PRICE T ROWE INTERNATIONAL SERIES INC, PRE 14A, 2000-07-31

PRICE T ROWE INTERNATIONAL SERIES INC
PRE 14A, 2000-07-31

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Section Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

Institutional International Funds, Inc. 033-29697/811-5833
Foreign Equity Fund
T. Rowe Price International Funds, Inc. 002-65539/811-2958
T. Rowe Price International Stock Fund
T. Rowe Price International Bond 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 Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price Spectrum Fund, Inc. 033-10992/811-4998
Spectrum International Fund
T. Rowe Price International Series, Inc. 033-52171/811-07145
T. Rowe Price International Stock Portfolio
_________________________________________________________________
(Name of Registrant as Specified in its Charter)

<PAGE>

T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price Spectrum Fund, Inc. 033-10992/811-4998
Spectrum International Fund
T. Rowe Price International Series, Inc. 033-52171/811-07145
T. Rowe Price International Stock Portfolio
_______________________________________________________________
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________
3)
Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): (1)
________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________
5) Total fee paid:
________________________________________________________
[ ] Fee paid previously with preliminary materials.
________________________________________________________

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
_______________________________________________________
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4) Date filed:
________________________________________________________

<PAGE>

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
T. Rowe Price Funds
100 East Pratt Street
Baltimore, Maryland 21202

Patricia B. Lippert
Secretary

September 1, 2000

An annual meeting of shareholders of the funds, all Maryland corporations, will
be held on Wednesday, October 25, 2000, at 2:00 p.m., eastern time, at the Four
Seasons Hotel, 2800 Pennsylvania Avenue, N.W., Washington, D.C. 20007. The
following matters will be acted upon at that time:

1. ALL FUNDS. To approve or disapprove a new investment management agreement
for each fund;

2. FOREIGN EQUITY FUND. To approve or disapprove amending a fundamental policy
of the Foreign Equity Fund to permit it to engage in securities lending;

3. NEW ASIA FUND. To approve or disapprove amending a fundamental policy of the
New Asia Fund to change its status from diversified to non-diversified;

4. ALL FUNDS EXCEPT SPECTRUM INTERNATIONAL. To elect five directors to serve on
the Boards of the funds until the next annual meeting, if any, or until their
successors shall have been duly elected and qualified;

5. ALL FUNDS. To ratify or reject the appointment of the firm of
PricewaterhouseCoopers LLP as independent accountants for each fund for its
current fiscal year; and

6. To transact such other business as may properly come before the meeting and
any adjournments thereof.

Institutional International Funds, Inc.
consisting of its series;
Foreign Equity Fund
T. Rowe Price International Funds, Inc.
consisting of its series;
T. Rowe Price International Stock Fund
T. Rowe Price International Bond 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 Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Bond Fund -Advisor Class
T. Rowe Price International Stock Fund -Advisor Class
T. Rowe Price Spectrum Fund, Inc.
consisting of its series;
Spectrum International Fund
T. Rowe Price International Series, Inc.
consisting of its series;
T. Rowe Price International Stock Portfolio
(Collectively the "funds" and,
individually, a "fund")
<PAGE>

The shareholders of each fund will vote only on those proposals that apply to
their fund(s). Only shareholders of record of common stock at the close of
business on August 25, 2000, are entitled to notice of, and to vote at, this
meeting or any adjournment thereof. THE BOARDS OF THE FUNDS RECOMMEND THAT YOU
VOTE IN FAVOR OF EACH PROPOSAL.

PATRICIA B. LIPPERT

<TABLE>
<CAPTION>
YOUR VOTE IS IMPORTANT
------------------------------------------------------------------------------
<S><C>
ALL FUNDS (OTHER THAN INTERNATIONAL STOCK PORTFOLIO)
SHAREHOLDERS ARE URGED TO DESIGNATE THEIR CHOICES ON EACH OF THE MATTERS TO BE
ACTED UPON BY USING ONE OF THE FOLLOWING THREE METHODS:

1. VOTE BY INTERNET.

. Read the proxy statement.

. Go to the proxy voting link found on your proxy card.

. Enter the control number found on your proxy card.

. Follow the instructions using your proxy card as a guide.

2. VOTE BY TELEPHONE.

. Read the proxy statement.

. Call the toll-free number found on your proxy card.

. Enter the control number found on your proxy card.

. Follow the recorded instructions using your proxy card as a guide.

3. VOTE BY MAIL.

. Date, sign, and return the enclosed proxy card in the envelope
provided, which requires no postage if mailed in the United States.

INTERNATIONAL STOCK PORTFOLIO

SHAREHOLDERS ARE URGED TO DESIGNATE THEIR CHOICES ON EACH OF THE MATTERS TO BE
ACTED UPON BY USING THE FOLLOWING METHOD:

1. VOTE BY MAIL.

. Date, sign, and return the enclosed proxy card in the envelope
provided, which requires no postage if mailed in the United States.

YOUR PROMPT RESPONSE WILL HELP ASSURE A QUORUM AT THE MEETING AND AVOID THE
ADDITIONAL EXPENSE OF FURTHER SOLICITATION.

------------------------------------------------------------------------------
</TABLE>

<PAGE>

INSTITUTIONAL INTERNATIONAL FUNDS, INC.

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

T. ROWE PRICE SPECTRUM FUND, INC., AND

T. ROWE PRICE INTERNATIONAL SERIES, INC.

Annual Meeting of Shareholders -- October 25, 2000

PROXY STATEMENT

This document gives you information you need in order to vote on the matters
coming before the annual meeting and is furnished in connection with the
solicitation of proxies by the funds, all Maryland corporations. If you have any
questions, please feel free to call us toll free, 1-800-541-5910.

Who is asking for my vote?

The boards of the funds have asked that you vote on the matters listed in the
notice of annual meeting of shareholders. The votes will be formally counted at
the annual meeting on Wednesday, October 25, 2000, and if the annual meeting is
adjourned, at any later meeting. You may vote in person at the annual meeting,
by Internet, (except for shareholders of International Stock Portfolio), by
telephone, or by returning your completed proxy card in the postage-paid
envelope provided. Details can be found on the enclosed proxy insert. Do not
mail the proxy card if you are voting by Internet or telephone.

Who is eligible to vote?

Shareholders of record at the close of business on August 25, 2000, (the "RECORD
DATE") are notified of the meeting and are entitled to vote. The notice of
annual meeting, the proxy card, and the proxy statement were mailed to
shareholders of record on or about September 1, 2000.

Shareholders are entitled to one vote for each full share and a proportionate
vote for each fractional share of the fund(s) they held as of August 25, 2000.
Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries, or otherwise) will be voted as follows, unless a
written instrument or court order providing to the contrary has been filed with
the fund(s): (1) if only one votes, that vote will bind all; (2) if more than
one votes, the vote of the majority will bind all; and (3) if more than one
votes and the vote is evenly divided, the vote will be cast proportionately.

<PAGE>

What are shareholders being asked to vote on?

At a meeting held on July 18, 2000, the Boards of the funds, including the
independent directors, unanimously approved submitting the following proposals:

<TABLE>
<CAPTION>
PROPOSAL FUNDS AFFECTED
-------------------------------------------------------------------------------------------------------
<S> <C>
1. To approve or disapprove a new Investment Management Agreement. All funds
2. To approve an amendment of the fundamental policy of the Foreign Equity Foreign Equity Fund
Fund to permit the fund to engage in securities lending. only
3. To approve an amendment of the fundamental policy of the New Asia Fund to T. Rowe Price New
change its status from diversified to non-diversified. Asia Fund only
4. To elect five directors to serve on the Boards of the funds until the All funds (other than
next annual meeting, if any, or until their successors shall have been duly Spectrum
elected and qualified; International Fund)
5. To ratify the appointment of the firm of PricewaterhouseCoopers LLP as All funds
independent accountants for each fund for its current fiscal year.
6. To transact such other business as may properly come before the meeting All funds
and any adjournments thereof.
-------------------------------------------------------------------------------------------------------
</TABLE>

How can I get more information about the funds?

A COPY OF EACH FUND'S MOST CURRENT ANNUAL AND SEMIANNUAL SHAREHOLDER REPORT WAS
MAILED TO ALL SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS FOR THE FUND'S
FISCAL PERIOD-END. IF YOU WOULD LIKE TO RECEIVE ADDITIONAL COPIES OF ANY REPORT,
PLEASE CONTACT T. ROWE PRICE BY CALLING 1-800-541-5910; WRITING TO 100 EAST
PRATT STREET, BALTIMORE, MARYLAND 21202; OR VISITING OUR WEBSITE AT
WWW.TROWEPRICE.COM. ALL COPIES ARE PROVIDED FREE OF CHARGE.

<PAGE>

PROPOSAL NO. 1 -- NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN T. ROWE PRICE
INTERNATIONAL, INC. AND THE FUNDS.

Why are shareholders being asked to approve new investment management
agreements?

Rowe-Price Fleming International, Inc. ("Price-Fleming") was the investment
manager of the funds since their inception. Price-Fleming was 50% owned by
Robert Fleming Holdings Limited ("Flemings") and 50% owned by T. Rowe Price
Associates, Inc. ("T. Rowe Price"). On August 8, T. Rowe Price became the sole
owner of Price-Fleming. At the same time, T. Rowe Price changed the name of
Price-Fleming to T. Rowe Price International, Inc. ("Price International"). The
August 8, 2000 purchase caused the investment management agreements between the
funds and Price-Fleming (the Price-Fleming Agreements") to terminate
automatically. In order to avoid disruption of the funds' investment management
programs, the Boards of Directors of the funds, in accordance with Rule 15a-4
under the Investment Company Act of 1940, approved interim investment management
agreements ("Interim Agreements") between the funds and Price International. The
Interim Agreements have a term of only 150 days from August 8, 2000. Therefore,
in order to ensure continuity and avoid disruption of the funds' investment
management programs, the Boards of the funds decided to approve continuing
investment management agreements (the "Proposed Agreements") with Price
International and recommended that shareholders of the funds approve these
agreements as well.

How do the Proposed Agreements differ from the current ones?

The Proposed Agreements are exactly the same as the Price-Fleming Agreements
except that they reflect the new name of the adviser to the funds: Price
International instead of Price-Fleming. There are no changes in the fees or
services being provided. The Proposed Agreements are also the same as the
Interim Agreements except that the term of the Proposed Agreements runs from
year to year, subject to approval of the Boards of Directors, rather than 150
days. Additionally, the Interim Agreements include a provision requiring the
investment management fees due Price International to be held in escrow pending
approval of the Proposed Agreements.

What matters were considered by the Boards in recommending the new advisory
agreement?

On July 18, 2000, the Board of Directors of the funds, including the directors
who are not "interested persons" of the investment manager or the fund,
unanimously voted to approve the Proposed Agreements.

<PAGE>

In authorizing the Proposed Agreements, the Boards of the funds took special
note that the investment management fees to be paid by the funds and the level
of services to be received by the funds were exactly the same as under the
Interim and Price-Fleming Agreements. The Boards also considered the performance
of the funds on an absolute basis and relative to other international and global
funds, the level of investment management fees charged by the funds and other
comparable international and global mutual funds and the overall expense ratios
of the funds in relation to other international and global mutual funds. The
boards reviewed the expertise, personnel and resources Price International is
willing to commit to the management of the funds. The boards took into account
benefits that the funds and Price International might receive as a result of the
funds being a part of the T. Rowe Price family of mutual funds and Price
International being an affiliate of T. Rowe Price. Finally, the boards took into
account all of the information presented to them at their March 8, 2000 board
meeting in connection with their annual review of the funds' investment
management agreements. After reviewing all of these factors, the boards
unanimously recommended that shareholders of the funds approve the Proposed
Agreements.

When were the current agreements adopted?

The Interim Agreements were approved by the directors of the funds on July 18,
2000, effective August 8, 2000. The Price Fleming Agreements were last approved
by the directors of the funds on March 8, 2000. By their terms, the Proposed
Agreements will continue in effect from year to year as long as they are
approved annually by the funds' Boards (at a meeting called for that purpose) or
by vote of a majority of the fund's outstanding shares. In either case, renewal
of the Proposed Agreements must be approved by a majority of the funds'
independent directors. The Proposed Agreements are subject to termination
without penalty on 60 days' written notice by either party to the other and will
terminate automatically in the event of assignment.

What do the funds currently pay to Price-International for its advisory
services?

For its services to the funds under the Interim Agreements, Price-International
is paid a management fee ("MANAGEMENT FEE") at the rates set forth below as a
percentage of each fund's average weekly net assets. As noted, the management
fees paid under the Interim Agreements are being held in escrow pending approval
of the Proposed Agreements.

<PAGE>

<TABLE>
Table 1 Fiscal Year-End Management Fees & Rates
<CAPTION>
Individual Fee Group Fee Rate Total Fee Rate Total Fees
T. Rowe Price Fund Rate
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foreign Equity Fund/1/ 0.70% -- 0.74%
-------------------------------------------------------------------------------------------------------------
International Stock Fund 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
International Bond Fund 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
International Discovery Fund 0.75% 0.32% 1.07%
-------------------------------------------------------------------------------------------------------------
European Stock Fund 0.50% 0.32% 0.82%
-------------------------------------------------------------------------------------------------------------
New Asia Fund 0.50% 0.32% 0.82%
-------------------------------------------------------------------------------------------------------------
Japan Fund 0.50% 0.32% 0.82%
-------------------------------------------------------------------------------------------------------------
Latin America Fund 0.75% 0.32% 1.07%
-------------------------------------------------------------------------------------------------------------
Emerging Markets Stock Fund 0.75% 0.32% 1.07%
-------------------------------------------------------------------------------------------------------------
Emerging Markets Bond Fund 0.45% 0.32% 0.77%
-------------------------------------------------------------------------------------------------------------
Global Stock Fund 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
International Growth & Income Fund 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
International Bond Fund - Advisor Class 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
International Stock Fund - Advisor Class 0.35% 0.32% 0.67%
-------------------------------------------------------------------------------------------------------------
Spectrum International/2/ 0.45% to 1.07%

-------------------------------------------------------------------------------------------------------------
International Stock Portfolio/1/

-------------------------------------------------------------------------------------------------------------
</TABLE>

/1/ There is no group fee.

/2/
Spectrum Fund does not pay a management fee. However, shareholders in the fund
indirectly pay the management fees of the underlying funds in which Spectrum
invests. A range is given because the management fee fluctuates based on the
portion of the fund's assets invested in each underlying fund.

Table 2 sets forth the name of each investment company for which Price
International acts as investment advisor or sub-advisor, the annual rate of
compensation (i.e., the fee Price-International is paid for its services as
adviser to the respective portfolio), and the fund's net assets as of June 30,
2000.

<PAGE>

<TABLE>
Table 2 Comparison of Advisory Fees of T. Rowe
Price Funds
Advised by Price International
<CAPTION>
Net Assets
of Fund at
Investment 06/30/00 (in Annual Rate of Fees Waived or
Name of Fund Objective thousands) Compensation Reduced
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foreign Equity Fund Long-term $3,361,796 0.70% No
growth of capi
tal through
investments
primarily in the
common
stocks of
established,
non-U.S. com
panies
-------------------------------------------------------------------------------------------------------------------
International Stock Fund Long-term $10,615,338 0.67% No
growth of capi
tal through
investments
primarily in the
common
stocks of
established,
non-U.S. com
panies
-------------------------------------------------------------------------------------------------------------------
International Bond Fund To provide $778,672 0.67% No
high current
income and
capital appre
ciation by
investing pri
marily in high-
quality, non
dollar -denom
inated bonds
outside the
U.S.
-------------------------------------------------------------------------------------------------------------------
International Discovery Fund Long-term $381,462 1.07% No
growth of capi
tal through
investments
primarily in the
common
stocks of rap
idly growing,
small to
medium-sized
companies
outside the
U.S.
-------------------------------------------------------------------------------------------------------------------
European Stock Fund Long-term $1,382,168 0.82% No
growth of capi
tal through
investments
primarily in the
common
stocks of Euro
pean compa
nies. Current
income is a
secondary
objective.
-------------------------------------------------------------------------------------------------------------------
New Asia Fund Long-term $995,829 0.82% No
growth of capi
tal through
investments in
companies
located (or
with primary
operations) in
Asia (exclud
ing Japan).
-------------------------------------------------------------------------------------------------------------------
Global Bond Fund High current $32,336 0.67% Yes
income and, /a/
secondarily,
capital appre
ciation and
protection of
principal by
investing pri
marily in high-
quality foreign
and U.S. gov
ernment
bonds.
-------------------------------------------------------------------------------------------------------------------
Japan Fund Long-term $513,739 0.82% No
growth of capi
tal through
investments in
common
stocks of com
panies located
(or with pri
mary opera
tions) in Japan.
-------------------------------------------------------------------------------------------------------------------
Latin America Fund Long-term $200,385 1.07% No
growth of capi
tal through
investments
primarily in the
common
stocks of com
panies located
(or with pri
mary opera
tions) in Latin
America.
-------------------------------------------------------------------------------------------------------------------
Emerging Long-term $108,418 1.07% Yes
Markets Stock Fund growth of capi /a/
tal through
investments
primarily in the
common
stocks of com
panies located
(or with pri
mary opera
tions) in
emerging mar
kets.
-------------------------------------------------------------------------------------------------------------------
Emerging High income $173,078 0.77% Yes
Markets Bond Fund and capital /a/
appreciation
-------------------------------------------------------------------------------------------------------------------
Global Stock Fund Long-term $73,837 0.67% Yes
growth of capi /a/
tal through
investments
primarily in the
common
stocks of
established
companies
throughout
the world,
including the
U.S.
-------------------------------------------------------------------------------------------------------------------
International Growth & Income Fund Long-term $9,776 0.67% Yes
growth of capi /a/
tal and reason
able income
through
investments
primarily in the
common
stocks of well-
established,
dividend-pay
ing non-U.S.
companies.
-------------------------------------------------------------------------------------------------------------------
Spectrum International Fund Long-term cap $82,846 0.45%to No
ital apprecia 1.07%
tion
-------------------------------------------------------------------------------------------------------------------
International Stock Portfolio Long-term $707,330 No
growth of capi
tal through
investments
primarily in the
common
stocks of
established,
non-U.S. com
panies
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

/a/Price-Fleming is contractually obligated to waive its fees and bear any
expenses to the extent such fees or expenses would cause the funds' ratios of
expenses to average net assets to exceed the indicated percentage
limitations. Fees waived or expenses paid or assumed are subject to
reimbursement to Price-Fleming by each fund through the indicated
reimbursement date, but no reimbursement will be made if it would result in a
fund's expense ratio exceeding its specified limit. A summary of the funds'
expense limitations and the periods for which they are effective is set forth
below:
<TABLE>
<CAPTION>
<S> <S> <C> <S> <S>
Fund Limitation Period Expense Ratio Limitation Reimbursement Date

International 12/1/98-10/31/00 1.25% 10/31/02
Growth & Income
-----------------------------------------------------------------
Global Stock 11/1/99-10/31/01 1.20% 10/31/03
-----------------------------------------------------------------
Emerging Markets 11/1/99-10/31/01 1.75% 10/31/03
Stock
-----------------------------------------------------------------
Global Bond 1/1/99-12/31/00 1.00% 12/31/02
Emerging Markets
Bond 1/1/99-12/31/00 1.25% 12/31/02
</TABLE>

<PAGE>

<TABLE>
Table 2 Comparison of Expenses of Funds
Sub-Advised by Price International
<CAPTION>
Net Assets
of Fund at
Investment 06/30/00 (in Annual Rate of Fees Waived or
Name of Fund Objective thousands) Compensation Reduced
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Subadvised Mutual Funds:
-------------------------------------------------------------------------------------------
American Skandia High current $134,038 .40% on all
Trust income and assets
T. Rowe Price capital growth
Global Bond
Portfolio
-------------------------------------------------------------------------------------------
The Commerce Funds Long-term $195,303 .75% of the first Yes
growth of capital
The International $20 million
Equity Fund .60% of the next

$30 million
.50% above $50
million*
-------------------------------------------------------------------------------------------
Endeavor Series Long-term $233,296 .75% of the first Yes
Trust growth of capital
$20 million
T. Rowe Price .60% of the next
International
Stock Portfolio $30 million
.50% above $50
million*
-------------------------------------------------------------------------------------------
EQ Advisors Trust Long-term $241,526 .75% of the first Yes
growth of capital
T. Rowe Price $20 million
International .60% of the next
Stock Portfolio
$30 million
.50% above $50
million*
-------------------------------------------------------------------------------------------
John Hancock Long-term $104,223 .75% of the first Yes
Variable Series growth of capital
Trust I $20 million
.60% of the next
International
Opportunities $30 million
Portfolio .50% above $50
million*
-------------------------------------------------------------------------------------------
LB Series Fund, Long-term .75% of the first Yes
Inc. growth of capital $591,528
$20 million
World Growth .60% of the next
Portfolio
$142,736 $30 million
.50% above $50

Lutheran million
Brotherhood Family .50% on all
of Funds assets once
assets exceed
Lutheran $200 million**
Brotherhood World
Growth Fund
-------------------------------------------------------------------------------------------
Manufacturers Long-term $266,081 .75% of the first Yes
Investment Trust growth of capital
$50 million
International .50% of the next
Stock Trust
$150 million
.50% on all
assets once
assets exceed
$200 million**
-------------------------------------------------------------------------------------------
SunAmerica Style Long-term $61,441 .75% of the first Yes
Select Series, growth of capital
Inc. $20 million
.60% of the next
International
Equity Portfolio $30 million
.50% above $50
million*
-------------------------------------------------------------------------------------------
The Vantagepoint Long-term $111,659 .75% of the first Yes
Funds growth of capital
International Fund $20 million
.60% of the next

$30 million
.50% above $50
million*
-------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Please note that the net asset figures for subadvised funds are based on
internal T. Rowe Price market value records.

* Price International has agreed to waive its fees so that at $200 million, the
Sub-Advisory fee would be .50% on all assets.

**Price International has agreed to waive its fees so that at $500 million, the
Sub-Advisory fee would be .45% on all assets.

What services does Price International provide under the current and Proposed
Agreements?

Under the current and Proposed Agreements, Price International provides the fund
with discretionary investment services. Specifically, Price International is
responsible for supervising and directing the investments of the fund in
accordance with the fund's investment objective, program, and restrictions as
provided in its prospectus and Statement of Additional Information. Price
International is also responsible for effecting all securities transactions on
behalf of the fund, including the negotiation of commissions and the allocation
of principal business and portfolio brokerage. In addition to these services
Price International provides the fund with a wide range of corporate
administrative services. Each agreement provides that the fund will bear all
expenses of its operations not specifically assumed by Price International.

<PAGE>

The current and Proposed Agreements also provide that Price International, its
directors, officer, employees, and certain other persons performing specific
functions for the fund will only be liable to the fund for losses resulting from
willful misfeasance, bad faith, gross negligence, or reckless disregard of duty.

Who else provides services to the funds?

Each fund has an underwriting agreement with T. Rowe Price Investment Services,
Inc. ("INVESTMENT SERVICES"), a transfer agency agreement with T. Rowe Price
Services, Inc. ("PRICE SERVICES"), an agreement with T. Rowe Price Retirement
Plan Services, Inc. ("RETIREMENT SERVICES") and a fund accounting services
agreement with T. Rowe Price. The address of T. Rowe Price and Investment
Services is 100 East Pratt Street, Baltimore, Maryland 21202, and the address of
Price Services and Retirement Services is 4515 Painters Mill Road, Owings Mills,
Maryland 21117. Each is a wholly owned subsidiary of T. Rowe Price. James S.
Riepe, is Chairman of the Board of Price Services, Retirement Services, and
Investment Services. Henry H. Hopkins, a vice president of the funds, is a vice
president and director of both Investment Services and Price Services and a vice
president of Retirement Services. Certain officers of the funds own shares of
the common stock of T. Rowe Price, its only class of securities.

What services are provided under these other agreements?

Price Services provides certain transfer agency and other shareholder
administrative and communication services for all accounts, for which the funds
paid Price Services the fees set forth below for the fiscal year ended October
31, 1999. T. Rowe Price calculates the daily share price and maintains the
portfolio and general accounting records of the funds, for which the funds paid
T. Rowe Price the fees set forth below for the same period. Retirement Services
performs certain subaccounting and recordkeeping services with respect to
shareholder accounts in certain retirement plans for which the funds paid
Retirement Services the fees set forth below for the same period. All such fees
are reviewed annually by the fund's directors in connection with renewal of the
service contracts involving these entities. The services provided by these
entities will continue to be provided whether or not the Proposed Agreements are
approved.

<PAGE>

<TABLE>
Table 3
<CAPTION>
Transfer Agent and Retirement
Shareholder Subaccounting Accounting
Fund Services Services Services
<S> <C> <C> <C>
Foreign Equity Fund 32,000 -- 111,000
International Stock $6,346,000 4,529,000 $164,000
Fund
International Bond
Fund
International 400,000 24,000 132,000
Discovery Fund
European Stock Fund 1,709,000 115,000 111,000
New Asia Fund 1,736,000 138,000 122,000
Japan Fund 435,000 7,000 108,000
Latin America Fund 595,000 43,000 117,000
Emerging Markets 260,000 19,000 106,000
Stock Fund
Global Stock Fund 136,000 28,000 106,000
International Growth 25,000 -- 97,000
& Income Fund
International Bond
Fund - Advisor Class
International Stock
Fund - Advisor Class
Spectrum
International Fund
International Stock
Portfolio
----------------------------------------------------------------------
</TABLE>

The T. Rowe Price Trust Company (the "TRUST COMPANY"), a wholly owned subsidiary
of T. Rowe Price, serves as trustee and custodian for certain IRA, Keogh, and
other prototype plans which utilize the Price Funds as investment options. For
these services, the Trust Company charges each such shareholder account a
fiduciary fee. During 1999, the aggregate of such fees totaled approximately
$__________ (of this amount, approximately $__________ were paid with respect to
fund accounts). In addition, Retirement Services provides administrative
services to certain defined contribution retirement plans. During 1999,
Retirement Services received fees from all plans utilizing such services in the
amount of $__________.

<PAGE>

Investment Services, the distributor for the Price Funds, makes available to
shareholders of the Price Funds and others a brokerage service. During 1999,
this service generated net commissions totaling $______.

The funds have been authorized to use brokers affiliated with Robert Fleming in
connection with the execution of their portfolio transactions. The aggregate
amount of commissions paid to these affiliated brokers by the funds for the
fiscal year ended October 31, 1999 and the percentages these amounts represented
of the total commissions paid by the funds over that period are set forth below.
These brokers ceased to be affiliates of the funds on August 8, 2000 when Price
International became a wholly owned subsidiary of T. Rowe Price.

<TABLE>
Table 4
<CAPTION>
<S> <C> <C>
Total brokerage commissions % of total fund brokerage
Fund Name paid to affiliated brokers commissions paid to affiliated
brokers
---------------------------------------------------------------------------------------
Foreign Equity Fund
---------------------------------------------------------------------------------------
International Stock
Fund
---------------------------------------------------------------------------------------
International Bond
Fund
---------------------------------------------------------------------------------------
International
Discovery Fund
---------------------------------------------------------------------------------------
European Stock Fund
---------------------------------------------------------------------------------------
New Asia Fund
---------------------------------------------------------------------------------------
Japan Fund
---------------------------------------------------------------------------------------
Latin America Fund
---------------------------------------------------------------------------------------
Emerging Markets Stock
Fund
---------------------------------------------------------------------------------------
Emerging Markets Bond
Fund
---------------------------------------------------------------------------------------
Global Stock Fund
---------------------------------------------------------------------------------------
International Growth &
income Fund
---------------------------------------------------------------------------------------
International Bond
Fund - Advisor Class
---------------------------------------------------------------------------------------
International Stock
Fund - Advisor Class
---------------------------------------------------------------------------------------
International Stock
Portfolio
---------------------------------------------------------------------------------------
</TABLE>

What vote is required to approve the new Investment Management Agreement?

Proposal No. 1 requires the affirmative vote of the lesser of (a) 67% of the
shares present at the meeting of the fund in person or by proxy or (b) a
majority of the fund's outstanding shares. THE BOARD OF DIRECTORS OF EACH FUND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL. The votes of the
International Bond Fund and International Bond Fund - Advisor Class will be
combined. The votes of the International Stock Fund and the International Stock
Fund - Advisor Class will be combined.

<PAGE>

PROPOSAL NO. 2 -- AMENDMENT OF THE FUND'S FUNDAMENTAL POLICY ON SECURITIES
LENDING.

Foreign Equity Fund
The Foreign Equity Fund has a fundamental policy that prohibits it from engaging
in any securities lending. It is the only fund among the T. Rowe Price
international funds that has such a policy. The directors of the fund recommend
changing the policy to permit the fund to engage in securities lending.

In making its decision, the directors determined that the potential benefits of
permitting the fund to make securities loans outweigh the potential risks.
Securities lending has the potential to increase the fund's income as a result
of fees received by the fund from the borrowers of the securities. The potential
risk in a securities loan is that the borrower will default, that is, be unable
to return the lent security at all or return it late. To protect against this
risk, the fund's investment manager will only loan securities to persons it
believes to be creditworthy. Further, all securities loans would be fully
collateralized with liquid, high-grade debt securities. This means that at the
time the fund would make a loan of its securities, it would receive as
collateral liquid, high-grade debt securities or cash in an amount at least
equal to the value of the securities lent plus an additional amount as
determined by the fund and borrower. The amount of collateral is adjusted daily
to ensure that it remains at the appropriate level throughout the time the
securities are on loan. When the securities are returned to the fund, the
collateral is returned to the borrower. The fund would also have the right to
terminate the loan at any time and receive the securities back in a timely
manner. While there is no guarantee that the fund would have the same results,
the experience of the fund's investment manager to date with securities lending
in the other portfolios it manages has been positive. No defaults have occurred
and the income received by those other portfolios has contributed to their
overall income and return.

If the proposed change is approved by shareholders, the fund's fundamental
policy on lending would be amended to permit securities lending as follows (the
new language is in bold):

The fund may not 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;

<PAGE>

What vote is required to approve this amendment to the fund's policies and
practices?

Proposal No. 2 requires the affirmative vote of the lesser of (a) 67% of the
shares present at the meeting of the fund in person or by proxy or (b) a
majority of the fund's outstanding shares. THE BOARD OF DIRECTORS OF EACH FUND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL.

PROPOSAL NO. 3 -- AMENDMENT OF THE FUND'S FUNDAMENTAL POLICY TO CHANGE THE
STATUS OF THE NEW ASIA FUND FROM DIVERSIFIED TO NON-DIVERSIFIED.

The fund is considered to be a diversified mutual fund under the Investment
Company Act of 1940. This means that as a matter of 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 the fund's total assets would be invested in securities
of a single issue or more than 10% of the outstanding voting securities of the
issuer would be held by the fund. This proposal asks shareholders to approve or
disapprove amending this fundamental policy to change the fund to
non-diversified. A non-diversified fund can 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. As a result the fund could become somewhat
riskier because it would have the ability to hold larger positions in a fewer
number of securities.

Importantly, the fund is not seeking this change in order to concentrate the
portfolio in a significantly fewer number of issuers. However, the fund's
benchmark, the MSCI All Country Far East Free Ex-Japan Index ("MSCI Index"), has
become increasingly dominated by a small group of large companies.

The fund does not seek to replicate the MSCI Index. However, if it were
enthusiastic about the dominant stocks in the index and wished to overweight
them, it could be prevented from doing so given the fund's current policy on
diversification. Therefore, to provide the fund with sufficient investment
flexibility to pursue its investment program, the fund's board believes it would
be prudent to remove the diversification restriction to which it is now subject.

If the proposal is approved, the fund will still be subject to the
diversification rules of the Internal Revenue Code. These provide that the fund
will not purchase a security if, as a result, with respect to 50% (instead of
75%) of its total assets, more than 5% of the fund's 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 the fund.

<PAGE>

What vote is required to approve this amendment to the fund's policies and
practices?

Proposal No. 3 requires the affirmative vote of the lesser of (a) 67% of the
shares present at the meeting of the fund in person or by proxy or (b) a
majority of the fund's outstanding shares. THE BOARD OF DIRECTORS OF EACH FUND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL.

PROPOSAL NO. 4 -- ELECTION OF DIRECTORS

ALL FUNDS (other than Spectrum International)

Who are the nominees for director?

The Boards have proposed a slate of the five persons listed in Table 5 for
election as director, each to hold office until the next annual meeting (if any)
or until his successor is duly elected and qualified. Each of the nominees is a
member of the present Board of Directors of each fund and has served in that
capacity since originally elected.

A shareholder using the enclosed proxy card can vote for all or any of the
nominees or withhold his or her vote from all or any of such nominees. If the
proxy card is properly executed but unmarked, it will be voted for all of the
nominees. Each of the nominees has agreed to serve as a director if elected;
however, should any nominee become unable or unwilling to accept nomination or
election, the persons named in the proxy will exercise their voting power in
favor of such other person or persons as the Boards of the funds may recommend.
There are no family relationships among these nominees.

Shareholders are being asked to elect the Board of Directors of their respective
fund(s) only.

<TABLE>
Table 5 Nominees to Each Fund's Board of
Directors
<CAPTION>
All Other Price
Fund Shares Beneficially Funds' Shares Owned
Name, Date of Birth, Address, Owned, Directly or Directly as of
Position on Fund Board, and Indirectly, December 31, 1999
Principal Occupations/a/ as of December 31, 1999/b/
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*M. David Testa, 4/22/44

100 E. Pratt Street, Baltimore, MD
21202

Director of the Funds

Vice Chairman of the Board, Chief
Investment Officer, Managing Director,
T. Rowe Price; Chairman of the Board,
Rowe Price-Fleming International, Inc.,
Vice President and Director, T. Rowe
Price Trust Company; Officer and/or
Director of the T. Rowe Price
Funds/Trusts.
-------------------------------------------------------------------------------------------
*Martin G. Wade, 2/16/43

25 Copthall Avenue
London, EC2R 7DR, England

President/Director of the Funds

Director, Chief Investment Officer and
Vice Chairman of the Board of
Rowe-Price Fleming; Director of Robert
Fleming Holdings and, Robert Fleming
Asset Management.
-------------------------------------------------------------------------------------------
Anthony W. Deering, 1/28/45

10275 Little Patuxent Parkway,
Columbia, MD 21044

Director of the Funds

Director, Chairman of the Board,
President, and Chief Operating Officer,
The Rouse Company, real estate
developers, Columbia, Maryland;
Advisory Director, Kleinwort, Benson
(North America) Corporation, a
registered broker-dealer;
Director/Trustee of the T. Rowe Price
Fixed Income and International
Funds/Trusts.
-------------------------------------------------------------------------------------------
Donald W. Dick, Jr., 1/27/43

925 Cleveland Street, #177
Greenville, South Carolina, 29601

Director of the Funds

Principal, EuroCapital Advisors, LLC,
on acquisition and management advisory
firm; Director, Waverly, Inc.,
Baltimore, Maryland; Director/Trustee
of the T. Rowe Price Equity Funds.
-------------------------------------------------------------------------------------------
Paul M. Wythes, 6/23/33

755 Page Mill Road, Suite A200
Palo Alto, California 94304-1005

Director of the Funds

Managing Director of the General
Partner of Sutter Hill Ventures;
Director, Teltone Corporation,
Interventional Technologies Inc. and
Stuart Medical, Inc.; Director/ Trustee
of the T. Rowe Price Equity and
International Funds/Trusts.
-------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

* Nominees considered "interested persons" of T. Rowe Price.

/a/Except as otherwise noted, each individual has held the office indicated, or
other offices in the same company, for the last five years.

/b/In addition to the shares owned beneficially and of record by each of the
nominees, the amounts shown reflect the proportionate interests of Messrs.
Testa and Wade in

<PAGE>

____________ shares of the funds which are owned by a wholly owned subsidiary
of T. Rowe Price, and also their proportionate interests in ____________ shares
of the funds owned by T. Rowe Price.

Table 6 sets forth the year each director/trustee was first elected to the fund.

<TABLE>
Table 6 Year of Original Election to Each Fund's
Board
<CAPTION>
T. Rowe Price Fund Deering Dick Testa Wade Wythes
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional International 1991 1989 1989 1989 1996
--------------------------------------------------------------------------------------
International Funds 1994 1994 1994 1994 1996
--------------------------------------------------------------------------------------
International Series 1994 1994 1994 1994 1996
--------------------------------------------------------------------------------------
</TABLE>

Do the nominees have a stake in the funds?

The Boards of the funds believe it is important that each nominee for director
have an investment in the T. Rowe Price funds. The nominees allocate their
investments among the 88 T. Rowe Price funds based on their own investment
objectives. Table 4 lists each nominee's investment in the funds as well as his
total investment in all of the T. Rowe Price funds.

What are the primary responsibilities of each fund's Board members?

They are responsible for the general oversight of each fund's business and for
assuring that each fund is managed in the best interests of its shareholders.
The directors periodically review the performance, expenses, and service
providers of the funds based on reports provided by Price International, T. Rowe
Price, auditors, and legal counsel.

How often does each fund's Board meet?

The Boards of Directors of the funds (other than Spectrum International) held
five meetings during fiscal year 1999, and each director standing for reelection
attended 75% or more of those meetings. The Boards of Directors have held six
meetings so far during fiscal year 2000, and each director standing for
reelection has attended

<PAGE>

all of the meetings with the exception of Paul Wythes who did not attend the
December, 1999 meeting. Each Board currently has three committees, described in
the following paragraphs.

The Nominating Committee, which functions only in an advisory capacity, is
responsible for reviewing and recommending to the full Board candidates for
election as independent directors or trustees to fill vacancies on each fund's
Board. The Nominating Committee will consider written recommendations from
shareholders for possible nominees. Shareholders should submit their
recommendations to the secretary of the funds. Members of the Nominating
Committee are Messrs. Deering, Dick, and Wythes. They met informally during the
last fiscal year, but the committee as such held no formal meetings.

The Joint Audit Committee includes at least one independent trustee/ director
representing each of the T. Rowe Price funds. Messrs. Dick and Wythes, nominees
of the funds, are members of the committee. The other members are F. Pierce
Linaweaver, John G. Schreiber, and Hubert D. Vos, independent directors of other
T. Rowe Price funds. These directors also receive a fee of $1,000 for each
committee meeting attended. The Audit Committee holds two regular meetings
during each fiscal year, at which time it meets with the independent accountants
of the T. Rowe Price funds to review: (1) the services provided; (2) the
findings of the most recent audit; (3) management's response to the findings of
the most recent audit; (4) the scope of the audit to be performed; (5) the
accountants' fees; and (6) any accounting or other questions relating to
particular areas of the T. Rowe Price funds' operations or the operations of
parties dealing with the T. Rowe Price funds, as circumstances indicate. The
Audit Committee for the funds (other than Spectrum International) met four times
in 1999 and twice so far in 2000. All members of the committee participated in
the meetings. The Audit Committee for the Spectrum International Fund met once
in 1999. All members of the committee participated in the meeting.

<PAGE>

What are the directors paid for their services to the funds?

Messrs. Testa and Wade are employed by, and thus are considered "interested
persons" of Price International. Therefore, they are not entitled to
compensation or benefits from the funds for their service as directors of the
funds.

Messrs. Deering, Dick, and Wythes are the independent, or noninterested,
directors of the funds. Their directors' fees are based on the following fee
schedule applicable to all independent directors of the T. Rowe Price funds: an
annual retainer of $65,000 per year for service on the Boards of the T. Rowe
Price domestic funds, an additional annual retainer of $15,000 for service on
the boards of the T. Rowe Price international funds, and a fee of $1,000 for
each Audit Committee meeting attended. The Price fund group included 88 funds at
December 31, 1999. The independent directors of the funds do not receive any
pension or retirement benefits from the funds or T. Rowe Price.

Table 7 provides the independent directors' accrued compensation for the most
recently completed fiscal year of each fund and their total compensation for the
period January 1, 1999, through December 31, 1999. The fees are allocated to
each fund under a formula which includes a base fee and a fee based on the net
assets of each fund relative to the other funds.

<TABLE>
Table 7 Compensation to Fund Trustees/Directors
<CAPTION>
Total
Director Compensation From
Aggregate Compensation From T. Rowe Price Fund ---------------------------Funds and Fund
Deering Dick Wythes Complex
------------------------------------------------(#)/a/ -----------------
---------(#)/a/ (#)/a/
------------------
<S> <C> <C> <C> <C>
Institutional International

------------------------------------------------$15,000 $15,000 $15,000 -----------------
International Funds

------------------------------------------------ -----------------
International Series ---------------------------

------------------------------------------------ -----------------
</TABLE>

/a/ Indicates the number of T. Rowe Price funds on which the director serves.

What vote is required to elect the directors?

Each corporation, Institutional International, International Funds and
International Series, votes separately but all funds or series of each
corporation vote together. A plurality of the combined votes cast at the meeting
by the shareholders of all funds or series of each corporation is sufficient to
approve the election of a director of that corporation. THE BOARD OF DIRECTORS
RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL OF THE PROPOSED NOMINEES. The votes of
the International Bond Fund and International Bond Fund - Advisor Class will be
combined. The votes of the International Stock Fund and the International Stock
Fund - Advisor Class will be combined.

<PAGE>

PROPOSAL NO. 4 -- SELECTION OF INDEPENDENT ACCOUNTANTS

All Funds

The selection by the Board of Directors of the firm of PricewaterhouseCoopers
LLP as the independent accountants for the funds for their current fiscal year
is to be submitted for ratification or rejection by the shareholders at the
annual meeting. The firm of PricewaterhouseCoopers LLP has served each fund as
independent accountants since its inception. The independent accountants have
advised the funds that they have no direct or material indirect financial
interest in the funds. Representatives of the firm of PricewaterhouseCoopers LLP
are expected to be present at the annual meeting and will be available to make a
statement, if they desire to do so, and to respond to appropriate questions
which the shareholders may wish to address to them. Table 8 lists the various
fiscal year-ends for the funds.

<TABLE>
Table 8 Fiscal Year-Ends
<CAPTION>
T. Rowe Price Fund Fiscal Year-End
-------------------------------------------------------------
<S> <C>
Foreign Equity Fund October 31, 1999
-------------------------------------------------------------
International Stock Fund October 31, 1999
-------------------------------------------------------------
International Bond Fund December 31, 1999
-------------------------------------------------------------
International Discovery Fund October 31, 1999
-------------------------------------------------------------
European Stock Fund October 31, 1999
-------------------------------------------------------------
New Asia Fund October 31, 1999
-------------------------------------------------------------
Japan Fund October 31, 1999
-------------------------------------------------------------
Latin America Fund October 31, 1999
-------------------------------------------------------------
Emerging Markets Stock Fund October 31, 1999
-------------------------------------------------------------
Emerging Markets Bond Fund December 31, 1999
-------------------------------------------------------------
Global Stock Fund October 31, 1999
-------------------------------------------------------------
International Growth & Income Fund October 31, 1999
-------------------------------------------------------------
International Bond Fund - Advisor Class December 31, 1999
-------------------------------------------------------------
International Stock Fund - Advisor Class October 31, 1999
-------------------------------------------------------------
Spectrum International Fund December 31, 1999
-------------------------------------------------------------
International Stock Portfolio December 31, 1999
-------------------------------------------------------------
</TABLE>

<PAGE>

What vote is required to ratify the funds' independent accountants?

Each fund votes separately. Approval of the proposal requires an affirmative
vote by a majority of the shares cast at the meeting of each fund in person or
by proxy. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSAL. The votes of the International Bond Fund and International Bond Fund -
Advisor Class will be combined. The voices of the International Stock Fund and
the International Stock Fund - Advisor Class will be combined.

FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING

What is the required quorum?

To hold the meeting, a majority of each fund's shares entitled to be voted must
have been received by proxy or be present at the meeting. In the event that a
quorum is present but sufficient votes in favor of one or more of the proposals
are not received by the meeting date, the persons named as proxies may propose
one or more adjournments to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of the shares
present in person or by proxy at the meeting to be adjourned. The persons named
as proxies will vote in favor of such adjournment if they determine that
additional solicitation is reasonable and in the interests of the fund's
shareholders.

How are the votes counted?

The individuals named as proxies (or their substitutes) on the enclosed proxy
card (or cards, if you have multiple funds or accounts) will vote according to
your directions if your proxy is received properly executed, or in accordance
with your instructions given when voting by telephone or Internet. You may
direct the proxy holders to vote your shares on a proposal by checking the
appropriate box "FOR" or "AGAINST," or instruct them not to vote those shares on
the proposal by checking the "ABSTAIN" box. Alternatively, you may simply sign,
date, and return your proxy card(s) with no specific instructions as to the

<PAGE>

proposals. IF YOU PROPERLY EXECUTE YOUR PROXY CARD AND GIVE NO VOTING
INSTRUCTIONS WITH RESPECT TO A PROPOSAL, YOUR SHARES WILL BE VOTED FOR THE
PROPOSAL.

Abstentions and "broker non-votes" (as defined below) are counted for purposes
of determining whether a quorum is present for purposes of convening the
meeting. "Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the fund but are not voted as to one or more
proposals because instructions have not been received from the beneficial owners
or persons entitled to vote, and the broker or nominee does not have
discretionary voting power. If a proposal must be approved by a percentage of
votes cast on the proposal, abstentions and broker non-votes will not be counted
as "votes cast" on the proposal and will have no effect on the result of the
vote. If the proposal must be approved by a percentage of voting securities
present at the meeting or a majority of the fund's outstanding shares,
abstentions and broker non-votes will be considered to be voting securities that
are present and will have the effect of being counted as votes against the
proposal.

Can additional matters be acted upon at the annual meeting?

The management of the funds knows of no other business which may come before the
meeting. However, if any additional matters are properly presented at the
meeting, it is intended that the persons named in the enclosed proxy, or their
substitutes, will vote on such matters in accordance with their judgment.

How can proxies be recorded?

You may record your votes on the proxy card enclosed with this statement and
mail it in the prepaid envelope provided to Management Information Services
Corp., who the funds have retained to tabulate the votes. In addition, the funds
(except the International Stock Portfolio) have arranged to have votes recorded
through the Internet or by telephone. The telephone and Internet voting
procedures are designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been properly
recorded.

How can proxies be solicited, and who pays for the costs involved?

Directors, officers, or employees of the funds, Price International or T. Rowe
Price, may solicit proxies by mail, in person, or by telephone. In the event
that votes are solicited by telephone, shareholders would be called at the
telephone number T. Rowe Price has in its records for their accounts, and would
be asked for their Social Security number or other identifying information. The
shareholders would then be given

<PAGE>

an opportunity to authorize proxies to vote their shares at the meeting in
accordance with their instructions. To ensure that shareholders' instructions
have been recorded correctly, confirmation of the instructions is also mailed. A
special toll-free number will be available in case the information contained in
the confirmation is incorrect.

To ensure that sufficient shares of common stock are represented at the meeting
to permit approval of the proposals outlined in the proxy statement, the funds
may retain the services of a proxy solicitor to assist them in soliciting
proxies for a fee plus reimbursement of out-of-pocket expenses. Securities
brokers, custodians, fiduciaries, and other persons holding shares as nominees
will be reimbursed, upon request, for their reasonable expenses in sending
solicitation materials to the principals of the accounts.

The approximate date on which this proxy statement and proxy card are first
being mailed to shareholders is September 3, 1998.

All costs of the shareholder meetings and the proxy solicitation will be paid
for by Price International.

Can I change my vote after I mail my proxy?

Any proxy, including those given via the Internet or by telephone, may be
revoked at any time before it is voted by filing a written notice of revocation
with the funds, by delivering a properly executed proxy bearing a later date, or
by attending the meeting and voting in person.

Are the funds required to hold annual meetings?

Under Maryland law, the funds are not required to hold annual meetings. The
Board of Directors of each fund have determined that the funds will take
advantage of these Maryland law provisions to avoid the significant expense
associated with holding annual meetings, including legal, accounting, printing,
and mailing fees incurred in preparing proxy materials. Accordingly, no annual
meetings shall be held in any year in which a meeting is not otherwise required
to be held by the 1940 Act unless the Boards determine otherwise. However,
special meetings will be held in accordance with applicable law or when
otherwise determined by each fund's Board.

If a shareholder wishes to present a proposal to be included in the proxy
statement for the next shareholder meeting, the proposal must be submitted in
writing and received by Patricia B. Lippert, Secretary of the Funds, T. Rowe
Price Associates, Inc., 100 East Pratt Street, Baltimore, Maryland 21202, within
a reasonable time before the funds begin to print and mail their proxy
materials.

<PAGE>

GENERAL INFORMATION ABOUT THE FUNDS

Who are the funds' executive officers?

Table 9 lists the executive officers of the funds (other than the nominees for
election as directors) and their positions with Price International or T. Rowe
Price. Each executive officer has been an officer of Price International and the
funds for at least the last five years.

<TABLE>
Table 9 Executive Officers of the Funds
<CAPTION>
Officer, Date of Birth Position With Fund Position With Price International
------------------------------------------------------------------------------------------
<S> <C> <C>
International Funds
------------------------------------------------------------------------------------------
John R. Ford, 11/25/57 Executive Vice President Executive Vice President
------------------------------------------------------------------------------------------
David J. L. Warren, 4/14/57 Executive Vice President Executive Vice President
------------------------------------------------------------------------------------------
Officer, Date of Birth Position With Fund Position With T. Rowe Price
------------------------------------------------------------------------------------------
Spectrum International
------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------
</TABLE>

What is the share ownership of each fund?

Table 10 presents the shares of the capital stock of each fund outstanding as of
December 31, 1999.

<TABLE>
Table 10 Outstanding Shares of Capital Stock
<CAPTION>
Outstanding Shares of
T. Rowe Price Fund Capital Stock
--------------------------------------------------------------------
<S> <C>
Foreign Equity Fund 173,881,998
--------------------------------------------------------------------
International Stock Fund 666,006,054
--------------------------------------------------------------------
International Bond Fund 85,011,184
--------------------------------------------------------------------
International Discovery Fund 18,670,836
--------------------------------------------------------------------
European Stock Fund 66,528,995
--------------------------------------------------------------------
New Asia Fund 137,883,411
--------------------------------------------------------------------
Japan Fund 37,368,235
--------------------------------------------------------------------
Latin America Fund 24,819,230
--------------------------------------------------------------------
Emerging Markets Stock Fund 10,467,264
--------------------------------------------------------------------
Emerging Markets Bond Fund 17,115,245
--------------------------------------------------------------------
Global Stock Fund 4,809,889
--------------------------------------------------------------------
International Growth & Income Fund 945,998
--------------------------------------------------------------------
International Bond Fund - Advisor Class

--------------------------------------------------------------------
International Stock Fund - Advisor Class

--------------------------------------------------------------------
Spectrum International Fund

--------------------------------------------------------------------
International Stock Portfolio 37,155,888
--------------------------------------------------------------------
</TABLE>

<PAGE>

Who are the principal holders of each fund's shares?

Table 11 sets forth the persons owning more than 5% of each fund's outstanding
common stock as of June 30, 2000.

<TABLE>
Table 11 Record/Beneficial Ownership of Fund
Shares
<CAPTION>
Fund Name Owner % Ownership
----------------------------------------------------------------------------------------------
<S> <C> <C>
Foreign Equity PACO, attn.: Mutual Funds, P.O. 10.94
Box 831575, Dallas, TX 75288-1575
----------------------------------------------------------------------------------------------
International Stock Fund Pirateline & Co., c/o T. Rowe 6.04
Price Assoc., 100 E. Pratt St.,
Baltimore, MD 21202
-------------------------------------------------
Charles Schwab & Co., Inc., 8.62
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
---------------------------------------------San Francisco, CA 94104-4122
-------------------------------------------------
International Bond Fund Yachtcrew & Co., c/o T. Rowe Price 40.53
Assoc., 100 E. Pratt St.,
Baltimore, MD 21202
-------------------------------------------------
Charles Schwab & Co., Inc., 12.78
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
---------------------------------------------San Francisco, CA 94104-4122
-------------------------------------------------
International Discovery Fund Fidelity Investments, 7.25
Institutional Operations Co.,
FIIOC as agent for Ford SSIP, 100
Magellan Way (KW1C) Covington, KY
41015-1999
----------------------------------------------------------------------------------------------
European Stock Fund Charles Schwab & Co., Inc., 13.13
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------
New Asia Fund Charles Schwab & Co., Inc., 8.20
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
----------------------------------------------------------------------------------------------
Japan Fund Charles Schwab & Co., Inc., 8.05
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
-------------------------------------------------
National Financial Services for 9.62
the exclusive benefit of our
customers, 200 Liberty, One
Financial Center, 4th Fl., New
---------------------------------------------York, NY 10005-3500
-------------------------------------------------
Latin America Fund Fidelity Investments, 6.30
Institutional Operations Co.,
FIIOC as agent for Ford SSIP, 100
Magellan Way (KW1C) Covington, KY
41015-1999
----------------------------------------------------------------------------------------------
Emerging Markets Stock Fund

----------------------------------------------------------------------------------------------
Emerging Markets Bond Fund Yachtcrew & Co., c/o T. Rowe Price 56.48
Assoc., 100 E. Pratt St.,
Baltimore, MD 21202
----------------------------------------------------------------------------------------------
Global Stock Fund

----------------------------------------------------------------------------------------------
International Growth & Income Fund

----------------------------------------------------------------------------------------------
International Bond Fund - Advisor Class

----------------------------------------------------------------------------------------------
International Stock Fund - Advisor Class

----------------------------------------------------------------------------------------------
Spectrum International Fund T. Rowe Price Associates
Foundation, Inc., 100 East Pratt
Street, Baltimore, Maryland
21202-1009
----------------------------------------------------------------------------------------------
International Stock Portfolio CUNA Mutual Life Ins. Co., 13.80
Century Variable Annuity Acct.,
c/o Fund Accounting, 2000 Heritage
Way, Waverly, IA, 50677-9208
-------------------------------------------------
The Prudential Insurance Company 5.61
of America, attn.: Lillian
Triblett, 213 Washington St., 18th
Fl., Newark, NJ 07102-2992
-------------------------------------------------
SMA Life, 440 Lincoln St. 5310, 33.87
Worcester, MA 01653-0002
-------------------------------------------------
United of Omaha - Series V, attn.: 7.62
John Martin, Corporate General
Ledger, Mutual of Omaha Plaza,
Omaha, NE 68175-0001
-------------------------------------------------
PRUCO Life, Flexible Premium 9.39
Variable Annuity Accounting,
attn.: Kathy McClunn/Sep Accts/
340W, 213 Washington St. - 7th
Fl., Newark, NJ 07102-2917
-------------------------------------------------
---------------------------------------------Lincoln National Life Ins. Co., 5.23
Separate Acct. L, Mutual Fund
Acct. 4C-01, attn.: Theresa Burke,
1300 South Clinton St., Fort
Wayne, IN, 46802-3518
-------------------------------------------------
</TABLE>

<PAGE>

As of June 30, 2000, the executive officers and directors of each fund, as a
group, beneficially owned, directly or indirectly, ________ shares, representing
less than 1% of each fund's outstanding stock. More detailed information on the
share ownership of the fund's management is provided in Table 12.

<TABLE>
Table 12 Fund by Fund Security Ownership of
Management
<CAPTION>
Name of Fund, Name of Beneficial Owner and Amount and Nature of Beneficial
Position With Fund Ownership as of December 31, 1999/ a/
-----------------------------------------------------------------------------------
<S> <C>
All Funds
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
Management as a Group

-----------------------------------------------------------------------------------
</TABLE>

/a/ All securities listed represent ownership in shares of common stock.

INFORMATION ABOUT T. ROWE PRICE INTERNATIONAL

Who are the directors of T. Rowe Price International?

The investment manager for the funds is Price International, a Maryland
corporation, 100 East Pratt Street, Baltimore, Maryland 21202. The principal
executive officer of Price International is M. David Testa who, together with
Messrs. Riepe, George A. Roche and Martin G. Wade, constitutes its Board of
Directors.

The address of Messrs. Testa, Riepe, and Roche is 100 East Pratt Street,
Baltimore, Maryland 21202 and they are employed by T. Rowe Price. The address of
Messr. Wade, is 25 Copthall Avenue, London, England EC2R 7DR. Mr. Wade is
employed by Price International.

<PAGE>

TRANSACTIONS IN T. ROWE PRICE STOCK

The following information pertains to transactions involving common stock of T.
Rowe Price, par value $.20 per share ("STOCK"), during the period January 1,
1999, through December 31, 1999. There were no transactions during the period by
any director/trustee or officer of the funds, or any director or officer of
Price International or T. Rowe Price which involved more than 1% of the
outstanding stock of T. Rowe Price. These transactions did not involve, and
should not be mistaken for, transactions in the stock of the funds.

During the period, certain employees exercised their options for a total of
2,294,013 shares of stock at an average price $6.73 per share. Pursuant to the
terms of T. Rowe Price's Employee Stock Purchase Plan, eligible employees of T.
Rowe Price and its subsidiaries purchased an aggregate (including dividends
reinvested) of 230,208 shares of stock at fair market value. Such shares were
purchased in the open market during this period for employees' accounts.

T. Rowe Price's Board of Directors has approved the repurchase of shares of its
stock in the open market. During 1999, T. Rowe Price purchased 2,216,490 shares
of stock under this plan, leaving 5,503,510 shares of stock authorized for
future repurchase at December 31, 1999.

During the period, T. Rowe Price issued 3,470,325 common stock options with an
average exercise price of $31.02 per share to certain employees and directors
under terms of the 1993 and 1996 Stock Incentive Plans and the 1995 and 1998
Director Stock Option Plan.

INFORMATION ABOUT T. ROWE PRICE

Who are the directors of T. Rowe Price?

T. Rowe Price, a Maryland corporation, 100 East Pratt Street, Baltimore,
Maryland 21202 owns 100% of Price International. The principal executive officer
of T. Rowe Price is George A. Roche who together with Messrs. Reynolds, Riepe,
and Testa, James E. Halbkat, Jr., Henry H. Hopkins, James A. C. Kennedy III,
John H. Laporte, Richard L. Menschel, Brian C. Rogers, John W. Rosenblum, Robert
L. Strickland, Philip C. Walsh, and Anne Marie Whittemore constitute its Board
of Directors.

The address of each of these persons, with the exception of Messrs. Halbkat,
Menschel, Rosenblum, Strickland, Walsh, and Mrs. Whittemore, is 100 East Pratt
Street, Baltimore, Maryland 21202, and, with the exception of Messrs. Halbkat,
Menschel, Rosenblum, Strickland, Walsh, and Mrs. Whittemore, all are employed by
T. Rowe Price.

<PAGE>

Mr. Halbkat is President of U.S. Monitor Corporation, a provider of public
response systems. Mr. Halbkat's address is: P.O. Box 23109, Hilton Head Island,
South Carolina 29925.

Mr. Menschel is a limited partner of The Goldman Sachs Group, L.P. Mr.
Menschel's address is 85 Broad Street, 2nd Floor, New York, New York 10004.

Mr. Rosenblum is the Dean of the Jepson School of Leadership Studies at the
University of Richmond and a director of: Comdial Corporation, a manufacturer of
telephone systems for businesses; Cone Mills Corporation, a textiles producer;
and Providence Journal Company, a publisher of newspapers and owner of broadcast
television stations. Mr. Rosenblum's address is: University of Richmond,
Richmond, Virginia 23173.

Mr. Strickland retired as Chairman of Lowe's Companies, Inc., as of January 31,
1998. He is a director of Hannaford Bros., Co., a food retailer. Mr.
Strickland's address is 604 Two Piedmont Plaza Building, Winston-Salem, North
Carolina 27104.

Mr. Walsh is a Consultant to Cyprus Amax Minerals Company, Englewood, Colorado
and director of Piedmont Mining Company, Inc., in Charlotte, North Carolina. Mr.
Walsh's address is: Pleasant Valley, Peapack, New Jersey 07977.

Mrs. Whittemore is a partner of the law firm of McGuire, Woods, Battle & Boothe
and is a director of Owens & Minor, Inc.; USF&G Corporation; the James River
Corporation of Virginia; and Albemarle Corporation. Mrs. Whittemore's address is
One James Center, Richmond, Virginia 23219.

<PAGE>

EXHIBIT I

INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
between
T. ROWE PRICE INTERNATIONAL, INC.
and
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
consisting of the series;
Foreign Equity Fund;
and
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
consisting of the series;
T. Rowe Price International Stock Fund
T. Rowe Price International Bond 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 Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
and;
T. ROWE PRICE SPECTRUM FUND, INC.
consisting of its series;
Spectrum International Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
consisting of its series;
T. Rowe Price International Stock Portfolio

(FOR PURPOSES OF THIS MODEL AGREEMENT, EACH OF THE ABOVE FUNDS IS REFERRED TO
AS THE "T. ROWE PRICE INTERNATIONAL FUND")

<PAGE>

INVESTMENT MANAGEMENT AGREEMENT, made as of the 26th day of October, 2000,
by and between T. ROWE PRICE FUND, a Maryland corporation (the "Corporation"),
and T. ROWE PRICE INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Maryland (hereinafter called the "Manager").

W I T N E S S E T H:

WHEREAS, the Corporation is engaged in business as an open-end management
investment company and is registered as such under the federal Investment
Company Act of 1940, as amended (the "Act");

WHEREAS, the Corporation is authorized to issue shares of capital stock
("Shares") in the Fund (the "Fund"), a separate series of the Corporation whose
Shares represent interests in a separate portfolio of securities and other
assets ("Fund Shares");

WHEREAS, the Manager is engaged principally in the business of rendering
investment supervisory services and is registered as an investment adviser under
the federal Investment Advisers Act of 1940, as amended; and

WHEREAS, the Fund desires the Manager to render investment supervisory
services to the Fund in the manner and on the terms and conditions hereinafter
set forth.

NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:

1. DUTIES AND RESPONSIBILITIES OF MANAGER.

A.
INVESTMENT MANAGEMENT SERVICES. The Manager shall act as investment manager and
shall supervise and direct the investments of the Fund in accordance with the
Fund's investment objective, program and restrictions as provided in the
Corporation's prospectus, on behalf of the Fund, as amended from time to time,
and such other limitations as the Corporation may impose by notice in writing to
the Manager. The Manager shall obtain and evaluate such information relating to
the economy, industries, businesses, securities markets and securities as it may
deem necessary or useful in the discharge of its obligations hereunder and shall
formulate and implement a continuing program for the management of the assets
and resources of the Fund in a manner consistent with its investment objective.
In furtherance of this duty, the Manager, as agent and attorney-in-fact with
respect to the Corporation, is authorized, in its discretion and without prior
consultation with the Corporation, to:

(1)
buy, sell, exchange, convert, lend, and otherwise trade in any stocks, bonds,
and other securities or assets; and

<PAGE>

(2)
place orders and negotiate the commissions (if any) for the execution of
transactions in securities with or through such brokers, dealers, underwriters
or issuers as the Manager may select.

B.
FINANCIAL, ACCOUNTING, AND ADMINISTRATIVE SERVICES. The Manager shall maintain
the existence and records of the Corporation; maintain the registrations and
qualifications of Fund Shares under federal and state law; monitor the
financial, accounting, and administrative functions of the Fund; maintain
liaison with the various agents employed for the benefit of the Fund by the
Corporation (including the Corporation's transfer agent, custodian, independent
accountants and legal counsel) and assist in the coordination of their
activities on behalf of the Fund.

C.
REPORTS TO FUND. The Manager shall furnish to or place at the disposal of the
Corporation or Fund, as appropriate, such information, reports, evaluations,
analyses and opinions as they may, at any time or from time to time, reasonably
request or as the Manager may deem helpful to the Fund.

D.
REPORTS AND OTHER COMMUNICATIONS TO FUND SHAREHOLDERS. The Manager shall assist
in developing all general shareholder communications, including regular
shareholder reports.

E.
FUND PERSONNEL. The Manager agrees to permit individuals who are officers or
employees of the Manager to serve (if duly elected or appointed) as officers,
directors, members of any committee of directors, members of any advisory board,
or members of any other committee of the Corporation, without remuneration or
other cost to the Fund or the Corporation.

F.
PERSONNEL, OFFICE SPACE, AND FACILITIES OF MANAGER. The Manager at its own
expense shall furnish or provide and pay the cost of such office space, office
equipment, office personnel, and office services as the Manager requires in the
performance of its investment advisory and other obligations under this
Agreement.

2. ALLOCATION OF EXPENSES (EXCEPT INTERNATIONAL STOCK PORTFOLIO).

A. EXPENSES PAID BY MANAGER.

(1)
SALARIES AND FEES OF OFFICERS. The Manager shall pay all salaries, expenses, and
fees of the officers and directors of the Corporation who are affiliated with
the Manager.

(2)
ASSUMPTION OF FUND EXPENSES BY MANAGER. The payment or assumption by the Manager
of any expense of the Corporation or Fund, as appropriate, that the Manager is
not required by this Agreement to pay or assume shall not obligate the Manager
to pay or assume the

<PAGE>

same or any similar expense of the Corporation or Fund, as appropriate, on any
subsequent occasion.

B.
EXPENSES PAID BY FUND (OTHER THAN SPECTRUM INTERNATIONAL). The Corporation or
Fund, as appropriate, shall bear all expenses of its organization, operations,
and business not specifically assumed or agreed to be paid by the Manager as
provided in this Agreement. In particular, but without limiting the generality
of the foregoing, the Corporation or Fund, as appropriate, shall pay:

EXPENSES OF THE FUND (SPECTRUM INTERNATIONAL ONLY). All expenses of the
organization, operations, and business of the Corporation or Fund, as
appropriate, not specifically assumed or agreed to be paid by the Manager as
provided in paragraph 2.A. above, will be paid in accordance with paragraph
3.3.A. of this Agreement. Such expenses include the following:

(1)
CUSTODY AND ACCOUNTING SERVICES. All expenses of the transfer, receipt,
safekeeping, servicing and accounting for the cash, securities, and other
property of the Corporation, for the benefit of the Fund, including all charges
of depositories, custodians, and other agents, if any;

(2)
SHAREHOLDER SERVICING. All expenses of maintaining and servicing shareholder
accounts, including all charges for transfer, shareholder recordkeeping,
dividend disbursing, redemption, and other agents for the benefit of the Fund,
if any;

(3)
SHAREHOLDER COMMUNICATIONS. All expenses of preparing, setting in type,
printing, and distributing reports and other communications to shareholders;

(4)
SHAREHOLDER MEETINGS. All expenses incidental to holding meetings of Fund
shareholders, including the printing of notices and proxy material, and proxy
solicitation therefor;

(5)
PROSPECTUSES. All expenses of preparing, setting in type, and printing of annual
or more frequent revisions of the Fund's prospectus and of mailing them to
shareholders;

(6)
PRICING. All expenses of computing the Fund's net asset value per share,
including the cost of any equipment or services used for obtaining price
quotations;

(7)
COMMUNICATION EQUIPMENT. All charges for equipment or services used for
communication between the Manager or the Corporation or Fund and the custodian,
transfer agent or any other agent selected by the Corporation;

<PAGE>

(8)
LEGAL AND ACCOUNTING FEES AND EXPENSES. All charges for services and expenses of
the Corporation's legal counsel and independent auditors for the benefit of the
Fund;

(9)
DIRECTORS' FEES AND EXPENSES. All compensation of directors, other than those
affiliated with the Manager, and all expenses incurred in connection with their
service;

(10)
FEDERAL REGISTRATION FEES. All fees and expenses of registering and maintaining
the registration of the Corporation under the Act and the registration of the
Fund's shares under the Securities Act of 1933, as amended (the "'33 Act"),
including all fees and expenses incurred in connection with the preparation,
setting in type, printing, and filing of any registration statement and
prospectus under the '33 Act or the Act, and any amendments or supplements that
may be made from time to time;

(11)
STATE FILING FEES. All fees and expenses imposed on the Fund with respect to the
sale of the Fund shares under securities laws of various states or
jurisdictions, and, under all other laws applicable to the Fund, or its business
activities (including registering the Fund as a broker-dealer, or any officer of
the Fund or any person as agent or salesman of the Fund in any state);

(12)
ISSUE AND REDEMPTION OF FUND SHARES. All expenses incurred in connection with
the issue, redemption, and transfer of the Fund's shares, including the expense
of confirming all share transactions;

(13)
BONDING AND INSURANCE. All expenses of bond, liability, and other insurance
coverage required by law or deemed advisable by the Corporation's board of
directors;

(14)
BROKERAGE COMMISSIONS. All brokers' commissions and other charges incident to
the purchase, sale, or lending of the Fund's portfolio securities;

(15)
TAXES. All taxes or governmental fees payable by or with respect of the
Corporation or Fund, as appropriate, to federal, state, or other governmental
agencies, domestic or foreign, including stamp or other transfer taxes;

(16)
TRADE ASSOCIATION FEES. All fees, dues, and other expenses incurred in
connection with the Corporation's or Fund's, as appropriate, membership in any
trade association or other investment organization; and

(17)
NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring expenses as may
arise, including the costs of actions, suits, or proceedings to which the
Corporation or Fund, as appropriate, is a party and

<PAGE>

the expenses the Corporation or Fund, as appropriate, may incur as a result of
its legal obligation to provide indemnification to its officers, directors, and
agents.

2.1. ALLOCATION OF EXPENSES (INTERNATIONAL STOCK PORTFOLIO).

The Manager shall pay all of the Corporation expenses, on behalf of the Fund,
with the following exceptions:

(1) INTEREST. Interest;

(2)
TAXES. All taxes or governmental fees payable by or with respect of the Fund to
federal, state, or other governmental agencies, domestic or foreign, including
stamp or other transfer taxes;

(3)
BROKERAGE COMMISSIONS. All brokers' commissions and other charges incident to
the purchase, sale, or lending of the Fund's portfolio securities;

(4)
DIRECTORS' FEES AND EXPENSES. All compensation of directors, other than those
AFFILIATED with the Manager, and all expenses (including counsel fees and
expenses) incurred in connection with their service; and

(5)
NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring expenses as may
arise, including the costs of actions, suits, or proceedings to which the Fund
is a party and the expenses the Fund may incur as a result of/ its legal
obligation to provide indemnification to its officers, directors, and agents.

3.1MANAGEMENT FEE. (ALL FUNDS OTHER THAN FOREIGN EQUITY FUND, SPECTRUM
INTERNATIONAL FUND, AND INTERNATIONAL STOCK PORTFOLIO.) The Fund shall pay the
Manager a fee ("Fee") which will consist of two components: a Group Management
Fee ("Group Fee") and an Individual Fund Fee ("Fund Fee"). The Fee shall be paid
monthly to the Manager on the first business day of the next succeeding calendar
month and shall be calculated as follows:

A.
GROUP FEE. The monthly Group Fee ("Monthly Group Fee") shall be the sum of the
daily Group Fee accruals ("Daily Group Fee Accruals") for each month. The Daily
Group Fee Accrual for any particular day will be computed by multiplying the
Price Funds' group fee accrual as determined below ("Daily Price Funds' Group
Fee Accrual") by the ratio of the 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 shall be 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:

<PAGE>

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% Next $16 billion
0.305% Next $30 billion
0.300% Next $40 billion
0.295% Thereafter

The Price Funds shall include all the mutual funds distributed by T. Rowe
Price Investment Services, Inc., (other than institutional, "private label" or
index funds, Spectrum Funds and Reserve Investment Funds). For the purposes of
calculating the Daily Price Funds' Group Fee Accrual for any particular day, the
net assets of each Price Fund shall be determined in accordance with the Fund's
prospectus, as of the close of business on the previous business day on which
the Fund was open for business.

B.
FUND FEE. The monthly Fund Fee ("Monthly Fund Fee") shall be the sum of the
daily Fund Fee accruals ("Daily Fund Fee Accruals") for each month. The Daily
Fund Fee Accrual for any particular day will be computed by multiplying the
fraction of one (1) over the number of calendar days in the year by the Fund Fee
Rate as set forth below and multiplying this product by the net assets of the
Fund for that day, as determined in accordance with the Fund's prospectus as of
the close of business on the previous business day on which the Fund was open
for business.

<TABLE>
Table 1
<CAPTION>
T. Rowe Price Fund Fund Fee Rate
---------------------------------------------------------
<S> <C>
International Stock Fund 0.35%
---------------------------------------------------------
International Bond Fund 0.35
---------------------------------------------------------
International Discovery Fund 0.75
---------------------------------------------------------
European Stock Fund 0.50
---------------------------------------------------------
New Asia Fund 0.50
---------------------------------------------------------
Japan Fund 0.50
---------------------------------------------------------
Latin America Fund 0.75
---------------------------------------------------------
Emerging Markets Stock Fund 0.75
---------------------------------------------------------
Emerging Markets Bond Fund 0.45
---------------------------------------------------------
Global Stock Fund 0.35
---------------------------------------------------------
International Growth & Income Fund 0.35
---------------------------------------------------------
</TABLE>

<PAGE>

C.
EXPENSE LIMITATION. As part of the consideration for the Fund entering into this
Agreement, the Manager hereby may agree to limit the aggregate expenses of every
character incurred by the Fund, including but not limited to Fees of the Manager
computed as hereinabove set forth, but excluding interest, taxes, brokerage, and
other expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, ("Manager Limitation"). Under
the Manager Limitation, the Manager agrees that through a certain date ("Certain
Date"), such expenses shall not exceed a certain level of the average daily net
assets of the Fund ("Expense Limitation"). To determine the Manager's liability
for the Fund's expenses over the Expense Limitation, the amount of allowable
year-to-date expenses shall be computed daily by pro rating the Expense
Limitation based on the number of days elapsed within the fiscal year of the
Fund, or limitation period, if shorter ("Pro Rated Limitation"). The Pro Rated
Limitation shall be compared to the expenses of the Fund recorded through the
prior day in order to produce the allowable expenses to be recorded for the
current day ("Allowable Expenses"). If the Fund's Management Fee and other
expenses for the current day exceed the Allowable Expenses, the Management Fee
for the current day shall be reduced by such excess ("Unaccrued Fees"). In the
event the excess exceeds the amount due as the Management Fee, the Manager shall
be responsible to the Fund for the additional excess ("Other Expenses Exceeding
Limit"). If at any time up through and including the Certain Date, the Fund's
Management Fee and other expenses for the current day are less than the
Allowable Expenses, the differential shall be due to the Manager as payment of
cumulative Unaccrued Fees (if any) or as payment for cumulative Other Expenses
Exceeding Limit (if any). If cumulative Unaccrued Fees or cumulative Other
Expenses Exceeding Limit remain at the Certain Date, these amounts shall be paid
to the Manager in the future provided that: (1) no such payment shall be made to
the Manager after _________; and (2) such payment shall only be made to the
extent that it does not result in the Fund's aggregate expenses exceeding the
Expense Limitation. The Manager may voluntarily agree to an additional expense
limitation (any such additional expense limitation hereinafter referred to as an
"Additional Expense Limitation"), at the same or a different level and for the
same or a different period of time beyond the Certain Date (any such additional
period being hereinafter referred to an as "Additional Period") provided,
however, that: (1) the calculations and methods of payment shall be as described
above; (2) no payment for cumulative Unaccrued Fees or cumulative Other Expenses
Exceeding Limit shall be made to the Manager more than two years after the end
of an Additional Period; and (3) payment for cumulative Unaccrued Fees or
cumulative Other Expenses Exceeding Limit after the expiration of the Additional
Period shall only

<PAGE>

including a majority of the independent directors, may from time to time
authorize the imposition of a fee as a direct charge against shareholder
accounts to be retained by the Fund or to be paid to the Manager to defray
expenses which would otherwise be paid by the Manager in accordance with the
provisions of Paragraph 2 of this Agreement. At least 60 days' prior written
notice of the intent to impose such fee must be given to the Fund's
shareholders.

3.5.
PRORATION OF FEE (ALL FUNDS). If this Agreement becomes effective or terminates
before the end of any month, the Fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.

4.
BROKERAGE. Subject to the approval of the board of directors, the Manager, in
carrying out its duties under Paragraph 1.A., may cause the Corporation, with
respect to the Fund, to pay a broker-dealer which furnishes brokerage or
research services [as such services are defined under Section 28(e) of the
Securities Exchange Act of 1934, as amended (the "'34 Act")], a higher
commission than that which might be charged by another broker-dealer which does
not furnish brokerage or research services or which furnishes brokerage or
research services deemed to be of lesser value, if such commission is deemed
reasonable in relation to the brokerage and research services provided by the
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of the Manager with respect to the accounts as to which
it exercises investment discretion (as such term is defined under Section
3(a)(35) of the '34 Act).

5.
MANAGER'S USE OF THE SERVICES OF OTHERS. The Manager may (at its cost except as
contemplated by Paragraph 4 of this Agreement) employ, retain or otherwise avail
itself of the services or facilities of other persons or organizations for the
purpose of providing the Manager or the Corporation or Fund, as appropriate,
with such statistical and other factual information, such advice regarding
economic factors and trends, such advice as to occasional transactions in
specific securities or such other information, advice or assistance as the
Manager may deem necessary, appropriate or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Corporation or Fund, as
appropriate, or in the discharge of Manager's overall responsibilities with
respect to the other accounts which it serves as investment manager.

6.
OWNERSHIP OF RECORDS. All records required to be maintained and preserved by the
Corporation or Fund pursuant to the provisions of rules or regulations of the
Securities and Exchange Commission under Section 31(a) of the Act and maintained
and preserved by the Manager on behalf of the Corporation or Fund, as
appropriate, are the property of the Corporation or Fund, as appropriate, and
will be surrendered by the Manager promptly on request by the Corporation or
Fund, as appropriate.

<PAGE>

7.
REPORTS TO MANAGER. The Corporation or Fund, as appropriate, shall furnish or
otherwise make available to the Manager such prospectuses, financial statements,
proxy statements, reports, and other information relating to the business and
affairs of the Corporation or Fund, as appropriate, as the Manager may, at any
time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.

8.
SERVICES TO OTHER CLIENTS. Nothing herein contained shall limit the freedom of
the Manager or any affiliated person of the Manager to render investment
supervisory and corporate administrative services to other investment companies,
to act as investment manager or investment counselor to other persons, firms or
corporations, or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
or until the Manager shall otherwise consent, the Manager shall be the only
investment manager to the Fund.

9.
LIMITATION OF LIABILITY OF MANAGER. Neither the Manager nor any of its officers,
directors, or employees, nor any person performing executive, administrative,
trading, or other functions for the Corporation or Fund (at the direction or
request of the Manager) or the Manager in connection with the Manager's
discharge of its obligations undertaken or reasonably assumed with respect to
this Agreement, shall be liable for any error of judgment or mistake of law or
for any loss suffered by the Corporation or Fund in connection with the matters
to which this Agreement relates, except for loss resulting from willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties on behalf of the Corporation or Fund or from reckless disregard by the
Manager or any such person of the duties of the Manager under this Agreement.

10.
USE OF MANAGER'S NAME. The Corporation or Fund may use the name "T. Rowe Price
International Funds, Inc." or any other name derived from the name "T. Rowe
Price" only for so long as this Agreement or any extension, renewal or amendment
hereof remains in effect, including any similar agreement with any organization
which shall have succeeded to the business of the Manager as investment manager.
At such time as this Agreement or any extension, renewal or amendment hereof, or
such other similar agreement shall no longer be in effect, the Corporation or
Fund will (by corporate action, if necessary) cease to use any name derived from
the name "T. Rowe Price," any name similar thereto or any other name indicating
that it is advised by or otherwise connected with the Manager, or with any
organization which shall have succeeded to the Manager's business as investment
manager.

11.
TERM OF AGREEMENT. The term of this Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through April 30, 2001. Thereafter, this
Agreement shall continue in effect from year to year, with respect to the Fund,
subject to the termination provisions and all other terms and conditions hereof,
so long as such continuation shall be specifically approved at least annually
(a) by either the board of directors of the Corporation, or by vote of a
majority of the

<PAGE>

outstanding voting securities of the Fund; (b) in either event by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the directors of the Corporation, with respect to the Fund, who are
not parties to this Agreement or interested persons of any such party; and (c)
the Manager shall not have notified the Corporation, in writing, at least 60
days prior to April 30, 2001 or prior to April 30th of any year thereafter, that
it does not desire such continuation. The Manager shall furnish to the
Corporation, promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any extension, renewal or
amendment hereof.

12.
AMENDMENT AND ASSIGNMENT OF AGREEMENT. This Agreement may not be amended or
assigned without the affirmative vote of a majority of the outstanding voting
securities of the Fund, and this Agreement shall automatically and immediately
terminate in the event of its assignment.

13.
TERMINATION OF AGREEMENT. This Agreement may be terminated by either party
hereto, without the payment of any penalty, upon 60 days' prior notice in
writing to the other party; provided, that in the case of termination by the
Corporation, with respect to the Fund, such action shall have been authorized by
resolution of a majority of the directors of the Corporation who are not parties
to this Agreement or interested persons of any such party, or by vote of a
majority of the outstanding voting securities of the Fund.

14. MISCELLANEOUS.

A.
CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

B.
INTERPRETATION. Nothing herein contained shall be deemed to require the
Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the board of directors
of the Corporation of its responsibility for and control of the conduct of the
affairs of the Fund.

C.
DEFINITIONS. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretations thereof, if any, by the United States courts or, in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission validly issued pursuant to the
Act. Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested person," "assignment," and "affiliated person," as used
in Paragraphs 2, 8, 9, 11, 12, and 13 hereof, shall have the meanings assigned
to them by Section 2(a) of the Act. In addition, where the effect of a
requirement of the Act reflected in any provision of this Agreement is relaxed
by a rule, regulation or order of the Securities and Exchange Commission,
whether of special or of

<PAGE>

general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.

Attest: T. ROWE PRICE INTERNATIONAL FUND

________________________ By: ______________________
Patricia B. Lippert, M. David Testa,
Secretary Director and Vice President

Attest: T. ROWE PRICE INTERNATIONAL, INC.

_______________________ By: _______________________
Barbara A. Van Horn, Henry H. Hopkins,
Secretary Vice President

<PAGE>

[To international funds shareholders]

Dear Shareholder:

We cordially invite you to attend an annual meeting of shareholders of the T.
Rowe Price International Funds on Wednesday, October 25, 2000. Several important
issues affecting your funds will be on the agenda: three apply to all
shareholders in the international funds, one applies only to shareholders in the
New Asia Fund, and one applies to the Foreign Equity Fund. (The Foreign Equity
Fund is for institutional investors.) THE FUNDS' BOARDS OF DIRECTORS RECOMMEND
THE FOLLOWING PROPOSALS, AND WE ASK YOU TO READ THE ENCLOSED INFORMATION
CAREFULLY AND REGISTER YOUR VOTES.

Proposals affecting all international funds:
. To approve a new Investment Management Agreement for each international fund.
As you know, the international funds were managed by Rowe Price-Fleming, a
50/50 joint venture between T. Rowe Price Associates and Robert Fleming
Holdings. On August 8, 2000, T. Rowe Price became the sole owner of the
investment management company and renamed it T. Rowe Price International, Inc.
This transaction caused the investment management agreements with Rowe
Price-Fleming to terminate automatically. We are seeking your approval of new
agreements between the funds and T. Rowe Price International, Inc. that are
identical to the prior ones. There are no changes in fees or services.

. To elect directors for the Boards of the funds (except for Spectrum
International).

. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants.

Proposal affecting New Asia Fund:
. To change the fund's status to "nondiversified." The New Asia Fund is
currently classified as "diversified," which means its holdings must meet
certain criteria established by the Investment Act of 1940 (see pages xx of
this proxy). As a "nondiversified" fund, the portfolio would still be subject
to Internal Revenue Service rules (see page xx), which are somewhat less
restrictive but still require significant diversification of assets among
issuers. (Neither set of rules applies to geographic diversification.) The
requested change reflects the rapid growth of some companies in the region and
their more dominant status in their various markets. The change would increase
the portfolio managers' flexibility in implementing the fund's investment
program, especially in certain markets, but we do not expect a meaningful
reduction in the overall number of securities in the portfolio.

Proposal affecting Foreign Equity Fund:
. To permit the fund to lend securities. Granting the fund this right would
align its fundamental policy on securities lending with corresponding policies
of all other T. Rowe Price international funds. Securities lending, which can
generate significant income for the fund, is subject to all of the existing
controls in place in the Price Funds Securities Lending Program (see page xxx
of this proxy) and to a T. Rowe Price limit on all lending to no more than
33-1/3% of the value of a fund's total assets.

INT

<PAGE>

We realize it may be difficult for you to attend the meeting to vote your
shares. HOWEVER, WE NEED YOUR VOTE. YOU CAN VOTE BY MAIL, TELEPHONE, OR THROUGH
THE INTERNET, AS EXPLAINED ON THE ENCLOSED PROXY CARD.

If you have any questions, please call us at 1-800-541-5910. YOUR VOTE IS
EXTREMELY IMPORTANT.

Sincerely,

/s/James S. Riepe
James S. Riepe
Vice Chairman of the Board
T. Rowe Price Associates, Inc.

<PAGE>

To International Stock Portfolio shareholders

Dear Shareholder:

We cordially invite you to attend the annual meeting of shareholders of the T.
Rowe Price International Stock Portfolio on Wednesday, October 25, 2000. Several
issues affecting your fund will be on the agenda. THE FUND'S BOARD OF DIRECTORS
RECOMMENDS THE FOLLOWING PROPOSALS, AND WE ASK YOU TO READ THE ENCLOSED
INFORMATION CAREFULLY AND REGISTER YOUR VOTES.

. To approve a new investment management agreement for the fund. As you know,
the International Stock Portfolio was managed by Rowe Price-Fleming, a 50/50
joint venture between T. Rowe Price Associates and Robert Fleming Holdings. On
August 8, 2000, T. Rowe Price became the sole owner of the investment
management company and renamed it T. Rowe Price International, Inc. This
transaction caused the investment management agreement with Rowe Price-Fleming
to terminate automatically. We are seeking your approval of a new agreement
between the fund and T. Rowe Price International, Inc. that is identical to
the prior one. There are no changes in fees or services.

. To elect the directors nominated for the fund's Board.

. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants.

We realize it may be difficult for you to attend the meeting to vote your
shares, so we are enclosing a proxy card. Just indicate your votes, sign, date,
and return the card in the envelope provided. If you have any questions, please
call us at 1-800-541-5910. YOUR VOTE IS EXTREMELY IMPORTANT.

Sincerely,

/s/James S. Riepe
James S. Riepe
Vice Chairman of the Board
T. Rowe Price Associates, Inc.

ISP

<PAGE>

VOTE BY TOUCH-TONE PHONE, THE INTERNET, OR BY MAIL
--------------------------------------------------

Call Toll-Free: 1-888-221-0697 Or By Accessing WWW.PROXYWEB.COM
Invest With Confidence

SEE THE ENCLOSED INSERT FOR FURTHER INSTRUCTIONS ON VOTING BY PHONE OR INTERNET
T. Rowe Price

***CONTROL NUMBER: 999 999 999 999 99***
Ram Logo

Please fold and detach card at perforation
before mailing

-------------------------------------------------------------------------------

T. ROWE PRICE [Fund Name] ("Fund")

MEETING TIME: 2:00 P.M. EASTERN TIME THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

By my signature below, I appoint M. David Testa and Martin G. Wade as proxies to
vote all Fund shares that I am entitled to vote at the Annual Meeting of
Shareholders to be held on October 25, 2000, at 2:00 p.m., ET at the Four
Seasons Hotel, 2800 Pennsylvania Avenue, N.W., Washington, D.C. 20007, and at
any adjournments of the meeting. Messrs. Testa or Wade may vote my shares, and
they may appoint substitutes to vote my shares on their behalf. I instruct
Messrs. Testa and Wade to vote this proxy as specified on the reverse side, and
I revoke any previous proxies that I have executed. I acknowledge receipt of the
fund's Notice of Annual Meeting of Shareholders and proxy statement.

PLEASE SIGN, DATE, AND RETURN PROMPTLY
IN THE ENCLOSED
ENVELOPE IF YOU ARE NOT VOTING BY PHONE OR INTERNET.

Date_____________________

NOTE: Please sign exactly as
name appears on this proxy. Joint
owners should each sign
personally. Directors and other
fiduciaries should indicate the
capacity in which they sign, and
where more than one name appears,
a majority must sign. If a
corporation, this signature
should be that of an authorized
officer who should state his or
her title.
_______________________________________

CONTINUED ON REVERSE SIDE Signature(s) (and Title(s),
if applicable)

INT

<PAGE>

Please refer to the Proxy Statement discussion of these proposals. THE PROXY
WILL BE VOTED FOR THE PROPOSALS IF YOU DO NOT SPECIFY OTHERWISE. Your appointed
---
attorneys will vote any other matters that arise at the meeting in accordance
with their best judgement. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF
---
THE FOLLOWING:

Please fold and detach card at perforation before mailing.

------------------------------------------------------------------------------

Please vote by checking the appropriate box below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAI

1. ALL FUNDS. / / /
To approve a new investment management agreement.
2. FOREIGN EQUITY FUND. / / /
To amend the Fund's fundamental policy to
permit it to engage in securities lending.
3. NEW ASIA FUND. / / /
To amend the Fund's fundamental policy to
permit it to change its status from diversified to non-
diversified.
FOR ALL WITHH
NOMINEES AUTHO
4. ALL FUNDS, EXCEPT SPECTRUM INTERNATIONAL FUND. / / /
To elect the
directors listed below:

(01) M. David Testa (02) Martin G. Wade

(03) Anthony W. Deering (04) Donald W. Dick, Jr.
(05) Paul M. Wythes
INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL

NOMINEE, WRITE THE NOMINEE'S NAME ON THE SPACE PROVIDED BELOW. FOR AGAI
___________________________________________________________
5. ALL FUNDS. / / /
To ratify the appointment of
PricewaterhouseCoopers, LLP as independent accountants for
each Fund for its current fiscal year.

PLEASE SIGN ON REVERSE SIDE

INT
</TABLE>

<PAGE>

PAGE 1
Voting Your Proxy: It's Easier Than Ever

The enclosed proxy discusses matters affecting your T. Rowe Price fund. IT'S
IMPORTANT TO VOTE on these issues, and voting promptly can save money for your
fund by making a second mailing unnecessary. In addition to the option of
mailing the proxy card back to us, we now offer you TWO OTHER WAYS TO VOTE - by
touch-tone telephone and by computer via the Internet. Using either SAVES TIME
for you and HELPS REDUCE YOUR FUND'S EXPENSES. T. Rowe Price Ram Logo T. Rowe
Price Investment Services, Inc., Distributor.

So after you've read the proxy information about your fund, but BEFORE you sign,
seal, and mail the proxy card, consider voting either by telephone or by
computer via the Internet.

GRAPHIC OF TELEPHONE

By touch-tone TELEPHONE:

. have the proxy card handy

. call 1-888-221-0697 toll free

. enter the control number found in the upper left corner of your proxy card

. follow the simple recorded instructions

GRAPHIC OF COMPUTER SCREEN

By COMPUTER via the Internet:

. have the proxy card handy

. go to the Website WWW.PROXYWEB.COM

. enter the control number found in the upper left corner of your proxy card

. follow the instructions on the screen

IF YOU VOTE BY COMPUTER OR TELEPHONE, YOU DO NOT NEED TO MAIL THE PROXY CARD.

Thank you.