<PAGE>
Registration Nos. 033-52171/811-07145
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. 8 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 9 /X/
T. ROWE PRICE INTERNATIONAL SERIES, INC.
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Exact Name of Registrant as Specified in Charter
100 East Pratt Street, Baltimore, Maryland 21202
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Address of Principal Executive Offices
410-345-2000
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Registrant's Telephone Number, Including Area Code
Henry H. Hopkins
100 East Pratt Street, Baltimore, Maryland 21202
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Name and Address of Agent for Service
Approximate Date of Proposed Public Offering May 1, 2000
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It is proposed that this filing will become effective (check
appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/X/ On May 1, 2000, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On (date), pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
PROSPECTUS
May 1, 2000
T. ROWE PRICE
InternationalStock Portfolio
A stock fund seeking long-term capital growth through investments in non-U.S.
companies.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
(LOGO)
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T. Rowe Price International Series, Inc. T. Rowe Price International Stock
Portfolio
Prospectus
May 1, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ABOUT THE FUND
1
Objective, Strategy, Risks, and Expenses 1
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Other Information About the Fund 4
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Some Basics of
Investing
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ABOUT YOUR ACCOUNT
2
Pricing Shares and Receiving 5
Sale Proceeds
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Rights Reserved by the Fund 6
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Dividends and Distributions 7
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MORE ABOUT THE FUND
3
Organization and Management 8
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Understanding Performance Information 10
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Investment Policies and Practices 11
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Financial Highlights 15
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</TABLE>
Rowe Price-Fleming International, Inc. (Price-Fleming) was founded in 1979 as
a joint venture between T. Rowe Price Associates, Inc. and Robert Fleming
Holdings, Ltd. As of December 31, 1999, Price-Fleming managed $42.6 billion in
foreign stocks and bonds through its offices in Baltimore, London, Tokyo,
Singapore, Hong Kong, Buenos Aires, and Paris.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any
depository institution. Shares are not insured by the FDIC, Federal Reserve, or
any other government agency, and are subject to investment risks, including
possible loss of the principal amount invested.
<PAGE>
ABOUT THE FUND
1
OBJECTIVE, STRATEGY, RISKS, AND EXPENSES
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To help you decide whether this fund is appropriate for you, this section
reviews its major characteristics.
The fund should be used as an investment option for variable annuity and
variable life insurance contracts.
What is the fund's objective?
The fund seeks long-term growth of capital through investments primarily in
the common stocks of established, non-U.S. companies.
What is the fund's principal investment strategy?
We expect to invest substantially all of the fund's assets outside the U.S.
and to diversify broadly among developed and emerging countries throughout
the world. Stock selection reflects a growth style. We may purchase the
stocks of companies of any size, but our focus will typically be on large
and, to a lesser extent, medium-sized companies.
Selection of common stocks reflects a growth style. Price-Fleming employs
in-depth fundamental research in an effort to identify companies capable of
achieving and sustaining above-average, long-term earnings growth. We seek
to purchase such stocks at reasonable prices in relation to present or
anticipated earnings, cash flow, or book value, and valuation factors often
influence our allocations among large-, mid-, or small-cap shares.
While we invest with an awareness of the global economic backdrop and our
outlook for individual countries, bottom-up stock selection is the focus of
our decision-making. Country allocation is driven largely by stock
selection, though we may limit investments in markets that appear to have
poor overall prospects.
In selecting stocks, we generally favor companies with one or more of the
following characteristics:
. leading market position;
. attractive business niche;
. strong franchise or natural monopoly;
. technological leadership or proprietary advantages;
. seasoned management;
. earnings growth and cash flow sufficient to support growing dividends;
and
. healthy balance sheet with relatively low debt.
Normally, the fund invests primarily (at least 65% of total assets) in
common stocks. To a lesser extent, the fund may also purchase other
securities, including futures and options, in keeping with the fund's
objective.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
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T. ROWE PRICE
What are the main risks of investing in the fund?
As with all stock funds, this fund's share price can fall because of
weakness in one or more of its primary equity markets, a particular
industry, or specific holdings. Stock markets can decline for many reasons,
including adverse political or economic developments, changes in investor
psychology, or heavy institutional selling. The prospects for an industry
or company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. In
addition, our assessment of companies held in the fund may prove incorrect,
resulting in losses or poor performance even in rising markets.
Funds that invest overseas generally carry more risk than funds that invest
strictly in U.S. assets. Even investments in countries with highly
developed economies are subject to significant risks. Some particular risks
affecting this fund include the following:
. Currency risk This refers to a decline in the value of a foreign currency
versus the U.S. dollar, which reduces the dollar value of securities
denominated in that currency. The overall impact on a fund's holdings can
be significant and long-lasting depending on the currencies represented in
the portfolio, how each one appreciates or depreciates in relation to the
U.S. dollar, and whether currency positions are hedged. Under normal
conditions, the fund does not engage in extensive foreign currency hedging
programs. Further, exchange rate movements are unpredictable and it is not
possible to effectively hedge the currency risks of many developing
countries.
. Geographic risk The economies and financial markets of certain
regions-such as Latin America and Asia-can be highly interdependent and may
decline all at the same time.
. Emerging market risk To the extent the fund invests in emerging markets,
it is subject to greater risk than a fund investing only in developed
markets. The economic and political structures of developing nations, in
most cases, do not compare favorably with the U.S. or other developed
countries in terms of wealth and stability, and their financial markets
often lack liquidity. Fund performance will likely be negatively affected
by portfolio exposure to nations in the midst of hyperinflation, currency
devaluation, trade disagreements, sudden political upheaval, or
interventionist government policies. Significant buying or selling actions
by a few major investors may also heighten the volatility of emerging
markets. These factors make investing in such countries significantly
riskier than in other countries and any one of them could cause the fund's
share price to decline.
. Other risks of foreign investing Other risks result from the varying
stages of economic and political development, the differing regulatory
environments, trading days, and accounting standards, and higher
transaction costs of non-U.S. markets. Investments outside the United
States could be subject to actions such as capital or currency controls,
nationalizing a company or industry, expropriating assets, or imposing
punitive taxes which would have an adverse effect on the fund.
. While certain countries have made progress in economic growth,
liberalization, fiscal discipline, and political and social stability,
there is no assurance these trends will continue.
. Futures/options risk To the extent the fund uses futures and options, it
is exposed to additional volatility and potential losses.
As with any mutual fund, there can be no guarantee the fund will achieve
its objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money.
<PAGE>
ABOUT THE FUND
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of common stock and international
investments. If you want to diversify your domestic stock portfolio by
adding foreign investments, seek the long-term capital appreciation
potential of growth stocks, and are comfortable with the risks that
accompany foreign investments, the fund could be an appropriate part of
your overall investment strategy.
. The fund should not represent your complete investment program or be used
for short-term trading purposes.
How has the fund performed in the past?
The bar chart showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next and over time. Fund past performance is no guarantee
of future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"95" "96" "97" "98" "99"
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<S> <C> <C> <C> <C>
11.18 14.70 3.09 15.86 33.32
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</TABLE>
Quarter ended Total return
Best quarter 12/31/99 24.01%
Worst quarter 12/31/98 -13.80%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended
December 31, 1999
Since inception
1 year 5 years (3/31/94)
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<S> <C> <C> <C>
International Stock
Portfolio 33.32% 15.22% 13.45%
MSCI EAFE 27.30 13.15 12.16
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
<PAGE>
T. ROWE PRICE
OTHER INFORMATION ABOUT THE FUND
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What are some of the potential rewards of investing overseas through the fund?
Investing abroad increases the opportunities available to you. Many foreign
countries may have greater potential for economic growth than the U.S.
Foreign investments also provide effective diversification for an all-U.S.
portfolio, since historically their returns have not moved in sync with
U.S. stocks over long time periods. Investing a portion of your overall
portfolio in foreign stock funds can enhance your diversification while
providing the opportunity to boost long-term returns.
How does the portfolio manager try to reduce risk?
The principal tools we use to try to reduce risk are intensive research and
diversification. Currency hedging techniques may be used from time to time.
. Price-Fleming employs a team of experienced portfolio managers and
analysts, with offices in London, Tokyo, Singapore, Hong Kong, Buenos
Aires, Paris, and Baltimore. Portfolio managers keep close watch on
individual investments as well as on political and economic trends in each
country and region. Holdings are adjusted according to the manager's
analysis and outlook.
. Diversification significantly reduces, but does not eliminate, risk. The
impact on the fund's share price from a drop in the price of a particular
stock is reduced substantially by investing in a portfolio with dozens of
different companies. Likewise, the impact of unfavorable developments in a
particular country is reduced when investments are spread among many
countries. However, the economies and financial markets of countries in a
certain region may be influenced heavily by one another.
. Though the fund doesn't normally engage in extensive currency hedging, fund
managers can employ currency forwards and options to hedge the risk to the
portfolio when foreign exchange movements are expected to be unfavorable
for U.S. investors. In a general sense, these tools allow a manager to lock
in a specified exchange rate for a stated period of time. (For more
details, please see Foreign Currency Transactions under Investment Policies
and Practices.) If the manager's forecast proves to be wrong, such a hedge
may cause a loss. Also, it may be difficult or impractical to hedge
currency risk in many emerging countries.
Is there other information I can review before making a decision?
Investment Policies and Practices in Section 3 discusses various types of
portfolio securities the fund may purchase as well as types of management
practices the fund may use.
<PAGE>
ABOUT YOUR ACCOUNT
2
PRICING SHARES AND RECEIVING SALE PROCEEDS
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Here are some procedures you should know when investing in the fund. For
instructions on how to purchase and redeem shares of the fund, read the
separate account prospectus.
Shares of the fund are designed to be offered to insurance company separate
accounts established for the purpose of funding variable annuity contracts.
They may also be offered to insurance company separate accounts established
for the purpose of funding variable life contracts. Variable annuity and
variable life contract holders or participants are not the shareholders of
the fund. Rather, the separate account is the shareholder. The variable
annuity and variable life contracts are described in separate prospectuses
issued by the insurance companies. The fund assumes no responsibility for
such prospectuses, or variable annuity or variable life contracts.
Shares of the fund are sold and redeemed without the imposition of any
sales commission or redemption charge. However, certain other charges may
apply to annuity or life contracts. Those charges are disclosed in the
separate account prospectus.
Your ability to exchange from this fund to any other one that serves as an
investment option under your insured contract is governed by the terms of
that contract and the separate account prospectus.
How and when shares are priced
The share price (also called "net asset value" or NAV per share) for the
fund is calculated at the close of the New York Stock Exchange, normally 4
p.m. ET, each day the New York Stock Exchange is open for business. To
calculate the NAV, the fund's assets are valued and totaled, liabilities
are subtracted, and the balance, called net assets, is divided by the
number of shares outstanding. Current market values are used to price fund
shares.
The fund's portfolio securities usually are valued on the basis of the most
recent closing market prices at 4 p.m. ET when the fund calculates its NAV.
Most of the securities in which the fund invests, however, are traded in
markets that close before that time. For securities primarily traded in the
Far East, for example, the most recent closing prices may be as much as 15
hours old at 4 p.m. Normally, developments that could affect the values of
portfolio securities that occur between the close of the foreign market and
4 p.m. ET will not be reflected in the fund's NAV. However, if the fund
determines that such developments are so significant that they will, in its
judgment, clearly and materially affect the value of the fund's securities,
the fund may adjust the previous closing prices to reflect what it believes
to be the fair value of the securities as of 4 p.m. ET. The fund may fair
value securities in other situations, for example, when a particular
foreign market is closed but the fund is open.
How your purchase, sale, or exchange price is determined
Purchases
The insurance companies purchase shares of the fund for their separate
accounts, using premiums allocated by the contract holders or participants.
Shares are purchased at the NAV next determined after the insurance company
receives the premium payment in acceptable form. Initial and subsequent
payments allocated to the fund are subject to the limits stated in the
separate account prospectus issued by the insurance company.
<PAGE>
T. ROWE PRICE
Redemptions
The insurance companies redeem shares of the fund to make benefit or
surrender payments under the terms of its contracts. Redemptions are
processed on any day on which the New York Stock Exchange is open and are
priced at the fund's NAV next determined after the insurance company
receives a surrender request in acceptable form.
Note: The time at which transactions and shares are priced and the time
until which orders are accepted may be changed in case of an emergency or
if the New York Stock Exchange closes at a time other than 4 p.m. ET.
How you can receive the proceeds from a sale
Payment for redeemed shares will be made promptly, but in no event later
than seven days after receipt of your redemption order. However, the right
of redemption may be suspended or the date of payment postponed in
accordance with the Investment Company Act of 1940. The amount received
upon redemption of the shares of the fund may be more or less than the
amount paid for the shares, depending on the fluctuations in the market
value of the assets owned by the fund.
Excessive Trading
. T. Rowe Price may bar excessive traders from purchasing shares.
Frequent trades involving your account or accounts controlled by you can
disrupt management of the fund and raise its expenses. To deter such
activity, the fund has adopted an excessive trading policy. If you violate
our excessive trading policy, you may be barred indefinitely and without
further notice from further purchases of T. Rowe Price funds. Our excessive
trading policy applies to contract holders and participants notwithstanding
any provisions in your insurance contract:
You can make one purchase and one sale involving the same fund within any
120-day period. If you exceed this limit or if you hold fund shares for
less than 60 calendar days, you are in violation of our excessive trading
policy. Systematic purchases or redemptions are exempt from this policy.
RIGHTS RESERVED BY THE FUND
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The fund and its agents reserve the following rights: (1) to waive or lower
investment minimums; (2) to refuse any purchase or exchange order; (3) to
cancel or rescind any purchase or exchange order (including, but not
limited to, orders deemed to result in excessive trading, market timing,
fraud, or 5% ownership by individual contract holders or participants) upon
notice to the contract holder or participant within five business days of
the trade or if the written confirmation has not been received by the
contract holder or participant, whichever is sooner; (4) to freeze any
account and suspend account services when notice has been received of a
dispute between the registered or beneficial account owners or there is
reason to believe a fraudulent transaction may occur; (5) to otherwise
modify the conditions of purchase and any services at any time; or (6) to
act on instructions believed to be genuine. These actions will be taken
when, in the sole discretion of management, they are deemed to be in the
best interest of the fund.
<PAGE>
ABOUT THE FUND
In an effort to protect the fund from the possible adverse effects of a
substantial redemption in a large account, as a matter of general policy,
no contract holder or participant or group of contract holders or
participants controlled by the same person or group of persons will
knowingly be permitted to purchase in excess of 5% of the outstanding
shares of the fund, except upon approval of the fund's management.
DIVIDENDS AND OTHER DISTRIBUTIONS
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For a discussion of the tax status of your variable annuity contract,
please refer to the separate account prospectus.
Dividends and Other Distributions
The policy of the fund is to distribute all of its net investment income
and net capital gains each year to its shareholders, which are the separate
accounts established by the various insurance companies in connection with
their issuance of variable annuity and variable life contracts. Dividends
from net investment income are declared and paid annually. All fund
distributions made to a separate account will be reinvested automatically
in additional fund shares, unless a shareholder (separate account) elects
to receive distributions in cash. Under current law, dividends and
distributions made by the fund to separate accounts generally are not
taxable to the separate accounts, the insurance company, or the contract
holder, provided that the separate account meets the diversification
requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended, and other tax-related requirements are satisfied. The fund intends
to diversify its investments in the manner required under Code Section
817(h).
Foreign Transactions
If the fund pays nonrefundable taxes to foreign governments during the
year, the taxes will reduce fund dividends.
<PAGE>
MORE ABOUT THE FUND
3
ORGANIZATION AND MANAGEMENT
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How is the fund organized?
The T. Rowe Price International Series, Inc. (the "corporation") was
incorporated in Maryland in 1994. Currently, the corporation consists of
one series, the International Stock Portfolio.
While the fund is managed in a manner similar to that of the T. Rowe Price
International Stock Fund, investors should be aware that the fund is not
the same fund and will not have the same performance. Investments made by
the fund at any given time may not be the same as those made by the T. Rowe
Price International Stock Fund. Different performance will result due to
factors such as differences in the cash flows into and out of the fund,
different fees and expenses, and differences in portfolio size and
positions.
What is meant by "shares"?
Contract holders and participants indirectly (through the insurance company
separate account) purchase shares when they put money in a fund offered as
an investment option in their insurance contracts. These shares are part of
a fund's authorized capital stock, but share certificates are not issued.
Each share and fractional share entitles the shareholder (the insurance
company separate account) to cast one vote per share on certain fund
matters, including the election of fund directors, changes in fundamental
policies, or approval of changes in the fund's management contract.
The shares of the fund have equal voting rights. The various insurance
companies own the outstanding shares of the fund in their separate
accounts. These separate accounts are registered under the Investment
Company Act of 1940 or are excluded from registration thereunder. Under
current law, the insurance companies must vote the shares held in
registered separate accounts in accordance with voting instructions
received from variable contract holders or participants having the right to
give such instructions.
Do T. Rowe Price funds have annual shareholder meetings?
The funds are not required to hold annual meetings and, to avoid
unnecessary costs to fund shareholders, do not do so except when certain
matters, such as a change in fundamental policies, must be decided. In
addition, shareholders representing at least 10% of all eligible votes may
call a special meeting, if they wish, for the purpose of voting on the
removal of any fund director or trustee. If a meeting is held and you
cannot attend, you can vote by proxy. Before the meeting, the fund will
send you proxy materials that explain the issues to be decided and include
instructions on voting.
Who runs the fund?
General Oversight
The corporation is governed by a Board of Directors that meets regularly to
review the fund investments, performance, expenses, and other business
affairs. The Board elects the corporation's officers. The policy of the
corporation is that the majority of Board members are independent of
Price-Fleming.
<PAGE>
ABOUT THE FUND
. All decisions regarding the purchase and sale of fund investments are made
by Price-Fleming - specifically by the fund's Investment Advisory Group.
Investment Manager
Price-Fleming is responsible for selection and management of the fund's
portfolio investments. Price-Fleming's U.S. office is located at 100 East
Pratt Street, Baltimore, Maryland 21202. Price-Fleming also has offices in
London, Tokyo, Singapore, Hong Kong, Buenos Aires, and Paris. Price-Fleming
was incorporated in Maryland in 1979 as a joint venture between T. Rowe
Price and Robert Fleming Holdings Limited (Flemings).
T. Rowe Price, Flemings, and Jardine Fleming Group Limited (Jardine
Fleming) are owners of Price-Fleming. The common stock of Price-Fleming is
50% owned by a wholly owned subsidiary of T. Rowe Price, 25% by a
subsidiary of Flemings, and 25% by a subsidiary of Jardine Fleming. Jardine
Fleming is owned by Flemings. T. Rowe Price has the right to elect a
majority of the Board of Directors of Price-Fleming, and Flemings has the
right to elect the remaining directors, one of whom will be nominated by
Jardine Fleming.
. Flemings is a diversified investment organization that participates in a
global network of regional investment offices in New York, London, Zurich,
Geneva, Tokyo, Hong Kong, Manila, Kuala Lumpur, Seoul, Taipei, Bombay,
Jakarta, Singapore, Bangkok, and Johannesburg.
Portfolio Management
The fund has an Investment Advisory Group that has day-to-day
responsibility for managing the portfolio and developing and executing the
fund's investment program. The members of the advisory group are: John R.
Ford, James B.M. Seddon, Mark C.J. Bickford-Smith, and David J.L. Warren.
John Ford joined Price-Fleming in 1982 and has 20 years of experience with
the Fleming Group in research and portfolio management. James Seddon joined
Price-Fleming in 1987 and has 13 years of portfolio management experience.
Mark Bickford-Smith joined Price-Fleming in 1995 and has 15 years of
experience in equity research and portfolio management. David Warren joined
Price-Fleming in 1983 and has 19 years of experience in equity research,
fixed income research, and portfolio management.
Portfolio Transactions
Decisions with respect to the purchase and sale of the fund's portfolio
securities on behalf of the fund are made by Price-Fleming. The
corporation's Board of Directors has authorized Price-Fleming to utilize
affiliates of Flemings and Jardine Fleming in the capacity of broker in
connection with the execution of a fund's portfolio transactions if
Price-Fleming believes that doing so would result in an economic advantage
(in the form of lower execution costs or otherwise) to the fund.
The Management Fee
The fund pays Price-Fleming an annual all-inclusive fee of 1.05% based on
its average daily net assets. The fund calculates and accrues the fee
daily. This fee pays for investment management services and other operating
costs.
From time to time, Price-Fleming may pay eligible insurance companies for
services they provide to the fund for contract holders. These payments
range from 0.15% to 0.25% of the average annual total assets invested by
the separate accounts of the insurance company in the fund.
<PAGE>
T. ROWE PRICE
Research and Administration
Certain administrative support is provided by T. Rowe Price, which receives
from Price-Fleming a fee of 0.15% of the market value of all assets in
equity accounts, 0.15% of the market value of all assets in active fixed
income accounts, and 0.035% of the market value of all assets in passive
fixed income accounts under Price-Fleming's management. Price-Fleming has
entered into research agreements with Fleming Investment Management Limited
(FIM) and Jardine Fleming International Holdings Limited (JFIH). For
services under the research agreements, FIM and JFIH each receive a fee of
0.075% of the market value of all assets in equity accounts under
Price-Fleming's management. FIM and JFIH each receive a fee of 0.075% of
the market value of all assets in active fixed income accounts and 0.0175%
of such market value in passive fixed income accounts under Price-Fleming's
management. In addition to the research provided under these agreements,
Price-Fleming has access to the publicly available research materials
produced by FIM and JFIH. FIM is a wholly owned subsidiary of Flemings.
JFIH is a wholly owned subsidiary of Jardine Fleming.
Variable Annuity and Variable Life Charges
Variable annuity and variable life fees and charges imposed on contract
holders and participants by the insurance companies are in addition to
those described previously and are described in the variable annuity and
variable life contract prospectuses.
Variable Annuity and Variable Life Conflicts
The fund may serve as an investment medium for both variable annuity
contracts and variable life insurance policies. Shares of the fund may be
offered to separate accounts established by any number of insurance
companies. The fund currently does not foresee any disadvantages to
variable annuity contract owners due to the fact that the fund may serve as
an investment medium for both variable life insurance policies and annuity
contracts; however, due to differences in tax treatment or other
considerations, it is theoretically possible that the interests of owners
of annuity contracts and insurance policies for which the fund serves as an
investment medium might at some time be in conflict. However, the fund's
Board of Directors is required to monitor events to identify any material
conflicts between variable annuity contract owners and variable life policy
owners, and will determine what action, if any, should be taken in the
event of such a conflict. If such a conflict were to occur, an insurance
company participating in the fund might be required to redeem the
investment of one or more of its separate accounts from the fund. This
might force the fund to sell securities at disadvantageous prices.
UNDERSTANDING PERFORMANCE INFORMATION
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This section should help you understand the terms used to describe fund
performance. You will come across them in shareholder reports you receive
from your insurance company.
Total Return
This tells you how much an investment has changed in value over a given
time period. It reflects any net increase or decrease in the share price
and assumes that all dividends and capital gains (if any) paid during the
period were reinvested in additional shares. Therefore, total return
numbers include the effect of compounding.
Advertisements may include cumulative or average annual total return
figures, which may be compared with various indices, other performance
measures, or other mutual funds.
<PAGE>
ABOUT THE FUND
Cumulative Total Return
This is the actual return of an investment for a specified period. A
cumulative return does not indicate how much the value of the investment
may have fluctuated during the period. For example, an investment could
have a 10-year positive cumulative return despite experiencing some
negative years during that time.
Average Annual Total Return
This is always hypothetical and should not be confused with actual
year-by-year results. It smooths out all the variations in annual
performance to tell you what constant year-by-year return would have
produced the investment's actual cumulative return. This gives you an idea
of an investment's annual contribution to your portfolio, provided you held
it for the entire period.
Total returns and yields quoted for the fund include the effect of
deducting the fund's expenses, but may not include charges and expenses
attributable to any particular insurance product. Since you can only
purchase shares of the fund through an insurance product, you should
carefully review the prospectus of the insurance product you have chosen
for information on relevant charges and expenses. Excluding these charges
from quotations of the fund's performance has the effect of increasing the
performance quoted.
INVESTMENT POLICIES AND PRACTICES
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This section takes a detailed look at some of the types of fund portfolio
securities and the various kinds of investment practices that may be used
in day-to-day portfolio management. Fund investments are subject to further
restrictions and risks described in the Statement of Additional
Information.
Shareholder approval is required to substantively change fund objectives
and certain investment restrictions noted in the following section as
"fundamental policies." The managers also follow certain "operating
policies," which can be changed without shareholder approval. However,
significant changes are discussed with shareholders in fund reports. Fund
investment restrictions and policies are adhered to at the time of
investment. A later change in circumstances will not require the sale of an
investment if it was proper at the time it was made.
Fund holdings of certain kinds of investments cannot exceed maximum
percentages of total assets, which are set forth in this prospectus. For
instance, fund investments in hybrid instruments are limited to 10% of
total assets. While these restrictions provide a useful level of detail
about fund investments, investors should not view them as an accurate gauge
of the potential risk of such investments. For example, in a given period,
a 5% investment in hybrid instruments could have significantly more of an
impact on a fund's share price than its weighting in the portfolio. The net
effect of a particular investment depends on its volatility and the size of
its overall return in relation to the performance of all the other fund
investments.
Changes in fund holdings, fund performance, and the contribution of various
investments are discussed in the shareholder reports sent to you by your
insurance company.
. Fund managers have considerable leeway in choosing investment strategies
and selecting securities they believe will help achieve fund objectives.
<PAGE>
T. ROWE PRICE
Types of Portfolio Securities
In seeking to meet its investment objective, we may invest in any type of
security or instrument (including certain potentially high-risk derivatives
described in this section) whose investment characteristics are consistent
with the fund's investment program. The following pages describe various
types of fund portfolio securities and investment management practices.
Fundamental policy The fund will not purchase a security if, as a result,
with respect to 75% of its total assets, more than 5% of its total assets
would be invested in securities of a single issuer, or if more than 10% of
the voting securities of the issuer would be held by the fund.
Fund investments are primarily in common stocks (normally, at least 65% of
total assets) and, to a lesser degree, other types of securities as
described below.
Common and Preferred Stocks
Stocks represent shares of ownership in a company. Generally, preferred
stock has a specified dividend and ranks after bonds and before common
stocks in its claim on income for dividend payments and on assets should
the company be liquidated. After other claims are satisfied, common
stockholders participate in company profits on a pro-rata basis; profits
may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's
stock price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred
stocks pay a dividend, preferred stock may be purchased where the issuer
has omitted, or is in danger of omitting, payment of its dividend. Such
investments would be made primarily for their capital appreciation
potential.
Convertible Securities and Warrants
Investments may be made in debt or preferred equity securities convertible
into, or exchangeable for, equity securities. Traditionally, convertible
securities have paid dividends or interest at rates higher than common
stocks but lower than nonconvertible securities. They generally participate
in the appreciation or depreciation of the underlying stock into which they
are convertible, but to a lesser degree. In recent years, convertibles have
been developed which combine higher or lower current income with options
and other features. Warrants are options to buy a stated number of shares
of common stock at a specified price anytime during the life of the
warrants (generally, two or more years).
Fixed Income Securities
From time to time, we may invest in investment-grade, fixed-income
securities. These securities would be purchased in companies that meet fund
investment criteria. The price of a bond fluctuates with changes in
interest rates, generally rising when interest rates fall and falling when
interest rates rise.
Hybrid Instruments
These instruments (a type of potentially high-risk derivative) can combine
the characteristics of securities, futures, and options. For example, the
principal amount, redemption, or conversion terms of a security could be
related to the market price of some commodity, currency, or securities
index. Such securities may bear interest or pay dividends at below market
or even relatively nominal rates. Under some conditions, the redemption
value of such an investment could be zero.
. Hybrids can have volatile prices and limited liquidity, and their use may
not be successful.
<PAGE>
ABOUT THE FUND
Operating policy Fund investments in hybrid instruments are limited to 10%
of total assets.
Private Placements
These securities are sold directly to a small number of investors, usually
institutions. Unlike public offerings, such securities are not registered
with the SEC. Although certain of these securities may be readily sold, for
example, under Rule 144A, others may be illiquid, and their sale may
involve substantial delays and additional costs.
Operating policy Fund investments in illiquid securities are limited to
15% of net assets.
Types of Investment Management Practices
Reserve Position
A certain portion of fund assets will be held in money market reserves.
Fund reserve positions are expected to consist primarily of shares of one
or more T. Rowe Price internal money market funds. Short-term, high-quality
U.S. and foreign dollar-denominated money market securities, including
repurchase agreements, may also be held. For temporary, defensive purposes,
there is no limit on fund investments in money market reserves. The effect
of taking such a position is that the fund may not achieve its investment
objective. The reserve position provides flexibility in meeting
redemptions, expenses, and the timing of new investments and can serve as a
short-term defense during periods of unusual market volatility.
Borrowing Money and Transferring Assets
Fund borrowings may be made from banks and other T. Rowe Price funds for
temporary emergency purposes to facilitate redemption requests, or for
other purposes consistent with fund policies as set forth in this
prospectus. Such borrowings may be collateralized with fund assets, subject
to restrictions.
Fundamental policy Borrowings may not exceed 33/1//\\/3/\\% of total fund
assets.
Operating policy Fund transfers of portfolio securities as collateral will
not be made except as necessary in connection with permissible borrowings
or investments, and then such transfers may not exceed 33/1//\\/3/\\% of
the fund's total assets. Fund purchases of additional securities will not
be made when borrowings exceed 5% of total assets.
Foreign Currency Transactions
The fund will normally conduct its foreign currency exchange transactions
either on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or through entering into forward
contracts to purchase or sell foreign currencies. The fund will generally
not enter into a forward contract with a term greater than one year.
The fund will generally enter into forward foreign currency exchange
contracts only under two circumstances. First, when the fund enters into a
contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
Second, when Price-Fleming believes that the currency of a particular
foreign country may move substantially against another currency, it may
enter into a forward contract to sell or buy the former foreign currency
(or another currency that acts as a proxy for that currency). The contract
may approximate the value of some or all of the fund portfolio securities
denominated in such foreign currency. Under certain circumstances, the fund
may commit a substantial portion or the entire value of its portfolio to
the consummation of these contracts. Price-Fleming will consider the effect
such a commitment to forward contracts would have on the fund investment
program and the flexibility of the fund to purchase additional securities.
<PAGE>
T. ROWE PRICE
Although forward contracts will be used primarily to protect the fund from
adverse currency movements, they also involve the risk that anticipated
currency movements will not be accurately predicted, and fund total return
could be adversely affected as a result.
There are some markets where it is not possible to engage in effective
foreign currency hedging. This is generally true, for example, for the
currencies of various emerging markets where the foreign exchange markets
are not sufficiently developed to permit hedging activity to take place.
Futures and Options
Futures (a type of potentially high-risk derivative) are often used to
manage or hedge risk because they enable the investor to buy or sell an
asset in the future at an agreed-upon price. Options (another type of
potentially high-risk derivative) give the investor the right (where the
investor purchases the option), or the obligation (where the investor
writes (sells) the option), to buy or sell an asset at a predetermined
price in the future. Futures and options contracts may be bought or sold
for any number of reasons, including: to manage fund exposure to changes in
securities prices and foreign currencies; as an efficient means of
adjusting fund overall exposure to certain markets; in an effort to enhance
income; as a cash management tool; and to protect the value of portfolio
securities. Call and put options may be purchased or sold on securities,
financial indices, and foreign currencies.
Futures contracts and options may not always be successful hedges; their
prices can be highly volatile; using them could lower fund total return;
and the potential loss from the use of futures can exceed a fund's initial
investment in such contracts.
Operating policies Futures: Initial margin deposits and premiums on
options used for nonhedging purposes will not exceed 5% of fund net asset
value. Options on securities: The total market value of securities against
which call or put options are written may not exceed 25% of its total
assets. No more than 5% of fund total assets will be committed to premiums
when purchasing call or put options.
Tax Consequences of Hedging
Under applicable tax law, the fund may be required to limit its gains from
hedging in foreign currency forwards, futures, and options. Although the
fund is expected to comply with such limits, the extent to which these
limits apply is subject to tax regulations as yet unissued. Hedging may
also result in the application of the mark-to-market and straddle
provisions of the Internal Revenue Code. These provisions could result in
an increase (or decrease) in the amount of taxable dividends paid by the
fund and could affect whether dividends paid are classified as capital
gains or ordinary income.
Lending of Portfolio Securities
Fund securities may be lent to broker-dealers, other institutions, or other
persons to earn additional income. The principal risk is the potential
insolvency of the broker-dealer or other borrower. In this event, the fund
could experience delays in recovering its securities and capital losses.
Fundamental policy The value of loaned securities may not exceed
33/1//\\/3/\\% of total fund assets.
Portfolio Turnover
The fund will not generally trade in securities for short-term profits,
but, when circumstances warrant, securities may be purchased and sold
without regard to the length of time held. A high turnover rate may
increase transaction costs and result in higher capital gain distributions
<PAGE>
ABOUT THE FUND
by the fund. The fund's portfolio turnover rates for the fiscal years
ending December 31 are listed in the table in the Financial Highlights
section.
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Table 2, which provides information about the fund's financial history, is
based on a single share outstanding throughout each fiscal year. The table
is part of the fund's financial statements, which are included in its
annual report and are incorporated by reference into the Statement of
Additional Information (available upon request). The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the fund (assuming reinvestment of all dividends and
distributions). The financial statements in the annual report were audited
by the fund's independent accountants, PricewaterhouseCoopers LLP.
<TABLE>
Table 2 Financial Highlights
<CAPTION>
Year ended December 31
1995 1996 1997 1998 1999
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.18 $ 11.26 $ 12.64 $ 12.74 $ 14.52
Income From Investment Operations
Net investment income 0.07 0.09 0.12 0.17 0.12
------------------------------------------------------
Net gains or losses
on securities (both
realized and 1.06 1.55 0.27/a/ 1.84 4.69
unrealized)
------------------------------------------------------
Total from investment
operations 1.13 1.64 0.39 2.01 4.81
Less Distributions
Dividends (from net (0.05) (0.17) (0.12) (0.17) (0.07)
investment income)
------------------------------------------------------
Distributions (from -- (0.09) (0.06) (0.06) (0.22)
capital gains)
------------------------------------------------------
In excess of realized -- -- (0.11) -- --
gain
------------------------------------------------------
Returns of capital -- -- -- -- --
------------------------------------------------------
Total distributions (0.05) (0.26) (0.29) (0.23) (0.29)
------------------------------------------------------
Net asset value, $ 11.26 $ 12.64 $ 12.74 $ 14.52 $ 19.04
end of period
------------------------------------------------------
Total return 11.18% 14.70% 3.09% 15.86% 33.32%
Ratios/Supplemental Data
Net assets, end of $51,661 $210,746 $369,400 $497,946 $707,330
period (in thousands)
------------------------------------------------------
Ratio of expenses to 1.05% 1.05% 1.05% 1.05% 1.05%
average net assets
------------------------------------------------------
Ratio of net income 1.47% 1.22% 1.10% 1.25% 0.83%
to average net assets
------------------------------------------------------
Portfolio turnover 17.4% 9.7% 16.6% 18.1% 25.4%
rate
-----------------------------------------------------------------------------------
</TABLE>
/a/
The amount presented is calculated pursuant to a methodology prescribed by the
Securities and Exchange Commission for a share outstanding throughout the
period. This amount is inconsistent with the fund's aggregate gains and losses
because of the timing of sales and redemptions of fund shares in relation to
fluctuating market values for the investment portfolio.
<PAGE>
A fund Statement of Additional Information has been filed with the Securities
and Exchange Commission and is incorporated by reference into this prospectus.
Further information about fund investments, including a review of market
conditions and the manager's recent strategies and their impact on performance,
is available in the annual and semiannual shareholder reports. To obtain a free
copy of a fund report or Statement of Additional Information, or for inquiries,
contact your insurance company.
Fund information and Statements of Additional Information are also available
from the Public Reference Room of the Securities and Exchange Commission.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-202-942-8090. Fund reports and other fund information are
available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained, after paying a
duplicating fee, by electronic request at [email protected], or by writing the
Public Reference Room, Washington D.C. 20549-0102.
(LOGO)
1940 Act File No.: 811-07145
5/1/00
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
The date of this Statement of Additional Information is May 1, 2000.
T. ROWE PRICE INTERNATIONAL SERIES, INC. (the "Corporation")
T. Rowe Price International Stock Portfolio (the "fund")
-------------------------------------------------------------------------------
Mailing Address: T. Rowe Price Investment Services, Inc. 100 East Pratt
Street Baltimore, Maryland 21202 1-800-638-5660
Shares of the fund are designed to be offered to insurance company separate
accounts established for the purpose of funding variable annuity contracts.
They may also be offered to insurance company separate accounts established
for the purpose of funding variable life contracts. Variable annuity and
variable life contract holders or participants are not the shareholders of
the fund. Rather, the separate account is the shareholder. The variable
annuity and variable life contracts are described in separate prospectuses
issued by the insurance companies. The fund assumes no responsibility for any
insurance company prospectuses or variable annuity or variable life
contracts.
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the appropriate fund prospectus dated May 1, 2000,
which may be obtained from T. Rowe Price Investment Services, Inc.
("Investment Services").
The fund's financial statements for the year ended December 31, 1999, and the
report of independent accountants are included in the fund's Annual Report
and incorporated by reference into this Statement of Additional Information.
SAI-ISP 5/1/00
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page Page
---- ----
<S> <C> <C> <C> <C>
Capital Stock 34 Investment Restrictions 20
- ----------------------------------- ---------------------------------------
Code of Ethics 27 Legal Counsel 35
- ----------------------------------- ---------------------------------------
Custodian 26 Management of the Fund 22
- ----------------------------------- ---------------------------------------
Distributor for the Fund 26 Net Asset Value Per Share 30
- ----------------------------------- ---------------------------------------
Dividends and Distributions 31 Portfolio Management Practices 8
- ----------------------------------- ---------------------------------------
Federal Registration of 35 Portfolio Transactions 27
Shares
- ----------------------------------- ---------------------------------------
Independent Accountants 35 Pricing of Securities 30
- ----------------------------------- ---------------------------------------
Investment Management 2 Principal Holders of Securities 24
Services 5
- ----------------------------------- ---------------------------------------
Investment Objectives and 2 Risk Factors 2
Policies
- ----------------------------------- ---------------------------------------
Investment Performance 32 Tax Status 31
- ----------------------------------- ---------------------------------------
Investment Program 6
- ----------------------------------- ---------------------------------------
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
-------------------------------------------------------------------------------
The following information supplements the discussion of the fund's investment
objectives and policies discussed in the fund's prospectus.
The fund will not make a material change in its investment objectives without
obtaining shareholder approval. Unless otherwise specified, the investment
programs and restrictions of the fund are not fundamental policies. The
fund's operating policies are subject to change by its Board of Directors
without shareholder approval. However, shareholders will be notified of a
material change in an operating policy. The fund's fundamental policies may
not be changed without the approval of at least a majority of the outstanding
shares of the fund or, if it is less, 67% of the shares represented at a
meeting of shareholders at which the holders of 50% or more of the shares are
represented. References to the following are as indicated:
Investment Company Act of 1940 ("1940 Act")
Securities and Exchange Commission ("SEC")
T. Rowe Price Associates, Inc. ("T. Rowe Price")
Moody's Investors Service, Inc. ("Moody's")
Standard & Poor's Corporation ("S&P")
Internal Revenue Code of 1986 ("Code")
Rowe Price-Fleming International, Inc. ("Price-Fleming")
RISK FACTORS
-------------------------------------------------------------------------------
Reference is also made to the sections entitled "Types of Securities" and
"Portfolio Management Practices" for discussions of the risks associated with
the investments and practices described therein as they apply to the fund.
The fund's investment manager, Price-Fleming, one of America's largest
managers of no-load international mutual fund assets, regularly analyzes a
broad range of international equity and fixed income markets in order to
assess the degree or risk and level of return that can be expected from each
market. Based upon its current assessment, Price-Fleming believes long-term
growth of capital may be achieved by investing in marketable
<PAGE>
securities of non-United States companies which have the potential for growth
of capital. Of course, there can be no assurance that Price-Fleming's
forecasts of expected return will be reflected in the actual returns achieved
by the funds.
Risk Factors of Foreign Investing There are special risks in foreign
investing. Certain of these risks are inherent in any international mutual
fund while others relate more to the countries in which the fund will invest.
Many of the risks are more pronounced for investments in developing or
emerging market countries, such as many of the countries of Asia, Latin
America, Eastern Europe, Russia, Africa, and the Middle East. Although there
is no universally accepted definition, a developing country is generally
considered to be a country which is in the initial stages of its
industrialization cycle with a per capita gross national product of less than
$8,000.
. Political and Economic Factors Individual foreign economies of certain
countries differ favorably or unfavorably from the United States' economy in
such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments position.
The internal politics of certain foreign countries are not as stable as in
the United States. For example, in 1991, the existing government in Thailand
was overthrown in a military coup. In 1994-1995, the Mexican peso plunged in
value setting off a severe crisis in the Mexican economy. Asia is still
coming to terms with its own crisis and recessionary conditions sparked off
by widespread currency weakness in late 1997. In 1998, there was substantial
turmoil in markets throughout the world. In 1999, the democratically elected
government of Pakistan was over thrown by a military coup. The Russian
government also defaulted on all its domestic debt. In addition, significant
external political risks currently affect some foreign countries. Both Taiwan
and China still claim sovereignty of one another and there is a demilitarized
border and hostile relations between North and South Korea.
Governments in certain foreign countries continue to participate to a
significant degree, through ownership interest or regulation, in their
respective economies. Action by these governments could have a significant
effect on market prices of securities and payment of dividends. The economies
of many foreign countries are heavily dependent upon international trade and
are accordingly affected by protective trade barriers and economic conditions
of their trading partners. The enactment by these trading partners of
protectionist trade legislation could have a significant adverse effect upon
the securities markets of such countries.
. Currency Fluctuations The fund invests in securities denominated in various
currencies. Accordingly, a change in the value of any such currency against
the U.S. dollar will result in a corresponding change in the U.S. dollar
value of the fund's assets denominated in that currency. Such changes will
also affect the fund's income. Generally, when a given currency appreciates
against the dollar (the dollar weakens) the value of the fund's securities
denominated in that currency will rise. When a given currency depreciates
against the dollar (the dollar strengthens) the value of the fund's
securities denominated in that currency would be expected to decline.
. Investment and Repatriation Restrictions Foreign investment in the
securities markets of certain foreign countries is restricted or controlled
in varying degrees. These restrictions limit at times and preclude investment
in certain of such countries and increase the cost and expenses of the fund.
Investments by foreign investors are subject to a variety of restrictions in
many developing countries. These restrictions may take the form of prior
governmental approval, limits on the amount or type of securities held by
foreigners, and limits on the types of companies in which foreigners may
invest. Additional or different restrictions may be imposed at any time by
these or other countries in which the funds invest. In addition, the
repatriation of both investment income and capital from several foreign
countries is restricted and controlled under certain regulations, including
in some cases the need for certain government consents. For example, capital
invested in Chile normally cannot be repatriated for one year. In 1998, the
government of Malaysia imposed currency controls which effectively made it
impossible for foreign investors to convert Malaysian ringgits to foreign
currencies.
. Market Characteristics It is contemplated that most foreign securities will
be purchased in over-the-counter markets or on securities exchanges located
in the countries in which the respective principal offices of the issuers of
the various securities are located, if that is the best available market.
Investments in certain markets may be made through American Depository
Receipts ("ADRs") and Global Depository Receipts ("GDRs")
<PAGE>
traded in the United States or on foreign exchanges. Foreign securities
markets are generally not as developed or efficient as, and more volatile
than, those in the United States. While growing in volume, they usually have
substantially less volume than U.S. markets and the fund's portfolio
securities may be less liquid and subject to more rapid and erratic price
movements than securities of comparable U.S. companies. Securities may trade
at price/earnings multiples higher than comparable United States securities
and such levels may not be sustainable. Commissions on foreign securities are
generally higher than commissions on United States exchanges, and while there
is an increasing number of overseas securities markets that have adopted a
system of negotiated rates, a number are still subject to an established
schedule of minimum commission rates. There is generally less government
supervision and regulation of foreign securities exchanges, brokers, and
listed companies than in the United States. Moreover, settlement practices
for transactions in foreign markets may differ from those in United States
markets. Such differences include delays beyond periods customary in the
United States and practices, such as delivery of securities prior to receipt
of payment, which increase the likelihood of a "failed settlement." Failed
settlements can result in losses to the fund.
. Investment Funds The fund may invest in investment funds which have been
authorized by the governments of certain countries specifically to permit
foreign investment in securities of companies listed and traded on the stock
exchanges in these respective countries. The fund's investment in these funds
is subject to the provisions of the 1940 Act. If the fund invests in such
investment funds, the fund's shareholders will bear not only their
proportionate share of the expenses of the fund (including operating expenses
and the fees of the investment manager), but also will bear indirectly
similar expenses of the underlying investment funds. In addition, the
securities of these investment funds may trade at a premium over their net
asset value.
. Information and Supervision There is generally less publicly available
information about foreign companies comparable to reports and ratings that
are published about companies in the United States. Foreign companies are
also generally not subject to uniform accounting, auditing and financial
reporting standards, practices, and requirements comparable to those
applicable to United States companies. It also is often more difficult to
keep currently informed of corporate actions which affect the prices of
portfolio securities.
. Taxes The dividends and interest payable on certain of the fund's foreign
portfolio securities may be subject to foreign withholding taxes, thus
reducing the net amount of income available for distribution to the fund's
shareholders.
. Costs Investors should understand that the expense ratios of the fund can be
expected to be higher than investment companies investing in domestic
securities since the cost of maintaining the custody of foreign securities
and the rate of advisory fees paid by the fund is higher.
. Other With respect to certain foreign countries, especially developing and
emerging ones, there is the possibility of adverse changes in investment or
exchange control regulations, expropriation or confiscatory taxation,
limitations on the removal of funds or other assets of the funds, political
or social instability, or diplomatic developments which could affect
investments by U.S. persons in those countries.
. Small Companies Small companies may have less experienced management and
fewer management resources than larger firms. A smaller company may have
greater difficulty obtaining access to capital markets, and may pay more for
the capital it obtains. In addition, smaller companies are more likely to be
involved in fewer market segments, making them more vulnerable to any
downturn in a given segment. Some of these factors may also apply, to a
lesser extent, to medium size companies.
. Eastern Europe and Russia Changes occurring in Eastern Europe and Russia
today could have long-term potential consequences. As restrictions fall, this
could result in rising standards of living, lower manufacturing costs,
growing consumer spending, and substantial economic growth. However,
investment in most countries of Eastern Europe and Russia is highly
speculative at this time. Political and economic reforms are too recent to
establish a definite trend away from centrally planned economies and
state-owned industries. The collapse of the ruble from its crawling peg
exchange rate against the U.S. dollar has set back the path of reform for
several years. In many of the countries of Eastern Europe and Russia, there
is no stock exchange or formal market for securities. Such countries may also
have government exchange controls, currencies with no recognizable market
value relative to the established currencies of western market economies,
little or no
<PAGE>
experience in trading in securities, no financial reporting standards, a lack
of a banking and securities infrastructure to handle such trading, and a
legal tradition which does not recognize rights in private property. In
addition, these countries may have national policies which restrict
investments in companies deemed sensitive to the country's national interest.
Further, the governments in such countries may require governmental or
quasi-governmental authorities to act as custodian of the fund's assets
invested in such countries, and these authorities may not qualify as a
foreign custodian under the 1940 Act and exemptive relief from such Act may
be required. All of these considerations are among the factors which could
cause significant risks and uncertainties to investment in Eastern Europe and
Russia. The fund will only invest in a company located in, or a government
of, Eastern Europe and Russia, if it believes the potential return justifies
the risk.
. Latin America
Inflation Most Latin American countries have experienced, at one time or
another, severe and persistent levels of inflation, including, in some cases,
hyperinflation. This has, in turn, led to high interest rates, extreme
measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth. Although inflation in many countries
has lessened, there is no guarantee it will remain at lower levels.
Political Instability The political history of certain Latin American
countries has been characterized by political uncertainty, intervention by
the military in civilian and economic spheres, and political corruption. Such
developments, if they were to reoccur, could reverse favorable trends toward
market and economic reform, privatization, and removal of trade barriers, and
result in significant disruption in securities markets.
Foreign Currency Certain Latin American countries may experience sudden and
large adjustments in their currency which, in turn, can have a disruptive and
negative effect on foreign investors. For example, in late 1994 the value of
the Mexican peso lost more than one-third of its value relative to the
dollar. In 1999, the Brazalian real lost 30% of its value against the U.S.
dollar. Certain Latin American countries may impose restrictions on the free
conversion of their currency into foreign currencies, including the U.S.
dollar. There is no significant foreign exchange market for many currencies
and it would, as a result, be difficult for the fund to engage in foreign
currency transactions designed to protect the value of the fund's interests
in securities denominated in such currencies.
Sovereign Debt A number of Latin American countries are among the largest
debtors of developing countries. There have been moratoria on, and
reschedulings of, repayment with respect to these debts. Such events can
restrict the flexibility of these debtor nations in the international markets
and result in the imposition of onerous conditions on their economies.
. Japan
The fund's concentration of its investments in Japan means the fund will be
more dependent on the investment considerations discussed above and may be
more volatile than a fund which is broadly diversified geographically. To the
extent any of the other funds also invest in Japan, such investments will be
subject to these same factors. Additional factors relating to Japan include
the following:
Japan has experienced earthquakes and tidal waves of varying degrees of
severity, and the risks of such phenomena, and damage resulting therefrom,
continue to exist. Japan also has one of the world's highest population
densities. A significant percentage of the total population of Japan is
concentrated in the metropolitan areas of Tokyo, Osaka and Nagoya.
Economy The Japanese economy languished for much of the last decade. Lack of
effective governmental action in the areas of tax reform to reduce high tax
rates, banking regulation to address enormous amounts of bad debt, and
economic reforms to attempt to stimulate spending are among the factors cited
as possible causes of Japan's economic problems. The yen has had a history of
unpredictable and volatile movements against the dollar; a weakening yen
hurts U.S. investors holding yen denominated securities. Finally, the
Japanese stock market has experienced wild swings in value and has often been
considered significantly overvalued.
Energy Japan has historically depended on oil for most of its energy
requirements. Almost all of its oil is imported, the majority from the Middle
East. In the past, oil prices have had a major impact on the domestic
<PAGE>
economy, but more recently Japan has worked to reduce its dependence on oil
by encouraging energy conservation and use of alternative fuels. In addition,
a restructuring of industry, with emphasis shifting from basic industries to
processing and assembly type industries, has contributed to the reduction of
oil consumption. However, there is no guarantee this favorable trend will
continue.
Foreign Trade Overseas trade is important to Japan's economy. Japan has few
natural resources and must export to pay for its imports of these basic
requirements. Because of the concentration of Japanese exports in highly
visible products such as automobiles, machine tools and semiconductors and
the large trade surpluses ensuing therefrom, Japan has had difficult
relations with its trading partners, particularly the U.S. It is possible
that trade sanctions or other protectionist measures could impact Japan
adversely in both the short- and long-term.
. Asia (ex-Japan)
Political Instability The political history of certain Asian countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such developments,
if they continue to occur, could reverse favorable trends toward market and
economic reform, privatization and removal of trade barriers and result in
significant disruption in securities markets.
Foreign Currency Certain Asian countries may have managed currencies which
are maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and
negative effect on foreign investors. For example, in 1997 the Thai baht lost
46.75% of its value against the U.S. dollar. Certain Asian countries also may
restrict the free conversion of their currency into foreign currencies,
including the U.S. dollar. There is no significant foreign exchange market
for certain currencies and it would, as a result, be difficult for the fund
to engage in foreign currency transactions designed to protect the value of
the fund's interests in securities denominated in such currencies.
Debt A number of Asian companies are highly dependent on foreign loans for
their operation. In 1997, several Asian countries were forced to negotiate
loans from the International Monetary Fund ("IMF") and others that impose
strict repayment term schedules and require significant economic and
financial restructuring.
INVESTMENT PROGRAM
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Types of Securities
Set forth below is additional information about certain of the investments
described in the fund's prospectus.
Hybrid Instruments
Hybrid Instruments (a type of potentially high-risk derivative) have been
developed and combine the elements of futures contracts or options with those
of debt, preferred equity, or a depository instrument (hereinafter "Hybrid
Instruments"). Generally, a Hybrid Instrument will be a debt security,
preferred stock, depository share, trust certificate, certificate of deposit,
or other evidence of indebtedness on which a portion of or all interest
payments, and/or the principal or stated amount payable at maturity,
redemption, or retirement, is determined by reference to prices, changes in
prices, or differences between prices, of securities, currencies,
intangibles, goods, articles, or commodities (collectively "Underlying
Assets") or by another objective index, economic factor, or other measure,
such as interest rates, currency exchange rates, commodity indices, and
securities indices (collectively "Benchmarks"). Thus, Hybrid Instruments may
take a variety of forms, including, but not limited to, debt instruments with
interest or principal payments or redemption terms determined by reference to
the value of a currency or commodity or securities index at a future point in
time, preferred stock with dividend rates determined by reference to the
value of a currency, or convertible securities with the conversion terms
related to a particular commodity.
<PAGE>
Hybrid Instruments can be an efficient means of creating exposure to a
particular market, or segment of a market, with the objective of enhancing
total return. For example, a fund may wish to take advantage of expected
declines in interest rates in several European countries, but avoid the
transaction costs associated with buying and currency-hedging the foreign
bond positions. One solution would be to purchase a U.S. dollar-denominated
Hybrid Instrument whose redemption price is linked to the average three-year
interest rate in a designated group of countries. The redemption price
formula would provide for payoffs of greater than par if the average interest
rate was lower than a specified level, and payoffs of less than par if rates
were above the specified level. Furthermore, the fund could limit the
downside risk of the security by establishing a minimum redemption price so
that the principal paid at maturity could not be below a predetermined
minimum level if interest rates were to rise significantly. The purpose of
this arrangement, known as a structured security with an embedded put option,
would be to give the fund the desired European bond exposure while avoiding
currency risk, limiting downside market risk, and lowering transactions
costs. Of course, there is no guarantee that the strategy will be successful,
and the fund could lose money if, for example, interest rates do not move as
anticipated or credit problems develop with the issuer of the Hybrid
Instruments.
The risks of investing in Hybrid Instruments reflect a combination of the
risks of investing in securities, options, futures, and currencies. Thus, an
investment in a Hybrid Instrument may entail significant risks that are not
associated with a similar investment in a traditional debt instrument that
has a fixed principal amount, is denominated in U.S. dollars, or bears
interest either at a fixed rate or a floating rate determined by reference to
a common, nationally published benchmark. The risks of a particular Hybrid
Instrument will, of course, depend upon the terms of the instrument, but may
include, without limitation, the possibility of significant changes in the
Benchmarks or the prices of Underlying Assets to which the instrument is
linked. Such risks generally depend upon factors which are unrelated to the
operations or credit quality of the issuer of the Hybrid Instrument and which
may not be readily foreseen by the purchaser, such as economic and political
events, the supply and demand for the Underlying Assets, and interest rate
movements. In recent years, various Benchmarks and prices for Underlying
Assets have been highly volatile, and such volatility may be expected in the
future. Reference is also made to the discussion of futures, options, and
forward contracts herein for a discussion of the risks associated with such
investments.
Hybrid Instruments are potentially more volatile and carry greater market
risks than traditional debt instruments. Depending on the structure of the
particular Hybrid Instrument, changes in a Benchmark may be magnified by the
terms of the Hybrid Instrument and have an even more dramatic and substantial
effect upon the value of the Hybrid Instrument. Also, the prices of the
Hybrid Instrument and the Benchmark or Underlying Asset may not move in the
same direction or at the same time.
Hybrid Instruments may bear interest or pay preferred dividends at below
market (or even relatively nominal) rates. Alternatively, Hybrid Instruments
may bear interest at above market rates but bear an increased risk of
principal loss (or gain). The latter scenario may result if "leverage" is
used to structure the Hybrid Instrument. Leverage risk occurs when the Hybrid
Instrument is structured so that a given change in a Benchmark or Underlying
Asset is multiplied to produce a greater value change in the Hybrid
Instrument, thereby magnifying the risk of loss as well as the potential for
gain.
Hybrid Instruments may also carry liquidity risk since the instruments are
often "customized" to meet the portfolio needs of a particular investor, and
therefore, the number of investors that are willing and able to buy such
instruments in the secondary market may be smaller than that for more
traditional debt securities. In addition, because the purchase and sale of
Hybrid Instruments could take place in an over-the-counter market without the
guarantee of a central clearing organization or in a transaction between the
fund and the issuer of the Hybrid Instrument, the creditworthiness of the
counter party or issuer of the Hybrid Instrument would be an additional risk
factor which the fund would have to consider and monitor. Hybrid Instruments
also may not be subject to regulation of the Commodities Futures Trading
Commission ("CFTC"), which generally regulates the trading of commodity
futures by U.S. persons, the SEC, which regulates the offer and sale of
securities by and to U.S. persons, or any other governmental regulatory
authority.
<PAGE>
Illiquid or Restricted Securities
Restricted securities may be sold only in privately negotiated transactions
or in a public offering with respect to which a registration statement is in
effect under the Securities Act of 1933 (the "1933 Act"). Where registration
is required, the fund may be obligated to pay all or part of the registration
expenses, and a considerable period may elapse between the time of the
decision to sell and the time the fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the fund might obtain a less favorable
price than prevailed when it decided to sell. Restricted securities will be
priced at fair value as determined in accordance with procedures prescribed
by the fund's Board of Directors. If, through the appreciation of illiquid
securities or the depreciation of liquid securities, the fund should be in a
position where more than 15% of the value of its net assets is invested in
illiquid assets, including restricted securities, the fund will take
appropriate steps to protect liquidity.
Notwithstanding the above, the fund may purchase securities which, while
privately placed, are eligible for purchase and sale under Rule 144A under
the 1933 Act. This rule permits certain qualified institutional buyers, such
as the fund, to trade in privately placed securities even though such
securities are not registered under the 1933 Act. Price-Fleming, under the
supervision of the fund's Board of Directors, will consider whether
securities purchased under Rule 144A are illiquid and thus subject to the
fund's restriction of investing no more than 15% of its net assets in
illiquid securities. A determination of whether a Rule 144A security is
liquid or not is a question of fact. In making this determination,
Price-Fleming will consider the trading markets for the specific security
taking into account the unregistered nature of a Rule 144A security. In
addition, Price-Fleming could consider the following: (1) frequency of trades
and quotes; (2) number of dealers and potential purchases; (3) dealer
undertakings to make a market; and (4) the nature of the security and of
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of transfer). The liquidity of
Rule 144A securities would be monitored and, if as a result of changed
conditions it is determined that a Rule 144A security is no longer liquid,
the fund's holdings of illiquid securities would be reviewed to determine
what, if any, steps are required to assure that the fund does not invest more
than 15% of its net assets in illiquid securities. Investing in Rule 144A
securities could have the effect of increasing the amount of the fund's
assets invested in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities.
Warrants
The fund may acquire warrants. Warrants can be highly volatile and have no
voting rights, pay no dividends, and have no rights with respect to the
assets of the corporation issuing them. Warrants basically are options to
purchase securities at a specific price valid for a specific period of time.
They do not represent ownership of the securities, but only the right to buy
them. Warrants differ from call options in that warrants are issued by the
issuer of the security which may be purchased on their exercise, whereas call
options may be written or issued by anyone. The prices of warrants do not
necessarily move parallel to the prices of the underlying securities.
There are, of course, other types of securities that are, or may become
available, which are similar to the foregoing and the fund may invest in
these securities.
PORTFOLIO MANAGEMENT PRACTICES
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Lending of Portfolio Securities
Securities loans are made to broker-dealers, institutional investors, or
other persons, pursuant to agreements requiring that the loans be
continuously secured by collateral at least equal at all times to the value
of the securities lent, marked to market on a daily basis. The collateral
received will consist of cash, U.S. government securities, letters of credit,
or such other collateral as may be permitted under its investment program.
While the securities are being lent, the fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities,
as well as interest on the investment of the collateral or a fee from the
borrower.
<PAGE>
The fund has a right to call each loan and obtain the securities, within such
period of time which coincides with the normal settlement period for
purchases and sales of such securities in the respective markets. The fund
will not have the right to vote on securities while they are being lent, but
it will call a loan in anticipation of any important vote. The risks in
lending portfolio securities, as with other extensions of secured credit,
consist of possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially. Loans will only be made to firms deemed
by Price-Fleming to be of good standing and will not be made unless, in the
judgment of Price-Fleming, the consideration to be earned from such loans
would justify the risk.
Interfund Borrowing and Lending
The fund is a party to an exemptive order received from the SEC on December
8, 1998, amended on November 23, 1999, that permits it to borrow money from
and/or lend money to other funds in the T. Rowe Price complex ("Price
Funds"). All loans are set at an interest rate between the rate charged on
overnight repurchase agreements and short-term bank loans. All loans are
subject to numerous conditions designed to ensure fair and equitable
treatment of all participating funds. The program is subject to the oversight
and periodic review of the Boards of Directors of the Price Funds.
Repurchase Agreements
The fund may enter into a repurchase agreement through which an investor
(such as the fund) purchases a security (known as the "underlying security")
from a well-established securities dealer or a bank that is a member of the
Federal Reserve System. Any such dealer or bank will be on T. Rowe Price's
approved list and have a credit rating with respect to its short-term debt of
at least A1 by S&P, P1 by Moody's, or the equivalent rating by T. Rowe Price.
At that time, the bank or securities dealer agrees to repurchase the
underlying security at the same price, plus specified interest. Repurchase
agreements are generally for a short period of time, often less than a week.
Repurchase agreements which do not provide for payment within seven days will
be treated as illiquid securities. The fund will only enter into repurchase
agreements where (1) the underlying securities are of the type (excluding
maturity limitations) which the fund's investment guidelines would allow it
to purchase directly, (2) the market value of the underlying security,
including interest accrued, will be at all times equal to or exceed the value
of the repurchase agreement, and (3) payment for the underlying security is
made only upon physical delivery or evidence of book-entry transfer to the
account of the custodian or a bank acting as agent. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the fund
could experience both delays in liquidating the underlying security and
losses, including: (a) possible decline in the value of the underlying
security during the period while the fund seeks to enforce its rights
thereto; (b) possible subnormal levels of income and lack of access to income
during this period; and (c) expenses of enforcing its rights.
Money Market Reserves
It is expected that the fund will invest its cash reserves primarily in one
or more money market funds established for the exclusive use of the T. Rowe
Price family of mutual funds and other clients of T. Rowe Price and
Price-Fleming. Currently, two such money market funds are in
operation-Reserve Investment Fund ("RIF") and Government Reserve Investment
Fund ("GRF"), each a series of the Reserve Investment Funds, Inc. Additional
series may be created in the future. These funds were created and operate
under an Exemptive Order issued by the SEC (Investment Company Act Release
No. IC-22770, July 29, 1997).
Both funds must comply with the requirements of Rule 2a-7 under the 1940 Act
governing money market funds. The RIF invests at least 95% of its total
assets in prime money market instruments receiving the highest credit rating.
The GRF invests primarily in a portfolio of U.S. government-backed
securities, primarily U.S. Treasuries, and repurchase agreements thereon.
The RIF and GRF provide a very efficient means of managing the cash reserves
of the fund. While neither RIF or GRF pay an advisory fee to the Investment
Manager, they will incur other expenses. However, the RIF and GRF are
expected by T. Rowe Price to operate at very low expense ratios. The fund
will only invest in RIF or GRF to the extent it is consistent with its
objective and program.
<PAGE>
Neither fund is insured or guaranteed by the U.S. government, and there is no
assurance they will maintain a stable net asset value of $1.00 per share.
Options
Options are a type of potentially high-risk derivative.
Writing Covered Call Options
The fund may write (sell) American or European style "covered" call options
and purchase options to close out options previously written by the fund. In
writing covered call options, the fund expects to generate additional premium
income which should serve to enhance the fund's total return and reduce the
effect of any price decline of the security or currency involved in the
option. Covered call options will generally be written on securities or
currencies which, in Price-Fleming's opinion, are not expected to have any
major price increases or moves in the near future but which, over the long
term, are deemed to be attractive investments for the fund.
A call option gives the holder (buyer) the "right to purchase", and the
writer (seller) has the "obligation to sell", a security or currency at a
specified price (the exercise price) at expiration of the option (European
style) or at any time until a certain date (the expiration date) (American
style). So long as the obligation of the writer of a call option continues,
he may be assigned an exercise notice by the broker-dealer through whom such
option was sold, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer
effects a closing purchase transaction by repurchasing an option identical to
that previously sold. To secure his obligation to deliver the underlying
security or currency in the case of a call option, a writer is required to
deposit in escrow the underlying security or currency or other assets in
accordance with the rules of a clearing corporation.
The fund generally will write only covered call options. This means that the
fund will either own the security or currency subject to the option or an
option to purchase the same underlying security or currency, having an
exercise price equal to or less than the exercise price of the "covered"
option. From time to time, the fund will write a call option that is not
covered as indicated above but where the fund will establish and maintain
with its custodian for the term of the option, an account consisting of cash,
U.S. government securities, other liquid high-grade debt obligations, or
other suitable cover as permitted by the SEC having a value equal to the
fluctuating market value of the optioned securities or currencies. While such
an option would be "covered" with sufficient collateral to satisfy SEC
prohibitions on issuing senior securities, this type of strategy would expose
the fund to the risks of writing uncovered options.
Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with
the fund's investment objective. The writing of covered call options is a
conservative investment technique believed to involve relatively little risk
(in contrast to the writing of naked or uncovered options, which the fund
generally will not do), but capable of enhancing the fund's total return.
When writing a covered call option, a fund, in return for the premium, gives
up the opportunity for profit from a price increase in the underlying
security or currency above the exercise price, but conversely retains the
risk of loss should the price of the security or currency decline. Unlike one
who owns securities or currencies not subject to an option, the fund has no
control over when it may be required to sell the underlying securities or
currencies, since it may be assigned an exercise notice at any time prior to
the expiration of its obligation as a writer. If a call option which the fund
has written expires, the fund will realize a gain in the amount of the
premium; however, such gain may be offset by a decline in the market value of
the underlying security or currency during the option period. If the call
option is exercised, the fund will realize a gain or loss from the sale of
the underlying security or currency. The fund does not consider a security or
currency covered by a call to be "pledged" as that term is used in the fund's
policy which limits the pledging or mortgaging of its assets. If the fund
writes an uncovered option as described above, it will bear the risk of
having to purchase the security subject to the option at a price higher than
the exercise price of the option. As the price of a security could appreciate
substantially, the fund's loss could be significant.
<PAGE>
The premium received is the market value of an option. The premium the fund
will receive from writing a call option will reflect, among other things, the
current market price of the underlying security or currency, the relationship
of the exercise price to such market price, the historical price volatility
of the underlying security or currency, and the length of the option period.
Once the decision to write a call option has been made, Price-Fleming, in
determining whether a particular call option should be written on a
particular security or currency, will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will
exist for those options. The premium received by the fund for writing covered
call options will be recorded as a liability of the fund. This liability will
be adjusted daily to the option's current market value, which will be the
latest sale price at the time at which the net asset value per share of the
fund is computed (close of the New York Stock Exchange), or, in the absence
of such sale, the latest asked price. The option will be terminated upon
expiration of the option, the purchase of an identical option in a closing
transaction, or delivery of the underlying security or currency upon the
exercise of the option.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the fund to write
another call option on the underlying security or currency with either a
different exercise price or expiration date or both. If the fund desires to
sell a particular security or currency from its portfolio on which it has
written a call option, or purchased a put option, it will seek to effect a
closing transaction prior to, or concurrently with, the sale of the security
or currency. There is, of course, no assurance that the fund will be able to
effect such closing transactions at favorable prices. If the fund cannot
enter into such a transaction, it may be required to hold a security or
currency that it might otherwise have sold. When the fund writes a covered
call option, it runs the risk of not being able to participate in the
appreciation of the underlying securities or currencies above the exercise
price, as well as the risk of being required to hold on to securities or
currencies that are depreciating in value. This could result in higher
transaction costs. The fund will pay transaction costs in connection with the
writing of options to close out previously written options. Such transaction
costs are normally higher than those applicable to purchases and sales of
portfolio securities.
Call options written by the fund will normally have expiration dates of less
than nine months from the date written. The exercise price of the options may
be below, equal to, or above the current market values of the underlying
securities or currencies at the time the options are written. From time to
time, the fund may purchase an underlying security or currency for delivery
in accordance with an exercise notice of a call option assigned to it, rather
than delivering such security or currency from its portfolio. In such cases,
additional costs may be incurred.
The fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more than the premium received from
the writing of the option. Because increases in the market price of a call
option will generally reflect increases in the market price of the underlying
security or currency, any loss resulting from the repurchase of a call option
is likely to be offset in whole or in part by appreciation of the underlying
security or currency owned by the fund.
The fund will not write a covered call option if, as a result, the aggregate
market value of all portfolio securities or currencies covering written call
or put options exceeds 25% of the market value of the fund's net assets. In
calculating the 25% limit, the fund will offset, against the value of assets
covering written calls and puts, the value of purchased calls and puts on
identical securities or currencies with identical maturity dates.
Writing Covered Put Options
The fund may write American or European style covered put options and
purchase options to close out options previously written by the fund. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) has the obligation to buy, the underlying security or currency at
the exercise price during the option period (American style) or at the
expiration of the option (European style). So long as the obligation of the
writer continues, he may be assigned an exercise notice by the broker-dealer
through whom such option was sold, requiring him to make payment to the
exercise price against delivery of the underlying security or currency. The
operation of put options in other respects, including their related risks and
rewards, is substantially identical to that of call options.
<PAGE>
The fund would write put options only on a covered basis, which means that
the fund would maintain in a segregated account cash, U.S. government
securities, other liquid high-grade debt obligations, or other suitable cover
as determined by the SEC, in an amount not less than the exercise price or
the fund will own an option to sell the underlying security or currency
subject to the option having an exercise price equal to or greater than the
exercise price of the "covered" option at all times while the put option is
outstanding. (The rules of a clearing corporation currently require that such
assets be deposited in escrow to secure payment of the exercise price.)
The fund would generally write covered put options in circumstances where
Price-Fleming wishes to purchase the underlying security or currency for the
fund's portfolio at a price lower than the current market price of the
security or currency. In such event the fund would write a put option at an
exercise price which, reduced by the premium received on the option, reflects
the lower price it is willing to pay. Since the fund would also receive
interest on debt securities or currencies maintained to cover the exercise
price of the option, this technique could be used to enhance current return
during periods of market uncertainty. The risk in such a transaction would be
that the market price of the underlying security or currency would decline
below the exercise price less the premiums received. Such a decline could be
substantial and result in a significant loss to the fund. In addition, the
fund, because it does not own the specific securities or currencies which it
may be required to purchase in exercise of the put, cannot benefit from
appreciation, if any, with respect to such specific securities or currencies.
The fund will not write a covered put option if, as a result, the aggregate
market value of all portfolio securities or currencies covering put or call
options exceeds 25% of the market value of the fund's net assets. In
calculating the 25% limit, the fund will offset, against the value of assets
covering written puts and calls, the value of purchased puts and calls on
identical securities or currencies with identical maturity dates.
Purchasing Put Options
The fund may purchase American or European style put options. As the holder
of a put option, the fund has the right to sell the underlying security or
currency at the exercise price at any time during the option period (American
style) or at the expiration of the option (European style). The fund may
enter into closing sale transactions with respect to such options, exercise
them or permit them to expire. The fund may purchase put options for
defensive purposes in order to protect against an anticipated decline in the
value of its securities or currencies. An example of such use of put options
is provided next.
The fund may purchase a put option on an underlying security or currency (a
"protective put") owned by the fund as a defensive technique in order to
protect against an anticipated decline in the value of the security or
currency. Such hedge protection is provided only during the life of the put
option when the fund, as the holder of the put option, is able to sell the
underlying security or currency at the put exercise price regardless of any
decline in the underlying security's market price or currency's exchange
value. For example, a put option may be purchased in order to protect
unrealized appreciation of a security or currency where T. Rowe Price deems
it desirable to continue to hold the security or currency because of tax
considerations. The premium paid for the put option and any transaction costs
would reduce any capital gain otherwise available for distribution when the
security or currency is eventually sold.
The fund may also purchase put options at a time when the fund does not own
the underlying security or currency. By purchasing put options on a security
or currency it does not own, the fund seeks to benefit from a decline in the
market price of the underlying security or currency. If the put option is not
sold when it has remaining value, and if the market price of the underlying
security or currency remains equal to or greater than the exercise price
during the life of the put option, the fund will lose its entire investment
in the put option. In order for the purchase of a put option to be
profitable, the market price of the underlying security or currency must
decline sufficiently below the exercise price to cover the premium and
transaction costs, unless the put option is sold in a closing sale
transaction.
The fund will not commit more than 5% of its assets to premiums when
purchasing put and call options. The premium paid by the fund when purchasing
a put option will be recorded as an asset of the fund. This asset will be
adjusted daily to the option's current market value, which will be the latest
sale price at the time at
<PAGE>
which the net asset value per share of the fund is computed (close of New
York Stock Exchange), or, in the absence of such sale, the latest bid price.
This asset will be terminated upon expiration of the option, the selling
(writing) of an identical option in a closing transaction, or the delivery of
the underlying security or currency upon the exercise of the option.
Purchasing Call Options
The fund may purchase American or European style call options. As the holder
of a call option, the fund has the right to purchase the underlying security
or currency at the exercise price at any time during the option period
(American style) or at the expiration of the option (European style). The
fund may enter into closing sale transactions with respect to such options,
exercise them or permit them to expire. The fund may purchase call options
for the purpose of increasing its current return or avoiding tax consequences
which could reduce its current return. The fund may also purchase call
options in order to acquire the underlying securities or currencies. Examples
of such uses of call options are provided next.
Call options may be purchased by the fund for the purpose of acquiring the
underlying securities or currencies for its portfolio. Utilized in this
fashion, the purchase of call options enables the fund to acquire the
securities or currencies at the exercise price of the call option plus the
premium paid. At times the net cost of acquiring securities or currencies in
this manner may be less than the cost of acquiring the securities or
currencies directly. This technique may also be useful to the fund in
purchasing a large block of securities or currencies that would be more
difficult to acquire by direct market purchases. So long as it holds such a
call option rather than the underlying security or currency itself, the fund
is partially protected from any unexpected decline in the market price of the
underlying security or currency and in such event could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
The fund will not commit more than 5% of its assets to premiums when
purchasing call and put options. The fund may also purchase call options on
underlying securities or currencies it owns in order to protect unrealized
gains on call options previously written by it. A call option would be
purchased for this purpose where tax considerations make it inadvisable to
realize such gains through a closing purchase transaction. Call options may
also be purchased at times to avoid realizing losses.
Dealer (Over-the-Counter) Options
The fund may engage in transactions involving dealer options. Certain risks
are specific to dealer options. While the fund would look to a clearing
corporation to exercise exchange-traded options, if the fund were to purchase
a dealer option, it would rely on the dealer from whom it purchased the
option to perform if the option were exercised. Failure by the dealer to do
so would result in the loss of the premium paid by the fund as well as loss
of the expected benefit of the transaction.
Exchange-traded options generally have a continuous liquid market while
dealer options have none. Consequently, the fund will generally be able to
realize the value of a dealer option it has purchased only by exercising it
or reselling it to the dealer who issued it. Similarly, when the fund writes
a dealer option, it generally will be able to close out the option prior to
its expiration only by entering into a closing purchase transaction with the
dealer to which the fund originally wrote the option. While the fund will
seek to enter into dealer options only with dealers who will agree to and
which are expected to be capable of entering into closing transactions with
the fund, there can be no assurance that the fund will be able to liquidate a
dealer option at a favorable price at any time prior to expiration. Until the
fund, as a covered dealer call option writer, is able to effect a closing
purchase transaction, it will not be able to liquidate securities (or other
assets) or currencies used as cover until the option expires or is exercised.
In the event of insolvency of the contra party, the fund may be unable to
liquidate a dealer option. With respect to options written by the fund, the
inability to enter into a closing transaction may result in material losses
to the fund. For example, since the fund must maintain a secured position
with respect to any call option on a security it writes, the fund may not
sell the assets which it has segregated to secure the position while it is
obligated under the option. This requirement may impair a fund's ability to
sell portfolio securities or currencies at a time when such sale might be
advantageous.
<PAGE>
The Staff of the SEC has taken the position that purchased dealer options and
the assets used to secure the written dealer options are illiquid securities.
The fund may treat the cover used for written Over-the-Counter ("OTC")
options as liquid if the dealer agrees that the fund may repurchase the OTC
option it has written for a maximum price to be calculated by a predetermined
formula. In such cases, the OTC option would be considered illiquid only to
the extent the maximum repurchase price under the formula exceeds the
intrinsic value of the option.
Futures Contracts
Futures contracts are a type of potentially high-risk derivative.
Transactions in Futures
The fund may enter into futures contracts including stock index, interest
rate, and currency futures ("futures" or "futures contracts").
Stock index futures contracts may be used to provide a hedge for a portion of
the fund's portfolio, as a cash management tool, or as an efficient way for
Price-Fleming to implement either an increase or decrease in portfolio market
exposure in response to changing market conditions. The fund may purchase or
sell futures contracts with respect to any stock index. Nevertheless, to
hedge the fund's portfolio successfully, the fund must sell futures contacts
with respect to indices or subindices whose movements will have a significant
correlation with movements in the prices of the fund's portfolio securities.
Interest rate or currency futures contracts may be used as a hedge against
changes in prevailing levels of interest rates or currency exchange rates in
order to establish more definitely the effective return on securities or
currencies held or intended to be acquired by the fund. In this regard, the
fund could sell interest rate or currency futures as an offset against the
effect of expected increases in interest rates or currency exchange rates and
purchase such futures as an offset against the effect of expected declines in
interest rates or currency exchange rates.
The fund will enter into futures contracts which are traded on national or
foreign futures exchanges, and are standardized as to maturity date and
underlying financial instrument. Futures exchanges and trading in the United
States are regulated under the Commodity Exchange Act by the CFTC. Although
techniques other than the sale and purchase of futures contracts could be
used for the above-referenced purposes, futures contracts offer an effective
and relatively low cost means of implementing the fund's objectives in these
areas.
Regulatory Limitations
If the fund purchases or sells futures contracts or related options which do
not qualify as bona fide hedging under applicable CFTC rules, the aggregate
initial margin deposits and premium required to establish those positions
cannot exceed 5% of the liquidation value of the fund after taking into
account unrealized profits and unrealized losses on any such contracts it has
entered into; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5% limitation. For purposes of this policy, options on
futures contracts and foreign currency options traded on a commodities
exchange will be considered "related options." This policy may be modified by
the Board of Directors without a shareholder vote and does not limit the
percentage of the fund's assets at risk to 5%.
In instances involving the purchase of futures contracts or the writing of
call or put options thereon by the fund, an amount of cash, liquid assets, or
other suitable cover as permitted by the SEC, equal to the market value of
the futures contracts and options thereon (less any related margin deposits),
will be identified by the fund to cover the position, or alternative cover
(such as owning an offsetting position) will be employed. Assets used as
cover or held in an identified account cannot be sold while the position in
the corresponding option or future is open, unless they are replaced with
similar assets. As a result, the commitment of a large portion of a fund's
assets to cover or identified accounts could impede portfolio management or
the fund's ability to meet redemption requests or other current obligations.
If the CFTC or other regulatory authorities adopt different (including less
stringent) or additional restrictions, the fund would comply with such new
restrictions.
<PAGE>
Trading in Futures Contracts
A futures contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (e.g.,
units of a stock index) for a specified price, date, time, and place
designated at the time the contract is made. Brokerage fees are incurred when
a futures contract is bought or sold and margin deposits must be maintained.
Entering into a contract to buy is commonly referred to as buying or
purchasing a contract or holding a long position. Entering into a contract to
sell is commonly referred to as selling a contract or holding a short
position.
Unlike when the fund purchases or sells a security, no price would be paid or
received by the fund upon the purchase or sale of a futures contract. Upon
entering into a futures contract, and to maintain the fund's open positions
in futures contracts, the fund would be required to deposit with its
custodian in a segregated account in the name of the futures broker an amount
of cash, or liquid assets known as "initial margin." The margin required for
a particular futures contract is set by the exchange on which the contract is
traded, and may be significantly modified from time to time by the exchange
during the term of the contract. Futures contracts are customarily purchased
and sold on margins that may range upward from less than 5% of the value of
the contract being traded.
If the price of an open futures contract changes (by increase in the case of
a sale or by decrease in the case of a purchase) so that the loss on the
futures contract reaches a point at which the margin on deposit does not
satisfy margin requirements, the broker will require an increase in the
margin. However, if the value of a position increases because of favorable
price changes in the futures contract so that the margin deposit exceeds the
required margin, the broker will pay the excess to the fund.
These subsequent payments, called "variation margin," to and from the futures
broker, are made on a daily basis as the price of the underlying assets
fluctuate, making the long and short positions in the futures contract more
or less valuable, a process known as "marking to market."
Although certain futures contracts, by their terms, require actual future
delivery of and payment for the underlying instruments, in practice most
futures contracts are usually closed out before the delivery date. Closing
out an open futures contract purchase or sale is effected by entering into an
offsetting futures contract sale or purchase, respectively, for the same
aggregate amount of the identical securities and the same delivery date. If
the offsetting purchase price is less than the original sale price, the fund
realizes a gain; if it is more, the fund realizes a loss. Conversely, if the
offsetting sale price is more than the original purchase price, the fund
realizes a gain; if it is less, the fund realizes a loss. The transaction
costs must also be included in these calculations. There can be no assurance,
however, that the fund will be able to enter into an offsetting transaction
with respect to a particular futures contract at a particular time. If the
fund is not able to enter into an offsetting transaction, the fund will
continue to be required to maintain the margin deposits on the futures
contract.
Settlement of a stock index futures contract may or may not be in the
underlying security. If not in the underlying security, then settlement will
be made in cash, equivalent over time to the difference between the contract
price and the actual price of the underlying asset (as adjusted by a
multiplier) at the time the stock index futures contract expires.
Special Risks of Transactions in Futures Contracts
. Volatility and Leverage The prices of futures contracts are volatile and are
influenced, among other things, by actual and anticipated changes in the
market and interest rates, which in turn are affected by fiscal and monetary
policies and national and international political and economic events.
Most United States futures exchanges limit the amount of fluctuation
permitted in futures contract prices during a single trading day. The daily
limit establishes the maximum amount that the price of a futures contract may
vary either up or down from the previous day's settlement price at the end of
a trading session. Once the daily limit has been reached in a particular type
of futures contract, no trades may be made on that day at a price beyond that
limit. The daily limit governs only price movement during a particular
trading day and therefore does not limit potential losses, because the limit
may prevent the liquidation of unfavorable positions. Futures contract prices
have occasionally moved to the daily limit for several consecutive trading
<PAGE>
days with little or no trading, thereby preventing prompt liquidation of
futures positions and subjecting some futures traders to substantial losses.
Margin deposits required on futures trading are low. As a result, a
relatively small price movement in a futures contract may result in immediate
and substantial loss, as well as gain, to the investor. For example, if at
the time of purchase, 10% of the value of the futures contract is deposited
as margin, a subsequent 10% decrease in the value of the futures contract
would result in a total loss of the margin deposit, before any deduction for
the transaction costs, if the account were then closed out. A 15% decrease
would result in a loss equal to 150% of the original margin deposit, if the
contract were closed out. Thus, a purchase or sale of a futures contract may
result in losses in excess of the amount invested in the futures contract.
. Liquidity The fund may elect to close some or all of its futures positions
at any time prior to their expiration. The fund would do so to reduce
exposure represented by long futures positions or short futures positions.
The fund may close its positions by taking opposite positions which would
operate to terminate the fund's position in the futures contracts. Final
determinations of variation margin would then be made, additional cash would
be required to be paid by or released to the fund, and the fund would realize
a loss or a gain.
Futures contracts may be closed out only on the exchange or board of trade
where the contracts were initially traded. Although the fund intends to
purchase or sell futures contracts only on exchanges or boards of trade where
there appears to be an active market, there is no assurance that a liquid
market on an exchange or board of trade will exist for any particular
contract at any particular time. In such event, it might not be possible to
close a futures contract, and in the event of adverse price movements, the
fund would continue to be required to make daily cash payments of variation
margin. However, in the event futures contracts have been used to hedge the
underlying instruments, the fund would continue to hold the underlying
instruments subject to the hedge until the futures contracts could be
terminated. In such circumstances, an increase in the price of underlying
instruments, if any, might partially or completely offset losses on the
futures contract. However, as described next, there is no guarantee that the
price of the underlying instruments will, in fact, correlate with the price
movements in the futures contract and thus provide an offset to losses on a
futures contract.
. Hedging Risk A decision of whether, when, and how to hedge involves skill
and judgment, and even a well-conceived hedge may be unsuccessful to some
degree because of unexpected market behavior, market or interest rate trends.
There are several risks in connection with the use by the fund of futures
contracts as a hedging device. One risk arises because of the imperfect
correlation between movements in the prices of the futures contracts and
movements in the prices of the underlying instruments which are the subject
of the hedge. Price-Fleming will, however, attempt to reduce this risk by
entering into futures contracts whose movements, in its judgment, will have a
significant correlation with movements in the prices of the fund's underlying
instruments sought to be hedged.
Successful use of futures contracts by the fund for hedging purposes is also
subject to Price-Fleming's ability to correctly predict movements in the
direction of the market. It is possible that, when the fund has sold futures
to hedge its portfolio against a decline in the market, the index, indices,
or instruments underlying futures might advance and the value of the
underlying instruments held in the fund's portfolio might decline. If this
were to occur, the fund would lose money on the futures and also would
experience a decline in value in its underlying instruments. However, while
this might occur to a certain degree, Price-Fleming believes that over time
the value of the fund's portfolio will tend to move in the same direction as
the market indices used to hedge the portfolio. It is also possible that, if
the fund were to hedge against the possibility of a decline in the market
(adversely affecting the underlying instruments held in its portfolio) and
prices instead increased, the fund would lose part or all of the benefit of
increased value of those underlying instruments that it has hedged, because
it would have offsetting losses in its futures positions. In addition, in
such situations, if the fund had insufficient cash, it might have to sell
underlying instruments to meet daily variation margin requirements. Such
sales of underlying instruments might be, but would not necessarily be, at
increased prices (which would reflect the rising market). The fund might have
to sell underlying instruments at a time when it would be disadvantageous to
do so.
<PAGE>
In addition to the possibility that there might be an imperfect correlation,
or no correlation at all, between price movements in the futures contracts
and the portion of the portfolio being hedged, the price movements of futures
contracts might not correlate perfectly with price movements in the
underlying instruments due to certain market distortions. First, all
participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors might close futures contracts through offsetting
transactions, which could distort the normal relationship between the
underlying instruments and futures markets. Second, the margin requirements
in the futures market are less onerous than margin requirements in the
securities markets and, as a result, the futures market might attract more
speculators than the securities markets do. Increased participation by
speculators in the futures market might also cause temporary price
distortions. Due to the possibility of price distortion in the futures market
and also because of imperfect correlation between price movements in the
underlying instruments and movements in the prices of futures contracts, even
a correct forecast of general market trends by Price-Fleming might not result
in a successful hedging transaction over a very short time period.
Options on Futures Contracts
The fund may purchase and sell options on the same types of futures in which
it may invest.
Options (another type of potentially high-risk derivative) on futures are
similar to options on underlying instruments except that options on futures
give the purchaser the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the option is a put), rather than to purchase or sell the
futures contract, at a specified exercise price at any time during the period
of the option. Upon exercise of the option, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by the delivery of the accumulated balance in the writer's
futures margin account which represents the amount by which the market price
of the futures contract, at exercise, exceeds (in the case of a call) or is
less than (in the case of a put) the exercise price of the option on the
futures contract. Purchasers of options who fail to exercise their options
prior to the exercise date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put options on stock
index futures, the fund may write or purchase call and put options on
financial indices. Such options would be used in a manner similar to the use
of options on futures contracts. From time to time, a single order to
purchase or sell futures contracts (or options thereon) may be made on behalf
of the fund and other T. Rowe Price funds. Such aggregated orders would be
allocated among the funds and the other T. Rowe Price funds in a fair and
nondiscriminatory manner.
Special Risks of Transactions in Options on Futures Contracts
The risks described under "Special Risks in Transactions on Futures
Contracts" are substantially the same as the risks of using options on
futures. If the fund were to write an option on a futures contract, it would
be required to deposit and maintain initial and variation margin in the same
manner as a regular futures contract. In addition, where the fund seeks to
close out an option position by writing or buying an offsetting option
covering the same index, underlying instrument or contract and having the
same exercise price and expiration date, its ability to establish and close
out positions on such options will be subject to the maintenance of a liquid
secondary market. Reasons for the absence of a liquid secondary market on an
exchange include the following: (1) there may be insufficient trading
interest in certain options; (2) restrictions may be imposed by an exchange
on opening transactions or closing transactions or both; (3) trading halts,
suspensions, or other restrictions may be imposed with respect to particular
classes or series of options, or underlying instruments; (4) unusual or
unforeseen circumstances may interrupt normal operations on an exchange; (5)
the facilities of an exchange or a clearing corporation may not at all times
be adequate to handle current trading volume; or (6) one or more exchanges
could, for economic or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular class or series
of options), in which event the secondary market on that exchange (or in the
class or series of options) would cease to exist, although outstanding
options on the exchange that had been issued by a clearing corporation as a
result of trades on that exchange would continue to be exercisable in
accordance with their terms. There is no assurance that higher than
anticipated trading activity or other unforeseen events might not, at times,
render certain of the facilities of any
<PAGE>
of the clearing corporations inadequate, and thereby result in the
institution by an exchange of special procedures which may interfere with the
timely execution of customers' orders.
Additional Futures and Options Contracts
Although the fund has no current intention of engaging in futures or options
transactions other than those described above, it reserves the right to do
so. Such futures and options trading might involve risks which differ from
those involved in the futures and options described above.
Foreign Futures and Options
Participation in foreign futures and foreign options transactions involves
the execution and clearing of trades on or subject to the rules of a foreign
board of trade. Neither the National Futures Association nor any domestic
exchange regulates activities of any foreign boards of trade, including the
execution, delivery and clearing of transactions, or has the power to compel
enforcement of the rules of a foreign board of trade or any applicable
foreign law. This is true even if the exchange is formally linked to a
domestic market so that a position taken on the market may be liquidated by a
transaction on another market. Moreover, such laws or regulations will vary
depending on the foreign country in which the foreign futures or foreign
options transaction occurs. For these reasons, when the fund trades foreign
futures or foreign options contracts, it may not be afforded certain of the
protective measures provided by the Commodity Exchange Act, the CFTC's
regulations and the rules of the National Futures Association and any
domestic exchange, including the right to use reparations proceedings before
the CFTC and arbitration proceedings provided by the National Futures
Association or any domestic futures exchange. In particular, funds received
from the fund for foreign futures or foreign options transactions may not be
provided the same protections as funds received in respect of transactions on
United States futures exchanges. In addition, the price of any foreign
futures or foreign options contract and, therefore, the potential profit and
loss thereon may be affected by any variance in the foreign exchange rate
between the time the fund's order is placed and the time it is liquidated,
offset or exercised.
Foreign Currency Transactions
A forward foreign currency exchange contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. These contracts are principally traded
in the interbank market conducted directly between currency traders (usually
large, commercial banks) and their customers. A forward contract generally
has no deposit requirement, and no commissions are charged at any stage for
trades.
The fund may enter into forward contracts for a variety of purposes in
connection with the management of the foreign securities portion of its
portfolio. The fund's use of such contracts would include, but not be limited
to, the following:
First, when the fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, it may desire to "lock in" the
U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale, for a fixed amount of dollars, of the amount of foreign
currency involved in the underlying security transactions, the fund will be
able to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date the security is purchased or sold
and the date on which payment is made or received.
Second, when Price-Fleming believes that one currency may experience a
substantial movement against another currency, including the U.S. dollar, it
may enter into a forward contract to sell or buy the amount of the former
foreign currency, approximating the value of some or all of the fund's
portfolio securities denominated in such foreign currency. Alternatively,
where appropriate, the fund may hedge all or part of its foreign currency
exposure through the use of a basket of currencies or a proxy currency where
such currency or currencies act as an effective proxy for other currencies.
In such a case, the fund may enter into a forward contract where the amount
of the foreign currency to be sold exceeds the value of the securities
denominated in such currency. The use of this basket hedging technique may be
more efficient and economical than entering into separate forward contracts
for each currency held in the fund. The precise matching of the forward
contract amounts and the value of the securities involved will not generally
be possible since the future value of such securities in foreign currencies
will change as a consequence of market movements in the
<PAGE>
value of those securities between the date the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Under normal circumstances,
consideration of the prospect for currency parties will be incorporated into
the longer term investment decisions made with regard to overall
diversification strategies. However, Price-Fleming believes that it is
important to have the flexibility to enter into such forward contracts when
it determines that the best interests of the fund will be served.
The fund may enter into forward contacts for any other purpose consistent
with the fund's investment objective and program. However, the fund will not
enter into a forward contract, or maintain exposure to any such contract(s),
if the amount of foreign currency required to be delivered thereunder would
exceed the fund's holdings of liquid, high-grade debt securities, currency
available for cover of the forward contract(s), or other suitable cover as
permitted by the SEC. In determining the amount to be delivered under a
contract, the fund may net offsetting positions.
At the maturity of a forward contract, the fund may sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and either extend the maturity of the forward contract (by "rolling"
that contract forward) or may initiate a new forward contract.
If the fund retains the portfolio security and engages in an offsetting
transaction, the fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward prices increase, the
fund will suffer a loss to the extent of the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
The fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. However, the fund
reserves the right to enter into forward foreign currency contracts for
different purposes and under different circumstances. Of course, the fund is
not required to enter into forward contracts with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate
by Price-Fleming. It also should be realized that this method of hedging
against a decline in the value of a currency does not eliminate fluctuations
in the underlying prices of the securities. It simply establishes a rate of
exchange at a future date. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result from an increase in the value of that currency.
Although the fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on
a daily basis. It will do so from time to time, and there are costs
associated with currency conversion. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the difference
(the "spread") between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to
the fund at one rate, while offering a lesser rate of exchange should the
fund desire to resell that currency to the dealer.
Federal Tax Treatment of Options, Futures Contracts, and Forward Foreign
Exchange Contracts
The fund may enter into certain options, futures, and forward foreign
exchange contracts, including options and futures on currencies, which will
be treated as Section 1256 contracts or straddles.
Transactions that are considered Section 1256 contracts will be considered to
have been closed at the end of the fund's fiscal year and any gains or losses
will be recognized for tax purposes at that time. Such gains or losses from
the normal closing or settlement of such transactions will be characterized
as 60% long-term capital gain (taxable at a maximum rate of 20%) or loss and
40% short-term capital gain or loss regardless of the holding period of the
instrument (ordinary income or loss for foreign exchange contracts). The fund
will be required to distribute net gains on such transactions to shareholders
even though it may not have closed the transaction and received cash to pay
such distributions.
<PAGE>
Options, futures, and forward foreign exchange contracts, including options
and futures on currencies, which offset a foreign dollar-denominated bond or
currency position may be considered straddles for tax purposes, in which case
a loss on any position in a straddle will be subject to deferral to the
extent of unrealized gain in an offsetting position. The holding period of
the securities or currencies comprising the straddle will be deemed not to
begin until the straddle is terminated. The holding period of the security
offsetting an "in-the-money qualified covered call" option on an equity
security will not include the period of time the option is outstanding.
Losses on written covered calls and purchased puts on securities, excluding
certain "qualified covered call" options on equity securities, may be
long-term capital losses, if the security covering the option was held for
more than 12 months prior to the writing of the option.
In order for the fund to continue to qualify for federal income tax treatment
as a regulated investment company, at least 90% of its gross income for a
taxable year must be derived from qualifying income, i.e., dividends,
interest, income derived from loans of securities, and gains from the sale of
securities or currencies. Tax regulations could be issued limiting the extent
that net gain realized from option, futures, or foreign forward exchange
contracts on currencies is qualifying income for purposes of the 90%
requirement.
As a result of the "Taxpayer Relief Act of 1997," entering into certain
options, futures contracts, or forward contracts may result in the
"constructive sale" of offsetting stocks or debt securities of the fund.
INVESTMENT RESTRICTIONS
-------------------------------------------------------------------------------
Fundamental policies may not be changed without the approval of the lesser of
(1) 67% of the fund's shares present at a meeting of shareholders if the
holders of more than 50% of the outstanding shares are present in person or
by proxy or (2) more than 50% of a fund's outstanding shares. Other
restrictions in the form of operating policies are subject to change by the
fund's Board of Directors without shareholder approval. Any investment
restriction which involves a maximum percentage of securities or assets shall
not be considered to be violated unless an excess over the percentage occurs
immediately after, and is caused by, an acquisition of securities or assets
of, or borrowings by, the fund. Calculation of the fund's total assets for
compliance with any of the following fundamental or operating policies or any
other investment restrictions set forth in the fund's prospectus or Statement
of Additional Information will not include cash collateral held in connection
with securities lending activities.
Fundamental Policies
As a matter of fundamental policy, the fund may not:
(1) Borrowing Borrow money except that the fund may (i) borrow for
non-leveraging, temporary, or emergency purposes; and (ii) engage in
reverse repurchase agreements and make other investments or engage in
other transactions, which may involve a borrowing, in a manner consistent
with the fund's investment objective and program, provided that the
combination of (i) and (ii) shall not exceed 33/1//\\/3/\\% of the value
of the fund's total assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage permitted by
law. Any borrowings which come to exceed this amount will be reduced in
accordance with applicable law. The fund may borrow from banks, other
Price Funds, or other persons to the extent permitted by applicable law;
(2) Commodities Purchase or sell physical commodities; except that it may
enter into futures contracts and options thereon;
(3) Industry Concentration Purchase the securities of any issuer if, as a
result, more than 25% of the value of the fund's total assets would be
invested in the securities of issuers having their principal business
activities in the same industry;
(4) Loans Make loans, although the fund may (i) lend portfolio securities and
participate in an interfund lending program with other Price Funds
provided that no such loan may be made if, as a result, the
<PAGE>
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;
(5) Percent Limit on Assets Invested in Any One Issuer Purchase a security
if, as a result, with respect to 75% of the value of its total assets,
more than 5% of the value of the fund's total assets would be invested in
the securities of a single issuer, except securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities;
(6) Percent Limit on Share Ownership of Any One Issuer Purchase a security
if, as a result, with respect to 75% of the value of a fund's total
assets, more than 10% of the outstanding voting securities of any issuer
would be held by the fund (other than obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities);
(7) Real Estate Purchase or sell real estate, including limited partnership
interests therein, unless acquired as a result of ownership of securities
or other instruments (but this shall not prevent the fund from investing
in securities or other instruments backed by real estate or securities of
companies engaged in the real estate business);
(8) Senior Securities Issue senior securities except in compliance with the
1940 Act; or
(9) Underwriting Underwrite securities issued by other persons, except to the
extent that the fund may be deemed to be an underwriter within the
meaning of the 1933 Act in connection with the purchase and sale of its
portfolio securities in the ordinary course of pursuing its investment
program.
NOTES
The following Notes should be read in connection with the above-described
fundamental policies. The Notes are not fundamental policies.
With respect to investment restriction (2), the fund does not consider
currency contracts or hybrid investments to be commodities.
For purposes of investment restriction (3), U.S., state, or local
governments, or related agencies or instrumentalities, are not considered
an industry. Industries are determined by reference to the
classifications of industries set forth in the fund's semiannual and
annual reports. It is the position of the Staff of the SEC that foreign
governments are industries for purposes of this restriction.
For purposes of investment restriction (4), the fund will consider the
acquisition of a debt security to include the execution of a note or
other evidence of an extension of credit with a term of more than nine
months.
Operating Policies
As a matter of operating policy, the fund may not:
(1) Borrowing Purchase additional securities when money borrowed exceeds 5%
of its total assets;
The fund will limit borrowing for any variable annuity separate account
to (a) 10% of net asset value when borrowing for any general purpose, and
(b) 25% of net asset value when borrowing as a temporary measure to
facilitate redemptions.
Net asset value of a portfolio is the market value of all investments or
assets owned less outstanding liabilities of the portfolio at the time
that any new or additional borrowing is undertaken.
(2) Control of Portfolio Companies Invest in companies for the purpose of
exercising management or control;
(3) Futures Contracts Purchase a futures contract or an option thereon, if,
with respect to positions in futures or options on futures which do not
represent bona fide hedging, the aggregate initial margin and premiums on
such options would exceed 5% of the fund's net asset value;
<PAGE>
(4) Illiquid Securities Purchase illiquid securities if, as a result, more
than 15% of its net assets would be invested in such securities;
(5) Investment Companies Purchase securities of open-end or closed-end
investment companies except (i) in compliance with the 1940 Act; or (ii)
securities of the Reserve Investment or Government Reserve Investment
Funds;
(6) Margin Purchase securities on margin, except (i) for use of short-term
credit necessary for clearance of purchases of portfolio securities and
(ii) it may make margin deposits in connection with futures contracts or
other permissible investments;
(7) Mortgaging Mortgage, pledge, hypothecate or, in any manner, transfer any
security owned by the fund as security for indebtedness except as may be
necessary in connection with permissible borrowings or investments and
then such mortgaging, pledging, or hypothecating may not exceed
33/1//\\/3/\\% of the fund's total assets at the time of borrowing or
investment;
(8) Oil and Gas Programs Purchase participations or other direct interests
in, or enter into leases with respect to oil, gas, or other mineral
exploration or development programs if, as a result thereof, more than 5%
of the value of the total assets of the fund would be invested in such
programs;
(9) Options, etc. Invest in puts, calls, straddles, spreads, or any
combination thereof, except to the extent permitted by the prospectus and
Statement of Additional Information;
(10) Short Sales Effect short sales of securities; or
(11) Warrants Invest in warrants if, as a result thereof, more than 10% of
the value of the net assets of the fund would be invested in warrants.
In addition to the restrictions described above, some foreign countries
limit, or prohibit, all direct foreign investment in the securities of their
companies. However, the governments of some countries have authorized the
organization of investment funds to permit indirect foreign investment in
such securities. For tax purposes, these funds may be known as Passive
Foreign Investment Companies. Each fund is subject to certain percentage
limitations under the 1940 Act and certain states relating to the purchase of
securities of investment companies, and may be subject to the limitation that
no more than 10% of the value of the fund's total assets may be invested in
such securities.
Notwithstanding anything in the above fundamental and operating restrictions
to the contrary, the fund may invest all of its assets in a single investment
company or a series thereof in connection with a "master-feeder" arrangement.
Such an investment would be made where the fund (a "Feeder"), and one or more
other funds with the same investment objective and program as the fund,
sought to accomplish its investment objective and program by investing all of
its assets in the shares of another investment company (the "Master"). The
Master would, in turn, have the same investment objective and program as the
fund. The fund would invest in this manner in an effort to achieve the
economies of scale associated with having a Master fund make investments in
portfolio companies on behalf of a number of Feeder funds.
MANAGEMENT OF THE FUND
-------------------------------------------------------------------------------
The officers and directors of the fund are listed below. Unless otherwise
noted, the address of each is 100 East Pratt Street, Baltimore, Maryland
21202. Except as indicated, each has been an employee of T. Rowe Price for
more than five years. In the list below, the fund's directors who are
considered "interested persons" of T. Rowe Price as defined under Section
2(a)(19) of the 1940 Act are noted with an asterisk (*). These directors are
referred to as inside directors by virtue of their officership, directorship,
and/or employment with T. Rowe Price.
<PAGE>
Independent Directors/(a)/
ANTHONY W. DEERING, 1/28/45, Director, Chairman of the Board, President, and
Chief Executive Officer, The Rouse Company, real estate developers, Columbia,
Maryland; Address: 10275 Little Patuxent Parkway, Columbia, Maryland 21044
DONALD W. DICK, JR., 1/27/43, Principal, EuroCapital Advisors, LLC, an
acquisition and management advisory firm; formerly (5/89-6/95) Principal,
Overseas Partners, Inc., a financial investment firm; formerly (6/65-3/89)
Director and Vice President; Consumer Products Division, McCormick & Company,
Inc., international food processors; Director, Waverly, Inc., Baltimore,
Maryland; Address: P.O.Box 491, Chilmark, Massachusetts 02535
PAUL M. WYTHES, 6/23/33, Founding Partner of Sutter Hill Ventures, a venture
capital limited partnership, providing equity capital to young high
technology companies throughout the United States; Director, Teltone
Corporation and InterVentional Technologies Inc.; Address: 755 Page Mill
Road, Suite A200, Palo Alto, California 94304-1005
(a) Unless otherwise indicated, the Independent Directors have been at their
respective companies for at least five years.
Inside Directors/Officers
* M. DAVID TESTA, 4/22/44, Director and Vice President-Chairman of the Board
and Director, Price-Fleming; Vice Chairman of the Board, Chief Investment
Officer, Director, and Managing Director, T. Rowe Price; Vice President and
Director, T. Rowe Price Trust Company; Chartered Financial Analyst
* MARTIN G. WADE, 2/16/43, Chairman of the Board-Director, Chief Executive
Officer, and Vice Chairman of the Board, Price-Fleming; Director, T. Rowe
Price, Fleming Holdings Limited, and Robert Fleming Asset Management;
Address: 25 Copthall Avenue, London, EC2R 7DR, England
JOHN R. FORD, 11/25/57, President-Chief Investment Officer and Executive Vice
President, Price-Fleming; Chartered Financial Analyst
MARK C.J. BICKFORD-SMITH, 4/30/62, Vice President-Vice President and
portfolio manager of Price-Fleming; formerly a Director and Portfolio Manager
of Jardine Fleming Investment Management
HENRY H. HOPKINS, 12/23/42, Vice President-Vice President, Price-Fleming and
T. Rowe Price Retirement Plan Services, Inc.; Director and Managing Director,
T. Rowe Price; Vice President and Director, T. Rowe Price Investment
Services, Inc., T. Rowe Price Services, Inc. and T. Rowe Price Trust Company
GEORGE A. MURNAGHAN, 5/1/56, Vice President-Managing Director, T. Rowe Price;
Executive Vice President, Price-Fleming; Vice President, T. Rowe Price Trust
Company and T. Rowe Price Investment Services, Inc.
GONZALO PANGARO, 11/27/68, Vice President-Vice President, Price-Fleming
JAMES S. RIEPE, 6/25/43, Vice President-Vice Chairman of the Board, Managing
Director, and Director, T. Rowe Price; Chairman of the Board and Director, T.
Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., and T.
Rowe Price Retirement Plan Services, Inc.; Chairman of the Board, Director,
President, and Trust Officer, T. Rowe Price Trust Company; Director,
Price-Fleming and General Re Corporation
JAMES B.M. SEDDON, 6/17/64, Vice President-Vice President, Price-Fleming
ROBERT W. SMITH, 4/11/61, Vice President-Managing Director, T. Rowe Price;
Vice President, Price-Fleming
DAVID J.L. WARREN, 4/14/57, Vice President-President, Price-Fleming
WILLIAM F. WENDLER II, 3/14/62, Vice President-Vice President, T. Rowe Price,
Price-Fleming, and T. Rowe Price Investment Services, Inc.
EDWARD A. WIESE, 4/12/59, Vice President-Vice President, T. Rowe Price and T.
Rowe Price Trust Company; Chartered Financial Analyst
<PAGE>
PATRICIA B. LIPPERT, 1/12/53, Secretary-Assistant Vice President, T. Rowe
Price and T. Rowe Price Investment Services, Inc.
JOSEPH A. CARRIER, 12/30/60, Treasurer-Vice President, T. Rowe Price and T.
Rowe Price Investment Services, Inc.
DAVID S. MIDDLETON, 1/18/56, Controller-Vice President, T. Rowe Price and T.
Rowe Price Trust Company
ANN B. CRANMER, 3/23/47, Assistant Vice President-Vice President,
Price-Fleming
ROGER L. FIERY III, 2/10/59, Assistant Vice President-Vice President,
Price-Fleming and T. Rowe Price
LEAH P. HOLMES, 2/11/44, Assistant Vice President-Vice President,
Price-Fleming; Assistant Vice President, T. Rowe Price
INGRID I. VORDEMBERGE, 9/27/35, Assistant Vice President-Employee, T. Rowe
Price
Compensation Table
The fund does not pay pension or retirement benefits to its independent
officers or directors. Also, any director of the fund who is an officer or
employee of T. Rowe Price or Price-Fleming does not receive any remuneration
from the fund.
<TABLE>
<CAPTION>
Name of Person, Aggregate Compensation from Total Compensation from Fund and
Position Fund(a) Fund Complex Paid to Directors(b)
- -------------------------------------- -------------------------------------------- ---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <S>
Anthony W. Deering, Director $1,892 $80,000
Donald W. Dick, Jr., Director 1,853 82,000
Paul M. Wythes, Director 1,853 80,000
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Amounts in this column are based on accrued compensation for calendar
year 1999.
(b) Amounts in this column are based on compensation received from January
1, 1999 to December 31, 1999. The T. Rowe Price complex included 88 funds
as of December 31, 1999.
The fund's Executive Committee, consisting of the fund's interested
directors, has been authorized by its respective Board of Directors to
exercise all powers of the Board to manage the funds in the intervals between
meetings of the Board, except the powers prohibited by statute from being
delegated.
PRINCIPAL HOLDERS OF SECURITIES
-------------------------------------------------------------------------------
As of the date of the prospectus, the officers and directors of the fund, as
a group, owned less than 1% of the outstanding shares of the fund.
As of April 1, 2000, the following shareholders beneficially owned more than
5% of the outstanding shares of the fund:
CUNA Mutual Life Insurance Company, Century Variable Annuity Account, c/o
Fund Accounting, 2000 Heritage Way, Waverly, IA 50677-9208; SMA Life, 440
Lincoln Street S310, Worcester, MA 01653-0002; United of Omaha-Series V,
Attn.: John Martin, Corporate General Ledger, Mutual of Omaha Plaza, Omaha,
NE 68175-0001; PRUCO Life Flexible Premium Variable Annuity Account, Attn.:
Kathy McClunn/SEP ACCTS/34OW, 213 Washington St., 7th Floor, Newark, NJ
07102-2917; The Prudential Insurance Company of America, Attn.: Lillian
Trimblett, 290 W. Mount Pleasant Ave., Livingston, NJ 07039-2747.
<PAGE>
INVESTMENT MANAGEMENT SERVICES
-------------------------------------------------------------------------------
Services
Under the Management Agreement, Price-Fleming provides the fund with
discretionary investment services. Specifically, Price-Fleming is responsible
for supervising and directing the investments of the fund in accordance with
the fund's investment objectives, program, and restrictions as provided in
its prospectus and this Statement of Additional Information. Price-Fleming is
also responsible for effecting all security transactions on behalf of the
fund, including the negotiation of commissions, and the allocation of
principal business and portfolio brokerage. In addition to these services,
Price-Fleming provides the fund with certain corporate administrative
services, including: maintaining the fund's corporate existence and corporate
records; registering and qualifying fund shares under federal laws;
monitoring the financial, accounting, and administrative functions of the
fund; maintaining liaison with the agents employed by the fund such as the
fund's custodian and transfer agent; assisting the fund in the coordination
of such agents' activities; and permitting Price-Fleming's employees to serve
as officers, directors, and committee members of the fund without cost to the
fund.
The Management Agreement also provides that Price-Fleming, its directors,
officers, employees, and certain other persons performing specific functions
for the fund will only be liable to the fund for losses resulting from
willful misfeasance, bad faith, gross negligence, or reckless disregard of
duty.
Under the Management Agreement, Price-Fleming is permitted to utilize the
services or facilities of others to provide it or the funds with statistical
and other factual information, advice regarding economic factors and trends,
advice as to occasional transactions in specific securities, and such other
information, advice or assistance as Price-Fleming may deem necessary,
appropriate, or convenient for the discharge of its obligations under the
Management Agreement or otherwise helpful to the funds.
Certain administrative support is provided by T. Rowe Price, which receives
from Price-Fleming a fee of 0.15% of the market value of all assets in equity
accounts, 0.15% of the market value of all assets in active fixed income
accounts, and 0.035% of the market value of all assets in passive fixed
income accounts under Price-Fleming's management. Price-Fleming has entered
into research agreements with Fleming Investment Management Limited (FIM) and
Jardine Fleming International Holdings Limited (JFIH). For services under the
research agreements, FIM and JFIH each receive a fee of 0.075% of the market
value of all assets in equity accounts under Price-Fleming's management. FIM
and JFIH each receive a fee of 0.075% of the market value of all assets in
active fixed income accounts and 0.0175% of such market value in passive
fixed income accounts under Price-Fleming's management. In addition to the
research provided under these agreements, Price-Fleming has access to the
publicly available research materials produced by FIM and JFIH. FIM is a
wholly owned subsidiary of Flemings. JFIH is a wholly owned subsidiary of
Jardine Fleming.
Under these agreements, Price-Fleming paid the following amounts for the
years indicated:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C>
$1,733,000 $1,380,000 $984,000
</TABLE>
Management Fee
The fund pays Price-Fleming an annual all-inclusive fee (the "Fee") of 1.05%.
The Fee is paid monthly to the Price-Fleming on the first business day of the
next succeeding calendar month and is the sum of the daily Fee accruals for
each month. The daily Fee accrual for any particular day is calculated by
multiplying the fraction of one (1) over the number of calendar days in the
year by the appropriate Fee rate 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 from the previous business day on
which the fund was open for business.
The Management Agreement between the fund and Price-Fleming provides that
Price-Fleming will pay all expenses of the fund's operations, except
interest, taxes, brokerage commissions, and other charges incident to the
purchase, sale, or lending of the fund's portfolio securities, directors' fee
and expenses (including counsel
<PAGE>
fees and expenses), and such nonrecurring or extraordinary expenses that 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
obligation to provide indemnification to its officers, directors, and agents.
However, the Board of Directors of the fund reserves the right to impose
additional fees against shareholder accounts to defray expenses which would
otherwise be paid by Price-Fleming under the Management Agreement. The Board
does not anticipate levying such charges; such a fee, if charged, may be
retained by the fund or paid to Price-Fleming. Under the Management
Agreement, the fund paid Price-Fleming the following amounts for the years
indicated:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C>
$5,724,000 $4,709,000 $3,203,000
</TABLE>
In 1999, the fund's investment manager made payments of $770,022.27 to
various insurance companies for services.
From time to time, Price-Fleming may pay eligible insurance companies for
services they provide to the fund for contract holders.
DISTRIBUTOR FOR THE FUND
-------------------------------------------------------------------------------
Investment Services, a Maryland corporation formed in 1980 as a wholly owned
subsidiary of T. Rowe Price, serves as the fund's distributor. Investment
Services is registered as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities Dealers,
Inc. The offering of the fund's shares is continuous.
Investment Services is located at the same address as the fund and T. Rowe
Price-100 East Pratt Street, Baltimore, Maryland 21202.
Investment Services serves as distributor to the fund pursuant to an
Underwriting Agreement ("Underwriting Agreement"), which provides that the
fund will pay all fees and expenses in connection with: necessary state
filings; preparing, setting in type, printing, and mailing its prospectuses
and reports to shareholders; and issuing its shares, including expenses of
confirming purchase orders.
The Underwriting Agreement provides that Investment Services will pay all
fees and expenses in connection with: printing and distributing prospectuses
and reports for use in offering and selling fund shares; preparing, setting
in type, printing, and mailing all sales literature and advertising;
Investment Services' federal and state registrations as a broker-dealer; and
offering and selling shares, except for those fees and expenses specifically
assumed by the fund. Investment Services' expenses are paid by T. Rowe Price.
Investment Services acts as the agent of the fund in connection with the sale
of its shares in the various states in which Investment Services is qualified
as a broker-dealer. Under the Underwriting Agreement, Investment Services
accepts orders for fund shares at net asset value. No sales charges are paid
by investors or the fund.
CUSTODIAN
-------------------------------------------------------------------------------
State Street Bank and Trust Company is the custodian for the fund's U.S.
securities and cash, but it does not participate in the fund's investment
decisions. Portfolio securities purchased in the U.S. are maintained in the
custody of the Bank and may be entered into the Federal Reserve Book Entry
System, or the security depository system of the Depository Trust
Corporation. State Street Bank's main office is at 225 Franklin Street,
Boston, Massachusetts 02110.
The fund has entered into a Custodian Agreement with The Chase Manhattan
Bank, N.A., London, pursuant to which portfolio securities which are
purchased outside the United States are maintained in the custody of
<PAGE>
various foreign branches of The Chase Manhattan Bank and such other
custodians, including foreign banks and foreign securities depositories as
are approved in accordance with regulations under the 1940 Act. The address
for The Chase Manhattan Bank, N.A., London is Woolgate House, Coleman Street,
London, EC2P 2HD, England.
CODE OF ETHICS
-------------------------------------------------------------------------------
The fund's investment adviser (Price-Fleming) has a written Code of Ethics
which requires all Access Persons to obtain prior clearance before engaging
in personal securities transactions. Transactions must be executed within
three business days of their clearance. In addition, all employees must
report their personal securities transactions within 10 days after the end of
the calendar quarter. Access Persons will not be permitted to effect
transactions in a security: if there are pending client orders in the
security; the security has been purchased or sold by a client within seven
calendar days; the security is being considered for purchase for a client; or
the security is subject to internal trading restrictions. In addition, Access
Persons are prohibited from profiting from short-term trading (e.g.,
purchases and sales involving the same security within 60 days). Any person
becoming an Access Person must file a statement of personal securities
holdings within 10 days of this date. All Access Persons are required to file
an annual statement with respect to their personal securities holdings. Any
material violation of the Code of Ethics is reported to the Board of the
fund. The Board also reviews the administration of the Code of Ethics on an
annual basis.
PORTFOLIO TRANSACTIONS
-------------------------------------------------------------------------------
Investment or Brokerage Discretion
Decisions with respect to the purchase and sale of portfolio securities on
behalf of the fund are made by Price-Fleming. Price-Fleming is also
responsible for implementing these decisions, including the negotiation of
commissions and the allocation of portfolio brokerage and principal business.
How Brokers and Dealers Are Selected
Equity Securities
In purchasing and selling equity securities, it is Price-Fleming's policy to
obtain quality execution at the most favorable prices through responsible
brokers and dealers and at competitive commission rates where such rates are
negotiable. However, under certain conditions, the fund may pay higher
brokerage commissions in return for brokerage and research services. As a
general practice, over-the-counter orders are executed with market-makers. In
selecting among market-makers, Price-Fleming generally seeks to select those
it believes to be actively and effectively trading the security being
purchased or sold. In selecting broker-dealers to execute the fund's
portfolio transactions, consideration is given to such factors as the price
of the security, the rate of the commission, the size and difficulty of the
order, the reliability, integrity, financial condition, general execution and
operational capabilities of competing brokers and dealers, their expertise in
particular markets and brokerage and research services provided by them. It
is not the policy of Price-Fleming to seek the lowest available commission
rate where it is believed that a broker or dealer charging a higher
commission rate would offer greater reliability or provide better price or
execution.
Transactions on stock exchanges involve the payment of brokerage commissions.
In transactions on stock exchanges in the United States, these commissions
are negotiated. Traditionally, commission rates have generally not been
negotiated on stock markets outside the United States. However, an increasing
number of overseas stock markets have adopted a system of negotiated rates,
although a number of markets continue to be subject to an established
schedule of minimum commission rates. It is expected that equity securities
will ordinarily be purchased in the primary markets, whether over-the-counter
or listed, and that listed securities may be purchased in the
over-the-counter market if such market is deemed the primary market. In the
case of securities traded on the over-the-counter markets, there is generally
no stated commission, but the price
<PAGE>
usually includes an undisclosed commission or markup. In underwritten
offerings, the price includes a disclosed, fixed commission or discount.
Fixed Income Securities
For fixed income securities, it is expected that purchases and sales will
ordinarily be transacted with the issuer, the issuer's underwriter, or with a
primary market maker acting as principal on a net basis, with no brokerage
commission being paid by the fund. However, the price of the securities
generally includes compensation which is not disclosed separately.
Transactions placed through dealers who are serving as primary market makers
reflect the spread between the bid and asked prices.
With respect to equity and fixed income securities, Price-Fleming may effect
principal transactions on behalf of the funds with a broker or dealer who
furnishes brokerage and/or research services benefitting such clients,
designate any such broker or dealer to receive selling concessions,
discounts, or other allowances, or otherwise deal with any such broker or
dealer in connection with the acquisition of securities in underwritings.
Price-Fleming may receive research services in connection with brokerage
transactions, including designations in fixed price offerings.
Price-Fleming may cause a fund to pay a broker-dealer who furnishes brokerage
and/or research services a commission for executing a transaction that is in
excess of the commission another broker-dealer would have received for
executing the transaction if it is determined that such commission is
reasonable in relation to the value of the brokerage and/or research services
which have been provided. In some cases, research services are generated by
third parties but are provided to Price-Fleming by or through broker-dealers.
How Evaluations Are Made of the Overall Reasonableness of Brokerage Commissions
Paid
On a continuing basis, Price-Fleming seeks to determine what levels of
commission rates are reasonable in the marketplace for transactions executed
on behalf of the fund. In evaluating the reasonableness of commission rates,
Price-Fleming considers: (a) historical commission rates; (b) rates which
other institutional investors are paying, based on available public
information; (c) rates quoted by brokers and dealers; (d) the size of a
particular transaction, in terms of the number of shares, dollar amount, and
number of clients involved; (e) the complexity of a particular transaction in
terms of both execution and settlement; (f) the level and type of business
done with a particular firm over a period of time; and (g) the extent to
which the broker or dealer has capital at risk in the transaction.
Descriptions of Research Services Received From Brokers and Dealers
Price-Fleming receives a wide range of research services from brokers and
dealers covering investment opportunities throughout the world, including
information on the economies, industries, groups of securities, individual
companies, statistics, political developments, technical market action,
pricing and appraisal services, and performance analyses of all the countries
in which a fund's portfolio is likely to be invested. Price-Fleming cannot
readily determine the extent to which commissions charged by brokers reflect
the value of their research services, but brokers occasionally suggest a
level of business they would like to receive in return for the brokerage and
research services they provide. To the extent that research services of value
are provided by brokers, Price-Fleming is relieved of expenses which it might
otherwise bear. In some cases, research services are generated by third
parties but are provided to Price-Fleming by or through brokers.
Commissions to Brokers Who Furnish Research Services
Certain brokers-dealers that provide quality execution services also furnish
research services to Price-Fleming. Price-Fleming has adopted a brokerage
allocation policy embodying the concepts of Section 28(e) of the Securities
Exchange Act of 1934, which permits an investment adviser to cause its
clients to pay a broker which furnishes brokerage or research services a
higher commission than that which might be charged by another broker which
does not furnish brokerage or research services, or which furnishes brokerage
or research services deemed to be of lesser value, if such commission is
deemed reasonable in relation to the brokerage and research services provided
by the broker, viewed in terms of either that particular transaction or the
overall responsibilities of the adviser with respect to the accounts as to
which it exercises investment discretion. Accordingly, Price-Fleming may
assess the reasonableness of commissions in light of the total brokerage and
research services provided by each particular broker.
<PAGE>
Miscellaneous
Research services furnished by brokers through which Price-Fleming effects
securities transactions may be used in servicing all accounts managed by
Price-Fleming. Conversely, research services received from brokers which
execute transactions for a particular fund will not necessarily be used by
Price-Fleming exclusively in connection with the management of that fund.
Some of Price-Fleming's other clients have investment objectives and programs
similar to those of the fund. Price-Fleming may make recommendations to other
clients which result in their purchasing or selling securities simultaneously
with the fund. As a result, the demand for securities being purchased or the
supply of securities being sold may increase, and this could have an adverse
effect on the price of those securities. It is Price-Fleming's policy not to
favor one client over another in making recommendations or in placing orders.
Price-Fleming may follow the practice of grouping orders of various clients
for execution which generally results in lower commission rates being
attained. In certain cases, where the aggregate order is executed in a series
of transactions at various prices on a given day, each participating client's
proportionate share of such order reflects the average price paid or received
with respect to the total order. Price-Fleming has established a general
investment policy that it will ordinarily not make additional purchases of a
common stock of a company for its clients (including the T. Rowe Price funds)
if, as a result of such purchases, 10% or more of the outstanding common
stock of such company would be held by its clients in the aggregate.
The fund does not allocate business to any broker-dealer on the basis of its
sales of the fund's shares. However, this does not mean that broker-dealers
who purchase fund shares for their clients will not receive business from the
fund.
Transactions With Related Brokers and Dealers
As provided in the Investment Management Agreement between the fund and
Price-Fleming, Price-Fleming is responsible not only for making decisions
with respect to the purchase and sale of the fund's portfolio securities, but
also for implementing these decisions, including the negotiation of
commissions and the allocation of portfolio brokerage and principal business.
It is expected that, from time to time, Price-Fleming may place orders for
the fund's portfolio transactions with broker-dealer affiliates of Robert
Fleming Holdings Limited ("RF"), an affiliate of Price-Fleming. RF, through
Copthall Overseas Limited, a wholly owned subsidiary, owns 25% of the common
stock of Price-Fleming. Fifty percent of the common stock of Price-Fleming is
owned by TRP Finance, Inc., a wholly owned subsidiary of T. Rowe Price, and
the remaining 25% is owned by Jardine Fleming International Holdings Limited,
a wholly owned subsidiary of Jardine Fleming Group Limited ("JF"). JF is
owned by RF. The affiliates through whose trading desks such orders may be
placed include Fleming Investment Management Limited ("FIM"). FIM is a wholly
owned subsidiary of RF. These trading desks operate under strict instructions
from the fund's portfolio manager as to quantity, price, and broker or dealer
designated to execute the transactions. Neither RF, JF, nor their affiliates
will receive any commission, fee, or other remuneration specifically for the
use of their trading desks, although orders for a fund's portfolio
transactions may be placed with affiliates of RF and JF who may receive a
commission for the trade.
The Board of Directors of the funds has authorized Price-Fleming to utilize
certain affiliates of RF and JF in the capacity of broker in connection with
the execution of each fund's portfolio transactions, provided that
Price-Fleming believes that doing so will result in an economic advantage (in
the form of lower execution costs or otherwise) being obtained for each fund.
The following amounts and percentages were paid to JFS during the last three
fiscal years:
<TABLE>
<CAPTION>
Year Total Brokerage Commissions Aggregate Brokerage Commissions Aggregate Dollar Amount
---- --------------------------- ------------------------------- -----------------------
<S> <C> <C> <C>
1999 $ 6,167 1.38% 1.72%
1998 11,069 0.26 0.62
1997 10,325 1.53 1.07
</TABLE>
<PAGE>
The following amounts and percentages were paid to RF&Co during the last
three fiscal year:
<TABLE>
<CAPTION>
Year Total Brokerage Commissions Aggregate Brokerage Commissions Aggregate Dollar Amount
---- --------------------------- ------------------------------- -----------------------
<S> <C> <C> <C>
1999 $11,247 2.52% 2.52%
1998 14,352 3.51 4.08
1997 14,527 2.16 2.51
</TABLE>
The following amounts and percentages were paid to Ord Minnett during the
last three fiscal years:
<TABLE>
<CAPTION>
Year Total Brokerage Commissions Aggregate Brokerage Commissions Aggregate Dollar Amount
---- --------------------------- ------------------------------- -----------------------
<S> <C> <C> <C>
1999 -- -- --
1998 $2,788 0.68% 0.51%
1997 1,584 0.24 0.16
</TABLE>
Other
For the fiscal years ended December 31, 1999, 1998, and 1997, the total
brokerage commissions paid by the fund, including the discounts received by
securities dealers in connection with underwritings, were $447,001, $409,000,
and $674,000, respectively. Of these commissions, approximately 96.1%, 96.1%,
and 97%, respectively, were paid to firms which provided research,
statistical, or other services to Price-Fleming in connection with the
management of the fund or, in some cases, to the fund.
The portfolio turnover rates for the fiscal years ending December 31, 1999,
1998, and 1997, were 25.4%, 18.2%, and 16.6%, respectively.
PRICING OF SECURITIES
-------------------------------------------------------------------------------
Equity securities are valued at the last quoted sales price at the time the
valuations are made. A security that is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers who
make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their amortized cost in local
currency which, when combined with accrued interest, approximates fair value.
For the purposes of determining the fund's net asset value per share, the
U.S. dollar value of all assets and liabilities initially expressed in
foreign currencies is determined by using the mean of the bid and offer
prices of such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value, are stated at fair
value as determined in good faith by or under the supervision of the officers
of the fund, as authorized by the Board of Directors.
Trading in the portfolio securities of each fund may take place in various
foreign markets on certain days (such as Saturday) when the funds are not
open for business and do not calculate their net asset values. In addition,
trading in a fund's portfolio securities may not occur on days when the fund
is open.
NET ASSET VALUE PER SHARE
-------------------------------------------------------------------------------
The purchase and redemption price of the fund's shares is equal to the fund's
net asset value per share or share price. The fund determines its net asset
value per share by subtracting its liabilities (including accrued expenses
and dividends payable) from its total assets (the market value of the
securities the fund holds plus
<PAGE>
cash and other assets, including income accrued but not yet received) and
dividing the result by the total number of shares outstanding. The net asset
value per share of the fund is normally calculated as of the close of trading
on the New York Stock Exchange ("NYSE") every day the NYSE is open for
trading. The NYSE is closed on the following days: New Year's Day, Dr. Martin
Luther King, Jr. Holiday, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Determination of net asset value (and the offering, sale redemption and
repurchase of shares) for the fund may be suspended at times (a) during which
the NYSE is closed, other than customary weekend and holiday closings, (b)
during which trading on the NYSE is restricted, (c) during which an emergency
exists as a result of which disposal by the fund of securities owned by it is
not reasonably practicable or it is not reasonably practicable for the fund
fairly to determine the value of its net assets, or (d) during which a
governmental body having jurisdiction over the fund may by order permit such
a suspension for the protection of the fund's shareholders; provided that
applicable rules and regulations of the SEC (or any succeeding governmental
authority) shall govern as to whether the conditions prescribed in (b), (c),
or (d) exist.
DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------------------------------
Unless the separate account elects otherwise, the fund's annual capital gain
distribution will be reinvested on the reinvestment date using the NAV per
share of that date. The reinvestment date normally precedes the payment date
by one day, although the exact timing is subject to change and can be as
great as 10 days.
TAX STATUS
-------------------------------------------------------------------------------
The fund intends to qualify as a "regulated investment company" under
Subchapter M of the Code and also intends to diversify its assets in
accordance with regulations under Code Section 817(h).
Dividends and distributions paid by the fund are not eligible for the
dividends-received deduction for corporate shareholders, if as expected, none
of the fund's income consists of dividends paid by United States
corporations. Long-term capital gain distributions paid from this fund are
never eligible for this deduction. For tax purposes, the fund must declare
dividends by December 31 of each year equal to at least 98% of ordinary
income (as of December 31) and capital gains (as of October 31) in order to
avoid a federal excise tax and distribute within 12 months 100% of ordinary
income and capital gains as of December 31 to avoid federal income tax. In
certain circumstances, the fund may not be required to comply with the excise
tax distribution requirements. It does not make any difference whether
dividends and capital gain distributions are paid in cash or additional
shares.
At the time a shareholder acquires fund shares, the fund's net asset value
may reflect undistributed income, capital gains, or net unrealized
appreciation of securities held by the fund, which may be subsequently
distributed as either dividends or capital gain distributions. For federal
income tax purposes, the fund is permitted to carry forward its net realized
capital losses, if any, for eight years and realize net capital gains up to
the amount of such losses without being required to pay taxes on, or
distribute such gains.
Income received by the fund from sources within various foreign countries may
be subject to foreign income taxes withheld at the source. Under the Code, if
more than 50% of the value of the fund's total assets at the close of its
taxable year comprise securities issued by foreign corporations or
governments, the fund may file an election with the Internal Revenue Service
to "pass through" to the fund's shareholders the amount of any foreign income
taxes paid by the fund. Pursuant to this election, shareholders will be
required to: (1) include in gross income, even though not actually received,
their respective pro rata share of foreign taxes paid by the fund; (2) treat
their pro rata share of foreign taxes as paid by them; and (3) either deduct
their pro rata share of foreign taxes in computing their taxable income, or
use it as a foreign tax credit against U.S. income taxes (but not both). No
deduction for foreign taxes may be claimed by a shareholder who does not
itemize deductions.
<PAGE>
The fund intends to meet the requirements of the Code to "pass through" to
its shareholders foreign income taxes paid, but there can be no assurance
that a fund will be able to do so. Each shareholder will be notified within
60 days after the close of each taxable year of the fund, if the fund will
"pass through" foreign taxes paid for that year, and, if so, the amount of
each shareholder's pro rata share (by country) of (1) the foreign taxes paid,
and (2) the fund's gross income from foreign sources. Of course, shareholders
who are not liable for federal income taxes, such as retirement plans
qualified under Section 401 of the Code, will not be affected by any such
"pass through" of foreign tax credits.
If, in any taxable year, the fund should not qualify as a regulated
investment company under the Code: (1) the fund would be taxed at normal
corporate rates on the entire amount of its taxable income without deduction
for dividends or other distributions to shareholders; (2) the fund's
distributions to the extent made out of the fund's current or accumulated
earnings and profits would be treated as ordinary dividends (regardless of
whether they would otherwise have been considered capital gain dividends),
and the fund may qualify for the 70% deduction for dividends received by
corporations; (3) foreign tax credits would not "pass through" to
shareholders; and (4) the separate accounts investing in the fund may fail to
satisfy the requirements of Code Section 817(h) which in turn could adversely
affect the status of life insurance and annuity contracts with premiums
invested in the affected separate accounts.
Passive Foreign Investment Companies
The fund may purchase the securities of certain foreign investment funds or
trusts called passive foreign investment companies. Such trusts have been the
only or primary way to invest in certain countries. In addition to bearing
their proportionate share of the trust's expenses (management fees and
operating expenses), shareholders will also indirectly bear similar expenses
of such trusts. Capital gains on the sale of such holdings are considered
ordinary income regardless of how long the fund held its investment. In
addition, the fund may be subject to corporate income tax and an interest
charge on certain dividends and capital gains earned from these investments,
regardless of whether such income and gains are distributed to shareholders.
To avoid such tax and interest, the fund intends to treat these securities as
sold on the last day of its fiscal year and recognize any gains for tax
purposes at that time; deductions for losses are allowable only to the extent
of any gains resulting from these deemed sales for prior taxable years. Such
gains and losses will be treated as ordinary income. The fund will be
required to distribute any resulting income even though it has not sold the
security and received cash to pay such distributions.
Foreign Currency Gains and Losses
Foreign currency gains and losses, including the portion of gain or loss on
the sale of debt securities attributable to foreign exchange rate
fluctuation, are taxable as ordinary income. If the net effect of these
transactions is a gain, the ordinary income dividend paid by the fund will be
increased. If the result is a loss, the income dividend paid by the fund will
be decreased, or to the extent such dividend has already been paid a portion
may be classified as a return of capital. Adjustments, to reflect these gains
and losses will be made at the end of the fund's taxable year.
INVESTMENT PERFORMANCE
-------------------------------------------------------------------------------
Total Return Performance
The fund's calculation of total return performance includes the reinvestment
of all capital gain distributions and income dividends for the period or
periods indicated, without regard to tax consequences to a shareholder in the
fund. Total return is calculated as the percentage change between the
beginning value of a static account in the fund and the ending value of that
account measured by the then current net asset value, including all shares
acquired through reinvestment of income and capital gain dividends. The
results shown are historical and should not be considered indicative of the
future performance of the fund. Each average annual compound rate of return
is derived from the cumulative performance of the fund over the time period
<PAGE>
specified. The annual compound rate of return for the fund over any other
period of time will vary from the average.
<TABLE>
<CAPTION>
Performance of International Stock Portfolio
1 Yr. 5 Yrs. 10 Yrs. % Since Inception
----- ------ ------- ------- ---------
Ended Ended Ended Inception Date
- --------------------------- ----- ----- ----- --------- ----
12/31/99 12/31/99 12/31/99 12/31/99
-------- -------- -------- --------
----------------------------------------------------
<S> <C> <C> <C> <C> <S>
Cumulative Performance
Percentage Change 33.32% 103.06% -- 106.72% 03/31/94
Average Annual Compound 33.32 15.22 -- 13.45 03/31/94
Rates of Return
- -------------------------------------------------------------------------------
</TABLE>
Outside Sources of Information
From time to time, in reports and promotional literature: (1) the fund's
total return performance, ranking, or any other measure of the fund's
performance may be compared to any one or combination of the following: (a) a
broad-based index; (b) other groups of mutual funds, including T. Rowe Price
funds, tracked by independent research firms ranking entities, or financial
publications; (c) indices of securities comparable to those in which the fund
invests; (2) the Consumer Price Index (or any other measure for inflation,
government statistics, such as GNP may be used to illustrate investment
attributes of the fund or the general economic, business, investment, or
financial environment in which the fund operates; (3) various financial,
economic, and market statistics developed by brokers, dealers, and other
persons may be used to illustrate aspects of the fund's performance; (4) the
effect of tax-deferred compounding on the fund's investment returns, or on
returns in general in both qualified and nonqualified retirement plans or any
other tax advantage product, may be illustrated by graphs, charts, etc.; and
(5) the sectors or industries in which the fund invests may be compared to
relevant indices or surveys in order to evaluate the fund's historical
performance or current or potential value with respect to the particular
industry or sector.
Other Publications
From time to time, in newsletters and other publications issued by Investment
Services, T. Rowe Price mutual fund portfolio managers may discuss economic,
financial, and political developments in the U.S. and abroad and how these
conditions have affected or may affect securities prices or the fund;
individual securities within the fund's portfolio; and their philosophy
regarding the selection of individual stocks, including why specific stocks
have been added, removed, or excluded from the fund's portfolio.
Other Features and Benefits
The fund is a member of the T. Rowe Price family of funds and may help
investors achieve various long-term investment goals, which include, but are
not limited to, investing money for retirement, saving for a down payment on
a home, or paying college costs. To explain how the fund could be used to
assist investors in planning for these goals and to illustrate basic
principles of investing, various worksheets and guides prepared by T. Rowe
Price and/or Investment Services may be made available.
No-Load Versus Load and 12b-1 Funds
Many mutual funds charge sales fees to investors or use fund assets to
finance distribution activities. These fees are in addition to the normal
advisory fees and expenses charged by all mutual funds. There are several
types of fees charged which vary in magnitude and which may often be used in
combination. A sales charge (or "load") can be charged at the time the fund
is purchased (front-end load) or at the time of redemption (back-end load).
Front-end loads are charged on the total amount invested. Back-end loads or
"redemption fees" are charged either on the amount originally invested or on
the amount redeemed. 12b-1 plans allow for the payment of marketing and sales
expenses from fund assets. These expenses are usually computed daily as a
fixed percentage of assets.
The fund is a no-load fund which imposes no sales charges or 12b-1 fees.
No-load funds are generally sold directly to the public without the use of
commissioned sales representatives. This means that 100% of your purchase is
invested for you.
<PAGE>
Redemptions in Kind
The fund has filed a notice of election under Rule 18f-1 of the 1940 Act.
This permits the fund to effect redemptions in kind as set forth in its
prospectus.
In the unlikely event a shareholder were to receive an in kind redemption of
portfolio securities of the fund, it would be the responsibility of the
shareholder to dispose of the securities. The shareholder would be at risk
that the value of the securities would decline prior to their sale, that it
would be difficult to sell the securities and that brokerage fees could be
incurred.
Issuance of Fund Shares for Securities
Transactions involving issuance of fund shares for securities or assets other
than cash will be limited to (1) bona fide reorganizations; (2) statutory
mergers; or (3) other acquisitions of portfolio securities that: (a) meet the
investment objective and policies of the fund; (b) are acquired for
investment and not for resale except in accordance with applicable law; (c)
have a value that is readily ascertainable via listing on or trading in a
recognized United States or international exchange or market; and (d) are not
illiquid.
CAPITAL STOCK
-------------------------------------------------------------------------------
The fund's Charter authorizes the Board of Directors to classify and
reclassify any and all shares which are then unissued, including unissued
shares of capital stock into any number of classes or series, each class or
series consisting of such number of shares and having such designations, such
powers, preferences, rights, qualifications, limitations, and restrictions,
as shall be determined by the Board subject to the 1940 Act and other
applicable law. The shares of any such additional classes or series might
therefore differ from the shares of the present class and series of capital
stock and from each other as to preferences, conversions or other rights,
voting powers, restrictions, limitations as to dividends, qualifications or
terms or conditions of redemption, subject to applicable law, and might thus
be superior or inferior to the capital stock or to other classes or series in
various characteristics. The Board of Directors may increase or decrease the
aggregate number of shares of stock or the number of shares of stock of any
class or series that the fund has authorized to issue without shareholder
approval.
Except to the extent that the Corporation's Board of Directors might provide
by resolution that holders of shares of a particular class are entitled to
vote as a class on specified matters presented for a vote of the holders of
all shares entitled to vote on such matters, there would be no right of class
vote unless and to the extent that such a right might be construed to exist
under Maryland law. The Charter contains no provision entitling the holders
of the present class of capital stock to a vote as a class on any matter.
Accordingly, the preferences, rights, and other characteristics attaching to
any class of shares, including the present class of capital stock, might be
altered or eliminated, or the class might be combined with another class or
classes, by action approved by the vote of the holders of a majority of all
the shares of all classes entitled to be voted on the proposal, without any
additional right to vote as a class by the holders of the capital stock or of
another affected class or classes.
The various insurance companies own the outstanding shares of the fund in
their separate accounts. These separate accounts are registered as investment
companies under the 1940 Act or are excluded from registration. Each
insurance company, as the Shareholder, is entitled to one vote for each full
share held (and fractional votes for fractional shares held). Under the
current laws, the insurance companies must vote the shares held in registered
separate accounts in accordance with voting instructions received from
variable contract holders or participants. Fund shares for which contract
holders or participants are entitled to give voting instructions, but as to
which no voting instructions are received, and shares owned by the insurance
companies or affiliated companies in the separate accounts, will be voted in
proportion to the shares for which voting instructions have been received.
There will normally be no meeting of shareholders for the purpose of electing
directors unless and until such time as less than a majority of the directors
holding office have been elected by shareholders, at which time the
<PAGE>
directors then in office will call a shareholders' meeting for the election
of directors. Except as set forth above, the directors shall continue to hold
office and may appoint successor directors. Voting rights are not cumulative,
so that the holders of more than 50% of the shares voting in the election of
directors can, if they choose to do so, elect all the directors of the fund,
in which event the holders of the remaining shares will be unable to elect
any person as a director. As set forth in the By-Laws of the Corporation, a
special meeting of shareholders of the Corporation shall be called by the
Secretary of the Corporation on the written request of shareholders entitled
to cast at least 10% of all the votes of the Corporation entitled to be cast
at such meeting. Shareholders requesting such a meeting must pay to the
Corporation the reasonably estimated costs of preparing and mailing the
notice of the meeting. The Corporation, however, will otherwise assist the
shareholders seeking to hold the special meeting in communicating to the
other shareholders of the Corporation to the extent required by Section 16(c)
of the 1940 Act.
FEDERAL REGISTRATION OF SHARES
-------------------------------------------------------------------------------
The fund's shares are registered for sale under the 1933 Act. Registration of
the fund's shares is not required under any state law, but the fund is
required to make certain filings with and pay fees to the states in order to
sell its shares in the states.
LEGAL COUNSEL
-------------------------------------------------------------------------------
Swidler Berlin Shereff Friedman, LLP, whose address is The Chrysler Building,
405 Lexington Avenue, New York, New York 10174, is legal counsel to the fund.
INDEPENDENT ACCOUNTANTS
-------------------------------------------------------------------------------
PricewaterhouseCoopers LLP, 250 West Pratt Street, 21st Floor, Baltimore,
Maryland 21201, are the independent accountants to the funds.
The financial statements of the fund for the year ended December 31, 1999,
and the report of independent accountants are included in the fund's Annual
Report for the year ended December 31, 1999. A copy of the Annual Report
accompanies this Statement of Additional Information. The following financial
statements and the report of independent accountants appearing in the Annual
Report for the year ended December 31, 1999, are incorporated into this
Statement of Additional Information by reference:
<TABLE>
<CAPTION>
ANNUAL REPORT REFERENCES:
INTERNATIONAL
STOCK PORTFOLIO
---------------
<S> <C>
Financial Highlights 6
Portfolio of Investments, December 31, 1999 7-12
Statement of Assets and Liabilities, December 31, 1999 13
Statement of Operations, year ended December 31, 1999 14
Statement of Changes in Net Assets, years ended
December 31, 1999 and December 31, 1998 15
Notes to Financial Statements, December 31, 1999 16-17
Report of Independent Accountants 18
</TABLE>
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(1) Articles of Incorporation of Registrant, dated January 31, 1994
(electronically filed with initial Registration Statement dated
February 4, 1994)
(2) By-Laws of Registrant, as amended July 21, 1999
(3) See Article SIXTH, Capital Stock, Paragraphs (b)-(g) of the Articles of
Incorporation, Article II, Shareholders, Sections 2.01-2.11 and Article
VIII, Capital Stock, Sections 8.01-8.07 of the Bylaws filed as Exhibits
to this Registration Statement
(4) Investment Management Agreement between Registrant and Rowe
Price-Fleming International, Inc., on behalf of T. Rowe Price
International Stock Portfolio, dated March 1, 1994 (electronically
filed with Amendment No. 1 dated March 30, 1994)
(5) Underwriting Agreement between Registrant, on behalf of T. Rowe Price
International Stock Portfolio, and T. Rowe Price Investment Services,
Inc., dated March 1, 1994 (electronically filed with Amendment No. 1
dated March 30, 1994)
(6) Inapplicable
(7) Custody Agreements
(7)(a) Custodian Agreement between T. Rowe Price Funds and State Street Bank
and Trust Company, dated January 28, 1998, as amended November 4, 1998,
April 21, 1999, and February 9, 2000
(7)(b) Global Custody Agreement between The Chase Manhattan Bank, N.A., and T.
Rowe Price Funds, dated January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995,
July 31, 1996, July 23, 1997, September 3, 1997, October 29, 1997,
December 15, 1998, October 6, 1999, and February 9, 2000
(8) Other Agreements
(8)(a) Transfer Agency and Service Agreement between T. Rowe Price Services,
Inc. and T. Rowe Price Funds, dated January 1, 2000, as amended
February 9, 2000
<PAGE>
(8)(b) Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price
Funds for Fund Accounting Services, dated January 1, 2000, as amended
February 9, 2000
(9) Opinion of Counsel
(10) Consent of Independent Accountants
(11) Inapplicable
(12) Inapplicable
(13) Inapplicable
(14) Inapplicable
(15) Code of Ethics, dated March 1, 2000
(16) Inapplicable
(17) Financial Data Schedule
(18) Other Exhibits
(a) Power of Attorney
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
ITEM 25. INDEMNIFICATION
The Registrant maintains comprehensive Errors and Omissions and
Officers and Directors insurance policies written by the Evanston Insurance
Company and ICI Mutual. These policies provide coverage for T. Rowe Price
Associates, Inc. ("Manager"), and its subsidiaries and affiliates as listed in
Item 26 of this Registration Statement (with the exception of the T. Rowe Price
Associates Foundation, Inc.), and all other investment companies in the T. Rowe
Price family of mutual funds. In addition to the corporate insureds, the
policies also cover the officers, directors, and employees of the Manager, its
subsidiaries, and affiliates. The premium is allocated among the named corporate
insureds in accordance with the provisions of Rule 17d-1(d)(7) under the
Investment Company Act of 1940.
GENERAL. The Charter of the Corporation provides that to the fullest extent
permitted by Maryland or federal law, no director or officer of the Corporation
shall be personally liable to the
<PAGE>
Corporation or the holders of Shares for money damages and each director and
officer shall be indemnified by the Corporation; PROVIDED, HOWEVER, that nothing
therein shall be deemed to protect any director or officer of the Corporation
against any liability to the Corporation of the holders of Shares to which such
director or officer would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Article X, Section 10.01 of the Registrant's By-Laws provides as
follows:
SECTION 10.01. INDEMNIFICATION AND PAYMENT OF EXPENSES IN ADVANCE. The
Corporation shall indemnify any individual ("Indemnitee") who is a present or
former director, officer, employee, or agent of the Corporation, or who is or
has been serving at the request of the Corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, who, by reason of his position was, is, or is threatened to be
made, a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative
(hereinafter collectively referred to as a "Proceeding") against any judgments,
penalties, fines, settlements, and reasonable expenses (including attorneys'
fees) incurred by such Indemnitee in connection with any Proceeding, to the
fullest extent that such indemnification may be lawful under applicable Maryland
law, as from time to time amended. The Corporation shall pay any reasonable
expenses so incurred by such Indemnitee in defending a Proceeding in advance of
the final disposition thereof to the fullest extent that such advance payment
may be lawful under applicable Maryland Law, as from time to time amended.
Subject to any applicable limitations and requirements set forth in the
Corporation's Articles of Incorporation and in these By-Laws, any payment of
indemnification or advance of expenses shall be made in accordance with the
procedures set forth in applicable Maryland law, as from time to time amended.
Notwithstanding the foregoing, nothing herein shall protect or purport
to protect any Indemnitee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office
("Disabling Conduct").
Anything in this Article X to the contrary notwithstanding, no
indemnification shall be made by the Corporation to any Indemnitee unless:
(a) there is a final decision on the merits by a court or other body before
whom the Proceeding was brought that
<PAGE>
the Indemnitee was not liable by reason of Disabling Conduct; or
(b) in the absence of such a decision, there is a reasonable determination,
based upon a review of the facts, that the Indemnitee was not liable by
reason of Disabling Conduct, which determination shall be made by:
(i) the vote of a majority of a quorum of directors who are neither
"interested persons" of the Corporation, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, nor parties to the Proceeding;
or
(ii) an independent legal counsel in a written opinion.
Anything in this Article X to the contrary notwithstanding, any advance
of expenses by the Corporation to any Indemnitee shall be made only upon the
undertaking by such Indemnitee to repay the advance unless it is ultimately
determined that such Indemnitee is entitled to indemnification as above
provided, and only if one of the following conditions is met:
(a) the Indemnitee provides a security for his undertaking; or
(b) the Corporation shall be insured against losses arising by reason of
any lawful advances; or
(c) there is a determination, based on a review of readily available facts,
that there is reason to believe that the Indemnitee will ultimately be
found entitled to indemnification, which determination shall be made
by:
(i) a majority of a quorum of directors who are neither "interested
persons" of the Corporation as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
Section 10.02 of the Registrant's By-Laws provides as follows:
SECTION 10.02. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS.
To the fullest extent permitted by applicable Maryland law and by Section 17(h)
of the Investment Company Act of 1940, as from time to time amended, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of the Corporation, or who is or
was serving at the request of the Corporation as a director, officer, employee,
or agent of another corporation,
<PAGE>
partnership, joint venture, trust, or other enterprise, against any liability
asserted against him and incurred by him in or arising out of his position,
whether or not the Corporation would have the power to indemnify him against
such liability.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT MANAGER
M. DAVID TESTA, Chairman of the Board and Director of the Manager; is also
Vice-Chairman of the Board, Chief Investment Officer, Director, and Managing
Director of T. Rowe Price.
PETER B. ASKEW, Executive Vice President of the Manager.
PAUL T. BATEMAN, Director of the Manager. Mr. Bateman also serves as Director
and/or officer of other companies related to or affiliated with Robert Fleming
Holdings.
JOHN R. FORD, Chief Investment Officer and Executive Vice President of the
Manager.
D. WILLIAM J. GARRETT, Director of the Manager; is Group Chief Executive of
Robert Fleming Holdings Limited ("Robert Fleming Holdings"), a parent of the
Manager which is a United Kingdom holding company duly organized and existing
under the laws of the United Kingdom. Mr. Garrett also serves as Director and/or
officer of other companies related to or affiliated with Robert Fleming
Holdings; Director of Stone Investments (Number 4) Limited; Vice President of
SimCoGeF S.p.A.
P. JOHN MANSER, Director of the Manager; is Chairman of Robert Fleming Holdings.
Mr. Manser also serves as Director and/or officer of other companies related to
or affiliated with Robert
<PAGE>
Fleming Holdings; Chairman of Delancey Estates PIc; Director of Capital Shopping
Centres, Cancer Research Campaign, and Shaftesbury PIc.
GEORGE A. MURNAGHAN, Executive Vice President of the Manager; is Managing
Director of T. Rowe Price.
JAMES S. RIEPE, Director of the Manager; is also Vice-Chairman of the Board,
Director, and Managing Director of T. Rowe Price.
GEORGE A. ROCHE, Director of the Manager; is also Chairman of the Board,
President, and Managing Director of T. Rowe Price.
MARTIN G. WADE, Director, Vice Chairman, and Chief Executive Officer of the
Manager; is a Director of Robert Fleming Holdings, and Robert Fleming Asset
Management.
DAVID J.L. WARREN, President of the Manager.
With the exception of Christopher D. Alderson, Steven J. Banks, Mark C.J.
Bickford-Smith, Michael J. Conelius, Ann B. Cranmer, Julio A. Delgado, Frances
Dydasco, Mark J.T. Edwards, Carol A. Eve, Roger L. Fiery III, Abigail Fulton, R.
Aran Gordon, Pascal Hautcoeur, Todd J. Henry, Leah P. Holmes, Henry H. Hopkins,
Paul Kitney, Ian J. Macdonald, Nancy M. Morris, Thomas O. Murther, Gonzalo
Pangaro, Sally Patterson, Kathleen G. Polk, Robert Revel-Chion, Christopher
Rothery, James B.M. Seddon, Robert W. Smith, Benedict R.F. Thomas, Justin
Thomson, Christine To, William F. Wendler II, and Richard T. Whitney, all
officers of the Manager are officers and/or employees of Price Associates and
may also be officers and/or directors of one or more subsidiaries of Price
Associates and/or one or more of the registered investment companies for which
Price Associates or the Manager serves as investment adviser. Ms. Cranmer is a
Director of Fleming Investment Management Limited and Robert Fleming Management
Services.
RPFI International Partners, L.P., is a Delaware limited partnership organized
in 1985 for the purpose of investing in a diversified group of small and
medium-sized non-U.S. companies. The Manager is the general partner of this
partnership, and certain institutional investors, including advisory clients of
the Manager, are its limited partners.
See also "Management of Fund," in the Registrant's Statement of Additional
Information.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) The principal underwriter for the Registrant is Investment Services.
Investment Services acts as the
<PAGE>
principal underwriter for eighty-eight mutual funds, including the
following investment companies: T. Rowe Price Growth Stock Fund, Inc.,
T. Rowe Price New Horizons Fund, Inc., T. Rowe Price New Era Fund,
Inc., T. Rowe Price New Income Fund, Inc., T. Rowe Price Prime Reserve
Fund, Inc., T. Rowe Price Tax-Free Income Fund, Inc., T. Rowe Price
Tax-Exempt Money Fund, Inc., T. Rowe Price International Funds, Inc.,
T. Rowe Price Growth & Income Fund, Inc., T. Rowe Price Tax-Free
Short-Intermediate Fund, Inc., T. Rowe Price Short-Term Bond Fund,
Inc., T. Rowe Price High Yield Fund, Inc., T. Rowe Price Tax-Free High
Yield Fund, Inc., T. Rowe Price New America Growth Fund, T. Rowe Price
Equity Income Fund, T. Rowe Price GNMA Fund, T. Rowe Price Capital
Appreciation Fund, T. Rowe Price California Tax-Free Income Trust, T.
Rowe Price State Tax-Free Income Trust, T. Rowe Price Science &
Technology Fund, Inc., T. Rowe Price Small-Cap Value Fund, Inc.,
Institutional International Funds, Inc., T. Rowe Price U.S. Treasury
Funds, Inc., T. Rowe Price Index Trust, Inc., T. Rowe Price Spectrum
Fund, Inc., T. Rowe Price Balanced Fund, Inc., T. Rowe Price Short-Term
U.S. Government Fund, Inc., T. Rowe Price Mid-Cap Growth Fund, Inc., T.
Rowe Price Small-Cap Stock Fund, Inc., T. Rowe Price Tax-Free
Intermediate Bond Fund, Inc., T. Rowe Price Dividend Growth Fund, Inc.,
T. Rowe Price Blue Chip Growth Fund, Inc., T. Rowe Price Summit Funds,
Inc., T. Rowe Price Summit Municipal Funds, Inc., T. Rowe Price Equity
Series, Inc., T. Rowe Price International Series, Inc., T. Rowe Price
Fixed Income Series, Inc., T. Rowe Price Personal Strategy Funds, Inc.,
T. Rowe Price Value Fund, Inc., T. Rowe Price Capital Opportunity Fund,
Inc., T. Rowe Price Corporate Income Fund, Inc., T. Rowe Price Health
Sciences Fund, Inc., T. Rowe Price Mid-Cap Value Fund, Inc.,
Institutional Equity Funds, Inc., T. Rowe Price Financial Services
Fund, Inc., T. Rowe Price Diversified Small-Cap Growth Fund, Inc., T.
Rowe Price Tax-Efficient Funds, Inc., Reserve Investment Funds, Inc.,
T. Rowe Price Media & Telecommunications Fund, Inc., and T. Rowe Price
Real Estate Fund, Inc. Investment Services is a wholly owned subsidiary
of the Manager, is registered as a broker-dealer under the Securities
Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. Investment Services has been formed for the
limited purpose of distributing the shares of the Price Funds and will
not engage in the general securities business. Since the Price Funds
are sold on a no-load basis, Investment Services will not receive any
commissions or other compensation for acting as principal underwriter.
<PAGE>
(b) The address of each of the directors and officers of Investment
Services listed below is 100 East Pratt Street, Baltimore, Maryland
21202.
<TABLE>
<CAPTION>
NAME POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
UNDERWRITER REGISTRANT
<C> <S> <S>
James S. Riepe Chairman of the Board Vice President
and Director
Edward C. Bernard President and Director None
Henry H. Hopkins Vice President and Director Vice President
Charles E. Vieth Vice President and Director None
Patricia M. Archer Vice President None
Steven J. Banks Vice President None
John T. Bielski Vice President None
Darrell N. Braman Vice President None
Ronae M. Brock Vice President None
Meredith C. Callanan Vice President None
John H. Cammack Vice President None
Ann R. Campbell Vice President None
Christine M. Carolan Vice President None
Joseph A. Carrier Vice President None
Laura H. Chasney Vice President None
Renee M. Christoff Vice President None
Christopher W. Dyer Vice President None
Christine S. Fahlund Vice President None
Forrest R. Foss Vice President None
Thomas A. Gannon Vice President None
Andrea G. Griffin Vice President None
Douglas E. Harrison Vice President None
David J. Healy Vice President None
Joanne M. Healey Vice President None
Joseph P. Healy Vice President None
Walter J. Helmlinger Vice President None
Valerie King Vice President None
- -Calloway
Eric G. Knauss Vice President None
Sharon R. Krieger Vice President None
Steven A. Larson Vice President None
Jeanette M. LeBlanc Vice President None
Keith W. Lewis Vice President None
Gayle A. Lomax Vice President None
Sarah McCafferty Vice President None
Maurice A. Minerbi Vice President None
Mark J. Mitchell Vice President None
Nancy M. Morris Vice President None
George A. Murnaghan Vice President None
Steven E. Norwitz Vice President None
Kathleen M. O'Brien Vice President None
Barbara A. O'Connor Vice President None
Wayne D. O'Melia Vice President None
David Oestr Vice President None
e
icher
Robert Petrow Vice President None
Pamela D. Preston Vice President None
George D. Riedel Vice President None
Lucy B. Robins Vice President None
John R. Rockwell Vice President None
Kenneth J. Rutherford Vice President None
Alexander Savich Vice President None
Kristin E. Seeberger Vice President None
Donna B. Singer Vice President None
Bruce D. Stewart Vice President None
William W. Strickland, Jr. Vice President None
Jerome Tuccille Vice President None
Walter Wdowiak Vice President None
William F. Wendler II Vice President None
Jane F. White Vice President None
Thomas R. Woolley Vice President None
Barbara A. O'Connor Controller None
Theodore J. Zamerski III Assistant Vice President and None
Assistant Controller
Matthew B. Alsted Assistant Vice President None
Kimberly B. Andersen Assistant Vice President None
Richard J. Barna Assistant Vice President None
Catherine L.Berkenkemper Assistant Vice President None
Edwin J. Brooks Assistant Vice President None
III
Carl A. Cox Assistant Vice President None
Charles R. Dicken Assistant Vice President None
Cheryl L. Emory Assistant Vice President None
John A. Galateria Assistant Vice President None
Edward F. Giltenan Assistant Vice President None
Jason L. Gounaris Assistant Vice President None
Janelyn A. Healey Assistant Vice President None
Sandra J. Kiefler Assistant Vice President None
Suzanne M. Knoll Assistant Vice President None
Patricia Assistant Vice President Secretary
B
.
Lippert
Teresa M. Loeffert Assistant Vice President None
C. Lillian Matthews Assistant Vice President None
Janice D. McCrory Assistant Vice President None
Danielle N. Nicholson Assistant Vice President None
JeanneMarie B. Patella Assistant Vice President None
Kylelane Purcell Assistant Vice President None
David A. Roscum Assistant Vice President None
Matthew A. Scher Assistant Vice President None
Carole H. Smith Assistant Vice President None
John A. Stranovsky Assistant Vice President None
Nolan L. North Assistant Treasurer None
Barbara A. Van Horn Secretary None
</TABLE>
<PAGE>
(c) Not applicable. Investment Services will not receive any compensation
with respect to its activities as underwriter for the Price Funds since
the Price Funds are sold on a no-load basis.
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, and other documents required to be maintained by
the Registrant under Section 31(a) of the Investment Company Act of 1940 and the
rules thereunder will be maintained by the Registrant at its offices at 100 East
Pratt Street, Baltimore, Maryland 21202. Transfer, dividend disbursing, and
shareholder service activities are performed by T. Rowe Price Services, Inc., at
4515 Painters Mill Road, Owings Mills, Maryland 21117. Custodian activities for
the Registrant are performed at State Street Bank and Trust Company's Service
Center (State Street South), 1776 Heritage Drive, Quincy, Massachusetts 02171.
Custody of Registrant's portfolio securities which are purchased
outside the United States is maintained by The Chase Manhattan Bank, N.A.,
London, in its foreign branches or with other U.S. banks. The Chase Manhattan
Bank, N.A., London, is located at Woolgate House, Coleman Street, London EC2P
2HD England.
ITEM 29. MANAGEMENT SERVICES
Registrant is not a party to any management-related service contract,
other than as set forth in the Prospectus or Statement of Additional
Information.
ITEM 30. UNDERTAKINGS
(a) Not applicable
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant certifies
that it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Baltimore, State of Maryland, this
April 24, 2000.
T. Rowe Price International Series, Inc.
/s/Martin G. Wade
By: Martin G. Wade
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/s/Martin G. Wade Chairman of the Board April 24, 2000
Martin G. Wade (Chief Executive Officer)
/s/Joseph A. Carrier Treasurer (Chief April 24, 2000
Joseph A. Carrier Financial Officer)
/s/M. David Testa Director and April 24, 2000
M. David Testa Vice President
* Director April 24, 2000
Anthony W. Deering
* Director April 24, 2000
Donald W. Dick, Jr.
* Director April 24, 2000
Paul M. Wythes
/s/Henry H. Hopkins Attorney-In-Fact April 24, 2000
Henry H. Hopkins
BY-LAWS
OF
T. ROWE PRICE INTERNATIONAL SERIES, INC.
AS AMENDED:
JULY 21, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I. NAME OF CORPORATION, LOCATION OF OFFICES AND
SEAL 1
1.01.Name 1
1.02.Principal Office 1
1.03.Seal 1
ARTICLE II. SHAREHOLDERS 1
2.01.Annual Meetings 1
2.02.Special Meetings 2
2.03.Place of Meetings 2
2.04.Notice of Meetings 2
2.05.Voting - In General 3
2.06.Shareholders Entitled to Vote 3
2.07.Voting - Proxies 3
2.08.Quorum 4
2.09.Absence of Quorum 4
2.10.Stock Ledger and List of Shareholders 4
2.11.Informal Action by Shareholders 4
ARTICLE III. BOARD OF DIRECTORS 4
3.01.Number and Term of Office 4
3.02.Qualification of Directors 5
3.03.Election of Directors 5
3.04.Removal of Directors 5
3.05.Vacancies and Newly Created Directorships5
3.06.General Powers 5
3.07.Power to Issue and Sell Stock 6
3.08.Power to Declare Dividends 6
3.09.Annual and Regular Meetings 7
3.10.Special Meetings 7
3.11.Notice 7
3.12.Waiver of Notice 7
3.13.Quorum and Voting 7
3.14.Conference Telephone 7
<PAGE>
3.15.Compensation 7
3.16.Action Without a Meeting 8
3.17.Director Emeritus 8
ARTICLE IV. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 8
4.01.How Constituted 8
4.02.Powers of the Executive Committee 8
4.03.Other Committees of the Board of Directors9
4.04.Proceedings, Quorum and Manner of Acting 9
4.05.Other Committees 9
ARTICLE V. OFFICERS 9
5.01.General 9
5.02.Election, Term of Office and Qualifications9
5.03.Resignation 10
5.04.Removal 10
5.05.Vacancies and Newly Created Offices 10
5.06.Chairman of the Board 10
5.07.President 10
5.08.Vice President 10
5.09.Treasurer and Assistant Treasurers 11
5.10.Secretary and Assistant Secretaries 11
5.11.Subordinate Officers 11
5.12.Remuneration 12
5.13.Surety Bond 12
ARTICLE VI. CUSTODY OF SECURITIES AND CASH 12
6.01.Employment of a Custodian 12
6.02.Central Certificate Service 12
6.03.Cash Assets 12
6.04.Free Cash Accounts 13
6.05.Action Upon Termination of Custodian Agreement 13
6.06.Other Arrangements 13
ARTICLE VII. EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES 13
7.01.Execution of Instruments 13
7.02.Voting of Securities 13
<PAGE>
ARTICLE VIII. CAPITAL STOCK 14
8.01.Ownership of Shares 14
8.02.Transfer of Capital Stock 14
8.03.Transfer Agents and Registrars 14
8.04.Transfer Regulations 14
8.05.Fixing of Record Date 14
ARTICLE IX. FISCAL YEAR, ACCOUNTANT 15
9.01.Fiscal Year 15
9.02.Accountant 15
ARTICLE X. INDEMNIFICATION AND INSURANCE 16
10.01.Indemnification and Payment of Expenses in Advance 16
10.02.Insurance of Officers, Directors, Employees and Agents 17
10.03. Amendment 17
ARTICLE XI. AMENDMENTS 17
11.01. General 17
11.02. By Shareholders Only 18
ARTICLE XII. MISCELLANEOUS 18
12.01Use of the Term "Annual Meeting" 18
<PAGE>
T. ROWE PRICE INTERNATIONAL SERIES, INC.
(A Maryland Corporation)
BY-LAWS
ARTICLE I
---------
NAME OF CORPORATION,
LOCATION OF OFFICES AND SEAL
----------------------------
Section 1.01. NAME: The name of the Corporation is T. ROWE PRICE
----
INTERNATIONAL SERIES, INC.
Section 1.02. PRINCIPAL OFFICE: The principal office of the Corporation in
----------------
the State of Maryland shall be located in the City of Baltimore. The Corporation
may, in addition, establish and maintain such other offices and places of
business, within or outside the State of Maryland, as the Board of Directors may
from time to time determine. [ MGCL, Sections 2-103(4), 2-108(a)(1) ]*
Section 1.03. SEAL: The corporate seal of the Corporation shall be circular
----
in form, and shall bear the name of the Corporation, the year of its
incorporation, and the words "Corporate Seal, Maryland." The form of the seal
shall be subject to alteration by the Board of Directors and the seal may be
used by causing it or a facsimile to be impressed or affixed or printed or
otherwise reproduced. In lieu of affixing the corporate seal to any document it
shall be sufficient to meet the requirements of any law, rule, or regulation
relating to a corporate seal to affix the word "(Seal)" adjacent to the
signature of the authorized officer of the Corporation. Any officer or Director
of the Corporation shall have authority to affix the corporate seal of the
Corporation to any document requiring the same. [ MGCL, Sections 1-304(b),
2-103(3) ]
ARTICLE II
----------
SHAREHOLDERS
------------
Section 2.01. ANNUAL MEETINGS: The Corporation shall not be required to
---------------
hold an annual meeting of its shareholders in any year unless the Investment
Company Act of 1940 requires an election of directors by shareholders. In the
event that the Corporation shall be so required to hold an annual meeting, such
meeting shall be held at a date and time set by the Board of Directors, which
date shall be no later than 120 days after the occurrence of the event requiring
the meeting. Any
- -------------------------
* Bracketed citations are to the General Corporation Law of the State of
Maryland ("MGCL") or to the United States Investment Company Act of 1940, as
amended (the "Investment Company Act"), or to Rules of the United States
Securities and Exchange Commission thereunder ("SEC Rules"). The citations are
inserted for reference only and do not constitute a part of the By-Laws.
<PAGE>
shareholders' meeting held in accordance with the preceding sentence shall for
all purposes constitute the annual meeting of shareholders for the fiscal year
of the corporation in which the meeting is held. At any such meeting, the
shareholders shall elect directors to hold the offices of any directors who have
held office for more than one year or who have been elected by the Board of
Directors to fill vacancies which result from any cause. Except as the Articles
of Incorporation or statute provides otherwise, Directors may transact any
business within the powers of the Corporation as may properly come before the
meeting. Any business of the Corporation may be transacted at the annual meeting
without being specially designated in the notice, except such business as is
specifically required by statute to be stated in the notice. [ MGCL, Section
2-501 ]
Section 2.02. SPECIAL MEETINGS: Special meetings of the shareholders may be
----------------
called at any time by the Chairman of the Board, the President, any Vice
President, or by the Board of Directors. Special meetings of the shareholders
shall be called by the Secretary on the written request of shareholders entitled
to cast at least ten (10) percent of all the votes entitled to be cast at such
meeting, provided that (a) such request shall state the purpose or purposes of
the meeting and the matters proposed to be acted on, and (b) the shareholders
requesting the meeting shall have paid to the Corporation the reasonably
estimated cost of preparing and mailing the notice thereof, which the Secretary
shall determine and specify to such shareholders. Unless requested by
shareholders entitled to cast a majority of all the votes entitled to be cast at
the meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted upon at any special meeting of the
shareholders held during the preceding twelve (12) months. [ MGCL, Section 2-502
]
Section 2.03. PLACE OF MEETINGS: All shareholders' meetings shall be held
-----------------
at such place within the United States as may be fixed from time to time by the
Board of Directors. [ MGCL, Section 2-503 ]
Section 2.04. NOTICE OF MEETINGS: Not less than ten (10) days, nor more
------------------
than ninety (90) days before each shareholders' meeting, the Secretary or an
Assistant Secretary of the Corporation shall give to each shareholder entitled
to vote at the meeting, and each other shareholder entitled to notice of the
meeting, written notice stating (1) the time and place of the meeting, and (2)
the purpose or purposes of the meeting if the meeting is a special meeting or if
notice of the purpose is required by statute to be given. Such notice shall be
personally delivered to the shareholder, or left at his residence or usual place
of business, or mailed to him at this address or transmitted to the shareholder
by electronic mail to any electronic mail address of the shareholder or by any
other electronic means in all cases as such address appears on the records of
the Corporation. No notice of a shareholders' meeting need be given to any
shareholder who shall sign a written waiver of such notice, whether before or
after the meeting, which is filed with the records of shareholders' meetings, or
to any shareholder who is present at the meeting in person or by proxy. Notice
of adjournment of a shareholders' meeting to another time or place need not be
given if such time and place are announced at the meeting, unless the
adjournment is for more than one hundred twenty (120) days after the original
record date. [ MGCL, Sections 2-504, 2-511(d) ]
(Section 2.04. Notice of Meetings, as amended July 21, 1999)
------------------
Section 2.05. VOTING - IN GENERAL: Except as otherwise specifically
-------------------
provided in the Articles of Incorporation or these By-Laws, or as required by
provisions of the Investment Company
<PAGE>
Act with respect to the vote of a series, if any, of the Corporation, at every
shareholders' meeting, each shareholder shall be entitled to one vote for each
share of stock of the Corporation validly issued and outstanding and held by
such shareholder, except that no shares held by the Corporation shall be
entitled to a vote. Fractional shares shall be entitled to fractional votes.
Except as otherwise specifically provided in the Articles of Incorporation, or
these By-Laws, or as required by provisions of the Investment Company Act, a
majority of all the votes cast at a meeting at which a quorum is present is
sufficient to approve any matter which properly comes before the meeting. The
vote upon any question shall be by ballot whenever requested by any person
entitled to vote, but, unless such a request is made, voting may be conducted in
any way approved by the meeting. [ MGCL, Sections 2-214(a)(i), 2-506(a)(2),
2-507(a), 2-509(b) ]
At any meeting at which there is an election of Directors, the Chairman of
the meeting may, and upon the request of the holders of ten (10) percent of the
stock entitled to vote at such election shall, appoint two inspectors of
election who shall first subscribe an oath or affirmation to execute faithfully
the duties of inspectors at such election with strict impartiality and according
to the best of their ability, and shall, after the election, make a certificate
of the result of the vote taken. No candidate for the office of Director shall
be appointed as an inspector.
Section 2.06. SHAREHOLDERS ENTITLED TO VOTE: If, pursuant to Section 8.05
-----------------------------
hereof, a record date has been fixed for the determination of shareholders
entitled to notice of or to vote at any shareholders' meeting, each shareholder
of the Corporation shall be entitled to vote in person or by proxy, each share
or fraction of a share of stock outstanding in his name on the books of the
Corporation on such record date. If no record date has been fixed for the
determination of shareholders, the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day on which notice of the meeting is mailed
or the 30th day before the meeting, whichever is the closer date to the meeting,
or, if notice is waived by all shareholders, at the close of business on the
tenth (10th) day next preceding the date of the meeting. [ MGCL, Sections 2-507,
2-511 ]
Section 2.07. VOTING - PROXIES: A shareholder may authorize another person
----------------
to act as proxy for the shareholder by: (i) signing a writing authorizing
another person to act as proxy, (ii) the shareholder's authorized agent signing
the writing or causing the shareholder's signature to be affixed to the writing
by any reasonable means, including facsimile signature, or (iii) transmitting,
or authorizing the transmission of, an authorization for the person to act as
proxy to the person authorized to act as proxy or any other person authorized to
receive the proxy authorization on behalf of the person authorized to act as the
proxy, including a proxy solicitation firm or proxy support service
organization. The authorization may be transmitted by a telegram, cablegram,
datagram, electronic mail, or any other electronic or telephonic means. A copy,
facsimile telecommunication, or other reliable reproduction of the writing or
transmission may be substituted for the original writing or transmission for any
purpose for which the original writing or transmission could be used. No proxy
shall be valid more than eleven (11) months after its date unless it provides
for a longer period. [ MGCL, Section 2-507(b) and (c) ]
(Section 2.07. Voting - Proxies, as amended July 21, 1999)
----------------
<PAGE>
Section 2.08. QUORUM: The presence at any shareholders' meeting, in person
------
or by proxy, of shareholders entitled to cast a majority of the votes entitled
to be cast at the meeting shall constitute a quorum. [ MGCL, Section 2-506(a) ]
Section 2.09. ABSENCE OF QUORUM: In the absence of a quorum, the holders of
-----------------
a majority of shares entitled to vote at the meeting and present thereat in
person or by proxy, or, if no shareholder entitled to vote is present in person
or by proxy, any officer present who is entitled to preside at or act as
Secretary of such meeting, may adjourn the meeting sine die or from time to
--------
time. Any business that might have been transacted at the meeting originally
called may be transacted at any such adjourned meeting at which a quorum is
present.
Section 2.10. STOCK LEDGER AND LIST OF SHAREHOLDERS: It shall be the duty
-------------------------------------
of the Secretary or Assistant Secretary of the Corporation to cause an original
or duplicate stock ledger to be maintained at the office of the Corporation's
transfer agent, containing the names and addresses of all shareholders and the
number of shares of each class held by each shareholder. Such stock ledger may
be in written form, or any other form capable of being converted into written
form within a reasonable time for visual inspection. Any one or more persons,
who together are and for at least six (6) months have been shareholders of
record of at least five percent (5%) of the outstanding capital stock of the
Corporation, may submit (unless the Corporation at the time of the request
maintains a duplicate stock ledger at its principal office) a written request to
any officer of the Corporation or its resident agent in Maryland for a list of
the shareholders of the Corporation. Within twenty (20) days after such a
request, there shall be prepared and filed at the Corporation's principal office
a list, verified under oath by an officer of the Corporation or by its stock
transfer agent or registrar, which sets forth the name and address of each
shareholder and the number of shares of each class which the shareholder holds.
[ MGCL, Sections 2-209, 2-513 ]
Section 2.11. INFORMAL ACTION BY SHAREHOLDERS: Any action required or
-------------------------------
permitted to be taken at a meeting of shareholders may be taken without a
meeting if the following are filed with the records of shareholders' meetings:
(a)
A unanimous written consent which sets forth the action and is signed by each
shareholder entitled to vote on the matter; and
(b)
A written waiver of any right to dissent signed by each shareholder entitled to
notice of the meeting, but not entitled to vote at it.
[ MGCL, Section 2-505 ]
ARTICLE III
-----------
BOARD OF DIRECTORS
------------------
Section 3.01. NUMBER AND TERM OF OFFICE: The Board of Directors shall
-------------------------
consist of one (1) Director, which number may be increased by a resolution of a
majority of the entire Board of Directors, provided that the number of Directors
shall not be more than fifteen (15) nor less than the
<PAGE>
lesser of (i) three (3) or (ii) the number of shareholders of the Corporation.
Each Director (whenever elected) shall hold office until the next annual meeting
of shareholders and until his successor is elected and qualifies or until his
earlier death, resignation, or removal. [ MGCL, Sections 2-402, 2-404, 2-405 ]
Section 3.02. QUALIFICATION OF DIRECTORS: No member of the Board of
--------------------------
Directors need be a shareholder of the Corporation, but at least one member of
the Board of Directors shall be a person who is not an interested person (as
such term is defined in the Investment Company Act) of the investment adviser of
the Corporation, nor an officer or employee of the Corporation. [ MGCL, Section
2-403; Investment Company Act, Section 10(d) ]
Section 3.03. ELECTION OF DIRECTORS: Until the first annual meeting of
---------------------
shareholders, or until successors are duly elected and qualified, the Board of
Directors shall consist of the persons named as such in the Articles of
Incorporation. Thereafter, except as otherwise provided in Sections 3.04 and
3.05 hereof, at each annual meeting, the shareholders shall elect Directors to
hold office until the next annual meeting and/or until their successors are
elected and qualify. In the event that Directors are not elected at an annual
shareholders' meeting, then Directors may be elected at a special shareholders'
meeting. Directors shall be elected by vote of the holders of a plurality of the
shares present in person or by proxy and entitled to vote. [ MGCL, Section 2-404
]
Section 3.04. REMOVAL OF DIRECTORS: At any meeting of shareholders, duly
--------------------
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any Director or Directors from office, either with or without
cause, and may elect a successor or successors to fill any resulting vacancies
for the unexpired terms of removed Directors. [ MGCL, Sections 2-406, 2-407 ]
Section 3.05. VACANCIES AND NEWLY CREATED DIRECTORSHIPS: If any vacancies
-----------------------------------------
occur in the Board of Directors by reason of resignation, removal or otherwise,
or if the authorized number of Directors is increased, the Directors then in
office shall continue to act, and such vacancies (if not previously filled by
the shareholders) may be filled by a majority of the Directors then in office,
whether or not sufficient to constitute a quorum, provided that, immediately
after filling such vacancy, at least two-thirds of the Directors then holding
office shall have been elected to such office by the shareholders of the
Corporation. In the event that at any time, other than the time preceding the
first meeting of shareholders, less than a majority of the Directors of the
Corporation holding office at that time were so elected by the shareholders, a
meeting of the shareholders shall be held promptly and in any event within sixty
(60) days for the purpose of electing Directors to fill any existing vacancies
in the Board of Directors unless the Securities and Exchange Commission shall by
order extend such period. Except as provided in Section 3.04 hereof, a Director
elected by the Board of Directors to fill a vacancy shall be elected to hold
office until the next annual meeting of shareholders or until his successor is
elected and qualifies. [ MGCL, Section 2-407; Investment Company Act, Section
16(a) ]
Section 3.06. GENERAL POWERS:
--------------
(a)
The property, business, and affairs of the Corporation shall be managed under
the direction of the Board of Directors which may exercise all the powers of the
Corporation except
<PAGE>
such as are by law, by the Articles of Incorporation, or by these By-Laws
conferred upon or reserved to the shareholders of the Corporation. [ MGCL,
Section 2-401 ]
(b)
All acts done by any meeting of the Directors or by any person acting as a
Director, so long as his successor shall not have been duly elected or
appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the Directors or such person acting as a
Director or that they or any of them were disqualified, be as valid as if the
Directors or such person, as the case may be, had been duly elected and were or
was qualified to be Directors or a Director of the Corporation.
Section 3.07. POWER TO ISSUE AND SELL STOCK: The Board of Directors may
-----------------------------
from time to time authorize by resolution the issuance and sale of any of the
Corporation's authorized shares to such persons as the Board of Directors shall
deem advisable and such resolution shall set the minimum price or value of
consideration for the stock or a formula for its determination, and shall
include a fair description of any consideration other than money and a statement
of the actual value of such consideration as determined by the Board of
Directors or a statement that the Board of Directors has determined that the
actual value is or will be not less than a certain sum. [ MGCL, Section 2-203 ]
Section 3.08. POWER TO DECLARE DIVIDENDS:
--------------------------
(a)
The Board of Directors, from time to time as it may deem advisable, may declare
and the Corporation pay dividends, in cash, property, or shares of the
Corporation available for dividends out of any source available for dividends,
to the shareholders according to their respective rights and interests. [ MGCL,
Section 2-309 ]
(b)
The Board of Directors shall cause to be accompanied by a written statement any
dividend payment wholly or partly from any source other than the Corporation's
accumulated undistributed net income (determined in accordance with good
accounting practice and the rules and regulations of the Securities and Exchange
Commission then in effect) not including profits or losses realized upon the
sale of securities or other properties. Such statement shall adequately disclose
the source or sources of such payment and the basis of calculation and shall be
otherwise in such form as the Securities and Exchange Commission may prescribe.
[ Investment Company Act, Section 19; SEC Rule 19a-1; MGCL, Section 2-309(c) ]
(c)
Notwithstanding the above provisions of this Section 3.08, the Board of
Directors may at any time declare and distribute pro rata among the shareholders
a stock dividend out of the Corporation's authorized but unissued shares of
stock, including any shares previously purchased by the Corporation, provided
--------
that such dividend shall not be distributed in shares of any class with respect
to any shares of a different class. The shares so distributed shall be issued at
the par value thereof, and there shall be transferred to stated capital, at the
time such dividend is paid, an amount of surplus equal to the aggregate par
value of the shares issued as a dividend and there may be transferred from
earned surplus to capital surplus such additional amount as the Board of
Directors may determine. [ MGCL, Section 2-309 ]
Section 3.09. ANNUAL AND REGULAR MEETINGS: The annual meeting of the Board
---------------------------
of Directors for choosing officers and transacting other proper business shall
be held after the annual
<PAGE>
shareholders' meeting at such time and place as may be specified in the notice
of such meeting of the Board of Directors or, in the absence of such annual
shareholders' meeting, at such time and place as the Board of Directors may
provide. The Board of Directors from time to time may provide by resolution for
the holding of regular meetings and fix their time and place (within or outside
the State of Maryland). [ MGCL, Section 2-409(a) ]
Section 3.10. SPECIAL MEETINGS: Special meetings of the Board of Directors
----------------
shall be held whenever called by the Chairman of the Board, the President (or,
in the absence or disability of the President, by any Vice President), the
Treasurer, or two or more Directors, at the time and place (within or outside
the State of Maryland) specified in the respective notices or waivers of notice
of such meetings.
Section 3.11. NOTICE: Notice of annual, regular, and special meetings shall
------
be in writing, stating the time and place, and shall be mailed to each Director
at his residence or regular place of business or caused to be delivered to him
personally or to be transmitted to him by telegraph, cable, or wireless at least
two (2) days before the day on which the meeting is to be held. Except as
otherwise required by the By-Laws or the Investment Company Act, such notice
need not include a statement of the business to be transacted at, or the purpose
of, the meeting. [ MGCL, Section 2-409(b) ]
Section 3.12. WAIVER OF NOTICE: No notice of any meeting need be given to
----------------
any Director who is present at the meeting or to any Director who signs a waiver
of the notice of the meeting (which waiver shall be filed with the records of
the meeting), whether before or after the meeting. [ MGCL, Section 2-409(c) ]
Section 3.13. QUORUM AND VOTING: At all meetings of the Board of Directors
-----------------
the presence of one-third of the total number of Directors authorized, but not
less than two (2) Directors if there are at least two directors, shall
constitute a quorum. In the absence of a quorum, a majority of the Directors
present may adjourn the meeting, from time to time, until a quorum shall be
present. The action of a majority of the Directors present at a meeting at which
a quorum is present shall be the action of the Board of Directors unless the
concurrence of a greater proportion is required for such action by law, by the
Articles of Incorporation or by these By-Laws. [ MGCL, Section 2-408 ]
Section 3.14. CONFERENCE TELEPHONE: Members of the Board of Directors or of
--------------------
any committee designated by the Board, may participate in a meeting of the Board
or of such committee by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time, and participation by such means shall constitute
presence in person at such meeting. [ MGCL, Section 2-409(d) ]
Section 3.15. COMPENSATION: Each Director may receive such remuneration for
------------
his services as shall be fixed from time to time by resolution of the Board of
Directors.
Section 3.16. ACTION WITHOUT A MEETING: Except as otherwise provided under
------------------------
the Investment Company Act, any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken without
a meeting if a unanimous written consent which sets forth the action is signed
by all members of the Board or of such committee and
<PAGE>
such written consent is filed with the minutes of proceedings of the Board or
committee. [ MGCL, Section 2-408(c) ]
Section 3.17. DIRECTOR EMERITUS: Upon the retirement of a Director of the
-----------------
Corporation, the Board of Directors may designate such retired Director as a
Director Emeritus. The position of Director Emeritus shall be honorary only and
shall not confer upon such Director Emeritus any responsibility, or voting
authority, whatsoever with respect to the Corporation. A Director Emeritus may,
but shall not be required to, attend the meetings of the Board of Directors and
receive materials normally provided Directors relating to the Corporation. The
Board of Directors may establish such compensation as it may deem appropriate
under the circumstances to be paid by the Corporation to a Director Emeritus.
ARTICLE IV
----------
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
----------------------------------------
Section 4.01. HOW CONSTITUTED: By resolution adopted by the Board of
---------------
Directors, the Board may appoint from among its members one or more committees,
including an Executive Committee, each consisting of at least two (2) Directors.
Each member of a committee shall hold office during the pleasure of the Board. [
MGCL, Section 2-411 ]
Section 4.02. POWERS OF THE EXECUTIVE COMMITTEE: Unless otherwise provided
---------------------------------
by resolution of the Board of Directors, the Executive Committee, in the
intervals between meetings of the Board of Directors, shall have and may
exercise all of the powers of the Board of Directors to manage the business and
affairs of the Corporation except the power to:
(a) Declare dividends or distributions on stock;
(b)
Issue stock other than as provided in Section 2-411(b) of Corporations and
------------ ---
Associations Article of the Annotated Code of Maryland;
- --------------------
(c)
Recommend to the shareholders any action which requires shareholder approval;
(d) Amend the By-Laws; or
(e)
Approve any merger or share exchange which does not require shareholder
approval.
[ MGCL, Section 2-411(a) ]
Section 4.03. OTHER COMMITTEES OF THE BOARD OF DIRECTORS: To the extent
------------------------------------------
provided by resolution of the Board, other committees shall have and may
exercise any of the powers that may lawfully be granted to the Executive
Committee. [ MGCL, Section 2-411(a) ]
<PAGE>
Section 4.04. PROCEEDINGS, QUORUM, AND MANNER OF ACTING: In the absence of
-----------------------------------------
appropriate resolution of the Board of Directors, each committee may adopt such
rules and regulations governing its proceedings, quorum and manner of acting as
it shall deem proper and desirable, provided that the quorum shall not be less
than two (2) Directors. In the absence of any member of any such committee, the
members thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the Board of Directors to act in the place of such
absent member. [ MGCL, Section 2-411(c) ]
Section 4.05. OTHER COMMITTEES: The Board of Directors may appoint other
----------------
committees, each consisting of one or more persons who need not be Directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Board of Directors, but shall not
exercise any power which may lawfully be exercised only by the Board of
Directors or a committee thereof.
ARTICLE V
---------
OFFICERS
--------
Section 5.01. GENERAL: The officers of the Corporation shall be a
-------
President, one or more Vice Presidents (one or more of whom may be designated
Executive Vice President), a Secretary, and a Treasurer, and may include one or
more Assistant Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 5.11 hereof. The Board of Directors may elect,
but shall not be required to elect, a Chairman of the Board. [ MGCL, Section
2-412 ]
Section 5.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS: The officers of
-------------------------------------------
the Corporation (except those appointed pursuant to Section 5.11 hereof) shall
be elected by the Board of Directors at its first meeting and thereafter at each
annual meeting of the Board. If any officer or officers are not elected at any
such meeting, such officer or officers may be elected at any subsequent regular
or special meeting of the Board. Except as provided in Sections 5.03, 5.04, and
5.05 hereof, each officer elected by the Board of Directors shall hold office
until the next annual meeting of the Board of Directors and until his successor
shall have been chosen and qualified. Any person may hold two or more offices of
the Corporation, except that neither the Chairman of the Board, nor the
President, may hold the office of Vice President, but no person shall execute,
acknowledge, or verify any instrument in more than one capacity if such
instrument is required by law, the Articles of Incorporation, or these By-Laws
to be executed, acknowledged, or verified by two or more officers. The Chairman
of the Board shall be selected from among the Directors of the Corporation and
may hold such office only so long as he continues to be a Director. No other
officer need be a Director. [ MGCL, Sections 2-412, 2-413 and 2-415 ]
Section 5.03. RESIGNATION: Any officer may resign his office at any time by
-----------
delivering a written resignation to the Board of Directors, the President, the
Secretary, or any Assistant Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
<PAGE>
Section 5.04. REMOVAL: Any officer may be removed from office by the Board
-------
of Directors whenever in the judgment of the Board of Directors the best
interests of the Corporation will be served thereby. [ MGCL, Section 2-413(c) ]
Section 5.05 VACANCIES AND NEWLY CREATED OFFICES: If any vacancy shall
-----------------------------------
occur in any office by reason of death, resignation, removal, disqualification
or other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Board of Directors at any meeting or, in
the case of any office created pursuant to Section 5.11 hereof, by any officer
upon whom such power shall have been conferred by the Board of Directors. [
MGCL, Section 2-413(d) ]
Section 5.06. CHAIRMAN OF THE BOARD: Unless otherwise provided by
---------------------
resolution of the Board of Directors, the Chairman of the Board, if there be
such an officer, shall be the chief executive and operating officer of the
Corporation, shall preside at all shareholders' meetings, and at all meetings of
the Board of Directors. He shall be ex officio a member of all standing
----------
committees of the Board of Directors. Subject to the supervision of the Board of
Directors, he shall have general charge of the business, affairs, property, and
operation of the Corporation and its officers, employees, and agents. He may
sign (unless the President or a Vice President shall have signed) certificates
representing stock of the Corporation authorized for issuance by the Board of
Directors and shall have such other powers and perform such other duties as may
be assigned to him from time to time by the Board of Directors.
Section 5.07. PRESIDENT: Unless otherwise provided by resolution of the
---------
Board of Directors, the President shall, at the request of or in the absence or
disability of the Chairman of the Board, or if no Chairman of the Board has been
chosen, he shall preside at all shareholders' meetings and at all meetings of
the Board of Directors and shall in general exercise the powers and perform the
duties of the Chairman of the Board. He may sign (unless the Chairman or a Vice
President shall have signed) certificates representing stock of the Corporation
authorized for issuance by the Board of Directors. Except as the Board of
Directors may otherwise order, he may sign in the name and on behalf of the
Corporation all deeds, bonds, contracts, or agreements. He shall exercise such
other powers and perform such other duties as from time to time may be assigned
to him by the Board of Directors.
Section 5.08. VICE PRESIDENT: The Board of Directors shall, from time to
--------------
time, designate and elect one or more Vice Presidents (one or more of whom may
be designated Executive Vice President) who shall have such powers and perform
such duties as from time to time may be assigned to them by the Board of
Directors or the President. At the request or in the absence or disability of
the President, the Vice President (or, if there are two or more Vice Presidents,
the Vice President in order of seniority of tenure in such office or in such
other order as the Board of Directors may determine) may perform all the duties
of the President and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Any Vice President may sign
(unless the Chairman, the President, or another Vice President shall have
signed) certificates representing stock of the Corporation authorized for
issuance by the Board of Directors.
Section 5.09. TREASURER AND ASSISTANT TREASURERS: The Treasurer shall be
----------------------------------
the principal financial and accounting officer of the Corporation and shall have
general charge of the finances and books of account of the Corporation. Except
as otherwise provided by the Board of Directors, he shall have general
supervision of the funds and property of the Corporation and of the performance
<PAGE>
by the custodian of its duties with respect thereto. He may countersign (unless
an Assistant Treasurer or Secretary or Assistant Secretary shall have
countersigned) certificates representing stock of the Corporation authorized for
issuance by the Board of Directors. He shall render to the Board of Directors,
whenever directed by the Board, an account of the financial condition of the
Corporation and of all his transactions as Treasurer; and as soon as possible
after the close of each fiscal year he shall make and submit to the Board of
Directors a like report for such fiscal year. He shall cause to be prepared
annually a full and correct statement of the affairs of the Corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year, which shall be submitted at the annual meeting of
shareholders and filed within twenty (20) days thereafter at the principal
office of the Corporation. He shall perform all the acts incidental to the
office of the Treasurer, subject to the control of the Board of Directors. Any
Assistant Treasurer may perform such duties of the Treasurer as the Treasurer or
the Board of Directors may assign, and, in the absence of the Treasurer, he may
perform all the duties of the Treasurer.
Section 5.10. SECRETARY AND ASSISTANT SECRETARIES: The Secretary shall
-----------------------------------
attend to the giving and serving of all notices of the Corporation and shall
record all proceedings of the meetings of the shareholders and Directors in one
or more books to be kept for that purpose. He shall keep in safe custody the
seal of the Corporation and shall have charge of the records of the Corporation,
including the stock books and such other books and papers as the Board of
Directors may direct and such books, reports, certificates and other documents
required by law to be kept, all of which shall at all reasonable times be open
to inspection by any Director. He shall countersign (unless the Treasurer, an
Assistant Treasurer or an Assistant Secretary shall have countersigned)
certificates representing stock of the Corporation authorized for issuance by
the Board of Directors. He shall perform such other duties as appertain to his
office or as may be required by the Board of Directors. Any Assistant Secretary
may perform such duties of the Secretary as the Secretary or the Board of
Directors may assign, and, in the absence of the Secretary, he may perform all
the duties of the Secretary.
Section 5.11. SUBORDINATE OFFICERS: The Board of Directors from time to
--------------------
time may appoint such other officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such period, have such authority and
perform such duties as the Board of Directors may determine. The Board of
Directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities, and duties. Any officer or
agent appointed in accordance with the provisions of this Section 5.11 may be
removed, either with or without cause, by any officer upon whom such power of
removal shall have been conferred by the Board of Directors. [ MGCL, Section
2-412(b) ]
Section 5.12. REMUNERATION: The salaries or other compensation of the
------------
officers of the Corporation shall be fixed from time to time by resolution of
the Board of Directors, except that the Board of Directors may by resolution
delegate to any person or group of persons the power to fix the salaries or
other compensation of any subordinate officers or agents appointed in accordance
with the provisions of Section 5.11 hereof.
Section 5.13. SURETY BOND: The Board of Directors may require any officer
-----------
or agent of the Corporation to execute a bond (including, without limitation,
any bond required by the Investment Company Act and the rules and regulations of
the Securities and Exchange Commission
<PAGE>
promulgated thereunder) to the Corporation in such sum and with such surety or
sureties as the Board of Directors may determine, conditioned upon the faithful
performance of his or her duties to the Corporation, including responsibility
for negligence and for the accounting for any of the Corporation's property,
funds or securities that may come into his or her hands.
ARTICLE VI
----------
CUSTODY OF SECURITIES AND CASH
------------------------------
Section 6.01. EMPLOYMENT OF A CUSTODIAN: The Corporation shall place and at
-------------------------
all times maintain in the custody of a Custodian (including any sub-custodian
for the Custodian) all funds, securities, and similar investments owned by the
Corporation. The Custodian shall be a bank having an aggregate capital, surplus,
and undivided profits of not less than $10,000,000. Subject to such rules,
regulations, and orders as the Securities and Exchange Commission may adopt as
necessary or appropriate for the protection of investors, the Corporation's
Custodian may deposit all or a part of the securities owned by the Corporation
in a sub-custodian or sub-custodians situated within or without the United
States. The Custodian shall be appointed and its remuneration fixed by the Board
of Directors. [ Investment Company Act, Section 17(f) ]
Section 6.02. CENTRAL CERTIFICATE SERVICE: Subject to such rules,
---------------------------
regulations, and orders as the Securities and Exchange Commission may adopt as
necessary or appropriate for the protection of investors, the Corporation's
Custodian may deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, pursuant to which system all securities of
any particular class or series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities. [ Investment Company Act, Section
17(f) ]
Section 6.03. CASH ASSETS: The cash proceeds from the sale of securities
-----------
and similar investments and other cash assets of the Corporation shall be kept
in the custody of a bank or banks appointed pursuant to Section 6.01 hereof, or
in accordance with such rules and regulations or orders as the Securities and
Exchange Commission may from time to time prescribe for the protection of
investors, except that the Corporation may maintain a checking account or
accounts in a bank or banks, each having an aggregate capital, surplus, and
undivided profits of not less than $10,000,000, provided that the balance of
--------
such account or the aggregate balances of such accounts shall at no time exceed
the amount of the fidelity bond, maintained pursuant to the requirements of the
Investment Company Act and rules and regulations thereunder, covering the
officers or employees authorized to draw on such account or accounts. [
Investment Company Act, Section 17(f) ]
Section 6.04. FREE CASH ACCOUNTS: The Corporation may, upon resolution of
------------------
its Board of Directors, maintain a petty cash account free of the foregoing
requirements of this Article VI in an amount not to exceed $500, provided that
--------
such account is operated under the imprest system and is maintained subject to
adequate controls approved by the Board of Directors over disbursements
<PAGE>
and reimbursements including, but not limited to, fidelity bond coverage for
persons having access to such funds. [ Investment Company Act, Rule 17f-3 ]
Section 6.05. ACTION UPON TERMINATION OF CUSTODIAN AGREEMENT: Upon
----------------------------------------------
resignation of a custodian of the Corporation or inability of a custodian to
continue to serve, the Board of Directors shall promptly appoint a successor
custodian, but in the event that no successor custodian can be found who has the
required qualifications and is willing to serve, the Board of Directors shall
call as promptly as possible a special meeting of the shareholders to determine
whether the Corporation shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a majority of the
outstanding shares of stock of the Corporation, the custodian shall deliver and
pay over all property of the Corporation held by it as specified in such vote.
Section 6.06. OTHER ARRANGEMENTS: The Corporation may make such other
------------------
arrangements for the custody of its assets (including deposit arrangements) as
may be required by any applicable law, rule or regulation.
ARTICLE VII
-----------
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES
----------------------------------------------
Section 7.01. EXECUTION OF INSTRUMENTS: All deeds, documents, transfers,
------------------------
contracts, agreements, requisitions or orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Corporation, and
other instruments requiring execution by the Corporation shall be signed by the
Chairman, the President, a Vice President, or the Treasurer, or as the Board of
Directors may otherwise, from time to time, authorize. Any such authorization
may be general or confined to specific instances.
Section 7.02. VOTING OF SECURITIES: Unless otherwise ordered by the Board
--------------------
of Directors, the Chairman, the President, or any Vice President shall have full
power and authority on behalf of the Corporation to attend and to act and to
vote, or in the name of the Corporation to execute proxies to vote, at any
meeting of shareholders of any company in which the Corporation may hold stock.
At any such meeting such officer shall possess and may exercise (in person or by
proxy) any and all rights, powers, and privileges incident to the ownership of
such stock. The Board of Directors may by resolution from time to time confer
like powers upon any other person or persons. [ MGCL, Section 2-509 ]
ARTICLE VIII
------------
CAPITAL STOCK
-------------
Section 8.01. OWNERSHIP OF SHARES:
-------------------
(a)
Certificates certifying the ownership of shares will not be issued for shares
purchased or otherwise acquired. The ownership of shares, full or fractional,
shall be recorded on
<PAGE>
the books of the Corporation or its agent. The record books of the Corporation
as kept by the Corporation or its agent, as the case may be, shall be conclusive
as to the number of shares held from time to time by each such shareholder.
Section 8.02. TRANSFER OF CAPITAL STOCK:
-------------------------
(a)
Shares of stock of the Corporation shall be transferable only upon the books of
the Corporation kept for such purpose.
(b)
The Corporation shall be entitled to treat the holder of record of any share of
stock as the absolute owner thereof for all purposes, and accordingly shall not
be bound to recognize any legal, equitable, or other claim or interest in such
share on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by the statutes of
the State of Maryland.
Section 8.03. TRANSFER AGENTS AND REGISTRARS: The Board of Directors may,
------------------------------
from time to time, appoint or remove transfer agents and registrars of transfers
of shares of stock of the Corporation, and it may appoint the same person as
both transfer agent and registrar.
Section 8.04. TRANSFER REGULATIONS: The shares of stock of the Corporation
--------------------
may be freely transferred, and the Board of Directors may, from time to time,
adopt lawful rules and regulations with reference to the method of transfer of
the shares of stock of the Corporation.
Section 8.05. FIXING OF RECORD DATE: The Board of Directors may fix in
---------------------
advance a date as a record date for the determination of the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion, or exchange of stock, or for any other proper purpose, provided that
--------
such record date shall be a date not more than sixty (60) days nor, in the case
of a meeting of shareholders, less than ten (10) days prior to the date on which
the particular action, requiring such determination of shareholders, is to be
taken. In such case, only such shareholders as shall be shareholders of record
on the record date so fixed shall be entitled to such notice of, and to vote at,
such meeting or adjournment, or to give such consent, or to receive payment of
such dividend or other distribution, or to receive such allotment of rights, or
to exercise such rights, or to take other action, as the case may be,
notwithstanding any transfer of any shares on the books of the Corporation after
any such record date. A meeting of shareholders convened on the date for which
it was called may be adjourned from time to time without notice to a date not
more than one hundred twenty (120) days after the original record date. [ MGCL,
Section 2-511 ]
ARTICLE IX
----------
FISCAL YEAR, ACCOUNTANT
-----------------------
Section 9.01. FISCAL YEAR: The fiscal year of the Corporation shall be the
-----------
twelve (12) calendar months beginning on the 1st day of November in each year
and ending on the last day of
<PAGE>
the following October, or such other period of twelve (12) calendar months as
the Board of Directors may by resolution prescribe.
Section 9.02. ACCOUNTANT:
----------
(a)
The Corporation shall employ an independent public accountant or firm of
independent public accountants for each series of the Corporation to examine the
accounts of the Corporation with respect to such series and to sign and certify
financial statements filed by the Corporation with respect to such series. The
certificates and reports of the accountant(s) shall be addressed both to the
Board of Directors and to the shareholders. The Corporation may employ a
different accountant with respect to each series.
(b)
A majority of the members of the Board of Directors who are not interested
persons (as such term is defined in the Investment Company Act) of the
Corporation shall select the accountant for each series, by vote cast in person,
at any meeting held within such period of time as may be allowed under the
Investment Company Act. Such selection shall be submitted for ratification or
rejection at the next succeeding annual shareholders' meeting for such series.
If such meeting shall reject such selection, the accountant for such series
shall be selected by majority vote of the Corporation's outstanding voting
securities of such series, either at the meeting at which the rejection occurred
or at a subsequent meeting of shareholders for such series called for the
purpose.
(c)
Any vacancy occurring between annual meetings, due to the death or resignation
of the accountant of a series, may be filled by the vote of a majority of those
members of the Board of Directors who are not interested persons (as so defined)
of the Corporation, cast in person at a meeting called for the purpose of voting
on such action.
(d)
The employment of the accountant of a series shall be conditioned upon the right
of such series of the Corporation by vote of a majority of the outstanding
voting securities of such series at any meeting called for the purpose to
terminate such employment forthwith without any penalty. [ Investment Company
Act, Section 32(a) ]
ARTICLE X
---------
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 10.01. INDEMNIFICATION AND PAYMENT OF EXPENSES IN ADVANCE: The
--------------------------------------------------
Corporation shall indemnify any individual ("Indemnitee") who is a present or
former director, officer, employee, or agent of the Corporation, or who is or
has been serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, who, by reason of his position was, is, or is threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative
(hereinafter collectively referred to as a "Proceeding") against any judgments,
penalties, fines, settlements, and reasonable expenses (including attorneys'
fees) incurred by such Indemnitee in connection with any Proceeding, to the
fullest extent that such indemnification may be lawful under Maryland law. The
Corporation shall pay any reasonable
<PAGE>
expenses so incurred by such Indemnitee in defending a Proceeding in advance of
the final disposition thereof to the fullest extent that such advance payment
may be lawful under Maryland law. Subject to any applicable limitations and
requirements set forth in the Corporation's Articles of Incorporation and in
these By-Laws, any payment of indemnification or advance of expenses shall be
made in accordance with the procedures set forth in Maryland law.
Notwithstanding the foregoing, nothing herein shall protect or purport to
protect any Indemnitee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office
("Disabling Conduct").
Anything in this Article X to the contrary notwithstanding, no
indemnification shall be made by the Corporation to any Indemnitee unless:
(a)
there is a final decision on the merits by a court or other body before whom the
Proceeding was brought that the Indemnitee was not liable by reason of Disabling
Conduct; or
(b)
in the absence of such a decision, there is a reasonable determination, based
upon a review of the facts, that the Indemnitee was not liable by reason of
Disabling Conduct, which determination shall be made by:
(i)
the vote of a majority of a quorum of directors who are neither "interested
persons" of the Corporation as defined in Section 2(a)(19) of the Investment
Company Act, nor parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
Anything in this Article X to the contrary notwithstanding, any advance of
expenses by the Corporation to any Indemnitee shall be made only upon the
undertaking by such Indemnitee to repay the advance unless it is ultimately
determined that such Indemnitee is entitled to indemnification as above
provided, and only if one of the following conditions is met:
(a) the Indemnitee provides a security for his undertaking; or
(b)
the Corporation shall be insured against losses arising by reason of any lawful
advances; or
(c)
there is a determination, based on a review of readily available facts, that
there is reason to believe that the Indemnitee will ultimately be found entitled
to indemnification, which determination shall be made by:
(i)
a majority of a quorum of directors who are neither "interested persons" of the
Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor
parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
<PAGE>
Section 10.02. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS: To
------------------------------------------------------
the fullest extent permitted by applicable Maryland law and by Section 17(h) of
the Investment Company Act, as from time to time amended, the Corporation may
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the Corporation, or who is or was
serving at the request of the Corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against any liability asserted against him and incurred by him in or
arising out of his position, whether or not the Corporation would have the power
to indemnify him against such liability. [ MGCL, Section 2-418(k) ]
Section 10.03. AMENDMENT: No amendment, alteration or repeal of this
---------
Article or the adoption, alteration or amendment of any other provision of the
Articles of Incorporation or By-Laws inconsistent with this Article shall
adversely affect any right or protection of any person under this Article with
respect to any act or failure to act which occurred prior to such amendment,
alteration, repeal or adoption.
ARTICLE XI
----------
AMENDMENTS
----------
Section 11.01. GENERAL: Except as provided in Section 11.02 hereof, all
-------
By-Laws of the Corporation, whether adopted by the Board of Directors or the
shareholders, shall be subject to amendment, alteration, or repeal, and new
By-Laws may be made, by the affirmative vote of a majority of either:
(a)
the holders of record of the outstanding shares of stock of the Corporation
entitled to vote, at any annual or special meeting the notice or waiver of
notice of which shall have specified or summarized the proposed amendment,
alteration, repeal, or new By-Law; or
(b)
the Directors present at any regular or special meeting at which a quorum is
present if the notice or waiver of notice thereof or material sent to the
Directors in connection therewith on or prior to the last date for the giving of
such notice under these By-Laws shall have specified or summarized the proposed
amendment, alteration, repeal, or new By-Law.
Section 11.02. BY SHAREHOLDERS ONLY:
--------------------
(a)
No amendment of any section of these By-Laws shall be made except by the
shareholders of the Corporation if the shareholders shall have provided in the
By-Laws that such section may not be amended, altered, or repealed except by the
shareholders.
(b)
From and after the issue of any shares of the Capital Stock of the Corporation,
no amendment of this Article XI shall be made except by the shareholders of the
Corporation.
<PAGE>
ARTICLE XII
-----------
MISCELLANEOUS
-------------
Section 12.01. USE OF THE TERM "ANNUAL MEETING:" The use of the term
---------------------------------
"annual meeting" in these By-Laws shall not be construed as implying a
requirement that a shareholder meeting be held annually.
The Custodian Agreement dated January 28, 1998, as amended, between State
Street Bank and Trust Company and T. Rowe Price Funds.
<PAGE>
CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of January 28, 1998 by and between each entity
set forth on Appendix A hereto (as such Appendix A may be amended from time to
time) which executes a copy of this Agreement (each referred to herein as the
"FUND"), and State Street Bank and Trust Company, a Massachusetts trust company
with its principal place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "CUSTODIAN").
WITNESSETH:
WHEREAS, each Fund desires to retain the Custodian to act as custodian of
certain of the assets of the Fund, and the Custodian is willing to provide such
services to each Fund, upon the terms and conditions hereinafter set forth; and
WHEREAS, except as otherwise set forth herein, this Agreement is intended
to supersede that certain custodian contract among the parties hereto dated
September 28, 1987, as amended; and
WHEREAS, the Funds have retained CHASE MANHATTAN BANK, N.A. to act as the
Funds' custodian with respect to the assets of each such Fund to be held outside
of the United States of America (except as otherwise set forth in this
Agreement) pursuant to a written custodian agreement (the "FOREIGN CUSTODIAN
AGREEMENT"),
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, each of the parties hereto agrees as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
Each Fund hereby employs the Custodian as the custodian of certain of its
assets, including those securities it desires to be held within the United
States of America ("DOMESTIC SECURITIES") and those securities it desires to be
held outside the United States of America (the "UNITED STATES") which are (i)
not held on the Funds' behalf by CHASE MANHATTAN BANK, N.A. pursuant to the
Foreign Custodian Agreement and (ii) described with greater particularity in
Section 3 hereof (such securities shall be referred to herein as "FOREIGN
SECURITIES"). Each Fund agrees to deliver to the Custodian all domestic
securities, foreign securities and cash owned by it from time to time, and all
payments of income, payments of principal or capital distributions received by
it with respect to
<PAGE>
securities held by it hereunder, and the cash consideration received by it for
such new or treasury shares of capital stock of each Fund as may be issued or
sold from time to time ("SHARES"). The Custodian shall not be responsible for
any property of any Fund held or received by such Fund (i) not delivered to the
Custodian, or (ii) held in the custody of CHASE MANHATTAN BANK N.A.
The Custodian is authorized to employ one or more sub-custodians located
within the United States, provided that the Custodian shall have obtained the
written acknowledgment of the Fund with respect to such employment. The
Custodian is authorized to employ sub-custodians located outside the United
States as noted on Schedule A attached hereto (as such Schedule A may be amended
from time to time). The Custodian shall have no more or less responsibility or
liability to any Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian and
shall not release any sub-custodian from any responsibility or liability unless
so agreed in writing by the Custodian and the applicable Fund. With the
exception of State Street Bank and Trust Company (London branch), the Custodian
shall not be liable for losses arising from the bankruptcy, insolvency or
receivership of any sub-custodian located outside the United States.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUNDS HELD
BY THE CUSTODIAN IN THE UNITED STATES.
SECTION 2.1
HOLDING SECURITIES. The Custodian shall hold and physically segregate for the
account of each Fund all non-cash property to be held by it in the United
States, including all domestic securities owned by the Fund other than (a)
securities which are maintained pursuant to Section 2.9 in a clearing agency
which acts as a securities depository or in a book-entry system authorized by
the United States Department of the Treasury and certain federal agencies (each,
a "U.S. SECURITIES SYSTEM") and (b) commercial paper of an issuer for which the
Custodian acts as issuing and paying agent ("DIRECT PAPER") which is deposited
and/or maintained in the Direct Paper system of the Custodian (the "DIRECT PAPER
SYSTEM") pursuant to Section 2.10.
SECTION 2.2
DELIVERY OF INVESTMENTS. The Custodian shall release and deliver domestic
investments owned by a Fund held by the Custodian or in a U.S. Securities System
account of the Custodian or in the Custodian's Direct Paper System account
("DIRECT PAPER SYSTEM ACCOUNT") only upon receipt of Proper Instructions, which
<PAGE>
may be continuing instructions when agreed to by the parties, and only in the
following cases:
1)Upon sale of such investments for the account of the Fund and
receipt of payment therefor;
2)Upon the receipt of payment in connection with any repurchase
agreement related to such investments entered into by the Fund;
3)
In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.9 hereof;
4)
To the depository agent in connection with tender or other similar
offers for portfolio investments of the Fund;
5)
To the issuer thereof or its agent when such investments are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6)
To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.8 or into the name or nominee name of any
sub-custodian appointed pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;
7)
Upon the sale of such investments for the account of the Fund, to
the broker or its clearing agent, against a receipt, for examination
in accordance with usual "street delivery" custom; provided that in
any such case the Custodian shall have no responsibility or
liability for any loss arising from the delivery of such investments
prior to receiving payment for such investments except as may arise
from the Custodian's own negligence or willful misconduct;
<PAGE>
8)For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the investments of the issuer of such investments, or pursuant to
provisions for conversion contained in such investments, or pursuant
to any deposit agreement; provided that, in any such case, the new
investments and cash, if any, are to be delivered to the Custodian;
9)In the case of warrants, rights or similar investments, the
surrender thereof in the exercise of such warrants, rights or
similar investments or the surrender of interim receipts or
temporary investments for definitive investments; provided that, in
any such case, the new investments and cash, if any, are to be
delivered to the Custodian or against a receipt;
10)
For delivery in connection with any loans of investments made on
behalf of the Fund, but only against receipt of adequate collateral
as agreed upon from time to time by the Fund or its duly-appointed
agent (which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities, or such
other property as the Fund may agree), except that in connection
with any loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held liable or
responsible for the delivery of investments owned by the Fund prior
to the receipt of such collateral in the absence of the Custodian's
negligence or willful misconduct;
11)
For delivery as security in connection with any borrowing by the
Fund requiring a pledge of assets by the Fund, but only against
receipt of amounts borrowed, except where additional collateral is
required to secure a borrowing already made, subject to Proper
Instructions, further securities may be released and delivered for
that purpose;
12)
For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "EXCHANGE ACT") and a
member of The National Association of Securities Dealers, Inc.
("NASD"),
<PAGE>
relating to compliance with the rules of The Options Clearing
Corporation, the rules of any registered national securities
exchange or of any similar organization or organizations, or under
the Investment Company Act of 1940, as amended from time to time
(the "1940 ACT"), regarding escrow or other arrangements in
connection with transactions by the Fund;
13)
For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or
any Contract Market, or any similar organization or organizations,
or under the 1940 Act, regarding account deposits in connection with
transactions by the Fund;
14)
Upon receipt of instructions from the transfer agent for the Fund
(the "TRANSFER AGENT"), for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind, as
may be described from time to time in the Fund's currently effective
prospectus, statement of additional information or other offering
documents (all, as amended, supplemented or revised from time to
time, the "PROSPECTUS"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15)
For any other purpose, but only upon receipt of Proper Instructions
specifying (a) the investments to be delivered, (b) setting forth
the purpose for which such delivery is to be made, and (c) naming
the person or persons to whom delivery of such investments shall be
made.
SECTION 2.3
REGISTRATION OF INVESTMENTS. Domestic investments held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the Custodian which nominee
shall be assigned exclusively to the Fund, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other registered
investment companies having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section 2.8 or in the
name or nominee name of any sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of the Fund under the terms of
<PAGE>
this Agreement shall be in good deliverable form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund of relevant corporate actions including,
without limitation, pendency of calls, maturities, tender or exchange offers.
SECTION 2.4
BANK ACCOUNTS. The Custodian shall open and maintain a separate bank account or
accounts in the United States in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement, and shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Fund, other than cash maintained
by the Fund in a bank account established and used in accordance with Rule 17f-3
under the 1940 Act. Monies held by the Custodian for the Fund may be deposited
by the Custodian to its credit as custodian in the banking department of the
Custodian or in such other banks or trust companies as it may in its discretion
deem necessary or desirable in the performance of its duties hereunder;
provided, however, that every such bank or trust company shall be qualified to
act as a custodian under the 1940 Act, and that each such bank or trust company
and the funds to be deposited with each such bank or trust company shall be
approved by vote of a majority of the board of directors or the board of
trustees of the applicable Fund (as appropriate and in each case, the "BOARD").
Such funds shall be deposited by the Custodian in its capacity as custodian and
shall be withdrawable by the Custodian only in that capacity.
SECTION 2.5
COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the Custodian
shall collect on a timely basis all income and other payments with respect to
United States registered investments held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the investments business, and
shall collect on a timely basis all income and other payments with respect to
United States bearer investments if, on the date of payment by the issuer, such
investments are held by the Custodian or its agent thereof and shall credit such
income, as collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due, collect interest when due on investments held hereunder, and receive
and collect all stock dividends, rights and other items of like nature as and
when they become due and payable. With respect to income due the Fund on United
States investments of the Fund loaned (pursuant to the provisions of Section 2.2
(10))
<PAGE>
in accordance with a separate agreement between the Fund and the Custodian in
its capacity as lending agent, collection thereof shall be in accordance with
the terms of such agreement. Except as otherwise set forth in the immediately
preceding sentence, income due the Fund on United States investments of the Fund
loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund; the Custodian will have no duty or responsibility in
connection therewith other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the timely delivery
to the Custodian of the income to which the Fund is properly entitled.
SECTION 2.6
PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may be
continuing instructions when agreed to by the parties, the Custodian shall, from
monies of the Fund held by the Custodian, pay out such monies in the following
cases only:
1)Upon the purchase of domestic investments, options, futures
contracts or options on futures contracts for the account of the
Fund but only (a) against the delivery of such investments, or
evidence of title to such options, futures contracts or options on
futures contracts, to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose in
accordance with Section 2.8) registered in the name of the Fund or
in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a U.S. Securities System, in accordance with the
conditions set forth in Section 2.9 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10 hereof; or (d) for transfer to
a time deposit account of the Fund in any bank, whether domestic or
foreign, such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions;
2)
In connection with conversion, exchange or surrender of investments
owned by the Fund as set forth in Section 2.2 hereof;
<PAGE>
3)
For the redemption or repurchase of Shares as set forth in Section 4
hereof;
4)
For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account
of the Fund: interest, taxes, management fees, accounting fees,
transfer agent fees, legal fees, and operating expenses of the Fund
(whether or not such expenses are to be in whole or part capitalized
or treated as deferred expenses);
5) For the payment of any dividends declared by the Board;
6)For payment of the amount of dividends received in respect of
investments sold short;
7)
For repayment of a loan upon redelivery of pledged securities and
upon surrender of the note(s), if any, evidencing the loan; or
8)
In connection with any repurchase agreement entered into by the Fund
with respect to which the collateral is held by the Custodian, the
Custodian shall act as the Fund's "securities intermediary"( as that
term is defined in Part 5 of Article 8 of the Massachusetts Uniform
Commercial Code, as amended), and, as securities intermediary, the
Custodian shall take the following steps on behalf of the Fund: (a)
provide the Fund with notification of the receipt of the purchased
securities, and (b), by book-entry identify on the books of the
Custodian as belonging to the Fund uncertificated securities
registered in the name of the Fund and held in the Custodian's
account at the Federal Reserve Bank. In connection with any
repurchase agreement entered into by the Fund with respect to which
the collateral is not held by the Custodian, the Custodian shall (a)
provide the Fund with such notification as it may receive with
respect to such collateral, and (b), by book-entry or otherwise,
identify as belonging to the Fund securities as shown in the
Custodian's account on the books of the entity appointed by the Fund
to hold such collateral.
9)
For any other purpose, but only upon receipt of Proper Instructions
specifying (a) the amount of such payment,
<PAGE>
(b) setting forth the purpose for which such payment is to be made,
and (c) naming the person or persons to whom such payment is to be
made.
SECTION 2.7
LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In any
and every case where payment for purchase of domestic securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from the
Fund to so pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been received by
the Custodian.
SECTION 2.8
APPOINTMENT OF AGENTS. The Custodian may at any time or times in its discretion
appoint (and may at any time remove) any other bank or trust company, which is
itself qualified under the 1940 Act to act as a custodian, as its agent to carry
out such of the provisions of this Section 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any such agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
SECTION 2.9
DEPOSIT OF INVESTMENTS IN U.S. SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain domestic investments owned by the Fund in a U.S. Securities
System in accordance with applicable Federal Reserve Board and United States
Securities and Exchange Commission ("SEC") rules and regulations, if any,
subject to the following provisions:
1)
The Custodian may keep domestic investments of the Fund in a U.S.
Securities System provided that such investments are represented in
an account of the Custodian in the U.S. Securities System
("ACCOUNT") which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise for
customers;
2)
The records of the Custodian with respect to domestic investments of
the Fund which are maintained in a U.S. Securities System shall
identify by book-entry those investments belonging to the Fund;
3)
The Custodian shall pay for domestic investments purchased for the
account of the Fund upon (i) receipt of advice from the U.S.
Securities System that such investments have been transferred to the
Account, and
<PAGE>
(ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund. The
Custodian shall transfer domestic investments sold for the account
of the Fund upon (i) receipt of advice from the U.S. Securities
System that payment for such investments has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the U.S. Securities System of
transfers of domestic investments for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian and
be provided to the Fund at its request. Upon request, the Custodian
shall furnish the Fund confirmation of each transfer to or from the
account of the Fund in the form of a written advice or notice and
shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities System for
the account of the Fund;
4)
The Custodian shall provide the Fund with any report obtained by the
Custodian on the U.S. Securities System's accounting system,
internal accounting control and procedures for safeguarding domestic
investments deposited in the U.S. Securities System;
5)
The Custodian shall have received from the Fund the initial or
annual certificate, as the case may be, described in Section 10
hereof; and
6)
Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the U.S. Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees, or from failure of
the Custodian or any such agent to enforce effectively such rights
as it may have against the U.S. Securities System. At the election
of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the U.S.
Securities System or any other person which the Custodian may have
as a consequence of any such loss, expense or damage if and to the
extent that
<PAGE>
the Fund has not been made whole for any such loss, expense or
damage.
SECTION 2.10
FUND ASSETS HELD IN THE DIRECT PAPER SYSTEM. The Custodian may deposit and/or
maintain investments owned by the Fund in the Direct Paper System subject to the
following provisions:
1)
No transaction relating to investments in the Direct Paper System
will be effected in the absence of Proper Instructions;
2)
The Custodian may keep investments of the Fund in the Direct Paper
System only if such investments are represented in the Direct Paper
System Account, which account shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
3)
The records of the Custodian with respect to investments of the Fund
which are maintained in the Direct Paper System shall identify by
book-entry those investments belonging to the Fund;
4)
The Custodian shall pay for investments purchased for the account of
the Fund upon the making of an entry on the records of the Custodian
to reflect such payment and transfer of investments to the account
of the Fund. The Custodian shall transfer investments sold for the
account of the Fund upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of payment for
the account of the Fund;
5)
The Custodian shall furnish the Fund confirmation of each transfer
to or from the account of the Fund, in the form of a written advice
or notice, of Direct Paper on the next business day following such
transfer and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transaction in the Direct Paper System
for the account of the Fund; and
6)
The Custodian shall provide the Fund with any report on its system
of internal accounting control as the Fund may reasonably request
from time to time.
SECTION 2.11
SEGREGATED ACCOUNT. The Custodian shall, upon receipt of Proper Instructions,
establish and maintain a segregated
<PAGE>
account or accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or investments, including investments
maintained in an account by the Custodian pursuant to Section 2.10 hereof, (i)
in accordance with the provisions of any agreement among the Fund, the Custodian
and a broker-dealer registered under the Exchange Act and a member of the NASD
(or any futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or government investments in connection with options purchased, sold or written
by the Fund or commodity futures contracts or options thereon purchased or sold
by the Fund, (iii) for the purposes of compliance by the Fund with the
procedures required by 1940 Act Release No. 10666, or any other procedures
subsequently required under the 1940 Act relating to the maintenance of
segregated accounts by registered investment companies, and (iv) for other
purposes, but only, in the case of clause (iv) upon receipt of Proper
Instructions specifying (a) the investments to be delivered, (b) setting forth
the purpose for which such delivery is to be made, and (c) naming the person or
persons to whom delivery of such investments shall be made.
SECTION 2.12
OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute ownership
and other certificates and affidavits for all United States federal and state
tax purposes in connection with receipt of income or other payments with respect
to domestic investments of the Fund held by it hereunder and in connection with
transfers of such investments.
SECTION 2.13
PROXIES. The Custodian shall, with respect to the domestic investments held
hereunder, cause to be promptly executed by the registered holder of such
investments, if the investments are registered otherwise than in the name of the
Fund or a nominee of the Fund, all proxies without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials received by the Custodian and all
notices received relating to such investments.
SECTION 2.14
COMMUNICATIONS RELATING TO FUND INVESTMENTS. Subject to the provisions of
Section 2.3, the Custodian shall transmit promptly to the Fund all written
information (including, without limitation, pendency of calls and maturities of
domestic investments and expirations of rights in connection therewith and
notices of
<PAGE>
exercise of call and put options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the Custodian in connection
with the domestic investments being held for the Fund pursuant to this
Agreement. With respect to tender or exchange offers, the Custodian shall
transmit to the Fund all written information received by the Custodian, any
agent appointed pursuant to Section 2.8 hereof, or any sub-custodian appointed
pursuant to Section 1 hereof, from issuers of the domestic investments whose
tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the Fund
shall notify the Custodian at least two (2) New York Stock Exchange business
days prior to the time such action must be taken under the terms of the tender,
exchange offer or other similar transaction, and it will be the responsibility
of the Custodian to timely transmit to the appropriate person(s) such notice.
Where the Fund provides the Custodian with less than two (2) New York Stock
Exchange business days notice of its desired action, the Custodian shall use its
best efforts to timely transmit the Fund's notice to the appropriate person. It
is expressly noted that the parties may agree to alternative procedures with
respect to such two (2) New York Stock Exchange business days notice period on a
selective and individual basis.
SECTION 2.15
REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian shall provide
the Fund, at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding investments, futures contracts and
options on futures contracts, including domestic investments deposited and/or
maintained in a U.S. Securities System, relating to the services provided by the
Custodian under this Agreement. Such reports shall be of sufficient scope and
detail, as may reasonably be required by the Fund, to provide reasonable
assurance that any material inadequacies would be disclosed by such examination,
and if there are no such inadequacies the reports shall so state.
SECTION 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO CERTAIN PROPERTY OF THE
FUNDS HELD OUTSIDE OF THE UNITED STATES
SECTION 3.1
DEFINITIONS. The following capitalized terms shall have the respective following
meanings:
"FOREIGN SECURITIES SYSTEM" means a clearing agency or a securities depository
listed on Schedule A hereto.
<PAGE>
"FOREIGN SUB-CUSTODIAN" means a foreign banking institution set forth on
Schedule A hereto.
SECTION 3.2
HOLDING SECURITIES. The Custodian shall identify on its books as belonging to
the Funds the foreign securities held by each Foreign Sub-Custodian or Foreign
Securities System. The Custodian may hold foreign securities for all of its
customers, including the Funds, with any Foreign Sub-Custodian in an account
that is identified as belonging to the Custodian for the benefit of its
customers, provided however, that (i) the records of the Custodian with respect
to foreign securities of the Funds which are maintained in such account shall
identify those securities as belonging to the Funds and (ii) the Custodian shall
require that securities so held by the Foreign Sub-Custodian be held separately
from any assets of such Foreign Sub-Custodian or of other customers of such
Foreign Sub-Custodian.
SECTION 3.3
FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign
Securities System in a designated country only through arrangements implemented
by the Foreign Sub-Custodian in such country pursuant to the terms of this
Agreement.
SECTION 3.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
3.4.1.
Delivery of Foreign Securities. The Custodian or a Foreign Sub-Custodian shall
- -------- -- ------- -----------
release and deliver foreign securities of the Funds held by such Foreign
Sub-Custodian, or in a Foreign Securities System account, only upon receipt of
Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(i)
upon the sale of such foreign securities for the Funds in accordance
with reasonable market practice in the country where such foreign
securities are held or traded, including, without limitation: (A)
delivery against expectation of receiving later payment; or (B) in
the case of a sale effected through a Foreign Securities System in
accordance with the rules governing the operation of the Foreign
Securities System;
(ii)
in connection with any repurchase agreement related to foreign
securities;
<PAGE>
(iii)
to the depository agent in connection with tender or other similar
offers for foreign securities of the Funds;
(iv)
to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v)
to the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian or such Foreign Sub-Custodian)
or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or number
of units;
(vi)
to brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with market custom; provided that
in any such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Foreign Sub-Custodian's own negligence
or willful misconduct;
(vii)for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;
(viii)
in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or temporary
securities for definitive securities;
(ix)
or delivery as security in connection with any borrowing by the
Funds requiring a pledge of assets by the Funds;
(x)in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
<PAGE>
(xi) in connection with the lending of foreign securities; and
(xii)
for any other proper purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper Fund purpose, and naming the
person or persons to whom delivery of such securities shall be made.
3.4.2.
Payment of Fund Monies. Upon receipt of Proper Instructions, which may be
- ------- -- ---- -------
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out, or direct the respective Foreign Sub-Custodian or the respective
Foreign Securities System to pay out, monies of a Fund in the following cases
only:
(i)upon the purchase of foreign securities for the Fund, unless
otherwise directed by Proper Instructions, by (A) delivering money
to the seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery of
such foreign securities; or (B) in the case of a purchase effected
through a Foreign Securities System, in accordance with the rules
governing the operation of such Foreign Securities System;
(ii)
in connection with the conversion, exchange or surrender of foreign
securities of the Fund;
(iii)
for the payment of any expense or liability of the Fund, including
but not limited to the following payments: interest, taxes,
investment advisory fees, transfer agency fees, fees under this
Agreement, legal fees, accounting fees, and other operating
expenses;
(iv)
for the purchase or sale of foreign exchange or foreign exchange
contracts for the Fund, including transactions executed with or
through the Custodian or its Foreign Sub-Custodians;
(v)in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
<PAGE>
(vii)
in connection with the borrowing or lending of foreign securities;
and
(viii)
for any other proper Fund purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper Fund purpose, and naming the person or
persons to whom such payment is to be made.
3.4.3.
Market Conditions. Notwithstanding any provision of this Agreement to the
- ------ -----------
contrary, settlement and payment for foreign securities received for the account
of the Funds and delivery of foreign securities maintained for the account of
the Funds may be effected in accordance with the customary established
securities trading or processing practices and procedures in the country or
market in which the transaction occurs, including, without limitation,
delivering foreign securities to the purchaser thereof or to a dealer therefor
(or an agent for such purchaser or dealer) with the expectation of receiving
later payment for such foreign securities from such purchaser or dealer.
SECTION 3.5
REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the
custody of a Foreign Custodian (other than bearer securities) shall be
registered in the name of the applicable Fund or in the name of the Custodian or
in the name of any Foreign Sub-Custodian or in the name of any nominee of the
foregoing, and the Fund agrees to hold any such nominee harmless from any
liability as a holder of record of such foreign securities. The Custodian or a
Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a
Fund under the terms of this Agreement unless the form of such securities and
the manner in which they are delivered are in accordance with reasonable market
practice.
SECTION 3.6
BANK ACCOUNTS. A bank account or bank accounts opened and maintained outside
the United States on behalf of a Fund with a Foreign Sub-Custodian shall be
subject only to draft or order by the Custodian or such Foreign Sub-Custodian,
acting pursuant to the terms of this Agreement to hold cash received by or from
or for the account of the Fund.
SECTION 3.7
COLLECTION OF INCOME. The Custodian shall use reasonable commercial efforts to
collect all income and other payments with respect to the foreign securities
held hereunder to which the Funds shall be entitled and shall credit such
income, as
<PAGE>
collected, to the applicable Fund. In the event that extraordinary measures are
required to collect such income, the Fund and the Custodian shall consult as to
such measures and as to the compensation and expenses of the Custodian relating
to such measures.
SECTION 3.8
PROXIES. With respect to the foreign securities held under this Section 3, the
Custodian will use reasonable commercial efforts to facilitate the exercise of
voting and other shareholder proxy rights, subject always to the laws,
regulations and practical constraints that may exist in the country where such
securities are issued. The Fund acknowledges that local conditions, including
lack of regulation, onerous procedural obligations, lack of notice and other
factors may have the effect of severely limiting the ability of the Fund to
exercise shareholder rights.
SECTION 3.9
COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall transmit
promptly to the Fund written information (including, without limitation,
pendency of calls and maturities of foreign securities and expirations of rights
in connection therewith) received by the Custodian in connection with the
foreign securities being held for the account of the Fund. With respect to
tender or exchange offers, the Custodian shall transmit promptly to the Fund
written information so received by the Custodian in connection with the foreign
securities whose tender or exchange is sought or from the party (or its agents)
making the tender or exchange offer.
SECTION 3.10
LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS. Each
agreement pursuant to which the Custodian employs as a Foreign Sub-Custodian
shall, to the extent possible, require the Foreign Sub-Custodian to exercise
reasonable care in the performance of its duties and, to the extent possible, to
indemnify, and hold harmless, the Custodian from and against any loss, damage,
cost, expense, liability or claim arising out of or in connection with the
Foreign Sub-Custodian's performance of such obligations. At the Fund's
election, the Funds shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a Foreign Sub-Custodian as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Funds have not been made whole for any such loss, damage,
cost, expense, liability or claim.
SECTION 3.11
TAX LAW. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as custodian
of the Funds by
<PAGE>
the tax law of the United States or of any state or political subdivision
thereof. It shall be the responsibility of the Fund to notify the Custodian of
the obligations imposed on the Fund or the Custodian as custodian of the Funds
by the tax law of countries set forth on Schedule A hereto, including
responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.
SECTION 4. PAYMENTS FOR REPURCHASES OR REDEMPTIONS AND SALES OF SHARES.
From such funds as may be available for the purpose, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares which have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares, the Custodian is authorized upon receipt of,
and in accordance with, instructions from the Transfer Agent to wire funds to or
through a commercial bank designated by the redeeming shareholders. In
connection with the redemption or repurchase of Shares, the Custodian shall
honor checks drawn on the Custodian by a holder of Shares, which checks have
been furnished by the Fund to the holder of Shares, when presented to the
Custodian in accordance with such written procedures and controls as may be
mutually agreed upon from time to time between the Fund and the Custodian.
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit to the account of the Fund such payments as are
received by the distributor or the Transfer Agent, as the case may be, for
Shares issued or sold from time to time. The Custodian will notify the Fund and
the Transfer Agent of any payments for Shares received by it from time to time.
SECTION 5. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of the
Fund and/or compute the net asset value per Share of the outstanding Shares or,
if directed in writing
<PAGE>
to do so by the Fund, shall itself keep such books of account and/ or compute
such net asset value per Share. If so directed, the Custodian shall also (i)
calculate daily the net income of the Fund as described in the Prospectus and
shall advise the Fund and the Transfer Agent daily of the total amounts of such
net income, and/ or (ii) advise the Transfer Agent periodically of the division
of such net income among its various components. The calculations of the net
asset value per share and the daily income of the Fund shall be made at the time
or times described from time to time in the Prospectus.
SECTION 6. PROPER INSTRUCTIONS.
"Proper Instructions," as such term is used throughout this Agreement,
means either (i) a writing, including a facsimile transmission, signed by one or
more persons as set forth on, and in accordance with, an "Authorized Persons
List," as such term is defined herein (each such instruction a "Written Proper
Instruction"), (ii) a "Client Originated Electronic Financial Instruction," as
such term is defined in the Data Access Services Addendum hereto, given in
accordance with the terms of such Addendum, or (iii) instructions received by
the Custodian from a third party in accordance with any three-party agreement
which requires a segregated asset account in accordance with Section 2.11.
Each Written Proper Instruction shall set forth a brief description of the
type of transaction involved (choosing from among the types of transactions set
forth on the Authorized Persons List), including a specific statement of the
purpose for which such action is requested, and any modification to a Written
Proper Instruction must itself be a Written Proper Instruction and subject to
all the provisions herein relating to Written Proper Instructions. The Fund
will provide the Custodian with an "Authorized Persons List," which list shall
set forth (a) the names of the individuals (each an "Authorized Person") who are
authorized by the Board to give Written Proper Instructions with respect to the
transactions described therein, and (b) the number of Authorized Persons whose
signature or approval, as the case may be, is necessary for the Custodian to be
able to act in accordance with such Written Proper Instructions with respect to
a particular type of transaction. The Custodian may accept oral instructions or
instructions delivered via electronic mail as Proper Instructions if the
Custodian reasonably believes such instructions to have been given by an
Authorized Person or Persons (as appropriate to the type of transaction);
provided, however, that in no event will instructions delivered orally or via
electronic mail be considered Proper
<PAGE>
Instructions with respect to transactions involving the movement of cash,
securities or other assets of a Fund. The Custodian shall be entitled to rely
upon instructions given in accordance with an Authorized Persons List until it
actually receives written notice from the Board of the applicable Fund to the
contrary.
SECTION 7. EVIDENCE OF AUTHORITY.
Subject to Section 9 hereof, the Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or other instrument
or paper reasonably and in good faith believed by it to be genuine and to have
been properly executed by or on behalf of the Fund. The Custodian may receive
and accept a copy of a vote of the Board, certified by the secretary or an
assistant secretary of the applicable Fund, as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board described in such vote, and such
vote may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
SECTION 8. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY.
The Custodian may in its discretion and without express authority from the
Fund:
1)
make payments to itself or others for minor expenses of handling
investments or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to
the Fund;
2) surrender investments in temporary form for investments in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other
dealings with the investments and property of the Fund except as
otherwise directed by the Board.
SECTION 9. RESPONSIBILITY OF CUSTODIAN.
<PAGE>
The Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. Notwithstanding anything to the
contrary herein, the Custodian shall be held to the exercise of reasonable care
in carrying out the provisions of this Agreement, and it shall be kept
indemnified by and shall be without liability to the Fund for any action taken
or omitted by it in good faith without negligence. In order for the
indemnification provision contained in this Section to apply, it is understood
that if in any case the Fund may be asked by the Custodian to indemnify or hold
the Custodian harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Custodian will use reasonable care to identify, and notify
the Fund promptly concerning, any situation which presents or appears likely to
present the probability of such a claim for indemnification. The Fund shall
have the option to defend the Custodian against any claim which may be the
subject of a claim for indemnification hereunder, and in the event that the Fund
so elects, it will notify the Custodian thereof and, thereupon, (i) the Fund
shall take over complete defense of the claim and (ii) the Custodian shall
initiate no further legal or other expenses with respect to such claim. The
Custodian shall in no case confess any claim or make any compromise with respect
to any claim for which it will seek indemnity from the Fund except with the
Fund's prior written consent. Nothing herein shall be construed to limit any
right or cause of action on the part of the Custodian under this Agreement which
is independent of any right or cause of action on the part of the Fund. The
Custodian shall be entitled to rely on and may act upon advice of counsel (who
may be counsel for the Fund or other such counsel as agreed to by the parties)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice. The Custodian shall be entitled to rely
upon, and shall have no duty of inquiry with respect to, the accuracy of any
representation or warranty given to it by the Fund or any duly-authorized
employee or agent thereof, and shall be without liability for any action
reasonably taken or omitted by it in reliance thereon. Regardless of whether
assets held pursuant to this Agreement are maintained in the custody of a
foreign banking institution, a foreign securities depository, or a branch or
affiliate of a U.S. bank, the Custodian shall not be liable for any loss,
damage, cost, expense, liability
<PAGE>
The Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. Notwithstanding anything to the
contrary herein, the Custodian shall be held to the exercise of reasonable care
in carrying out the provisions of this Agreement, and it shall be kept
indemnified by and shall be without liability to the Fund for any action taken
or omitted by it in good faith without negligence. In order for the
indemnification provision contained in this Section to apply, it is understood
that if in any case the Fund may be asked by the Custodian to indemnify or hold
the Custodian harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Custodian will use reasonable care to identify, and notify
the Fund promptly concerning, any situation which presents or appears likely to
present the probability of such a claim for indemnification. The Fund shall
have the option to defend the Custodian against any claim which may be the
subject of a claim for indemnification hereunder, and in the event that the Fund
so elects, it will notify the Custodian thereof and, thereupon, (i) the Fund
shall take over complete defense of the claim and (ii) the Custodian shall
initiate no further legal or other expenses with respect to such claim. The
Custodian shall in no case confess any claim or make any compromise with respect
to any claim for which it will seek indemnity from the Fund except with the
Fund's prior written consent. Nothing herein shall be construed to limit any
right or cause of action on the part of the Custodian under this Agreement which
is independent of any right or cause of action on the part of the Fund. The
Custodian shall be entitled to rely on and may act upon advice of counsel (who
may be counsel for the Fund or other such counsel as agreed to by the parties)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice. The Custodian shall be entitled to rely
upon, and shall have no duty of inquiry with respect to, the accuracy of any
representation or warranty given to it by the Fund or any duly-authorized
employee or agent thereof, and shall be without liability for any action
reasonably taken or omitted by it in reliance thereon. Regardless of whether
assets held pursuant to this Agreement are maintained in the custody of a
foreign banking institution, a foreign securities depository, or a branch or
affiliate of a U.S. bank, the Custodian shall not be liable for any loss,
damage, cost, expense, liability
<PAGE>
If the Fund requires the Custodian to take any action with respect to
investments, which action involves the payment of money or which action may, in
the reasonable opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
If the Custodian, or any of its affiliates, subsidiaries or agents,
advances cash or investments to the Fund for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement), or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor, and should the Fund fail to repay the Custodian promptly the
Custodian shall be entitled to utilize available cash and to dispose of the Fund
assets to the extent necessary to obtain reimbursement, provided that the
Custodian gives the Fund reasonable notice to repay such cash or securities
advanced, and provided further that such notice requirement shall not preclude
the Custodian's right to assert and execute on such lien.
Except as may arise from the Custodian's own negligence or willful
misconduct, or the negligence or willful misconduct of a subcustodian or agent
appointed by the Custodian, the Fund agrees to indemnify and hold the Custodian
harmless from and against any and all costs, expenses, losses, damages, charges,
reasonable counsel fees, payments and liabilities which may be asserted against
the Custodian (i) acting in accordance with any Proper Instruction, or (ii) for
any acts or omissions of CHASE MANHATTAN BANK N.A.
Notwithstanding any provision herein to the contrary, to the extent the
Custodian is found to be liable hereunder for any loss, liability, claim,
expense or damage, the Custodian shall be liable only for such loss, liability,
claim, expense or damage which was reasonably foreseeable.
<PAGE>
SECTION 10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.
This Agreement shall become effective as of the date of its execution,
shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto,
and may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect not
sooner than thirty (30) days after the date of such delivery or mailing in the
case of a termination by the Fund, and not sooner than one hundred eighty (180)
days after the date of such delivery or mailing in the case of termination by
the Custodian; provided, however that the Custodian shall not act under Section
2.9 hereof in the absence of receipt of an initial certificate of a Fund's
secretary, or an assistant secretary thereof, that the Board has approved the
initial use of a particular U.S. Securities System, as required by the 1940 Act
or any applicable Rule thereunder, and that the Custodian shall not act under
Section 2.10 hereof in the absence of receipt of an initial certificate of a
Fund's secretary, or an assistant secretary thereof, that the Board has approved
the initial use of the Direct Paper System; provided further, however, that the
Fund shall not amend or terminate this Agreement in contravention of any
applicable federal or state regulations, or any provision of the Fund's articles
of incorporation, agreement of trust, by-laws and/or registration statement (as
applicable, the "GOVERNING DOCUMENTS"); and further provided that the Fund may
at any time by action of its Board (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the United States Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its reasonable costs, expenses and disbursements,
provided that the Custodian shall not incur any costs, expenses or disbursements
specifically in connection with such termination unless it has received prior
approval from the Fund, such approval not to be unreasonably withheld.
<PAGE>
SECTION 11. SUCCESSOR CUSTODIAN.
If a successor custodian shall be appointed by the Board, the Custodian
shall, upon termination, deliver to such successor custodian at the offices of
the Custodian, duly endorsed and in the form for transfer, all investments and
other properties then held by it hereunder, and shall transfer to an account of
the successor custodian all of the Fund's investments held in a Securities
System. If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a copy of a vote of the Board, certified by the
secretary or an assistant secretary of the applicable Fund, deliver at the
offices of the Custodian and transfer such investments, funds and other
properties in accordance with such vote. In the event that no written order
designating a successor custodian or certified copy of a vote of the Board shall
have been delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the 1940 Act, doing
business in Boston, Massachusetts, or New York, New York, of its own selection
and having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $100,000,000, all property held by the
Custodian under this Agreement and to transfer to an account of such successor
custodian all of the Fund's investments held in any Securities System;
thereafter, such bank or trust company shall be the successor of the Custodian
under this Agreement.
In the event that any property held pursuant to this Agreement remains in
the possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such property, and the provisions of this Agreement relating to
the duties and obligations of the Custodian shall remain in full force and
effect.
SECTION 12. GENERAL.
SECTION 12.1
COMPENSATION OF CUSTODIAN. The Custodian shall be entitled to compensation for
its services and reimbursement of its expenses as Custodian as agreed upon from
time to time between the Fund and the Custodian.
<PAGE>
SECTION 12.2
MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
SECTION 12.3
RECORDS. The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the 1940 Act, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the
property of the Fund and shall at all times during the regular business hours of
the Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of investments owned by
the Fund and held by the Custodian hereunder, and shall, when requested to do so
by an officer of the Fund, and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers in such
tabulations.
SECTION 12.4
OPINION OF FUND'S INDEPENDENT ACCOUNTANT. The Custodian shall take all
reasonable action as the Fund may from time to time request to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, the preparation of the Fund's Form N-SAR, the preparation of any
other annual reports to the SEC with respect to the Fund, and with respect to
any other requirements of the SEC.
SECTION 12.5
INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the operation of
this Agreement, the Custodian and the Fund may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Agreement as
may in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Governing Documents. No interpretive
or additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Agreement.
SECTION 12.6
BOND. The Custodian shall at all times maintain a bond in such form and amount
as is acceptable to the Fund, which shall be issued by a reputable fidelity
insurance company authorized to do business in the place where such bond is
issued, against larceny and embezzlement, covering each officer and employee of
<PAGE>
the Custodian who may, singly or jointly with others, have access to securities
or funds of the Fund, either directly or through authority to receive and carry
out any certificate instruction, order request, note or other instrument
required or permitted by this Agreement. The Custodian agrees that it shall not
cancel, terminate or modify such bond insofar as it adversely affects the Fund
except after written notice given to the Fund not less than 10 days prior to the
effective date of such cancellation, termination or modification. The Custodian
shall, upon request, furnish to the Fund a copy of each such bond and each
amendment thereto.
SECTION 12.7
CONFIDENTIALITY. The Custodian agrees to treat all records and other
information relative to the Fund and its prior, present or future shareholders
as confidential, and the Custodian, on behalf of itself and its employees,
agrees to keep confidential all such information except, after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Custodian may be exposed
to civil or criminal contempt proceedings for failure to comply when requested
to divulge such information by duly constituted authorities, or when so
requested by the Fund.
SECTION 12.8
EXEMPTION FROM LIEN. Except as set forth in Section 9 hereof, the securities
and other assets held by the Custodian hereunder shall not be subject to lien or
charge of any kind in favor of the Custodian or any person claiming through the
Custodian. Nothing herein shall be deemed to deprive the Custodian of its right
to invoke any and all remedies available at law or equity to collect amounts due
it under this Agreement.
SECTION 12.9
ASSIGNMENT. This Agreement may not be assigned by either party without the
written consent of the other, except that either party may assign its rights and
obligations hereunder to a party controlling, controlled by, or under common
control with such party.
SECTION 12.10 PRIOR AGREEMENTS. Without derogating the rights established
thereunder prior to the date of this Agreement, this Agreement supersedes and
terminates, as of the date hereof, all prior agreements between the Fund and the
Custodian relating to the custody of Fund assets.
SECTION 12.11 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute but one and the same Agreement.
<PAGE>
SECTION 12.12 NOTICES. Any notice, instruction or other instrument
required to be given hereunder may be delivered in person to the offices of the
parties as set forth herein during normal business hours or delivered prepaid
registered mail or by telex, cable or telecopy to the parties at the following
addresses or such other addresses as may be notified by any party from time to
time.
To any Fund: c/o T. ROWE PRICE ASSOCIATES, INC.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Carmen Deyesu
Telephone: 410-345-6658
Telecopy: 410-685-8827/8830
To the Custodian: STATE STREET BANK AND TRUST COMPANY
1776 Heritage Drive
North Quincy, Massachusetts 02171, U.S.A.
Attention: Carol C. Ayotte
Telephone: 617-985-6894
Telecopy: 617-537-6321
Such notice, instruction or other instrument shall be deemed to have been
served in the case of a registered letter at the expiration of five business
days after posting, in the case of cable twenty-four hours after dispatch and,
in the case of telex, immediately on dispatch and if delivered outside normal
business hours it shall be deemed to have been received at the next time after
delivery when normal business hours commence and in the case of cable, telex or
telecopy on the business day after the receipt thereof. Evidence that the
notice was properly addressed, stamped and put into the post shall be conclusive
evidence of posting.
SECTION 12.13 ENTIRE AGREEMENT. This Agreement (including all schedules,
appendices, exhibits and attachments hereto) constitutes the entire Agreement
between the parties with respect to the subject matter hereof.
SECTION 12.14 HEADINGS NOT CONTROLLING. Headings used in this Agreement
are for reference purposes only and shall not be deemed a part of this
Agreement.
SECTION 12.15 SURVIVAL. All provisions regarding indemnification,
confidentiality, warranty, liability and limits thereon shall survive following
the expiration or termination of this Agreement.
<PAGE>
SECTION 12.16 SEVERABILITY. In the event any provision of this Agreement
is held illegal, void or unenforceable, the balance shall remain in effect.
SECTION 12.17 THE PARTIES. All references herein to the "Fund" are to each
of the funds listed on Appendix A hereto individually, as if this Agreement were
between such individual Fund and the Custodian. In the case of a series fund or
trust, all references to the "Fund" are to the individual series or portfolio of
such fund or trust, or to such fund or trust on behalf of the individual series
or portfolio, as appropriate. Any reference in this Agreement to "the parties"
shall mean the Custodian and such other individual Fund as to which the matter
pertains. Each Fund hereby represents and warranties that (i) it has the
requisite power and authority under applicable laws and its Governing Documents
to enter into and perform this Agreement, (ii) all requisite proceedings have
been taken to authorize it to enter into and perform this Agreement, and (iii)
its entrance into this Agreement shall not cause a material breach or be in
material conflict with any other agreement or obligation of the Fund or any law
or regulation applicable to it.
SECTION 12.18 DIRECTORS AND TRUSTEES. It is understood and is expressly
stipulated that neither the holders of Shares nor any member of the Board be
personally liable hereunder. Whenever reference is made herein to an action
required to be taken by the Board, such action may also be taken by the Board's
executive committee.
SECTION 12.19 MASSACHUSETTS BUSINESS TRUST. With respect to any Fund which
is a party to this Agreement and which is organized as a Massachusetts business
trust, the term "Fund" means and refers to the trustees from time to time
serving under the applicable trust agreement of such trust, as the same may be
amended from time to time (the "DECLARATION OF TRUST"). It is expressly agreed
that the obligations of any such Fund hereunder shall not be binding upon any of
the trustees, shareholders, nominees, officers, agents or employees of the Fund
personally, but bind only the trust property of the Fund as set forth in the
applicable Declaration of Trust. In the case of each Fund which is a
Massachusetts business trust (in each case, a "TRUST"), the execution and
delivery of this Agreement on behalf of the Trust has been authorized by the
trustees, and signed by an authorized officer, of the Trust, in each case acting
in such capacity and not individually, and neither such authorization by the
trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them
<PAGE>
individually, but shall bind only the trust property of the Trust as provided in
its Declaration of Trust.
SECTION 12.20 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules,
exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 12.21 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2 requires
banks which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of beneficial
owners of securities of that issuer held by the bank unless the beneficial owner
has expressly objected to disclosure of this information. In order to comply
with the rule, the Custodian needs the Fund to indicate whether it authorizes
the Custodian to provide the Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If the Fund tells the
Custodian "no", the Custodian will not provide this information to requesting
companies. If the Fund tells the Custodian "yes" or does not check either "yes"
or "no" below, the Custodian is required by the rule to treat the Fund as
consenting to disclosure of this information for all securities owned by the
Fund or any funds or accounts established by the Fund. For the Fund's
protection, the Rule prohibits the requesting company from using the Fund's name
and address for any purpose other than corporate communications. Please
indicate below whether the Fund consents or objects by checking one of the
alternatives below.
YES [ ]
The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [X]
The Custodian is not authorized to release the Fund's name,
address, and share positions.
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
Addendum to the Custodian Agreement (as defined below) between each fund
listed on Appendix A to the Custodian Agreement, as such Appendix A is amended
from time to time (each such fund listed on Appendix A shall be individually
referred to herein as the "FUND"), and State Street Bank and Trust Company
("STATE STREET").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
the Fund pursuant to a certain Custodian Agreement (the "CUSTODIAN AGREEMENT")
dated as of January 28, 1998, and amended thereafter from time to time;
WHEREAS, State Street has developed and utilizes proprietary accounting and
other systems, including State Street's proprietary Multicurrency HORIZON/R/
Accounting System, in its role as custodian of the Fund, and maintains certain
Fund-related data ("FUND DATA") in databases under the control and ownership of
State Street (the "DATA ACCESS SERVICES"); and
WHEREAS, State Street makes available to the Fund (and certain of the
Fund's agents as set forth herein) certain Data Access Services solely for the
benefit of the Fund, and intends to provide additional services, consistent with
the terms and conditions of this Addendum.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a.
System. Subject to the terms and conditions of this Addendum and solely for the
- ------
purpose of providing access to Fund Data as set forth herein, State Street
hereby agrees to provide the Fund, or certain third parties approved by State
Street that serve as the Fund's investment advisors, investment managers or fund
accountants (the "FUND ACCOUNTANTS") or as the Fund's independent auditors (the
"AUDITOR"), with access to State Street's Multicurrency HORIZON/R/ Accounting
System and the other information systems described in Attachment A
(collectively, the "SYSTEM") on a remote basis solely on the computer hardware,
system software and telecommunication links described in Attachment B (the
"DESIGNATED
<PAGE>
CONFIGURATION") or on any designated substitute or back-up equipment
configuration consented to in writing by State Street, such consent not to be
unreasonably withheld.
b.
Data Access Services. State Street agrees to make available to the Fund the
- ---- ------ --------
Data Access Services subject to the terms and conditions of this Addendum and
such data access operating standards and procedures as may be issued by State
Street from time to time. The Fund shall be able to access the System to (i)
originate electronic instructions to State Street in order to (a) effect the
transfer or movement of cash or securities held under custody by State Street or
(b) transmit accounting or other information (the transactions described in
(i)(a) and (i)(b) above are referred to herein as "CLIENT ORIGINATED ELECTRONIC
FINANCIAL INSTRUCTIONS"), and (ii) access data for the purpose of reporting and
analysis, which shall all be deemed to be Data Access Services for purposes of
this Addendum.
c.
Additional Services. State Street may from time to time agree to make available
- ---------- --------
to the Fund additional Systems that are not described in the attachments to this
Addendum. In the absence of any other written agreement concerning such
additional systems, the term "SYSTEM" shall include, and this Addendum shall
govern, the Fund's access to and use of any additional System made available by
State Street and/or accessed by the Fund.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Fund acknowledge that in connection with the Data
Access Services provided under this Addendum, the Fund will have access, through
the Data Access Services, to Fund Data and to functions of State Street's
proprietary systems; provided, however that in no event will the Fund have
direct access to any third party systems-level software that retrieves data for,
stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a.
Designated Equipment; Designated Locations. The System and the Data Access
- ---------- ---------- ---------- ---------
Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Fund or the Fund Accountants in Baltimore,
Maryland or Owings Mills, Maryland ("DESIGNATED LOCATIONS").
b.
Designated Configuration; Trained Personnel. State Street and the Fund shall
- ---------- -------------- ------- ---------
be responsible for supplying, installing
<PAGE>
and maintaining the Designated Configuration at the Designated Locations. State
Street and the Fund agree that each will engage or retain the services of
trained personnel to enable both parties to perform their respective obligations
under this Addendum. State Street agrees to use commercially reasonable efforts
to maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c.
Scope of Use. The Fund will use the System and the Data Access Services only
- ----- -- ---
for the processing of securities transactions, the keeping of books of account
for the Fund and accessing data for purposes of reporting and analysis. The
Fund shall not, and shall cause its employees and agents not to (i) permit any
unauthorized third party to use the System or the Data Access Services, (ii)
sell, rent, license or otherwise use the System or the Data Access Services in
the operation of a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the Data Access Services
for any fund, trust or other investment vehicle), other than as set forth
herein, without the prior written consent of State Street, (iv) allow access to
the System or the Data Access Services through terminals or any other computer
or telecommunications facilities located outside the Designated Locations, (v)
allow or cause any information (other than portfolio holdings, valuations of
portfolio holdings, and other information reasonably necessary for the
management or distribution of the assets of the Fund) transmitted from State
Street's databases, including data from third party sources, available through
use of the System or the Data Access Services to be redistributed or
retransmitted to another computer, terminal or other device for other than use
for or on behalf of the Fund or (vi) modify the System in any way, including
without limitation developing any software for or attaching any devices or
computer programs to any equipment, system, software or database which forms a
part of or is resident on the Designated Configuration.
d.
Other Locations. Except in the event of an emergency or of a planned System
- ----- ---------
shutdown, the Fund's access to services performed by the System or to Data
Access Services at the Designated Locations may be transferred to a different
location only upon the prior written consent of State Street. In the event of
an emergency or System shutdown, the Fund may use any back-up site included in
the Designated Configuration or any other back-up site agreed to by State
Street, which agreement will not be unreasonably withheld. The Fund may secure
from State Street the right to access the System or the Data Access Services
through computer and telecommunications
<PAGE>
facilities or devices complying with the Designated Configuration at additional
locations only upon the prior written consent of State Street and on terms to be
mutually agreed upon by the parties.
e.
Title. Title and all ownership and proprietary rights to the System, including
- -----
any enhancements or modifications thereto, whether or not made by State Street,
are and shall remain with State Street.
f.
No Modification. Without the prior written consent of State Street, the Fund
- -- ------------
shall not modify, enhance or otherwise create derivative works based upon the
System, nor shall the Fund reverse engineer, decompile or otherwise attempt to
secure the source code for all or any part of the System.
g.
Security Procedures. The Fund shall comply with data access operating standards
- -------- ----------
and procedures and with user identification or other password control
requirements and other security procedures as may be issued from time to time by
State Street for use of the System on a remote basis and to access the Data
Access Services. The Fund shall have access only to the Fund Data and
authorized transactions agreed upon from time to time by State Street and, upon
notice from State Street, the Fund shall discontinue remote use of the System
and access to Data Access Services for any security reasons cited by State
Street; provided, that, in such event, State Street shall, for a period not less
than 180 days (or such other shorter period specified by the Fund) after such
discontinuance, assume responsibility to provide accounting services under the
terms of the Custodian Agreement.
h.
Inspections. State Street shall have the right to inspect the use of the System
- -----------
and the Data Access Services by the Fund, the Fund Accountants and the Auditor
to ensure compliance with this Addendum. The on-site inspections shall be upon
prior written notice to Fund, the Fund Accountants and the Auditor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Fund's or the Fund Accountants' or the Auditor
respective businesses.
4. PROPRIETARY INFORMATION
a.
Proprietary Information. The Fund acknowledges and State Street represents that
- ----------- -----------
the System and the databases, computer programs, screen formats, report formats,
interactive design techniques, documentation and other information made
available to the Fund by State Street as part of the Data Access Services and
<PAGE>
through the use of the System constitute copyrighted, trade secret, or other
proprietary information of substantial value to State Street. Any and all such
information provided by State Street to the Fund shall be deemed proprietary and
confidential information of State Street (hereinafter "PROPRIETARY
INFORMATION"). The Fund agrees that it will hold such Proprietary Information
in the strictest confidence and secure and protect it in a manner consistent
with its own procedures for the protection of its own confidential information
and to take appropriate action by instruction or agreement with its employees or
agents who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. The Fund further acknowledges that State Street shall
not be required to provide the Fund Accountants or the Auditor with access to
the System unless it has first received from the Fund Accountants and the
Auditor an undertaking with respect to State Street's Proprietary Information in
the form of Attachment C and/or Attachment C-1 to this Addendum. The Fund shall
use all commercially reasonable efforts to assist State Street in identifying
and preventing any unauthorized use, copying or disclosure of the Proprietary
Information or any portions thereof or any of the logic, formats or designs
contained therein.
b.
Cooperation. Without limitation of the foregoing, the Fund shall advise State
- -----------
Street immediately in the event the Fund learns or has reason to believe that
any person to whom the Fund has given access to the Proprietary Information, or
any portion thereof, has violated or intends to violate the terms of this
Addendum, and the Fund will, at its reasonable expense, cooperate with State
Street in seeking injunctive or other equitable relief in the name of the Fund
or State Street against any such person.
c.
Injunctive Relief. The Fund acknowledges that the disclosure of any Proprietary
- ---------- ------
Information, or of any information which at law or equity ought to remain
confidential, will immediately give rise to continuing irreparable injury to
State Street inadequately compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d.
Survival. The provisions of this Section 4 shall survive the termination of
- --------
this Addendum.
<PAGE>
5. LIMITATION ON LIABILITY
a.
Standard of Care and Limitation on Amount and Time for Bringing Action. State
- -------- -- ---- --- ---------- -- ------ --- ---- --- -------- ------
Street shall be held to a standard of reasonable care with respect to all of its
duties and obligations under this Addendum. The Fund agrees that any liability
of State Street to the Fund or any third party arising with respect to the
System or State Street's provision of Data Access Services under this Data
Access Services Addendum shall be limited to the amount paid by the Fund for the
preceding 24 months for such services. The foregoing limitation shall relate
solely to State Street's provision of the Data Access Services pursuant to this
Addendum and is not intended to limit State Street's responsibility to perform
in accordance with the Custodian Agreement, including its duty to act in
accordance with Proper Instructions. In no event shall State Street be liable
to the Fund or any other party pursuant to this Addendum for any special,
indirect, punitive or consequential damages even if advised of the possibility
of such damages. No action, regardless of form, arising out of the terms of
this Addendum may be brought by the Fund more than two years after the Fund has
knowledge that the cause of action has arisen.
b.
Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING,
- ------- ----------
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
c.
Third-Party Data. Organizations from which State Street may obtain certain data
- ----------- ----
included in the System or the Data Access Services are solely responsible for
the contents of such data, and State Street shall have no liability for claims
arising out of the contents of such third-party data, including, but not limited
to, the accuracy thereof.
d.
Regulatory Requirements. As between State Street and the Fund, the Fund shall
- ---------- ------------
be solely responsible for the accuracy of any accounting statements or reports
produced using the Data Access Services and the System and the conformity
thereof with any requirements of law.
e.
Force Majeure. Neither party shall be liable for any costs or damages due to
- ----- -------
delay or nonperformance under this Data Access Services Addendum arising out of
any cause or event beyond such party's control, including, without limitation,
cessation of services hereunder or any damages resulting therefrom to the other
party as a result of work stoppage, power or other mechanical
<PAGE>
failure, computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Fund agrees to indemnify and hold State Street harmless from any loss,
damage or expense including reasonable attorney's fees, (a "loss") suffered by
State Street arising from (i) the negligence or willful misconduct in the use by
the Fund of the Data Access Services or the System, including any loss incurred
by State Street resulting from a security breach at the Designated Locations or
committed by the Fund's employees or agents or the Fund Accountants or the and
Auditor, and (ii) any loss resulting from incorrect Client Originated Electronic
Financial Instructions. State Street shall be entitled to rely on the validity
and authenticity of Client Originated Electronic Financial Instructions without
undertaking any further inquiry as long as such instruction is undertaken in
conformity with security procedures established by State Street from time to
time.
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the custody fee schedule in
effect from time to time between the parties (the "FEE SCHEDULE"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Addendum, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by the Fund. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a.
Training. State Street agrees to provide training, at a designated State Street
- --------
training facility or at the Designated Locations, to the Fund's personnel in
connection with the use of the System on the Designated Configuration. The Fund
agrees that it will set aside, during regular business hours or at other times
agreed upon by both parties, sufficient time to enable all operators of the
System and the Data Access Services, designated by the Fund, to receive the
training offered by State Street pursuant to this Addendum.
<PAGE>
b.
Installation and Conversion. State Street and the Fund shall be responsible for
- ------------ --- ----------
the technical installation and conversion ("INSTALLATION AND CONVERSION") of the
Designated Configuration. The Fund shall have the following responsibilities in
connection with Installation and Conversion of the System:
(i)
The Fund shall be solely responsible for the timely acquisition and
maintenance of the hardware and software that attach to the Designated
Configuration in order to use the Data Access Services at the
Designated Locations, and
(ii)
State Street and the Fund each agree that they will assign qualified
personnel to actively participate during the Installation and
Conversion phase of the System implementation to enable both parties
to perform their respective obligations under this Addendum.
9. SUPPORT
During the term of this Addendum, State Street agrees to provide the
support services set out in Attachment D to this Addendum.
10. TERM
a.
Term. This Addendum shall become effective on the date of its execution by
- ----
State Street and shall remain in full force and effect until terminated as
herein provided.
b.
Termination. Either party may terminate this Addendum (i) for any reason by
- -----------
giving the other party at least one-hundred and eighty (180) days' prior written
notice in the case of notice of termination by State Street to the Fund or
thirty (30) days' notice in the case of notice from the Fund to State Street of
termination; or (ii) immediately for failure of the other party to comply with
any material term and condition of the Addendum by giving the other party
written notice of termination. In the event the Fund shall cease doing
business, shall become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Addendum and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Fund. This
Addendum shall in any event terminate as to any Fund within ninety (90) days
after the termination of the Custodian Agreement.
<PAGE>
c.
Termination of the Right to Use. Upon termination of this Addendum for any
- ----------- -- --- ----- -- ---
reason, any right to use the System and access to the Data Access Services shall
terminate and the Fund shall immediately cease use of the System and the Data
Access Services. Immediately upon termination of this Addendum for any reason,
the Fund shall return to State Street all copies of documentation and other
Proprietary Information in its possession; provided, however, that in the event
that either party terminates this Addendum or the Custodian Agreement for any
reason other than the Fund's breach, State Street shall provide the Data Access
Services for a period of time and at a price to be agreed upon in writing by the
parties.
11. MISCELLANEOUS
a.Year 2000. State Street will take all steps necessary to ensure that its
---- ----
products (and those of its third-party suppliers) reflect the available state of
the art technology to offer products that are Year 2000 compliant, including,
but not limited to, century recognition of dates, calculations that correctly
compute same century and multi-century formulas and date values, and interface
values that reflect the date issues arising between now and the next one-hundred
years. If any changes are required, State Street will make the changes to its
products at no cost to the Fund and in a commercially reasonable time frame and
will require third-party suppliers to do likewise.
b.
Assignment; Successors. This Addendum and the rights and obligations of the
- ----------- ----------
Fund and State Street hereunder shall not be assigned by either party without
the prior written consent of the other party, except that State Street may
assign this Addendum to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
c.
Survival. All provisions regarding indemnification, warranty, liability and
- --------
limits thereon, and confidentiality and/or protection of proprietary rights and
trade secrets shall survive the termination of this Addendum.
d.
Entire Agreement. This Addendum and the attachments hereto constitute the
- ------ ---------
entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot
<PAGE>
be modified or altered except in a writing duly executed by the parties. This
Addendum is not intended to supersede or modify the duties and liabilities of
the parties hereto under the Custodian Agreement or any other agreement between
the parties hereto except to the extent that any such agreement specifically
refers to the Data Access Services or the System. No single waiver or any right
hereunder shall be deemed to be a continuing waiver.
e. Severability.
------------
If any provision or provisions of this Addendum shall be held to be invalid,
unlawful, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired.
f.
Governing Law. This Addendum shall be interpreted and construed in accordance
- --------- ---
with the internal laws of The Commonwealth of Massachusetts without regard to
the conflict of laws provisions thereof.
<PAGE>
ATTACHMENT A
MULTICURRENCY HORIZON/R/ ACCOUNTING SYSTEM
SYSTEM PRODUCT DESCRIPTION
I. The Multicurrency HORIZON/R/ Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest/R/ GlobalQuest/R/ is designed to provide customer access to
the following information maintained on The Multicurrency HORIZON/R/ Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund; 5) daily priced positions; 6) open trades; 7)
settlement status; 8) foreign exchange transactions; 9) trade history; and 10)
daily, weekly and monthly evaluation services.
III. HORIZON/R/ Gateway. HORIZON/R/ Gateway provides customers with the
ability to (i) generate reports using information maintained on the
Multicurrency HORIZON/R/ Accounting System which may be viewed or printed at the
customer's location; (ii) extract and download data from the Multicurrency
HORIZONR Accounting System; and (iii) access previous day and historical data.
The following information which may be accessed for these purposes: 1)
holdings; 2) holdings pricing; 3) transactions, 4) open trades; 5) income;
6) general ledger and 7) cash.
IV. State Street Interchange. State Street Interchange is an open
------------------------
information delivery architecture wherein proprietary communication products,
data formats and workstation tools are replaced by industry standards and is
designed to enable the connection of State Street's network to customer
networks, thereby facilitating the sharing of information.
ATTACHMENT C
UNDERTAKING
(FUND ACCOUNTANTS)
<PAGE>
The undersigned understands that in the course of its employment as Fund
Accountant to each fund listed on Appendix A (as amended from time to time) to
that certain Custodian Agreement dated as of January 28, 1998 (the "FUND"), it
will have access to State Street Bank and Trust Company's Multicurrency HORIZON
Accounting System and other information systems (collectively, the "SYSTEM").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street Bank and Trust Company ("STATE STREET") as part of the Data Access
Services provided to the Fund and through the use of the System constitute
copyrighted, trade secret, or other proprietary information of substantial value
to State Street. Any and all such information provided by State Street to the
Undersigned shall be deemed proprietary and confidential information of State
Street (hereinafter "PROPRIETARY INFORMATION"). The undersigned agrees that it
will hold such Proprietary Information in confidence and secure and protect it
in a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder.
The undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
<PAGE>
[The Fund Accountants]
By: ______________________________
Title: ______________________________
Date: ______________________________
<PAGE>
ATTACHMENT C-1
UNDERTAKING
(AUDITOR)
The undersigned understands that in the course of its employment as Auditor
to each fund listed on Appendix A (as amended from time to time) to that certain
Custodian Agreement dated as of January 28, 1998 (the "FUND") it will have
access to State Street Bank and Trust Company's Multicurrency HORIZON Accounting
System and other information systems (collectively, the "SYSTEM").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street Bank and Trust Company ("STATE STREET") as part of the Data Access
Services provided to the Fund and through the use of the System constitute
copyrighted, trade secret, or other proprietary information of substantial value
to State Street. Any and all such information provided by State Street to the
Undersigned shall be deemed proprietary and confidential information of State
Street (hereinafter "PROPRIETARY INFORMATION"). The undersigned agrees that it
will hold such Proprietary Information in confidence and secure and protect it
in a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder.
The undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
<PAGE>
[The Auditor]
By: ______________________________
Title: ______________________________
Date: ______________________________
<PAGE>
ATTACHMENT D
SUPPORT
During the term of this Addendum, State Street agrees to provide the
following on-going support services:
a.
Telephone Support. The Fund Designated Persons may contact State Street's
HORIZON/R/ Help Desk and Fund Assistance Center between the hours of 8 a.m. and
6 p.m. (Eastern time) on all business days for the purpose of obtaining answers
to questions about the use of the System, or to report apparent problems with
the System. From time to time, the Fund shall provide to State Street a list of
persons who shall be permitted to contact State Street for assistance (such
persons being referred to as the "FUND DESIGNATED PERSONS").
b.
Technical Support. State Street will provide technical support to assist the
- --------- -------
Fund in using the System and the Data Access Services. The total amount of
technical support provided by State Street shall not exceed 10 resource days per
year. State Street shall provide such additional technical support as is
expressly set forth in the fee schedule in effect from time to time between the
parties (the "FEE SCHEDULE"). Technical support, including during installation
and testing, is subject to the fees and other terms set forth in the Fee
Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
-------------------
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d.
System Enhancements. State Street will provide to the Fund any enhancements to
- ------ ------------
the System developed by State Street and made a part of the System; provided
that State Street offer the Fund reasonable training on the enhancement.
Charges for system enhancements shall be as provided in the Fee Schedule.
State Street retains the right to charge for related systems or products that
may be developed and separately made available for use other than through the
System.
e.
Custom Modifications. In the event the Fund desires custom modifications in
- ------ -------------
connection with its use of the System, the Fund shall make a written request to
State Street providing specifications for the desired modification. Any custom
<PAGE>
modifications may be undertaken by State Street in its sole discretion in
accordance with the Fee Schedule.
f.
Limitation on Support. State Street shall have no obligation to support the
- ---------- -- -------
Fund's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Fund has modified the System in breach of
this Addendum.
In WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date and year first written above.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
<PAGE>
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
<PAGE>
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
INSTITUTIONAL DOMESTIC EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
T. ROWE PRICE SMALL CAP STOCK FUND, INC.
T. Rowe Price Small Cap Stock Fund
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE TAX EFFICIENT BALANCED FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Government Reserve Investment Fund
Reserve Investment Fund
<PAGE>
SIGNATURE ATTESTED TO: EXECUTED ON BEHALF OF EACH FUND:
/s/Suzanne E. Fraunhoffer /s/Carmen Deyesu
By: _____________________ By:____________________
Name: Suzanne E. Fraunhoffer Name: Carmen Deyesu
Title: Legal Assistant Title: Treasurer for
each of the foregoing
SIGNATURE ATTESTED TO:
STATE STREET BANK AND TRUST COMPANY
/s/Glenn Ciotti /s/Ronald E. Logue
By: _____________________ By:____________________
Name: Glenn Ciotti Name: Ronald E. Logue
Title: VP & Assoc. Counsel Title: Executive Vice
President
<PAGE>
SCHEDULE A
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
United Kingdom State Street Bank None;
and Trust Company The Bank of England,
The Central Gilts Office (CGO);
The Central Moneymarkets Office (CMO)
Euroclear (The Euroclear System)/ State Street London Limited
<PAGE>
APPENDIX A
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
<PAGE>
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
<PAGE>
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE VALUE FUND, INC.
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
INSTITUTIONAL DOMESTIC EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
T. ROWE PRICE SMALL CAP STOCK FUND, INC.
T. Rowe Price Small Cap Stock Fund
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE TAX EFFICIENT BALANCED FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Government Reserve Investment Fund
Reserve Investment Fund
<PAGE>
AMENDMENT NO. 1
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
The Custodian Contract of January 28, 1998, between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is hereby further
amended, as of November 4, 1998, by adding thereto T. Rowe Price International
Funds, Inc., on behalf of T. Rowe Price International Growth & Income Fund.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE GNMA FUND
<PAGE>
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
<PAGE>
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT BALANCED FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
<PAGE>
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
/s/Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/Stephen F. Brown
By: _____________________________________
Stephen F. Brown, Vice President
<PAGE>
AMENDMENT NO. 2
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
The Custodian Contract of January 28, 1998, as amended November 4, 1998 between
State Street Bank and Trust Company and each of the Parties listed on Appendix A
thereto is hereby further amended, as of April 21, 1999, by adding thereto T.
Rowe Price Tax-Efficient Funds, Inc., on behalf of T. Rowe Price Tax-Efficient
Balanced Fund and T. Rowe Price Tax-Efficient Growth Fund.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
<PAGE>
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
<PAGE>
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
<PAGE>
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman
<PAGE>
AMENDMENT NO. 3
TO CUSTODIAN CONTRACT BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
THE T. ROWE PRICE FUNDS
The Custodian Contract of January 28, 1998, as amended November 4, 1998 and
April 21, 1999 between State Street Bank and Trust Company and each of the
Parties listed on Appendix A thereto is hereby further amended, as of February
9, 2000, by adding thereto Institutional Equity Funds, Inc., on behalf of
Institutional Large-Cap Value Fund and Institutional Small-Cap Stock Fund.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
<PAGE>
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
<PAGE>
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
/s/ Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins, Vice President
STATE STREET BANK AND TRUST COMPANY
/s/ Ronald E. Logue
By: _____________________________________
Ronald E. Logue, Vice Chairman
The Global Custody Agreement dated January 3, 1994, as amended, between
The Chase Manhattan Bank, N.A. and T. Rowe Price Funds.
<PAGE>
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective January 3, 1994, and is between THE CHASE
MANHATTAN BANK, N.A. (the "Bank") and EACH OF THE ENTITIES LISTED ON SCHEDULE A
HERETO, Individually and Separately (each individually, the "Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a)
A custody account in the name of the Customer ("Custody Account") for any
and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same or evidencing or representing any other
rights or interests therein and other similar property whether
certificated or uncertificated as may be received by the Bank or its
Subcustodian (as defined in Section 3) for the account of the Customer
("Securities"); and
(b)
A deposit account in the name of the Customer ("Deposit Account") for any
and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal
by draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional Accounts
may be established and separately accounted for as additional Accounts under the
terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to the
Bank:
(a)
Securities will be held in the country or other jurisdiction in which the
principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b)
Cash will be credited to an account in a country or other jurisdiction in
which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-interest
bearing accounts as may be available for the particular currency. To the extent
Instructions are issued and the Bank can comply with such Instructions, the Bank
is authorized to maintain cash balances on deposit for the Customer with itself
or one of its affiliates at such reasonable rates of interest as may from time
to time be paid on such accounts, or in non-interest bearing accounts as the
Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed in
Schedule B of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets
in the Accounts in accounts which the Bank has established with one or more of
its branches or Subcustodians. The Bank and Subcustodians are authorized to
hold any of the Securities in their account with any securities depository in
which they participate.
The Bank reserves the right to add new, replace or remove Subcustodians. The
Customer will be given reasonable notice by the Bank of any amendment to
Schedule B. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify such Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers
of the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only to
the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject
only to the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject to
any right, charge, security interest, lien or claim of any kind in favor
of such Subcustodian or its creditors except for a claim for payment for
safe custody or administration, and that the beneficial ownership of such
assets will be freely transferable without the payment of money or value
other than for safe custody or administration.
<PAGE>
The foregoing shall not apply to the extent of any special agreement or
arrangement made by the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit Account
upon receipt of Instructions which include all information required by the
Bank.
(b) In the event that any payment to be made under this Section 5 exceeds the
funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan
payable on demand, bearing interest at the rate customarily charged by the
Bank on similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at any time
prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, the Customer
will promptly return any such amount upon oral or written notification:
(i) that such amount has not been received in the ordinary course of
business or (ii) that such amount was incorrectly credited. If the
Customer does not promptly return any amount upon such notification, the
Bank shall be entitled, upon oral or written notification to the Customer,
to reverse such credit by debiting the Deposit Account for the amount
previously credited. The Bank or its Subcustodian shall have no duty or
obligation to institute legal proceedings, file a claim or a proof of
claim in any insolvency proceeding or take any other action with respect
to the collection of such amount, but may act for the Customer upon
Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or its
Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account may
be made in accordance with the customary or established securities trading
or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivery of Securities to a purchaser, dealer or their agents against a
receipt with the expectation of receiving later payment and free delivery.
Delivery of Securities out of the Custody Account may also be made in any
manner specifically required by Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any
sale, exchange or purchase of Securities. Otherwise, such transactions
will be credited or debited to the Accounts on the date cash or Securities
are actually received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii)
If any Securities delivered pursuant to this Section 6 are returned by
the recipient thereof, the Bank may reverse the credits and debits of
the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or retired
or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or
Subcustodian is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other certificates
as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the Securities,
including, without limitation, affiliates of the Bank or any Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless the
Customer sends the Bank a written exception or objection to any Bank statement
within ninety (90) days of receipt, the Customer shall be deemed to have
approved such statement. The Bank shall, to the extent permitted by law, be
released, relieved and discharged with respect to all matters set forth in such
statement or reasonably implied therefrom as though it had been settled by the
decree of a court of competent jurisdiction in an action where the Customer and
all persons having or claiming an interest in the Customer or the Customer's
Accounts were parties if: (a) the Customer has failed to provide a written
exception or objection to any Bank statement within ninety (90) days of receipt
and where the Customer's failure to so provide a written exception or objection
within such ninety (90) day period has limited the Bank's (i) access to the
records, materials and other information required to investigate the Customer's
exception or objection, and (ii) ability to recover from third parties any
amounts for which the Bank may become liable in connection with such exception
or objection, or (b) where the Customer has otherwise explicitly approved any
such statement.
<PAGE>
All collections of funds or other property paid or distributed in respect of
Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES.
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer notice of such Corporate Actions to the extent that the Bank's central
corporate actions department has actual knowledge of a Corporate Action in time
to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person, but if Instructions are not received in time
for the Bank to take timely action, or actual notice of such Corporate Action
was received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the Deposit Account with
the proceeds or take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing. Such
proxies shall be executed in the appropriate nominee name relating to Securities
in the Custody Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and where bearer
Securities are involved, proxies will be delivered in accordance with
Instructions.
9. NOMINEES.
Securities which are ordinarily held in registered form may be registered in
a nominee name of the Bank, Subcustodian or securities depository, as the case
may be. The Bank may without notice to the Customer cause any such Securities
to cease to be registered in the name of any such nominee and to be registered
in the name of the Customer. In the event that any Securities registered in a
nominee name are called for partial redemption by the issuer, the Bank may allot
the called portion to the respective beneficial holders of such class of
security pro rata or in any other manner that is fair, equitable and
practicable. The Customer agrees to hold the Bank, Subcustodians, and their
respective nominees harmless from any liability arising directly or indirectly
from their status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person received
by the Bank, via telephone, telex, TWX, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but the Customer will hold the Bank
harmless for the failure of an Authorized Person to send such confirmation in
writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties as
are set forth in this Agreement or expressly contained in Instructions
which are consistent with the provisions of this Agreement.
Notwithstanding anything to the contrary in this Agreement:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the
Customer's direct damages, and shall in no event be liable for any
special or consequential damages.
<PAGE>
(ii)
The Bank will not be responsible for any act, omission, default or for
the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith or for any
loss due to the negligent act of such broker or agent except to the
extent that such broker or agent (other than a Subcustodian) performs
in a negligent manner which is the cause of the loss to the Customer
and the Bank failed to exercise reasonable care in monitoring such
broker's or agent's performance where Customer has requested and Bank
has agreed to accept such monitoring responsibility.
(iii)
The Bank shall be indemnified by, and without liability to the Customer
for any action taken or omitted by the Bank whether pursuant to
Instructions or otherwise within the scope of this Agreement if such
act or omission was in good faith, without negligence. In performing
its obligations under this Agreement, the Bank may rely on the
genuineness of any document which it believes in good faith to have
been validly executed.
(iv)The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts, except to the extent
that the Bank has failed to exercise reasonable care in performing any
obligations which the Bank may have agreed to assume (in addition to
those stated in this Agreement) with respect to taxes and such failure
by the Bank is the direct cause of such imposition or assessment of
such taxes, charges or expenses.
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all legal matters and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice; provided, that the Bank gives (to the extent
practicable) prior notice to Customer of Bank's intention to so seek
advice of counsel and an opportunity for consultation with Customer on
the proposed contact with counsel.
(vi)
The Bank represents and warrants that it currently maintain a banker's
blanket bond which provides standard fidelity and non-negligent loss
coverage with respect to the Securities and Cash which may be held by
Subcustodians pursuant to this Agreement. The Bank agrees that if at
any time it for any reason discontinues such coverage, it shall
immediately give sixty (60) days' prior written notice to the Customer.
The Bank need not maintain any insurance for the benefit of the
Customer.
(vii)
Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: (1) the general risk of investing, or (2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or
other governmental actions; regulation of the banking or securities
industry; currency restrictions, devaluations or fluctuations; and
market conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii)
Neither party shall be liable to the other for any loss due to forces
beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this Section
12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii)
supervise or make recommendations with respect to investments or the
retention of Securities;
(iii)
advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement;
(iv)
evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent (other than a
Subcustodian) or other party to which Securities are delivered or
payments are made pursuant to this Agreement;
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may
have a material interest in a transaction, or circumstances are such that
the Bank may have a potential conflict of duty or interest including the
fact that the Bank or any of its affiliates may provide brokerage services
to other customers, act as financial advisor to the issuer of Securities,
act as a lender to the issuer of Securities, act in the same transaction
as agent for more than one customer, have a material interest in the issue
of Securities, or earn profits from any of the activities listed herein.
13. FEES AND EXPENSES.
<PAGE>
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
reasonable legal fees. The Bank shall have a lien on and is authorized to charge
any Accounts of the Customer for any amount owing to the Bank under any
provision of this Agreement upon notice to the Customer.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. Pursuant to Instructions, which may be
------------------------------
standing Instructions, to facilitate the administration of the Customer's
trading and investment activity, the Bank is authorized to enter into spot
or forward foreign exchange contracts with the Customer or an Authorized
Person for the Customer and may also provide foreign exchange through its
subsidiaries or Subcustodians. The Bank may establish rules or limitations
concerning any foreign exchange facility made available. In all cases
where the Bank, its subsidiaries, affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of
the then current foreign exchange contract of the Bank, its subsidiary,
affiliate or Subcustodian and, to the extent not inconsistent, this
Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is a
--------------------------------
resident of the United States and agrees to notify the Bank of any changes
in residency. The Bank may rely upon this certification or the
certification of such other facts as may be required to administer the
Bank's obligations under this Agreement. The Customer will indemnify the
Bank against all losses, liability, claims or demands arising directly or
indirectly from any such certifications.
(c) Access to Records. The Bank shall allow the Customer's independent public
------------------
accountants, officers and advisers reasonable access to the records of the
Bank relating to the Assets as is required in connection with their
examination of books and records pertaining to the Customer's affairs.
Subject to restrictions under applicable law, the Bank shall also obtain
an undertaking to permit the Customer's independent public accountants
reasonable access to the records of any Subcustodian which has physical
possession of any Assets as may be required in connection with the
examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be governed
--------------------------------------
by the laws of the State of New York and shall not be assignable by either
party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the Assets
------------------------------------
deposited in the Accounts are (Check one):
X <F1> Employee Benefit Plan or other assets subject to the Employee
-- ----
Retirement Income Security Act of 1974, as amended ("ERISA");
X /2/ Mutual Fund assets subject to certain Securities and Exchange
--
Commission ("SEC") rules and regulations;
X /3/ Neither of the above.
--
With respect to each Customer, this Agreement consists exclusively of this
document together with Schedules A, B, Exhibits I - _______ and the
following Rider(s) to the extent indicated on Schedule A hereto opposite
the name of the Customer under the column headed "Applicable Riders to
Agreement":
X ERISA
- -
X MUTUAL FUND
- -
SPECIAL TERMS AND CONDITIONS
---
There are no other provisions of this Agreement and this Agreement supersedes
any other agreements, whether written or oral, between the parties. Any
amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this Agreement
-------------
are held invalid, illegal or enforceable in any respect on the basis of
any particular circumstances or in any jurisdiction, the validity,
legality and enforceability of such provision or provisions under other
circumstances or in other jurisdictions and of the remaining provisions
will not in any way be affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure or
-------
delay on the part of either party in exercising any power or right under
this Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise, or
the exercise of any other power or right. No waiver by a party of any
provision of this Agreement, or waiver of any breach or default, is
effective unless in writing and signed by the party against whom the
waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
--------
actually received. Any notices or other
-------------------------
<F1>
With respect to each Customer listed on Schedule A hereto under the heading
"ERISA Trusts."
2.
With respect to each Customer listed on Schedule A hereto under the heading
"Investment Companies/Portfolios Registered Under the Investment Company
Act of 1940."
3.
With respect to certain of the Customers listed on Schedule A hereto under
the heading "Separate Accounts" as indicated on Schedule A.
<PAGE>
(h) Notices. All notices under this Agreement shall be effective when
--------
actually received. Any notices or other
<PAGE>
EACH OF THE CUSTOMERS, INDIVIDUALLY AND SEPARATELY
LISTED ON SECTION III OF SCHEDULE A HERETO
By:
/s/Alvin M. Younger
Alvin M. Younger
Treasurer
THE CHASE MANHATTAN BANK, N.A.
By:
/s/Alan Naughton
Alan Naughton
Vice President
<PAGE>
Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
<PAGE>
Schedule A
Page 2 of 2
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
-------- ------------------------
Income Funds
------------
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Common Trust Funds
------ ----- -----
T. Rowe Price Trust Company, as Trustee
for the International Common Trust Fund
on behalf of the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable
to the Customer listed
RPFI International Partners, L.P. under Section III of
this Schedule A.
<PAGE>
ERISA RIDER TO GLOBAL CUSTODY AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK, N.A. AND
EACH OF THE ENTITIES LISTED ON SCHEDULE A HERETO
EFFECTIVE JANUARY 3, 1994
Customer represents that the Assets being placed in the Bank's custody are
subject to ERISA. It is understood that in connection therewith the Bank is a
service provider and not a fiduciary of the plan and trust to which the assets
are related. The Bank shall not be considered a party to the underlying plan
and trust and the Customer hereby assumes all responsibility to assure that
Instructions issued under this Agreement are in compliance with such plan and
trust and ERISA.
This Agreement will be interpreted as being in compliance with the Department
of Labor Regulations Section 2550.404b-1 concerning the maintenance of indicia
of ownership of plan assets outside of the jurisdiction of the district courts
of the United States.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
------------------------------------------
Add the following language to the end of Section 3:
As used in this Agreement, the term Subcustodian and the term securities
depositories include a branch of the Bank, a branch of a qualified U.S. bank, an
eligible foreign custodian, or an eligible foreign securities depository, where
such terms shall mean:
(a) "qualified U.S. bank" shall mean a U.S. bank as described in paragraph
(a)(2)(ii)(A)(1) of the Department of Labor Regulations Section
2550.404b-1;
(b) "eligible foreign custodian" shall mean a banking institution
incorporated or organized under the laws of a country other than the
United States which is supervised or regulated by that country's
government or an agency thereof or other regulatory authority in the
foreign jurisdiction having authority over banks; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which is supervised or regulated
by that country's government or an agency thereof or other regulatory
authority in the foreign jurisdiction having authority over such
depositories or clearing agencies and which is described in paragraph
(c)(2) of the Department of Labor Regulations Section 2550.404b-1.
Section 4. Use of Subcustodian.
--------------------
Subsection (d) of this section is modified by deleting the last sentence.
Section 5. Deposit Account Payments.
-------------------------
Subsection (b) is amended to read as follows:
(b) In the event that any payment made under this Section 5 exceeds the
funds available in the Deposit Account, such discretionary advance shall
be deemed a service provided by the Bank under this Agreement for which it
is entitled to recover its costs as may be determined by the Bank in good
faith.
Section 10. Authorized Persons.
------------------
Add the following paragraph at the end of Section 10:
Customer represents that: a) Instructions will only be issued by or for a
fiduciary pursuant to Department of Labor Regulation Section 404b-1 (a)(2)(i)
and b) if Instructions are to be issued by an investment manager, such entity
will meet the requirements of Section 3(38) of ERISA and will have been
designated by the Customer to manage assets held in the Customer Accounts
("Investment Manager"). An Investment Manager may designate certain of its
employees to act as Authorized Persons under this Agreement.
Section 14(a). Foreign Exchange Transactions.
------------------------------
Add the following paragraph at the end of Subsection 14(a):
Instructions to execute foreign exchange transactions with the Bank, its
subsidiaries, affiliates or Subcustodians will include (1) the time period in
which the transaction must be completed; (2) the location i.e., Chase New York,
----
Chase London, etc. or the Subcustodian with whom the contract is to be executed
and (3) such additional information and guidelines as may be deemed necessary;
and, if the Instruction is a standing Instruction, a provision allowing such
Instruction to be overridden by specific contrary Instructions.
<PAGE>
MUTUAL FUND RIDER TO GLOBAL CUSTODY AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK, N.A. AND
EACH OF THE ENTITIES LISTED ON SCHEDULE A HERETO
EFFECTIVE JANUARY 3, 1994
Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
------------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this Agreement
shall mean a branch of a qualified U.S. bank, an eligible foreign custodian or
an eligible foreign securities depository, which are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in Rule
17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in
excess of $200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and
that has shareholders' equity in excess of $100 million in U.S. currency
(or a foreign currency equivalent thereof)(iii) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States or a majority owned direct or indirect subsidiary
of a qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States which
has such other qualifications as shall be specified in Instructions and
approved by the Bank; or (iv) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the SEC;
and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i) the central
system for handling securities or equivalent book-entries in that country,
or (ii) a transnational system for the central handling of securities or
equivalent book-entries.
The Customer represents that its Board of Directors has approved each of the
Subcustodians listed in Schedule B to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through of Schedule B, and further represents that its Board
----
has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule B for approval. As requested by the Bank, the Customer will supply
the Bank with certified copies of its Board of Directors resolution(s) with
respect to the foregoing prior to placing Assets with any Subcustodian so
approved.
Section 11. Instructions.
-------------
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is to be
made and Customer shall be solely responsible to assure that Instructions are in
accord with any limitations or restrictions applicable to the Customer by law or
as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or other
securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
<PAGE>
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge of
Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the Customer
and the delivery to, or the crediting to the account of, the Bank, its
Subcustodian or the Customer's transfer agent, such shares to be purchased
or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among the
Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the
option, or at expiration, the Bank will receive from brokers the
Securities previously deposited. The Bank will act strictly in accordance
with Instructions in the delivery of Securities to be held in escrow and
will have no responsibility or liability for any such Securities which are
not returned promptly when due other than to make proper request for such
return;
(m) For spot or forward foreign exchange transactions to facilitate security
trading, receipt of income from Securities or related transactions;
(n) For other proper purposes as may be specified in Instructions issued by
an officer of the Customer which shall include a statement of the purpose
for which the delivery or payment is to be made, the amount of the payment
or specific Securities to be delivered, the name of the person or persons
to whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing the Customer;
and
o) Upon the termination of this Agreement as set forth in Section 14(i).
Section 12. Standard of Care; Liabilities.
------------------------------
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after due
inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for
such Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank and its
securities depositories in New York.
Section 14. Access to Records.
------------------
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of internal
accounting controls applicable to the Bank's duties under this Agreement. The
Bank shall endeavor to obtain and furnish the Customer with such similar reports
as it may reasonably request with respect to each Subcustodian and securities
depository holding the Customer's assets.
GLOBAL CUSTODY AGREEMENT
WITH
-----------------------------------
DATE
-----------------------------------
<PAGE>
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
January, 1994
B
SUB-CUSTODIANS EMPLOYED BY
--------------------------
THE CHASE MANHATTAN BANK, N.A. LONDON, GLOBAL CUSTODY
-----------------------------------------------------
COUNTRY SUB-CUSTODIAN CORRESPONDENT BANK
ARGENTINA The Chase Manhattan Bank, The Chase Manhattan
N.A., Main Branch Bank, N.A.
25 De Mayo 130/140 Buenos Aires
Buenos Aires
ARGENTINA
AUSTRALIA The Chase Manhattan Bank, The Chase Manhattan Bank
Australia Limited Australia Limited Sydney
36th Floor
World Trade Centre
Jamison Street
Sydney
New South Wales 2000
AUSTRALIA
AUSTRIA Creditanstalt - Bankvereln Credit Lyonnais Vienna
Schottengasse 6
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered Bank Standard Chartered Bank
18-20 Motijheel C.A. Dhaka
Box 536,
Dhaka-1000
BANGLADESH
BELGIUM Generale Bank Credit Lyonnais Bank
3 Montagne Du Parc Brussels
1000 Bruxelles
BELGIUM
BOTSWANA Standard Chartered Bank Standard Chartered Bank
Botswana Ltd. Botswana Ltd.
4th Floor Commerce House Gabarone
The Mall
Gaborone
BOTSWANA
BRAZIL Banco Chase Manhattan, S.A. Banco Chase Manhattan
Chase Manhattan Center S.A., Sao Paolo
<PAGE>
Rua Verbo Divino, 1400
Sao Paulo, SP 04719-002
BRAZIL
CANADA The Royal Bank of Canada Toronto Dominion Bank
Royal Bank Plaza Toronto
Toronto
Ontario M5J 2J5
CANADA
Canada Trust Toronto Dominion Bank
Canada Trust Tower Toronto
BCE Place
161 Bay at Front
Toronto
Ontario M5J 2T2
CANADA
CHILE The Chase Manhattan Bank, The Chase Manhattan
N.A., Agustinas 1235 Bank, N.A., Santiago
Casilla 9192
Santiago
CHILE
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia S.A.
Sociedad Fiduciaria Sociedad Fiduciaria
Av. Jimenez No 8-89 Santafe de Bogota
Santafe de Bogota, DC
COLOMBIA
CZECH Ceskoslovenska Obchodni Ceskoslovenska
REPUBLIC Banka, A.S.; Na Prikoope 14 Obchodni Banka, A.S.
115 20 Praha 1 Praha
CZECH REPUBLIC
DENMARK Den Danske Bank Den Danske Bak
2 Holmens Kanala DK 1091 Copenhagen
Copenhagen
DENMARK
EUROBONDS Cedel S.A. A/c No. 17817
67 Blvd Grande Duchesse ECU:Lloyds Bank PLC
Charlotte LUXEMBOURG International Banking
Dividion
A/c Chase Manhattan Bank, London
N.A. London For all other
currencies: see
relevant country
<PAGE>
EURO CDS First Chicago Clearing Centre ECU:Lloyds Bank PLC
27 Leadenhall Street Banking Division London
London EC3A 1AA For all other
UK currencies: see
relevant country
FINLAND Kansallis-Osake-Pankki Kanasallis-Osake-Pankki
Aleksanterinkatu 42
00100 Helsinki 10
FINLAND
FRANCE Banque Paribas Societe Generale Paris
Ref 256
BP 141
3, Rue D'Antin
75078 Paris
Cedex 02
FRANCE
GERMANY Chase Bank A.G. Chase Bank A.G.
Alexanderstrasse 59 Frankfurt
Postfach 90 01 09
60441 Frankfurt/Main
GERMANY
GREECE National Bank of Greece S.A. National Bank of Greece
38 Stadiou Street S.A. Athens
Athens A/c Chase Manhattan
GREECE Bank, N.A., London
A/c No. 040/7/921578-68
HONG KONG The Chase Manhattan Bank,NA The Chase Manhattan
40/F One Exchange Square Bank, N.A., Hong Kong
8, Connaught Place
Central, Hong Kong
HONG KONG
HUNGARY Citibank Budapest Rt. Citibank Budapest Rt.
Vaci Utca 19-21 Budapest
1052 Budapest V
HUNGARY
INDIA The Hongkong and Shanghai The Hongkong and
Banking Corporation Limited Shanghai Banking
52/60 Mahatma Gandhi Road Corporation Limited,
Bombay 400 001 Bombay
INDIA
<PAGE>
INDONESIA The Hongkong and Shanghai The Chase Manhattan
Banking Corporation Limited Bank, N.A., Jakarta
World Trade Center
J1. Jend Sudirman Kav. 29-31
Jakarta 10023
INDONESIA
IRELAND Bank of Ireland Allied Irish Bank Dublin
International Financial Services Centre
1 Hargourmaster Place
Dublin 1
IRELAND
ISRAEL Bank Leumi Le-Israel B.M. Bank Leumi Le-Israel
19 Herzi Street B.M., Tel Aviv
65136 Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank, The Chase Manhattan
N.A., Piazza Meda 1 Bank, N.A., Milan
20121 Milan
ITALY
JAPAN The Chase Manhattan Bank, The Chase Manhattan
N.A.,1-3 Marunouchi 1-Chome Bank, N.A., Tokyo
Chiyoda-Ku
Tokyo 100
JAPAN
JORDAN Arab Bank Limited Arab Bank Limited
P.O. Box 950544-5 Amman
Amman
Shmeisani
JORDAN
LUXEMBOURG Banque Generale du Luxembourg Banque Generale du
S.A., 27 Avenue Monterey Luxembourg S.A.
LUXEMBOURG Luxembourg
MALAYSIA The Chase Manhattan Bank, The Chase Manhattan
N.A., Pernas International Bank, N.A., Kuala Lumpur
Jalan Sultan Ismail
50250, Kuala Lumpur
MALAYSIA
MEXICO The Chase Manhattan Bank, No correspondent Bank
N.A., Hamburgo 213, Piso 7 (Equities)
06660 Mexico D.F.
MEXICO
<PAGE>
(Government Banco Nacional de Mexico, Banque Commerciale du
Bonds) Avenida Juarez No. Maroc
104-11 Piso Casablanca
06040 Mexico D.F.
MEXICO
NETHERLANDS ABN AMRO N.V. Credit Lyonnais
Securities Centre Bank Nederland N.V.
P.O. Box 3200 Rotterdam
4800 De Breda
NETHERLANDS
NEW ZEALAND National Nominees Limited National Bank of New Zealand
Level 2 BNZ Tower Wellington
125 Queen Street
Auckland
NEW ZEALAND
NORWAY Den Norske Bank Den Norske Bank
Kirkegaten 21 Oslo
Oslo 1
NORWAY
PAKISTAN Citibank N.A. Citibank N.A.
State Life Building No.1 Karachi
I.I. Chundrigar Road
Karachi
PAKISTAN
PERU Citibank, N.A. Citibank N.A. Lima
Camino Real 457
CC Torre Real - 5th Floor
San Isidro, Lima 27
PERU
PHILIPPINES The Hongkong and Shanghai The Hongkong and Shaghai
Banking Corporation Limited Banking Corporation
Hong Kong Bank Centre 3/F Limited, Manila
San Miguel Avenue
Ortigas Commercial Centre
Pasig Metro Manila
PHILIPPINES
POLAND Bank Polska Kasa Opieki Bank Potska Kasa Opieki
S.A., 6/12 Nowy Swiat Str S.A., Warsaw
00-920 Warsaw
<PAGE>
POLAND
PORTUGAL Banco Espirito Santo & Banco Pinto &
Comercial de Lisboa Sotto Mayor
Servico de Gestaode Titulos Avenida Fontes
R. Mouzinho da Silvelra, Pereira de Melo
36 r/c, 1200 Lisbon 1000 Lisbon
PORTUGAL
SHANGHAI The Hongkong and Shanghai The Chase Manhattan
(CHINA) Banking Corporation Limited Bank, N.A.,Hong Kong
Shanghai Branch
Corporate Banking Centre
Unit 504, 5/F Shanghai Centre
1376 Hanjing Xi Lu
Shanghai
THE PEOPLE'S REPUBLIC OF CHINA
SCHENZHEN The Hongkong and Shanghai The Chase Manhattan
(CHINA) Banking Corporation Limited Bank, N.A., Hong Kong
1st Floor
Central Plaza Hotel
No. 1 Chun Feng Lu
Shenzhen
THE PEOPLE'S REPUBLIC OF CHINA
SINGAPORE The Chase Manhattan Bank, The Chase Manhattan
N.A. Bank, N.A.
Shell Tower Singapore
50 Raffles Place
Singapore 0104
SINGAPORE
SOUTH KOREA The Hongkong & Shanghai The Hongkong & Shanghai
Banking Corporation Limited Banking Corporation
6/F Kyobo Building Limited, Seoul
#1 Chongro, 1-ka Chongro-Ku,
Seoul
SOUGH KOREA
SPAIN The Chase Manhattan Bank, Banco Zaragozano, S.A.
N.A.,Calle Peonias 2 Madrid
7th Floor
La Piovera
28042 Madrid
SPAIN
URUGUAY The First National Bank The First National Bank
<PAGE>
of Boston of Boston
Zabala 1463 Montevideo
Montevideo
URUGUAY
U.S.A The Chase Manhattan Bank, The Chase Manhattan
N.A. Bank, N.A.
1 Chase Manhattan Plaza New York
New York
NY 10081
U.S.A.
VENEZUELA Citibank N.A. Citibank N.A.
Carmelitas a Altagracia Caracas
Edificio Citibank
Caracas 1010
VENEZUELA
<PAGE>
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of April 18, 1994 (the "AMENDMENT AGREEMENT")
to the Global Custody Agreement, effective January 3, 1994 (the "CUSTODY
AGREEMENT") by and between each of the Entities listed in Attachment A hereto,
separately and individually (each such entity referred to hereinafter as the
"CUSTOMER") and THE CHASE MANHATTAN BANK, N.A. (the "BANK"). Terms defined in
the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("SCHEDULE
---------
A") shall be amended to add each Customer listed in Attachment A hereto. The
revised Schedule A incorporating these changes in the form attached hereto as
Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
---------
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
-------------------------
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
<PAGE>
4. Governing Law. This Amendment Agreement shall be construed in
-------------
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
By: /s/Alan P. Naughton
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
T. Rowe Price International Series, Inc. on behalf of the
T. Rowe Price International Stock Portfolio
T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of
T. Rowe Price Limited-Term Bond Portfolio
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price New America Growth Fund, Inc.
<PAGE>
Attachment B Schedule A
Page 2 of 2
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
-------- --------------
AGREEMENT
----------
Income Funds
------------
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
------------------
T. Rowe Price Trust Company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of August 15, 1994 (the "AMENDMENT
AGREEMENT") to the Global Custody Agreement, effective January 3, 1994, as
amended (the "CUSTODY AGREEMENT") by and between each of the Entities listed in
Attachment A hereto, separately and individually (each such entity referred to
hereinafter as the "CUSTOMER") and THE CHASE MANHATTAN BANK, N.A. (the "BANK").
Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("SCHEDULE
---------
A") shall be amended to add each Customer listed in Attachment A hereto. The
revised Schedule A incorporating these changes in the form attached hereto as
Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
---------
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
-------------------------
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
<PAGE>
4. Governing Law. This Amendment Agreement shall be construed in
-------------
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
By: /s/Alan P. Naughton
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
T. Rowe Price Equity Series, Inc. on behalf of the
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
<PAGE>
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
<PAGE>
Attachment B Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
-------- --------------
AGREEMENT
----------
Income Funds
------------
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
------------------
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
<PAGE>
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of November 28, 1994 (the "Amendment
Agreement") to the Global Custody Agreement, effective January 3, 1994, as
amended (the "Custody Agreement") by and between each of the Entities listed in
Attachment A hereto, separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank").
Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add each Customer listed in Attachment A hereto. The
revised Schedule A incorporating these changes in the form attached hereto as
Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
<PAGE>
4. Governing Law. This Amendment Agreement shall be construed in
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By :_________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
T. Rowe Price Value Fund, Inc.
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
<PAGE>
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
<PAGE>
Attachment B Schedule A
Page 2 of 2
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
<PAGE>
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of May 31, 1995 (the "Amendment Agreement")
to the Global Custody Agreement, effective January 3, 1994, as amended (the
"Custody Agreement") by and between each of the Entities listed in Attachment A
hereto, separately and individually (each such entity referred to hereinafter as
the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank"). Terms defined
in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add and delete certain Customers as specified in
Attachment A hereto. The revised Schedule A incorporating these changes in the
form attached hereto as Attachment B shall supersede the existing Schedule A in
its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be construed in
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the
<PAGE>
day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan P. Naughton
By: _________________________________
Alan P. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
Add the following Fund:
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
Delete the following Fund:
CUNA Mutual Funds, Inc. on behalf of:
CUNA Mutual Cornerstone Fund
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
<PAGE>
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
<PAGE>
Attachment B Schedule A
Page 2 of 2
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
T. Rowe Price Trust company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
<PAGE>
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of November 1, 1995 (the "Amendment
Agreement") to the Global Custody Agreement, effective January 3, 1994, as
amended (the "Custody Agreement") by and between each of the Entities listed in
Attachment A hereto, separately and individually (each such entity referred to
hereinafter as the "Customer") and THE CHASE MANHATTAN BANK, N.A. (the "Bank").
Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add and delete certain Customers as specified in
Attachment A hereto. The revised Schedule A incorporating these changes in the
form attached hereto as Attachment B shall supersede the existing Schedule A in
its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be construed in
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, N.A.
/s/Alan R. Naughton
By: _________________________________
Alan R. Naughton
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
/s/Carmen F. Deyesu
By: _________________________________
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
Add the following Funds:
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Stock Fund
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Health & Life Sciences Fund, Inc.
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1993
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price European Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
<PAGE>
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price Value Fund, Inc.
T. Rowe Price Health & Life Sciences Fund, Inc.
Attachment B Schedule A
Page 1 of 2
Income Funds
T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Global Government Income Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Corporate Income Fund, Inc.
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
T. Rowe Price Trust Company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Pacific Discovery Trust
<PAGE>
European Discovery Trust
Japan Discovery Trust
Latin American Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to
the Customer listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, and November 1, 1995 (the
"Custody Agreement"), by and between each of the Entities listed in Attachment A
hereto, separately and individually (each such entity referred to hereinafter as
the "Customer") and The Chase Manhattan Bank, N.A., which contracts have been
assumed by operation of law by THE CHASE MANHATTAN BANK (the "Bank") is hereby
further amended, as of July 31, 1996 (the "Amendment Agreement"). Terms defined
in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section I of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add and delete certain Customers as specified in
Attachment A hereto. The revised Schedule A incorporating these changes in the
form attached hereto as Attachment B shall supersede the existing Schedule A in
its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
4. Governing Law. This Amendment Agreement shall be construed in
accordance with and governed by the law of the State of New York without regard
to its conflict of law principles.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK
/s/Caroline Willson
By:_________________________________
Caroline Willson Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEPARATELY AND
INDIVIDUALLY
/s/Carmen F. Deyesu
By:________________________________
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
Add the following Funds:
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Financial Services Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of:
Emerging Markets Equity Trust
<PAGE>
Attachment B Schedule A
Page 1 of 2
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK, N.A.
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of:
T. Rowe Price International Stock Portfolio
<PAGE>
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price OTC Fund, Inc. on behalf of:
T. Rowe Price OTC Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Value Fund, Inc.
Income Funds
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
T. Rowe Price Trust Company,
as Trustee for the International
Common Trust Fund on behalf of
the Underlying Trusts:
Emerging Markets Equity Trust
European Discovery Trust
<PAGE>
Foreign Discovery Trust
Foreign Discovery Trust-Augment
Japan Discovery Trust
Latin America Discovery Trust
Pacific Discovery Trust
New York City International Common Trust Fund
III. OTHER No Riders are applicable to the
Customer
listed under
RPFI International Section III of this
Partners, L.P. Schedule A.
<PAGE>
AMENDMENT, dated July 17, 1997 to the January 3, 1994 Custody Agreement
("Agreement"), as amended July 31, 1996 ("Amendment Agreement"), by and between
each of the Entities listed in Attachment B of the Amendment Agreement,
separately and individually (each such entity hereinafter referred to as the
"Customer"), and The Chase Manhattan Bank, N.A. whose obligations have since
been adopted by The Chase Manhattan Bank ("Bank"), having a place of business at
One Chase Manhattan Plaza, New York, N.Y. 10081
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows by adding the following as
new ' 15:
(a) "CMBI" shall mean Chase Manhattan Bank International, an indirect
wholly-owned subsidiary of Bank, located in Moscow, Russia, and any nominee
companies appointed by it.
(b) "International Financial Institution" shall mean any bank in the top
1,000 (together with their affiliated companies) as measured by "Tier 1" capital
or any broker/dealer in the top 100 as measured by capital.
(c) "Negligence" shall mean the failure to exercise "Reasonable Care".
(d) "No-Action Letter" shall mean the response of the Securities and
Exchange Commission's Office of Chief Counsel of Investment Management, dated
April 18, 1995, in respect of the Templeton Russia Fund, Inc. (SEC Ref. No.
95-151-CC, File No. 811-8788) providing "no-action" relief under '17(f) of the
Investment Company Act of 1940, as amended, and SEC Rule 17-f5 thereunder, in
connection with custody of such Templeton Russia Fund, Inc.'s investments in
Russian Securities.
(e) "Reasonable Care" shall mean the use of reasonable custodial practices
under the applicable circumstances as measured by the custodial practices then
prevailing in Russia of
<PAGE>
International Financial Institutions acting as custodians for their
institutional investor clients in Russia.
(f) "Registrar Company" shall mean any entity providing share registration
services to an issuer of Russian Securities.
(g) "Registrar Contact" shall mean a contract between CMBI and a Registrar
Company (and as the same may be amended from time to time) containing, inter
alia, the contractual provisions described at paragraphs (a)-(e) on pps. 5-6 of
the No-Action Letter.
(h) "Russian Security" shall mean a Security issued by a Russian issuer.
(i) "Share Extract" shall mean: (i) an extract of its share registration
books issued by a Registrar Company indicating an investor's ownership of a
security; and (ii) a form prepared by CMBI or its agent in those cases where a
Registrar Company in unwilling to issue a Share Extract.
Section 3. Section 6(a) of the Agreement is amended by adding the following
at the end thereof: "With respect to Russia, payment for Russian Securities
shall not be made prior to the issuance of the Share Extract relating to such
Russian Security. Delivery of Russian Securities may be made in accordance with
the customary or established securities trading or securities processing
practices and procedures in Russia. Delivery of Russian Securities may also be
made in any manner specifically required by Instructions acceptable to the Bank.
Customer shall promptly supply such transaction and settlement information as
may be requested by Bank or CMBI in connection with particular transactions."
Section 4. Section 8 of the Agreement is amended by adding a new paragraph
to the end thereof as follows: "It is understood and agreed that Bank need only
use its reasonable efforts with respect to performing the functions described in
this '8 with respect to Russian Securities."
Section 5. Section 12(a)(i) of the Agreement is amended with respect to
Russian custody by deleting the phrase "reasonable care" wherever it appears and
substituting, in lieu thereof, the phrase "Reasonable Care."
Section 6. Section 12(a)(i) of the Agreement is further amended with
respect to Russian
<PAGE>
custody by inserting the following at the end of the first sentence thereof:
"provided that, with respect to Russian Securities, Bank's responsibilities
shall be limited to safekeeping of relevant Share Extracts."
Section 7. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following after the second sentence
thereof: "In connection with the foregoing, neither Bank nor CMBI shall assume
responsibility for, and neither shall be liable for, any action or inaction of
any Registrar Company and no Registrar Company shall be, or shall be deemed to
be, Bank, CMBI, a Subcustodian, a securities depository or the employee, agent
or personnel of any of the foregoing. To the extent that CMBI employs agents to
perform any of the functions to be performed by Bank or CMBI with respect to
Russian Securities, neither Bank nor CMBI shall be responsible for any act,
omission, default or for the solvency of any such agent unless the appointment
of such agent was made with Negligence or in bad faith, or for any loss due to
the negligent act of such agent except to the extent that such agent performs in
a negligent manner which is the cause of the loss to the Customer and the Bank
or CMBI failed to exercise reasonable care in monitoring such agent's
performance where Customer has requested and Bank has agreed to accept such
monitoring responsibility and except that where Bank or CMBI uses (i) an
affiliated nominee or (ii) an agent to perform the share registration or share
confirmation functions described in paragraphs (a)-(e) on pps. 5-6 of the
No-Action Letter, and, to the extent applicable to CMBI, the share registration
functions described on pps. 2-3 of the No-Action Letter, Bank and CMBI shall be
liable to Customer as if CMBI were responsible for performing such services
itself."
Section 8. Section 12(a)(ii) is amended with respect to Russian custody by
deleting the word "negligently" and substituting, in lieu thereof, the word
"Negligently."
Section 9. Section 12(a)(iii) is amended with respect to Russian custody by
deleting the word "negligence" and substituting, in lieu thereof, the word
"Negligence."
Section 10. Add a new Section 16 to the Agreement as follows:
(a) Bank will advise Customer (and will update such advice from time to
time as changes occur) of those Registrar Companies with which CMBI has entered
into a Registrar Contract. Bank shall cause CMBI both to monitor each Registrar
Company and to promptly advise Customer when
<PAGE>
CMBI has actual knowledge of the occurrence of any one or more of the events
described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter with respect
to a Registrar Company that serves in that capacity for any issuer the shares of
which are held by Customer.
(b) Where Customer is considering investing in the Russian Securities of an
issuer as to which CMBI does not have a Registrar Company, Customer may request
that Bank ask that CMBI both consider whether it would be willing to attempt to
enter into such a Registrar Contract and to advise Customer of its willingness
to do so. Where CMBI has agreed to make such an attempt, Bank will advise
Customer of the occurrence of any one or more or the events described in
paragraphs (i)-(iv) on pps. 8-9 of the No-Action Letter of which CMBI has actual
knowledge.
(c) Where Customer is considering investing in the Russian Securities of an
issuer as to which CMBI has a Registrar Contract with the issuer's Registrar
Company, Customer may advise Bank of its interest in investing in such issuer
and, in such event, Bank will advise Customer of the occurrence of any one or
more of the events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action
Letter of which CMBI has actual knowledge.
Section 11. Add a new Section 17 to the Agreement as follows: "Customer
shall pay for and hold Bank and CMBI harmless from any liability or loss
resulting from the imposition or assessment of any taxes (including, but not
limited to, state, stamp and other duties) or other governmental charges, and
any related expenses with respect to income on Russian Securities."
Section 12. Add a new Section 18 to the Agreement as follows: "Customer
acknowledges and agrees that CMBI may not be able, in given cases and despite
its reasonable efforts, to obtain a Share Extract from a Registrar Company and
CMBI shall not be liable in any such even including with respect to any losses
resulting from such failure."
Section 13. Add a new Section 19 to the Agreement as follows: "Customer
acknowledges that it has received, reviewed and understands that Chase market
report for Russia, including, but not limited to, the risks described therein."
Section 14. Add a new Section 20 to the Agreement as follows: "Subject to
the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar
<PAGE>
Company, Bank shall cause CMBI to conduct share confirmations on at least a
quarterly basis, although thereafter confirmations may be conducted on a less
frequent basis if Customer's Board of Directors, in consultation with CMBI,
determines it to be appropriate."
Section 15. Add a new Section 21 to the Agreement as follows: "Bank shall
cause CMBI to prepare for distribution to Customer's Board of Directors a
quarterly report identifying: (i) any concerns it has regarding the Russian
share registration system that should be brought to the attention of the Board
of Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Customer's interests continue to be appropriately recorded."
Section 16. Add a new Section 22 to the Agreement as follows: "Except as
provided in new '16(b), the services to be provided by Bank hereunder will be
provided only in relation to Russian Securities for which CMBI has entered into
a Registrar Contract with the relevant Registrar Company."
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
for EACH CUSTOMER THE CHASE MANHATTAN
BANK
separately and individually
/s/Henry H. Hopkins /s/Helen C. Bairsto
Henry H. Hopkins Helen C. Bairsto
Vice President Vice President
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, and July 31,
1996 (the "Custody Agreement"), by and between each of the Entities listed in
Attachment A hereto, separately and individually (each such entity referred to
hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which
contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the
"Bank") is hereby further amended, as of July 23, 1997 (the "Amendment
Agreement"). Terms defined in the Custody Agreement are used herein as therein
defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section 1 of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add certain Customers as specified in Attachment A
hereto. The revised Schedule A incorporating these changes in the form attached
hereto as Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
4. Governing Law: This Amendment Agreement shall be construed in accordance
with and governed by the law of the State of New York without regard to its
conflict of law principles.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the
day and year first above written.
THE CHASE MANHATTAN BANK
By: /S/Caroline Willson
Caroline Willson
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
Add the following Funds:
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
Change the name of the following Fund:
T. Rowe Price OTC Fund, Inc., on behalf of:
T. Rowe Price OTC Fund
Effective May 1, 1997, the fund name changed to:
T. Rowe Price Small-Cap Stock Fund, Inc.
Delete the following Fund:
T. Rowe Price International Funds, Inc., on behalf of:
T. Rowe Price Short-Term Global Income Fund
<PAGE>
Attachment B
Schedule A
Page 1 of 3
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
PAGE 69
<PAGE>
Attachment B
Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Stock Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Value Fund, Inc.
Income Funds
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
<PAGE>
Attachment B
Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Savings Plan
Common Trust Funds
T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust
European Discovery Trust
Foreign Discovery Trust
Foreign Discovery Trust - Augment
Japan Discovery Trust
Latin America Discovery Trust
Pacific Discovery Trust
New York City International Common Trust Fund
III. OTHER
RPFI International Partners, L.P. No Riders are applicable to the
Customer listed under Section III of this Schedule A.
<PAGE>
AMENDMENT, dated July 23, 1997, to the Custody Agreement ("Agreement"),
dated January 3, 1994, between The Chase Manhattan Bank (as successor to The
Chase Manhattan Bank, N.A.), having an office at 270 Park Avenue, New York, NY
10017-2070 and certain T. Rowe Price funds.
It is agreed as follows:
1. The third line of '8 of the Agreement is deleted and the following is
inserted, in lieu thereof:
Bank shall provide proxy voting services in accordance with the
terms of the proxy voting services rider ("Proxy Rider") annexed
hereto as Exhibit 1. Proxy voting services may be provided by Bank
or, in whole or in part, by one or more third parties appointed by
Bank (which may be Affiliates of Bank).
2. Except as modified hereby, the Agreement is confirmed in all respects.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
EACH OF THE CUSTOMERS, INDIVIDUALLY THE CHASE MANHATTAN
AND SEPARATELY LISTED ON SECTION 1 OF BANK
SCHEDULE A HERETO
By:/s/Henry H. Hopkins By:/s/Helen C. Bairsto
Henry H. Hopkins Helen C. Bairsto
Vice President Vice President
EACH OF THE CUSTOMERS, INDIVIDUALLY AND
SEPARATELY LISTED ON SECTION 2 OF
SCHEDULE A HERETO
By:/s/Nancy M. Morris
Nancy M. Morris
Vice President
<PAGE>
Exhibit 1
GLOBAL PROXY SERVICE RIDER
TO GLOBAL CUSTODY AGREEMENT
BETWEEN
THE CHASE MANHATTAN BANK
AND
CERTAIN T. ROWE PRICE FUNDS
DATED 3RD JANUARY, 1994
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished to
the Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and form
a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank to
Customer of the dates of pending shareholder meetings, resolutions to be voted
upon and the return dates as may be received by Bank or provided to Bank by its
Subcustodians or third parties, and (b) voting by Bank of proxies based on
Customer directions. Original proxy materials or copies thereof shall not be
provided. Notifications shall generally be in English and, where necessary,
shall be summarized and translated from such non-English materials as have been
made available to Bank or its Subcustodian. In this respect Bank=s only
obligation is to provide information from sources it believes to be reliable
and/or to provide materials summarized and/or translated in good faith. Bank
reserves the right to provide Notifications, or parts thereof, in the language
received. Upon reasonable advance request by Customer, backup information
relative to Notifications, such as annual reports, explanatory material
concerning resolutions, management recommendations or other material relevant to
the exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications where
Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the Agreement, in
performing Proxy Services
<PAGE>
Bank shall be acting solely as the agent of Customer, and shall not
exercise any discretion with regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Securities are: (I) on loan;
(ii) at registrar for registration or reregistration; (iii) the subject of a
conversion or other corporate action; (iv) not held in a name subject to the
control of Bank or its Subcustodian or are otherwise held in a manner which
precludes voting; (v) not capable of being voted on account of local market
regulations or practices or restrictions by the issuer; or (vi) held in a margin
or collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis (e.g.,
a net yes or no vote given the voting instructions received from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in no
event sell, license, give or otherwise make the information provided hereunder
available, to any third party, and shall not directly or indirectly compete with
Bank or diminish the market for Proxy Services by provision of such information,
in whole or in part, for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with '10 of the Agreement. Proxy Services fees shall be as
separately agreed.
<PAGE>
SCHEDULE A
SECTION 1
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited Term Bond Portfolio
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Small-Cap Stock Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
T. Rowe Price Value Fund, Inc.
SECTION 2
NYC International Common Trust Fund
<PAGE>
AMENDMENT, dated October 29, 1997, to the Custody Agreement ("Agreement"),
dated January 3, 1994, between The Chase Manhattan Bank (as successor to The
Chase Manhattan Bank, N.A.), having an office at 270 Park Avenue, New York, NY
10017-2070 and certain T. Rowe Price funds.
It is agreed as follows:
1. The third line of '8 of the Agreement is deleted and the following is
inserted, in lieu thereof:
Bank shall provide proxy voting services in accordance with the
terms of the proxy voting services rider ("Proxy Rider") annexed
hereto as Exhibit 1. Proxy voting services may be provided by Bank
or, in whole or in part, by one or more third parties appointed by
Bank (which may be Affiliates of Bank).
2. Except as modified hereby, the Agreement is confirmed in all respects.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
EACH OF THE CUSTOMERS, INDIVIDUALLY THE CHASE MANHATTAN
AND SEPARATELY LISTED ON SECTION 1 OF BANK
SCHEDULE A HERETO
By:/s/Henry H. Hopkins By:/s/Helen C. Bairsto
Henry H. Hopkins Helen C. Bairsto
Vice President Vice President
EACH OF THE CUSTOMERS, INDIVIDUALLY AND
SEPARATELY LISTED ON SECTION 2 OF
SCHEDULE A HERETO
By:/s/Nancy M. Morris
Nancy M. Morris
Vice President
GLOBAL PROXY SERVICE RIDER
TO GLOBAL CUSTODY AGREEMENT
BETWEEN
THE CHASE MANHATTAN BANK
AND
CERTAIN T. ROWE PRICE FUNDS
<PAGE>
DATED 3RD JANUARY, 1994
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished to
the Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and form
a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank to
Customer of the dates of pending shareholder meetings, resolutions to be voted
upon and the return dates as may be received by Bank or provided to Bank by its
Subcustodians or third parties, and (b) voting by Bank of proxies based on
Customer directions. Original proxy materials or copies thereof shall not be
provided. Notifications shall generally be in English and, where necessary,
shall be summarized and translated from such non-English materials as have been
made available to Bank or its Subcustodian. In this respect Bank=s only
obligation is to provide information from sources it believes to be reliable
and/or to provide materials summarized and/or translated in good faith. Bank
reserves the right to provide Notifications, or parts thereof, in the language
received. Upon reasonable advance request by Customer, backup information
relative to Notifications, such as annual reports, explanatory material
concerning resolutions, management recommendations or other material relevant to
the exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications where
Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the Agreement, in
performing Proxy Services
Bank shall be acting solely as the agent of Customer, and shall not
exercise any discretion with regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Securities are: (I) on loan;
(ii) at registrar for registration or
<PAGE>
reregistration; (iii) the subject of a conversion or other corporate action;
(iv) not held in a name subject to the control of Bank or its Subcustodian or
are otherwise held in a manner which precludes voting; (v) not capable of being
voted on account of local market regulations or practices or restrictions by the
issuer; or (vi) held in a margin or collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis (e.g.,
a net yes or no vote given the voting instructions received from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in no
event sell, license, give or otherwise make the information provided hereunder
available, to any third party, and shall not directly or indirectly compete with
Bank or diminish the market for Proxy Services by provision of such information,
in whole or in part, for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with '10 of the Agreement. Proxy Services fees shall be as
separately agreed.
<PAGE>
SCHEDULE A
SECTION 1
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited Term Bond Portfolio
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price New America Growth Fund, Inc.
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Real Estate Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Small-Cap Stock Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
T. Rowe Price Value Fund, Inc.
SECTION 2
NYC International Common Trust Fund
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31,
1996, and July 23, 1997 (the "Custody Agreement"), by and between each of the
Entities listed in Attachment A hereto, separately and individually (each such
entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank,
N.A., which contracts have been assumed by operation of law by THE CHASE
MANHATTAN BANK (the "Bank") is hereby further amended, as of October 29, 1997
(the "Amendment Agreement"). Terms defined in the Custody Agreement are used
herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Section 1 of Schedule A of the Custody Agreement ("Schedule
A") shall be amended to add certain Customers as specified in Attachment A
hereto. The revised Schedule A incorporating these changes in the form attached
hereto as Attachment B shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
4. Governing Law: This Amendment Agreement shall be construed in
accordance with and governed by the law of the State of New York without regard
to its conflict
<PAGE>
of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK
By: /s/Helen C. Bairsto
Helen C. Bairsto
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEPARATELY AND INDIVIDUALLY
By: /s/Carmen F. Deyesu
Carmen F. Deyesu
Treasurer
<PAGE>
Attachment A
LIST OF CUSTOMERS
Add the following Fund:
T. Rowe Price Real Estate Fund, Inc.
<PAGE>
Attachment B
Schedule A
Page 1 of 3
LIST OF CUSTOMERS, EACH INDIVIDUALLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Capital Opportunity Fund, Inc.
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Financial Services Fund, Inc.
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price Health Sciences Fund, Inc.
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
<PAGE>
Attachment B
Schedule A
Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio
T. Rowe Price Media & Telecommunications Fund, Inc.
T. Rowe Price Mid-Cap Growth Fund, Inc.
T. Rowe Price Mid-Cap Value Fund, Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price Real Estate Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Small-Cap Stock Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Value Fund, Inc.
Income Funds
T. Rowe Price Corporate Income Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price International Bond Fund
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Short-Term U.S. Government Fund, Inc.
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
<PAGE>
Attachment B
Schedule A
Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company as Trustee for the
Johnson Matthey Salaried
Employee Savings Plan
Common Trust Funds
T. Rowe Price Trust Company, as Trustee for the
International Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust
European Discovery Trust
Foreign Discovery Trust
Foreign Discovery Trust - Augment
Japan Discovery Trust
Latin America Discovery Trust
Pacific Discovery Trust
New York City International Common Trust Fund
III. OTHER
RPFI International Partners, L.P. No Riders are
applicable to the
Customer listed under
Section III of this
Schedule A.
<PAGE>
AMENDMENT AGREEMENT TO
RUSSIAN RIDER TO THE GLOBAL
CUSTODY AGREEMENT
AMENDMENT to Attachment B of Global Custody Agreement dated January 3,
1994, as amended July 23, 1997, is hereby further amended as of September 3,
1997.
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Amend Attachment B to consist of the following funds when
pertaining to the Russian Rider dated July 17, 1997:
Institutional International Funds, Inc., on behalf of:
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK EACH OF THE PARTIES LISTED ABOVE
By: /s/Helen C. Bairsto By:/s/Henry H. Hopkins
Helen C. Bairsto Henry H. Hopkins
Vice President Vice President
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31,
1996, July 23, 1997, September 3, 1997, and October 29, 1997 (the "Custody
Agreement"), by and between each of the Entities listed in Schedule A, as
amended thereto, severally and not jointly (each such entity referred to
hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., which
contracts have been assumed by operation of law by THE CHASE MANHATTAN BANK (the
"Bank") is hereby further amended, as of December 15, 1998 (the "Amendment
Agreement"). Terms defined in the Custody Agreement are used herein as therein
defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Sections 1 and 3 of Schedule A of the Custody Agreement
----------
("Schedule A") shall be amended to add or change certain Customers as specified
in Attachment A hereto. The revised Schedule A incorporating these changes in
the form attached shall supersede the existing Schedule A in its entirety.
2. Agreement. The Customer agrees to be bound in all respects by all the
----------
terms and conditions of the Custody Agreement and shall be fully liable
thereunder as a "Customer" as defined in the Custody Agreement.
3. Confirmation of Agreement. Except as amended hereby, the Custody
--------------------------
Agreement is in full force and effect and as so amended is hereby ratified,
approved and confirmed by the Customer and the Bank in all respects.
<PAGE>
4. Governing Law. This Amendment Agreement shall be construed in accordance
--------------
with and governed by the law of the State of New York without regard to its
conflict of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK
/s/Joseph M. Rondinelli
By: _____________________________________
Joseph M. Rondinelli
Vice President
EACH OF THE CUSTOMERS LISTED IN ATTACHMENT A HERETO,
SEVERALLY AND NOT JOINTLY
/s/Henry H. Hopkins
By: _____________________________________
Henry H. Hopkins
Vice President
<PAGE>
Attachment A
LIST OF CUSTOMERS
Change the name of the following Fund:
- --------------------------------------
T. Rowe Price Global Government Bond Fund
Effective May 1, 1998, the fund name changed to:
T. Rowe Price Global Bond Fund
Add the following Fund:
- -----------------------
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price International Growth & Income Fund
Add the following Funds to the Russian Rider:
- ---------------------------------------------
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price International Growth & Income Fund
RPFI International Partners, L.P.
<PAGE>
Schedule A Page 1 of 3
LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is
REGISTERED UNDER THE INVESTMENT applicable to all Customers
COMPANY ACT OF 1940 listed under Section I of
this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc. Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc. Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc. Global Proxy Service
Rider
T. Rowe Price Dividend Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio Global Proxy Service
Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund Russian Rider
T. Rowe Price European Stock Fund Russian Rider
T. Rowe Price Global Stock Fund Russian Rider
T. Rowe Price International Discovery Fund Russian Rider
T. Rowe Price International Growth & Income Fund Russian Rider
T. Rowe Price International Stock Fund Russian Rider
T. Rowe Price Japan Fund Russian Rider
T. Rowe Price Latin America Fund Russian Rider
T. Rowe Price New Asia Fund Russian Rider
<PAGE>
Schedule A Page 2 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc. Global Proxy Service
Rider
T. Rowe Price Mid-Cap Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price New America Growth Fund Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc. Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc. Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc. Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc. Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price Value Fund, Inc. Global Proxy Service Rider
Income Funds
------------
T. Rowe Price Corporate Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc. Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund Russian Rider
T. Rowe Price Global Bond Fund Russian Rider
T. Rowe Price International Bond Fund Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc. Global Proxy Service
Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund Global Proxy Service Rider
T. Rowe Price Tax-Efficient Balanced Fund, Inc. Global Proxy Service Rider
<PAGE>
Schedule A Page 3 of 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY
AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable
to all Customers Under
Section II of this
Schedule A.
T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan
Common Trust Funds
------------------
T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust
European Discovery Trust
Foreign Discovery Trust
Foreign Discovery Trust - Augment
Japan Discovery Trust
Latin America Discovery Trust
Pacific Discovery Trust
New York City International Common Trust Fund Global Proxy Service Rider
III. OTHER
RPFI International Partners, L.P. Russian Rider
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31,
1996, July 23, 1997, September 3, 1997, October 29, 1997 and December 15, 1998
(the "Custody Agreement") by and between each of the Entities listed in Schedule
A, as amended thereto, severally and not jointly (each such entity referred to
hereinafter as the "Customer") and The Chase Manhattan Bank, N.A., whose
contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank") is hereby
further amended, as of October 6, 1999 (the "Amendment Agreement"). Terms
defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement
----------
("Schedule A") shall be amended to add or change certain Customers as specified
in Attachment A hereto. The revised Schedule A incorporating these changes in
the form attached shall supersede the existing Schedule A in its entirety.
2.
Agreement. The Customer and Bank agree to be bound in all respects by all the
- ----------
terms and conditions of the Custody Agreement and shall be fully liable and
responsible thereunder as a "Customer" and "Bank," respectively, as defined in
the Custody Agreement.
3.
Confirmation of Agreement. Except as amended hereby, the Custody Agreement is
- ------------ -- ---------
in full force and effect and as so amended is hereby ratified, approved and
confirmed by the Customer and the Bank in all respects.
<PAGE>
4.
Governing Law: This Amendment Agreement shall be construed in accordance with
- --------- ----
and governed by the law of the State of New York without regard to its conflict
of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK
/s/Joseph M. Rondinelli
By: ____________________________________
Joseph M. Rondinelli
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEVERALLY
AND NOT JOINTLY
/s/Henry H. Hopkins
By: ____________________________________
Henry H. Hopkins
Vice President
<PAGE>
ATTACHMENT A
PAGE 1 OF 2
LIST OF CUSTOMERS
Change the name of the following Fund:
- -------------------------------------
T. Rowe Price Tax-Efficient Balanced Fund, Inc.
Effective May 27, 1999, the fund name changed to:
T. Rowe Price Tax-Efficient Funds, Inc., on behalf of
T. Rowe Price Tax-Efficient Balanced Fund
Add the following Fund:
- -----------------------
T. Rowe Price Tax-Efficient Funds, Inc., on behalf of:
T. Rowe Price Tax-Efficient Growth Fund
Add the following Trusts:
- ------------------------
T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund, on behalf of the Underlying Trusts:
Foreign Discovery Trust - B
International Small-Cap Trust
Delete the following Trust:
- --------------------------
New York City International Common Trust Fund
Add the following Funds/Trusts/Limited Partnerships to the Global Proxy Service
- -------------------------------------------------------------------------------
Rider:
- -----
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Tax-Efficient Funds, Inc., on behalf of
T. Rowe Price Tax-Efficient Growth Fund
Institutional International Funds, Inc., on behalf of
Foreign Equity Fund
<PAGE>
ATTACHMENT A
PAGE 2 OF 2
T. Rowe Price International Funds, Inc., on behalf of
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price European Stock Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Stock Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
T. Rowe Price International Series, Inc., on behalf of
T. Rowe Price International Stock Portfolio
T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust
European Discovery Trust
Foreign Discovery Trust
Foreign Discovery Trust - Augment
Foreign Discovery Trust - B
International Small-Cap Trust
Japan Discovery Trust
Latin America Discovery Trust
Pacific Discovery Trust
RPFI International Partners, L.P.
<PAGE>
SCHEDULE A
PAGE 1 OF 3
LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENT all Customers listed under Section I of
COMPANY ACT OF 1940 this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc. Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio
Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
Global Proxy Service and Russian Rider
T. Rowe Price European Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price Global Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price International Discovery Fund
Global Proxy Service and Russian Rider
T. Rowe Price International Growth & Income Fund
Global Proxy Service and Russian Rider
T. Rowe Price International Stock Fund
Global Proxy Service and Russian Rider
T. Rowe Price Japan Fund Global Proxy Service and Russian Rider
T. Rowe Price Latin America Fund Global Proxy Service and Russian Rider
T. Rowe Price New Asia Fund Global Proxy Service and Russian Rider
<PAGE>
SCHEDULE A
PAGE 2 OF 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio
Global Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price New America Growth Fund Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc. Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc. Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc. Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price Value Fund, Inc. Global Proxy Service Rider
Income Funds
------------
T. Rowe Price Corporate Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc. Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
Global Proxy Service and Russian Rider
T. Rowe Price Global Bond Fund Global Proxy Service and Russian Rider
T. Rowe Price International Bond Fund
Global Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced Fund Global Proxy Service Rider
T. Rowe Price Tax-Efficient Growth Fund Global Proxy Service Rider
<PAGE>
SCHEDULE A
PAGE 3 OF 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable to all
Customers under Section II of this
Schedule A.
T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan
Common Trust Funds
------------------
T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust Global Proxy Service Rider
European Discovery Trust Global Proxy Service Rider
Foreign Discovery Trust Global Proxy Service Rider
Foreign Discovery Trust - Augment Global Proxy Service Rider
Foreign Discovery Trust - B Global Proxy Service Rider
International Small-Cap Trust Global Proxy Service Rider
Japan Discovery Trust Global Proxy Service Rider
Latin America Discovery Trust Global Proxy Service Rider
Pacific Discovery Trust Global Proxy Service Rider
III. OTHER
RPFI International Partners, L.P. Global Proxy Service and Russian Rider
<PAGE>
AMENDMENT AGREEMENT
The Global Custody Agreement of January 3, 1994, as amended April 18, 1994,
August 15, 1994, November 28, 1994, May 31, 1995, November 1, 1995, July 31,
1996, July 23, 1997, September 3, 1997, October 29, 1997, December 15, 1998 and
October 6, 1999 (the "Custody Agreement") by and between each of the Entities
listed in Schedule A, as amended thereto, severally and not jointly (each such
entity referred to hereinafter as the "Customer") and The Chase Manhattan Bank,
N.A., whose contracts have been assumed by THE CHASE MANHATTAN BANK (the "Bank")
is hereby further amended, as of February 9, 2000 (the "Amendment Agreement").
Terms defined in the Custody Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Customer wishes to appoint the Bank as its global custodian
and the Bank wishes to accept such appointment pursuant to the terms of the
Custody Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendment. Sections I, II and III of Schedule A of the Custody Agreement
----------
("Schedule A") shall be amended to add or change certain Customers as specified
in Attachment A hereto. The revised Schedule A incorporating these changes in
the form attached shall supersede the existing Schedule A in its entirety.
2.
Agreement. The Customer and Bank agree to be bound in all respects by all the
- ----------
terms and conditions of the Custody Agreement and shall be fully liable and
responsible thereunder as a "Customer" and "Bank," respectively, as defined in
the Custody Agreement.
3.
Confirmation of Agreement. Except as amended hereby, the Custody Agreement is
- ------------ -- ---------
in full force and effect and as so amended is hereby ratified, approved and
confirmed by the Customer and the Bank in all respects.
<PAGE>
4.
Governing Law: This Amendment Agreement shall be construed in accordance with
- --------- ----
and governed by the law of the State of New York without regard to its conflict
of law principles.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK
/s/Joseph M. Rondinelli
By: ____________________________________
Joseph M. Rondinelli
Vice President
EACH OF THE CUSTOMERS LISTED IN
ATTACHMENT A HERETO, SEVERALLY
AND NOT JOINTLY
/s/Henry H. Hopkins
By: ____________________________________
Henry H. Hopkins
Vice President
<PAGE>
ATTACHMENT A
PAGE 1 OF 1
LIST OF CUSTOMERS
Add the following Funds:
- ------------------------
Institutional Equity Funds, Inc., on behalf of:
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Add the following Funds to the Global Proxy Service Rider:
- ---------------------------------------------------------
Institutional Equity Funds, Inc., on behalf of
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
<PAGE>
SCHEDULE A
PAGE 1 OF 3
LIST OF CUSTOMERS, SEVERALLY AND NOT JOINTLY PARTIES TO
GLOBAL CUSTODY AGREEMENT WITH
THE CHASE MANHATTAN BANK
DATED JANUARY 3, 1994
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
I. INVESTMENT COMPANIES/PORTFOLIOS The Mutual Fund Rider is applicable to
REGISTERED UNDER THE INVESTMENT all Customers listed under Section I of
COMPANY ACT OF 1940 this Schedule A.
Equity Funds
------------
T. Rowe Price Balanced Fund, Inc. Global Proxy Service Rider
T. Rowe Price Blue Chip Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Capital Appreciation Fund Global Proxy Service Rider
T. Rowe Price Capital Opportunity Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Diversified Small-Cap Growth Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Dividend Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Equity Income Fund Global Proxy Service Rider
T. Rowe Price Equity Series, Inc. on behalf of:
T. Rowe Price Equity Income Portfolio Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Portfolio Global Proxy Service Rider
T. Rowe Price New America Growth Portfolio Global Proxy Service Rider
T. Rowe Price Personal Strategy Balanced Portfolio
Global Proxy Service Rider
T. Rowe Price Financial Services Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth & Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Growth Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Health Sciences Fund, Inc. Global Proxy Service Rider
Institutional Equity Funds, Inc. on behalf of:
Institutional Large-Cap Value Fund Global Proxy Service Rider
Institutional Small-Cap Stock Fund Global Proxy Service Rider
Mid-Cap Equity Growth Fund Global Proxy Service Rider
Institutional International Funds, Inc. on behalf of:
Foreign Equity Fund Global Proxy Service and Russian Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Stock Fund
Global Proxy Service and Russian Rider
T. Rowe Price European Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price Global Stock Fund Global Proxy Service and Russian Rider
T. Rowe Price International Discovery Fund
Global Proxy Service and Russian Rider
T. Rowe Price International Growth & Income Fund
Global Proxy Service and Russian Rider
T. Rowe Price International Stock Fund
Global Proxy Service and Russian Rider
T. Rowe Price Japan Fund Global Proxy Service and Russian Rider
T. Rowe Price Latin America Fund Global Proxy Service and Russian Rider
T. Rowe Price New Asia Fund Global Proxy Service and Russian Rider
<PAGE>
SCHEDULE A
PAGE 2 OF 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
T. Rowe Price International Series, Inc. on behalf of:
T. Rowe Price International Stock Portfolio
Global Proxy Service and Russian Rider
T. Rowe Price Media & Telecommunications Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Mid-Cap Growth Fund, Inc. Global Proxy Service Rider
T. Rowe Price Mid-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price New America Growth Fund Global Proxy Service Rider
T. Rowe Price New Era Fund, Inc. Global Proxy Service Rider
T. Rowe Price New Horizons Fund, Inc. Global Proxy Service Rider
T. Rowe Price Real Estate Fund, Inc. Global Proxy Service Rider
T. Rowe Price Science & Technology Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Small-Cap Stock Fund, Inc. Global Proxy Service Rider
T. Rowe Price Small-Cap Value Fund, Inc. Global Proxy Service Rider
T. Rowe Price Value Fund, Inc. Global Proxy Service Rider
Income Funds
------------
T. Rowe Price Corporate Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price High Yield Fund, Inc. Global Proxy Service Rider
T. Rowe Price Income Series, Inc. on behalf of:
T. Rowe Price Limited-Term Bond Portfolio Global Proxy Service Rider
T. Rowe Price International Funds, Inc. on behalf of:
T. Rowe Price Emerging Markets Bond Fund
Global Proxy Service and Russian Rider
T. Rowe Price Global Bond Fund Global Proxy Service and Russian Rider
T. Rowe Price International Bond Fund
Global Proxy Service and Russian Rider
T. Rowe Price New Income Fund, Inc. Global Proxy Service Rider
T. Rowe Price Personal Strategy Funds, Inc. on behalf of:
T. Rowe Price Personal Strategy Balanced Fund
Global Proxy Service Rider
T. Rowe Price Personal Strategy Growth Fund Global Proxy Service Rider
T. Rowe Price Personal Strategy Income Fund Global Proxy Service Rider
T. Rowe Price Short-Term Bond Fund, Inc. Global Proxy Service Rider
T. Rowe Price Short-Term U.S. Government Fund, Inc.
Global Proxy Service Rider
T. Rowe Price Summit Funds, Inc. on behalf of:
T. Rowe Price Summit Limited-Term Bond Fund Global Proxy Service Rider
T. Rowe Price Tax-Efficient Funds, Inc. on behalf of:
T. Rowe Price Tax-Efficient Balanced Fund Global Proxy Service Rider
T. Rowe Price Tax-Efficient Growth Fund Global Proxy Service Rider
<PAGE>
SCHEDULE A
PAGE 3 OF 3
APPLICABLE RIDERS TO
CUSTOMER GLOBAL CUSTODY AGREEMENT
II. ACCOUNTS SUBJECT TO ERISA The ERISA Rider is applicable to all
Customers under Section II of this
Schedule A.
T. Rowe Price Trust Company, as Trustee for the
Johnson Matthey Salaried Employee Savings Plan
Common Trust Funds
------------------
T. Rowe Price Trust Company, as Trustee for the International
Common Trust Fund on behalf of the Underlying Trusts:
Emerging Markets Equity Trust Global Proxy Service Rider
European Discovery Trust Global Proxy Service Rider
Foreign Discovery Trust Global Proxy Service Rider
Foreign Discovery Trust - Augment Global Proxy Service Rider
Foreign Discovery Trust - B Global Proxy Service Rider
International Small-Cap Trust Global Proxy Service Rider
Japan Discovery Trust Global Proxy Service Rider
Latin America Discovery Trust Global Proxy Service Rider
Pacific Discovery Trust Global Proxy Service Rider
III. OTHER
RPFI International Partners, L.P. Global Proxy Service and Russian Rider
The Transfer Agency and Service Agreement between T. Rowe Price Services,
Inc. and T. Rowe Price Funds, dated January 1, 2000, as amended.
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
T. ROWE PRICE SERVICES, INC.
AND
THE T. ROWE PRICE FUNDS
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
Article A Terms of Appointment............................ 2
Article B Duties of Price Services........................ 3
1. Receipt of Orders/Payments................3
2. Redemptions...............................5
3. Transfers.................................6
4. Confirmations.............................7
5. Returned Checks and ACH Debits............7
6. Redemption of Shares under a Hold.........7
7. Dividends, Distributions and Other Corporate Actions 9
8. Unclaimed Payments and Certificates......10
9. Books and Records........................10
10. Authorized Issued and Outstanding Shares.12
11. Tax Information..........................13
12. Information to be Furnished to the Fund..13
13. Correspondence...........................13
14. Lost or Stolen Securities................14
15. Telephone/Computer Services..............14
16. Collection of Shareholder Fees...........14
17. Form N-SAR...............................14
18. Cooperation With Accountants.............15
19. Blue Sky.................................15
20. Banking Services for the PLUS Classes ...15
21. Other Services...........................17
Article C Fees and Out-of-Pocket Expenses................. 17
1. Fees and Out-of-Pocket Expenses - All Funds17
2. Fees and Out-of-Pocket Expenses - PLUS Classes of Shares 19
Article D Representations and Warranties of the Price Services 19
Article E Representations and Warranties of the Fund...... 20
Article F Standard of Care/Indemnification................ 20
Article G Dual Interests................................23
Article H Documentation.................................23
Article I References to Price Services..................24
Article J Compliance with Governmental Rules and Regulations24
<PAGE>
Article K Ownership of Software and Related Material....25
Article L Quality Service Standards.....................25
Article M As of Transactions............................25
Article N Term and Termination of Agreement.............28
Article O Notice........................................28
Article P Assignment....................................29
Article Q Amendment/Interpretive Provisions.............29
Article R Further Assurances............................29
Article S Maryland Law to Apply........................29
Article T Merger of Agreement...........................29
Article U Counterparts..................................29
Article V The Parties...................................30
Article W Directors, Trustees, Shareholders and Massachusetts Business Trust
30
Article X Captions......................................31
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the first day of January, 2000, by and between T. ROWE
PRICE SERVICES, INC., a Maryland corporation having its principal office and
place of business at 100 East Pratt Street, Baltimore, Maryland 21202 ("PRICE
SERVICES"), and EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be
amended from time to time) and which evidences its agreement to be bound hereby
by executing a copy of this Agreement (each such Fund individually hereinafter
referred to as "THE FUND", whose definition may be found in Article V);
WHEREAS, the Fund desires to appoint Price Services as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities,
and Price Services desires to accept such appointment;
WHEREAS, Price Services represents that it is registered with the
Securities and Exchange Commission as a Transfer Agent under Section 17A of the
Securities Exchange Act of 1934 ("'34 ACT") and will notify each Fund promptly
if such registration is revoked or if any proceeding is commenced before the
Securities and Exchange Commission which may lead to such revocation;
WHEREAS, Price Services has the capability of providing shareholder
services on behalf of the Funds for the accounts of shareholders in the Funds,
including banks and brokers on behalf of underlying clients;
WHEREAS, Price Services has the capability of providing special banking
services, including debit card and unlimited check writing services ("BANKING
SERVICES") for the T. Rowe Price Prime Reserve Fund - PLUS Class of Shares and
T. Rowe Price Tax-Exempt Money Fund - PLUS Class of Shares ("PLUS CLASSES");
<PAGE>
WHEREAS, certain of the Funds are named investment options under various
tax-sheltered retirement plans including, but not limited to, individual
retirement accounts, Sep-IRA's, SIMPLE plans, deferred compensation plans,
403(b) plans, and profit sharing, thrift, and money purchase pension plans for
self-employed individuals and professional partnerships and corporations,
(collectively referred to as "RETIREMENT PLANS");
WHEREAS, Price Services also has the capability of providing special
services, on behalf of the Funds, for the accounts of shareholders participating
in these Retirement Plans ("RETIREMENT ACCOUNTS").
WHEREAS, Price Services may subcontract or jointly contract with other
parties, on behalf of the Funds to perform certain of the functions and services
described herein including services to Retirement Plans and Retirement Accounts;
WHEREAS, Price Services may also enter into, on behalf of the Funds,
certain banking relationships to perform various banking services including, but
not limited to, check deposits, check disbursements, automated clearing house
transactions ("ACH") and wire transfers.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
A. TERMS OF APPOINTMENT
--------------------
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints Price Services to act, and Price Services agrees to
act, as the Fund's transfer agent, dividend disbursing agent and agent in
connection with: (1) the Fund's authorized and issued shares of its common
stock or shares of beneficial interest (all such stock and shares to be referred
to as "SHARES"); (2) any dividend reinvestment or other services provided to the
shareholders of the Fund ("SHAREHOLDERS"), including, without limitation, any
periodic investment plan or periodic withdrawal program; and (3) certain
Retirement Plan and Retirement Accounts as agreed upon by the parties.
<PAGE>
The parties to the Agreement hereby acknowledge that from time to time,
Price Services and T. Rowe Price Trust Company may enter into contracts ("OTHER
CONTRACTS") with employee benefit plans and/or their sponsors for the provision
of certain plan participant services to Retirement Plans and Retirement
Accounts. Compensation paid to Price Services pursuant to this Agreement is
with respect to the services described herein and not with respect to services
provided under Other Contracts.
B. DUTIES OF PRICE SERVICES
------------------------
Price Services agrees that it will perform the following services:
1. RECEIPT OF ORDERS/PAYMENTS
------- -- ---------------
Receive for acceptance, orders/payments for the purchase of Shares and
promptly deliver payment and appropriate documentation thereof to the
authorized custodian of the Fund (the "CUSTODIAN"). Upon receipt of any
check or other instrument drawn or endorsed to it as agent for, or
identified as being for the account of, the Fund, Price Services will
process the order as follows:
o Examine the check to determine if the check conforms to the Funds'
acceptance procedures (including certain third-party check procedures). If
the check conforms, Price Services will endorse the check and include the
date of receipt, will process the same for payment, and deposit the net
amount to the parties agreed upon designated bank account prior to such
deposit in the Custodial account, and will notify the Fund and the
Custodian, respectively, of such deposits (such notification to be given on
a daily basis of the total amount deposited to said accounts during the
prior business day);
o Subject to guidelines mutually agreed upon by the Funds and Price
Services, excess balances, if any, resulting from deposit in these
designated bank accounts will be invested
<PAGE>
and the income therefrom will be used to offset fees which would otherwise
be charged to the Funds under this Agreement;
o Ensure that any documentation received from Shareholder is in "good
order" and all appropriate documentation is received to establish an
account.
o Open a new account, if necessary, and credit the account of the investor
with the number of Shares to be purchased according to the price of the
Fund's Shares in effect for purchases made on that date, subject to any
instructions which the Fund may have given to Price Services with respect
to acceptance of orders for Shares;
o Maintain a record of all unpaid purchases and report such information to
the Fund daily;
o Process periodic payment orders, as authorized by investors, in
accordance with the payment procedures mutually agreed upon by both
parties;
o Receive monies from Retirement Plans and determine the proper allocation
of such monies to the Retirement Accounts based upon instructions received
from Retirement Plan participants or Retirement Plan administrators
("ADMINISTRATORS");
o Process orders received from recordkeepers and banks and brokers for
omnibus accounts in accordance with internal policies and procedures
established in executed agency agreements and other agreements negotiated
with banks and brokers; and
o Process telephone orders for purchases of Fund shares from the
Shareholder's bank account (via wire or ACH) to the Fund in accordance with
procedures mutually agreed upon by both parties.
<PAGE>
Upon receipt of funds through the Federal Reserve Wire System that are
designated for purchases in Funds which declare dividends at 12:00 p.m. (or
such time as set forth in the Fund's current prospectus), Price Services
shall promptly notify the Fund and the Custodian of such deposit.
2. REDEMPTIONS
-----------
Receive for acceptance redemption requests, including telephone redemptions
and requests received from Administrators for distributions to participants
or their designated beneficiaries or for payment of fees due the
Administrator or such other person, including Price Services, and deliver
the appropriate documentation thereof to the Custodian. Price Services
shall receive and stamp with the date of receipt, all requests for
redemptions of Shares (including all certificates delivered to it for
redemption) and shall process said redemption requests as follows, subject
to the provisions of Section 6 hereof:
o Examine the redemption request and, for written redemptions, the
supporting documentation, to determine that the request is in good order
and all requirements have been met;
o Notify the Fund on the next business day of the total number of Shares
presented and covered by all such requests;
o For those Funds that impose redemption fees, calculate the fee owed on
the redemption in accordance with the guidelines established between the
Fund and Price Services;
o As set forth in the prospectus of the Fund, and in any event, on or prior
to the seventh (7th) calendar day succeeding any such request for
redemption, Price Services shall, from funds available in the accounts
maintained by Price Services as agent for the Funds, pay
<PAGE>
the applicable redemption price in accordance with the current prospectus
of the Fund, to the investor, participant, beneficiary, Administrator or
such other person, as the case may be;
o Instruct custodian to wire redemption proceeds to a designated bank
account of Price Services. Subject to guidelines mutually agreed upon by
the Funds and Price Services, excess balances, if any, resulting from
deposit in these bank accounts will be invested and the income therefrom
will be used to offset fees which would otherwise be charged to the Funds
under this Agreement;
o If any request for redemption does not comply with the Fund's
requirements, Price Services shall promptly notify the investor of such
fact, together with the reason therefore, and shall effect such redemption
at the price in effect at the time of receipt of all appropriate documents;
o Make such withholdings as may be required under applicable Federal tax
laws;
o In the event redemption proceeds for the payment of fees are to be wired
through the Federal Reserve Wire System or via ACH, Price Services shall
cause such proceeds to be wired in Federal funds or via ACH to the bank
account designated by Shareholder; and
o Process periodic redemption orders as authorized by the investor in
accordance with the periodic withdrawal procedures for Systematic
Withdrawal Plan ("SWP") and systematic ACH redemptions mutually agreed upon
by both parties.
Procedures and requirements for effecting and accepting redemption orders
from investors by telephone, Tele*Access, computer, or written instructions
shall be established by mutual agreement between Price Services and the
Fund consistent with the Fund's current prospectus.
<PAGE>
3. TRANSFERS
---------
Effect transfers of Shares by the registered owners thereof upon receipt of
appropriate instructions and documentation and examine such instructions
for conformance with appropriate procedures and requirements. In this
regard, Price Services, upon receipt of a proper request for transfer,
including any transfer involving the surrender of certificates of Shares,
is authorized to transfer, on the records of the Fund, Shares of the Fund,
including cancellation of surrendered certificates, if any, to credit a
like amount of Shares to the transferee.
4. CONFIRMATIONS
-------------
Mail all confirmations and statements as well as other enclosures requested
by the Fund to the shareholder, and in the case of Retirement Accounts, to
the Administrators, as may be required by the Funds or by applicable
Federal or state law.
5. RETURNED CHECKS AND ACH DEBITS
-------- ------ --- --- ------
In order to minimize the risk of loss to the Fund by reason of any check
being returned unpaid, Price Services will promptly identify and follow-up
on any check or ACH debit returned unpaid. For items returned, Price
Services may telephone the investor and/or redeposit the check or debit for
collection or cancel the purchase, as deemed appropriate. Price Services
and the Funds will establish procedures for the collection of money owed
the Fund from investors who have caused losses due to these returned items.
6. REDEMPTION OF SHARES UNDER A HOLD
---------- -- ------ ----- - ----
O
UNCOLLECTED FUNDS. Shares purchased by personal, corporate, governmental check,
cashier's, treasurer's, certified or official checks or by ACH will be
considered uncollected until the tenth calendar date (the seventh business date
for PLUS Classes) following the trade date of the trade ("UNCOLLECTED FUNDS");
<PAGE>
O
GOOD FUNDS. Shares purchased by wire transfer or automatically through a
shareholder's paycheck will be considered collected immediately ("GOOD FUNDS").
Absent information to the contrary (i.e., notification from the payee
institution), Uncollected Funds will be considered Good Funds on the tenth
calendar day (the seventh business day for the PLUS Classes) following trade
date.
O REDEMPTION OF UNCOLLECTED FUNDS
o
Shareholders making telephone requests for redemption of shares purchased with
Uncollected Funds will be given two options:
1.
The Shareholder will be permitted to exchange to a money market
fund to preserve principal until the payment is deemed Good
Funds;
2.
The redemption can be processed utilizing the same procedures
for written redemptions described below.
o
If a written redemption request is made for shares where any portion of the
payment for said shares is in Uncollected Funds, and the request is in good
order, Price Services will promptly obtain the information relative to the
payment necessary to determine when the payment becomes Good Funds. The
redemption will be processed in accordance with normal procedures, and the
proceeds will be held until confirmation that the payment is Good Funds. On
the seventh (7th) calendar day after trade date, and each day thereafter until
either confirmation is received or the tenth (10th) calendar day (the seventh
business day for the PLUS Classes), Price Services will call the paying
institution to request confirmation that the check or ACH in question has been
paid. On the tenth calendar day (the seventh business day for the PLUS
Classes) after trade date, the redemption proceeds will be released,
regardless of whether confirmation has been received.
O CHECKWRITING REDEMPTIONS.
<PAGE>
o
Daily, all checkwriting redemptions $10,000 and over reported as Uncollected
Funds or insufficient funds will be reviewed. An attempt will be made to
contact the shareholder to make good the funds (through wire, exchange,
transfer). Generally by 12:00 p.m. the same day, if the matter has not been
resolved, the redemption request will be rejected and the check returned to
the Shareholder.
oAll checkwriting redemptions under $10,000 reported as Uncollected or
insufficient funds will be rejected and the check returned to the Shareholder.
The Funds and Services may agree to contact shareholders presenting checks
under $10,000 reported as insufficient to obtain alternative instructions for
payment.
O
CONFIRMATIONS OF AVAILABLE FUNDS. The Fund expects that situations may develop
whereby it would be beneficial to determine if a person who has placed an
order for Shares has sufficient funds in his or her checking account to cover
the payment for the Shares purchased. When this situation occurs, Price
Services may call the bank in question and request that it confirm that
sufficient funds to cover the purchase are currently credited to the account
in question. Price Services will maintain written documentation or a
recording of each telephone call which is made under the procedures outlined
above. None of the above procedures shall preclude Price Services from
inquiring as to the status of any check received by it in payment for the
Fund's Shares as Price Services may deem appropriate or necessary to protect
both the Fund and Price Services. If a conflict arises between Section 2 and
this Section 6, Section 6 will govern.
7. DIVIDENDS, DISTRIBUTIONS AND OTHER CORPORATE ACTIONS
---------- ------------- --- ----- --------- -------
o
The Fund will promptly inform Price Services of the declaration of any
<PAGE>
dividend, distribution, stock split or any other distributions of a
similar kind on account of its Capital Stock.
o
Price Services shall act as Dividend Disbursing Agent for the Fund,
and as such, shall prepare and make income and capital gain payments
to investors. As Dividend Disbursing Agent, Price Services will on or
before the payment date of any such dividend or distribution, notify
the Custodian of the estimated amount required to pay any portion of
said dividend or distribution which is payable in cash, and the Fund
agrees that on or about the payment date of such distribution, it
shall instruct the Custodian to make available to Price Services
sufficient funds for the cash amount to be paid out. If an investor
is entitled to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits will be made to his or
her account.
8. UNCLAIMED PAYMENTS AND CERTIFICATES
--------- -------- --- ------------
In accordance with procedures agreed upon by both parties, report
abandoned property to appropriate state and governmental authorities
of the Fund. Price Services shall, 90 days prior to the annual
reporting of abandoned property to each of the states, make reasonable
attempts to locate Shareholders for which (a) checks, tax forms,
statements or confirms have been returned; (b) for which accounts have
aged outstanding checks; or (c) accounts with share balances that have
been coded with stop mail and meet the dormancy period guidelines
specified in the individual states. Price Services shall make
reasonable attempts to contact shareholders for those accounts which
have significant aged outstanding checks and those checks meet a
specified dollar threshold. Price Services shall also com-
<PAGE>
ply with applicable securities regulation with respect to searching
for lost shareholders.
9. BOOKS AND RECORDS
----- --- -------
Maintain records showing for each Shareholder's account, Retirement
Plan or Retirement Account, as the case may be, the following:
o Names, address and tax identification number;
o Number of Shares held;
o Certain historical information regarding the account of each
Shareholder, including dividends and distributions distributed in cash
or invested in Shares;
o Pertinent information regarding the establishment and maintenance
of Retirement Plans and Retirement Accounts necessary to properly
administer each account;
o Information with respect to the source of dividends and
distributions allocated among income (taxable and nontaxable income),
realized short-term gains and realized long-term gains;
o Any stop or restraining order placed against a Shareholder's
account;
o Information with respect to withholdings on domestic and foreign
accounts;
o Any instructions from a Shareholder including, all forms furnished
by the Fund and executed by a Shareholder with respect to (i) dividend
or distribution elections, and (ii) elections with respect to payment
options in connection with the redemption of Shares;
o Any correspondence relating to the current maintenance of a
Shareholder's account;
<PAGE>
o Certificate numbers and denominations for any Shareholder holding
certificates;
o Any information required in order for Price Services to perform the
calculations contemplated under this Agreement.
Price Services shall maintain files and furnish statistical and other
information as required under this Agreement and as may be agreed upon from
time to time by both parties or required by applicable law. However, Price
Services reserves the right to delete, change or add any information to the
files maintained; provided such deletions, changes or additions do not
contravene the terms of this Agreement or applicable law and do not
materially reduce the level of services described in this Agreement. Price
Services shall also use its best efforts to obtain additional statistical
and other information as each Fund may reasonably request for additional
fees as may be agreed to by both parties.
Any such records maintained pursuant to Rule 31a-1 under the Investment
Company Act of 1940 ("THE ACT") will be preserved for the periods and
maintained in a manner prescribed in Rule 31a-2 thereunder. Disposition of
such records after such prescribed periods shall be as mutually agreed upon
by the Fund and Price Services. The retention of such records, which may
be inspected by the Fund at reasonable times, shall be at the expense of
the Fund. All records maintained by Price Services in connection with the
performance of its duties under this Agreement will remain the property of
the Fund and, in the event of termination of this Agreement, will be
delivered to the Fund as of the date of termination or at such other time
as may be mutually agreed upon.
All books, records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the negotiation or
the carrying
<PAGE>
out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except after prior notification
to and approval by the other party hereto, which approval shall not be
unreasonably withheld and may not be withheld where Price Services or the
Fund may be exposed to civil or criminal contempt proceedings for failure
to comply; when requested to divulge such information by duly constituted
governmental authorities; or after so requested by the other party hereto.
10. AUTHORIZED ISSUED AND OUTSTANDING SHARES
---------- ------ --- ----------- ------
Record the issuance of Shares of the Fund and maintain, pursuant to Rule
17Ad-10(e) of the '34 Act, a record of the total number of Shares of the
Fund which are authorized, issued and outstanding, based upon data provided
to it by the Fund. Price Services shall also provide the Fund on a regular
basis the total number of Shares which are authorized and issued and
outstanding. Price Services shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or to take
cognizance of any laws relating to the issuance or sale of such Shares.
11. TAX INFORMATION
--- -----------
Prepare and file with the Internal Revenue Service and with other
appropriate state agencies and, if required, mail to investors, those
returns for reporting dividends and distributions paid as required to be so
filed and mailed, and shall withhold such sums required to be withheld
under applicable Federal income tax laws, rules, and regulations.
Additionally, Price Services will file and, as applicable, mail to
investors, any appropriate information returns required to be filed in
connection with Retirement Plan processing, such as 1099R, 5498, as well
as any other appropriate forms that the Fund or Price Services may deem
necessary. The Fund and Price Services shall agree to procedures to be
followed with respect to Price Services' responsibilities in connection
with compliance with back-up withholding and other tax laws.
<PAGE>
12. INFORMATION TO BE FURNISHED TO THE FUND
----------- -- -- --------- -- --- ----
Furnish to the Fund such information as may be agreed upon between the Fund
and Price Services including any information that the Fund and Price
Services agree is necessary to the daily operations of the business.
13. CORRESPONDENCE
--------------
Promptly and fully answer correspondence from shareholders and
Administrators relating to Shareholder Accounts, Retirement Accounts,
transfer agent procedures, and such other correspondence as may from time
to time be mutually agreed upon with the Funds. Unless otherwise
instructed, copies of all correspondence will be retained by Price Services
in accordance with applicable law and procedures.
14. LOST OR STOLEN SECURITIES
---- -- ------ ----------
Pursuant to Rule 17f-1 of the '34 Act, report to the Securities Information
Center and/or the FBI or other appropriate person on Form X-17-F-1A all
lost, stolen, missing or counterfeit securities. Provide any other
services relating to lost, stolen or missing securities as may be mutually
agreed upon by both parties.
15. TELEPHONE/COMPUTER SERVICES
------------------ --------
Maintain a Telephone Servicing Staff of representatives ("REPRESENTATIVES")
sufficient to timely respond to all telephonic inquiries reasonably
foreseeable. The Representatives will also effect telephone purchases,
redemptions, exchanges, and other transactions mutually agreed upon by both
parties, for those Shareholders who have authorized telephone services. The
Representatives shall require each Shareholder effecting a telephone
transaction to properly identify himself/herself before the transaction is
effected, in accordance with procedures agreed upon between by both
parties. Procedures for processing telephone transactions will be
mutually agreed upon by both parties. Price
<PAGE>
Services will also be responsible for providing Tele*Access, On-Line Access
and such other Services as may be offered by the Funds from time to time.
Price Services will maintain a special Shareholder Servicing staff to
service certain Shareholders with substantial relationships with the Funds.
16. COLLECTION OF SHAREHOLDER FEES
---------- -- ----------- ----
Calculate and notify shareholders of any fees owed the Fund, its affiliates
or its agents. Such fees include the small account fee IRA custodial fee
and wire fee.
17. FORM N-SAR
---- -----
Maintain such records, if any, as shall enable the Fund to fulfill the
requirements of Form N-SAR.
18. COOPERATION WITH ACCOUNTANTS
----------- ---- -----------
Cooperate with each Fund's independent public accountants and take all
reasonable action in the performance of its obligations under the Agreement
to assure that the necessary information is made available to such
accountants for the expression of their opinion without any qualification
as to the scope of their examination, including, but not limited to, their
opinion included in each such Fund's annual report on Form N-SAR and annual
amendment to Form N-1A.
19. BLUE SKY
---- ---
Provide to the Fund or its agent, on a daily, weekly, monthly and quarterly
basis, and for each state in which the Fund's Shares are sold, sales
reports and other materials for blue sky compliance purposes as shall be
agreed upon by the parties.
20. BANKING SERVICES FOR THE PLUS CLASSES
------- -------- --- --- ---- -------
O
DETERMINE SHAREHOLDER ELIGIBILITY FOR BANKING SERVICES. Pursuant to
mutually agreed upon procedures, Price Services shall determine
shareholder eligibility for Banking Services offered
<PAGE>
by the PLUS Classes. Such procedures include, but are not limited to, for
existing shareholders, review of account history (identification of any
previously returned investment checks or ACH transactions, redemptions of
uncollected funds, etc.) and for new investors, review of credit bureau and
suspicious activity fraud reports.
O
CARD ISSUANCE. Once a shareholder is approved for Banking Services, Price
Services shall transmit new card orders to the debit card processing bank
which will produce and mail new cards and PIN numbers to PLUS Classes'
shareholders. For existing shareholders, Price Services shall also cause
the bank to reissue cards prior to expiration date.
O
TRANSMISSION OF DATA TO AND FROM BANK. On a daily basis, Price Services
shall receive information from the debit card processing bank. In this
regard, Price Services shall, after card transaction information is
received from the debit card processing bank, process all debit card
transaction detail against each shareholder's PLUS Class collected account
balance. On each business day, Price Services shall cause information
regarding the available limit of each PLUS Class shareholder account to be
transmitted to the debit card processing bank by a time designated by the
bank.
O
REDEMPTION ORDERS RECEIVED FOR PLUS CLASS ACCOUNTS. Representatives shall
follow mutually agreed upon procedures to ensure that the shareholder's
PLUS Class collected account balance is reviewed and decremented with
authorized debit card transactions before processing any mutual fund
redemption or exchange transactions.
O
DISPUTED DEBIT CARD TRANSACTIONS/FRAUD. Price Services shall receive
information from PLUS Class shareholders regarding disputed debit card
transactions and forward this information to the bank who will investigate
the reported disputed transaction. Price Services will follow procedures
developed between it and the bank for resolving such disputes and for
provisionally crediting the shareholder's account. Price Services shall
also assist in the monitoring of shareholder activity for fraud.
<PAGE>
21. OTHER SERVICES
----- --------
Provide such other services as may be mutually agreed upon
between Price
Services and the Fund.
C. FEES AND OUT-OF-POCKET EXPENSES
-------------------------------
1. FEES AND OUT-OF-POCKET EXPENSES - ALL FUNDS.
---- --- ------------- -------- - --- ------
Each Fund shall pay to Price Services and/or its agents for its Transfer
Agent Services hereunder, fees computed as set forth in Schedule A
attached. Except as provided below, Price Services will be responsible for
all expenses relating to the providing of Services. Each Fund, however,
will reimburse Price Services for the following out-of-pocket expenses and
charges incurred in providing Services:
OPOSTAGE. The cost of postage and freight for mailing materials to
Shareholders and Retirement Plan participants, or their agents, including
overnight delivery, UPS and other express mail services and special courier
services required to transport mail between Price Services locations and
mail processing vendors.
O
PROXIES. The cost to mail proxy cards and other material supplied to it by
the Fund and costs related to the receipt, examination and tabulation of
returned proxies and the certification of the vote to the Fund.
O COMMUNICATIONS
O
PRINT. The printed forms used internally and externally for documentation
and processing Shareholder and Retirement Plan participant, or their
agent's inquiries and requests; paper and envelope supplies for letters,
notices, and other written communications sent to Shareholders and
Retirement Plan participants, or their agents.
<PAGE>
O
PRINT & MAIL HOUSE. The cost of internal and third party printing and
mail house services, including printing of statements and reports.
O
VOICE AND DATA. The cost of equipment (including associated maintenance),
supplies and services used for communicating with and servicing
Shareholders of the Fund and Retirement Plan participants, or their agents,
and other Fund offices or other agents of either the Fund or Price
Services. These charges shall include:
o
telephone toll charges (both incoming and outgoing, local, long distance
and mailgrams); and
o
data and telephone expenses to communicate with shareholders and transfer
shareholders between T. Rowe Price facilities.
oProduction support, service enhancements and custom reporting for the
shareholder mainframe recordkeeping system.
O
RECORD RETENTION. The cost of maintenance and supplies used to maintain,
microfilm, copy, record, index, display, retrieve, and store, in optical
disc, microfiche or microfilm form, documents and records.
O
DISASTER RECOVERY. The cost of services, equipment, facilities and other
charges necessary to provide disaster recovery for any and all services
listed in this Agreement.
Out-of-pocket costs will be billed at cost to the Funds. Allocation of
monthly costs among the Funds will generally be made based upon the number
of Shareholder and Retirement Accounts serviced by Price Services each
month. Some invoices for these costs will contain costs for both the Funds
and other funds serviced by Price Ser-
<PAGE>
vices. These costs will be allocated based on a reasonable allocation
methodology. Where possible, such as in the case of inbound and outbound
WATS charges, allocation will be made on the actual distribution or usage.
2. FEES AND OUT-OF-POCKET EXPENSES - PLUS CLASSES OF SHARES
---- --- ------------- -------- - ---- ------- -- ------
Notwithstanding anything to the contrary in Section 21, the fees and
out-of-pocket expenses set forth in Section C(1) above with respect to the
PLUS Classes shall be charged as follows:
o
All out-of-pocket expenses described in Section C(1) above shall be charged
to the Class in the same manner as if the Class was its own Price Fund. In
addition, each PLUS Class shall pay the following out-of-pocket expenses
charged by the debit card processing bank:
o Plastic stock and labels for the debit cards;
o
User tapes and automated voice response unit used to assist shareholders
whose cards have been lost or stolen;
o Ad hoc reports prepared by the bank; and
o Checkbooks.
D. REPRESENTATIONS AND WARRANTIES OF PRICE SERVICES
------------------------------------------------
Price Services represents and warrants to the Fund that:
1.
It is a corporation duly organized and existing and in good standing under
the laws of Maryland;
2.
It is duly qualified to carry on its business in Maryland, Colorado and
Florida;
3.
It is empowered under applicable laws and by its charter and by-laws to
enter into and perform this Agreement;
4. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
<PAGE>
5.
It is registered with the Securities and Exchange Commission as a Transfer
Agent pursuant to Section 17A of the '34 Act; and
6. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
E. REPRESENTATIONS AND WARRANTIES OF THE FUND
------------------------------------------
The Fund represents and warrants to Price Services that:
1.
It is a corporation or business trust duly organized and existing and in
good standing under the laws of Maryland or Massachusetts, as the case may
be;
2.
It is empowered under applicable laws and by its Articles of Incorporation
or Declaration of Trust, as the case may be, and By-Laws to enter into and
perform this Agreement;
3.
All proceedings required by said Articles of Incorporation or Declaration
of Trust, as the case may be, and By-Laws have been taken to authorize it
to enter into and perform this Agreement;
4. It is an investment company registered under the Act; and
5.
A registration statement under the Securities Act of 1933 ("THE '33 ACT")
is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale.
F. STANDARD OF CARE/INDEMNIFICATION
--------------------------------
Notwithstanding anything to the contrary in this Agreement:
1.
Price Services shall not be liable to any Fund for any act or failure to
act by it or its agents or subcontractors on behalf of the Fund in carrying
or attempting to carry out the terms and provisions of this Agreement
provided Price Services has acted in good faith
<PAGE>
and without negligence or willful misconduct and selected and monitored the
performance of its agents and subcontractors with reasonable care.
2.
The Fund shall indemnify and hold Price Services harmless from and against
all losses, costs, damages, claims, actions and expenses, including
reasonable expenses for legal counsel, incurred by Price Services resulting
from: (i) any action or omission by Price Services or its agents or
subcontractors in the performance of their duties hereunder; (ii) Price
Services acting upon instructions believed by it to have been executed by a
duly authorized officer of the Fund; or (iii) Price Services acting upon
information provided by the Fund in form and under policies agreed to by
Price Services and the Fund. Price Services shall not be entitled to such
indemnification in respect of actions or omissions constituting negligence
or willful misconduct of Price Services or where Price Services has not
exercised reasonable care in selecting or monitoring the performance of its
agents or subcontractors.
3.
Except as provided in Article M of this Agreement, Price Services shall
indemnify and hold harmless the Fund from all losses, costs, damages,
claims, actions and expenses, including reasonable expenses for legal
counsel, incurred by the Fund resulting from the negligence or willful
misconduct of Price Services or which result from Price Services' failure
to exercise reasonable care in selecting or monitoring the performance of
its agents or subcontractors. The Fund shall not be entitled to such
indemnification in respect of actions or omissions constituting negligence
or willful misconduct of such Fund or its agents or subcontractors; unless
such negligence or misconduct is attributable to Price Services.
4.
In determining Price Services' liability, an isolated error or omission
will normally not be deemed to constitute negligence when it is determined
that:
<PAGE>
o Price Services had in place "appropriate procedures;"
o
the employee(s) responsible for the error or omission had been reasonably
trained and were being appropriately monitored; and
o
the error or omission did not result from wanton or reckless conduct on the
part of the employee(s).
It is understood that Price Services is not obligated to have in place
separate procedures to prevent each and every conceivable type of error or
omission. The term "appropriate procedures" shall mean procedures
reasonably designed to prevent and detect errors and omissions. In
determining the reasonableness of such procedures, weight will be given to
such factors as are appropriate, including the prior occurrence of any
similar errors or omissions when such procedures were in place and transfer
agent industry standards in place at the time of the occurrence.
5.
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes or other causes
reasonably beyond its control, such party shall not be liable to the other
party for any loss, cost, damage, claim, action or expense resulting from
such failure to perform or otherwise from such causes.
6.
In order that the indemnification provisions contained in this Article E
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim, or to
defend against said claim in its own name or in the name of the other
party. The party seeking
<PAGE>
indemnification shall in no case confess any claim or make any compromise
in any case in which the other party may be required to indemnify it except
with the other party's prior written consent.
7. Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
G. DUAL INTERESTS
--------------
It is understood that some person or persons may be directors, officers, or
shareholders of both the Funds and Price Services (including Price Services'
affiliates), and that the existence of any such dual interest shall not affect
the validity of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
H. DOCUMENTATION
-------------
As requested by Price Services, the Fund shall promptly furnish to Price
Services the following:
oA certified copy of the resolution of the Directors/Trustees of the Fund
authorizing the appointment of Price Services and the execution and delivery of
this Agreement;
o
A copy of the Articles of Incorporation or Declaration of Trust, as the case may
be, and By-Laws of the Fund and all amendments thereto;
oAs applicable, specimens of all forms of outstanding and new stock/share
certificates in the forms approved by the Board of Directors/Trustees of the
Fund with a certificate of the Secretary of the Fund as to such approval;
o
All account application forms and other documents relating to Shareholders'
accounts;
<PAGE>
o
An opinion of counsel for the Fund with respect to the validity of the stock,
the number of Shares authorized, the status of redeemed Shares, and the number
of Shares with respect to which a Registration Statement has been filed and is
in effect; and
o A copy of the Fund's current prospectus.
The delivery of any such document for the purpose of any other agreement to
which the Fund and Price Services are or were parties shall be deemed to be
delivery for the purposes of this Agreement.
o
As requested by Price Services, the Fund will also furnish from time to time the
following documents:
o
Each resolution of the Board of Directors/Trustees of the Fund authorizing the
original issue of its Shares;
o
Each Registration Statement filed with the Securities and Exchange Commission
and amendments and orders thereto in effect with respect to the sale of Shares
with respect to the Fund;
oA certified copy of each amendment to the Articles of Incorporation or
Declaration of Trust, and the By-Laws of the Fund;
o
Certified copies of each vote of the Board of Directors/Trustees authorizing
officers to give instructions to the Transfer Agent;
o
Such other documents or opinions which Price Services, in its discretion, may
reasonably deem necessary or appropriate in the proper performance of its
duties; and
o Copies of new prospectuses issued.
<PAGE>
Price Services hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
I. REFERENCES TO PRICE SERVICES
----------------------------
Each Fund agrees not to circulate any printed matter which contains any
reference to Price Services without the prior approval of Price Services,
excepting solely such printed matter that merely identifies Price Services as
agent of the Fund. The Fund will submit printed matter requiring approval to
Price Services in draft form, allowing sufficient time for review by Price
Services and its legal counsel prior to any deadline for printing.
J. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
--------------------------------------------------
Except as otherwise provided in the Agreement and except for the accuracy
of information furnished to the Fund by Price Services, each Fund assumes full
responsibility for the preparation, contents and distribution of its
prospectuses and compliance with all applicable requirements of the Act, the '34
Act, the '33 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction over the Fund. Price Services shall be
responsible for complying with all laws, rules and regulations of governmental
authorities having jurisdiction over transfer agents and their activities.
K. OWNERSHIP OF SOFTWARE AND RELATED MATERIAL
------------------------------------------
All computer programs, magnetic tapes, written procedures and similar items
purchased and/or developed and used by Price Services in performance of the
Agreement shall be the property of Price Services and will not become the
property of the Fund.
<PAGE>
L. QUALITY SERVICE STANDARDS
-------------------------
Price Services and the Fund may from time to time agree to certain quality
service standards, as well as incentives and penalties with respect to Price
Services' hereunder.
M. AS OF TRANSACTIONS
------------------
For purposes of this Article M, the term "TRANSACTION" shall mean any
single or "related transaction" (as defined below) involving the purchase or
redemption of Shares (including exchanges) that is processed at a time other
than the time of the computation of the Fund's net asset value per Share next
computed after receipt of any such transaction order by Price Services due to an
act or omission of Price Services. "AS OF PROCESSING" refers to the processing
of these Transactions. If more than one Transaction ("RELATED TRANSACTION") in
the Fund is caused by or occurs as a result of the same act or omission, such
transactions shall be aggregated with other transactions in the Fund and be
considered as one Transaction.
O REPORTING
Price Services shall:
1.
Utilize a system to identify all Transactions, and shall compute the
net effect of such Transactions upon the Fund on a daily, monthly and
rolling 365 day basis. The monthly and rolling 365 day periods are
hereafter referred to as "CUMULATIVE".
2.
Supply to the Fund, from time to time as mutually agreed upon, a
report summarizing the Transactions and the daily and Cumulative net
effects of such Transactions both in terms of aggregate dilution and
loss ("DILUTION") or gain and negative dilution ("GAIN") experienced
by the Fund, and the impact such Gain or Dilution has had upon the
Fund's net asset value per Share.
<PAGE>
3.
With respect to any Transaction which causes Dilution to the Fund of
$100,000 or more, immediately provide the Fund: (i) a report
identifying the Transaction and the Dilution resulting therefrom, (ii)
the reason such Transaction was processed as described above, and
(iii) the action that Price Services has or intends to take to prevent
the reoccurrence of such as of processing ("REPORT").
O LIABILITY
1.
It will be the normal practice of the Funds not to hold Price Services
liable with respect to any Transaction which causes Dilution to any
single Fund of less than $25,000. Price Services will, however,
closely monitor for each Fund the daily and Cumulative Gain/Dilution
which is caused by Transactions of less than $25,000. When the
Cumulative Dilution to any Fund exceeds 3/10 of 1% per share, Price
Services, in consultation with counsel to the Fund, will make
appropriate inquiry to determine whether it should take any remedial
action. Price Services will report to the Board of Directors/Trustees
of the Fund ("BOARD") any action it has taken.
2.
Where a Transaction causes Dilution to a Fund greater than $25,000
("SIGNIFICANT TRANSACTION"), but less than $100,000, Price Services
will review with Counsel to the Fund the circumstances surrounding the
underlying Transaction to determine whether the Transaction was caused
by or occurred as a result of a negligent act or omission by Price
Services. If it is determined that the Dilution is the result of a
negligent action or omission by Price Services, Price Services and
outside counsel for the Fund will negotiate settlement. Significant
Transactions greater than $25,000 will be reported to the Audit
Committee at its annual meeting (unless the
<PAGE>
settlement fully compensates the Fund for any Dilution). Any
Significant Transaction, however, causing Dilution in excess of the
lesser of $100,000 or a penny per share will be promptly reported to
--------
the Board and resolved at the next scheduled Board Meeting. Settlement
for Significant Transactions causing Dilution of $100,000 or more will
not be entered into until approved by the Board. The factors to
consider in making any determination regarding the settlement of a
Significant Transaction would include but not be limited to:
o
Procedures and controls adopted by Price Services to prevent As Of
Processing;
o
Whether such procedures and controls were being followed at the time
of the Significant Transaction;
o
The absolute and relative volume of all transactions processed by
Price Services on the day of the Significant Transaction;
o
The number of Transactions processed by Price Services during prior
relevant periods, and the net Dilution/Gain as a result of all such
Transactions to the Fund and to all other Price Funds;
o
The prior response of Price Services to recommendations made by the
Funds regarding improvement to Price Services' As Of Processing
procedures.
3.
In determining Price Services' liability with respect to a Significant
Transaction, an isolated error or omission will normally not be deemed
to constitute negligence when it is determined that:
o Price Services had in place "appropriate procedures".
<PAGE>
o
the employee(s) responsible for the error or omission had been
reasonably trained and were being appropriately monitored; and
o
the error or omission did not result from wanton or reckless conduct
on the part of the employee(s).
It is understood that Price Services is not obligated to have in place
separate procedures to prevent each and every conceivable type of
error or omission. The term "appropriate procedures" shall mean
procedures reasonably designed to prevent and detect errors and
omissions. In determining the reasonableness of such procedures,
weight will be given to such factors as are appropriate, including the
prior occurrence of any similar errors or omissions when such
procedures were in place and transfer agent industry standards in
place at the time of the occurrence.
N. TERM AND TERMINATION OF AGREEMENT
---------------------------------
o
This Agreement shall run for a period of one (1) year from the date first
written above and will be renewed from year to year thereafter unless terminated
by either party as provided hereunder.
o
This Agreement may be terminated by the Fund upon one hundred twenty (120) days'
written notice to Price Services; and by Price Services, upon three hundred
sixty-five (365) days' writing notice to the Fund.
o
Upon termination hereof, the Fund shall pay to Price Services such compensation
as may be due as of the date of such termination, and shall likewise reimburse
for out-of-pocket expenses related to its services hereunder.
<PAGE>
O. NOTICE
------
Any notice as required by this Agreement shall be sufficiently given (i)
when sent to an authorized person of the other party at the address of such
party set forth above or at such other address as such party may from time to
time specify in writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
P. ASSIGNMENT
----------
Neither this Agreement nor any rights or obligations hereunder may be
assigned either voluntarily or involuntarily, by operation of law or otherwise,
by either party without the prior written consent of the other party, provided
this shall not preclude Price Services from employing such agents and
subcontractors as it deems appropriate to carry out its obligations set forth
hereunder.
Q. AMENDMENT/INTERPRETIVE PROVISIONS
---------------------------------
The parties by mutual written agreement may amend this Agreement at any
time. In addition, in connection with the operation of this Agreement, Price
Services and the Fund may agree from time to time on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. Any
such interpretive or additional provisions are to be signed by all parties and
annexed hereto, but no such provision shall contravene any applicable Federal or
state law or regulation and no such interpretive or additional provision shall
be deemed to be an amendment of this Agreement.
R. FURTHER ASSURANCES
------------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
<PAGE>
S. MARYLAND LAW TO APPLY
---------------------
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of Maryland.
T. MERGER OF AGREEMENT
-------------------
This Agreement, including the attached Appendices and Schedules supersedes
any prior agreement with respect to the subject hereof, whether oral or written.
U. COUNTERPARTS
------------
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instruments.
V. THE PARTIES
-----------
All references herein to "the Fund" are to each of the Funds listed on
Appendix A individually, as if this Agreement were between such individual Fund
and Price Services. In the case of a series Fund or trust, all references to
"the Fund" are to the individual series or portfolio of such Fund or trust, or
to such Fund or trust on behalf of the individual series or portfolio, as
appropriate. The "Fund" also includes any T. Rowe Price Funds which may be
established after the execution of this Agreement. Any reference in this
Agreement to "the parties" shall mean Price Services and such other individual
Fund as to which the matter pertains.
W. DIRECTORS, TRUSTEES AND SHAREHOLDERS AND MASSACHUSETTS BUSINESS TRUST
---------------------------------------------------------------------
It is understood and is expressly stipulated that neither the holders of
Shares in the Fund nor any Directors or Trustees of the Fund shall be personally
liable hereunder.
With respect to any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund" means and refers to
the trustees from time to time serving under the applicable trust agreement
(Declaration of Trust) of such Trust as the same may be amended from time to
time. It is expressly agreed that the obligations of any such Trust here-
<PAGE>
under shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the trust
property of the Trust, as provided in the Declaration of Trust of the Trust.
The execution and delivery of this Agreement has been authorized by the
trustees and signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them, but shall bind
only the trust property of the Trust as provided in its Declaration of Trust.
X. CAPTIONS
--------
The captions in the Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers.
T. ROWE PRICE SERVICES, INC. T. ROWE PRICE FUNDS
/s/Wayne D. O'Melia /s/Carmen F. Deyesu
BY: ______________________________
BY:
--------------------------------------------------------------
Wayne D. O'Melia Carmen F. Deyesu
DATED:____________________________
DATED:____________________________
<PAGE>
APPENDIX A
----------
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
<PAGE>
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. Rowe Price Prime Reserve Fund-PLUS Class
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balance Fund
T. Rowe Price Tax-Efficient Growth Fund
<PAGE>
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. Rowe Price Tax-Exempt Money Fund-PLUS Class
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC. on behalf of the:
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. on behalf of the:
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
<PAGE>
AMENDMENT NO. 1
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
T. ROWE PRICE SERVICES, INC.
AND
THE T. ROWE PRICE FUNDS
The Transfer Agency and Service Agreement of January 1, 2000, between T. Rowe
Price Services, Inc., and each of the Parties listed on Appendix A thereto is
hereby amended, as of February 9, 2000, by adding thereto Institutional Equity
Funds, Inc., on behalf of Institutional Large-Cap Value Fund and Institutional
Small-Cap Stock Fund; T. Rowe Price Blue Chip Growth Fund, Inc., on behalf of T.
Rowe Price Blue Chip Growth Fund-Advisor Class; T. Rowe Price Equity Income
Fund, on behalf of T. Rowe Price Equity Income Fund -Advisor Class; T. Rowe
Price High Yield Fund, Inc., on behalf of T. Rowe Price High Yield Fund-Advisor
Class; T. Rowe Price International Funds, Inc., on behalf of T. Rowe Price
International Bond Fund-Advisor Class and T. Rowe Price International Stock
Fund-Advisor Class; T. Rowe Price Mid-Cap Growth Fund, Inc., on behalf of T.
Rowe Price Mid-Cap Growth Fund-Advisor Class; T. Rowe Price Science & Technology
Fund, Inc., on behalf of T. Rowe Price Science & Technology Fund-Advisor Class;
T. Rowe Price Small-Cap Stock Fund, Inc., on behalf of T. Rowe Price Small-Cap
Stock Fund-Advisor Class; T. Rowe Price Small-Cap Value Fund, Inc., on behalf of
T. Rowe Price Small-Cap Value Fund-Advisor Class and T. Rowe Price Value Fund,
Inc., on behalf of T. Rowe Price Value Fund-Advisor Class.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund-Advisor Class
<PAGE>
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund-Advisor Class
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund-Advisor Class
<PAGE>
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund-Advisor Class
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund-Advisor Class
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund-Advisor Class
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
<PAGE>
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. Rowe Price Prime Reserve Fund-PLUS Class
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund-Advisor Class
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. Rowe Price Small-Cap Stock Fund-Advisor Class
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. Rowe Price Small-Cap Value Fund-Advisor Class
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
<PAGE>
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. Rowe Price Tax-Exempt Money Fund-PLUS Class
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC. on behalf of the:
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. on behalf of the:
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
<PAGE>
T. ROWE PRICE VALUE FUND, INC.
T. Rowe Price Value Fund-Advisor Class
Attest:
/s/Patricia B. Lippert /s/ Carmen F. Deyesu
______________________ ______________________________
Patricia B. Lippert By: Carmen F. Deyesu
Secretary Treasurer
Attest: T. ROWE PRICE SERVICES, INC.
/s/Barbara A. Van Horn /s/ Henry H. Hopkins
______________________ ______________________________
Barbara A. Van Horn By: Henry H. Hopkins
Secretary Vice President
The Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price
Funds for Fund Accounting Services, dated January 1, 2000, as amended.
<PAGE>
AGREEMENT
BETWEEN
T. ROWE PRICE ASSOCIATES, INC.
AND
THE T. ROWE PRICE FUNDS
FOR
FUND ACCOUNTING SERVICES
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
Article A.....Terms of Appointment/Duties of Price Associates 1
Article B.....................Fees and Out-of-Pocket Expenses 3
Article C..Representations and Warranties of Price Associates 3
Article D..........Representations and Warranties of the Fund 4
Article E..........Ownership of Software and Related Material 4
Article F...........................Quality Service Standards 4
Article G....................Standard of Care/Indemnification 4
Article H......................................Dual Interests 7
Article I.......................................Documentation 7
Article J.......................Recordkeeping/Confidentiality 7
Article K..Compliance with Governmental Rules and Regulations 8
Article L..................Terms and Termination of Agreement 8
Article M..............................................Notice 8
Article N..........................................Assignment 9
Article O...................Amendment/Interpretive Provisions 9
Article P..................................Further Assurances 9
Article Q...............................Maryland Law to Apply 9
Article R.................................Merger of Agreement 10
Article S........................................Counterparts 10
Article T.........................................The Parties 10
Article UDirectors, Trustee and Shareholders and Massachusetts Business Trust
10
Article V............................................Captions 11
<PAGE>
AGREEMENT made as of the first day of January, 2000, by and between T. ROWE
PRICE ASSOCIATES, INC., a Maryland corporation having its principal office and
place of business at 100 East Pratt Street, Baltimore, Maryland 21202 ("PRICE
ASSOCIATES"), and each Fund which is listed on Appendix A (as such Appendix may
be amended from time to time) and which evidences its agreement to be bound
hereby by executing a copy of this Agreement (each such Fund individually
hereinafter referred to as "THE FUND", whose definition may be found in Article
T);
WHEREAS, Price Associates has the capability of providing the Funds with
certain accounting services ("ACCOUNTING SERVICES");
WHEREAS, the Fund desires to appoint Price Associates to provide these
Accounting Services and Price Associates desires to accept such appointment;
WHEREAS, the Board of Directors of the Fund has authorized the Fund to
utilize various pricing services for the purpose of providing to Price
Associates securities prices for the calculation of the Fund's net asset value.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
A. TERMS OF APPOINTMENT/DUTIES OF PRICE ASSOCIATES
-----------------------------------------------
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints Price Associates to provide, and Price Associates
agrees to provide, the following Accounting Services:
1.
Maintain for each Fund a daily trial balance, a general ledger, subsidiary
records and capital stock accounts;
2.
Maintain for each Fund an investment ledger, including amortized bond and
foreign dollar denominated costs where applicable;
3. Maintain for each Fund all records relating to the Fund's income and
expenses;
4.
Provide for the daily valuation of each Fund's portfolio securities and the
computation of each Fund's daily net asset value per share ("NAV"). Such daily
valuations shall be made in accordance with the valuation policies established
by each of the Fund's Board of Directors including, but not limited to, the
utilization of such pricing valuation sources and/or pricing services as
determined by the Boards.
<PAGE>
Price Associates shall have no liability for any losses or damages incurred
by the Fund as a result of erroneous portfolio security evaluations provided by
such designated sources and/or pricing services; provided that, Price Associates
reasonably believes the prices are accurate, has adhered to its normal
verification control procedures, and has otherwise met the standard of care as
set forth in Article G of this Agreement;
5.
Provide daily cash flow and transaction status information to each
Fund's adviser;
6. Authorize the payment of Fund expenses, either through instruction of
custodial bank or utilization of custodian^s automated transfer system;
7. Prepare for each Fund such financial information that is reasonably
necessary for shareholder reports, reports to the Board of Directors and to the
officers of the Fund, reports to the Securities and Exchange Commission, the
Internal Revenue Service and other Federal and state regulatory agencies;
8. Provide each Fund with such advice that may be reasonably necessary to
properly account for all financial transactions and to maintain the Fund's
accounting procedures and records so as to insure compliance with generally
accepted accounting and tax practices and rules;
9. Maintain for each Fund all records that may be reasonably required in
connection with the audit performed by each Fund's independent accountant, the
Securities and Exchange Commission, the Internal Revenue Service or such other
Federal or state regulatory agencies; and
10. Cooperate with each Fund's independent public accountants and take all
reasonable action in the performance of its obligations under the Agreement to
assure that the necessary information is made available to such accountants for
the expression of their opinion without any qualification as to the scope of
their examination including, but not limited to, their opinion included in each
such Fund's annual report on Form N-SAR and annual amendment to Form N-1A.
B. FEES AND OUT-OF-POCKET EXPENSES
-------------------------------
Each Fund shall pay to Price Associates for its Accounting Services
hereunder, fees as set forth in the Schedule attached hereto. In addition, each
Fund will reimburse Price Associates for out-of-pocket expenses such as postage,
printed forms, voice and data transmissions, record retention, disaster
recovery, third party vendors, equipment leases and other similar items as may
be agreed upon between Price Associates and the Fund. Some invoices will
contain costs for both the Funds and other funds serviced by Price Associates.
In these cases, a reasonable allocation methodology will be used to allocate
these costs to the Funds.
<PAGE>
C. REPRESENTATIONS AND WARRANTEES OF PRICE ASSOCIATES
--------------------------------------------------
Price Associates represents and warrants to the Fund that:
1.
It is a corporation duly organized and existing in good standing under the laws
of Maryland.
2. It is duly qualified to carry on its business in Maryland.
3.
It is empowered under applicable laws and by its charter and By-Laws to enter
into and perform this Agreement.
4. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
5. It has, and will continue to have, access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
D. REPRESENTATIONS AND WARRANTIES OF THE FUND
------------------------------------------
The Fund represents and warrants to Price Associates that:
1.
It is a corporation or business trust, as the case may be, duly organized and
existing and in good standing under the laws of Maryland or Massachusetts, as
the case may be.
2.
It is empowered under applicable laws and by its Articles of Incorporation or
Declaration of Trust, as the case may be, and By-Laws have been taken to
authorize it to enter into and perform this Agreement.
3.
All proceedings required by said Articles of Incorporation or Declaration of
Trust, as the case may be, and By-Laws have been taken to authorize it to enter
into and perform this Agreement.
E. OWNERSHIP OF SOFTWARE AND RELATED MATERIAL
------------------------------------------
All computer programs, magnetic tapes, written procedures, and similar
items purchased and/or developed and used by Price Associates in performance of
this Agreement shall be the property of Price Associates and will not become the
property of the Funds.
F. QUALITY SERVICE STANDARDS
-------------------------
Price Associates and the Fund may, from time to time, agree to certain
quality service standards, with respect to Price Associates' services hereunder.
G. STANDARD OF CARE/INDEMNIFICATION
--------------------------------
Notwithstanding anything to the contrary in this Agreement:
<PAGE>
1.
Where a pricing error results in loss or dilution to a Fund of less than
$10,000, the determination of liability for the error will be made by Price
Associates. Where a pricing error results in loss or dilution to a Fund of
$10,000 or more but less than $100,000, liability for the error will be resolved
through negotiations between Fund Counsel and Price Associates. Where a pricing
error results in loss or dilution to a Fund of the lesser of 1/2 of 1% of NAV or
$100,000 or more, the error will be promptly reported to the Board of Directors
of the Fund (unless the Fund is fully compensated for the loss or dilution),
provided that final settlement with respect to such errors will not be made
until approved by the Board of Directors of the Fund. A summary of all pricing
errors and their effect on the Funds will be reported to the Funds^ Audit
Committee on an annual basis. In determining the liability of Price Associates
for a pricing error, an error or omission will not be deemed to constitute
negligence when it is determined that:
o Price Associates had in place "appropriate procedures and an adequate
system of internal controls;"
o the employee responsible for the error or omission had been reasonably
trained and was being appropriately monitored; and
o the error or omission did not result from wanton or reckless conduct on
the part of the employee.
It is understood that Price Associates is not obligated to have in place
separate procedures to prevent each and every conceivable type of error or
omission. The term "appropriate procedures and adequate system of internal
controls" shall mean procedures and controls reasonably designed to prevent and
detect errors and omissions. In determining the reasonableness of such
procedures and controls, weight will be given to such factors as are
appropriate, including the prior occurrence of any similar errors or omissions,
when such procedures and controls were in place and fund accounting industry
standards in place at the time of the error.
2. The Fund shall indemnify and hold Price Associates harmless from and
against all losses, costs, damages, claims, actions, and expenses, including
reasonable expenses for legal counsel, incurred by Price Associates resulting
from: (i) any action or omission by Price Associates or its agents or
subcontractors in the performance of their duties hereunder; (ii) Price
Associates acting upon instructions believed by it to have been executed by a
duly authorized officer of the Fund; or (iii) Price Associates acting upon
information provided by the Fund in form and under policies agreed to by Price
Associates and the Fund. Price Associates shall not be entitled
<PAGE>
to such indemnification in respect of actions or omissions constituting
negligence or willful misconduct of Price Associates or where Price Associates
has not exercised reasonable care in selecting or monitoring the performance of
its agents or subcontractors.
3. Price Associates shall indemnify and hold harmless the Fund from all
losses, costs, damages, claims, actions and expenses, including reasonable
expenses for legal counsel, incurred by the Fund resulting from the negligence
or willful misconduct of Price Associates or which result from Price Associates'
failure to exercise reasonable care in selecting or monitoring the performance
of its agents or subcontractors. The Fund shall not be entitled to such
indemnification with respect to actions or omissions constituting negligence or
willful misconduct of such Fund or its agents or subcontractors; unless such
negligence or misconduct is attributable to Price Associates.
4.
In the event either party is unable to perform its obligations under the terms
of this Agreement because of acts of God, strikes or other causes reasonably
beyond its control, such party shall not be liable to the other party for any
loss, cost, damage, claim, action or expense resulting from such failure to
perform or otherwise from such causes.
5.
In order that the indemnification provisions contained in this Article G shall
apply, upon the assertion of a claim for which either party may be required to
indemnify the other, the party seeking indemnification shall promptly notify the
other party of such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party who may be
required to indemnify shall have the option to participate with the party
seeking indemnification in the defense of such claim, or to defend against said
claim in its own name or in the name of the other party. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
H. DUAL INTERESTS
--------------
It is understood that some person or persons may be directors, officers, or
shareholders of both the Fund and Price Associates (including Price Associates'
affiliates), and that the existence of any such dual interest shall not affect
the validity of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
<PAGE>
I. DOCUMENTATION
-------------
As requested by Price Associates, the Fund shall promptly furnish to Price
Associates such documents as it may reasonably request and as are necessary for
Price Associates to carry out its responsibilities hereunder.
J. RECORDKEEPING/CONFIDENTIALITY
-----------------------------
1. Price Associates shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable, provided
that Price Associates shall keep all records in such form and in such manner as
required by applicable law, including the Investment Company Act of 1940 ("THE
ACT") and the Securities Exchange Act of 1934 ("THE '34 ACT").
2.
Price Associates and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except: (a) after prior notification to and approval in writing by the other
party hereto, which approval shall not be unreasonably withheld and may not be
withheld where Price Associates or Fund may be exposed to civil or criminal
contempt proceedings for failure to comply; (b) when requested to divulge such
information by duly constituted governmental authorities; or (c) after so
requested by the other party hereto.
K. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
--------------------------------------------------
Except as otherwise provided in the Agreement and except for the accuracy
of information furnished to the Funds by Price Associates, each Fund assumes
full responsibility for the preparation, contents and distribution of its
prospectuses, and for complying with all applicable requirements of the Act, the
'34 Act, the Securities Act of 1933 (the "33 ACT"), and any laws, rules and
regulations of governmental authorities having jurisdiction over the Funds.
L. TERM AND TERMINATION OF AGREEMENT
---------------------------------
1.
This Agreement shall run for a period of one (1) year from the date first
written above and will be renewed from year to year thereafter unless terminated
by either party as provided hereunder.
2.
This Agreement may be terminated by the Fund upon sixty (60) days' written
notice to Price Associates; and by Price Associates, upon three hundred
sixty-five (365) days' writing notice to the Fund.
<PAGE>
3. Upon termination hereof, the Fund shall pay to Price Associates such
compensation as may be due as of the date of such termination, and shall
likewise reimburse for out-of-pocket expenses related to its services hereunder.
M. NOTICE
------
Any notice as required by this Agreement shall be sufficiently given (i)
when sent to an authorized person of the other party at the address of such
party set forth above or at such other address as such party may from time to
time specify in writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
N. ASSIGNMENT
----------
Neither this Agreement nor any rights or obligations hereunder may be
assigned either voluntarily or involuntarily, by operation of law or otherwise,
by either party without the prior written consent of the other party, provided
this shall not preclude Price Associates from employing such agents and
subcontractors as it deems appropriate to carry out its obligations set forth
hereunder.
O. AMENDMENT/INTERPRETIVE PROVISIONS
---------------------------------
The parties by mutual written agreement may amend this Agreement at any
time. In addition, in connection with the operation of this Agreement, Price
Associates and the Fund may agree from time to time on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions are to be signed by all parties
and annexed hereto, but no such provision shall contravene any applicable
Federal or state law or regulation and no such interpretive or additional
provision shall be deemed to be an amendment of this Agreement.
P. FURTHER ASSURANCES
------------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
Q. MARYLAND LAW TO APPLY
---------------------
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of Maryland.
<PAGE>
R. MERGER OF AGREEMENT
-------------------
This Agreement, including the attached Appendix and Schedule supersedes any
prior agreement with respect to the subject hereof, whether oral or written.
S. COUNTERPARTS
------------
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instruments.
T. THE PARTIES
-----------
All references herein to "the Fund" are to each of the Funds listed on
Appendix A individually, as if this Agreement were between such individual Fund
and Price Associates. In the case of a series Fund or trust, all references to
"the Fund" are to the individual series or portfolio of such Fund or trust, or
to such Fund or trust on behalf of the individual series or portfolio, as
appropriate. The "Fund" also includes any T. Rowe Price Funds which may be
established after the execution of this Agreement. Any reference in this
Agreement to "the parties" shall mean Price Associates and such other individual
Fund as to which the matter pertains.
U. DIRECTORS, TRUSTEES AND SHAREHOLDERS AND MASSACHUSETTS BUSINESS TRUST
---------------------------------------------------------------------
It is understood and is expressly stipulated that neither the holders of
shares in the Fund nor any Directors or Trustees of the Fund shall be personally
liable hereunder.
With respect to any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund" means and refers to
the trustees from time to time serving under the applicable trust agreement
(Declaration of Trust) of such Trust as the same may be amended from time to
time. It is expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust, as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Agreement has been authorized by the trustees and
signed by an authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
<PAGE>
V. CAPTIONS
--------
The captions in the Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers.
T. ROWE PRICE ASSOCIATES, INC. T. ROWE PRICE FUNDS
/s/James S. Riepe /s/Carmen F. Deyesu
BY: ______________________________
BY:
--------------------------------------------------------------
James S. Riepe Carmen F. Deyesu
DATED:____________________________
DATED:____________________________
<PAGE>
APPENDIX A
----------
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
<PAGE>
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. Rowe Price Prime Reserve Fund-PLUS Class
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balance Fund
T. Rowe Price Tax-Efficient Growth Fund
<PAGE>
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. Rowe Price Tax-Exempt Money Fund - PLUS Class
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC. on behalf of the:
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. on behalf of the:
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
<PAGE>
AMENDMENT NO. 1
AGREEMENT
BETWEEN
T. ROWE PRICE ASSOCIATES, INC.
AND
THE T. ROWE PRICE FUNDS
FOR
FUND ACCOUNTING SERVICES
The Agreement for Fund Accounting Services of January 1, 2000, between T. Rowe
Price Associates, Inc. and each of the Parties listed on Appendix A thereto is
hereby amended, as of February 9, 2000, by adding thereto Institutional Equity
Funds, Inc., on behalf of Institutional Large-Cap Value Fund and Institutional
Small-Cap Stock Fund; T. Rowe Price Blue Chip Growth Fund, Inc., on behalf of T.
Rowe Price Blue Chip Growth Fund-Advisor Class; T. Rowe Price Equity Income
Fund, on behalf of T. Rowe Price Equity Income Fund -Advisor Class; T. Rowe
Price High Yield Fund, Inc., on behalf of T. Rowe Price High Yield Fund-Advisor
Class; T. Rowe Price International Funds, Inc., on behalf of T. Rowe Price
International Bond Fund-Advisor Class and T. Rowe Price International Stock
Fund-Advisor Class; T. Rowe Price Mid-Cap Growth Fund, Inc., on behalf of T.
Rowe Price Mid-Cap Growth Fund-Advisor Class; T. Rowe Price Science & Technology
Fund, Inc., on behalf of T. Rowe Price Science & Technology Fund-Advisor Class;
T. Rowe Price Small-Cap Stock Fund, Inc., on behalf of T. Rowe Price Small-Cap
Stock Fund-Advisor Class; T. Rowe Price Small-Cap Value Fund, Inc., on behalf of
T. Rowe Price Small-Cap Value Fund-Advisor Class and T. Rowe Price Value Fund,
Inc., on behalf of T. Rowe Price Value Fund-Advisor Class.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. Rowe Price Blue Chip Growth Fund-Advisor Class
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
<PAGE>
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE CAPITAL OPPORTUNITY FUND, INC.
T. ROWE PRICE CORPORATE INCOME FUND, INC.
T. ROWE PRICE DIVERSIFIED SMALL-CAP GROWTH FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. Rowe Price Equity Income Fund-Advisor Class
T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price Equity Income Portfolio
T. Rowe Price New America Growth Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. ROWE PRICE FINANCIAL SERVICES FUND, INC.
T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HEALTH SCIENCES FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. Rowe Price High Yield Fund-Advisor Class
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index 500 Fund
T. Rowe Price Extended Equity Market Index Fund
T. Rowe Price Total Equity Market Index Fund
INSTITUTIONAL EQUITY FUNDS, INC.
Institutional Large-Cap Value Fund
Institutional Small-Cap Stock Fund
Mid-Cap Equity Growth Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
<PAGE>
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Bond Fund-Advisor Class
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Stock Fund-Advisor Class
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio
T. ROWE PRICE MEDIA & TELECOMMUNICATIONS FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. Rowe Price Mid-Cap Growth Fund-Advisor Class
T. ROWE PRICE MID-CAP VALUE FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PERSONAL STRATEGY FUNDS, INC.
T. Rowe Price Personal Strategy Balanced Fund
T. Rowe Price Personal Strategy Growth Fund
T. Rowe Price Personal Strategy Income Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. Rowe Price Prime Reserve Fund-PLUS Class
T. ROWE PRICE REAL ESTATE FUND, INC.
RESERVE INVESTMENT FUNDS, INC.
Reserve Investment Fund
Government Reserve Investment Fund
<PAGE>
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. Rowe Price Science & Technology Fund-Advisor Class
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SHORT-TERM U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE SMALL-CAP STOCK FUND, INC.
T. Rowe Price Small-Cap Stock Fund-Advisor Class
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. Rowe Price Small-Cap Value Fund-Advisor Class
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum International Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Virginia Short-Term Tax-Free Bond Fund
Florida Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EFFICIENT FUNDS, INC.
T. Rowe Price Tax-Efficient Balanced Fund
T. Rowe Price Tax-Efficient Growth Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. Rowe Price Tax-Exempt Money Fund-PLUS Class
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
<PAGE>
T. ROWE PRICE SUMMIT FUNDS, INC. on behalf of the:
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC. on behalf of the:
T. Rowe Price Summit Municipal Money Market Fund
T. Rowe Price Summit Municipal Intermediate Fund
T. Rowe Price Summit Municipal Income Fund
T. ROWE PRICE VALUE FUND, INC.
T. Rowe Price Value Fund-Advisor Class
Attest:
/s/Patricia B. Lippert /s/ Carmen F. Deyesu
________________________ ______________________________
Patricia B. Lippert By: Carmen F. Deyesu
Secretary Treasurer
Attest: T. ROWE PRICE ASSOCIATES, INC.
/s/Barbara A. Van Horn /s/ Henry H. Hopkins
________________________ ______________________________
Barbara A. Van Horn By: Henry H. Hopkins
Secretary Managing Director
April 18, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: T. Rowe Price International Series, Inc. (the "Registrant")
T. Rowe Price International Stock Portfolio
File Nos.: 033-52171/811-07145
Post-Effective Amendment No. 8
Commissioners:
We are counsel to the above-referenced registrant which proposes to file,
pursuant to paragraph (b) of Rule 485 (the "Rule"), the above-referenced
Post-Effective Amendment (the "Amendment") to its registration statement under
the Securities Act of 1933, as amended.
Pursuant to paragraph (b)(4) of the Rule, we represent that the Amendment does
not contain disclosures which would render it ineligible to become effective
pursuant to paragraph (b) of the Rule.
Sincerely,
/s/Swidler Berlin Shereff Friedman, LLP
Swidler Berlin Shereff Friedman, LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 8 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated January 20, 2000 relating to the financial
statements and financial highlights appearing in the December 31, 1999 Annual
Report to Shareholders of International Stock Portfolio (comprising T. Rowe
Price International Series, Inc.), which is incorporated by reference into the
Registration Statement. We also consent to the references to us under the
heading "Financial Highlights" in the Prospectus and under the heading
"Independent Accountants" in the Statement of Additional Information.
/s/PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Baltimore, Maryland
April 20, 2000
Rowe Price-Fleming International, Inc. Statement of Policy on Securities
Transactions, dated March, 2000.
<PAGE>
ROWE PRICE-FLEMING INTERNATIONAL, INC.
STATEMENT OF POLICY
ON
SECURITIES TRANSACTIONS
BACKGROUND INFORMATION.
LEGAL REQUIREMENT. In accordance with the requirements of the securities
laws of the United States (i.e., the Securities Exchange Act of 1934, the
Investment Company Act of 1940, the Investment Advisers Act of 1940 and the
Insider Trading and Securities Fraud Enforcement Act of 1988) and the
various United Kingdom laws and regulations, Rowe Price-Fleming
International, Inc. ("RPFI") and the mutual funds which it manages ("RPFI
FUNDS") have adopted this Statement of Policy on Securities Transactions
("STATEMENT"). Both T. Rowe Price Associates, Inc. ("PRICE ASSOCIATES OR
TRPA") and T. Rowe Fleming Asset Management ("TRFAM") have also adopted
Statements of Policy on Securities Transactions. Funds sponsored and managed
by Price Associates or RPFI may be referred to collectively in this
Statement as the "PRICE FUNDS."
RPFI'S FIDUCIARY POSITION. As an investment adviser, RPFI is in a fiduciary
position which requires it to act with an eye only to the benefit of its
clients, avoiding those situations which might place, or appear to place,
the interests of RPFI or its officers, directors or employees in conflict
with the interests of clients.
PURPOSE OF STATEMENT. The Statement was developed to help guide RPFI and its
officers, non-affiliated directors and employees and the independent
directors of the RPFI Funds and Personnel of Related Entities, including all
Access Persons as defined below, in the conduct of their personal
investments and to:
o
eliminate the possibility of a transaction occurring that the United
States Securities and Exchange Commission or other regulatory bodies
would view as illegal, such as FRONT RUNNING (see definition below);
o
avoid situations where it might appear that RPFI or the RPFI Funds
or any of their officers, directors or employees had personally
benefited at the expense of a client or fund shareholder or taken
inappropriate advantage of their fiduciary positions; and
<PAGE>
o
prevent, as well as detect, the misuse of material, non-public
information.
All those covered by this Statement are urged to consider the reasons for
the adoption of this Statement. RPFI's and the RPFI Funds' reputations could
be adversely affected as the result of even a single transaction considered
questionable in light of the fiduciary duties of RPFI and the independent
directors of the RPFI Funds.
FRONT RUNNING. Front Running is illegal. It is generally defined as the
purchase or sale of a security by an officer, director or employee of an
investment adviser or mutual fund in anticipation of and prior to the
adviser effecting similar transactions for its clients in order to take
advantage of or avoid changes in market prices effected by the clients'
transactions.
ETHICS COMMITTEE. RPFI has established an Ethics Committee which is
responsible for the administration of this Statement. Its members are Martin
Wade and David Warren (London) and Henry Hopkins and M. David Testa
(Baltimore).
LONDON COMPLIANCE TEAM. The Ethics Committee has designated the London
Compliance Team to carry out the compliance functions described in this
Statement. The members of the London Compliance Team include Carol Eve,
Rachel Dickens, and Val Bailey.
PERSONS SUBJECT TO STATEMENT. The provisions of this Statement apply to the
following persons and entities. In the case of an individual, the Statement
also applies to the individual's spouse, minor children, and certain other
relatives, as further described on page 4-5 of this Statement.
RPFI. RPFI for its own account, including sponsored retirement plans of the
firm, if any.
RPFI OFFICERS, DIRECTORS AND EMPLOYEES. Each Officer, Director, and Employee
of RPFI. The term "Director" means any RPFI Director affiliated with Price
Associates or who is not an employee of Robert Fleming Holdings Limited
("RF" or "ROBERT FLEMING"). The responsibilities of the Robert-Fleming
related Directors (???) of RPFI are discussed separately on page 4-3 under
the heading "Non-Affiliated Directors of RPFI.".
<PAGE>
Each Officer, Director, and Employee stationed in RPFI's Baltimore office
will be referred to as BALTIMORE EMPLOYEES. Baltimore Employees are subject
to all the provisions of the TRPA Statement, including its prior clearance
and various reporting requirements. Therefore, although Baltimore Employees
will be subject to this Statement's general principles, they will not be
subject to the Statement's prior clearance or reporting requirements or the
restrictions on the use of non-affiliated brokers. The TRPA Statement is
considered a part of this Statement.
CERTAIN TEMPORARY WORKERS. These workers include:
o
Any temporary or consultant when his or her assignment at RPFI
exceeds or will exceed four weeks or when his or her cumulative
assignments exceed eight weeks over a twelve-month period; and
o
Any contingent worker immediately at the time of engagement if his
or her assignment is more than casual in nature or if he or she will
be exposed to the kinds of information and situations that would
create conflicts on matters covered in the Code.
PERSONNEL OF RELATED ENTITIES. Any officer, director or employee of one of
the entities ("RELATED ENTITIES") listed below who, in connection with his
or her regular functions or duties, makes, participates in, obtains, or has
access to information regarding the purchase or sale of a security by a
Price Fund or other advisory client, or whose functions or duties relate to
the making of any such recommendations with respect to the purchase or sale
of securities by any one or more of RPFI's clients.
o Robert Fleming Holdings Limited,
o Jardine Fleming Group, or
o Any other company in a control relationship to RPFI.
The London Compliance Team will keep a record of all such Related Entity
Personnel. This list, which shall be revised to reflect any changes on a
quarterly basis, shall be sent to the Compliance Section of the Legal
Department in Baltimore ("BALTIMORE LEGAL/COMPLIANCE").
<PAGE>
TRFAM PERSONNEL. As stated earlier, a Statement of Policy on Securities
Transactions has been adopted by TRFAM. Under that Statement any TRFAM
officer, director, or employee who has been seconded to TRFAM by RPFI and
who works in any office other than Baltimore will be subject to this
Statement.
NON-AFFILIATED DIRECTORS OF RPFI. Directors of RPFI who are neither officers
nor employees of RPFI or Price Associates and who, in connection with their
regular functions or duties, do not make, participate in, or obtain
information regarding the purchase or sale of a security by any one of
RPFI's clients, or whose functions or duties do not relate to the making of
any such recommendation with respect to the purchase or sale of securities
by any one of RPFI's clients. They are SUBJECT to:
^o^the Statement's general principles;
^o^the Statements transaction reporting requirements;
^o^restrictions on dealing with clients;
^o^co-investing restrictions;
^o^investment in client investment partnership restrictions; and
^o^1/2% ownership reporting requirements
They are EXEMPT from:
^^o^prior clearance requirements; and
^^o^the requirements and rules dealing with:
o^new issues;
o^investment clubs;
o^private placements;
o^short sales;
o^trading activity;
o^non-affiliated brokers;
o^brokerage confirmations, periodic account statements and
notification of broker/dealer accounts;
^^o^the 60-Day Rule; and
o^disclosure of personal securities holdings.
However, they are subject to personal securities transaction rules adopted
by their respective employers (Robert Fleming Holdings or Jardine Fleming
Group and their affiliates). In
<PAGE>
addition, any Non-Affiliated Director who, in connection with his or her
regular duties, receives information that would create conflicts on matters
covered by the Code, will be treated as Personnel of Related Entities.
INDEPENDENT DIRECTORS OF RPFI FUNDS. The Independent Directors of the RPFI
Funds are prohibited from owning the stock of Price Associates. They are
SUBJECT to:
^o^the Statement's general principles;
^o^the Statements transaction reporting requirements;
^o^restrictions on dealing with clients;
^o^co-investing restrictions;
^o^investment in client investment partnership restrictions; and
^o^1/2% ownership reporting requirements
They are EXEMPT from:
^^o^prior clearance requirements; and
^^o^the requirements and rules dealing with:
o^new issues;
o^investment clubs;
o^private placements;
o^short sales;
o^trading activity;
o^non-affiliated brokers;
o^brokerage confirmations, periodic account statements and
notification of broker/dealer accounts;
o^the 60-Day Rule; and
o^disclosure of personal securities holdings.
[Per DNB: Why aren't Independent and Non-Affiliated Directors subject to
confirm and b/d account requirements?]
ACCESS PERSONS. The term "ACCESS PERSON" means:
o^RPFI;
o^any officer (vice president or above) or director (excluding Independent
Directors of RPFI Funds and Non-Affiliated Directors of RPFI) of RPFI or the
Price Funds;
<PAGE>
o^any employee of RPFI, a Related Entity, or the Price Funds who, in
connection with his or her regular functions or duties, makes, participates
in, obtains, or has access to information regarding the purchase or sale of
securities by a Price Fund or other advisory client, or whose functions
relate to the making of any recommendations with respect to the purchases or
sales; or
o^any person in a control relationship to RPFI (excluding the Non-Affiliated
Directors of RPFI) or a Price Fund who obtains or has access to information
concerning recommendations made to a Price Fund or other advisory client
with regard to the purchase or sale of securities by the Price Fund or
advisory client.
The London Compliance Team notifies each Access Person of their status under
the Code. All Officers, Directors and Employees of RPFI are deemed to be
Access Persons.
INVESTMENT PERSONNEL. An Access Person is further identified as "INVESTMENT
PERSONNEL" if, in connection with his or her regular function on duties, he
or she makes or participates in making recommendations regarding the
purchase or sale of securities by a Price Fund or other advisory client. The
term "Investment Personnel" includes, but is not limited to:
o
those persons who are authorized to make investment decisions or
to recommend securities transactions on behalf of RPFI's
clients;
o research and credit analysts; and
o traders for RPFI.
All Investment Personnel are deemed Access Persons under the Code. The
London Compliance Team notifies all Investment Personnel of their status
under the Code.
QUESTIONS ABOUT THE STATEMENT. Covered Persons are urged to seek the advice
of Martin Wade, David Warren or Henry Hopkins or their designees when they
have questions as to the application of this Statement to their individual
circumstances.
<PAGE>
TRANSACTIONS SUBJECT TO STATEMENT. Except as provided below, the provisions
of this Statement apply to securities transactions that fall under one of
the following two conditions:
IF, you are a "BENEFICIAL OWNER" of the security under the Rule 16a-1 of the
United States Securities Exchange Act of 1934 ("EXCHANGE ACT"), as defined
below.
OR, if you CONTROL or direct securities trading for another person or entity,
those trades are subject to this Statement even if you are not a beneficial
owner of the securities. For example, if you have a power of attorney to direct
transactions in another person's account or give ongoing advice to another
person about his or her securities transactions, those transactions will be
subject to this Statement to the same extent your personal trades would be,
unless exempted as described below.
DEFINITION OF BENEFICIAL OWNER. A "beneficial owner" is any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise, has or shares in the opportunity to derive any
profit from a transaction in the security.
For example, a person has beneficial ownership in:
o^securities held by members of the person's immediate family SHARING THE
SAME HOUSEHOLD;
o^securities held by a trust, if that person is either a trust beneficiary
or a trustee with investment control;
o^the right to acquire securities through the exercise or conversion of any
derivative security, whether or not presently exercisable;
o^a proportionate interest in the portfolio securities held by a general or
limited partnership if that person is a general partner;
o^certain performance-related fees other than an asset-based fee, received
by any broker, dealer, bank, insurance company, investment company,
investment adviser, investment manager, trustee or person or entity
performing a similar function; and
<PAGE>
o^the right to dividends that is separated or separable from the underlying
securities. Otherwise, a right to dividends alone shall not represent
beneficial ownership in the securities.
A shareholder shall not be deemed to have beneficial ownership in the portfolio
securities held by a corporation or similar entity in which the person owns
securities if the shareholder is not a controlling shareholder of the entity and
does not have or share investment control over the entity's portfolio.
REQUESTS FOR EXEMPTIONS. If you have beneficial ownership of a security, any
transaction involving that security is presumed to be subject to the relevant
requirements of this Statement, UNLESS you have no control over the transaction.
Such a situation MAY arise, for example, if you have delegated investment
authority to an independent investment adviser, or your spouse has an
independent trading program in which you have no input. Similarly, if your
spouse has investment control over, but no beneficial ownership in, an unrelated
account, an exemption may be appropriate.
If you feel you should not be subject to the Statement's relevant prior
approval and/or reporting requirements, you should submit a written request
for clarification or exemption to the London Compliance Team. Any such
request for clarification or exemption should name the account, your
interest in the account, the persons or firms responsible for its
management, and the basis upon which the exemption is being claimed.
Exemptions are NOT self-executing; any exemption must be granted through the
London Compliance Team.
APPLICATION OF CERTAIN PROVISIONS OF THE STATEMENT. The application of the
provisions of this Statement varies depending upon a person's job
responsibilities, as follows:
o^ALL PERSONS subject to this Statement are bound by its general principles,
transaction reporting requirements, and sanctions provisions.
o^ALL ACCESS PERSONS, whether they are RPFI Officers, Directors or Employees
or Related Entity Personnel, are also subject to the brokerage notification
and initial and annual Securities Holdings Report requirements.
o^All Related Entity Personnel [DNB: "TRFAM Personnel"; however, this would
not pick up JF & RF] who are ALSO Investment Personnel, RPFI itself, and ALL
RPFI Officers, Directors, and Employees, regardless of whether they are
Investment Personnel, are subject to the prior clearance requirements for
transactions other than transactions in Price Associates' stock. These
persons and RPFI will be referred to as "CLEARING ACCESS PERSONS".
<PAGE>
o^All RPFI Officers, Directors, and Employees are also subject to other
requirements, including the prior clearance of transactions in Price
Associates' stock, as described below.
PROVISIONS APPLICABLE TO ALL PERSONS SUBJECT TO THIS STATEMENT. All persons
subject to this Statement are subject to the transaction reporting
requirements as described below, as well as the sanctions provisions (see p.
4-_).
TRANSACTION REPORTING REQUIREMENTS.
TRANSACTIONS THAT MUST BE REPORTED. Other than for the transactions
specified below as exempt, every Person subject to this Statement is
required to report to the London Compliance Team all securities
transactions, including the following:
CLEARED TRANSACTIONS. Any transaction that is subject to the prior
clearance requirements. Although only Clearing Access Persons must
receive prior clearance of trades, all persons subject to the Statement
MUST report any transaction that would have been required to be prior
cleared by a Clearing Access Person. This includes transactions by a
stock or investment club of which a person subject to this Statement is
a member. [CE & RD want to delete this]
PRO RATA DISTRIBUTIONS. Purchase effected by the exercise of rights
issued pro rata to all holders of a class of securities or the sale of
rights so received.
SECURITIES OF ROBERT FLEMING HOLDINGS, LTD. Transactions involving the
purchase or sale of the securities of Robert Fleming Holdings, Ltd.
directly from or to the issuer, including payroll deduction plan
transactions. However, these transactions need only be reported as a
current holding as part of an Access Person's initial and annual
Securities Holdings Report (see p. 4-_).
REGULAR SAVINGS SCHEMES. Transactions involving the purchase of
securities pursuant to a systematic investment plan, (i.e., a regular
savings scheme or savings plan) if the underlying investment(s) is not
exempt from prior clearance. REPORTING OF THESE TRANSACTIONS MUST BE
MADE PROMPTLY AFTER THE INDIVIDUAL RECEIVES HIS OR HER REPORTS REGARDING
THESE TRANSACTIONS (e.g., if the individual receives reports
semi-annually only, he or she must report the transactions on that
basis).
<PAGE>
MANDATORY TENDERS. Purchases and sales of securities pursuant to a
mandatory tender offer.
SPOUSAL PAYROLL DEDUCTION PLANS/SPOUSAL STOCK OPTION. Transactions
involving the purchase or exchange of securities by an Access Person's
spouse pursuant to a payroll deduction plan or the exercise by a spouse
of a stock option issued by the spouse's employer. REPORTING OF SPOUSAL
PAYROLL DEDUCTION PLAN TRANSACTIONS MUST BE MADE PROMPTLY AFTER THE
INDIVIDUAL RECEIVES HIS OR HER REPORTS REGARDING THESE TRANSACTIONS
(e.g., if the individual receives reports semi-annually only, he or she
must report the transactions on that basis); REPORTING OF A SPOUSAL
STOCK OPTION EXERCISE MUST BE MADE WITHIN 10 DAYS OF THE EXERCISE.
INHERITANCES. Acquisition of securities through inheritance.
GIFTS. Acquisition or disposition of securities by gift.
TRANSACTIONS EXEMPT FROM REPORTING. The following transactions are exempt
from the reporting requirements:
OPEN-ENDED COLLECTIVE INVESTMENT SCHEMES, INCLUDING UNIT TRUSTS AND U.S.
MUTUAL FUNDS. Purchases or redemptions of shares of any open-ended
collective investment schemes, unit trust and U.S. open-end investment
companies, including the Price Funds and similar, foreign-registered
investment vehicles, except that any person covered by this Statement
who serves as the president, chairman of the board, or executive vice
president of a Price Fund must report his or her beneficial ownership or
control of shares in that Fund to Baltimore Legal/Compliance at the time
of the initial purchase of shares.
GOVERNMENT OBLIGATIONS. Purchases or sales of direct U.S. or Foreign
Government obligations.
CORPORATE ACTIONS (E.G., STOCK SPLITS AND SIMILAR TRANSACTIONS). The
acquisition of additional shares of existing corporate holdings through
the reinvestment of income dividends and capital gains in mutual funds
and similar investment vehicles, stock splits, stock dividends, exercise
of rights, exchanges or conversions.
<PAGE>
DIVIDEND REINVESTMENT PLANS. The purchase of securities with dividends
effected through an established DRP. If, however, a Connected Purchase
or a sale must receive prior clearance (see p. 4-_), that transaction
must also be reported.
REPORT FORM. If the executing broker/dealer (including Robert Fleming or
Jardine Fleming) provides a confirmation, contract note or similar statement
directly to the London Compliance Team, you do not need to make a further
report. All other transactions must be reported on the form designated "Rowe
Price-Fleming International, Inc. Report of Securities Transactions," a
supply of which is available from the London Compliance Team.
WHEN REPORTS ARE DUE. Unless your broker/dealer provides a confirmation or
statement to the London Compliance Team, you must report a securities
transaction within ten (10) days after the trade date (for example, a
purchase in a private placement), or within (10) days after the date on
which you first gain knowledge of the transaction (for example, a bequest)
if this is later. Transactions involving either a regular savings scheme or
the purchase of securities by a spouse pursuant to a payroll deduction plan,
however, may be reported when the report is received. Transactions in the
stock of Robert Fleming Holdings, Ltd. may be reported as part of initial
and annual Securities Holdings Reports.
The London Compliance Team will send all such reports to Baltimore
Compliance quarterly.
TRANSACTION REPORTING REQUIREMENTS OF THE INDEPENDENT DIRECTORS OF THE RPFI
FUNDS AND THE NON-AFFILIATED DIRECTORS OF RPFI. The Independent Directors of
the RPFI Funds and the Non-Affiliated Directors of RPFI are subject to
similar reporting requirements as Access Persons, except that reports need
only be filed quarterly and the reports of the Independent Directors are
filed in Baltimore. Specifically, each Independent Director must file a
report for each quarter's transactions with Baltimore Legal/Compliance no
later than ten (10) calendar days after the end of the calendar quarter in
which the transactions were effected. Each Non-Affiliated Director must file
a report for each quarter's transactions with the London Compliance Team on
the same schedule. Reports must be filed for each quarter, regardless of
whether there have been any reportable transactions. Baltimore
Legal/Compliance will send the Independent Directors of the RPFI Funds a
reminder letter and Reporting Form approximately ten (10) days prior to the
end of each calendar quarter. [Does LCT send similar reminder to
Non-Affiliated Directors?]
<PAGE>
[Dottie: please confirm both groups report as indicated in revision.]
PROVISIONS APPLICABLE TO ALL ACCESS PERSONS. All Access Persons are also
subject to the permission and notification requirements for outside
broker/dealer accounts and the initial and annual Securities Holdings Report
requirements as described below, as well as the sanctions provisions (see p.
4-_).
PERMISSION AND NOTIFICATION REQUIREMENTS REGARDING OTHER BROKER/DEALER
ACCOUNTS (EXCLUDING ACCOUNTS WITH ROBERT FLEMING AND JARDINE FLEMING).
Access Persons must effect all their personal securities transactions
through the trading desks of Robert Fleming and Jardine Fleming,
respectively, [unless otherwise exempted. - CE & RD want to delete] TRP
Investment Services, Inc.'s Brokerage Division is considered an outside
broker/dealer for these purposes.
TRANSACTIONS EXEMPT FROM LONDON COMPLIANCE TEAM PERMISSION/NOTIFICATION
REQUIREMENTS. The following transactions are exempt from these requirements
without approval by the London Compliance Team if approved by RF Group
Compliance or JF Compliance, as appropriate:
o^IPOs
o^Investments in [Investment Trusts] made through Personal Equity Plans [or
IS's] [unless self-managed]
o^Exercise of Options and Warrants
o^Acquisitions of shares in investment trusts under any dividend
reinvestment or regular savings scheme
o^Exercise of Price Associates^ stock options, including cashless exercises,
if exercised through Deutsche Bank-Alex Brown and duplicate account
information is sent directly to RF Group Compliance by Deutsche Bank-Alex
Brown.
<PAGE>
An Access Person's trades in open-ended Collective Investment Schemes,
including Unit Trusts and U.S. Mutual Funds, do not require an exemption
from the London Compliance Team, RF Compliance, or JF Compliance.
Application for any other exemption from this requirement, including for an
Access Person's spouse's securities transactions if the spouse is subject to
conflicting requirements due to his or her employment, must be made to the
London Compliance Team. If the London Compliance Team approves the
application, it will forward it to RF Group Compliance or to JF Compliance,
as appropriate, for its approval as well.
PROCEDURES FOR PERMISSION AND NOTIFICATION.
ACCESS PERSONS. [Unless the transaction is exempted above,] RPFI Officers,
Directors, and Employees must contact the London Compliance Team to obtain
RF Group Compliance or JF Compliance permission, as appropriate, before
opening or trading in a securities account with any other broker/dealer. All
other Access Persons may obtain permission directly from RF Group Compliance
or JF Compliance but MUST inform the London Compliance Team within 10 days
of receiving such permission.
NEW ACCESS PERSONS. [Unless the transaction is exempted above,] new RPFI
Officers, Directors and Employees must apply to RF Group Compliance or JF
Compliance, as appropriate, through the London Compliance Team for
permission to maintain any existing securities accounts with any other
broker/dealer promptly upon joining the firm. All other new Access Persons
may obtain permission directly from RF Group Compliance or JF Compliance but
MUST inform the London Compliance Team within 10 days of receiving such
permission.
BROKERAGE CONFIRMATIONS AND PERIODIC ACCOUNT STATEMENTS. Robert Fleming and
Jardine Fleming notify the London Compliance Team of all transactions
effected through their trading desks by Access Persons. For transactions in
which Access Persons are considered to have beneficial ownership and/or
control (see page 4-_ for definitions of Beneficial Owner/Control) and that
are effected away from the Robert Fleming and Jardine Fleming trading desks,
Access Persons must request broker-dealers executing transactions to send to
the attention of the London Compliance Team the following documents:
<PAGE>
DUPLICATE CONFIRMATIONS. A duplicate confirmation or equivalent notice with
respect to each and every reportable transaction, including any transaction
in Price Associates' stock, within 10 days of execution.
PERIODIC STATEMENTS. A copy of all periodic statements for all such
securities accounts.
DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS. Upon
commencement of employment, appointment or promotion (no later than 10 days
after the starting date), each Access Person must disclose in writing all
current securities holdings in which he or she is considered to have
beneficial ownership and control ("SECURITIES HOLDINGS REPORT") (see page
4-_ for definitions of Beneficial Owner/Control). The form to provide the
Securities Holdings Report will be provided upon commencement of employment,
appointment or promotion and should be submitted to the London Compliance
Team, which will provide a copy to Baltimore Legal/Compliance.
All Investment Personnel and Directors (other than an Independent Director
of RPFI Funds or a Non-Affiliated Director of RPFI, who, in connection with
his or her regular functions or duties, does not make, participate in, or
obtain information regarding the purchase or sale of a security by any one
of RPFI's clients, or whose functions or duties do not relate to the making
of any such recommendation with respect to the purchase or sale of
securities by any one or more of RPFI's clients) are also required to file a
Securities Holding Report on an annual basis. Effective January 2001, this
requirement will be extended to ALL Access Persons, pursuant to United
States law. [DNB, CE and RD wants to delete language in parenthetical after
"Director of RPFI"]
CONFIDENTIALITY OF RECORDS. RPFI makes every effort to protect the privacy
of its Access Persons in connection with their Securities Holdings Reports
and Reports of Securities Transactions.
PROVISIONS APPLICABLE TO ALL CLEARING ACCESS PERSONS. All Clearing Access
Persons (see definition on p. 4-_) are also subject to prior clearance
requirements (other than for Price Associates' stock), a prohibition on
short sales, the 60-Day Rule, and restrictions on investment in Non-Listed
securities firms, as well as the sanctions provisions (see p. 4-_).
<PAGE>
PRIOR CLEARANCE REQUIREMENTS FOR CLEARING ACCESS PERSONS (OTHER THAN PRICE
ASSOCIATES' STOCK). All Clearing Access Persons must obtain prior clearance
before directly or indirectly initiating, recommending, or in any way
participating in the purchase or sale of a security in which the Clearing
Access Person has, or by reason of such transaction may acquire, any
beneficial interest or which he or she controls, unless exempted below.
PRIOR CLEARANCE MUST BE OBTAINED REGARDLESS OF HOW THE TRANSACTION IS
EFFECTED. Receiving prior clearance does not relieve Clearing Access Persons
from conducting their personal securities transactions in full compliance
with the Code including its prohibition on trading while in possession of
material, inside information, and with applicable law, including the
prohibition on Front Running (see page 4-1 for definition of Front Running).
Compliance with the 60-Day Rule (p. 4-_) is the responsibility of the Access
Person; it is not covered by prior clearance procedures. It is also the
Clearing Access Person's responsibility to ensure that all custody and
settlement requirements are met.
TRANSACTIONS EXEMPT FROM PRIOR CLEARANCE REQUIREMENTS (OTHER THAN PRICE
ASSOCIATES' STOCK). All securities transactions must receive prior clearance
except the following:
OPEN-ENDED COLLECTIVE INVESTMENT SCHEMES, INCLUDING UNIT TRUSTS AND U.S.
MUTUAL FUNDS. Purchases or redemptions of shares of any open-ended
collective investment scheme, unit trust and U.S. open-end investment
companies, including the Price Funds, and similar foreign-registered
investment vehicles.
GOVERNMENT OBLIGATIONS. Purchases or sales of direct U.S. or Foreign
Government obligations.
SECURITIES OF ROBERT FLEMING HOLDINGS, LTD. Purchases or sales of the
securities of Robert Fleming Holdings, Ltd. directly from or to the
issuer.
REGULAR SAVINGS SCHEMES. Purchases effected through a systematic
investment plan involving the automatic investment of a set amount on
predetermined dates (i.e., a regular savings scheme or savings plan),
provided that, if the underlying investment(s) in the scheme or plan is
not exempt from prior clearance, the London Compliance Team has been
previously notified by the Clearing Access Person that he or she will be
participating in the scheme or plan, and any purchase to initiate
participation in the scheme or plan, or any sale receives prior
clearance.
<PAGE>
DIVIDEND REINVESTMENT PLANS. Purchases effected through an established
Dividend Reinvestment Plan ("DRP"), provided the London Compliance Team
is first notified by the Clearing Access Person that he or she will be
participating in the DRP. A Clearing Access Person's purchase of
share(s) of the issuer to initiate participation in the DRP or his or
her purchase of shares in addition to those purchased with dividends (a
"CONNECTED PURCHASE") AND any sales of shares from the DRP MUST receive
prior clearance.
CORPORATE ACTIONS (E.G., STOCK SPLITS AND SIMILAR TRANSACTIONS). The
acquisition of additional shares of an existing holding through the
reinvestment of income dividends and capital gains in mutual funds and
similar investment vehicles, stock splits, stock dividends, exercise of
rights, exchanges or conversions.
MANDATORY TENDERS. Purchases and sales of securities pursuant to a
mandatory tender offer.
PAYROLL DEDUCTION PLANS. Purchases or exchanges by a Clearing Access
Person's spouse pursuant to a payroll deduction plan, provided the
London Compliance Team has been previously notified by the Clearing
Access Person that the spouse will be participating in the payroll
deduction plan.
EXERCISE OF STOCK OPTION OF CORPORATE EMPLOYER BY SPOUSE. Transactions
involving the exercise by a Clearing Access Person^s spouse of a stock
option issued by the corporation employing the spouse.
INHERITANCES. Acquisition of securities through inheritance.
GIFTS. Acquisition or disposition of securities by gift.
PROCEDURES FOR OBTAINING PRIOR CLEARANCE (OTHER THAN PRICE ASSOCIATES'
STOCK) FOR CLEARING ACCESS PERSONS. Requests for prior clearance may be made
by electronic mail or by submitting a written form to the London Compliance
Team. The London Compliance Team is responsible for processing and
maintaining the records of all such requests. All requests must include the
name of the security, the number of shares or amount of bond involved, [the
nature of the transaction, i.e., whether the transaction is a purchase or
sale, and whether the securities are part of a new issue.] and the estimated
value of the requested transaction.
<PAGE>
The London Compliance Team will record whether the request was approved or
disapproved and the date and time of the approval or disapproval; the reason
for any disapproval; if approval was granted pursuant to an exemption being
granted, [the name of the person granting the exemption; and the estimated
value of the requested transaction.], the nature of the transaction (i.e.,
whether the transaction is a purchase or sales) and whether the securities
are part of a new issue.
Responses to all requests will be confirmed by the London Compliance Team by
electronic mail or on a standard written form documenting the request and
its approval/disapproval.
Requests will normally be processed on the same day they are received;
HOWEVER, ADDITIONAL TIME MAY BE REQUIRED.
EFFECTIVENESS OF PRIOR CLEARANCE. Prior clearance of a securities
transaction is effective for three (3) business days FROM AND INCLUDING the
date the clearance is granted. If the proposed securities transaction is not
executed within this time, a new clearance must be obtained.
REASONS FOR DISALLOWING PROPOSED TRANSACTIONS. A proposed security
transaction will be disapproved by the London Compliance Team if:
PENDING CLIENT ORDERS BY RPFI. An order has been placed by RPFI to
purchase or sell the security through the London, Baltimore or Hong Kong
trading desk.
PENDING CLIENT ORDERS BY PRICE ASSOCIATES. An order has been
placed by Price Associates to purchase or sell the security.
PURCHASES AND SALES WITHIN SEVEN (7) CALENDAR DAYS. The security has
been purchased or sold by any client of RPFI or Price Associates within
the seven (7) calendar days immediately prior to the date of the
proposed transaction. For example, if a client transaction occurs on
Monday, a Clearing Access Person may not purchase or sell that security
until Tuesday of the following week. If all clients have eliminated
their holdings in a particular security, the seven-day restriction is
not applicable to a Clearing Access Person's transactions in that
security.
<PAGE>
SECURITIES SUBJECT TO INTERNAL TRADING RESTRICTIONS. The issuer has been
placed on the RPFI Restricted List.
PROCEDURES FOR OBTAINING PRIOR CLEARANCE FOR INITIAL PUBLIC OFFERINGS
("IPOS").
INVESTMENT PERSONNEL. Although subject to prior clearance, Investment
Personnel may purchase securities which are the subject of an IPO if the
London Compliance Team determines that all of the following conditions
are met:
o
The issue is open to the general public and allocations are made
by the issuer / syndicate on a purely random basis (lottery) or
on a pro-rata basis per application (collectively "PRO-RATA
OFFERING");
o
No order for the purchase of any such securities has been
entered by RPFI or Price Associates on behalf of any client;
o
The number of shares to be purchased is commensurate with the
normal size and activity of the Investment Personnel's account;
and
o
The Investment Personnel wishing to purchase the securities will
NOT participate in the firm^s investment decision regarding any
client investment in the underwritten issue.
NON-INVESTMENT PERSONNEL. Clearing Access Persons other than Investment
Personnel ("NON-INVESTMENT PERSONNEL") may purchase securities in a
Pro-rata Offering if the first three of the four conditions described
above are met.
Non-Investment Personnel may also be granted approval to purchase
securities which are the subject of a Non-Pro-rata Offering. In
considering such a request for approval, the London Compliance Team will
determine whether the proposed transaction presents a conflict of
interest with any of the firm's clients or otherwise violates the Code.
Approvals will carry the following conditions:
1.
The purchase is made through the Non-Investment Personnel's
regular broker, bank, or from a syndicate member through a
general solicitation or subscription form, if relevant;
<PAGE>
2.
The number of shares to be purchased is commensurate with the
normal size and activity of the Non-Investment Personnel's
account; and
3.
If the transaction is a public offering in the United States, it
otherwise meets the restrictions on free riding and withholding
set by the National Association of Securities Dealers, Inc.
ALL PERSONNEL. Neither Investment Personnel nor Non-Investment Personnel
will be permitted to purchase in an IPO if any of RPFI's or Price
Associates^ clients are prohibited from doing so. This prohibition will
remain in effect until these clients have had the opportunity to
purchase in the secondary market once the underwriting is completed --
commonly referred to as the aftermarket. In addition, the 60-Day Rule
applies to transactions in securities purchased in an IPO.
JAPANESE NEW ISSUES. All RPFI Officers, Directors and Employees are
prohibited from purchasing a security which is the subject of an IPO in
Japan.
PROCEDURES FOR OBTAINING PRIOR CLEARANCE FOR PRIVATE PLACEMENTS. Approval
for a Clearing Access Person to invest in a private placement of securities,
including the purchase of limited partnership interests, must be sought from
the London Compliance Team in the usual manner. The approval process will
include a review by a member of the Ethics Committee or the Chief Investment
Officer ("CIO") to determine whether the investment opportunity (private
placement) should be reserved for the firm's clients, and whether the
opportunity is being offered to the Clearing Access Person by virtue of his
or her position with the firm.
CONTINUING OBLIGATION. Any person who has received approval to invest in
a private placement of securities and who, at a later date, anticipates
participating in the firm's investment decision process regarding the
purchase or sale of securities of the issuer of that private placement
on behalf of any client, must immediately disclose his or her prior
investment in the private placement to the London Compliance Team.
REQUESTS FOR WAIVERS OF PRIOR CLEARANCE DENIALS. If a Clearing Access Person
has been denied prior clearance, he or she may apply to the London
Compliance Team, which will refer the matter to a member of the Ethics
Committee for a waiver. All such requests must
<PAGE>
be in writing and must fully describe the basis upon which the waiver is
being requested. Waivers are NOT routinely granted.
LARGE CAPITALIZATION EXEMPTION. Although subject to prior clearance,
transactions involving securities in large companies, within the parameters
set by the Ethics Committee, will be approved under normal circumstances
("LARGE CAPITALIZATION SECURITIES").
TRANSACTIONS INVOLVING LARGE CAPITALIZATION SECURITIES. This exemption
applies to transactions involving no more than $20,000 (all dollar
references are to U.S. dollars) or the nearest round lot (if the amount
of the transaction only marginally exceeds $20,000) per security per
week in securities of companies with market capitalizations of $5
billion or more.
TRANSACTIONS INVOLVING OPTIONS ON LARGE CAPITALIZATION SECURITIES.
Clearing Access Persons may not purchase uncovered put options or sell
uncovered call options unless otherwise permitted under the "Options and
Futures" discussion on p. 4-17. Otherwise, in the case of options on an
individual security qualifying for the Large Capitalization Exemption, a
Clearing Access Person may trade the GREATER of 5 contracts or
sufficient option contracts to control $20,000 in the underlying
security; thus a Clearing Access Person may trade 5 contracts even if
this permits the Clearing Access Person to control more than $20,000 in
the underlying security. Similarly, the Clearing Access Person may trade
more than 5 contracts as long as the number of contracts does not permit
him or her to control more than $20,000 in the underlying security.
[DNB: last 2 sentences contradict each other]
These parameters are subject to change by the Ethics Committee.
EXCHANGE-TRADED INDEX OPTIONS. Although subject to prior clearance, a
Clearing Access Person's transactions involving exchange-traded index
options, within the following parameters set by the Ethics Committee, will
be approved under normal circumstances. Generally, a Clearing Access Person
may trade the GREATER of 5 contracts or sufficient contracts to control
$20,000 in the underlying securities; thus a Clearing Access Person may
trade 5 contracts even if this permits the Clearing Access Person to control
more than $20,000 in the underlying securities. Similarly, the Clearing
Access Person may trade more than 5 contracts as long as the number of
contracts does not permit him or her to control more than $20,000 in the
underlying security.
<PAGE>
These parameters are subject to change by the Ethics Committee.
CLIENT LIMIT ORDERS. The London Compliance Team may approve a Clearing
Access Person's proposed trade even if a limit order has been entered for a
client for the same security, if:
^o^The Clearing Access Person's trade will be entered as a market order; and
^o^The client's limit order is 10% or more away from the market at the time
of approval.
INVESTMENT CLUBS. A Clearing Access Person may not form or participate in a
stock or investment club unless prior written approval has been obtained
from a member of the Ethics Committee. All transactions by such a stock or
investment club in which an individual has beneficial ownership or control
are subject to the same prior clearance and reporting requirements
applicable to an individual's trades. However, if a Clearing Access Person
has beneficial ownership solely by virtue of his or her spouse's
participation in the club and has no investment control or input into
decisions regarding the club's securities transactions, he or she may
request the waiver of prior clearance requirements for the club's
transactions, but not of reporting requirements, from a member of the Ethics
Committee as part of the approval process. Prior clearance waiver requests
by RPFI Officers, Directors and Employees for transactions in Price
Associates' stock (see p. _) will not be granted.
OPTIONS AND FUTURES. Please consult the specific section on Exchange-Traded
Index Options (p. 4-_) for transactions in these options.
<TABLE>
<CAPTION>
<C><S>
BEFORE ENGAGING IN OPTIONS AND FUTURES TRANSACTIONS,
ACCESS PERSONS SHOULD UNDERSTAND THE IMPACT THAT THE
60-DAY RULE MAY HAVE ON THEIR ABILITY TO CLOSE OUT A
POSITION (SEE PAGE 4-__).
--------------------------------------------------------
</TABLE>
OPTIONS AND FUTURES ON SECURITIES AND INDICES NOT HELD BY RPFI'S OR
PRICE ASSOCIATES^ CLIENTS. There are no specific restrictions with
respect to the purchase,
<PAGE>
sale or writing of put or call options or any other option or futures
activity, such as multiple writings, spreads and straddles, on
securities of issuers (and options or futures on such securities) which
are not held by any of RPFI's or Price Associates^ clients.
OPTIONS ON SECURITIES OF COMPANIES HELD BY RPFI'S OR PRICE ASSOCIATES^
CLIENTS. With respect to options on securities of issuers which are held
by any of RPFI's or Price Associate^s clients, it is the Firm^s policy
that a Clearing Access Person should not profit from a price decline of
a security owned by a client. Therefore, a Clearing Access Person may:
(i) purchase call options and sell covered call options and (ii)
purchase covered put options and sell put options. A Clearing Access
Person may NOT purchase uncovered put options or sell uncovered call
options, even if the issuer of the underlying security is eligible for
the Large Capitalization Exemption, unless purchased in connection with
other options on the same security as part of a straddle, combination or
spread strategy which is designed to result in a profit to the Clearing
Access Person if the underlying security rises in or does not change in
value. The purchase, sale and exercise of options are subject to the
same restrictions as those set forth with respect to securities, i.e.,
the option should be treated as if it were the common stock itself.
OTHER OPTIONS AND FUTURES HELD BY RPFI'S OR PRICE ASSOCIATES^ CLIENTS.
Any other option or futures transaction with respect to securities held
by any of RPFI's or Price Associates^ clients will be approved or
disapproved on a case-by-case basis after due consideration is given as
to whether the proposed transaction or series of transactions might
appear to or actually create a conflict with the interests of any of
RPFI's or Price Associates^ clients. Such securities include financial
instruments regulated solely by the United States Commodity Futures
Trading Commission ("CFTC").
SHORT SALES. Clearing Access Persons may not sell any security short which
is owned by any client of RPFI or Price Associates.
60-DAY RULE. RPFI adheres to the Robert Fleming and Jardine Fleming policy
that Clearing Access Persons are not permitted to engage in any security
transaction (EVEN A SALE AT A LOSS) unless the security has been held for 60
days. This rule includes transactions in equivalent securities. An
"equivalent" security means any option, warrant, convertible security, stock
appreciation right, or similar right with an exercise or conversion privilege
at a price
<PAGE>
related to the subject security, or similar securities with a value derived
from the value of the subject security. Thus, for example, the rule prohibits
options transactions on or short sales of a security within 60 days of its
purchase.
In addition, the rule applies regardless of the person's other holdings of
the same security or whether the person has split his or her holdings into
tax lots. For example, if a person buys 100 shares of XYZ stock on March 1,
1998 and another 100 shares of XYZ stock on March 1, 2000, he or she may not
sell ANY shares of XYZ stock at a profit for 60 days following March 1, 2000.
The 60-Day Rule "clock" restarts EACH time a trade is made in that security.
For purposes of this Code, the 60-Day Rule does not apply to:
^o^any transaction exempt from prior clearance (see p. 4-_);
^o^the purchase and sale or sale and purchase of exchange traded index
options; and
^o^the exercise of "in the money" Price Associates^ and/or Robert Fleming
stock options and the subsequent sale of the derivative shares.
Prior clearance procedures do NOT check compliance with the 60-Day Rule when
considering a trading request. Clearing Access Persons are responsible for
checking their compliance with this rule before entering a trade.
Clearing Access Persons may apply for a waiver from the 60-Day Rule to the
London Compliance Team, which will refer the matter to a member of the
Ethics Committee and to RF Group Compliance or JF Compliance, as
appropriate. All such requests must be in writing and must fully describe
the basis upon which the waiver is being requested; such waivers are NOT
routinely granted.
INVESTMENTS IN NON-LISTED SECURITIES FIRMS. Clearing Access Persons may not
purchase or sell the shares of a broker/dealer, underwriter or a U.S. or
other government registered investment adviser unless that entity is traded
on a recognized U.S., U.K., or foreign exchange, listed as a NASDAQ/NMS
stock, or permission is given under the Private Placement Procedures (See p.
4-_). The securities of Robert Fleming Holdings, Ltd. are exempted from this
restriction.
<PAGE>
PROVISIONS APPLICABLE TO ALL RPFI OFFICERS, DIRECTORS, AND EMPLOYEES. In
addition to the provisions noted above, RPFI Officers, Directors, and
Employees are also subject to the following requirements regarding
transactions in Price Associates' stock, dealing with clients, client
investment partnerships, margin accounts, trading activity, and 1/2 of 1%
ownership reporting, as well as the sanctions provisions (see p. 4-_).
TRANSACTIONS IN STOCK OF PRICE ASSOCIATES. Because Price Associates is a
public company, ownership of its stock subjects its officers, inside and
independent directors, and employees to special legal requirements under the
United States securities laws. These requirements have been extended to
apply to RPFI Officers, Directors and Employees. However, the Independent
Directors of the RPFI Funds are prohibited from owning the stock of Price
Associates. Each RPFI Officer, Director, and Employee is responsible for his
or her own compliance with these requirements. Price Associates^ stock may
be purchased through any broker-dealer, including T. Rowe Price Investment
Services, Inc^s TRP Brokerage division, as long as all other requirements
have been met. In connection with these legal requirements, RPFI has adopted
the following rules and procedures:
QUARTERLY EARNINGS REPORT. RPFI Officers, Directors and Employees must
refrain from initiating transactions in Price Associates' stock in which
they have a beneficial interest, generally from the sixth trading day
following the end of the quarter (or such other date as management shall
from time to time determine) until the third trading day following the
public release of earnings. They will be notified through the Office of the
Secretary of Price Associates ("SECRETARY") from time to time as to the
controlling dates.
PRIOR CLEARANCE. RPFI Officers, Directors and Employees are required to
obtain clearance prior to effecting any proposed transaction (including
gifts and transfers) involving shares of Price Associates' stock owned
beneficially. Requests for prior clearance must be in writing on the form
entitled "Notification of Proposed Transaction" (available from the Price
Associates^ Corporate Records Department) and submitted to the Secretary who
is responsible for processing and maintaining the records of all such
requests. Receiving prior clearance does not relieve RPFI Officers,
Directors and Employees from conducting their personal securities
transactions in full compliance with the applicable securities laws and
regulations, including the prohibition on trading while in possession of
material, inside information. Transactions in Price Associates^ stock are
subject to the 60-Day Rule except for certain options exercises. See p. 4-_.
<PAGE>
ALL RPFI OFFICERS, DIRECTORS AND EMPLOYEES MUST OBTAIN PRIOR
CLEARANCE OF ANY TRANSACTION INVOLVING PRICE ASSOCIATES^
STOCK FROM THE OFFICE OF THE SECRETARY OF PRICE ASSOCIATES.
CONTACT CLARA SALVINO (410-345-6790) OR BARBARA VAN HORN
(410-345-7733).
DIVIDEND REINVESTMENT PLANS. Purchases of Price Associates^ stock effected
through a dividend reinvestment plan need not receive prior clearance if the
Secretary^s office has been previously notified by the RPFI Officer,
Director, or Employee that he or she will be participating in that plan.
Reporting of transactions effected through that plan need only be made
quarterly, except that RPFI Officers, Directors, and Employees who are
subject to Section 16 of the United States Securities Exchange Act of 1934
reporting must report such transactions monthly.
EFFECTIVENESS OF PRIOR CLEARANCE. Prior clearance of transactions in Price
Associates' stock is effective for five (5) business days from and including
the date the clearance is granted, unless (i) advised to the contrary by the
Secretary prior to the proposed transaction, or (ii) the person receiving
the approval comes into possession of material, non-public information
concerning the firm. If the proposed transaction in Price Associates' stock
is not executed within this time period, a new clearance must be obtained.
REPORTING OF DISPOSITION OF PROPOSED TRANSACTION. RPFI Officers, Directors,
and Employees must notify the Secretary whether the proposed transaction in
Price Associates' stock was effected within two business days of its
execution, or within seven business days of the date of prior clearance, if
not executed.
INSIDER REPORTING AND LIABILITY. Under current rules, certain officers,
directors and 10% stockholders of a publicly traded company ("INSIDERS") are
subject to the requirements of Section 16. The Secretary will inform you if
you are an Insider of Price Associates. If you are an Insider, you should
refer to the TRPA Code for further information on reporting requirements for
Insiders.
LIABILITY FOR SHORT-SWING PROFITS. Under United States securities laws,
profit realized by certain officers, as well as directors and 10%
stockholders of a company (including Price Associates) as a result of a
purchase and sale (or sale and purchase) of stock of the company within a
period of less than six months must be returned to the firm upon request.
<PAGE>
DEALING WITH CLIENTS IN A PRINCIPAL TRANSACTION. RPFI Officers, Directors or
Employees may not, directly or indirectly, sell to or purchase from a RPFI
client any security. This prohibition does not preclude the purchase or
redemption of shares of any mutual fund that is a client of RPFI.
CLIENT INVESTMENT PARTNERSHIPS.
CO-INVESTING. RPFI Officers, Directors or Employees are not permitted to
co-invest in client investment partnerships of RPFI, Price Associates, or
their affiliates, such as International Partners, Strategic Partners and
Threshold.
DIRECT INVESTMENT. The Independent Directors of the RPFI Funds are not
permitted to invest as limited partners in client investment partnerships
of RPFI, Price Associates, or their affiliates.
MARGIN ACCOUNTS. While brokerage margin accounts are discouraged, RPFI
Officers, Directors and Employees may open and maintain margin accounts for
the purchase of securities provided such accounts are with brokerage firms
with which the RPFI Officer, Director or Employee maintains a regular
brokerage account.
TRADING ACTIVITY. RPFI Officers, Directors and Employees are discouraged
from engaging in a pattern of securities transactions which is either:
^o^So excessively frequent as to potentially impact his or her ability to
carry out assigned responsibilities, or
^o^Involve securities positions which are disproportionate to his or her net
assets.
At the discretion of the Ethics Committee, written notification of
excessive trading may be sent to the supervisor of the RPFI Officer,
Director, or Employee.
OWNERSHIP REPORTING REQUIREMENTS - ONE-HALF OF ONE PERCENT OWNERSHIP. If an
RPFI Officer, Director or Employee beneficially owns more than ^ of 1% of
the total outstanding shares of a public or private company, he or she must
immediately report in writing such fact to the London Compliance Team,
providing the name of the company and the total
<PAGE>
number of such company's shares beneficially owned. The London Compliance
Team will inform Baltimore Compliance about any such ownership promptly.
SANCTIONS. Strict compliance with the provisions of this Statement is
considered a basic provision of association with RPFI and the RPFI Funds.
The Ethics Committee and the London Compliance Team are primarily
responsible for administering this Statement. In fulfilling this function,
the Ethics Committee will institute such procedures as it deems reasonably
necessary to monitor Access Persons' compliance with this Statement and to
otherwise prevent and detect violations.
VIOLATIONS BY ACCESS PERSONS AND NON-AFFILIATED DIRECTORS OF RPFI. Upon
discovering a material violation of this Statement by an Access Person or
Non-Affiliated Director of RPFI, the Ethics Committee will impose such
sanctions as it deems appropriate or may, in its discretion, refer the
matter to the Board of Directors of RPFI to determine the appropriate
sanctions. Sanctions may include, inter alia, a letter of censure or
suspension, a fine, a suspension of trading privileges, or termination of
employment and/or officership of the violator. In addition, the violator may
be required to surrender to RPFI, or to the party or parties it may
designate, any profit realized from any transaction that is in violation of
this Statement. All material violations of this Statement shall be reported
to the Board of Directors of RPFI and to the Board of Directors of any RPFI
Fund with respect to whose securities such violations may have been
involved.
VIOLATIONS BY INDEPENDENT DIRECTORS OF RPFI FUNDS. Upon discovering a
material violation of this Statement by an Independent Director of a RPFI
Fund, the Ethics Committee shall report such violation to the Board of
Directors of RPFI and to the RPFI Fund Boards on which the director serves.
The RPFI Board of Directors and the RPFI Fund Boards will impose such
sanctions as they deem appropriate.
VIOLATIONS BY BALTIMORE EMPLOYEES OF RPFI. Upon discovering a material
violation of the Price Associates^ Statement of Policy on Securities
Transactions by a Baltimore-based employee of RPFI, the Price Associates^
Ethics Committee shall report such violation to the Board of Directors of
RPFI and to the Board of Directors of any RPFI Fund with respect to whose
securities such violations may have been involved.
March, 2000
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000918292
<NAME> T. ROWE PRICE INTERNATIONAL SERIES, INC.
<SERIES>
<NUMBER> 1
<NAME> T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 482,894
<INVESTMENTS-AT-VALUE> 707,888
<RECEIVABLES> 8,265
<ASSETS-OTHER> 2,650
<OTHER-ITEMS-ASSETS> 34,967
<TOTAL-ASSETS> 753,770
<PAYABLE-FOR-SECURITIES> 544
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,897
<TOTAL-LIABILITIES> 46,441
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 474,991
<SHARES-COMMON-STOCK> 37,156
<SHARES-COMMON-PRIOR> 34,301
<ACCUMULATED-NII-CURRENT> 1,839
<OVERDISTRIBUTION-NII> 1,839
<ACCUMULATED-NET-GAINS> 4,850
<OVERDISTRIBUTION-GAINS> 4,850
<ACCUM-APPREC-OR-DEPREC> 225,650
<NET-ASSETS> 707,330
<DIVIDEND-INCOME> 8,954
<INTEREST-INCOME> 1,300
<OTHER-INCOME> 0
<EXPENSES-NET> 5,724
<NET-INVESTMENT-INCOME> 4,530
<REALIZED-GAINS-CURRENT> 20,576
<APPREC-INCREASE-CURRENT> 150,246
<NET-CHANGE-FROM-OPS> 175,352
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,521)
<DISTRIBUTIONS-OF-GAINS> (7,924)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23,632
<NUMBER-OF-SHARES-REDEEMED> (21,379)
<SHARES-REINVESTED> 602
<NET-CHANGE-IN-ASSETS> 209,384
<ACCUMULATED-NII-PRIOR> (170)
<ACCUMULATED-GAINS-PRIOR> (170)
<OVERDISTRIB-NII-PRIOR> (7,802)
<OVERDIST-NET-GAINS-PRIOR> (7,802)
<GROSS-ADVISORY-FEES> 5,326
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,724
<AVERAGE-NET-ASSETS> 545,356
<PER-SHARE-NAV-BEGIN> 14.52
<PER-SHARE-NII> 0.12
<PER-SHARE-GAIN-APPREC> 4.69
<PER-SHARE-DIVIDEND> (0.07)
<PER-SHARE-DISTRIBUTIONS> (0.22)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.04
<EXPENSE-RATIO> 1.05
</TABLE>
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
T. ROWE PRICE INTERNATIONAL SERIES, INC.
POWER OF ATTORNEY
RESOLVED, that each of the above listed Corporations (collectively the
"Corporations" and individually the "Corporation") and each of its directors do
hereby constitute and authorize, M. David Testa, Joel H. Goldberg, and Henry H.
Hopkins, and each of them individually, their true and lawful attorneys and
agents to take any and all action and execute any and all instruments which said
attorneys and agents may deem necessary or advisable to enable the Corporation
to comply with the Securities Act of 1933, as amended, and the Investment
Company Act of 1940, as amended, and any rules, regulations, orders or other
requirements of the United States Securities and Exchange Commission thereunder,
in connection with the registration under the Securities Act of 1933, as
amended, of shares of the Corporation, to be offered by the Corporation, and the
registration of the Corporation under the Investment Company Act of 1940, as
amended, including specifically, but without limitation of the foregoing, power
and authority to sign the name of the Corporation on its behalf, and to sign the
names of each of such directors and officers on his behalf as such director or
officer to any amendment or supplement (including Post-Effective Amendments) to
the Registration Statement on Form N-1A of the Corporation filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and the Registration Statement on Form N-1A of the Corporation under the
Investment Company Act of 1940, as amended, and to any instruments or documents
filed or to be filed as a part of or in connection with such Registration
Statement.
IN WITNESS WHEREOF, the Corporations have caused these presents to be
signed and the same attested by their Secretary, each thereunto duly authorized
by their Board of Directors, and each of the undersigned has hereunto set his
hand and seal as of the day set opposite his name.
/s/Martin G. Wade
By:____________________________________
Martin G. Wade, Chairman of the Board
April 19, 2000
Attest:
/s/Patricia B. Lippert
______________________________
Patricia B. Lippert, Secretary
(Signatures Continued)
<PAGE>
/s/Martin G. Wade
____________________________ Chairman of the Board April 19, 2000
Martin G. Wade (Principal Executive Officer)
/s/M. David Testa
____________________________ Director and Vice President April 19, 2000
M. David Testa
/s/Joseph A. Carrier
____________________________ Treasurer (Principal Financial Officer)
April 19, 2000
Joseph A. Carrier
/s/Anthony W. Deering
____________________________ Director April 19, 2000
Anthony W. Deering
/s/Donald W. Dick, Jr.
____________________________ Director April 19, 2000
Donald W. Dick, Jr.
/s/Paul M. Wythes
____________________________ Director April 19, 2000
Paul M. Wythes
