
monthly and quarterly basis, and for each state in which the
Fund's Shares are sold, sales reports and other materials
PAGE 25
for blue sky compliance purposes as shall be agreed upon by
the parties.
20. Other Services
Provide such other services as may be mutually agreed
upon between Price Services and the Fund.
21. Fees and Out-of-Pocket Expenses
Each Fund shall pay to Price Services and/or its agents
for its Transfer Agent Services hereunder, fees computed as
set forth in Schedule A attached. Except as provided below,
Price Services will be responsible for all expenses relating
to the providing of Services. Each Fund, however, will
reimburse Price Services for the following out-of-pocket
expenses and charges incurred in providing Services:
o Postage. The cost of postage and freight for
mailing materials to Shareholders and Retirement
Plan participants, or their agents, including
overnight delivery, UPS and other express mail
services and special courier services required to
transport mail between Price Services locations
and mail processing vendors.
o Proxies. The cost to mail proxy cards and other
material supplied to it by the Fund and costs
related to the receipt, examination and tabulation
PAGE 26
of returned proxies and the certification of the
vote to the Fund.
o Communications
o Print. The printed forms used internally and
externally for documentation and processing
Shareholder and Retirement Plan participant,
or their agent's inquiries and requests;
paper and envelope supplies for letters,
notices, and other written communications
sent to Shareholders and Retirement Plan
participants, or their agents.
o Print & Mail House. The cost of internal
and third party printing and mail house
services, including printing of statements
and reports.
o Voice and Data. The cost of equipment
(including associated maintenance), supplies
and services used for communicating to and
from the Shareholders of the Fund and
Retirement Plan participants, or their
agents, the Fund's transfer agent, other Fund
offices, and other agents of either the Fund
PAGE 27
or Price Services. These charges shall
include:
o telephone toll charges (both incoming
and outgoing, local, long distance and
mailgrams); and
o data and telephone lines and associated
equipment such as modems, multiplexers,
and facsimile equipment.
o Record Retention. The cost of maintenance
and supplies used to maintain, microfilm,
copy, record, index, display, retrieve, and
store, in microfiche or microfilm form,
documents and records.
o Disaster Recovery. The cost of services,
equipment, facilities and other charges
necessary to provide disaster recovery for
any and all services listed in this
Agreement.
Out-of-pocket costs will be billed at cost to the
Funds. Allocation of monthly costs among the Funds will
generally be made based upon the number of Shareholder and
Retirement Accounts serviced by Price Services each month. Some
invoices for these costs will contain costs for both the Funds
PAGE 28
and other funds serviced by Price Services. These costs will be
allocated based on a reasonable allocation methodology. Where
possible, such as in the case of inbound and outbound WATS
charges, allocation will be made on the actual distribution or
usage.
C. Representations and Warranties of Price Services
Price Services represents and warrants to the Fund that:
1. It is a corporation duly organized and existing and in
good standing under the laws of Maryland;
2. It is duly qualified to carry on its business in
Maryland, California and Florida;
3. It is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement;
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
5. It is registered with the Securities and Exchange
Commission as a Transfer Agent pursuant to Section 17A of
the '34 Act; and
6. It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
PAGE 29
D. Representations and Warranties of the Fund
The Fund represents and warrants to Price Services that:
1. It is a corporation or business trust duly organized
and existing and in good standing under the laws of Maryland
or Massachusetts, as the case may be;
2. It is empowered under applicable laws and by its
Articles of Incorporation or Declaration of Trust, as the
case may be, and By-Laws to enter into and perform this
Agreement;
3. All proceedings required by said Articles of
Incorporation or Declaration of Trust, as the case may be,
and By-Laws have been taken to authorize it to enter into
and perform this Agreement;
4. It is an investment company registered under the Act;
and
5. A registration statement under the Securities Act of
1933 ("the '33 Act") is currently effective and will remain
effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale.
E. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
PAGE 30
1. Price Services shall not be liable to any Fund for any
act or failure to act by it or its agents or subcontractors
on behalf of the Fund in carrying or attempting to carry out
the terms and provisions of this Agreement provided Price
Services has acted in good faith and without negligence or
willful misconduct and selected and monitored the
performance of its agents and subcontractors with reasonable
care.
2. The Fund shall indemnify and hold Price Services
harmless from and against all losses, costs, damages,
claims, actions and expenses, including reasonable expenses
for legal counsel, incurred by Price Services resulting
from: (i) any action or omission by Price Services or its
agents or subcontractors in the performance of their duties
hereunder; (ii) Price Services acting upon instructions
believed by it to have been executed by a duly authorized
officer of the Fund; or (iii) Price Services acting upon
information provided by the Fund in form and under policies
agreed to by Price Services and the Fund. Price Services
shall not be entitled to such indemnification in respect of
actions or omissions constituting negligence or willful
misconduct of Price Services or where Price Services has not
PAGE 31
exercised reasonable care in selecting or monitoring the
performance of its agents or subcontractors.
3. Except as provided in Article L of this Agreement,
Price Services shall indemnify and hold harmless the Fund
from all losses, costs, damages, claims, actions and
expenses, including reasonable expenses for legal counsel,
incurred by the Fund resulting from the negligence or
willful misconduct of Price Services or which result from
Price Services' failure to exercise reasonable care in
selecting or monitoring the performance of its agents or
subcontractors. The Fund shall not be entitled to such
indemnification in respect of actions or omissions
constituting negligence or willful misconduct of such Fund
or its agents or subcontractors; unless such negligence or
misconduct is attributable to Price Services.
4. In determining Price Services' liability, an isolated
error or omission will normally not be deemed to constitute
negligence when it is determined that:
o Price Services had in place "appropriate procedures".
o the employee(s) responsible for the error or omission
had been reasonably trained and were being
appropriately monitored; and
PAGE 32
o the error or omission did not result from wanton or
reckless conduct on the part of the employee(s).
It is understood that Price Services is not obligated to
have in place separate procedures to prevent each and every
conceivable type of error or omission. The term
"appropriate procedures" shall mean procedures reasonably
designed to prevent and detect errors and omissions. In
determining the reasonableness of such procedures, weight
will be given to such factors as are appropriate, including
the prior occurrence of any similar errors or omissions when
such procedures were in place and transfer agent industry
standards in place at the time of the occurrence.
5. In the event either party is unable to perform its
obligations under the terms of this Agreement because of
acts of God, strikes or other causes reasonably beyond its
control, such party shall not be liable to the other party
for any loss, cost, damage, claim, action or expense
resulting from such failure to perform or otherwise from
such causes.
6. In order that the indemnification provisions contained
in this Article E shall apply, upon the assertion of a claim
for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly
PAGE 33
notify the other party of such assertion, and shall keep the
other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim,
or to defend against said claim in its own name or in the
name of the other party. The party seeking indemnification
shall in no case confess any claim or make any compromise in
any case in which the other party may be required to
indemnify it except with the other party's prior written
consent.
7. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of
this Agreement.
F. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both the Funds and Price
Services (including Price Services's affiliates), and that the
existence of any such dual interest shall not affect the validity
of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
PAGE 34
G. Documentation
o As requested by Price Services, the Fund shall promptly
furnish to Price Services the following:
o A certified copy of the resolution of the
Directors/Trustees of the Fund authorizing the
appointment of Price Services and the execution and
delivery of this Agreement;
o A copy of the Articles of Incorporation or
Declaration of Trust, as the case may be, and By-
Laws of the Fund and all amendments thereto;
o As applicable, specimens of all forms of outstanding
and new stock/share certificates in the forms
approved by the Board of Directors/Trustees of the
Fund with a certificate of the Secretary of the Fund
as to such approval;
o All account application forms and other documents
relating to Shareholders' accounts;
o An opinion of counsel for the Fund with respect to
the validity of the stock, the number of Shares
authorized, the status of redeemed Shares, and the
number of Shares with respect to which a
Registration Statement has been filed and is in
effect; and
PAGE 35
o A copy of the Fund's current prospectus.
The delivery of any such document for the purpose of any
other agreement to which the Fund and Price Services are or were
parties shall be deemed to be delivery for the purposes of this
Agreement.
o As requested by Price Services, the Fund will also furnish
from time to time the following documents:
o Each resolution of the Board of Directors/Trustees of
the Fund authorizing the original issue of its Shares;
o Each Registration Statement filed with the Securities
and Exchange Commission and amendments and orders
thereto in effect with respect to the sale of Shares
with respect to the Fund;
o A certified copy of each amendment to the Articles of
Incorporation or Declaration of Trust, and the By-Laws
of the Fund;
o Certified copies of each vote of the Board of
Directors/Trustees authorizing officers to give
instructions to the Transfer Agent;
o Such other documents or opinions which Price Services,
in its discretion, may reasonably deem necessary or
appropriate in the proper performance of its duties;
and
PAGE 36
o Copies of new prospectuses issued.
Price Services hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for
safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices.
H. References to Price Services
Each Fund agrees not to circulate any printed matter which
contains any reference to Price Services without the prior
approval of Price Services, excepting solely such printed matter
that merely identifies Price Services as agent of the Fund. The
Fund will submit printed matter requiring approval to Price
Services in draft form, allowing sufficient time for review by
Price Services and its legal counsel prior to any deadline for
printing.
I. Compliance With Governmental Rules and Regulations
Except as otherwise provided in the Agreement and except for
the accuracy of information furnished to the Fund by Price
Services, each Fund assumes full responsibility for the
preparation, contents and distribution of its prospectuses and
compliance with all applicable requirements of the Act, the '34
Act, the '33 Act, and any other laws, rules and regulations of
PAGE 37
governmental authorities having jurisdiction over the Fund.
Price Services shall be responsible for complying with all laws,
rules and regulations of governmental authorities having
jurisdiction over transfer agents and their activities.
J. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures
and similar items purchased and/or developed and used by Price
Services in performance of the Agreement shall be the property of
Price Services and will not become the property of the Fund.
K. Quality Service Standards
Price Services and the Fund may from time to time agree to
certain quality service standards, as well as incentives and
penalties with respect to Price Services' hereunder.
L. As Of Transactions
For purposes of this Article L, the term "Transaction" shall
mean any single or "related transaction" (as defined below)
involving the purchase or redemption of Shares (including
exchanges) that is processed at a time other than the time of the
computation of the Fund's net asset value per Share next computed
after receipt of any such transaction order by Price Services.
If more than one Transaction ("Related Transaction") in the Fund
is caused by or occurs as a result of the same act or omission,
PAGE 38
such transactions shall be aggregated with other transactions in
the Fund and be considered as one Transaction.
o Reporting
Price Services shall:
1. Utilize a system to identify all Transactions, and
shall compute the net effect of such Transactions upon
the Fund on a daily, monthly and rolling 365 day basis.
The monthly and rolling 365 day periods are hereafter
referred to as "Cumulative".
2. Supply to the Fund, from time to time as mutually
agreed upon, a report summarizing the Transactions and
the daily and Cumulative net effects of such
Transactions both in terms of aggregate dilution and
loss ("Dilution") or gain and negative dilution
("Gain") experienced by the Fund, and the impact such
Gain or Dilution has had upon the Fund's net asset
value per Share.
3. With respect to any Transaction which causes
Dilution to the Fund of $25,000 or more, immediately
provide the Fund: (i) a report identifying the
Transaction and the Dilution resulting therefrom, (ii)
the reason such Transaction was processed as described
above, and (iii) the action that Price Services has or
PAGE 39
intends to take to prevent the reoccurrence of such as
of processing ("Report").
o Liability
1. It will be the normal practice of the Funds not to
hold Price Services liable with respect to any
Transaction which causes Dilution to any single Fund of
less than $25,000. Price Services will, however,
closely monitor for each Fund the daily and Cumulative
Gain/Dilution which is caused by Transactions of less
than $25,000. When the Cumulative Dilution to any Fund
exceeds 3/10 of 1% per share, Price Services, in
consultation with counsel to the Fund, will make
appropriate inquiry to determine whether it should take
any remedial action. Price Services will report to the
Board of Directors/Trustees of the Fund ("Board") any
action it has taken.
2. Where a Transaction causes Dilution to a Fund of
$25,000 or more ("Significant Transaction"), Price
Services will review with counsel to the Fund the
Report and the circumstances surrounding the underlying
Transaction to determine whether the Transaction was
caused by or occurred as a result of a negligent act or
omission by Price Services. If it is determined that
PAGE 40
the Dilution is the result of a negligent action or
omission by Price Services, Price Services and outside
counsel for the Fund will negotiate settlement. All
such Significant Transactions will be reported to the
Board at its next meeting (unless the settlement fully
compensates the Fund for any Dilution). Any
Significant Transaction, however, causing Dilution in
excess of the lesser of $100,000 or a penny per Share
will be promptly reported to the Board. Settlement
will not be entered into with Price Services until
approved by the Board. The factors the Board would be
expected to consider in making any determination
regarding the settlement of a Significant Transaction
would include but not be limited to:
o Procedures and controls adopted by Price Services
to prevent "As Of" processing;
o Whether such procedures and controls were being
followed at the time of the Significant
Transaction;
o The absolute and relative volume of all
transactions processed by Price Services on the
day of the Significant Transaction;
PAGE 41
o The number of Transactions processed by Price
Services during prior relevant periods, and the
net Dilution/Gain as a result of all such
transactions to the Fund and to all other Price
Funds;
o The prior response of Price Services to
recommendations made by the Funds regarding
improvement to the Transfer Agent's "As Of"
Processing Procedures.
3. In determining Price Services' liability with respect
to a Significant Transaction, an isolated error or
omission will normally not be deemed to constitute
negligence when it is determined that:
o Price Services had in place "appropriate
procedures".
o the employee(s) responsible for the error or
omission had been reasonably trained and were
being appropriately monitored; and
o the error or omission did not result from wanton
or reckless conduct on the part of the
employee(s).
It is understood that Price Services is not obligated
to have in place separate procedures to prevent each
PAGE 42
and every conceivable type of error or omission. The
term "appropriate procedures" shall mean procedures
reasonably designed to prevent and detect errors and
omissions. In determining the reasonableness of such
procedures, weight will be given to such factors as are
appropriate, including the prior occurrence of any
similar errors or omissions when such procedures were
in place and transfer agent industry standards in place
at the time of the occurrence.
M. Term and Termination of Agreement
o This Agreement shall run for a period of one (1) year from
the date first written above and will be renewed from year
to year thereafter unless terminated by either party as
provided hereunder.
o This Agreement may be terminated by the Fund upon one
hundred twenty (120) days' written notice to Price Services;
and by Price Services, upon three hundred sixty-five (365)
days' writing notice to the Fund.
o Upon termination hereof, the Fund shall pay to Price
Services such compensation as may be due as of the date of
such termination, and shall likewise reimburse for out-of-
pocket expenses related to its services hereunder.
PAGE 43
N. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
O. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party, provided this shall not
preclude Price Services from employing such agents and
subcontractors as it deems appropriate to carry out its
obligations set forth hereunder.
P. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, Price Services and the Fund may
agree from time to time on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions are to
PAGE 44
be signed by all parties and annexed hereto, but no such
provision shall contravene any applicable Federal or state law or
regulation and no such interpretive or additional provision shall
be deemed to be an amendment of this Agreement.
Q. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
R. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
S. Merger of Agreement
This Agreement, including the attached Appendices and
Schedules supersedes any prior agreement with respect to the
subject hereof, whether oral or written.
T. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
U. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
PAGE 45
between such individual Fund and Price Services. In the case of
a series Fund or trust, all references to "the Fund" are to the
individual series or portfolio of such Fund or trust, or to such
Fund or trust on behalf of the individual series or portfolio, as
appropriate. The "Fund" also includes any T. Rowe Price Funds
which may be established after the execution of this Agreement.
Any reference in this Agreement to "the parties" shall mean Price
Services and such other individual Fund as to which the matter
pertains.
V. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither
the holders of Shares in the Fund nor any Directors or Trustees
of the Fund shall be personally liable hereunder. With respect to
any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund"
means and refers to the trustees from time to time serving under
the applicable trust agreement (Declaration of Trust) of such
Trust as the same may be amended from time to time. It is
expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
PAGE 46
Declaration of Trust of the Trust. The execution and delivery of
this Agreement has been authorized by the trustees and signed by
an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
W. Captions
The captions in the Agreement are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under
their seals by and through their duly authorized officers.
DATED: ______________________ T. ROWE PRICE SERVICES, INC.
ATTEST:
/s/Mark E. Rayford
___________________________ BY: _________________________
Mark E. Rayford
PAGE 47
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
PAGE 48
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
PAGE 49
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
PAGE 50
T. ROWE PRICE VALUE FUND, INC.
DATED: ______________________
ATTEST:
/s/Carmen F. Deyesu
_________________________ BY: __________________________
Carmen F. Deyesu
PAGE 51
APPENDIX A
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price California Tax-Free Income Trust on behalf of the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Fixed Income Series, Inc. on behalf of the
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Index Trust, Inc. on behalf of the
T. Rowe Price Equity Index Fund
PAGE 52
T. Rowe Price Institutional International Funds, Inc. on behalf
of the
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of the
T. Rowe Price International Bond Fund and
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Series, Inc. on behalf of the
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of the
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
PAGE 53
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Spectrum Fund, Inc. on behalf of the
Spectrum Growth Fund
Spectrum Income Fund
T. Rowe Price State Tax-Free Income Trust on behalf of the
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Insured Intermediate Bond Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
T. Rowe Price U.S. Treasury Funds, Inc. on behalf of the
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Value Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of the
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc. on behalf of the
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
PAGE 54
SCHEDULE A - FEE SCHEDULE
The following fees for services provided by T. Rowe Price
Services, Inc. (TRPS) and vendors will be billed by TRPS for
1996:
I. T. Rowe Price Services Maintenance and Transaction Charges -
Billable Monthly
A. Retail Individual
Retail Individual Account Fee - $14.50 for each Equity,
Bond, and Money Market Account serviced.
The Per Account Annual Fee will be billed monthly
at a rate of 1/12 of the annual fee for each Fund
account serviced during the month. Accounts
serviced is defined as all open accounts at month
end plus accounts which closed during the month.
Transaction Fees
1. New Account Fees (billed for all new accounts
setup in excess of 15,000/month)
$2.00 for every account opened, including
fiduciary accounts, excluding those opened by exchange.
2. Non-Automated Transactions (billed for all
transactions in excess of 300,000/month)
a. $1.00 for each non-automated transaction and
maintenance item processed for the Fund Group
as a whole during a month in excess of
300,000. The non-automated transaction count
will include all manually processed price
dependent and maintenance transactions.
Also, the number of new account setups will
be excluded from the number of non-automated
transactions.
b. Fee to be charged to the Funds based on each
Fund's number of total non-automated
transactions and maintenance.
c. Fee to be billed monthly for that month.
PAGE 55
d. NOTE: The transaction count should not
include correction of transactions
caused by non-shareholder errors.
3. Telephone Fee (billed for all calls in excess of
110,000/month)
Billed at the rate of $5.00 per call for
shareholder servicing calls received in excess of
110,000 calls per month. Calls received in Retail
Services are allocated to the Funds based on
accounts serviced and calls received in Telephone
Services are allocated based on actual calls
received.
4. Tele*Access
Base fee, per month for all calls is $100,000.
5. Correspondence (for all correspondence in excess
of 10,000/month)
$5.00 billed for each shareholder correspondence
request completed in writing or by phone in excess
of 10,000 a month. Allocated to the Funds based
on accounts serviced.
6. Telephone Transaction Fee (billed for all
telephone transactions in excess of 30,000/month)
Each price dependent transaction initiated through
the Telephone Services Group in excess of 30,000 a
month will be charged $1.00.
B. Retail Retirement Participants - $41.00 for each
Participant serviced.
The Per Participant Annual Fee will be billed monthly
at a rate of 1/12 of the annual fee for each
Participant serviced during the month.
C. Financial Institutions Accounts - $27.00 for each
Equity, Bond, and Money Market Account serviced.
PAGE 56
The Per Account Annual Fee will be billed monthly at a
rate of 1/12 of the annual fee for each Fund account
serviced during the month. Accounts serviced is defined
as all open accounts at month end plus accounts which
closed during the month.
II. Vendor Fees
A. DST
1. Annual Open Account Fee
a. $1.82 for each Equity Fund account serviced.
b. $4.33 for each Bond Fund account serviced.
c. $4.33 for each Money Market Fund account
serviced.
The Open Account Fee will be billed monthly at a
rate of 1/12 of the annual fee for each Fund account serviced
during the month.
2. Closed Account Fee (Annualized)
Payable at an annual rate of $1.48. The Closed
Account Fee will be billed monthly at a rate of
1/12 of the annual rate and will be charged in the
month following the month during which such
account is closed and shall cease to be charged in
the month following the Purge Date.
3. Fiduciary Sub-Accounting
Payable at the rate of $1.00 per month for each
fiduciary account. Fiduciary accounts closed
during the prior year will not be included as
billable items.
4. Annual Base Fee Per Fund
Annual Fee of $7,422.00 will be charged at a
monthly rate of $618.50. The fee is waived for
the first six (6) months after a new Fund is
effective. The definition of new Fund excludes
Funds created by mergers, purchases, or
reorganizations.
PAGE 57
5. Bank Account Reconciliation System (Comp/Recon)
Annual charge of $120,000 payable at a rate of
$10,000 per month.
6. TRAC 2000
Century 401(k) plans are charged $5.00 per
eligible employee per year. The ComDisco plan is
charged $4.00 per eligible employee per year.
$7.00 is the maximum fee per participant.
7. Voice Response Unit
a. $500 Set-up Fee will be charged for each
investment company unit.
b. $2,500 Maintenance Fee will be billed each
month.
c. $.24 will be billed per call connected to the
VRU. This service will be discontinued
during 1996.
8. Contingent Deferred Sales Charge.
Billed to each Fund utilizing this service at an
annual rate of $1.03 per open account.
9. Asset Allocation
The rate of $1.80 per reallocation group will be
charged for each reallocation.
B. State Street Bank
1. Checkwriting Fees
$.61 for each checkwriting item processed (i.e.
those resulting in either redemptions or returned
as non-processable). This includes signature card
maintenance and verification, manual or special
processing of checks, stop payment processing,
settlement functions, and postage and mailing
expenses to return canceled checks to
shareholders.
PAGE 58
2. ACH Transactions
$.06 for each ACH transaction processed by the
Bank and submitted to the ACH network.
3. Change of Address
$.0625 for each notice printed, addressed, and
mailed. Includes subfile established or changed.
4. Wire Order Invoices - $.07 each.
5. Dividend & Daily Spac Master Forms - $.1225 each.
6. On-Request Work Orders - $25.00 each.
7. Internal Book Transfers
$1.14 billed for money movement between TRP DDA's
at the Bank. Money is transferred by debit and
credit memos.
8. Wire Fees
$4.24 for each incoming, manual, internal bank
transfer and outgoing transmission wire.
9. Paid checks
$.20 for each paid check processed.
10. PAC Checks
$.0475 billed for eah PAC check printed and mailed
in bulk to TRP.
11. Nightly Audits
$.0325 per page for the audit of the DST nightly
update.
12. Research
DDA Research copies $1.09 each.
PAGE 59
Research for BFDS records will be billed at $3.00
per request for CAMR and other purchase items.
Other research is billed at $7.20 per request.
There will be no charge for items that were
processed via IMAGE that TRP cannot locate on
film. Transcripts are not covered under this
schedule.
13. VAX Computer Usage
Billed at the rate of $8,709.56 per month which
covers both:
a. System Fee - for use of sub-systems such as
capital stock interface, PDPS, Direct
Deposit, etc.
b. Communication Fee - charge for the line,
modems, and statistical multiplexers.
14. Abandoned Property
Services based on the following fee schedule:
a. Administrative charge $125/Fund
b. Processing charges $1.00/account
c. Due Diligence Mailings $1.35/account
d. Labor will be charged based on the number of
hours required.
e. Lost shareholder recovery $2.25/account
initial attempt
$5.00/s/o
any s/o located
15. NSCC Settlement
Settlement redemption $11.98
Settlement purchase $ 5.45
C. J.P. Morgan Bank
1. Wire Transfer Fees
Annual Account Maintenance $250.00
Annual MORCOM/CASH
First Account $5,000.00
Subsequent Accounts $3,000.00
PAGE 60
Batch File Transfer (BFT)
Transmission $15.00
(capped at 10 per month) each
Outgoing Wires
Straight-through (Repetitive or Freetype)
80% of total volume $3.25
Book Transfer (IBT) $1.50
Repair (Freeform) $7.00
Zero Balance Transfer $1.00
Incoming Wires
Fed or CHIPS $3.25
Book (IBT) $1.50
D. Bank of Boston
1. Controlled Disbursement Fees
Annual Account Maintenance $300.00
per
account
Annual Prior Day Balance Reporting Detail
Transmission $600.00
per
account
Annual Batch File Transfer (BFT)
Service $120 per
account
BFT Transmission $.003 each
Same Day Match Pay (Dividend & Redemption Checks)
CD Full Recon/Daily Match Fixed $120.00
per
account
CD Full Recon/Daily Match Items $.025 per
item
Checks Paid $.036 per
item
PAGE 61
Check Truncation
Fixed $120.00
per
account
Items $.011 per
item
Stops
On-line $7.00
Photos of Checks $4.00 per
item
Incoming Wires $5.00 per
item
On-Line Inquiry Report Terminal $3.50 per
item
2. The bank may charge interest at a rate in excess
of normal borrowing rates if the TRPS balance is
overdrawn or is in a negative collected balance
status.
E. First National Bank of Maryland
1. Internal Fund Transfer $6.00
2. Returned Items $2.50
3. Deposit Items
Charge varies 1
4. Deposit Tickets $0.50
5. Return/redeposit items $3.00
6. Deposit Corrections $4.50
7. Check copy $9.00
8. First Facts
CDA Repetitive Wire $3.95
System Reports/Per Module $27.00
Per Report Previous Day $1.80
Per Report Current Day $3.60
9. Account maintenance $12.25
10. Debit item $0.54
11. Credit transaction $0.54
____________________
1Charge varies by District, $ .0267 to $ .1167
PAGE 62
12. Foreign Deposit Check amount $1,000-$4,999
$7.50
$5,000-19,999
$15.00
over $20,000
$20.00
13. ACH Debit $0.117
14. Tax Deposits $0.90
15. Film - Monthly $121.50
16. TRPS may be charged interest when TRPS's
balance at FNB is in a negative collected
balance status. TRPS may also receive
balance credits on a positive investable balance
III. New Funds
Funds added during the term of this contract may have their
Maintenance and Transaction charges and other charges
(Section I) waived for a period of time, as agreed to by
TRPS and Fund Directors, following the establishment of the
Fund. Out-of-pocket expenses will be billed to the Fund
from the Fund's inception.
IN WITNESS WHEREOF, T.Rowe Price Funds and T.Rowe Price Services,
Inc. have agreed upon this fee schedule to be executed in their
names and on their behalf through their duly authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE SERVICES, INC.
/s/Carmen F. Deyesu /s/Mark E. Rayford
NAME _______________________ NAME _________________________
Carmen F. Deyesu Mark E. Rayford
TITLE ______________________ TITLE ________________________
DATE ______________________ DATE _________________________
The Agreement between T. Rowe Price Associates, Inc. and
T. Rowe Price Funds for Fund Accounting Services, dated January
1, 1996.
PAGE 1
AGREEMENT
between
T. ROWE PRICE ASSOCIATES, INC.
and
THE T. ROWE PRICE FUNDS
for
FUND ACCOUNTING SERVICES
PAGE 2
TABLE OF CONTENTS
Page
Article A Terms of Appointment/Duties of Price
Associates . . . . . . . . . . . . . . . . . . 1
Article B Fees and Out-of-Pocket Expenses . . . . . . . . 2
Article C Representations and Warranties of Price
Associates . . . . . . . . . . . . . . . . . . 3
Article D Representations and Warranties of the Fund . . 3
Article E Ownership of Software and Related Material . . 3
Article F Quality Service Standards . . . . . . . . . . . 4
Article G Standard of Care/Indemnification . . . . . . . 4
Article H Dual Interests . . . . . . . . . . . . . . . . 5
Article I Documentation . . . . . . . . . . . . . . . . . 5
Article J Recordkeeping/Confidentiality . . . . . . . . . 5
Article K Compliance with Governmental Rules and
Regulations . . . . . . . . . . . . . . . . . . 6
Article L Terms and Termination of Agreement . . . . . . 6
Article M Notice . . . . . . . . . . . . . . . . . . . . 6
Article N Assignment . . . . . . . . . . . . . . . . . . 7
Article O Amendment/Interpretive Provisions . . . . . . . 7
Article P Further Assurances . . . . . . . . . . . . . . 7
Article Q Maryland Law to Apply . . . . . . . . . . . . . 7
Article R Merger of Agreement . . . . . . . . . . . . . . 7
Article S Counterparts . . . . . . . . . . . . . . . . . 8
Article T The Parties . . . . . . . . . . . . . . . . . . 8
PAGE 3
Article U Directors, Trustee and Shareholders and
Massachusetts Business Trust . . . . . . . . . 8
Article V Captions . . . . . . . . . . . . . . . . . . . 9
PAGE 4
AGREEMENT made as of the first day of January, 1996, by and
between T. ROWE PRICE ASSOCIATES, INC., a Maryland corporation
having its principal office and place of business at 100 East
Pratt Street, Baltimore, Maryland 21202 ("Price Associates"), and
each Fund which is listed on Appendix A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each such
Fund individually hereinafter referred to as "the Fund", whose
definition may be found in Article T);
WHEREAS, Price Associates has the capability of providing the
Funds with certain accounting services ("Accounting Services");
WHEREAS, the Fund desires to appoint Price Associates to
provide these Accounting Services and Price Associates desires to
accept such appointment;
WHEREAS, the Board of Directors of the Fund has authorized
the Fund to utilize various pricing services for the purpose of
providing to Price Associates securities prices for the
calculation of the Fund's net asset value.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
4
PAGE 5
A. Terms of Appointment/Duties of Price Associates
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Price Associates
to provide, and Price Associates agrees to provide, the following
Accounting Services:
a. Maintain for each Fund a daily trial balance, a general
ledger, subsidiary records and capital stock accounts;
b. Maintain for each Fund an investment ledger, including
amortized bond and foreign dollar denominated costs where
applicable;
c. Maintain for each Fund all records relating to the Fund's
income and expenses;
d. Provide for the daily valuation of each Fund's portfolio
securities and the computation of each Fund's daily net
asset value per share. Such daily valuations shall be
made in accordance with the valuation policies established
by each of the Fund's Board of Directors including, but
not limited to, the utilization of such pricing valuation
sources and/or pricing services as determined by the
Boards. Price Associates shall have no liability for any
losses or damages incurred by the Fund as a result of
erroneous portfolio security evaluations provided by such
designated sources and/or pricing services; provided that,
5
PAGE 6
Price Associates reasonably believes the prices are
accurate, has adhered to its normal verification control
procedures, and has otherwise met the standard of care as
set forth in Article G of this Agreement;
e. Provide daily cash flow and transaction status information
to each Fund's adviser;
f. Prepare for each Fund such financial information that is
reasonably necessary for shareholder reports, reports to
the Board of Directors and to the officers of the Fund,
and reports to the Securities and Exchange Commission and
the Internal Revenue Service and other Federal and state
regulatory agencies;
g. Provide each Fund with such advice that may be reasonably
necessary to properly account for all financial
transactions and to maintain the Fund's accounting
procedures and records so as to insure compliance with
generally accepted accounting and tax practices and rules;
h. Maintain for each Fund all records that may be reasonably
required in connection with the audit performed by each
Fund's independent accountant, the Securities and Exchange
Commission, the Internal Revenue Service or such other
Federal or state regulatory agencies; and
i. Cooperate with each Fund's independent public accountants
and take all reasonable action in the performance of its
6
PAGE 7
obligations under the Agreement to assure that the
necessary information is made available to such
accountants for the expression of their opinion without
any qualification as to the scope of their examination
including, but not limited to, their opinion included in
each such Fund's annual report on Form N-SAR and annual
amendment to Form N-1A.
B. Fees and Out-of-Pocket Expenses
Each Fund shall pay to Price Associates for its Accounting
Services hereunder, fees as set forth in the Schedule attached
hereto. In addition, each Fund will reimburse Price Associates
for out-of-pocket expenses such as postage, printed forms, voice
and data transmissions, record retention, disaster recovery,
third party vendors, equipment leases and other similar items as
may be agreed upon between Price Associates and the Fund. Some
invoices will contain costs for both the Funds and other funds
services by Price Associates. In these cases, a reasonable
allocation methodology will be used to allocate these costs to
the Funds.
C. Representations and Warrantees of Price Associates
Price Associates represents and warrants to the Fund that:
1. It is a corporation duly organized and existing in good
standing under the laws of Maryland.
2. It is duly qualified to carry on its business in Maryland.
7
PAGE 8
3. It is empowered under applicable laws and by its charter
and By-Laws to enter into and perform this Agreement.
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
5. It has, and will continue to have, access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
D. Representations and Warrantees of the Fund
The Fund represents and warrants to Price Associates that:
1. It is a corporation or business trust, as the case may be,
duly organized and existing and in good standing under the laws
of Maryland or Massachusetts, as the case may be.
2. It is empowered under applicable laws and by its Articles
of Incorporation or Declaration of Trust, as the case may be, and
By-Laws have been taken to authorize it to enter into and perform
this Agreement.
3. All proceedings required by said Articles of Incorporation
or Declaration of Trust, as the case may be, and By-Laws have
been taken to authorize it to enter into and perform this
Agreement.
E. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures,
and similar items purchased and/or developed and used by Price
Associates in performance of the Agreement shall be the property
8
PAGE 9
of Price Associates and will not become the property of the
Funds.
F. Quality Service Standards
Price Associates and the Fund may, from time to time, agree
to certain quality service standards, with respect to Price
Associates' services hereunder.
G. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1. Price Associates shall not be liable to any Fund for any
act or failure to act by it or its agents or subcontractors on
behalf of the Fund in carrying or attempting to carry out the
terms and provisions of the Agreement provided Price Associates
has acted in good faith and without negligence or willful
misconduct and selected and monitored the performance of its
agents and subcontractors with reasonable care.
2. The Fund shall indemnify and hold Price Associates
harmless from and against all losses, costs, damages, claims,
actions, and expenses, including reasonable expenses for legal
counsel, incurred by Price Associates resulting from: (i) any
action or omission by Price Associates or its agents or
subcontractors in the performance of their duties hereunder; (ii)
Price Associates acting upon instructions believed by it to have
been executed by a duly authorized officer of the Fund; or (iii)
9
PAGE 10
Price Associates acting upon information provided by the Fund in
form and under policies agreed to by Price Associates and the
Fund. Price Associates shall not be entitled to such
indemnification in respect of actions or omissions constituting
negligence or willful misconduct of Price Associates or where
Price Associates has not exercised reasonable care in selecting
or monitoring the performance of its agents or subcontractors.
3. Price Associates shall indemnify and hold harmless the
Fund from all losses, costs, damages, claims, actions and
expenses, including reasonable expenses for legal counsel,
incurred by the Fund resulting from the negligence or willful
misconduct of Price Associates or which result from Price
Associates' failure to exercise reasonable care in selecting or
monitoring the performance of its agents or subcontractors. The
Fund shall not be entitled to such indemnification with respect
to actions or omissions constituting negligence or willful
misconduct of such Fund or its agents or subcontractors; unless
such negligence or misconduct is attributable to Price
Associates. 4. In the event either party is unable to
perform its obligations under the terms of this Agreement because
of acts of God, strikes or other causes reasonably beyond its
control, such party shall not be liable to the other party for
any loss, cost, damage, claim, action or expense resulting from
such failure to perform or otherwise from such causes.
10
PAGE 11
5. In order that the indemnification provisions contained in
this Article F shall apply, upon the assertion of a claim for
which either party may be required to indemnify the other, the
party seeking indemnification shall promptly notify the other
party of such assertion, and shall keep the other party advised
with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense
of such claim, or to defend against said claim in its own name or
in the name of the other party. The party seeking
indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required
to indemnify it except with the other party's prior written
consent.
6. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this
Agreement.
H. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both the Fund and Price
Associates (including Price Associates' affiliates), and that the
existence of any such dual interest shall not affect the validity
of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
11
PAGE 12
I. Documentation
As requested by Price Associates, the Fund shall promptly
furnish to Price Associates such documents as it may reasonably
request and as are necessary for Price Associates to carry out
its responsibilities hereunder.
J. Recordkeeping/Confidentiality
1. Price Associates shall keep records relating to the
services to be performed hereunder, in the form and manner as it
may deem advisable, provided that Price Associates shall keep all
records in such form and in such manner as required by applicable
law, including the Investment Company Act of 1940 ("the Act") and
the Securities Exchange Act of 1934 ("the '34 Act").
2. Price Associates and the Fund agree that all books,
records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other
person, except: (a) after prior notification to and approval in
writing by the other party hereto, which approval shall not be
unreasonably withheld and may not be withheld where Price
Associates or Fund may be exposed to civil or criminal contempt
proceedings for failure to comply; (b) when requested to divulge
such information by duly constituted governmental authorities; or
(c) after so requested by the other party hereto.
12
PAGE 13
K. Compliance With Governmental Rules and Regulations
Except as otherwise provided in the Agreement and except for
the accuracy of information furnished to the Funds by Price
Associates, each Fund assumes full responsibility for the
preparation, contents and distribution of its prospectuses, and
for complying with all applicable requirements of the Act, the
'34 Act, the Securities Act of 1933 (the "33 Act"), and any laws,
rules and regulations of governmental authorities having
jurisdiction over the Funds.
L. Term and Termination of Agreement
1. This Agreement shall run for a period of one (1) year from
the date first written above and will be renewed from year to
year thereafter unless terminated by either party as provided
hereunder.
2. This Agreement may be terminated by the Fund upon sixty
(60) days' written notice to Price Associates; and by Price
Associates, upon three hundred sixty-five (365) days' writing
notice to the Fund.
3. Upon termination hereof, the Fund shall pay to Price
Associates such compensation as may be due as of the date of such
termination, and shall likewise reimburse for out-of-pocket
expenses related to its services hereunder.
13
PAGE 14
M. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
N. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party, provided this shall not
preclude Price Associates from employing such agents and
subcontractors as it deems appropriate to carry out its
obligations set forth hereunder.
O. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, Price Associates and the Fund may
agree from time to time on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this
14
PAGE 15
Agreement. Any such interpretive or additional provisions are to
be signed by all parties and annexed hereto, but no such
provision shall contravene any applicable Federal or state law or
regulation and no such interpretive or additional provision shall
be deemed to be an amendment of this Agreement.
P. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
Q. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
R. Merger of Agreement
This Agreement, including the attached Appendices and
Schedules supersedes any prior agreement with respect to the
subject hereof, whether oral or written.
S. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
15
PAGE 16
T. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
between such individual Fund and Price Associates. In the case
of a series Fund or trust, all references to "the Fund" are to
the individual series or portfolio of such Fund or trust, or to
such Fund or trust on behalf of the individual series or
portfolio, as appropriate. The "Fund" also includes any T. Rowe
Price Funds which may be established after the execution of this
Agreement. Any reference in this Agreement to "the parties"
shall mean Price Associates and such other individual Fund as to
which the matter pertains.
U. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither the
holders of shares in the Fund nor any Directors or Trustees of
the Fund shall be personally liable hereunder. With respect to
any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund"
means and refers to the trustees from time to time serving under
the applicable trust agreement (Declaration of Trust) of such
Trust as the same may be amended from time to time. It is
16
PAGE 17
expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of
this Agreement has been authorized by the trustees and signed by
an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
V. Captions
The captions in the Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under
their seals by and through their duly authorized officers.
17
PAGE 18
DATED: ______________________ T. ROWE PRICE ASSOCIATES, INC.
ATTEST:
/s/Barbara A. Van Horn /s/Alvin M. Younger, Jr.
______________________________ BY: __________________________
Barbara A. Van Horn, Managing Director
Assistant Secretary
18
PAGE 19
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price personal Strategy Balanced
Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
19
PAGE 20
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MID-CAP GROWTH FUND
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC. on behalf of the:
T. Rowe Price OTC Fund
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND,
INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
20
PAGE 21
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND
FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.on behalf of
the:
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. on
behalf of the:
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
21
PAGE 22
DATED: ______________________ T. ROWE PRICE FUNDS
ATTEST:
/s/Patricia S. Butcher /s/Carmen F. Deyesu
______________________________ BY: ___________________________
Patricia S. Butcher, Carmen F. Deyesu
Assistant Secretary
22
PAGE 23
APPENDIX A
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price Adjustable Rate U.S. Government
Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price California Tax-Free Income
Trust on behalf of the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf
of the:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced
Portfolio
T. Rowe Price Fixed Income Series, Inc. on
behalf of the:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
23
PAGE 24
T. Rowe Price Index Trust, Inc. on behalf of
the:
T. Rowe Price Equity Index Fund
T. Rowe Price Institutional International
Funds, Inc. on behalf of the:
Foreign Equity Fund
T. Rowe Price International Equity Fund, Inc.
T. Rowe Price International Funds, Inc. on
behalf of the:
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income
Fund
T. Rowe Price Latin American Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price Mid-Cap Growth Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of
the:
T. Rowe Price OTC Fund
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government
Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
24
PAGE 25
T. Rowe Price Spectrum Fund, Inc. on behalf
of the:
Spectrum Growth Fund
Spectrum Income Fund
T. Rowe Price State Tax-Free Income Trust on
behalf of the:
Maryland Tax-Free Bond Fund,
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund and
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Bond
Fund
Georgia Tax-Free Bond Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free Insured Intermediate
Bond Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate
Fund, Inc.
T. Rowe Price U.S. Treasury Funds, Inc. on
behalf of the:
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Summit Funds, Inc. on behalf of
the:
Summit Cash Reserves Fund
Summit Limited-Term Bond Fund
Summit GNMA Fund
25
PAGE 26
T. Rowe Price Summit Municipal Funds, Inc. on
behalf of the:
Summit Municipal Money Market Fund
Summit Municipal Intermediate Fund
Summit Municipal Income Fund
T. Rowe Price Value Fund, Inc.
26
PAGE 27
FUND ACCOUNTING SERVICES FEE SCHEDULE
Between
T. ROWE PRICE ASSOCIATES, INC.
And
THE T. ROWE PRICE FUNDS
January 1, 1996 to December 31, 1996
27
PAGE 28
FUND ACCOUNTING SERVICES
1996 FEE SCHEDULE
A.Fee Structure
1. Base Fee
Domestic Funds $60,000 each
International Funds $100,000 each
Spectrum Funds $45,000 each
Per Fund fee for basic recordkeeping
and financial reporting
2. Individual Fund Fee
Total fees reflecting special $ 968,000
characteristics of each Fund
3. Stock Lending Fee
Flat fee reflecting $ 75,000
monitoring of Security Lending Program
4. Additional Funds
Domestic Funds $60,000 each
International Funds $100,000 each
Spectrum Funds $45,000 each
B. Total Cost Per Fund
Growth Stock Fund $ 104,000
New Horizons Fund 95,000
Equity Income Fund 85,000
New Era Fund 72,000
International Stock Fund 115,000
Growth & Income Fund 85,000
New America Growth Fund 70,000
Capital Appreciation Fund 85,000
Small-Cap Value Fund 60,000
Foreign Equity Fund 105,000
International Discovery Fund 125,000
Science & Technology Fund 70,000
28
PAGE 29
High Yield Fund 165,000
Tax-Free Income Fund 110,000
New Income Fund 100,000
Tax-Free High Yield Fund 110,000
European Stock Fund 100,000
Equity Index Fund 60,000
New Asia Fund 110,000
Spectrum Growth Fund 45,000
GNMA Fund 120,000
International Bond Fund 125,000
Balanced Fund 90,000
Maryland Bond Fund 81,000
Tax-Free Short Intermediate Fund 90,000
Short-Term Bond Fund 120,000
California Bond Fund 72,000
New York Bond Fund 72,000
U.S. Treasury Short-Intermediate Fund 60,000
U.S. Treasury Long-Term Bond Fund 60,000
Spectrum Income Fund 45,000
Prime Reserve Fund 85,000
Tax-Exempt Money Fund 93,000
U.S. Treasury Money Fund 60,000
California Money Fund 67,000
New York Money Fund 67,000
Short-Term U.S. Government Fund 100,000
Virginia Bond Fund 65,000
New Jersey Bond Fund 65,000
Global Government Bond Fund 100,000
OTC Fund 85,000
Japan Fund 100,000
Mid-Cap Growth Fund 60,000
Short-Term Global Fund 110,000
Maryland Short-Term Tax-Free Bond Fund 65,000
Florida Insured Intermediate Tax-Free Fund 65,000
Georgia Tax-Free Bond Fund 65,000
Tax-Free Insured Intermediate Bond Fund 65,000
Blue Chip Growth Fund 60,000
Dividend Growth Fund 65,000
Latin America Fund 110,000
Summit Cash Reserve Fund 60,000
Summit Limited-Term Bond Fund 60,000
Summit GNMA Fund 60,000
Summit Municipal Money Market Fund 60,000
Summit Municipal Intermediate Fund 60,000
Summit Municipal Income Fund 60,000
29
PAGE 30
International Stock Portfolio 100,000
Personal Strategy Income Fund 70,000
Equity Income Portfolio 60,000
Personal Strategy Balanced Fund 70,000
New America Growth Portfolio 60,000
Personal Strategy Growth Fund 70,000
Limited-Term Bond Portfolio 60,000
Value Fund 60,000
Virginia Short-Term Tax Free Bond Fund 60,000
Capital Opportunity Fund 60,000
Emerging Markets Bond Fund 100,000
Personal Strategy Balanced Portfolio 60,000
Corporate Income Fund 70,000
Global Stock Fund 100,000
Heath Sciences Fund 60,000
IN WITNESS WHEREOF, T. Rowe Price Funds and T. Rowe Price
Associates, Inc. have agreed upon this fee schedule to be
executed in their names and on their behalf through their duly
authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE ASSOCIATES, INC.
/s/Carmen F. Deyesu /s/Alvin M. Younger
Name _________________________ Name ______________________
Carmen F. Deyesu Alvin M. Younger
Title Treasurer Title Treasurer and Managing
Director
Date _________________________ Date ______________________
30
The Agreement between T. Rowe Price Retirement Plan
Services, Inc. and the Taxable Funds, dated January 1, 1996.
PAGE 1
AGREEMENT
between
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
PAGE 2
TABLE OF CONTENTS
Page
Article A Terms of Appointment . . . . . . . . . . . . . . 2
Article B Duties of RPS . . . . . . . . . . . . . . . . . 2
1. Purchases - Retirement Plans and Retirement
Accounts . . . . . . . . . . . . . . . . . 2
2. Retirement Plans - Redemptions to Cover
Distributions . . . . . . . . . . . . . . . 3
3. Exchanges . . . . . . . . . . . . . . . . . 4
4. Shares held by Retirement Accounts . . . . 4
5. Books and Records . . . . . . . . . . . . . 4
6. Tax Information . . . . . . . . . . . . . . 5
7. Other Information to be furnished to the
Funds . . . . . . . . . . . . . . . . . . . 6
8. Correspondence . . . . . . . . . . . . . . 6
9. Mailings/Confirmation Statements . . . . . 6
10. Proxies . . . . . . . . . . . . . . . . . . 6
11. Form N-SAR . . . . . . . . . . . . . . . . 6
12. Backup Withholding . . . . . . . . . . . . 6
Article C Fee and Out-of-Pocket Expenses . . . . . . . . . 7
1. Postage . . . . . . . . . . . . . . . . . . 7
2. Proxies . . . . . . . . . . . . . . . . . . 7
3. Communications . . . . . . . . . . . . . . 7
4. Record Retention . . . . . . . . . . . . . 8
5. Disaster Recovery . . . . . . . . . . . . . 8
Article D Representations and Warranties of RPS . . . . . 8
Article E Representations and Warranties of the Fund . . . 8
Article F Standard of Care/Indemnification . . . . . . . . 9
Article G Dual Interests . . . . . . . . . . . . . . . . 11
Article H Documentation . . . . . . . . . . . . . . . . 11
Article I Recordkeeping/Confidentiality . . . . . . . . 13
Article J Ownership of Software and Related Material . . 13
PAGE 3
Article K As of Transactions . . . . . . . . . . . . . . 13
1. Reporting . . . . . . . . . . . . . . . . 14
2. Liability . . . . . . . . . . . . . . . . 14
Article L Term and Termination of Agreement . . . . . . 16
Article M Notice . . . . . . . . . . . . . . . . . . 17
Article N Assignment . . . . . . . . . . . . . . . . . . 17
Article O Amendment/Interpretive Provisions . . . . . . 17
Article P Further Assurances . . . . . . . . . . . . . . 17
Article Q Maryland Law to Apply . . . . . . . . . . . . 18
Article R Merger of Agreement . . . . . . . . . . . . . 18
Article S Counterparts . . . . . . . . . . . . . . . . . 18
Article T The Parties . . . . . . . . . . . . . . . . . 18
Article U Directors, Trustees and Shareholders and
Massachusetts Business Trust . . . . . . . . . 18
Article V Captions . . . . . . . . . . . . . . . . . . . 19
PAGE 4
AGREEMENT, made as of the first day of January, 1996, by and
between T. ROWE PRICE RETIREMENT PLAN SERVICES, INC., a Maryland
corporation having its principal office and place of business at
100 East Pratt Street, Baltimore, Maryland 21202 ("RPS"), and
EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each Fund
hereinafter referred to as "the Fund") whose definition may be
found in Article T;
WHEREAS, the Funds are named investment options under various
tax-sheltered plans, including, but not limited to, state
deferred compensation plans, 403(b) plans, and profit sharing,
thrift, and money purchase pension plans for self-employed
individuals, professional partnerships and corporations,
(collectively referred to as "Retirement Plans"); and the Fund
has determined that such investments of Retirement Plans in the
Funds are in the best long-term interest of the Funds;
WHEREAS, RPS has the capability of providing special
services, on behalf of the Fund, for the accounts ("Retirement
Accounts") of shareholders participating in these Retirement
Plans;
WHEREAS, RPS represents that it is registered with the
Securities and Exchange Commission as a Transfer Agent under
PAGE 5
Section 17A of the Securities Exchange Act of 1934 ("the '34
Act").
WHEREAS, RPS may subcontract or jointly contract with other
parties on behalf of the Funds to perform certain of the
functions described herein, RPS may also enter into, on behalf of
the Funds, certain banking relationships to perform various
banking services, including, but not limited to, check deposits,
disbursements, automatic clearing house transactions ("ACH") and
wire transfers. Subject to guidelines mutually agreed upon by
the Funds and RPS, excess balances, if any, resulting from these
banking relationships will be invested and the income therefrom
will be used to offset fees which would otherwise be charged to
the Funds under this Agreement.
WHEREAS, the Fund desires to contract with RPS the foregoing
functions and services described herein in connection with the
Retirement Plans and Retirement Accounts;
NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
A. Terms of Appointment
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints RPS to perform
the services and functions described herein in connection with
PAGE 6
certain Retirement Plan and Retirement Accounts as agreed upon by
the parties.
B. Duties of RPS:
RPS agrees that it will perform the following services:
1. Purchases - Retirement Plans and Retirement Accounts
After RPS has received monies from Retirement Plans and
has determined the proper allocation of such monies to the
Retirement Accounts or Retirement Plan participants
("Participants") based upon instructions received from
Participants, Retirement Plans or their designees, or
Retirement Plan Administrator(s) ("Administrator(s)"), RPS
will, as a responsibility under the Agreement:
a. Transmit by check or wire the aggregate money
allocated to each Fund to the Fund's custodian;
b. In the case of a new Participant, establish and
maintain a Retirement Account for such Participant;
and
c. Compute the number of shares of each Fund to which
the Participant is entitled according to the price of
such Fund shares as provided by such Fund for
purchases made at that time and date, and credit each
such Account with the number of shares of the Fund so
purchased.
PAGE 7
2. Retirement Plans - Redemptions to Cover Distributions.
After RPS has received instructions from the Administrator
regarding distributions to be made to Participants or their
designated beneficiaries from Funds designated as investment
options under the Retirement Plan, RPS will, as a
responsibility under the Agreement:
a. Compute the amount due for shares to be redeemed from
each Retirement Account or compute the number of
shares to be redeemed from each such Retirement
Account for such distributions and the total number
of all shares of each Fund to be redeemed in
accordance with the price per share at that time and
date of such Fund as calculated and provided by the
Fund. After such computation, inform the Fund of the
amount necessary to be redeemed. Distribute to
Participants or their designated beneficiaries the
amount to be disbursed.
b. After RPS has received instructions from the
Administrator regarding disbursements to be made
regarding the payment of fees due the Administrator,
or other persons including RPS, RPS will, as a
responsibility under this Agreement:
PAGE 8
i. Compute the number of shares to be redeemed from
each Retirement Account to pay for such
disbursements and the total number of all shares
to be redeemed in accordance with the price per
share at that time and date, of such Fund as
calculated and provided by the Fund;
ii. Effect the necessary redemption from the Fund's
custodian to cover such disbursements; and
iii. Mail to the Administrator or such other person as
designated by the Administrator the amount to be
disbursed.
c. Other Provisions
i. If any instruction tendered by an Administrator to
redeem shares in a Retirement Account is not
satisfactory to RPS, RPS shall promptly notify the
Administrator of such fact together with the
reason therefor;
ii. The authority of RPS to perform its
responsibilities under Paragraph B(2) with respect
to each Fund shall be suspended upon receipt of
notification by such Fund of the suspension of the
determination of the Fund's net asset value per
PAGE 9
share and shall remain suspended until proper
notification; and
iii. The Fund will promptly inform RPS of the
declaration of any dividend or distribution on
account of the capital stock of any Fund so that
RPS may properly credit income and capital gain
payments to each Retirement Account.
3. Exchanges
Effect exchanges of shares of the Funds upon receipt of
appropriate instructions from the Administrator and/or
Participant.
4. Shares held by Retirement Accounts will be
Noncertificate Shares
RPS will have neither responsibility nor authority to
issue stock certificates evidencing ownership of Fund shares
held by Participants. All shares held in Retirement Accounts
maintained by RPS shall be noncertificated shares.
5. Books and Records
RPS shall maintain records showing for each Retirement
Plan or Retirement Account, the following:
a. Names, addresses and tax identification numbers, when
provided;
b. Number of shares held;
PAGE 10
c. Historical information regarding the account of each
Participant and/or Retirement Plan, including
dividends and distributions invested in shares;
d. Pertinent information regarding the establishment and
maintenance of Retirement Plans and Retirement
Accounts necessary to properly administer each
account.
e. Any instructions from a Participant or Administrator
including, all forms furnished by the Fund and
executed by a Participant with respect to elections
with respect to payment options in connection with
the redemption of shares; or distribution elections,
if applicable; and
f. Any information required in order for RPS to perform
the calculations contemplated under this Agreement.
Any such records maintained pursuant to Rule 31a-1 under
the Investment Company Act of 1940 ("the Act") will be
preserved for the periods prescribed in Rule 31a-2
thereunder. Disposition of such records after such
prescribed periods shall be as mutually agreed upon from time
to time by RPS and the Funds. The retention of such records,
which may be inspected by the Fund at reasonable times, shall
be at the expense of the Funds. All records maintained by
PAGE 11
RPS in connection with the performance of its duties under
this Agreement will remain the property of the Funds and, in
the event of termination of this Agreement, will be delivered
to the Fund as of the date of termination or at such other
time as may be mutually agreed upon.
6. Tax Information
RPS shall also prepare and file with appropriate federal
and state agencies, such information returns and reports as
required by applicable Federal and State statutes relating to
redemptions effected in Retirement Accounts which constitute
reportable distributions. RPS will also prepare and submit
to Participants, such reports containing information as is
required by applicable Federal and State law.
7. Other Information to be furnished to the Funds
RPS will furnish to the Fund, such information, including
shareholder lists and statistical information as may be
agreed upon from time to time between RPS and the Fund.
8. Correspondence
RPS will promptly and fully answer correspondence from
Administrators and in some cases, Participants, relating to
Retirement Accounts, transfer agent procedures, and such
other correspondence as may from time to time be mutually
agreed upon with the Funds. Unless otherwise instructed,
PAGE 12
copies of all correspondence will be retained by RPS in
accordance with applicable law.
9. Mailings/Confirmation Statements
RPS will be responsible for mailing all confirmations and
other enclosures and mailings, as requested by the
Administrators and as may be required of the Funds by
applicable Federal or state law.
10. Proxies
RPS shall monitor the mailing of proxy cards and other
material supplied to it by the Fund in connection with
shareholder meetings of the Fund and shall coordinate the
receipt, examination and tabulation of returned proxies and
the certification of the vote to the Fund.
11. Form N-SAR
RPS shall maintain such records, if any, as shall enable
the Fund to fulfill the requirements of Form N-SAR.
12. Withholding
The Fund and RPS shall agree to procedures to be followed
with respect to RPS's responsibilities in connection with
compliance for federal withholding for Participants.
PAGE 13
C. Fees and Out-of-Pocket Expenses
Each Fund shall pay to RPS for its services hereunder fees
computed as set forth in the Schedule attached hereto. Except as
provided below, RPS will be responsible for all expenses relating
to the providing of services. Each Fund, however, will reimburse
RPS for the following out-of-pocket expenses and charges incurred
in providing services:
1. Postage. The cost of postage and freight for mailing
materials to Participants, or their agents, including
overnight delivery, UPS and other express mail services
and special courier services required to transport mail
between RPS locations and mail processing vendors.
2. Proxies. The cost to mail proxy cards and other
material supplied to it by the Fund and costs related to
the receipt, examination and tabulation of returned
proxies and the certification of the vote to the Fund.
3. Communications
a. Print. The printed forms used internally and
externally for documentation and processing
Participant, or their agent's, inquiries and
requests; paper and envelope supplies for letters,
notices, and other written communications sent to
Administrators and Participants, or their agents.
PAGE 14
b. Print & Mail House. The cost of internal and third
party printing and mail house services, including
printing of statements and reports.
c. Voice and Data. The cost of equipment (including
associated maintenance), supplies and services used
for communicating to and from the Participants, or
their agents, the Fund's transfer agent, other Fund
offices, and other agents of either the Fund or RPS.
These charges shall include:
o telephone toll charges (both incoming and outgoing,
local, long distance and mailgrams); and
o data and telephone lines and associated equipment
such as modems, multiplexers, and facsimile
equipment.
4. Record Retention. The cost of maintenance and supplies
used to maintain, microfilm, copy, record, index,
display, retrieve, and store, in microfiche or microfilm
form, documents and records.
5. Disaster Recovery. The cost of services, equipment,
facilities and other charges necessary to provide
disaster recovery for any and all services listed in
this Agreement.
PAGE 15
D. Representations and Warranties of RPS
RPS represents and warrants to the Fund that:
1. It is a corporation duly organized and existing and in
good standing under the laws of Maryland.
2. It is duly qualified to carry on its business in
Maryland.
3. It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
5. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
6. It is registered with the Securities and Exchange
Commission as a Transfer Agent pursuant to Section 17A of the
'34 Act.
E. Representations and Warranties of the Fund
The Fund represents and warrants to RPS that:
1. It is a corporation or business trust duly organized and
existing and in good standing under the laws of Maryland, or
Massachusetts, as the case may be.
2. It is empowered under applicable laws and by its
Articles of Incorporation or Declaration of Trust, as the
PAGE 16
case may be, and By-Laws to enter into and perform this
Agreement.
3. All proceedings required by said Articles of
Incorporation or Declaration of Trust, as the case may be,
and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4. It is an investment company registered under the Act.
5. A registration statement under the Securities Act of
1933 ("the '33 Act") is currently effective and will remain
effective, and appropriate state securities law filing have
been made and will continue to be made, with respect to all
shares of the Fund being offered for sale.
F. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1. RPS shall not be liable to the Fund for any act or
failure to act by it or its agents or subcontractors on
behalf of the Fund in carrying or attempting to carry out the
terms and provisions of this Agreement provided RPS has acted
in good faith and without negligence or willful misconduct
and selected and monitored the performance of its agents and
subcontractors with reasonable care.
2. The Fund shall indemnify and hold RPS harmless from and
against all losses, costs, damages, claims, actions and
PAGE 17
expenses, including reasonable expenses for legal counsel,
incurred by RPS resulting from: (i) any action or omission by
RPS or its agents or subcontractors in the performance of
their duties hereunder; (ii) RPS acting upon instructions
believed by it to have been executed by a duly authorized
officer of the Fund; or (iii) RPS acting upon information
provided by the Fund in form and under policies agreed to by
RPS and the Fund. RPS shall not be entitled to such
indemnification in respect of actions or omissions
constituting negligence or willful misconduct of RPS or where
RPS has not exercised reasonable care in selecting or
monitoring the performance of its agents or subcontractors.
3. Except as provided in Article K of this Agreement, RPS
shall indemnify and hold harmless the Fund from all losses,
costs, damages, claims, actions and expenses, including
reasonable expenses for legal counsel, incurred by the Fund
resulting from negligence or willful misconduct of RPS or
which result from RPS' failure to exercise reasonable care in
selecting or monitoring the performance of its agents or
subcontractors. The Fund shall not be entitled to such
indemnification in respect of actions or omissions
PAGE 18
constituting negligence or willful misconduct of such Fund or
its agents or subcontractors; unless such negligence or
misconduct is attributable to RPS.
4. In determining RPS' liability, an isolated error or
omission will normally not be deemed to constitute negligence
when it is determined that:
o RPS had in place "appropriate procedures".
o the employees responsible for the error or omission had
been reasonably trained and were being appropriately
monitored; and
o the error or omission did not result from wanton or
reckless conduct on the part of the employees.
It is understood that RPS is not obligated to have in place
separate procedures to prevent each and every conceivable
type of error or omission. The term "appropriate
procedures" shall mean procedures reasonably designed to
prevent and detect errors and omissions. In determining the
reasonableness of such procedures, weight will be given to
such factors as are appropriate, including the prior
occurrence of any similar errors or omissions when such
procedures were in place and transfer agent industry
standards in place at the time of the occurrence.
PAGE 19
5. In the event either party is unable to perform its
obligations under the terms of this Agreement because of
acts of God, strikes or other causes reasonably beyond its
control, such party shall not be liable to the other party
for any loss, cost, damage, claims, actions or expense
resulting from such failure to perform or otherwise from
such causes.
6. In order that the indemnification provisions contained
in this Article F shall apply, upon the assertion of a claim
for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly
notify the other party of such assertion, and shall keep the
other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim,
or to defend against said claim in its own name or in the
name of the other party. The party seeking indemnification
shall in no case confess any claim or make any compromise in
any case in which the other party may be required to
indemnify it except with the other party's prior written
consent.
PAGE 20
7. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of
this Agreement.
G. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both RPS and the Fund and
that the existence of any such dual interest shall not affect the
validity of this Agreement or of any transactions hereunder
except as otherwise provided by a specific provision of
applicable law.
H. Documentation
1. As requested by RPS, the Fund shall promptly furnish to
RPS the following:
a. A certified copy of the resolution of the
Directors/Trustees of the Fund authorizing the
appointment of RPS and the execution and delivery
of this Agreement;
b. A copy of the Articles of Incorporation or
Declaration of Trust, as the case may be, and By-
Laws of the Fund and all amendments thereto;
c. Specimens of all forms of outstanding and new
stock/share certificates in the forms approved by
the Board of Directors/Trustees of the Fund with a
PAGE 21
certificate of the Secretary of the Fund as to such
approval;
d. All account application forms and other documents
relating to shareholders' accounts;
e. An opinion of counsel for the Fund with respect to
the validity of the stock, the number of Shares
authorized, the status of redeemed Shares, and the
number of Shares with respect to which a
Registration Statement has been filed and is in
effect; and
f. A copy of the Fund's current prospectus.
The delivery of any such document for the purpose of any
other agreement to which the Fund and RPS are or were parties
shall be deemed to be delivery for the purposes of this
Agreement.
2. As requested by RPS, the Fund will also furnish from
time to time the following documents:
a. Each resolution of the Board of Directors/Trustees
of the Fund authorizing the original issue of its
shares;
b. Each Registration Statement filed with the
Securities and Exchange Commission and amendments
PAGE 22
and orders thereto in effect with respect to the
sale of shares with respect to the Fund;
c. A certified copy of each amendment to the Articles
of Incorporation or Declaration of Trust, and the
By-Laws of the Fund;
d. Certified copies of each vote of the Board of
Directors/Trustees authorizing officers to give
instructions to the Fund;
e. Specimens of all new certificates accompanied by
the Board of Directors/Trustees' resolutions
approving such forms;
f. Such other documents or opinions which RPS, in its
discretion, may reasonably deem necessary or
appropriate in the proper performance of its
duties; and
g. Copies of new prospectuses issued.
3. RPS hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for
safekeeping of check forms and facsimile signature
imprinting devices, if any, and for the preparation or use,
and for keeping account of, such forms and devices.
PAGE 23
I. Recordkeeping/Confidentiality
1. RPS shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem
advisable, provided that RPS shall keep all records in such
form and in such manner as required by applicable law,
including the Act and the '34 Act.
2. RPS and the Fund agree that all books, records,
information and data pertaining to the business of the other
party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed
to any other person, except: (a) after prior notification
to and approval in writing by the other party hereto, which
approval shall not be unreasonably withheld and may not be
withheld where RPS or the Fund may be exposed to civil or
criminal contempt proceedings for failure to comply; (b)
when requested to divulge such information by duly
constituted governmental authorities; or (c) after so
requested by the other party hereto.
J. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures
and similar items purchased and/or developed and used by RPS in
PAGE 24
performance of the Agreement shall be the property of RPS and
will not become the property of the Fund.
K. As Of Transactions
For purposes of this Article K, the term "Transaction" shall
mean any single or "related transaction" (as defined below)
involving the purchase or redemption of shares (including
exchanges) that are processed at a time other than the time of
the computation of the Fund's net asset value per share next
computed after receipt of any such transaction order by RPS. If
more than one Transaction ("Related Transaction") in the Fund is
caused by or occurs as a result of the same act or omission, such
transactions shall be aggregated with other transactions in the
Fund and be considered as one Transaction.
1. Reporting
RPS shall:
a. Utilize a system to identify all Transactions, and
shall compute the net effect of such Transactions
upon the Fund on a daily, monthly and rolling 365
day basis. The Monthly and rolling 365 day periods
are hereinafter referred to as ("Cumulative").
b. Supply to the Fund, from time to time as mutually
agreed upon, a report summarizing the Transactions
and the daily and Cumulative net effects of such
PAGE 25
Transactions both in terms of aggregate dilution
and loss ("Dilution") or gain and negative dilution
("Gain") experienced by the Fund, and the impact
such Gain or Dilution has had upon the Fund's net
asset value per share.
c. With respect to any Transaction which causes
Dilution to the Fund of $25,000 or more,
immediately provide the Fund: (i) a report
identifying the Transaction and the Dilution
resulting therefrom, (ii) the reason such
Transaction was processed as described above, and
(iii) the action that RPS has or intends to take to
prevent the reoccurrence of such as of processing
("Report").
2. Liability
a. It will be the normal practice of the Fund not to
hold RPS liable with respect to any Transaction
which causes Dilution to any single Fund of less
than $25,000. RPS will, however, closely monitor
for each Fund the daily and Cumulative
Gain/Dilution which is caused by Transactions of
less than $25,000. When the Cumulative Dilution to
any Fund exceeds 3/10 of 1% per share, RPS, in
PAGE 26
consultation with counsel to the Fund, will make
appropriate inquiry to determine whether it should
take any remedial action. RPS will report to the
Board of Directors/Trustees of the Fund ("Board"),
as appropriate, any action it has taken.
b. Where a Transaction causes Dilution to a Fund of
$25,000 or more ("Significant Transaction"), RPS
will review with counsel to the Fund, the Report
and the circumstances surrounding the underlying
Transaction to determine whether the Transaction
was caused by or occurred as a result of a
negligent act or omission by RPS. If it is
determined that the Dilution is the result of a
negligent action or omission by RPS, RPS and
outside counsel for the Fund, as appropriate, will
negotiate settlement. All such Significant
Transactions will be reported to the Board at its
next meeting (unless the settlement fully
compensates the Fund for any Dilution). Any
Significant Transaction, however, causing Dilution
in excess of the lesser of $100,000 or a penny per
share will be promptly reported to the Board.
PAGE 27
Settlement will not be entered into with RPS until
approved by the Board. The factors the Board or
the Funds would be expected to consider in making
any determination regarding the settlement of a
Significant Transaction would include but not be
limited to:
i. Procedures and controls adopted by RPS to
prevent As Of processing;
ii. Whether such procedures and controls were being
followed at the time of the Significant
Transaction;
iii. The absolute and relative volume of all
transactions processed by RPS on the day of the
Significant Transaction;
iv. The number of Transactions processed by RPS
during prior relevant periods, and the net
Dilution/Gain as a result of all such
transactions to the Fund and to all other Price
Funds; and
v. The prior response of RPS to recommendations
made by the Funds regarding improvement to the
Transfer Agent's As Of Processing Procedures.
PAGE 28
c. In determining RPS' liability with respect to a
Significant Transaction, an isolated error or omission will
normally not be deemed to constitute negligence when
it is determined that:
o RPS had in place "appropriate procedures".
o the employees responsible for the error or omission
had been reasonably trained and were being
appropriately monitored; and
o the error or omission did not result from wanton or
reckless conduct on the part of the employees.
It is understood that RPS is not obligated to have in
place separate procedures to prevent each and every
conceivable type of error or omission. The term
"appropriate procedures" shall mean procedures
reasonably designed to prevent and detect errors and
omissions. In determining the reasonableness of such
procedures, weight will be given to such factors as are
appropriate, including the prior occurrence of any
similar errors or omissions when such procedures were
in place and transfer agent industry standards in place
at the time of the occurrence.
L. Term and Termination of Agreement
1. This Agreement shall run for a period of one (1) year
from the date first written above and will be renewed from
PAGE 29
year to year thereafter unless terminated by either party as
provided hereunder.
2. This Agreement may be terminated by the Funds upon one
hundred twenty (120) days' written notice to RPS; and by
RPS, upon three hundred sixty-five (365) days' writing
notice to the Fund.
3. Upon termination hereof, the Fund shall pay to RPS such
compensation as may be due as of the date of such
termination, and shall likewise reimburse for out-of-pocket
expenses related to its services hereunder.
M. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
N. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party
PAGE 30
O. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, RPS and the Fund may agree from time
to time on such provisions interpretive of or in addition to the
provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions are to be signed by all
parties and annexed hereto, but no such provision shall
contravene any applicable federal or state law or regulation and
no such interpretive or additional provision shall be deemed to
be an amendment of this Agreement.
P. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
Q. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
R. Merger of Agreement
This Agreement, including the attached Schedule supersede
any prior agreement with respect to the subject hereof, whether
oral or written.
PAGE 31
S. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
T. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
between such individual Fund and RPS. In the case of a series
Fund or trust, all references to "the Fund" are to the individual
series or portfolio of such fund or trust, or to such Fund or
trust on behalf of the individual series or portfolio, as
appropriate. Any reference in this Agreement to "the parties"
shall mean RPS and such other individual Fund as to which the
matter pertains. The "Fund" also includes any T. Rowe Price Fund
which may be established after the date of this Agreement.
Any reference in this Agreement to "the parties" shall mean
the Funds and RPS.
U. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither
the holders of shares in the Fund nor any Directors or Trustees
of the Fund shall be personally liable hereunder. With respect
PAGE 32
to any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund"
means and refers to the trustees from time to time serving under
the applicable trust agreement (Declaration of Trust) of such
Trust as the same may be amended from time to time. It is
expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of
this Agreement has been authorized by the trustees and signed by
an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
V. Captions
The captions in the Agreement are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
PAGE 33
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under
their seals by and through their duly authorized officers.
T. ROWE PRICE RETIREMENT PLAN DATED: _______________________
SERVICES, INC.
ATTEST:
/s/Charles E. Vieth
By: ________________________ ________________________
Charles E. Vieth
PAGE 34
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
PAGE 35
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND,
INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE VALUE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
PAGE 36
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
DATED: ______________________
ATTEST:
/s/Carmen F. Deyesu
______________________________ BY: __________________________
Carmen F. Deyesu
PAGE 37
APPENDIX A
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Index Trust, Inc. on behalf of the
T. Rowe Price Equity Index Fund
T. Rowe Price Institutional International Funds, Inc. on
behalf of the
Foreign Equity Fund
PAGE 38
T. Rowe Price International Funds, Inc. on behalf of the
T. Rowe Price International Bond Fund and
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of the
T. Rowe Price OTC Fund
T. Rowe Price Personal Strategy Funds, Inc. on behalf of
the
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Spectrum Fund, Inc. on behalf of the
Spectrum Growth Fund
Spectrum Income Fund
PAGE 39
T. Rowe Price Value Fund, Inc.
T. Rowe Price U.S. Treasury Funds, Inc. on behalf of the
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Summit Funds, Inc.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
PAGE 40
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
FEE SCHEDULE
Fees for transfer agent services performed for retirement plan
accounts serviced by T. Rowe Price Retirement Plan Services, Inc.
("RPS").
Effective January 1, 1996 to December 31, 1996.
A. Base Fee
A monthly base fee of $750,000 ($9,000,000 per year)
allocated pro rata by account.
B. Per Participant Fee
A monthly per participant fee of $3.583 for each active
(non-zero balance) participant being serviced at the end of
the month. This fee will be allocated among the Funds based
on the relative percentage of T. Rowe Price assets at the
end of the month.
C. Per Transaction Fee
A fee for each Account transaction will be charged at the
rate of $.15 per transaction, except for dividend
transactions.
D. Institutional Support Group (ISG) Telephone Call
A fee of $5.50 per ISG telephone call will be charged to the
Fund (s) involved in the telephone call.
E. New Participant Fee
A one-time new participant fee of $3.50 will be charged each
time a participant is added to the records.
F. Perks Fee
Fees for PERKS plans will be $10 per account, maximum $40
per participant, capped at 25 basis points.
PAGE 41
G. Billing Procedures
RPS will render a monthly invoice which shall include: the
number of participants in existence at month-end and the
Fund's pro rata share; the assets by Fund at month-end; the
number of transactions recorded during the month for each
Fund; and the number of new participants added during the
month and the Fund's pro rata share. RPS will render a
separate invoice for out-of-pocket expenses for which RPS is
entitled to reimbursement under the Agreement and the Fund's
pro rata share.
H. New Funds
Funds added during the term of this Agreement may have their
Maintenance and Transaction charges waived for a period of
time agreed upon between RPS and the Funds following the
establishment of the Fund. Out-of-pocket expenses will be
billed to the Fund from the Fund's inception.
IN WITNESS WHEREOF, T. Rowe Price Funds and T. Rowe Price
Retirement Plan Services, Inc. have agreed upon this fee schedule
to be executed in their names and on their behalf through their
duly authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE RETIREMENT PLAN
SERVICES, INC.
Name /s/Carmen F. Deyesu Name /s/Charles E. Vieth
Title Treasurer Title President
Date __________________________ Date _______________________
February 7, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: T. Rowe Price International Funds, Inc. (the
"Corporation")
File Nos.: 002-56639/811-2958
Commissioners:
We are counsel to the above-referenced registrant which
proposes to file, pursuant to paragraph (b) of Rule 485 (the
"Rule"), Post-Effective Amendment No. 60 (the "Amendment") to its
registration statement under the Securities Act of 1933, as
amended.
Pursuant to paragraph (b)(4) of the Rule, we represent that
the Amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b) of the
Rule.
Sincerely,
/s/Shereff, Friedman, Hoffman & Goodman, LLP
Shereff, Friedman, Hoffman & Goodman, LLP
PAGE 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus and Statement of Additional Information constituting
parts of this Post-Effective Amendment No. 60 to the Registration
Statement on Form N-1A of our reports dated November 17, 1995,
relating to the financial statements and financial highlights
appearing in the October 31, 1995 Annual Reports to Shareholders
of the International Discovery Fund, International Stock Fund,
European Stock Fund, Japan Fund, Latin America Fund, New Asia
Fund and Emerging Markets Stock Fund (seven of the portfolios
constituting T. Rowe Price International Funds, Inc.). We also
consent to the references to us under the heading "Financial
Highlights" in the Prospectus and under the heading "Independent
Accountants" in the Statement of Additional Information.
/s/PRICE WATERHOUSE LLP
Price Waterhouse LLP
Baltimore, Maryland
February 5, 1996
PAGE 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading
"Independent Accountants" in the Statement of Additional
Information constituting part of this Post-Effective Amendment
No. 60 to the Registration Statement on Form N-1A of the Foreign
Equity Fund (the portfolio comprising Institutional International
Funds, Inc.) and the Global Stock Fund (one of the portfolios
constituting T. Rowe Price International Funds, Inc.).
/s/PRICE WATERHOUSE LLP
Price Waterhouse LLP
Baltimore, Maryland
February 5, 1996
PAGE 3
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
T. Rowe Price International Funds, Inc. and
Shareholders of T. Rowe Price New Asia Fund
We consent to the incorporation by reference in Post-
Effective Amendment No. 60 to the Registration Statement of the
T. Rowe Price International Funds, Inc. on Form N-1A (File No.
002-65539) of our report dated November 17, 1994, on our audit of
the statement of changes in net assets for the year ended October
31, 1994, and the financial highlights for the year then ended,
the ten months ended October 31, 1993, each of the two years in
the period ended December 31, 1992, and from September 28, 1990
(commencement of operations) to December 31, 1990 of the T. Rowe
Price New Asia Fund.
/s/COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Baltimore, Maryland
February 5, 1996
PAGE 4
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
T. Rowe Price International Funds, Inc.
and the Shareholders of
T. Rowe Price New Asia Fund
We have audited the statement of changes in net assets for
the year ended October 31, 1994, and the financial highlights for
the year ended October 31, 1994, and ten months ended October 31,
1993, each of the two years in the period ended December 31,
1992, and from September 28, 1990 (commencement of operations) to
December 31, 990 of the T. Rowe Price New Asia Fund (the "Fund").
This financial statement and financial highlights are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on this financial statement and financial
highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statement and financial
highlights referred to above present fairly, in all material
respects, the changes in net assets for the year ended October
31, 1994 and the financial highlights of the Fund for each of the
respective periods stated in the first paragraph in conformity
with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Baltimore, Maryland
November 17, 1994
PAGE 5
February 5, 1996
Coopers and Lybrand LLP
217 East Redwood Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
This letter is furnished in connection with the options and
consents you are to give with respect to the financial statements
of T. Rowe Price New Asia Fund (one of the portfolios
constituting T. Rowe Price International Funds, Inc.) and the
Foreign Equity Fund (the portfolio comprising Institutional
International Funds, Inc.) for the periods ended October 31,
1994, which statements are to be incorporated by reference in the
Prospectuses and Statement of Additional Information constituting
parts of the Post-Effective Amendments No. 60 and No. 7 to the
respective Fund's Registration Statements on Form N-1A.
We have audited the financial statements of T. Rowe Price New
Asia Fund and the Foreign Equity Fund for the year ended October
31, 1995 as set forth in our reports dated November 17, 1995.
During our audit, we obtained no knowledge of any significant
matters that might have a material effect on, or require
disclosure in the financial statements for the periods ended
October 31, 1994.
In addition we have (1) read the minutes of meetings of
shareholders and the boards of directors as set forth in the
minute books at February 5, 1996, officials of the company having
advised us that the minutes of all such meetings through that
date were set forth therein, (2) reviewed the unaudited financial
information of the Funds for the period ended February 5, 1996,
(3) made inquiries of and obtained letters of representation from
the Funds' legal counsel concerning litigation, claims and
assessments, and (4) made inquiries of, had discussions with and
obtained letters of representation from certain officials
responsible for financial and accounting matters of the Funds as
to transactions and events subsequent to October 31, 1995. The
foregoing procedures do not constitute an audit in accordance
with generally accepted auditing standards and, accordingly, we
cannot and do not express an opinion on the financial statements
subsequent to October 31, 1995. Nothing has come to our
attention as a result of the foregoing procedures which in our
judgment would indicate that during the period from October 31,
PAGE 6
1995 to February 5, 1996 there have been any events which would
have a material effect on, or require disclosure in, the
financial statements covered by your opinions.
This letter is solely for your information in connection with
your previously mentioned opinions and consents.
Yours very truly,
/s/Price Waterhouse LLP
PRICE WATERHOUSE LLP
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