PRICE T ROWE INTERNATIONAL SERIES INC, DEF 14A, DEFA14A, 2000-08-31

PRICE T ROWE INTERNATIONAL SERIES INC
DEF 14A, DEFA14A, 2000-08-31

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<PAGE>

PAGE 1
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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

Institutional International Funds, Inc. 033-29697/811-5833
Foreign Equity Fund
T. Rowe Price International Funds, Inc. 002-65539/811-2958
T. Rowe Price International Stock Fund
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Japan Fund
T. Rowe Price Latin America Fund
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price Spectrum Fund, Inc. 033-10992/811-4998
Spectrum International Fund
T. Rowe Price International Series, Inc. 033-52171/811-07145
T. Rowe Price International Stock Portfolio
_________________________________________________________________
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<PAGE>

PAGE 2
T. Rowe Price Emerging Markets Stock Fund
T. Rowe Price Emerging Markets Bond Fund
T. Rowe Price Global Stock Fund
T. Rowe Price International Growth & Income Fund
T. Rowe Price International Bond Fund--Advisor Class
T. Rowe Price International Stock Fund--Advisor Class
T. Rowe Price Spectrum Fund, Inc. 033-10992/811-4998
Spectrum International Fund
T. Rowe Price International Series, Inc. 033-52171/811-07145
T. Rowe Price International Stock Portfolio

_________________________________________________________________
(NAME OF PERSON(S) FILING PROXY STATEMENT)

Payment of Filing Fee (Check the appropriate box):

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

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
_______________________________________________________
2) Form, schedule, or Registration Statement no.:
________________________________________________________
3) Filing party:
________________________________________________________
4) Date filed:
________________________________________________________

<PAGE>

PAGE 3

<PAGE>

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

Patricia B. Lippert
Secretary

September 1, 2000

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

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

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

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

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

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

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

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

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

PATRICIA B. LIPPERT

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

1. VOTE BY INTERNET.

. Read the proxy statement.

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

. Enter the control number found on your proxy card.

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

2. VOTE BY TELEPHONE.

. Read the proxy statement.

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

. Enter the control number found on your proxy card.

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

3. VOTE BY MAIL.

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

INTERNATIONAL STOCK PORTFOLIO

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

1. VOTE BY MAIL.

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

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

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

PAGE 2
<PAGE>

INSTITUTIONAL INTERNATIONAL FUNDS, INC.

T. ROWE PRICE INTERNATIONAL FUNDS, INC.

T. ROWE PRICE SPECTRUM FUND, INC., AND

T. ROWE PRICE INTERNATIONAL SERIES, INC.

Annual Meeting of Shareholders -- October 25, 2000

PROXY STATEMENT

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

Who is asking for my vote?

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

Who is eligible to vote?

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

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

PAGE 3
<PAGE>

What are shareholders being asked to vote on?

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

<TABLE>
<CAPTION>
PROPOSAL FUNDS AFFECTED
---------------------------------------------------------------------
<S> <C>
1. To approve or disapprove new Investment All funds
Management Agreements.
2. To approve or disapprove an amendment Foreign Equity Fund
to the fundamental policy of the Foreign only
Equity Fund to permit the fund to engage
in securities lending.
3. To approve or disapprove an amendment T. Rowe Price New
to the fundamental policy of the New Asia Asia Fund only
Fund to change its status from diversified
to non-diversified.
4. To elect five directors to serve on the All funds (other than
Boards of the funds until the next annual Spectrum
meeting, if any, or until their successors International Fund)
shall have been duly elected and
qualified.
5. To ratify the appointment of the firm All funds
of PricewaterhouseCoopers LLP as
independent accountants for each fund's
current fiscal year.
6. To transact such other business as may All funds
properly come before the meeting and any
adjournments thereof.
---------------------------------------------------------------------
</TABLE>

How can I get more information about the funds?

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

PAGE 4
<PAGE>

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

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

Rowe-Price Fleming International, Inc. ("Price-Fleming") was the investment
manager of the funds since their inception. Price-Fleming was 50% owned by
Robert Fleming Holdings Limited ("Flemings") and 50% owned by T. Rowe Price
Associates, Inc. ("T. Rowe Price"). On August 8, 2000, T. Rowe Price became the
sole owner of Price-Fleming. At the same time, T. Rowe Price changed the name of
Price-Fleming to T. Rowe Price International, Inc. ("Price International"). The
August 8, 2000, purchase caused the investment management agreements between the
funds and Price-Fleming (the "Price-Fleming Agreements") to terminate
automatically. On July 18, 2000, in order to avoid disruption of the funds'
investment management programs, the Boards of Directors of the funds, in
accordance with Rule 15a-4 under the Investment Company Act of 1940 ("1940
Act"), approved interim investment management agreements ("Interim Agreements")
between the funds and Price International. The Interim Agreements have a term of
150 days from August 8, 2000. Also, on July 18, 2000, in order to ensure
continuity and avoid disruption of the funds' investment management programs,
the Boards of the funds decided to approve new investment management agreements
(the "Proposed Agreements") with Price International and recommended that
shareholders of the funds be asked to approve these agreements as well.

How do the Proposed Agreements differ from the current ones?

The Proposed Agreements are identical to the Price-Fleming Agreements except
that they reflect the new name of the investment manager: Price International
instead of Price-Fleming. There are no changes in the fees charged or services
being provided. The Proposed Agreements are also identical to the Interim
Agreements except that the term of the Proposed Agreements runs from year to
year, subject to approval of the Boards of Directors, including all of the
independent directors, rather than 150 days. Additionally, the Interim
Agreements include a provision requiring the investment management fees due
Price International to be held in escrow pending approval of the Proposed
Agreements. See Exhibit 1 for a model Proposed Agreement.

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

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

PAGE 5
<PAGE>

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

When were the current agreements adopted?

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

PAGE 6
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
International Stock Fund and April 21, 1987
International Bond Fund
European Stock Fund and April 19, 1990
Foreign Equity Fund
International Discovery Fund April 18, 1991
and New Asia Fund
</TABLE>

The Price-Fleming Agreements for the other funds were approved by the initial
shareholders at the time of their inception.

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

For its services to the funds under the Interim Agreements, Price International
is paid a management fee ("MANAGEMENT FEE") at the rates set forth below. As
noted, the management fees paid under the Interim Agreements are being held in
escrow pending approval of the Proposed Agreements.

Table 1 sets forth the name of each T. Rowe Price sponsored investment company
for which Price International acts as investment manager, the fund's investment
objective and focus, net assets as of June 30, 2000, the annual rate of
compensation (i.e., the fee Price International is paid for its services as
manager to the respective portfolio), whether fees are waived or reduced, and
the total fees paid to Price International for the fund's most recent fiscal
year.

<TABLE>
Table 1
<CAPTION>
Net Assets Annual
of Fund at Rate of Fees Total Fees
Name of Investment Investment 06/30/00 (in CompensatiWaived or (in
Fund Objective Focus thousands) Reduced thousands)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Foreign Long-term C $3,610,796 0.70% No $
Equity growth of ommon 22,916
capital stocks of
estab
lished,
non-U.S.
compa
nies
----------------------------------------------------------------------------------------
InternationalLong-term C $12,011,954 0.67% No $
Stock growth of ommon 67,463
capital stocks of
estab
lished,
non-U.S.
compa
nies
-------------------------------------------------------------------------------------------
</TABLE>

PAGE 7
<PAGE>

U.S. com
panies
-----------------------------------------------------------------------------------------------
European Stock Long-term Common $1,432,727 0.82% No $
growth of stocks of 11,960
capital. European
Current compa
income is nies
secondary
-----------------------------------------------------------------------------------------------
New Asia Long-term Asian $1,205,974 0.82% No $
growth of compa 6,444
capital nies
excluding
Japan
-----------------------------------------------------------------------------------------------
Japan Long-term Common $419,351 0.82% No $
growth of stocks of 2,345
capital Japanese
compa
nies
-----------------------------------------------------------------------------------------------
Latin America Long-term C $261,545 1.07% No $
growth of ommon 2,155
capital stocks of
Latin
American
compa
nies
-----------------------------------------------------------------------------------------------
Emerging Long-term Common $188,457 1.07% Yes $
Markets Stock growth of stocks of /a/ 962
capital emerging
market
compa
nies
-----------------------------------------------------------------------------------------------
Global Stock Long-term Common $114,324 0.67% Yes $
growth of stocks of /a/ 275
capital estab
lished
compa
nies
through
out the
world,
including
the U.S.
-----------------------------------------------------------------------------------------------
</TABLE>

PAGE 8
<PAGE>

<TABLE>
Table 1 (continued)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net Assets Annual Fees Total Fees
Investment Investment of Fund at Rate of Waived or (in thou
Name of Fund Objective Focus 06/30/00 (in Compensa Reduced sands)
thousands) tion
-----------------------------------------------------------------------------------------------
International Long-term Common $10,887 0.67% Yes $
Growth & Income growth of /a/ 0
capital s
and rea tocks of
sonable well-
income estab
lished,
dividend-
paying
non-U.S.
compa
nies
-----------------------------------------------------------------------------------------------
Spectrum Long-term T. Rowe $102,469 0.45%to No -
International capital Price 1.07%
apprecia interna /b/
tion tional
funds
-----------------------------------------------------------------------------------------------
International Long-term C $767,025 1.05% No $5,724
Stock Portfolio growth of ommon /c/ /c/
capital stocks of
estab
lished,
non-U.S.
compa
nies
-----------------------------------------------------------------------------------------------
International H High- $708,784 0.67% No $
Bond igh cur quality, 5,822
rent nondollar-
income denomi
and capi nated
tal appre bonds
ciation outside
the U.S.
-----------------------------------------------------------------------------------------------
Emerging High Emerging $169,693 0.77% Yes $1,
Markets Bond income m /a/ 329
and capi arket
tal appre bonds
ciation
-----------------------------------------------------------------------------------------------
Global Bond High cur High- $26,987 0.67% Yes $
rent quality /a/ 54
income foreign
and, sec and U.S.
ondarily, govern
capital ment
apprecia bonds
tion and
protec
tion of
principal
-----------------------------------------------------------------------------------------------
</TABLE>

/a/
Price International is contractually obligated to waive its fees and bear any
expenses to the extent

PAGE 9
<PAGE>

such fees or expenses would cause the funds' ratios of expenses to average net
assets to exceed the indicated percentage limitations. Fees waived or expenses
paid or assumed are subject to reimbursement to Price International by each
fund through the indicated reimbursement date, but no reimbursement will be
made if it would result in a fund's expense ratio exceeding its specified
limit. A summary of the funds' expense limitations and the periods for which
they are effective is set forth below:

<TABLE>
<CAPTION>
<S> <S> <C> <S> <S>
Fund Limitation Period Expense Ratio Limitation Reimbursement Date

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

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

/c/
The International Stock Portfolio pays an all-in management fee that includes
operating expenses.

Table 2 sets forth the name of each fund subadvised by Price International, its
investment objective, net assets as of June 30, 2000, annual rate of
compensation, and whether fees have been waived or reduced.

<TABLE>
Table 2 Comparison of Funds Subadvised by Price
International
<CAPTION>
Net Assets
of Fund at
Investment 06/30/00 (in Annual Rate of Fees Waived or
Name of Fund Objective thousands) Compensation Reduced
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Commerce Funds Long-term $180,393 .75% of the first Yes
growth of capital
The International Equity Fund $20 million
.60% of the next

$30 million
.50% above $50
million*
------------------------------------------------------------------------------------------------------------------------
Endeavor Series Trust Long-term $223,607 .75% of the first Yes
growth of capital
T. Rowe Price International Stock Portfolio $20 million
.60% of the next

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

PAGE 10
<PAGE>

Table

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net Assets
Investment of Fund at Annual Rate of Fees Waived or
Name of Fund Objective 06/30/00 (in Compensation Reduced
thousands)
------------------------------------------------------------------------------------------
EQ Advisors Trust Long-term $244,639 .75% of the first Yes
growth of capital
T. Rowe Price $20 million
International .60% of the next
Stock Portfolio
$30 million
.50% above $50
million*
------------------------------------------------------------------------------------------
John Hancock Long-term .75% of the first Yes
Variable Series growth of capital
Trust I $20 million
.60% of the next
International
Opportunities $30 million
Portfolio .50% above $50
million*
International
Opportunities II
Portfolio $102,752

$26,108
------------------------------------------------------------------------------------------
LB Series Fund, Long-term .75% of the first Yes
Inc. growth of capital $600,967
$20 million
World Growth .60% of the next
Portfolio
$30 million
.50% above $50

Lutheran million
Brotherhood .50% on all
Family of Funds assets once
assets exceed
Lutheran $200 million**
Brotherhood World
Growth Fund $142,639
------------------------------------------------------------------------------------------
Manufacturers Long-term $286,236 .75% of the first Yes
Investment Trust growth of capital
$50 million
International .50% of the next
Stock Trust
$150 million
.50% on all
assets once
assets exceed
$200 million**
------------------------------------------------------------------------------------------
SunAmerica Style Long-term $61,476 .75% of the first Yes
Select Series, growth of capital
Inc. $20 million
.60% of the next
International
Equity Portfolio $30 million
.50% above $50
million*
------------------------------------------------------------------------------------------
</TABLE>

2 Comparison of Funds Subadvised by Price International (continued)

<TABLE>
Table 2 Comparison of Funds Subadvised by Price
International (continued)
<CAPTION>
<S> <C> <C> <C> <C>
Net Assets
Investment of Fund at Annual Rate of Fees Waive
Name of Fund Objective 06/30/00 (in Compensation Reduced
thousands)
------------------------------------------------------------------------------------------------------------------------------------
The Vantagepoint Funds Long-term $112,456 .75% of the first Yes
growth of capital
International Fund $20 million
.60% of the next

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

PAGE 11
<PAGE>

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

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

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

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

Under the current and Proposed Agreements, Price International provides the
funds with discretionary investment services. Specifically, Price International
is responsible for supervising and directing the investments of the fund in
accordance with the fund's investment objective, program, and restrictions as
provided in its prospectus and Statement of Additional Information. Price
International is also responsible for effecting all securities transactions on
behalf of the fund, including the negotiation of commissions and the allocation
of principal business and portfolio brokerage. In addition to these services,
Price International provides the fund with a wide range of corporate
administrative services. Each agreement (other than for International Stock
Portfolio and Spectrum International) provides that the funds will bear all
expenses of their operations not specifically assumed by Price International.
The agreement with the International Stock Portfolio provides that Price
International will pay all expenses of the fund with the exception of interest,
taxes, brokerage commissions, directors fees and expenses, and non-recurring and
extraordinary expenses. The agreement with Spectrum International Fund
essentially provides that either the underlying funds in which Spectrum Fund
invests or Price International will bear the expenses of Spectrum International
Fund.

The current and Proposed Agreements also provide that Price International, 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.

PAGE 12
<PAGE>

Who else provides services to the funds?

Each fund has an underwriting agreement with T. Rowe Price Investment Services,
Inc. ("Investment Services"), a transfer agency agreement with T. Rowe Price
Services, Inc. ("Price Services"), a subtransfer agency agreement with T. Rowe
Price Retirement Plan Services, Inc. ("Retirement Services"), and a fund
accounting services agreement with T. Rowe Price. The address of T. Rowe Price
and Investment Services is 100 East Pratt Street, Baltimore, Maryland 21202, and
the address of Price Services and Retirement Services is 4515 Painters Mill
Road, Owings Mills, Maryland 21117. Each is a wholly owned subsidiary of T. Rowe
Price. James S. Riepe is Chairman of the Board of Price Services, Retirement
Services, Investment Services, and the Spectrum Fund. He is also a vice
president of Institutional International Funds, International Funds, and
International Series.

Henry H. Hopkins, a vice president of the funds, is a vice president and
director of both Investment Services and Price Services and a vice president of
Retirement Services. Certain officers and interested directors of the funds own
shares of the common stock of T. Rowe Price, its only class of securities.

What services are provided under these other agreements?

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

<TABLE>
Table 3
<CAPTION>
Retirement
Transfer Agent and Subaccounting
Fund Shareholder Services Services Accounting Services
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Foreign Equity $32,000 -- $111,000
International Stock $6,347,000 $4,529,000 $164,000
International Bond $1,201,000 $62,000 $135,000
International Discovery $400,000 $24,000 $132,000
European Stock $1,709,000 $115,000 $111,000
New Asia $1,735,000 $138,000 $122,000
Japan $436,000 $7,000 $108,000
Latin America $595,000 $43,000 $117,000
-----------------------------------------------------------------------------------------------------------------------------
Emerging Markets Stock $260,000 $19,000 $106,000
Global Stock $136,000 $28,000 $106,000
International Growth & Income $25,000 -- $97,000
International Bond Fund - Advisor Class*
-- -- --

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

Spectrum International/**/ -- -- --
International Stock Portfolio *** -- -- --
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

PAGE 13
<PAGE>

* The advisor class shares were first issued on March 31, 2000. Information is
for the period April 1 through June 30, 2000.

** Expenses of the Spectrum International Fund are paid by the underlying funds
in which it invests.

***
The International Stock Portfolio pays an all-in management fee that includes
operating expenses.

The T. Rowe Price Trust Company (the "TRUST COMPANY"), a wholly-owned subsidiary
of T. Rowe Price, serves as trustee and custodian for certain IRA, Keogh, and
other prototype plans which utilize the Price Funds as investment options. For
these services, the Trust Company charges each such shareholder account a
fiduciary fee. During 1999, the aggregate of such fees totaled approximately
$4.7 million. In addition, Retirement Services provides administrative services
to certain defined contribution retirement plans. During 1999, Retirement
Services received fees from all plans utilizing such services in the amount of
$31.5 million. T. Rowe Price also receives fees for servicing variable annuity
contracts that utilize the T. Rowe Price mutual funds as investment vehicles. In
1999, these fees totaled $900,000.

Investment Services, the distributor for the Price Funds, makes available to
shareholders of the Price Funds and others a brokerage service. During 1999,
this service generated net commissions totaling $19.6 million.

The funds have been authorized to use brokers affiliated with Flemings in
connection with the execution of their portfolio transactions. The aggregate
amount of commissions paid to these affiliated brokers by the funds for their
most recent fiscal year and the percentages these

PAGE 14
<PAGE>

amounts represented of the total commissions paid by the funds over that period
are set forth below. These brokers ceased to be affiliates of the funds on
August 8, 2000, when Price International became a wholly-owned subsidiary of T.
Rowe Price.

<TABLE>
Table 4
<CAPTION>
<S> <C>
Fund Name Total Brokerage Commissions Paid to Affiliated Brokers

---------------------------------------------------------------------------------
Foreign Equity $ 83,531
---------------------------------------------------------------------------------
International Stock $ 273,399
(including Advisor
Class)
---------------------------------------------------------------------------------
International $ 68,420
Discovery
---------------------------------------------------------------------------------
European Stock $ 54,259
---------------------------------------------------------------------------------
New Asia $ 332,889
---------------------------------------------------------------------------------
Japan $ 64,341
---------------------------------------------------------------------------------
Latin America $ 112,032
---------------------------------------------------------------------------------
Emerging Markets $ 37,250
Stock
---------------------------------------------------------------------------------
Global Stock $ 1,773
---------------------------------------------------------------------------------
International Growth $ 165
& Income
---------------------------------------------------------------------------------
International Stock $ 17,414
Portfolio
---------------------------------------------------------------------------------
<CAPTION>
<S> <C>
% of Total Fund Brokerage Commissions Paid to Affiliated Brokers
Fund Name

------------------------------------------------------------------------------------------------
Foreign Equity 3.27%
------------------------------------------------------------------------------------------------
International Stock 4.18%
(including Advisor
Class)
------------------------------------------------------------------------------------------------
International 6.14%
Discovery
------------------------------------------------------------------------------------------------
European Stock 5.75%
------------------------------------------------------------------------------------------------
New Asia 9.60%
------------------------------------------------------------------------------------------------
Japan 8.56%
------------------------------------------------------------------------------------------------
Latin America 27.05%
------------------------------------------------------------------------------------------------
Emerging Markets 10.75%
Stock
------------------------------------------------------------------------------------------------
Global Stock 0.23%
------------------------------------------------------------------------------------------------
International Growth 0.36%
& Income
------------------------------------------------------------------------------------------------
International Stock 3.90%
Portfolio
------------------------------------------------------------------------------------------------
</TABLE>

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

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

PAGE 15
<PAGE>

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

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

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

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

The fund may not make loans, although the fund may (i) lend portfolio securities
and participate in an interfund lending program with other Price Funds provided
that no such loan may be made if, as a result, the aggregate of such loans would
exceed 33 1/3% of the value of the fund's total assets; (ii) purchase money
market securities and enter into repurchase agreements; and (iii) acquire
publicly distributed or privately placed debt securities and purchase debt.

PAGE 16
<PAGE>

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

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

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

The fund is considered to be a diversified mutual fund under the 1940 Act. This
means that as a matter of fundamental policy the fund will not purchase a
security if, as a result, with respect to 75% of its total assets, more than 5%
of the fund's total assets would be invested in securities of a single issuer or
more than 10% of the outstanding voting securities of the issuer would be held
by the fund. The directors of the fund recommend amending this fundamental
policy to change the fund to nondiversified. A nondiversified fund can invest a
greater portion of its assets in, and own a greater amount of the voting
securities of, a single company than a diversified fund. As a result, the fund
could become somewhat riskier because it would have the ability to hold larger
positions in a fewer number of securities.

Importantly, the fund is not seeking this change in order to invest the
portfolio in a significantly fewer number of issuers. However, the fund's
benchmark, the MSCI All Country Far East Free Ex-Japan Index ("MSCI Index"), has
become increasingly dominated by a small group of large companies. The fund does
not seek to replicate the MSCI Index. However, if it were enthusiastic about the
dominant stocks in the index and wished to overweight them, it could be
prevented from doing so given the fund's current policy on diversification.
Therefore, to provide the fund with sufficient investment flexibility to pursue
its investment program, the fund's Board believes it would be prudent to remove
the diversification restriction to which it is now subject.

If the proposal is approved, the fund will still be subject to the
diversification rules of the Internal Revenue Code. These provide that the fund
will not purchase a security if, as a result, with respect to 50% (instead of
75%) of its total assets, more than 5% of the fund's total assets would be
invested in securities of a single issuer or more than 10% of the outstanding
voting securities of the issuer would be held by the fund.

PAGE 17
<PAGE>

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

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

PROPOSAL NO. 4 -- ELECTION OF DIRECTORS

ALL FUNDS (other than Spectrum International)

Who are the nominees for director?

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

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

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

<TABLE>
Table 5 Nominees to Each Fund's Board of
Directors
<CAPTION>
All Other Price
Name, Date of Birth, Address, Fund Shares Beneficially Funds' Shares Owned
Position on Fund Board, and Owned, Directly or Indirectly, Directly as of June
Principal Occupations/a/ as of June 30, 2000 30, 2000
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*M. David Testa, 4/22/44 Emerging Markets 30,794.796 1,118,813.637
Stock 98,192.199
100 E. Pratt Street, Baltimore, MD 21202 International
Stock
Vice President and Director of the Funds

Vice Chairman of the Board, Chief
Investment Officer, Managing Director, T.
Rowe Price; Director, T. Rowe Price
International, Inc.; Vice President and
Director, T. Rowe Price Trust Company;
Officer and/or Director of the T. Rowe
Price Funds/Trusts.
----------------------------------------------------------------------------------------------------
*Martin G. Wade, 2/16/43 International 15,598.205 4,150.208
Stock 3,237.370
25 Copthall Avenue 4,726.901
London, EC2R 7DR, England International
Discovery
Chairman of the Board of the Funds
Latin America
Director, T. Rowe Price; Chairman, T. Rowe
Price International, Inc.
----------------------------------------------------------------------------------------------------
Anthony W. Deering, 1/28/45 European Stock 6,151.461 123,100.143
International 1
10275 Little Patuxent Parkway, Discovery ,
Columbia, MD 21044 Japan 918.816
6,722.880
Director of the Funds

Director, Chairman of the Board, President,
and Chief Executive Officer, The Rouse
Company, real estate developers, Columbia,
Maryland; Advisory Director, Kleinwort,
Benson (North America) Corporation, a
registered broker-dealer; Director/Trustee
of the T. Rowe Price Fixed Income
Funds/Trusts.
----------------------------------------------------------------------------------------------------
Donald W. Dick, Jr., 1/27/43 International 1,158.75 16
Discovery 0 8
28 Loon Lane International 2,472.012 ,679.648
Menemsha Inn Road Stock 1,136.614
Chilmark, MA 02535 Latin America 1,754.735
New Asia 1,305.885
Director of the Funds Global Bond 2,058.592
International Bond 2,693.515
Principal, EuroCapital Advisors, LLC, an Japan 1,143.619
acquisition and management advisory firm; European Stock
Director, Waverly, Inc., Baltimore, Fund
Maryland; Director/Trustee of the T. Rowe
Price Equity Funds/Trusts.
----------------------------------------------------------------------------------------------------
Paul M. Wythes, 6/23/33 International 31,824.325 62,643.560
Discovery
755 Page Mill Road, Suite A200
Palo Alto, California 94304-1005

Director of the Funds

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.;
Director/Trustee of the T. Rowe Price
Equity Funds/Trusts.
----------------------------------------------------------------------------------------------------
</TABLE>

PAGE 18
<PAGE>

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

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

PAGE 19
<PAGE>

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

<TABLE>
Table 6 Year of Original Election to Each Fund's
Board
<CAPTION>
T. Rowe Price Fund Deering Dick Testa Wade Wythes
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional International 1991 1989 1989 1989 1996
--------------------------------------------------------------------------------------
International Funds 1991 1988 1979 1982 1996
--------------------------------------------------------------------------------------
International Series 1994 1994 1994 1994 1996
--------------------------------------------------------------------------------------
</TABLE>

Do the nominees have a stake in the funds?

The Boards of the funds believe it is important that each nominee for director
have an investment in the T. Rowe Price funds. The nominees allocate their
investments among the T. Rowe Price funds based on their own investment
objectives. Table 5 lists each nominee's investment in the funds, if any, as
well as his total investment in all of the T. Rowe Price funds.

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

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

How often does each fund's Board meet?

The Boards of Directors of the funds held five meetings during fiscal year 1999,
and each director standing for reelection attended 75% or more of those
meetings. The Board of Directors for the T. Rowe Price International Funds,
Inc., has held seven meetings so far during fiscal year 2000. The Boards of
Directors of the Institutional International Funds, Inc., and the T. Rowe Price
International Series, Inc., have met six times. Each director standing for
reelection has attended 75% or more of the meetings held so far during fiscal
year 2000. Each Board currently has two committees, described in the following
paragraphs.

The Nominating Committee, which functions only in an advisory capacity, is
responsible for reviewing and recommending to the full Board candidates for
election as independent directors or trustees to fill vacancies on each fund's
Board. The Nominating Committee will consider written recommendations from
shareholders for possible nominees. Shareholders should submit their
recommendations to the

PAGE 20
<PAGE>

secretary of the funds. Members of the Nominating Committee are Messrs. Deering,
Dick, and Wythes. They met informally during the last fiscal year, but the
committee as such held no formal meetings.

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

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

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

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

PAGE 21
<PAGE>

at December 31, 1999. The independent directors of the funds do not receive any
pension or retirement benefits from the funds or T. Rowe Price.

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

<TABLE>
Table 7 Compensation to Fund Directors
<CAPTION>
Director
---------------------------
Aggregate Compensation From T. Rowe Price Funds Deering Dick Wythes
------------------------------------------------- 50/a/
--------- 58/a/ 58/a/
------------------
<S> <C> <C> <C>
Institutional International $15,000 $15,000 $15,000
-------------------------------------------------
International Funds
----------------------------------------------------------------------------
International Series
-------------------------------------------------
Total Compensation From Funds and Fund Complex $81,000 $81,000 $80,000
----------------------------------------------------------------------------
</TABLE>

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

What vote is required to elect the directors?

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

PAGE 22
<PAGE>

PROPOSAL NO. 5 -- SELECTION OF INDEPENDENT ACCOUNTANTS

All Funds

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

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

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

Each fund votes separately. Approval of the proposal requires an affirmative
vote by a majority of the shares cast at the meeting of each fund in person or
by proxy. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSAL. The votes of the International

PAGE 23
<PAGE>

Bond Fund and International Bond Fund - Advisor Class will be combined. The
votes of the International Stock Fund and the International Stock Fund - Advisor
Class will be combined.

FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING

What is the required quorum?

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

How are the votes counted?

The individuals named as proxies (or their substitutes) on the enclosed proxy
card (or cards, if you have multiple funds or accounts) will vote according to
your directions if your proxy is received properly executed, or in accordance
with your instructions given when voting by telephone or Internet. You may
direct the proxy holders to vote your shares on a proposal by checking the
appropriate box "FOR" or "AGAINST," or instruct them not to vote those shares on
the proposal by checking the "ABSTAIN" box. Alternatively, you may simply sign,
date, and return your proxy card(s) with no specific instructions as to the
proposals. IF YOU PROPERLY EXECUTE YOUR PROXY CARD AND GIVE NO VOTING
INSTRUCTIONS WITH RESPECT TO A PROPOSAL, YOUR SHARES WILL BE VOTED FOR THE
PROPOSAL.

PAGE 24
<PAGE>

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

For shares held in IRA accounts, the Custodian shall, without written direction
from the investor, vote shares for which no voting instructions are timely
received in the same proportion as shares for which voting instructions from
other shareholders are timely received. Shares of the International Stock
Portfolio held by insurance company separate accounts for which the insurance
company has not received timely voting instructions, as well as shares the
insurance company owns, shall be voted in the same proportion as shares for
which voting instructions from contract holders are timely received.

Can additional matters be acted upon at the annual meeting?

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

How can proxies be recorded?

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

PAGE 25
<PAGE>

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

Directors, officers, or employees of the funds, Price International or T. Rowe
Price, may solicit proxies by mail, in person, or by telephone. In the event
that votes are solicited by telephone, shareholders would be called at the
telephone number T. Rowe Price has in its records for their accounts, and would
be asked for their Social Security number or other identifying information. The
shareholders would then be given an opportunity to authorize proxies to vote
their shares at the meeting in accordance with their instructions. To ensure
that shareholders' instructions have been recorded correctly, confirmation of
the instructions is also mailed. A special toll-free number will be available in
case the information contained in the confirmation is incorrect.

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

The approximate date on which this proxy statement and proxy card are first
being mailed to shareholders is September 1, 2000.

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

Can I change my vote after I mail my proxy?

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

Are the funds required to hold annual meetings?

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

PAGE 26
<PAGE>

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

GENERAL INFORMATION ABOUT THE FUNDS

Who are the funds' executive officers?

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

<TABLE>
Table 9 Executive Officers of the Funds
<CAPTION>
Officer, Date of Birth Position With Fund Position With Price International
-------------------------------------------------------------------------------------------
<S> <C> <C>
International Funds, Institutional International Funds, and International Series
-------------------------------------------------------------------------------------------
John R. Ford, 11/25/57 President since Director since 8/
4/19/2000 9
/00
;
Executive Vice President since
10/12/98; Chief Investment
Officer since 7/1/98
-------------------------------------------------------------------------------------------
David J. L. Warren, 4/14/57 Executive Vice President Chief Executive Officer
since 11/4/98 and
(International Funds Director since
only) 8/
9
/00
;
President since 7/1/98
-------------------------------------------------------------------------------------------
Officer, Date of Birth Position With Fund Position With T. Rowe Price
-------------------------------------------------------------------------------------------
Spectrum Fund
-------------------------------------------------------------------------------------------
James S. Riepe, 6/25/43 Chairman since Vice Chairman since 4/17/97
6/12/90
-------------------------------------------------------------------------------------------
Edmund M. Notzon, 10/1/45 President since Managing Director since
12/1/98 4/17/97
-------------------------------------------------------------------------------------------
</TABLE>

What is the share ownership of each fund?

Table 10 presents the shares of the capital stock of each fund outstanding as of
June 30, 2000.

<TABLE>
Table 10 Outstanding Shares of Capital Stock
<CAPTION>
Outstanding Shares of
T. Rowe Price Fund Capital Stock
---------------------------------------------------------------------
<S> <C>
Foreign Equity 168,208,641
---------------------------------------------------------------------
International Stock 659,357,430
---------------------------------------------------------------------
International Bond 81,896,843
---------------------------------------------------------------------
International Discovery 27,746,477
---------------------------------------------------------------------
European Stock 60,953,483
---------------------------------------------------------------------
New Asia 129,256,568
---------------------------------------------------------------------
Japan 29,640,513
---------------------------------------------------------------------
Latin America 23,749,176
---------------------------------------------------------------------
Emerging Markets Stock 12,379,841
---------------------------------------------------------------------
Emerging Markets Bond 16,340,410
---------------------------------------------------------------------
Global Stock 5,993,438
---------------------------------------------------------------------
International Growth & Income 948,007
---------------------------------------------------------------------
International Bond - Advisor Class 1,965
---------------------------------------------------------------------
International Stock - Advisor Class 5,741
---------------------------------------------------------------------
Spectrum International 7,491,233
---------------------------------------------------------------------
International Stock Portfolio 41,149,009
---------------------------------------------------------------------
</TABLE>

PAGE 27
<PAGE>

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

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

<TABLE>
Table 11 Record/Beneficial Ownership of Fund
Shares
<CAPTION>
Fund Name Owner % Ownership
------------------------------------------------------------------------------------------------
<S> <C> <C>
Foreign Equity PACO, attn.: Mutual Funds, P.O. Box 10.45
831575, Dallas, TX 75283-1575
------------------------------------------------------------------------------------------------
International Stock Pirateline & Co., c/o T. Rowe Price 6.23
Assoc., 100 E. Pratt St.,
Baltimore, MD 21202-1009
---------------------------------------------------
Charles Schwab & Co., Inc., 8.68
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
---------------------------------------------------
T. Rowe Price Trust Co., Inc., 12.21
attn: TRPS Inst Control Department,
--------------------------------------------- P.O. Box 17215, Baltimore, MD
21297-1215
---------------------------------------------------
International Bond Yachtcrew & Co., c/o T. Rowe Price 43.95
Assoc., attn: Fund Accounting
Department, 100 E. Pratt St.,
Baltimore, MD 21202-1009
---------------------------------------------------
Charles Schwab & Co., Inc., 12.62
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
--------------------------------------------- San Francisco, CA 94104-4122
---------------------------------------------------
International Discovery Fidelity Investments, Institutional 5.79
Operations Co., FIIOC as agent for
Ford SSIP, 100 Magellan Way (KW1C),
Covington, KY 41015-1999
---------------------------------------------------
Charles Schwab & Co., Inc., 7.79
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
--------------------------------------------- San Francisco, CA 94104-4122
---------------------------------------------------
European Stock Charles Schwab & Co., Inc., 11.64
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
------------------------------------------------------------------------------------------------
New Asia Charles Schwab & Co., Inc., 9.03
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
------------------------------------------------------------------------------------------------
Japan Charles Schwab & Co., Inc., 7.90
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
San Francisco, CA 94104-4122
---------------------------------------------------
National Financial Services for the 9.59
exclusive benefit of our customers,
200 Liberty, One Financial Center,
--------------------------------------------- 4th Fl., New York, NY 10005-3500
---------------------------------------------------
Latin America Fidelity Investments, Institutional 5.17
Operations Co., FIIOC as agent for
Ford SSIP, 100 Magellan Way (KW1C),
Covington, KY 41015-1999
------------------------------------------------------------------------------------------------
Emerging Markets Stock T. Rowe Price Trust Co., Inc., 11.92
attn: TRPS Inst Control Department,
P.O. Box 17215, Baltimore, MD
21297-1215
------------------------------------------------------------------------------------------------
Emerging Markets Bond Yachtcrew & Co., c/o T. Rowe Price 53.08
Assoc., attn: Fund Accounting
Department, 100 E. Pratt St.,
Baltimore, MD 21202-1009
---------------------------------------------------
Charles Schwab & Co., Inc., 5.06
Reinvest Account, attn.: Mutual
Fund Dept., 101 Montgomery Street,
--------------------------------------------- San Francisco, CA 94104-4122
---------------------------------------------------
Global Stock T. Rowe Price RPS, Inc., Co., 11.53
Omnibus, Plan #Omni Plan, Install
Team for #113, P.O. Box 17215,
Baltimore, MD 21297-1215
------------------------------------------------------------------------------------------------
International Growth & Income - -
------------------------------------------------------------------------------------------------
Spectrum International T. Rowe Price Associates 5.62
Foundation, Inc., 100 East Pratt
Street, Baltimore, MD 21202-1009
------------------------------------------------------------------------------------------------
International Stock Portfolio CUNA Mutual Life Ins. Co., 13.61
Century Variable Annuity Acct., c/o
Fund Accounting, 2000 Heritage Way,
Waverly, IA 50677-9208
---------------------------------------------------
The Prudential Insurance Company of 5.02
America, attn.: Lillian Trimblett,
290 W. Mount Pleasant Ave.,
Livingston, NJ 07039-2747
---------------------------------------------------
SMA Life, 440 Lincoln St. S310, 34.47
Worcester, MA 01653-0002
---------------------------------------------------
United of Omaha - Series V, attn.: 6.78
John Martin, Corporate General
Ledger, Mutual of Omaha Plaza,
Omaha, NE 68175-0001
---------------------------------------------------
PRUCO Life, Flexible Premium 10.03
--------------------------------------------- Variable Annuity Accounting, attn.:
Kathy McClunn/Sep Accts/ 340W, 213
Washington St. - 7th Fl., Newark,
NJ 07102-2917
---------------------------------------------------
</TABLE>

PAGE 28
<PAGE>

PAGE 29
<PAGE>

The following sets forth the ownership of the directors and executive officers
of the funds as of June 30, 2000 (other than as set forth in Table 5).

<TABLE>
Table 12 Security Ownership of Management/a/
<CAPTION>
Amount and Nature of
Name of Fund, Name of Beneficial Owner, and Beneficial Ownership as of
Position With Fund Fund Name June 30, 2000/ //b/
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John R. Ford - President International Stock 267.308
International 213.496
Discovery
European Stock 358.802
Latin America 508.045
-----------------------------------------------------------------------------------------------------------------------
James S. Riepe - Chairman Spectrum 120.921
International /c/

-----------------------------------------------------------------------------------------------------------------------
Donald W. Dick, Jr. - Director Spectrum 476.248
International
-----------------------------------------------------------------------------------------------------------------------
Hanne M. Merriman - Director Spectrum 1,809.086
International
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

/a//The Directors and Executive Officers not listed did not own any shares as of
June 30, 2000, other than as/ / shown on Table 5./

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

/c/Represents the indirect proportionate interest of Mr. Riepe in shares of
Spectrum International held by Price International as of June 30, 2000.

PAGE 30
<PAGE>

As of June 30, 2000, the executive officers and directors of each fund, as a
group, beneficially owned, directly or indirectly, the following number of
shares in the funds:

International Stock, 118,208.700; International Discovery, 38,352.760; European
Stock, 7,653.882; Latin America, 6,371.560; Emerging Markets, 30,794.800; New
Asia, 1,754.735; International Bond, 2,058.592; Japan, 9,416.395; and Spectrum
International, 2,406.255. In all cases their ownership represented less than 1%
of the funds' outstanding shares.

INFORMATION ABOUT PRICE INTERNATIONAL

Who are the directors of Price International?

The investment manager for the funds is Price International, a Maryland
corporation, 100 East Pratt Street, Baltimore, Maryland 21202 and a wholly owned
subsidiary of T. Rowe Price. The chief executive officer and president of Price
International is David J.L. Warren who, together with Messrs. Wade, Riepe, Ford,
Testa, and George A. Roche, constitutes its Board of Directors.

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

TRANSACTIONS IN T. ROWE PRICE STOCK

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

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

PAGE 31
<PAGE>

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

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

INFORMATION ABOUT T. ROWE PRICE

Who are the directors of T. Rowe Price?

T. Rowe Price, a Maryland corporation, 100 East Pratt Street, Baltimore,
Maryland 21202 owns 100% of Price International. The principal executive officer
of T. Rowe Price is George A. Roche who together with Messrs. M. David Testa,
Martin G. Wade, Edward C. Bernard, James E. Halbkat, Jr., Donald B. Hebb, Jr.,
Henry H. Hopkins, James A. C. Kennedy, John H. Laporte, Richard L. Menschel,
William T. Reynolds, James S. Riepe, Brian C. Rogers, Robert L. Strickland, and
Mrs. Anne Marie Whittemore, constitutes its Board of Directors.

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

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

Mr. Hebb is the managing general partner of ABS Capital Partners. Mr. Hebb's
address is One South Street, 25th Floor, Baltimore, Maryland 21202.

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

Mr. Strickland retired as Chairman of Lowe's Companies, Inc., as of January 31,
1998. He is a director of Hannaford Bros., Co., a food retailer; and Krispy
Kreme Doughnuts, Inc. Mr. Strickland's address is 2000 W. First Street, Suite
604, Winston-Salem, North Carolina 27104.

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

PAGE 32
<PAGE>

EXHIBIT I

PRO FORMA
---------

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

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

PAGE 33
<PAGE>

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

W I T N E S S E T H:

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

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

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

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

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

1. DUTIES AND RESPONSIBILITIES OF MANAGER.

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

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

PAGE 34
<PAGE>

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

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

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

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

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

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

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

A. EXPENSES PAID BY MANAGER.

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

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

PAGE 35
<PAGE>

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

B. (i)
EXPENSES PAID BY FUND (OTHER THAN SPECTRUM INTERNATIONAL). The Corporation or
Fund, as appropriate, shall bear all expenses of its organization, operations,
and business not specifically assumed or agreed to be paid by the Manager as
provided in this Agreement. In particular, but without limiting the generality
of the foregoing, the Corporation or Fund, as appropriate, shall pay the
expenses set forth under paragraphs 1-17 below:

(ii)
EXPENSES OF THE FUND (SPECTRUM INTERNATIONAL ONLY). All expenses of the
organization, operations, and business of the Corporation or Fund, as
appropriate, not specifically assumed or agreed to be paid by the Manager as
provided in paragraph 2.A. above, will be paid in accordance with paragraph
3.3.A. of this Agreement. Such expenses include the following as set for under
paragraphs 1-17 below:

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

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

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

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

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

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

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

PAGE 36
<PAGE>

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

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

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

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

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

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

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

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

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

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

PAGE 37
<PAGE>

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

2.1. ALLOCATION OF EXPENSES (INTERNATIONAL STOCK PORTFOLIO).

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

(1) INTEREST. Interest;

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

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

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

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

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

A.
GROUP FEE. The monthly Group Fee ("Monthly Group Fee") shall be the sum of the
daily Group Fee accruals ("Daily Group Fee Accruals") for each month. The Daily
Group Fee Accrual for any particular day will be computed by multiplying the
Price Funds' group fee accrual as determined below ("Daily Price Funds' Group
Fee Accrual") by the ratio of the Fund's net assets for that day to the sum of
the aggregate net assets of the Price Funds for that day. The Daily Price Funds'
Group Fee Accrual for any particular day shall be calculated by multiplying the
fraction of one (1) over the number of calendar days in the year by the
annualized Daily Price Funds' Group Fee Accrual for that day as determined in
accordance with the following schedule:

PAGE 38
<PAGE>

Price Funds Annual Group
Base Fee Rate for Each Level of Assets
______________________________________

0.480% First $1 billion
0.450% Next $1 billion
0.420% Next $1 billion
0.390% Next $1 billion
0.370% Next $1 billion
0.360% Next $2 billion
0.350% Next $2 billion
0.340% Next $5 billion
0.330% Next $10 billion
0.320% Next $10 billion
0.310% Next $16 billion
0.305% Next $30 billion
0.300% Next $40 billion
0.295% Thereafter

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

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

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

PAGE 39
<PAGE>

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

PAGE 40
<PAGE>

PAGE 41
<PAGE>

3.4.1
SHAREHOLDER ACCOUNT FEE (INTERNATIONAL STOCK PORTFOLIO). The Corporation, on
behalf of the Fund, by resolution of the board of directors, including a
majority of the independent directors, may from time to time authorize the
imposition of a fee as a direct charge against shareholder accounts to be
retained by the Fund or to be paid to the Manager to defray expenses which would
otherwise be paid by the Manager in accordance with the provisions of Paragraph
2 of this Agreement. At least 60 days' prior written notice of the intent to
impose such fee must be given to the Fund's shareholders.

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

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

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

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

PAGE 42
<PAGE>

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

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

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

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

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

PAGE 43
<PAGE>

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

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

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

14. MISCELLANEOUS.

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

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

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

PAGE 44
<PAGE>

or order of the Securities and Exchange Commission, whether of special or of
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation, or order.

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

Attest: T. ROWE PRICE FUND

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

Attest: T. ROWE PRICE INTERNATIONAL, INC.

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

PAGE 45
<PAGE>

PAGE 46
<PAGE>

PAGE 47

To International Stock Portfolio shareholders

Dear Shareholder:

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

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

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

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

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

Sincerely,

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

ISP

[To international funds shareholders]

Dear Shareholder:

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

Proposals affecting all international funds:
. To approve a new Investment Management Agreement for each international fund.
As you know, the international funds were managed by Rowe Price-Fleming, a
50/50 joint venture between T. Rowe Price Associates and Robert Fleming
Holdings. On August 8, 2000, T. Rowe Price became the sole owner of the
investment management company and renamed it T. Rowe Price International, Inc.
This transaction caused the investment management agreements with Rowe
Price-Fleming to terminate automatically. The funds' Directors previously
approved interim management agreements and we are seeking your approval of new
agreements between the funds and T. Rowe Price International, Inc. that are
identical to the prior ones. There are no changes in fees or services.

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

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

Proposal affecting New Asia Fund:
. To change the fund's status to "nondiversified." The New Asia Fund is
currently classified as "diversified," which means its holdings must meet
certain diversification criteria established by the Investment Act of 1940
(see page 17 of this proxy). Importantly, the fund is not seeking this change
in order to invest the portfolio in a significantly fewer number of issuers.
However, a number of large, fast growing companies represent significant
portions of the region's market value. This change will give the fund the
flexibility it needs if the managers wish to increase exposure to these
companies.

Proposal affecting Foreign Equity Fund:
. To permit the fund to lend securities. Securities lending can generate
significant income for the Fund. Granting the fund this right would align its
fundamental policy on securities lending with corresponding policies of all
other T. Rowe Price international funds. This program will be subject to all
of the existing controls in place in the Price Funds Securities Lending
Program (see page 16) and to a T. Rowe Price limit on all lending to no more
than 33 1/3% of the value of a fund's total assets.

<PAGE>

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

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

Sincerely,

/s/Martin G. Wade
Martin G. Wade
Chairman of the Board
T. Rowe Price International, Inc.

<PAGE>

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

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

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

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

Please fold and detach card at perforation
before mailing
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

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

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

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

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

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

Date_____________________

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

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

INT

</TABLE>

<PAGE>

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

Please fold and detach card at perforation before mailing.

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

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

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

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

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

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

PLEASE SIGN ON REVERSE SIDE

INT

<PAGE>

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

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

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

GRAPHIC OF TELEPHONE

By touch-tone TELEPHONE:

. have the proxy card handy

. call 1-888-221-0697 toll free

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

. follow the simple recorded instructions

GRAPHIC OF COMPUTER SCREEN

By COMPUTER via the Internet:

. have the proxy card handy

. go to the Website WWW.PROXYWEB.COM

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

. follow the instructions on the screen

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

Thank you.