Registration Nos. 2-29866/811-1710
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. 59 /X/
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 18 /X/
Fiscal Year Ended December 31, 1993
___________________________________
T. ROWE PRICE NEW ERA FUND, INC.
________________________________
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(Exact Name of Registrant as Specified in Charter)
Registrant's Telephone Number, Including Area Code 410-547-2000
Henry H. Hopkins
100 East Pratt Street
Baltimore, Maryland 21202
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering May 1, 1994
It is proposed that this filing will become effective (check
appropriate box):
/__/ immediately upon filing pursuant to paragraph (b) /__/ on (date) pursuant to paragraph (b) /__/ 60 days after filing pursuant to paragraph (a) /X/ on May 1, 1994 pursuant to paragraph (a) of Rule 485 |
Pursuant to Section 24f-2 of the Investment Company Act of 1940, the Registrant has registered an indefinite number of securities under the Securities Act of 1933 and intends to file a 24f-2 Notice by February 28, 1994.
+Not applicable, as no securities are being registered by this Post-Effective Amendment No. 59 to the Registration Statement.
The Registration Statement of T. Rowe Price New Era Fund, Inc., on Form N-1A (File Number 2-29866) is hereby amended under the Securities Act of 1933 to update the Registrant's financial statements, make other changes in the Registrant's Prospectus and Statement of Additional Information, and to satisfy the annual amendment requirements of Rule 8b-16 under the Investment Company Act of 1940.
This Amendment consists of the following:
Cross Reference Sheet
Part A of Form N-1A, Revised Prospectus
Part B of Form N-1A, Statement of Additional
Information
Part C of Form N-1A, Other Information
Accountants' Consent
CROSS REFERENCE SHEET
N-1A Item No. Location
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary of Fund Fees and
Expenses
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Investment Summary;
Registrant Investment Objective
and Program; Investing
in the Stock Market;
Summary
of Fund Fees and
Expenses; Investment
Policies; Performance
Information; Capital
Stock
Item 5. Management of the Fund Summary of Fund
Fees and Expenses;
Management of the Fund;
Expenses and Management
Fee;
Item 5A. Management's Discussion of +
Fund Performance
Item 6. Capital Stock and Other Capital Stock; Dividends
Securities and Distributions;
Taxes
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Item 7. Purchase of Securities Being NAV, Pricing, and
Offered Effective Date;
Shareholder Services;
Conditions of Your
Purchase; Completing the
New Account Form;
Opening a New
Account; Purchasing
Additional Shares
Item 8. Redemption or Repurchase NAV, Pricing, and
Effective Date;
Receiving Your
Proceeds; Conditions of
Your Purchase;
Exchanging and
Redeeming Shares
Item 9. Pending Legal Proceeding +
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and +
History
Item 13. Investment Objectives and Investment Objectives
Policies and Policies; Risk
Factors;
Investment Program;
Portfolio Management
Practices;
Investment
Restrictions; Investment
Performance
Item 14. Management of the Registrant Management of Fund
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Item 15. Control Persons and Principal Principal Holders of Holders of Securities Securities
Item 16. Investment Advisory and Other Investment Management
Services Services; Custodian;
Capital Stock;
Legal Counsel;
Independent Accountants;
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Dividends and
Securities Distributions;
Item 19. Purchase, Redemption and Pricing of Securities;
Pricing of Securities Being Net Asset Value
Offered Per Share; Redemptions
in Kind;
Federal and State
Registration of Shares;
Ratings of Corporate
Debt Securities
Item 20. Tax Status Tax Status
Item 21. Underwriters Distributor for Fund
Item 22. Calculation of Yield Quotations
of Money Market Funds +
Item 23. Financial Statements Incorporated by
Reference from
Annual Report
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PAGE 1 Investment Summary
New Era The Fund invests primarily in the common
Fund stocks of companies which own or develop
natural resources and other basic
Prospectus commodities, and other selected growth
May 1, 1994 companies. It is designed for investors
T. Rowe Price seeking long-term growth of capital.
New Era Fund, Inc. ________________________________________
T. Rowe Price
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Table of Contents 100% No Load. This Fund has no sales
charges, no redemption fees, and no 12b-1
Fund Information fees. 100% of your investment is credited
Investment Objective to your account.
and Program
Summary of Fund Fees and Services. T. Rowe Price provides easy
Expenses access to your money through bank wires or
Financial Highlights telephone redemptions and offers easy
Investing in the Stock exchange to other T. Rowe Price Funds.
Market
Investment Policies T. Rowe Price Associates, Inc. (T. Rowe
Performance Information Price) was founded in 1937 by the late
Capital Stock Thomas Rowe Price, Jr. As of December 31,
NAV, Pricing, and 1993, the firm and its affiliates managed
Effective Date over $49 billion for approximately 2.5
Receiving Your Proceeds million individual and institutional
Dividends and investor accounts.
Distributions ____________________________________
Taxes This prospectus contains information you
Management of the Fund should know about the Fund before you
Expenses and Management invest. Please keep it for future
Fee reference. A Statement of Additional
How to Invest Information for the Fund (dated May 1,
Shareholder Services 1994) has been filed with the Securities
Conditions of Your and Exchange Commission and is incorporated
Purchase by reference in this prospectus. It is
Completing the New available at no charge by calling: 1-800-
Account Form 638-5660.
Opening a New Account
Purchasing Additional THESE SECURITIES HAVE NOT BEEN APPROVED OR
Shares DISAPPROVED BY THE SECURITIES AND EXCHANGE
Exchanging and Redeeming COMMISSION, OR ANY STATE SECURITIES
Shares COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY STATE
SECURITIES COMMISSION, PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PAGE
INVESTMENT The Fund's investment objective is to seek
OBJECTIVE long-term growth of capital through
AND PROGRAM investment primarily in common stocks of
companies which own or develop natural
resources and other basic commodities, and
other selected, non-resource growth
companies. Current income is not a factor
in the selection of stocks for investment
by the Fund. Total return will consist
primarily of capital appreciation (or
depreciation).
The Fund's share price will fluctuate
with changing market conditions, and your
investment may be worth more or less when
redeemed than when purchased. The Fund
should not be relied upon as a complete
investment program, nor used to play
short-term swings in the stock market. The
Fund cannot guarantee it will achieve its
investment objective.
In the opinion of T. Rowe Price, inflation
represents one of the major economic
problems investors will face over the long
term. From the early 1970's through the
late 1980's, the inflation rate was
considerably above average historic levels.
Although inflation was slowed in recent
years, T. Rowe Price believes the strenuous
efforts required on the part of government,
business, labor, and consumers to control
inflation are difficult to maintain for
extended periods--particularly during
recessions. Political pressure to
counteract these economic slowdowns often
leads to governmental policies which in
turn renew inflationary forces. The
investment program of the Fund has been
developed in light of these considerations.
Investing in companies The Fund invests in a diversified group
whose earnings are of companies whose earnings and/or value of
expected to exceed tangible assets are expected to grow faster
inflation. than the rate of inflation over the long
term. T. Rowe Price believes the most
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attractive opportunities which satisfy the Fund's objective are in companies which own or develop natural resources and in companies where management has the flexibility to adjust prices or the ability to control operating costs.
Some of the most important factors evaluated by T. Rowe Price in selecting natural resource companies are the capability for expanded production, superior exploration programs and production facilities, and the potential to accumulate new resources. The Fund expects to invest in those natural resource companies which own or develop energy sources (such as oil, gas, coal, and uranium), precious metals, forest products, real estate, nonferrous metals, diversified resources, and other basic commodities which, in the opinion of T. Rowe Price, can be produced and marketed profitably during periods of rising labor costs and prices.
However, the percentage of the Fund's
assets invested in natural resource and
related businesses versus the percentage
invested in non-resource companies may vary
greatly depending upon economic and
monetary conditions and the outlook for
inflation. The earnings of natural
resource companies may be expected to
follow irregular patterns, because these
companies are particularly influenced by
the forces of nature and international
politics. Companies which own or develop
real estate might also be subject to
irregular fluctuations of earnings, because
these companies are affected by changes in
the availability of money, interest rates,
and other factors.
Although the Fund will invest primarily in U.S. common stocks, it may also purchase other types of securities, for example, foreign securities, convertible securities and warrants, when considered consistent with the Fund's investment objective and program. The Fund may also engage in a
variety of investment management practices,
such as buying and selling futures and
options. Please see Investment Policies
for a more complete description of these
and other permissible Fund investments.
SUMMARY OF The Fund is 100% no-load . . . you pay no
FUND FEES AND fees to purchase, exchange or redeem
EXPENSES shares, nor any ongoing marketing (12b-1)
expenses. Lower expenses benefit you by
increasing your investment return from the
Fund.
Shown below are all expenses and fees the
Fund incurred during its fiscal year.
Where applicable, expenses were restated to
reflect current fees. Expenses are
expressed as a percent of average Fund net
assets. More information about these
expenses may be found below and under
Expenses and Management Fee and in the
Statement of Additional Information under
Management Fee and Limitation on Fund
Expenses.
Shareholder Annual Fund Expenses
Transaction Expenses
Sales load None Management fee 0.60%
"charge" on purchases Total other
Sales load None (Shareholder 0.20%
"charge" on reinvested servicing,
dividends custodial,
Redemption fees None auditing, etc.)+
Exchange fees None Distribution None
fees (12b-1) _____
Total Fund 0.80%
Expenses
+ The Fund charges a $5.00 fee for wire
redemptions under $5,000, subject to
change without notice.
Example of The following example illustrates the
Fund expenses. expenses you would incur on a $1,000
investment, assuming a 5% annual rate of
return and redemption at the end of each
period shown. For example, expenses for
the first year in the Fund would be $8.
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This is an illustration only. Actual
expenses and performance may be more or
less than shown.
1 Year--$8 3 Years--$26 5 Years--$44
10 Years--$98
Management Fee. The Fund pays T. Rowe
Price an investment management fee
consisting of a flat Individual Fund Fee of
0.25% of the Fund's net assets and a Group
Fee, defined on page __ under Expenses and
Management Fee, of 0.35% as of December 31,
1993. Thus, the total combined management
fee for the Fund would be 0.60% of net
assets.
Transfer Agent, Shareholder Servicing, and
Administrative Costs. The Fund paid fees
to: (i) T. Rowe Price Services, Inc. (TRP
Services) for transfer and dividend
disbursing agent functions and shareholder
services for all accounts; (ii) T. Rowe
Price Retirement Plan Services, Inc. for
subaccounting and recordkeeping services
for certain retirement accounts; and (iii)
T. Rowe Price for calculating the daily
share price and maintaining the portfolio
and general accounting records of the Fund.
These fees totaled approximately $517,000,
$179,000, and $71,000, respectively.
FINANCIAL The following table provides information
HIGHLIGHTS about the Fund's financial history. It is
based on a single share outstanding
throughout each fiscal year (which ends on
the last day of December). The most recent
five years of the table are part of the
Fund's financial statements which are
included in the Fund's annual report and
incorporated by reference into the
Statement of Additional Information, which
is available to shareholders. The
financial statements in the annual report
have been audited by Price Waterhouse,
independent accountants, whose unqualified
report covers the most recent five-year
period.
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Investment Activities Distributions
Net Real-
ized and
Net Unreal- Total
Asset ized Gain from
Value, Net (Loss) Invest- Net Net
Begin- Invest- on ment Invest-Real- Total
Year Ended, ning of ment Invest- Activi- ment lized Distri-
December 31 Year Income ments ties Income Gain butions
_________________________________________________________________
1984 $18.44 $.67 $(.08) $.59 $(.61)
$(1.29) $(1.90)
1985 17.13 .49 3.14 3.63 (.68)(1.41) (2.09)
1986 18.67 .38 2.46 2.84 (.50)(3.25) (3.75)
1987 17.76 .61 2.46 3.07 (.98)(1.77) (2.75)
1988 18.08 .51 1.34 1.85 (.53) (.61) (1.14)
1989 18.79 .56 3.99 4.55 (.56)(1.05) (1.61)
1990 21.73 .60 (2.52) (1.92) (.62) (.71) (1.33)
1991 18.48 .54 2.12 2.66 (.55) (.73) (1.28)
1992 19.86 .45 (.04) .41 (.45) (.94) (1.39)
1993 18.88 .40 2.48 2.88 (.38)(1.03) (1.41)
End of Period
Ratio
of
Total Ratio Net
Return of Invest-
Net (Includes Expenses ment Port-
Asset Rein- to Income
folio
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1984 $17.13 13.3% $471,995 0.68% 3.96% 38.6% 1985 18.67 23.4% 529,469 0.69% 2.76% 36.7% 1986 17.76 16.0% 496,242 0.73% 1.98% 32.4% 1987 18.08 17.8% 756,549 0.82% 3.11% 29.5% 1988 18.79 10.3% 726,476 0.89% 2.41% 15.5% 1989 21.73 24.3% 826,582 0.83% 2.52% 18.6% 1990 18.48 (8.8)% 707,548 0.83% 2.81% 9.0% 1991 19.86 14.7% 756,817 0.85% 2.56% 9.0% 1992 18.88 2.1% 699,599 0.81% 2.22% 16.9% 1993 20.35 15.3% 752,532 0.80% 1.92% 24.7% |
INVESTING IN THE STOCK ___________________________________________
MARKET Common stocks offer a way to invest for
long-term growth of capital. As the U.S.
economy has expanded, corporate profits
have grown, and share values have risen.
Economic growth has been punctuated by
periodic declines. Share prices of even the
best managed, most profitable corporations
are subject to market risk, which means
their stock prices can decline. For this
reason, equity investors should have a
long-term investment horizon and be willing
to wait out bear markets.
The accompanying charts show year-by-year
stock market returns as well as longer-term
performance. (The market is represented by
Standard & Poor's 500 Stock Index of large-
company stocks.) In 10 of the years from
1950 through 1993, stocks posted negative
returns, as shown, which means they rose
77% of the time. For this same time span,
however, all cumulative returns for 10-year
rolling periods were positive. Thus, the
risk of incurring a loss was reduced
considerably for longer holding periods.
Not all areas of the stock market behave
like the large companies reflected in the
S&P 500. For example, small-company stocks,
especially those of fast-growing, emerging
companies, are typically more volatile than
large-company issues, and indices tracking
them, such as the Nasdaq Composite or
Russell 2000, would show this volatility.
Your investment in the Fund will be
subject to the fluctuations -- up or down
-- described above. You should weigh this
factor carefully before investing.
Volatility of Stock Returns
(S&P 500 Stock Index)*
1 Year Annual Total Returns
11.95 -7.15
1960 0.49 6.62
26.91 18.63
-8.7 1980 32.45
22.8 -4.97
16.48 21.56
12.46 22.56
-10.07 6.22
23.95 31.72
11.07 18.7
8.44 5.16
1970 3.95 16.59
14.3 31.41
19 1990 -2.79
-14.69 30.41
-26.47 7.61
37.23 1993 10.07
23.93
10-Year Cumulative Total Return
485.72 42.42
1960346.93 36.72
357.4 77.14
252.86 1980 125.71
337.56 87.67
234.06 91.7
185.6 175.41
141.09 297.82
234.93 281.84
159.57 265.73
112.28 314.19
1970119.59 352.92
97.77 401.7
157.78 1990 268.24
79.08 405.31
13.06 347.46
37.96 1993 301.77
90.12
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*The S&P 500, a registered trademark of Standard & Poor's Corporation, is an unmanaged index of common stocks and includes investment of dividends. This chart is intended as an illustration of historical common stock behavior and does not represent the performance of any T. Rowe Price mutual fund. Past results do not indicate future returns
INVESTMENT This section takes a detailed look at some
POLICIES of the types of securities the Fund may
hold in its portfolio and the various kinds
of investment practices that may be used in
day-to-day portfolio management. The Fund's
investment program is subject to further
restrictions and risks described in the
"Statement of Additional Information."
Shareholder approval is required to
substantively change the Fund's objective
(stated on page __) and to change certain
investment restrictions noted in the
following section as "fundamental
policies." The managers also follow
certain "operating policies" which can be
changed without shareholder approval.
However, significant changes are discussed
with shareholders in Fund reports.
Types of Portfolio Securities
Fund managers have In seeking to meet its investment
considerable leeway in objective, the Fund may invest in any type
choosing investment of security whose investment
strategies and selecting characteristics are consistent with the
securities they believe Fund's investment program. These and some
will help the fund of the other investment techniques the Fund
achieve its objectives. may use are described in the following
pages.
Fundamental Policy. The Fund will not
purchase a security if, as a result, with
respect to 75% of its total assets, more
than 5% of its total assets would be
invested in securities of the issuer or
more than 10% of the voting securities of
the issuer would be held by the fund.
Common and Preferred Stocks. Stocks
represent shares of ownership in a company.
Generally, preferred stock has a specified
dividend and ranks after bonds and before
common stocks in its claim on income for
dividend payments and on assets should the
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company be liquidated. After other claims are satisfied, common stockholders participate in company profits on a pro rata basis; profits may be paid out in dividends or reinvested in the company to help it grow. Increases and decreases in earnings are usually reflected in a company's stock price, so common stocks generally have the greatest appreciation and depreciation potential of all corporate securities. While most preferred stocks pay a dividend, the Fund may purchase preferred stock where the issuer has omitted, or is in danger of omitting, payment of its dividend. Such investments would be made primarily for their capital appreciation potential.
Convertible Securities and Warrants. The Fund may invest in debt or preferred equity securities convertible into or exchangeable for equity securities. Traditionally, convertible securities have paid dividends or interest at rates higher than common stocks but lower than non-convertible securities. They generally participate in the appreciation or depreciation of the underlying stock into which they are convertible, but to a lesser degree. In recent years, convertibles have been developed which combine higher or lower current income with options and other features. Warrants are options to buy a stated number of shares of common stock at a specified price any time during the life of the warrants (generally, two or more years).
Foreign Securities. The Fund may invest in foreign securities. These include non- dollar denominated securities traded outside of the U.S. and dollar denominated securities traded in the U.S. (such as ADRs). Such investments increase a portfolio's diversification and may enhance return, but they also involve some special risks such as exposure to potentially adverse local political and economic
developments; nationalization and exchange controls; potentially lower liquidity and higher volatility; possible problems arising from accounting, disclosure, settlement, and regulatory practices that differ from U.S. standards; and the chance that fluctuations in foreign exchange rates will decrease the investment's value (favorable changes can increase its value).
Operating Policy. The Fund may invest up to 25% of its total assets in foreign securities.
Fixed Income Securities. The Fund may invest in debt securities of any type without regard to quality or rating. Such securities would be purchased in companies which meet the investment criteria for the Fund. The price of a bond fluctuates with changes in interest rates, rising when interest fall and falling when interest rise. The Fund will not purchase a non- investment grade debt security (or junk bond) if immediately after such purchase the Fund would have more than 10% of its total assets invested in such securities.
High Yield/High Risk Investing. The total return and yield of lower quality (high yield/high risk) bonds, commonly referred to as "junk bonds," can be expected to fluctuate more than the total return and yield of higher quality, shorter-term bonds, but not as much as common stocks.
Junk bonds are regarded as predominantly
speculative with respect to the issuer's
continuing ability to meet principal and
interest payments.
Operating Policy. The Fund may not invest
more than 10% in securities rated below-
investment grade.
Hybrid Instruments. These instruments can combine the characteristics of securities, futures and options. For example, the principal amount, redemption or conversion
terms of a security could be related to the market price of some commodity, currency or securities index. Such securities may bear interest or pay dividends at below market (or even relatively nominal) rates. Under certain conditions, the redemption value of such an investment could be zero. Hybrids can have volatile prices and limited liquidity and their use by the Fund may not be successful.
Operating Policy. The Fund may invest up to 10% of its total assets in hybrid instruments.
Private Placements (Restricted Securities).
These securities are sold directly to a
small number of investors, usually
institutions. Unlike public offerings, such
securities are not registered with the SEC.
Although certain of these securities may be
readily sold, for example under Rule 144A,
the sale of others may involve substantial
delays and additional costs.
Operating Policy. The Fund will not invest more than 15% of its net assets in illiquid securities.
Types of Management Practices
Cash Position. The Fund will hold a certain
portion of its assets in money market
securities, including repurchase
agreements, in the two highest rating
categories, maturing in one year or less.
For temporary, defensive purposes, the Fund
may invest without limitation in such
securities. This reserve position provides
flexibility in meeting redemptions,
expenses, and the timing of new
investments, and serves as a short-term
defense during periods of unusual market
volatility.
Borrowing Money and Transferring Assets. The Fund can borrow money from banks as a temporary measure for emergency purposes,
to facilitate redemption requests, or for other purposes consistent with the fund's investment objectives and program. Such borrowings may be collateralized with fund assets, subject to restrictions.
Fundamental Policy. Borrowings may not exceed 33 1/3% of total Fund assets.
Operating Policies. The Fund may not transfer as collateral any portfolio securities except as necessary in connection with permissible borrowings or investments, and then such transfers may not exceed 33 1/3% of the Fund's total assets. The Fund may not purchase additional securities when borrowings exceed 5% of total assets.
Futures and Options. Futures are often used to manage risk, because they enable the investor to buy or sell an asset in the future at an agreed upon price. Options give the investor the right, but not the obligation, to buy or sell an asset at a predetermined price in the future. The Fund may buy and sell futures contracts (and options on such contracts) to manage its exposure to changes in securities prices and foreign currencies and as an efficient means of adjusting its overall exposure to certain markets. The Fund may purchase, sell, or write call and put options on securities, financial indices, and foreign currencies.
Futures contracts and options may not always be successful hedges; their prices can be highly volatile; using them could lower the Fund's total return; and the potential loss from the use of futures can exceed the Fund's initial investment in such contracts.
Operating Policies. Futures: Initial margin deposits and premiums on options used for non-hedging purposes will not equal more than 5% of the Fund's net asset value.
Options on securities: The total market value of securities against which the fund has written call or put options may not exceed 25% of its total assets. The Fund will not commit more than 5% of its total assets to premiums when purchasing call or put options.
Managing Foreign Currency Risk. Investors in foreign securities may "hedge" their exposure to potentially unfavorable currency changes by purchasing a contract to exchange one currency for another on some future date at a specified exchange rate. In certain circumstances, a "proxy currency" may be substituted for the currency in which the investment is denominated, a strategy known as "proxy hedging." Although foreign currency transactions will be used primarily to protect the Fund's foreign securities from adverse currency movements relative to the dollar, they involve the risk that anticipated currency movements will not occur and the Fund's total return could be reduced.
Lending of Portfolio Securities. Like other mutual funds, the Fund may lend securities to broker-dealers, other institutions, or other persons to earn additional income.
The principal risk is the potential
insolvency of the broker-dealer or other
borrower. In this event, the Fund could
experience delays in recovering its
securities and possibly capital losses.
Fundamental Policy. The value of loaned
securities may not exceed 33 1/3% of the
Fund's total assets.
Portfolio Transactions. The Fund will not
generally trade in securities for short-
term profits but, when circumstances
warrant, securities may be purchased and
sold without regard to the length of time
held. The Fund's portfolio turnover rates
for the years 1993, 1992, and 1992 were
24.7%, 16.9%, and 9.0%, respectively.
PERFORMANCE The Fund may advertise total return figures
INFORMATION on both a cumulative and compound average
annual basis and compare them to various
indices (e.g., the S&P 500), other mutual
funds or other performance measures. (The
total return of the Fund consists of the
change in its net asset value per share and
the net income it earns.) Cumulative total
return compares the amount invested at the
beginning of a period with the amount
redeemed at the end of the period, assuming
the reinvestment of all dividends and
capital gain distributions. The compound
average annual total return indicates a
yearly compound average of the Fund's
performance, derived from the cumulative
total return. The annual compound rate of
return for the Fund may vary from any
average. Further information about the
Fund's performance is contained in its
annual report which is available free of
charge.
CAPITAL STOCK The Fund is a Maryland corporation
organized in 1968 and registered with the
Securities and Exchange Commission under
the Investment Company Act of 1940 as a
diversified, open-end investment company,
commonly known as a "mutual fund." A
mutual fund, such as the Fund, enables
shareholders to: (1) obtain professional
management of investments, including T.
Rowe Price's proprietary research; (2)
diversify their portfolio to a greater
degree than would be generally possible if
they were investing as individuals and
thereby reduce, but not eliminate risks;
and (3) simplify the recordkeeping and
reduce transaction costs associated with
investments.
The Fund has an Investment Advisory
Committee composed of the following
members: George A. Roche, Chairman, Stephen
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W. Boesel, Richard P. Howard, James A.C. Kennedy, Charles M. Ober, David L. Rea, Alan R. Stuart, and David J. Wallack. The Committee Chairman has day-to-day responsibility for managing the Fund and works with the Committee in developing and executing the Fund's investment program. Mr. Roche has been Chairman of the Committee since 1988. He has been managing investments since joining T. Rowe Price in 1968.
Shareholder Rights. The Fund issues one class of capital stock, all shares of which have equal rights with regard to voting, redemptions, dividends, distributions, and liquidations. Fractional shares have voting rights and participate in any distributions and dividends. Shareholders have no preemptive or conversion rights; nor do they have cumulative voting rights. When the Fund's shares are issued, they are fully paid and nonassessable. The Fund does not routinely hold annual meetings of shareholders. The total authorized capital stock of the Fund consists of 200,000,000 shares, each having a par value of $1.00. As of December 31, 1993, there were 48,855 shareholders in the Fund and a total of 3,044,166 shareholders in the other 56 T. Rowe Price Funds.
________________________ ___________________________________________
FUND OPERATIONS AND The following sections apply to this Fund
SERVICES and all T. Rowe Price Equity Funds.
________________________ ___________________________________________
NAV, PRICING, AND Net Asset Value Per Share (NAV). The NAV
EFFECTIVE DATE per share, or share price, for the Fund is
normally determined as of 4:00 pm Eastern
Time (ET) each day the New York Stock
Exchange is open. The Fund's share price
is calculated by subtracting its
liabilities from its total assets and
dividing the result by the total number of
shares outstanding. Among other things,
the Fund's liabilities include accrued
expenses and dividends payable, and its
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total assets include portfolio securities
valued at market as well as income accrued
but not yet received.
If your order is received Purchased shares are priced at that day's
in good order before 4:00 NAV if your request is received before 4:00
pm ET, you will receive pm ET in good order. (See Completing the
that day's NAV. New Account Form and Opening a New
Account.) If received later than 4:00 pm
ET, shares will be priced at the next
business day's NAV.
Redemptions are priced at that day's NAV
if your request is received before 4:00 pm
ET in good order at the transfer agent's
offices at T. Rowe Price Account Services,
P.O. Box 89000, Baltimore, MD 21289-0220.
If received after 4:00 pm ET, shares will
be priced at the next business day's NAV.
Also, we cannot accept requests which
specify a particular date for purchase or
redemption or which specify any special
conditions. If your redemption request
cannot be accepted, you will be notified
and given further instructions.
Exchanges are normally priced in the same
manner as purchases and redemptions.
However, if you are exchanging into a bond
or money fund and the release of your
exchange proceeds is delayed for the
allowable five business days (see Receiving
Your Proceeds), you will not begin to earn
dividends until the sixth business day
after the exchange.
The Fund reserves the right to change the
time at which purchases, redemptions, and
exchanges are priced if the New York Stock
Exchange closes at a time other than 4:00
pm ET or an emergency exists.
________________________ ___________________________________________
RECEIVING YOUR PROCEEDS Redemption proceeds are mailed to the
address, or sent by wire or ACH transfer to
the bank account, designated on your New
Account Form. They are generally sent the
next business day after your redemption
|
request is received in good order.
Proceeds sent by bank wire should be
credited to your bank account the next
business day and proceeds sent by ACH
transfer should be credited the second day
after the sale. In addition, under unusual
conditions, or when deemed to be in the
best interest of the Fund, redemption
proceeds may not be sent for up to five
business days after your request is
received to allow for the orderly
liquidation of securities. Requests by
mail for wire redemptions (unless
previously authorized) must have a
signature guarantee.
________________________ ___________________________________________
DIVIDENDS AND The Fund distributes all net investment
DISTRIBUTIONS income and capital gains to shareholders.
Dividends from net investment income and
distributions from capital gains, if any,
are normally declared in December and paid
in January. However, dividends from net
investment income for the Balanced, Growth
& Income, Equity Income, and Dividend
Growth Funds will be declared and paid
quarterly. Dividends and distributions
declared by the Fund will be reinvested
unless you choose an alternative payment
option on the New Account Form. Dividends
not reinvested are paid by check or
transmitted to your bank account via ACH.
If the U.S. Postal Service cannot deliver
your check, or if your check remains
uncashed for six months, the Fund reserves
the right to reinvest your distribution
check in your account at the then current
NAV and to reinvest all subsequent
distributions in shares of the Fund.
________________________ ___________________________________________
TAXES Dividends and Distributions. In January,
the Fund will mail you Form 1099-DIV
indicating the federal tax status of your
dividends and capital gain distributions.
Form 1099-DIV will be Generally, dividends and distributions are
mailed to you in January. taxable in the year they are paid.
However, any dividends and distributions
paid in January but declared during the
________
prior three months are taxable in the year
|
they are declared. Dividends and distributions are taxable to you regardless of whether they are taken in cash or reinvested. Dividends and short-term capital gain distributions are taxable as ordinary income; long-term capital gain distributions are taxable as long-term capital gains. The capital gain holding period is determined by the length of time the Fund has held the securities, not the length of time you have owned Fund shares.
Shares Sold. A redemption or exchange of Fund shares is treated as a sale for tax purposes which will result in a short or long-term capital gain or loss, depending on how long you have owned the shares. In January, the Fund will mail you Form 1099-B indicating the trade date and proceeds from all sales and exchanges.
Undistributed Income and Gains. At the time of purchase, the share price of the Fund may reflect undistributed income, capital gains or unrealized appreciation of securities. Any income or capital gains from these amounts which are later distributed to you are fully taxable.
Foreign Transactions (All Funds other than New America Growth Fund). Distributions resulting from the sale of certain foreign currencies and debt securities, to the extent of foreign exchange gains, are taxed as ordinary income or loss. If the Fund pays nonrefundable taxes to foreign governments during the year, the taxes will reduce the Fund's dividends.
Corporations. All or part of the Fund's dividends will be eligible for the 70% deduction for dividends received by corporations.
Tax-Qualified Retirement Plans. Tax- qualified retirement plans generally will not be subject to federal tax liability on either distributions from the Fund or
redemption of shares of the Fund. Rather,
participants in such plans will be taxed
when they begin taking distributions from
the plans.
________________________ ___________________________________________
MANAGEMENT OF THE FUND Investment Manager. T. Rowe Price is
responsible for selection and management of
the Fund's portfolio investments. T. Rowe
Price serves as investment manager to a
variety of individual and institutional
investors, including limited and real
estate partnerships and other mutual funds.
Board of Directors/Trustees. The
management of the Fund's business and
affairs is the responsibility of the Fund's
Board of Directors/Trustees.
Portfolio Transactions. Decisions with
respect to the purchase and sale of the
Fund's portfolio securities are made by T.
Rowe Price. The Fund's Board of
Directors/Trustees has authorized T. Rowe
Price to utilize certain brokers indirectly
related to T. Rowe Price in the capacity of
broker in connection with the execution of
the Fund's portfolio transactions.
Investment Services. T. Rowe Price
Investment Services, Inc., a wholly-owned
subsidiary of T. Rowe Price, is the
distributor for this Fund as well as all
other T. Rowe Price Funds.
Transfer and Dividend Disbursing Agent,
Shareholder Servicing and Administrative.
TRP Services, a wholly-owned subsidiary of
T. Rowe Price, serves the Fund as transfer
and dividend disbursing agent. T. Rowe
Price Retirement Plan Services, Inc., a
wholly-owned subsidiary of T. Rowe Price,
performs subaccounting and recordkeeping
services for shareholder accounts in
certain retirement plans investing in the
Price Funds. T. Rowe Price calculates the
daily share price and maintains the
portfolio and general accounting records of
the Fund. The address for TRP Services and
|
T. Rowe Price Retirement Plan Services,
Inc. is 100 East Pratt Street, Baltimore,
Maryland 21202.
________________________ ___________________________________________
EXPENSES AND The Fund bears all expenses of its
MANAGEMENT FEE operations other than those incurred by T.
Rowe Price under its Investment Management
Agreement with T. Rowe Price. Fund
expenses include: the management fee;
shareholder servicing fees and expenses;
custodian and accounting fees and expenses;
legal and auditing fees; expenses of
preparing and printing prospectuses and
shareholder reports; registration fees and
expenses; proxy and annual meeting
expenses, if any; and directors'/trustees'
fees and expenses.
Management Fee. The Fund pays T. Rowe
Price an investment management fee
consisting of an Individual Fund Fee and a
Group Fee. See Summary of Fund Fees and
Expenses for the Individual Fund Fee. The
Group Fee varies and is based on the
combined net assets of all mutual funds
sponsored and managed by T. Rowe Price and
Rowe Price-Fleming International, Inc.,
excluding T. Rowe Price Spectrum Fund,
Inc., and any institutional or private
label mutual funds, and distributed by T.
Rowe Price Investment Services, Inc.
The Fund pays, as its portion of the
Group Fee, an amount equal to the ratio of
its daily net assets to the daily net
assets of all the Price Funds. The table
below shows the annual Group Fee rate at
various asset levels of the combined Price
Funds:
0.480% First $1 billion
0.450% Next $1 billion
0.420% Next $1 billion
0.390% Next $1 billion
0.370% Next $1 billion
0.360% Next $2 billion
0.350% Next $2 billion
0.340% Next $5 billion
|
0.330% Next $10 billion
0.320% Next $10 billion
0.310% Thereafter
Based on combined Price Funds' assets of
approximately $34.7 billion at December 31,
1993, the Group Fee was 0.35%.
________________________ ___________________________________________
SHAREHOLDER SERVICES The following is a brief summary of
services available to shareholders in the
T. Rowe Price Funds, some of which may be
restricted or unavailable to retirement
plan accounts. You must authorize most of
these services on a New Account or
Shareholder Services Form. Services may be
modified or withdrawn at any time without
notice. Please verify all transactions on
your confirmation statements promptly after
receiving them. Any discrepancies must be
reported to Shareholder Services
immediately.
Automatic Asset Builder. You can have us
move $50 or more on the same day each month
from your bank account or invest $50 or
more from your paycheck into any T. Rowe
Price Fund.
Investor Services Discount Brokerage Service. You can trade
1-800-638-5660 stocks, bonds, options, CDs, Treasury
1-410-547-2308 Bills, and precious metals at substantial
savings through our Discount Brokerage
Service. Call Investor Services for more
information.
Exchange Service. You can move money from
one account to an existing identically
registered account or open a new
identically registered account. Remember
that, for tax purposes, an exchange is
treated as a redemption and a new purchase.
Exchanges into a state tax-free fund are
limited to investors residing in states
where those funds are qualified for sale.
Some of the T. Rowe Price Funds may impose
a redemption fee of .50-2%, payable to such
Funds, on shares held for less than twelve
months, or in some Funds, six months.
|
Retirement Plans. For details on IRAs,
please call Investor Services at 1-800-638-
5660. For details on all other retirement
plans, please call our Trust Company at 1-
800-492-7670.
Shareholder Telephone Services. The following services
Services are explained fully in the Services Guide,
1-800-225-5132 which is mailed to new T. Rowe Price
1-410-625-6500 investors. If you don't have a copy,
please call Shareholder Services. (All
telephone calls to Shareholder Services and
Investor Services are recorded in order to
protect you, the Fund, and its agents.)
24-Hour Service. Tele*AccessR provides
information on yields, prices, latest
dividends, account balances, and last
transaction as well as the ability to
request prospectuses, account forms,
duplicate statements, and initiate
purchase, redemption and exchange orders
(if you have established Telephone
Services). Just call 1-800-638-2587 and
press the appropriate codes into your
touch-tone phone. PC*AccessR provides
the same information as Tele*Access, but
on a personal computer.
Electronic Transfers. We offer three
free methods for purchasing or redeeming
Fund shares in amounts of $100 to
$100,000 through ACH transfers between
your bank and Fund accounts:
-- By calling Shareholder Services
during business hours (Tele-
ConnectR);
-- By touch-tone phone any day,
any time (Tele*Access);
-- By personal computer any day,
any time (PC*Access).
If your bank checking and Fund account
are not identically registered, you will
need a signature guarantee to establish
this service.
|
Wire Transfers. Wire transfers can be
processed through bank wires (a $5 charge
applies to redemption amounts under
$5,000, and your bank may charge you for
receiving wires). While this is usually
the quickest transfer method, the Fund
reserves the right to temporarily suspend
wires under unusual circumstances.
________________________ ___________________________________________
CONDITIONS OF YOUR Account Balance. If your account drops
PURCHASE below $1,000 for three months or more, the
Fund has the right to close your account,
after giving 60 days' notice, unless you
make additional investments to bring your
account value to $1,000 or more.
Broker-Dealers. Purchases or redemptions
through broker-dealers, banks, and other
institutions may be subject to service fees
imposed by those entities. No such fees
are charged by T. Rowe Price Investment
Services or the Fund if shares are
purchased or redeemed directly from the
Fund.
Excessive Trading and Exchange Limitations.
To protect Fund shareholders against
disruptions in portfolio management which
might occur as a result of too frequent buy
and sell activity and to minimize Fund
expenses associated with such transaction
activity, the Fund prohibits excessive
trading in any account (or group of
accounts managed by the same person).
Within any 120 consecutive-day period,
investors may not exchange between Price
Funds more than twice or buy and sell the
Price Funds more than once, if the
transactions involve substantial assets or
a substantial portion of the assets in the
account or accounts. This policy is
applied on a multi-fund basis. Any
transactions above and beyond these
guidelines will be considered to be
excessive trading, and the investor may be
prohibited from making additional purchases
or exercising the exchange privilege.
|
This policy does not apply to exchanges solely between, or purchases and sales solely of, the Price Money Funds, nor does it apply to simple redemptions from any Fund.
Nonpayment. If your check, wire or ACH transfer does not clear, or if payment is not received for any telephone purchase, the transaction will be cancelled and you will be responsible for any loss the Fund or Investment Services incurs. If you are already a shareholder, the Fund can redeem shares from any identically registered account in this Fund or any other T. Rowe Price Fund as reimbursement for any loss incurred. You may be prohibited or restricted from making future purchases in any of the T. Rowe Price Funds.
U.S. Dollars. All purchases must be paid for in U.S. dollars, and checks must be drawn on U.S. banks.
Redemptions in Excess of $250,000.
Redemption proceeds are normally paid in
cash. However, if you redeem more than
$250,000, or 1% of the Fund's net assets,
in any 90-day period, the Fund may in its
discretion: (1) pay the difference between
the redemption amount and the lesser of
these two figures with securities of the
Fund or (2) delay the transmission of your
proceeds for up to five business days after
your request is received.
Signature Guarantees. A signature
guarantee is designed to protect you and
the Fund by verifying your signature. You
will need one to:
than the address of record, (ii)
made payable to other than the
registered owner(s), or (iii) being
sent to a bank account other than
the bank account listed on your fund
account.
(4) Transfer shares to another owner.
(5) Send us written instructions asking
us to wire redemption proceeds
(unless previously authorized).
(6) Establish Electronic Transfers when
your bank checking and fund account
are not identically registered.
These requirements may be waived or modified in certain instances.
Acceptable guarantors are all eligible
guarantor institutions as defined by the
Securities Exchange Act of 1934 such as:
commercial banks which are FDIC members,
trust companies, firms which are members of
a domestic stock exchange, and foreign
branches of any of the above. We cannot
accept guarantees from institutions or
individuals who do not provide
reimbursement in the case of fraud, such as
notaries public.
Telephone Exchange and Redemption. Telephone exchange and redemption are established automatically when you sign the New Account Form unless you check the box which states that you do not want these services. The Fund uses reasonable procedures (including shareholder identity verification) to confirm that instructions given by telephone are genuine. If these procedures are not followed, it is the opinion of certain regulatory agencies that the Fund may be liable for any losses that may result from acting on the instructions given. All conversations are recorded, and a confirmation is sent within five business days after the telephone transaction.
Ten-Day Hold. The mailing of proceeds for redemption requests involving any shares
purchased by personal, corporate or
government check, or ACH transfer is
generally subject to a 10-day delay to
allow the check or transfer to clear. The
10-day clearing period does not affect the
trade date on which your purchase or
redemption order is priced, or any
dividends and capital gain distributions to
which you may be entitled through the date
of redemption. If your redemption request
was sent by mail or mailgram, proceeds will
be mailed no later than the seventh
calendar day following receipt unless the
check or ACH transfer has not cleared. The
10-day hold does not apply to purchases
made by wire, Automatic Asset Builder-
Paycheck, or cashier's, treasurer's, or
certified checks.
The Fund and its agents reserve the right
to: (1) reject any purchase or exchange,
cancel any purchase due to nonpayment, or
reject any exchange or redemption where the
Fund has not received payment; (2) waive or
lower the investment minimums; (3) accept
initial purchases by telephone or mailgram;
(4) waive the limit on subsequent purchases
by telephone; (5) reject any purchase or
exchange prior to receipt of the
confirmation statement; (6) redeem your
account (see Tax Identification Number);
(7) modify the conditions of purchase at
any time; and (8) reject any check not made
directly payable to the Fund or T. Rowe
Price (call Shareholder Services for more
information).
________________________ ___________________________________________
COMPLETING THE NEW Tax Identification Number. We must have
ACCOUNT FORM your correct social security or corporate
tax identification number and a signed New
Account Form or W-9 Form. Otherwise,
federal law requires the Fund to withhold a
percentage (currently 31%) of your
dividends, capital gain distributions, and
redemptions, and may subject you to an IRS
penalty. You also will be prohibited from
opening another account by exchange. If
this information is not received within 60
|
You must provide your tax days after your account is established,
ID number and sign the your account may be redeemed, priced at the
New Account Form. NAV on the date of redemption.
Unless you otherwise request, one
shareholder report will be mailed to
multiple account owners with the same tax
identification number and same zip code and
to those shareholders who have requested
that their accounts be combined with
someone else's for financial reporting.
Account Registration. If you own other T.
Rowe Price Funds, make certain the
registration (name and account type) is
identical to your other funds for easy
exchange. Remember to sign the form
exactly as the name appears in the
registration section.
Services. By signing up for services on
the New Account Form, rather than after the
account is opened, you will avoid having to
complete a separate form and obtain a
signature guarantee (see Conditions of Your
Purchase).
________________________ ___________________________________________
OPENING A NEW ACCOUNT Minimum initial investment: $2,500 ($1,000
for retirement
plans and
UGMA/UTMA and
IRA accounts;
$50 per month
for Automatic
Asset Builder
accounts--see
Shareholder
Services)
By Mail Send your New Account Form and
check to:
Checks payable to T. Rowe Regular Mail Mailgram,
Price Funds. Express,
Registered, or
Certified Mail
T. Rowe Price T. Rowe Price
|
Account Services Account Services
P.O. Box 17300 10090 Red Run
Baltimore, MD Boulevard
21298-9353 Owings Mills, MD
21117
___________________________________________
Investor Services By Wire Call Investor Services for an
1-800-638-5660 account number and use Wire Address
1-410-547-2308 below. Then, complete the New
Account Form and mail it to one of
the addresses above. (Not
applicable to retirement plans.)
Wire Address Morgan Guaranty
(to give to your Trust Company of
bank): New York
ABA #021000238
T. Rowe Price
(fund name)/
AC-00153938
Account name(s)
and account
number
Shareholder Services ___________________________________________
1-800-225-5132 By Exchange Call Shareholder Services. The
1-410-625-6500 new account will have the same
registration as the account
from which you are exchanging.
Services for the new account
may be carried over by
telephone request if
preauthorized on the existing
account. See Excessive Trading
and Exchange Limitations under
Conditions of Your Purchase.
___________________________________________
In Person Drop off your New Account Form
and obtain a receipt at a
T. Rowe Price Investor Center:
101 East T. Rowe Price
Lombard StreetFinancial Center
First Floor First Floor
Baltimore, MD 10090 Red Run
Boulevard
Owings Mills, MD
Farragut ARCO Tower
|
Square 31st Floor
First Floor 515 South
900 17th Flower Street
Street, NW Los Angeles,
Washington, CA
DC
________________________ ___________________________________________
PURCHASING ADDITIONAL Minimum: $100 ($50 for retirement plans)
SHARES
By Wire Call Shareholder Services or
use the Wire Address (see
Opening a New Account).
___________________________________________
By Mail Indicate your account number
and the Fund name on your
check. Mail it to us at the
Shareholder Services address below with the stub
1-800-225-5132 from a statement confirming a
1-410-625-6500 prior transaction or a note
stating that you want to
purchase shares in that Fund
and giving us the account
number.
T. Rowe Price Funds
Account Services
P.O. Box 89000
Baltimore, MD 21289-1500
___________________________________________
By ACH Use Tele*Access, PC*Access or
Transfer call Shareholder Services (if
you have established Telephone
Services) for ACH transfers.
___________________________________________
By Fill out the Automatic Asset
Automatic Builder section on the New
Asset Account or Shareholder Services
Builder Form.
___________________________________________
Minimum: $5,000
By Phone Call Shareholder Services.
________________________ ___________________________________________
EXCHANGING AND REDEEMING By Phone Call Shareholder Services. If
SHARES you find our phones busy during
unusually volatile markets,
please consider placing your
order by express mail,
|
mailgram, Tele*Access or
PC*Access if you have
authorized Telephone Services.
For exchange policy, see
Excessive Trading and Exchange
Limitations under Conditions of
Your Purchase.
Redemption proceeds can be
mailed, sent by electronic
transfer, or wired to your
bank. The Fund charges a $5.00
fee for wire redemptions under
$5,000, subject to change
without notice. Your bank may
also charge you for receiving
wires.
___________________________________________
Shareholder Services By Mail Indicate account name(s) and
1-800-225-5132 numbers, fund name(s), and
1-410-625-6500 exchange or redemption amount.
For exchanges, indicate the
accounts you are exchanging
from and to along with the
amount. We require the
signature of all owners exactly
as registered, and possibly a
signature guarantee (see
Signature Guarantees under
Conditions of Your Purchase).
Note: Distributions from
retirement accounts, including
T. Rowe Price Trust IRAs, must be in writing.
Company Please call Shareholder
1-800-492-7670 Services to obtain an IRA
1-410-625-6585 Distribution Request Form. For
employer-sponsored retirement
accounts, call T. Rowe Price
Trust Company or your plan
administrator for instructions.
Shareholders holding previously
issued certificates must
conduct transactions by mail.
If you lose a stock
certificate, you may incur an
expense to replace it. Call
Shareholder Services for
|
further information.
Mailing addresses:
Regular Mail Mailgram,
Express,
Registered, or
Certified Mail
Non-Retirement
and IRA
Accounts All Accounts
______________ _____________
T. Rowe Price T. Rowe Price
Account ServicesAccount
P.O. Box 89000 Services
Baltimore, MD 10090 Red Run
21289-0220 Boulevard
Owings Mills,
MD 21117
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jal\servsect.equ
Prospectus
To Open an Account:
Investor Services T. Rowe Price
1-800-638-5660 New Era FundR
547-2308 in Baltimore
May 1, 1994
Yields & Prices:
Tele*AccessR
24 hours, 7 days a week
1-800-638-2587
625-7676 in Baltimore
Existing Account:
Shareholder Services
1-800-225-5132
625-6500 in Baltimore
Investor Services:
101 East Lombard Street
First Floor
Baltimore, Maryland
Farragut Square
First Floor
900 17th Street, NW
Washington, DC
T. Rowe Price Financial
Center
First Floor
10090 Red Run Boulevard
Owings Mills, Maryland
ARCO Tower
31st Floor
515 South Flower Street
Los Angeles, California
T. ROWE PRICE
Invest With ConfidenceR
|
STATEMENT OF ADDITIONAL INFORMATION
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
(collectively the "Funds" and individually the "Fund")
This Statement of Additional Information is not a prospectus but should be read in conjunction with the appropriate Fund's prospectus dated May 1, 1994, which may be obtained from T. Rowe Price Investment Services, Inc., 100 East Pratt Street, Baltimore, Maryland 21202.
If you would like a prospectus for a Fund of which you are not a shareholder, please call 1-800-638-5660. A prospectus with more complete information, including management fees and expenses will be sent to you. Please read it carefully.
The date of this Statement of Additional Information is May 1, 1994.
Page Page
Asset-Backed Securities. . . Lending of Portfolio
Capital Stock. . . . . . . . Securities. . . . . . . . .
Custodian. . . . . . . . . . Management of Fund . . . . .
Distributor for Fund . . . . Mortgage-Related
Dividends and Distributions. Securities. . . . . . . . .
Federal and State Net Asset Value Per Share. .
Registration of Shares. . . Options. . . . . . . . . . .
Foreign Currency Organization of the Fund . .
Transactions. . . . . . . . Portfolio Transactions . . .
Foreign Futures and Options. Pricing of Securities. . . .
Foreign Securities . . . . . Principal Holders of
Futures Contracts. . . . . . Securities. . . . . . . . .
Hybrid Instruments . . . . . Ratings of Corporate
Independent Accountants. . . Debt Securities . . . . . .
Illiquid or Restricted Repurchase Agreements. . . .
Securities. . . . . . . . . Risk Factors . . . . . . . .
Investment Management Tax Status . . . . . . . . .
Services. . . . . . . . . . Taxation of Foreign
Investment Objectives Shareholders. . . . . . . .
and Polices . . . . . . . . Warrants . . . . . . . . . .
Investment Performance . . . When-Issued Securities and Forward
Investment Program . . . . . Commitment Contracts. . . .
Investment Restrictions. . . Yield Information. . . . . .
Legal Counsel. . . . . . . .
|
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of each Fund's investment objectives and policies discussed in each Fund's prospectus. The Funds will not make a material change in their investment objectives without obtaining shareholder approval. Unless otherwise specified, the investment programs and restrictions of the Funds are not fundamental policies. Each Fund's operating policies are subject to change by each Board of Directors/Trustees without shareholder approval. However, shareholders will be notified of a material change in an operating policy. Each Fund's fundamental policies may not be changed without the approval of at least a majority of the outstanding shares of the Fund or, if it is less, 67% of the shares represented at a meeting of shareholders at which the holders of 50% or more of the shares are represented.
Throughout this Statement of Additional Information, "the Fund" is intended to refer to each Fund listed on the cover page, unless otherwise indicated.
RISK FACTORS
General
Because of its investment policy, the Fund may or may not be suitable or appropriate for all investors. The Fund is not a money market fund and is not an appropriate investment for those whose primary objective is principal stability. The Fund will normally have substantially all (for the Balanced Fund 50-70%) of its assets in equity securities (e.g., common stocks). This portion of the Fund's assets will be subject to all of the risks of investing in the stock market. There is risk in all investment. The value of the portfolio securities of the Fund will fluctuate based upon market conditions. Although the Fund seeks to reduce risk by investing in a diversified portfolio, such diversification does not eliminate all risk. There can, of course, be no assurance that the Fund will achieve its investment objective. Reference is also made to the sections entitled "Types of Securities" and "Portfolio Management Practices" for discussions of the risks associated with the investments and practices described therein as they apply to the Fund.
After purchase by the Fund, a security may cease to be rated or its rating may be reduced below the minimum required for purchase by the Fund. Neither event will require a sale of such security by the Fund. However, T. Rowe Price will consider such event in its determination of whether the Fund should continue to hold the security. To the extent that the ratings given by Moody's or S&P may change as a result of changes in such organizations or their rating systems, the Fund will attempt to use comparable ratings as standards for investments in accordance with the investment policies contained in the prospectus.
Balanced, Blue Chip Growth, Capital Appreciation, Dividend Growth, Equity Income, Growth & Income, New Era, OTC, and Small- Cap Value Funds
Debt Obligations
Although the Fund's assets are invested primarily in common stocks, the Fund may invest in convertible securities, corporate debt securities and preferred stocks which hold the prospect of contributing to the achievement of the Fund's objectives. Yields on short, intermediate, and long-term securities are dependent on a variety of factors, including the general conditions of the money and bond markets, the size of a particular offering, the maturity of the obligation, and the credit quality and rating of the issue. Debt securities with longer maturities tend to have higher yields and are generally subject to potentially greater capital appreciation and depreciation than obligations with shorter maturities and lower yields. The market prices of debt
securities usually vary, depending upon available yields. An increase in interest rates will generally reduce the value of portfolio investments, and a decline in interest rates will generally increase the value of portfolio investments. The ability of the Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of the debt securities in which the Fund invests to meet their obligations for the payment of interest and principal when due. The Fund's investment program permits it to purchase below investment grade securities. Since investors generally perceive that there are greater risks associated with investment in lower quality securities, the yields from such securities normally exceed those obtainable from higher quality securities. However, the principal value of lower-rated securities generally will fluctuate more widely than higher quality securities. Lower quality investments entail a higher risk of default--that is, the nonpayment of interest and principal by the issuer than higher quality investments. Although the Fund seeks to reduce risk by portfolio diversification, credit analysis (considered by T. Rowe Price to be among the most stringent in the investment management industry), and attention to trends in the economy, industries and financial markets, such efforts will not eliminate all risk. There can, of course, be no assurance that the Fund will achieve its investment objective.
Special Risks of High Yield Investing
The Fund may invest in low quality bonds commonly referred to as "junk bonds." Junk bonds are regarded as predominantly speculative with respect to the issuer's continuing ability to meet principal and interest payments. Because investment in low and lower-medium quality bonds involves greater investment risk, to the extent the Fund invests in such bonds, achievement of its investment objective will be more dependent on T. Rowe Price's credit analysis than would be the case if the Fund was investing in higher quality bonds. High yield bonds may be more susceptible to real or perceived adverse economic conditions than investment grade bonds. A projection of an economic downturn, or higher interest rates, for example, could cause a decline in high yield bond prices because the advent of such events could lessen the ability of highly leverage issuers to make principal and interest payments on their debt securities. In addition, the secondary trading market for high yield bonds may be less liquid than the market for higher grade bonds, which can adversely affect the ability of a Fund to dispose of its portfolio securities. Bonds for which there is only a "thin" market can be more difficult to value inasmuch as objective pricing data may be less available and judgment may play a greater role in the valuation process.
All Funds, Except Equity Index Fund
Foreign Securities
The Fund may invest in U.S. dollar-denominated and non U.S. dollar-denominated securities of foreign issuers.
Because the Fund may invest in foreign securities, investment in the Fund involves risks that are different in some respects from an investment in a fund which invests only in securities of U.S. domestic issuers. Foreign investments may be affected favorably or unfavorably by changes in currency rates and exchange control regulations. There may be less publicly available information about a foreign company than about a U.S. company, and foreign companies may not be subject to accounting, auditing, and financial reporting standards and requirements comparable to those applicable to U.S. companies. There may be less governmental supervision of securities markets, brokers and issuers of securities. Securities of some foreign companies are less liquid or more volatile than securities of U.S. companies, and foreign brokerage commissions and custodian fees are generally higher than in the United States. Settlement practices may include delays and may differ from those customary in United States markets. Investments in foreign securities may also be subject to other risks different from those affecting U.S. investments, including local political or economic developments, expropriation or nationalization of assets, restrictions on foreign investment and repatriation of capital, imposition of withholding taxes on dividend or interest payments, currency blockage (which would prevent cash from being brought back to the United States), and difficulty in enforcing legal rights outside the U.S.
INVESTMENT PROGRAM
Types of Securities
In addition to the investments described in the Fund's prospectus, the Fund may invest in the following:
Illiquid or Restricted Securities
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the Securities Act of 1933 (the "1933 Act"). Where registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop,
the Fund might obtain a less favorable price than prevailed when it decided to sell. Restricted securities will be priced at fair value as determined in accordance with procedures prescribed by the Fund's Board of Directors/Trustees. If through the appreciation of illiquid securities or the depreciation of liquid securities, the Fund should be in a position where more than 15% of the value of its net assets are invested in illiquid assets, including restricted securities, the Fund will take appropriate steps to protect liquidity.
Notwithstanding the above, the Fund may purchase securities which, while privately placed, are eligible for purchase and sale under Rule 144A under the 1933 Act. This rule permits certain qualified institutional buyers, such as the Fund, to trade in privately placed securities even though such securities are not registered under the 1933 Act. T. Rowe Price under the supervision of the Fund's Board of Directors/Trustees, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the Fund's restriction of investing no more than 15% of its assets in illiquid securities. A determination of whether a Rule 144A security is liquid or not is a question of fact. In making this determination, T. Rowe Price will consider the trading markets for the specific security taking into account the unregistered nature of a Rule 144A security. In addition, T. Rowe Price could consider the (1) frequency of trades and quotes, (2) number of dealers and potential purchases, (3) dealer undertakings to make a market, and (4) the nature of the security and of marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). The liquidity of Rule 144A securities would be monitored, and if as a result of changed conditions it is determined that a Rule 144A security is no longer liquid, the Fund's holdings of illiquid securities would be reviewed to determine what, if any, steps are required to assure that the Fund does not invest more than 15% of its assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of the Fund's assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.
There are, of course, other types of securities that are, or may become available, which are similar to the foregoing and the Fund may invest in these securities.
All Funds, Except Equity Index Fund
Hybrid Instruments
Hybrid Instruments have recently been developed and combine the elements of futures contracts or options with those of debt,
preferred equity or a depository instrument (hereinafter "Hybrid Instruments"). Often these Hybrid Instruments are indexed to the price of a commodity, particular currency, or a domestic or foreign debt or equity securities index. Hybrid Instruments may take a variety of forms, including, but not limited to, debt instruments with interest or principal payments or redemption terms determined by reference to the value of a currency or commodity or securities index at a future point in time, preferred stock with dividend rates determined by reference to the value of a currency, or convertible securities with the conversion terms related to a particular commodity.
The risks of investing in Hybrid Instruments reflect a combination of the risks from investing in securities, options, futures and currencies, including volatility and lack of liquidity. Reference is made to the discussion of futures, options, and forward contracts herein for a discussion of these risks. Further, the prices of the Hybrid Instrument and the related commodity or currency may not move in the same direction or at the same time. Hybrid Instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, Hybrid Instruments may bear interest at above market rates but bear an increased risk of principal loss (or gain). In addition, because the purchase and sale of Hybrid Instruments could take place in an over-the-counter market or in a private transaction between the Fund and the seller of the Hybrid Instrument, the creditworthiness of the contra party to the transaction would be a risk factor which the Fund would have to consider. Hybrid Instruments also may not be subject to regulation of the Commodities Futures Trading Commission ("CFTC"), which generally regulates the trading of commodity futures by U.S. persons, the SEC, which regulates the offer and sale of securities by and to U.S. persons, or any other governmental regulatory authority.
Capital Appreciation, Equity Income, New America Growth, New Era, OTC, Science & Technology, and Small-Cap Value Funds
Warrants
The Fund may invest in warrants; however, in order to comply with the securities law of a certain state, not more than 5% of its assets (at the time of purchase) will be invested in warrants other than warrants acquired in units or attached to other securities. Of such 5% not more than 2% of assets at the time of purchase may be invested in warrants that are not listed on the New York or American Stock Exchanges. Should the law of this state change or should the Fund obtain a waiver of its application, the Fund may invest in warrants to a greater extent than 5% of its assets. Warrants are pure speculation in that they have no voting rights, pay no dividends and have no rights
with respect to the assets of the corporation issuing them. Warrants basically are options to purchase equity securities at a specific price valid for a specific period of time. They do not represent ownership of the securities, but only the right to buy them. Warrants differ from call options in that warrants are issued by the issuer of the security which may be purchased on their exercise, whereas call options may be written or issued by anyone. The prices of warrants do not necessarily move parallel to the prices of the underlying securities.
Balanced Fund
Fixed income securities in which the Fund may invest include, but are not limited to, those described below.
U.S. Government Obligations. Bills, notes, bonds and other debt securities issued by the U.S. Treasury. These are direct obligations of the U.S. Government and differ mainly in the length of their maturities.
U.S. Government Agency Securities. Issued or guaranteed by U.S. Government sponsored enterprises and federal agencies. These include securities issued by the Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, Federal Land Banks, Farmers Home Administration, Banks for Cooperatives, Federal Intermediate Credit Banks, Federal Financing Bank, Farm Credit Banks, the Small Business Association, and the Tennessee Valley Authority. Some of these securities are supported by the full faith and credit of the U.S. Treasury; and the remainder are supported only by the credit of the instrumentality, which may or may not include the right of the issuer to borrow from the Treasury.
Bank Obligations. Certificates of deposit, bankers' acceptances, and other short-term debt obligations. Certificates of deposit are short-term obligations of commercial banks. A bankers' acceptance is a time draft drawn on a commercial bank by a borrower, usually in connection with international commercial transactions. Certificates of deposit may have fixed or variable rates. The Fund may invest in U.S. banks, foreign branches of U.S. banks, U.S. branches of foreign banks, and foreign branches of foreign banks.
Short-Term Corporate Debt Securities. Outstanding nonconvertible corporate debt securities (e.g., bonds and debentures) which have one year or less remaining to maturity. Corporate notes may have fixed, variable, or floating rates.
Commercial Paper. Short-term promissory notes issued by corporations primarily to finance short-term credit needs. Certain notes may have floating or variable rates.
Foreign Government Securities. Issued or guaranteed by a foreign government, province, instrumentality, political subdivision or similar unit thereof.
Savings and Loan Obligations. Negotiable certificates of deposit and other short-term debt obligations of savings and loan associations.
Supranational Agencies. The Fund may also invest in the securities of certain supranational entities, such as the International Development Bank.
When-Issued Securities and Forward Commitment Contracts
The Fund may purchase securities on a "when-issued" or delayed delivery basis ("When-Issueds") and may purchase securities on a forward commitment basis ("Forwards"). The Fund may invest without limitation in When-Issueds and Forwards. The price of such securities, which may be expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment take place at a later date. Normally, the settlement date occurs within 90 days of the purchase for When- Issueds, but may be substantially longer for Forwards. During the period between purchase and settlement, no payment is made by the Fund to the issuer and no interest accrues to the Fund. The purchase of these securities will result in a loss if their value declines prior to the settlement date. This could occur, for example, if interest rates increase prior to settlement. The longer the period between purchase and settlement, the greater the risks are. At the time the Fund makes the commitment to purchase these securities, it will record the transaction and reflect the value of the security in determining its net asset value. The Fund will cover these securities by maintaining cash and/or liquid, high-grade debt securities with its custodian bank equal in value to commitments for them during the time between the purchase and the settlement. Therefore, the longer this period, the longer the period during which alternative investment options are not available to the Fund (to the extent of the securities used for cover). Such securities either will mature or, if necessary, be sold on or before the settlement date.
To the extent the Fund remains fully or almost fully invested (in securities with a remaining maturity of more than one year) at the same time it purchases these securities, there will be greater fluctuations in the Fund's net asset value than if the Fund did not purchase them.
Mortgage-Related Securities
Mortgage-Backed Securities. Mortgage-backed securities are securities representing an interest in a pool of mortgages. The mortgages may be of a variety of types, including adjustable rate, conventional 30-year fixed rate, graduated payment, and 15- year. Principal and interest payments made on the mortgages in the underlying mortgage pool are passed through to the Fund. This is in contrast to traditional bonds where principal is normally paid back at maturity in a lump sum. Unscheduled prepayments of principal shorten the securities' weighted average life and may lower their total return. (When a mortgage in the underlying mortgage pool is prepaid, an unscheduled principal prepayment is passed through to the Fund. This principal is returned to the Fund at par. As a result, if a mortgage security were trading at a premium, its total return would be lowered by prepayments, and if a mortgage security were trading at a discount, its total return would be increased by prepayments.) The value of these securities also may change because of changes in the market's perception of the creditworthiness of the federal agency that issued them. In addition, the mortgage securities market in general may be adversely affected by changes in governmental regulation or tax policies.
Stripped Agency Mortgage-Backed Securities. The Fund may invest up to 10% of its total assets in stripped mortgage securities.
Stripped Agency Mortgage-Backed securities representing interests in a pool of mortgages, the cash flow of which has been separated into its interest and principal components. "IOs" (interest only securities) receive the interest portion of the cash flow while "POs" (principal only securities) receive the principal portion. Stripped Agency Mortgage-Backed Securities may be issued by U.S. Government Agencies or by private issuers similar to those described below with respect to CMOs and privately-issued mortgage-backed certificates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. The value of the other mortgage-backed securities described herein, like other debt instruments, will tend to move in the opposite direction compared to interest rates. Under the Internal Revenue Code of 1986, as amended (the "Code"), POs may generate taxable income from the current accrual of original issue discount, without a corresponding distribution of cash to the Fund.
The cash flows and yields on IO and PO classes are extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets. For example, a rapid or slow rate of principal payments may have a material adverse effect on the prices of IOs or POs, respectively. If the underlying mortgage assets experience greater than anticipated prepayments of principal, an investor
may fail to recoup fully its initial investment in an IO class of a stripped mortgage-backed security, even if the IO class is rated AAA or Aaa or is derived from a full faith and credit obligation. Conversely, if the underlying mortgage assets experience slower than anticipated prepayments of principal, the price on a PO class will be affected more severely than would be the case with a traditional mortgage-backed security.
The staff of the Securities and Exchange Commission has advised the Fund that it believes the Fund should treat IOs and POs, other than government-issued IOs or POs backed by fixed rate mortgages, as illiquid securities and, accordingly, limit its investments in such securities, together with all other illiquid securities, to 15% of the Fund's net assets. Under the Staff's position, the determination of whether a particular government-issued IO and PO backed by fixed rate mortgages may be made on a case by case basis under guidelines and standards established by the Fund's Board of Directors/Trustees. The Fund's Board of Directors/Trustees has delegated to T. Rowe Price the authority to determine the liquidity of these investments based on the following guidelines: the type of issuer; type of collateral, including age and prepayment characteristics; rate of interest on coupon relative to current market rates and the effect of the rate on the potential for prepayments; complexity of the issue's structure, including the number of tranches; size of the issue and the number of dealers who make a market in the IO or PO. The Fund will treat non-government-issued IOs and POs not backed by fixed or adjustable rate mortgages as illiquid unless and until the Securities and Exchange Commission modifies its position.
Collateralized Mortgage Obligations (CMOs)
CMOs are bonds that are collateralized by whole loan mortgages or mortgage pass-through securities. The bonds issued in a CMO deal are divided into groups, and each group of bonds is referred to as a "tranche." Under the traditional CMO structure, the cash flows generated by the mortgages or mortgage pass- through securities in the collateral pool are used to first pay interest and then pay principal to the CMO bondholders. The bonds issued under a CMO structure are retired sequentially as opposed to the pro rata return of principal found in traditional pass-through obligations. Subject to the various provisions of individual CMO issues, the cash flow generated by the underlying collateral (to the extent it exceeds the amount required to pay the stated interest) is used to retire the bonds. Under the CMO structure, the repayment of principal among the different tranches is prioritized in accordance with the terms of the particular CMO issuance. The "fastest-pay" tranche of bonds, as specified in the prospectus for the issuance, would initially receive all principal payments. When that tranche of bonds is
retired, the next tranche, or tranches, in the sequence, as specified in the prospectus, receive all of the principal payments until they are retired. The sequential retirement of bond groups continues until the last tranche, or group of bonds, is retired. Accordingly, the CMO structure allows the issuer to use cash flows of long maturity, monthly-pay collateral to formulate securities with short, intermediate and long final maturities and expected average lives.
In recent years, new types of CMO structures have evolved. These include floating rate CMOs, planned amortization classes, accrual bonds and CMO residuals. These newer structures affect the amount and timing of principal and interest received by each tranche from the underlying collateral. Under certain of these new structures, given classes of CMOs have priority over others with respect to the receipt of prepayments on the mortgages. Therefore, depending on the type of CMOs in which the Fund invests, the investment may be subject to a greater or lesser risk of prepayment than other types of mortgage-related securities.
The primary risk of any mortgage security is the uncertainty of the timing of cash flows. For CMOs, the primary risk results from the rate of prepayments on the underlying mortgages serving as collateral. An increase or decrease in prepayment rates (resulting from a decrease or increase in mortgage interest rates) will affect the yield, average life and price of CMOs. The prices of certain CMOs, depending on their structure and the rate of prepayments, can be volatile. Some CMOs may also not be as liquid as other securities.
Asset-Backed Securities
The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator or any other affiliated entities and the amount and quality of any credit support provided to the securities. The rate of principal payment on asset-backed securities generally depends on the rate of principal payments received on the underlying assets which in turn may be affected by a variety of economic and other factors. As a result, the yield on any asset-backed security is difficult to predict with precision and actual yield to maturity may be more or less than the anticipated yield to maturity. Asset- backed securities may be classified as pass-through certificates or collateralized obligations.
Pass-through certificates are asset-backed securities which represent an undivided fractional ownership interest in an underlying pool of assets. Pass-through certificates usually
provide for payments of principal and interest received to be passed through to their holders, usually after deduction for certain costs and expenses incurred in administering the pool. Because pass-through certificates represent an ownership interest in the underlying assets, the holders thereof bear directly the risk of any defaults by the obligors on the underlying assets not covered by any credit support. See "Types of Credit Support".
Asset-backed securities issued in the form of debt instruments, also known as collateralized obligations, are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Such assets are most often trade, credit card or automobile receivables. The assets collateralizing such asset-backed securities are pledged to a trustee or custodian for the benefit of the holders thereof. Such issuers generally hold no assets other than those underlying the asset-backed securities and any credit support provided. As a result, although payments on such asset-backed securities are obligations of the issuers, in the event of defaults on the underlying assets not covered by any credit support (see "Types of Credit Support"), the issuing entities are unlikely to have sufficient assets to satisfy their obligations on the related asset-backed securities.
Methods of Allocating Cash Flows. While many asset-backed securities are issued with only one class of security, many asset-backed securities are issued in more than one class, each with different payment terms. Multiple class asset-backed securities are issued for two main reasons. First, multiple classes may be used as a method of providing credit support. This is accomplished typically through creation of one or more classes whose right to payments on the asset-backed security is made subordinate to the right to such payments of the remaining class or classes. See "Types of Credit Support". Second, multiple classes may permit the issuance of securities with payment terms, interest rates or other characteristics differing both from those of each other and from those of the underlying assets. Examples include so-called "strips" (asset-backed securities entitling the holder to disproportionate interests with respect to the allocation of interest and principal of the assets backing the security), and securities with class or classes having characteristics which mimic the characteristics of non-asset-backed securities, such as floating interest rates (i.e., interest rates which adjust as a specified benchmark changes) or scheduled amortization of principal.
Asset-backed securities in which the payment streams on the underlying assets are allocated in a manner different than those described above may be issued in the future. The Fund may invest in such asset-backed securities if such investment is otherwise
consistent with its investment objectives and policies and with the investment restrictions of the Fund.
Types of Credit Support. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, such securities may contain elements of credit support. Such credit support falls into two classes: liquidity protection and protection against ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that scheduled payments on the underlying pool are made in a timely fashion. Protection against ultimate default ensures ultimate payment of the obligations on at least a portion of the assets in the pool. Such protection may be provided through guarantees, insurance policies or letters of credit obtained from third parties, through various means of structuring the transaction or through a combination of such approaches. Examples of asset-backed securities with credit support arising out of the structure of the transaction include "senior- subordinated securities" (multiple class asset-backed securities with certain classes subordinate to other classes as to the payment of principal thereon, with the result that defaults on the underlying assets are borne first by the holders of the subordinated class) and asset-backed securities that have "reserve funds" (where cash or investments, sometimes funded from a portion of the initial payments on the underlying assets, are held in reserve against future losses) or that have been "over collateralized" (where the scheduled payments on, or the principal amount of, the underlying assets substantially exceeds that required to make payment of the asset-backed securities and pay any servicing or other fees). The degree of credit support provided on each issue is based generally on historical information respecting the level of credit risk associated with such payments. Delinquency or loss in excess of that anticipated could adversely affect the return on an investment in an asset- backed security.
Automobile Receivable Securities. The Fund may invest in Asset Backed Securities which are backed by receivables from motor vehicle installment sales contracts or installment loans secured by motor vehicles ("Automobile Receivable Securities"). Since installment sales contracts for motor vehicles or installment loans related thereto ("Automobile Contracts") typically have shorter durations and lower incidences of prepayment, Automobile Receivable Securities generally will exhibit a shorter average life and are less susceptible to prepayment risk.
Most entities that issue Automobile Receivable Securities create an enforceable interest in their respective Automobile Contracts only by filing a financing statement and by having the servicer of the Automobile Contracts, which is usually the originator of the Automobile Contracts, take custody thereof. In such circumstances, if the servicer of the Automobile Contracts were to sell the same Automobile Contracts to another party, in violation of its obligation not to do so, there is a risk that such party could acquire an interest in the Automobile Contracts superior to that of the holders of Automobile Receivable Securities. Also although most Automobile Contracts grant a security interest in the motor vehicle being financed, in most states the security interest in a motor vehicle must be noted on the certificate of title to create an enforceable security interest against competing claims of other parties. Due to the large number of vehicles involved, however, the certificate of title to each vehicle financed, pursuant to the Automobile Contracts underlying the Automobile Receivable Security, usually is not amended to reflect the assignment of the seller's security interest for the benefit of the holders of the Automobile Receivable Securities. Therefore, there is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on the securities. In addition, various state and federal securities laws give the motor vehicle owner the right to assert against the holder of the owner's Automobile Contract certain defenses such owner would have against the seller of the motor vehicle. The assertion of such defenses could reduce payments on the Automobile Receivable Securities.
Credit Card Receivable Securities. The Fund may invest in Asset Backed Securities backed by receivables from revolving credit card agreements ("Credit Card Receivable Securities"). Credit balances on revolving credit card agreements ("Accounts") are generally paid down more rapidly than are Automobile Contracts. Most of the Credit Card Receivable Securities issued publicly to date have been Pass-Through Certificates. In order to lengthen the maturity of Credit Card Receivable Securities, most such securities provide for a fixed period during which only interest payments on the underlying Accounts are passed through to the security holder and principal payments received on such Accounts are used to fund the transfer to the pool of assets supporting the related Credit Card Receivable Securities of additional credit card charges made on an Account. The initial fixed period usually may be shortened upon the occurrence of specified events which signal a potential deterioration in the quality of the assets backing the security, such as the imposition of a cap on interest rates. The ability of the issuer to extend the life of an issue of Credit Card Receivable Securities thus depends upon the continued generation of additional principal amounts in the underlying accounts during
the initial period and the non-occurrence of specified events. An acceleration in cardholders' payment rates or any other event which shortens the period during which additional credit card charges on an Account may be transferred to the pool of assets supporting the related Credit Card Receivable Security could shorten the weighted average life and yield of the Credit Card Receivable Security.
Credit cardholders are entitled to the protection of a number of state and federal consumer credit laws, many of which give such holder the right to set off certain amounts against balances owed on the credit card, thereby reducing amounts paid on Accounts. In addition, unlike most other Asset Backed Securities, Accounts are unsecured obligations of the cardholder.
Other Assets. T. Rowe Price anticipates that Asset Backed Securities backed by assets other than those described above will be issued in the future. The Fund may invest in such securities in the future if such investment is otherwise consistent with its investment objective and policies.
All Funds
PORTFOLIO MANAGEMENT PRACTICES
Lending of Portfolio Securities
For the purpose of realizing additional income, the Fund may make secured loans of portfolio securities amounting to not more than 33 1/3% of its total assets. This policy is a fundamental policy. Securities loans are made to broker-dealers or institutional investors or other persons, pursuant to agreements requiring that the loans be continuously secured by collateral at least equal at all times to the value of the securities lent marked to market on a daily basis. The collateral received will consist of cash, U.S. government securities, letters of credit or such other collateral as may be permitted under its investment program. While the securities are being lent, the Fund will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as interest on the investment of the collateral or a fee from the borrower. The Fund has a right to call each loan and obtain the securities on five business days' notice or, in connection with securities trading on foreign markets, within such longer period of time which coincides with the normal settlement period for purchases and sales of such securities in such foreign markets. The Fund will not have the right to vote securities while they are being lent, but it will call a loan in anticipation of any important vote. The risks in lending portfolio securities, as with other extensions of secured credit, consist of possible delay in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower fail financially. Loans will only be made to firms deemed by T. Rowe Price to be of good standing and will not be made unless, in the judgment of T. Rowe Price, the consideration to be earned from such loans would justify the risk.
Other Lending/Borrowing
Subject to approval by the Securities and Exchange Commission and certain state regulatory agencies, the Fund may make loans to, or borrow funds from, other mutual funds sponsored or advised by T. Rowe Price or Price-Fleming (collectively, "Price Funds"). The Fund has no current intention of engaging in these practices at this time.
Repurchase Agreements
The Fund may enter into a repurchase agreement through which an investor (such as the Fund) purchases a security (known as the "underlying security") from a well-established securities dealer or a bank that is a member of the Federal Reserve System. Any such dealer or bank will be on T. Rowe Price's approved list and have a credit rating with respect to its short-term debt of at least A1 by Standard & Poor's Corporation, P1 by Moody's Investors Service, Inc., or the equivalent rating by T. Rowe Price. At that time, the bank or securities dealer agrees to repurchase the underlying security at the same price, plus specified interest. Repurchase agreements are generally for a short period of time, often less than a week. Repurchase agreements which do not provide for payment within seven days will be treated as illiquid securities. The Fund will only enter into repurchase agreements where (i) the underlying securities are of the type (excluding maturity limitations) which the Fund's investment guidelines would allow it to purchase directly, (ii) the market value of the underlying security, including interest accrued, will be at all times equal to or exceed the value of the repurchase agreement, and (iii) payment for the underlying security is made only upon physical delivery or evidence of book- entry transfer to the account of the custodian or a bank acting as agent. In the event of a bankruptcy or other default of a seller of a repurchase agreement, the Fund could experience both delays in liquidating the underlying security and losses, including: (a) possible decline in the value of the underlying security during the period while the Fund seeks to enforce its rights thereto; (b) possible subnormal levels of income and lack of access to income during this period; and (c) expenses of enforcing its rights.
All Funds, Except Equity Index Fund
Options
Writing Covered Call Options
The Fund may write (sell) American or European style "covered" call options and purchase options to close out options previously written by a Fund. In writing covered call options, the Fund expects to generate additional premium income which should serve to enhance the Fund's total return and reduce the effect of any price decline of the security or currency involved in the option. Covered call options will generally be written on securities or currencies which, in T. Rowe Price's opinion, are not expected to have any major price increases or moves in the near future but which, over the long term, are deemed to be attractive investments for the Fund.
A call option gives the holder (buyer) the "right to purchase" a security or currency at a specified price (the exercise price) at expiration of the option (European style) or at any time until a certain date (the expiration date) (American style). So long as the obligation of the writer of a call option continues, he may be assigned an exercise notice by the broker- dealer through whom such option was sold, requiring him to deliver the underlying security or currency against payment of the exercise price. This obligation terminates upon the expiration of the call option, or such earlier time at which the writer effects a closing purchase transaction by repurchasing an option identical to that previously sold. To secure his obligation to deliver the underlying security or currency in the case of a call option, a writer is required to deposit in escrow the underlying security or currency or other assets in accordance with the rules of a clearing corporation.
The Fund will write only covered call options. This means that the Fund will own the security or currency subject to the option or an option to purchase the same underlying security or currency, having an exercise price equal to or less than the exercise price of the "covered" option, or will establish and maintain with its custodian for the term of the option, an account consisting of cash, U.S. government securities or other liquid high-grade debt obligations having a value equal to the fluctuating market value of the optioned securities or currencies.
Portfolio securities or currencies on which call options may be written will be purchased solely on the basis of investment considerations consistent with the Fund's investment objective. The writing of covered call options is a conservative investment technique believed to involve relatively little risk (in contrast to the writing of naked or uncovered options, which the Fund will not do), but capable of enhancing the Fund's total return. When writing a covered call option, a Fund, in return for the premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, but conversely retains the risk of loss should the price of the security or currency decline. Unlike one who owns securities or currencies not subject to an option, the Fund has no control over when it may be required to sell the underlying securities or currencies, since it may be assigned an exercise notice at any time prior to the expiration of its obligation as a writer. If a call option which the Fund has written expires, the Fund will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security or currency during the option period. If the call option is exercised, the Fund will realize a gain or loss from the sale of the underlying security or currency. The Fund does not consider a security or currency covered by a call to be "pledged" as that term is used in the Fund's policy which limits the pledging or mortgaging of its assets.
The premium received is the market value of an option. The premium the Fund will receive from writing a call option will reflect, among other things, the current market price of the underlying security or currency, the relationship of the exercise price to such market price, the historical price volatility of the underlying security or currency, and the length of the option period. Once the decision to write a call option has been made, T. Rowe Price, in determining whether a particular call option should be written on a particular security or currency, will consider the reasonableness of the anticipated premium and the likelihood that a liquid secondary market will exist for those options. The premium received by the Fund for writing covered call options will be recorded as a liability of the Fund. This liability will be adjusted daily to the option's current market value, which will be the latest sale price at the time at which the net asset value per share of the Fund is computed (close of the New York Stock Exchange), or, in the absence of such sale, the latest asked price. The option will be terminated upon expiration of the option, the purchase of an identical option in a closing transaction, or delivery of the underlying security or currency upon the exercise of the option.
Closing transactions will be effected in order to realize a profit on an outstanding call option, to prevent an underlying security or currency from being called, or, to permit the sale of the underlying security or currency. Furthermore, effecting a closing transaction will permit the Fund to write another call option on the underlying security or currency with either a different exercise price or expiration date or both. If the Fund desires to sell a particular security or currency from its portfolio on which it has written a call option, or purchased a put option, it will seek to effect a closing transaction prior to, or concurrently with, the sale of the security or currency. There is, of course, no assurance that the Fund will be able to
effect such closing transactions at favorable prices. If the Fund cannot enter into such a transaction, it may be required to hold a security or currency that it might otherwise have sold. When the Fund writes a covered call option, it runs the risk of not being able to participate in the appreciation of the underlying securities or currencies above the exercise price, as well as the risk of being required to hold on to securities or currencies that are depreciating in value. This could result in higher transaction costs. The Fund will pay transaction costs in connection with the writing of options to close out previously written options. Such transaction costs are normally higher than those applicable to purchases and sales of portfolio securities.
Call options written by the Fund will normally have expiration dates of less than nine months from the date written. The exercise price of the options may be below, equal to, or above the current market values of the underlying securities or currencies at the time the options are written. From time to time, the Fund may purchase an underlying security or currency for delivery in accordance with an exercise notice of a call option assigned to it, rather than delivering such security or currency from its portfolio. In such cases, additional costs may be incurred.
The Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from the writing of the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security or currency, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security or currency owned by the Fund.
In order to comply with the requirements of several states, the Fund will not write a covered call option if, as a result, the aggregate market value of all portfolio securities or currencies covering call or put options exceeds 25% of the market value of the Fund's net assets. Should these state laws change or should the Fund obtain a waiver of its application, the Fund reserves the right to increase this percentage. In calculating the 25% limit, the Fund will offset, against the value of assets covering written calls and puts, the value of purchased calls and puts on identical securities or currencies with identical maturity dates.
Writing Covered Put Options
The Fund may write American or European style covered put options and purchase options to close out options previously written by the Fund. A put option gives the purchaser of the
option the right to sell, and the writer (seller) has the obligation to buy, the underlying security or currency at the exercise price during the option period (American style) or at the expiration of the option (European style). So long as the obligation of the writer continues, he may be assigned an exercise notice by the broker-dealer through whom such option was sold, requiring him to make payment of the exercise price against delivery of the underlying security or currency. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options.
The Fund would write put options only on a covered basis, which means that the Fund would maintain in a segregated account cash, U.S. government securities or other liquid high-grade debt obligations in an amount not less than the exercise price or the Fund will own an option to sell the underlying security or currency subject to the option having an exercise price equal to or greater than the exercise price of the "covered" option at all times while the put option is outstanding. (The rules of a clearing corporation currently require that such assets be deposited in escrow to secure payment of the exercise price.) The Fund would generally write covered put options in circumstances where T. Rowe Price wishes to purchase the underlying security or currency for the Fund's portfolio at a price lower than the current market price of the security or currency. In such event the Fund would write a put option at an exercise price which, reduced by the premium received on the option, reflects the lower price it is willing to pay. Since the Fund would also receive interest on debt securities or currencies maintained to cover the exercise price of the option, this technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying security or currency would decline below the exercise price less the premiums received. Such a decline could be substantial and result in a significant loss to the Fund. In addition, the Fund, because it does not own the specific securities or currencies which it may be required to purchase in exercise of the put, cannot benefit from appreciation, if any, with respect to such specific securities or currencies. In order to comply with the requirements of several states, the Fund will not write a covered put option if, as a result, the aggregate market value of all portfolio securities or currencies covering put or call options exceeds 25% of the market value of the Fund's net assets. Should these state laws change or should the Fund obtain a waiver of its application, the Fund reserves the right to increase this percentage. In calculating the 25% limit, the Fund will offset, against the value of assets covering written puts and calls, the value of purchased puts and calls on identical securities or currencies with identical maturity dates.
The Fund may purchase American or European style put options. As the holder of a put option, the Fund has the right to sell the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European style). The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may purchase put options for defensive purposes in order to protect against an anticipated decline in the value of its securities or currencies. An example of such use of put options is provided below.
The Fund may purchase a put option on an underlying security or currency (a "protective put") owned by the Fund as a defensive technique in order to protect against an anticipated decline in the value of the security or currency. Such hedge protection is provided only during the life of the put option when the Fund, as the holder of the put option, is able to sell the underlying security or currency at the put exercise price regardless of any decline in the underlying security's market price or currency's exchange value. For example, a put option may be purchased in order to protect unrealized appreciation of a security or currency where T. Rowe Price deems it desirable to continue to hold the security or currency because of tax considerations. The premium paid for the put option and any transaction costs would reduce any capital gain otherwise available for distribution when the security or currency is eventually sold.
The Fund may also purchase put options at a time when the Fund does not own the underlying security or currency. By purchasing put options on a security or currency it does not own, the Fund seeks to benefit from a decline in the market price of the underlying security or currency. If the put option is not sold when it has remaining value, and if the market price of the underlying security or currency remains equal to or greater than the exercise price during the life of the put option, the Fund will lose its entire investment in the put option. In order for the purchase of a put option to be profitable, the market price of the underlying security or currency must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction.
To the extent required by the laws of certain states, the Fund may not be permitted to commit more than 5% of its assets to premiums when purchasing put and call options. Should these state laws change or should the Fund obtain a waiver of its application, the Fund may commit more than 5% of its assets to premiums when purchasing call and put options. The premium paid by the Fund when purchasing a put option will be recorded as an
asset of the Fund. This asset will be adjusted daily to the option's current market value, which will be the latest sale price at the time at which the net asset value per share of the Fund is computed (close of New York Stock Exchange), or, in the absence of such sale, the latest bid price. This asset will be terminated upon expiration of the option, the selling (writing) of an identical option in a closing transaction, or the delivery of the underlying security or currency upon the exercise of the option.
Purchasing Call Options
The Fund may purchase American or European style call options. As the holder of a call option, the Fund has the right to purchase the underlying security or currency at the exercise price at any time during the option period (American style) or at the expiration of the option (European style). The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may purchase call options for the purpose of increasing its current return or avoiding tax consequences which could reduce its current return. The Fund may also purchase call options in order to acquire the underlying securities or currencies. Examples of such uses of call options are provided below.
Call options may be purchased by the Fund for the purpose of acquiring the underlying securities or currencies for its portfolio. Utilized in this fashion, the purchase of call options enables the Fund to acquire the securities or currencies at the exercise price of the call option plus the premium paid. At times the net cost of acquiring securities or currencies in this manner may be less than the cost of acquiring the securities or currencies directly. This technique may also be useful to the Fund in purchasing a large block of securities or currencies that would be more difficult to acquire by direct market purchases. So long as it holds such a call option rather than the underlying security or currency itself, the Fund is partially protected from any unexpected decline in the market price of the underlying security or currency and in such event could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option.
To the extent required by the laws of certain states, the Fund may not be permitted to commit more than 5% of its assets to premiums when purchasing call and put options. Should these state laws change or should the Fund obtain a waiver of its application, the Fund may commit more than 5% of its assets to premiums when purchasing call and put options. The Fund may also purchase call options on underlying securities or currencies it owns in order to protect unrealized gains on call options previously written by it. A call option would be purchased for
this purpose where tax considerations make it inadvisable to realize such gains through a closing purchase transaction. Call options may also be purchased at times to avoid realizing losses.
Dealer (Over-the-Counter) Options
The Fund may engage in transactions involving dealer options. Certain risks are specific to dealer options. While the Fund would look to a clearing corporation to exercise exchange-traded options, if the Fund were to purchase a dealer option, it would rely on the dealer from whom it purchased the option to perform if the option were exercised. Failure by the dealer to do so would result in the loss of the premium paid by the Fund as well as loss of the expected benefit of the transaction.
Exchange-traded options generally have a continuous liquid market while dealer options have none. Consequently, the Fund will generally be able to realize the value of a dealer option it has purchased only by exercising it or reselling it to the dealer who issued it. Similarly, when the Fund writes a dealer option, it generally will be able to close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer to which the Fund originally wrote the option. While the Fund will seek to enter into dealer options only with dealers who will agree to and which are expected to be capable of entering into closing transactions with the Fund, there can be no assurance that the Fund will be able to liquidate a dealer option at a favorable price at any time prior to expiration. Until the Fund, as a covered dealer call option writer, is able to effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) or currencies used as cover until the option expires or is exercised. In the event of insolvency of the contra party, the Fund may be unable to liquidate a dealer option. With respect to options written by the Fund, the inability to enter into a closing transaction may result in material losses to the Fund. For example, since the Fund must maintain a secured position with respect to any call option on a security it writes, the Fund may not sell the assets which it has segregated to secure the position while it is obligated under the option. This requirement may impair a Fund's ability to sell portfolio securities or currencies at a time when such sale might be advantageous.
The Staff of the SEC has taken the position that purchased dealer options and the assets used to secure the written dealer options are illiquid securities. The Fund may treat the cover used for written OTC options as liquid if the dealer agrees that the Fund may repurchase the OTC option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the OTC option would be considered illiquid only to
the extent the maximum repurchase price under the formula exceeds the intrinsic value of the option. Accordingly, the Fund will treat dealer options as subject to the Fund's limitation on unmarketable securities. If the SEC changes its position on the liquidity of dealer options, the Fund will change its treatment of such instrument accordingly.
Equity Index Fund
The only option activity the Fund currently may engage in is the purchase of S&P 500 call options. Such activity is subject to the same risks described above under "Purchasing Call Options". The Fund reserves the right to engage in other options activity, however.
All Equity Funds
Futures Contracts
Transactions in Futures
The Fund may enter into futures contracts, including stock index, interest rate and currency futures ("futures or futures contracts"). The New Era Fund may also enter into futures on commodities related to the types of companies in which it invests, such as oil and gold futures. The Equity Index Fund may only enter into stock index futures, such as the S&P 500 stock index, to provide an efficient means of maintaining liquidity while being invested in the market, to facilitate trading or to reduce transaction costs. It will not use futures for hedging purposes.
Stock index futures contracts may be used to provide a hedge for a portion of the Fund's portfolio, as a cash management tool, or as an efficient way for T. Rowe Price to implement either an increase or decrease in portfolio market exposure in response to changing market conditions. The Fund may, purchase or sell futures contracts with respect to any stock index. Nevertheless, to hedge the Fund's portfolio successfully, the Fund must sell futures contacts with respect to indices or subindices whose movements will have a significant correlation with movements in the prices of the Fund's portfolio securities.
Interest rate or currency futures contracts may be used as a hedge against changes in prevailing levels of interest rates or currency exchange rates in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by the Fund. In this regard, the Fund could sell interest rate or currency futures as an offset against the effect of expected increases in interest rates or currency exchange rates and purchase such futures as an offset against the effect
of expected declines in interest rates or currency exchange rates.
The Fund will enter into futures contracts which are traded on national or foreign futures exchanges, and are standardized as to maturity date and underlying financial instrument. Futures exchanges and trading in the United States are regulated under the Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"). Futures are traded in London at the London International Financial Futures Exchange in Paris at the MATIF and in Tokyo at the Tokyo Stock Exchange. Although techniques other than the sale and purchase of futures contracts could be used for the above-referenced purposes, futures contracts offer an effective and relatively low cost means of implementing the Fund's objectives in these areas.
Regulatory Limitations
The Fund will engage in futures contracts and options thereon only for bona fide hedging, yield enhancement, and risk management purposes, in each case in accordance with rules and regulations of the CFTC and applicable state law.
The Fund may not purchase or sell futures contracts or related options if, with respect to positions which do not qualify as bona fide hedging under applicable CFTC rules, the sum of the amounts of initial margin deposits and premiums paid on those portions would exceed 5% of the net asset value of the Fund after taking into account unrealized profits and unrealized losses on any such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5% limitation. For purposes of this policy options on futures contracts and foreign currency options traded on a commodities exchange will be considered "related options". This policy may be modified by the Board of Directors/Trustees without a shareholder vote and does not limit the percentage of the Fund's assets at risk to 5%.
In accordance with the rules of the State of California, the Fund will apply above 5% test without excluding the value of initial margin and premiums paid for bona fide hedging portions.
The Fund's use of futures contracts will not result in leverage. Therefore, to the extent necessary, in instances involving the purchase of futures contracts or the writing of call or put options thereon by the Fund, an amount of cash, U.S. government securities or other liquid, high-grade debt obligations, equal to the market value of the futures contracts and options thereon (less any related margin deposits), will be
identified in an account with the Fund's custodian to cover (such as owning an offsetting position) the position, or alternative cover will be employed. Assets used as cover or held in an identified account cannot be old while the position in the corresponding option or future is open, unless they are replaced with similar assets. As a result, the commitment of a large portion of a Fund's assets to cover or identified accounts could impede portfolio management or the fund's ability to meet redemption requests or over current obligations.
If the CFTC or other regulatory authorities adopt different (including less stringent) or additional restrictions, the Fund would comply with such new restrictions.
Trading in Futures Contracts
A futures contract provides for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument (e.g., units of a stock index) for a specified price, date, time and place designated at the time the contract is made. Brokerage fees are incurred when a futures contract is bought or sold and margin deposits must be maintained. Entering into a contract to buy is commonly referred to as buying or purchasing a contract or holding a long position. Entering into a contract to sell is commonly referred to as selling a contract or holding a short position.
Unlike when the Fund purchases or sells a security, no price would be paid or received by the Fund upon the purchase or sale of a futures contract. Upon entering into a futures contract, and to maintain the Fund's open positions in futures contracts, the Fund would be required to deposit with its custodian in a segregated account in the name of the futures broker an amount of cash, U.S. government securities, suitable money market instruments, or liquid, high-grade debt securities, known as "initial margin." The margin required for a particular futures contract is set by the exchange on which the contract is traded, and may be significantly modified from time to time by the exchange during the term of the contract. Futures contracts are customarily purchased and sold on margins that may range upward from less than 5% of the value of the contract being traded.
If the price of an open futures contract changes (by
increase in the case of a sale or by decrease in the case of a
purchase) so that the loss on the futures contract reaches a
point at which the margin on deposit does not satisfy margin
requirements, the broker will require an increase in the margin.
However, if the value of a position increases because of
favorable price changes in the futures contract so that the
margin deposit exceeds the required margin, the broker will pay
the excess to the Fund.
These subsequent payments, called "variation margin," to and from the futures broker, are made on a daily basis as the price of the underlying assets fluctuate making the long and short positions in the futures contract more or less valuable, a process known as "marking to the market." The Fund expects to earn interest income on its margin deposits.
Although certain futures contracts, by their terms, require actual future delivery of and payment for the underlying instruments, in practice most futures contracts are usually closed out before the delivery date. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical securities and the same delivery date. If the offsetting purchase price is less than the original sale price, the Fund realizes a gain; if it is more, the Fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that the Fund will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If the Fund is not able to enter into an offsetting transaction, the Fund will continue to be required to maintain the margin deposits on the futures contract.
For example, the Standard & Poor's 500 Stock Index is composed of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500 Index assigns relative weightings to the common stocks included in the Index, and the Index fluctuates with changes in the market values of those common stocks. In the case of the S&P 500 Index, contracts are to buy or sell 500 units. Thus, if the value of the S&P 500 Index were $150, one contract would be worth $75,000 (500 units x $150). The stock index futures contract specifies that no delivery of the actual stock making up the index will take place. Instead, settlement in cash occurs. Over the life of the contract, the gain or loss realized by the Fund will equal the difference between the purchase (or sale) price of the contract and the price at which the contract is terminated. For example, if the Fund enters into a futures contract to buy 500 units of the S&P 500 Index at a specified future date at a contract price of $150 and the S&P 500 Index is at $154 on that future date, the Fund will gain $2,000 (500 units x gain of $4). If the Fund enters into a futures contract to sell 500 units of the stock index at a specified future date at a contract price of $150 and the S&P 500 Index is at $152 on that future date, the Fund will lose $1,000 (500 units x loss of $2).
Special Risks of Transactions in Futures Contracts
Volatility and Leverage. The prices of futures contracts are volatile and are influenced, among other things, by actual and anticipated changes in the market and interest rates, which in turn are affected by fiscal and monetary policies and national and international political and economic events.
Most United States futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of futures contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.
Because of the low margin deposits required, futures trading involves an extremely high degree of leverage. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract. However, the Fund would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold it after the decline. Furthermore, in the case of a futures contract purchase, in order to be certain that the Fund has sufficient assets to satisfy its obligations under a futures contract, the Fund earmarks to the futures contract money market instruments equal in value to the current value of the underlying instrument less the margin deposit.
Liquidity. The Fund may elect to close some or all of its futures positions at any time prior to their expiration. The Fund would do so to reduce exposure represented by long futures positions or short futures positions. The Fund may close its
positions by taking opposite positions which would operate to terminate the Fund's position in the futures contracts. Final determinations of variation margin would then be made, additional cash would be required to be paid by or released to the Fund, and the Fund would realize a loss or a gain.
Futures contracts may be closed out only on the exchange or board of trade where the contracts were initially traded. Although the Fund intends to purchase or sell futures contracts only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a liquid market on an exchange or board of trade will exist for any particular contract at any particular time. In such event, it might not be possible to close a futures contract, and in the event of adverse price movements, the Fund would continue to be required to make daily cash payments of variation margin. However, in the event futures contracts have been used to hedge the underlying instruments, the Fund would continue to hold the underlying instruments subject to the hedge until the futures contracts could be terminated. In such circumstances, an increase in the price of underlying instruments, if any, might partially or completely offset losses on the futures contract. However, as described below, there is no guarantee that the price of the underlying instruments will, in fact, correlate with the price movements in the futures contract and thus provide an offset to losses on a futures contract.
Hedging Risk. A decision of whether, when, and how to hedge involves skill and judgment, and even a well-conceived hedge may be unsuccessful to some degree because of unexpected market behavior, market or interest rate trends. There are several risks in connection with the use by the Fund of futures contracts as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the futures contracts and movements in the prices of the underlying instruments which are the subject of the hedge. T. Rowe Price will, however, attempt to reduce this risk by entering into futures contracts whose movements, in its judgment, will have a significant correlation with movements in the prices of the Fund's underlying instruments sought to be hedged.
Successful use of futures contracts by the Fund for hedging purposes is also subject to T. Rowe Price's ability to correctly predict movements in the direction of the market. It is possible that, when the Fund has sold futures to hedge its portfolio against a decline in the market, the index, indices, or instruments underlying futures might advance and the value of the underlying instruments held in the Fund's portfolio might decline. If this were to occur, the Fund would lose money on the futures and also would experience a decline in value in its underlying instruments. However, while this might occur to a
certain degree, T. Rowe Price believes that over time the value of the Fund's portfolio will tend to move in the same direction as the market indices used to hedge the portfolio. It is also possible that if the Fund were to hedge against the possibility of a decline in the market (adversely affecting the underlying instruments held in its portfolio) and prices instead increased, the Fund would lose part or all of the benefit of increased value of those underlying instruments that it has hedged, because it would have offsetting losses in its futures positions. In addition, in such situations, if the Fund had insufficient cash, it might have to sell underlying instruments to meet daily variation margin requirements. Such sales of underlying instruments might be, but would not necessarily be, at increased prices (which would reflect the rising market). The Fund might have to sell underlying instruments at a time when it would be disadvantageous to do so.
In addition to the possibility that there might be an imperfect correlation, or no correlation at all, between price movements in the futures contracts and the portion of the portfolio being hedged, the price movements of futures contracts might not correlate perfectly with price movements in the underlying instruments due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors might close futures contracts through offsetting transactions, which could distort the normal relationship between the underlying instruments and futures markets. Second, the margin requirements in the futures market are less onerous than margin requirements in the securities markets, and as a result the futures market might attract more speculators than the securities markets do. Increased participation by speculators in the futures market might also cause temporary price distortions. Due to the possibility of price distortion in the futures market and also because of the imperfect correlation between price movements in the underlying instruments and movements in the prices of futures contracts, even a correct forecast of general market trends by T. Rowe Price might not result in a successful hedging transaction over a very short time period.
Options on Futures Contracts
The Fund may purchase and sell options on the same types of futures in which it may invest.
Options on futures are similar to options on underlying instruments except that options on futures give the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put), rather than to purchase
or sell the futures contract, at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by the delivery of the accumulated balance in the writer's futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put options on stock index futures, the Fund may write or purchase call and put options on stock indices. Such options would be used in a manner similar to the use of options on futures contracts. From time to time, a single order to purchase or sell futures contracts (or options thereon) may be made on behalf of the Fund and other T. Rowe Price Funds. Such aggregated orders would be allocated among the Funds and the other T. Rowe Price Funds in a fair and non-discriminatory manner.
Special Risks of Transactions in Options on Futures Contracts
The risks described under "Special Risks of Transactions on Futures Contracts" are substantially the same as the risks of using options on futures. In addition, where the Fund seeks to close out an option position by writing or buying an offsetting option covering the same index, underlying instrument or contract and having the same exercise price and expiration date, its ability to establish and close out positions on such options will be subject to the maintenance of a liquid secondary market. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options, or underlying instruments; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher than anticipated
trading activity or other unforeseen events might not, at times, render certain of the facilities of any of the clearing corporations inadequate, and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers' orders.
Additional Futures and Options Contracts
Although the Fund has no current intention of engaging in futures or options transactions other than those described above, it reserves the right to do so. Such futures and options trading might involve risks which differ from those involved in the futures and options described above.
Foreign Futures and Options
Participation in foreign futures and foreign options transactions involves the execution and clearing of trades on or subject to the rules of a foreign board of trade. Neither the National Futures Association nor any domestic exchange regulates activities of any foreign boards of trade, including the execution, delivery and clearing of transactions, or has the power to compel enforcement of the rules of a foreign board of trade or any applicable foreign law. This is true even if the exchange is formally linked to a domestic market so that a position taken on the market may be liquidated by a transaction on another market. Moreover, such laws or regulations will vary depending on the foreign country in which the foreign futures or foreign options transaction occurs. For these reasons, when the Fund trades foreign futures or foreign options contracts, it may not be afforded certain of the protective measures provided by the Commodity Exchange Act, the CFTC's regulations and the rules of the National Futures Association and any domestic exchange, including the right to use reparations proceedings before the Commission and arbitration proceedings provided by the National Futures Association or any domestic futures exchange. In particular, funds received from the Fund for foreign futures or foreign options transactions may not be provided the same protections as funds received in respect of transactions on United States futures exchanges. In addition, the price of any foreign futures or foreign options contract and, therefore, the potential profit and loss thereon may be affected by any variance in the foreign exchange rate between the time the Fund's order is placed and the time it is liquidated, offset or exercised.
Foreign Currency Transactions
A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are principally traded in the interbank market conducted directly between currency traders (usually large, commercial banks) and their customers. A forward contract generally has no deposit requirement, and no commissions are charged at any stage for trades.
The Fund may enter into forward contracts for a variety of purposes in connection with the management of the foreign securities portion of its portfolio. The Fund's use of such contracts would include, but not be limited to, the following:
First, when the Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of dollars, of the amount of foreign currency involved in the underlying security transactions, the Fund will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date the security is purchased or sold and the date on which payment is made or received.
Second, when T. Rowe Price believes that one currency may experience a substantial movement against another currency, including the U.S. dollar, it may enter into a forward contract to sell or buy the amount of the former foreign currency, approximating the value of some or all of the Fund's portfolio securities denominated in such foreign currency. Alternatively, where appropriate, the Fund may hedge all or part of its foreign currency exposure through the use of a basket of currencies or a proxy currency where such currency or currencies act as an effective proxy for other currencies. In such a case, the Fund may enter into a forward contract where the amount of the foreign currency to be sold exceeds the value of the securities denominated in such currency. The use of this basket hedging technique may be more efficient and economical than entering into separate forward contracts for each currency held in the Fund. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Other than as set forth above, and immediately below, the Fund will also not enter into such forward contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate the Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund, however, in order to avoid excess transactions and transaction costs, may maintain a net exposure to forward contracts in excess of the value of the Fund's portfolio securities or other assets to which the forward contracts relate (including accrued interest to the maturity of the forwards on such securities provided the excess amount is "covered" by liquid, high-grade debt securities, denominated in any currency, at least equal at all times to the amount of such excess. For these purposes "the securities or other assets to which the forward contracts relate" may be securities or assets denominated in a single currency, or where proxy forwards are used, securities denominated in more than one currency). Under normal circumstances, consideration of the prospect for currency parities will be incorporated into the longer term investment decisions made with regard to overall diversification strategies. However, T. Rowe Price believes that it is important to have the flexibility to enter into such forward contracts when it determines that the best interests of the Fund will be served.
At the maturity of a forward contract, the Fund may sell the portfolio security and make delivery of the foreign currency, or it may retain the security and either extend the maturity of the forward contract (by "rolling" that contract forward) or may initiate a new forward contract.
As indicated above, it is impossible to forecast with absolute precision the market value of portfolio securities at the expiration of the forward contract. Accordingly, it may be necessary for the Fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency the Fund is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security if its market value exceeds the amount of foreign currency the Fund is obligated to deliver. However, as noted, in order to avoid excessive transactions and transaction costs, the Fund may use liquid, high-grade debt securities denominated in any currency, to cover the amount by which the value of a forward contract exceeds the value of the securities to which it relates.
If the Fund retains the portfolio security and engages in an offsetting transaction, the Fund will incur a gain or a loss (as described below) to the extent that there has been movement in forward contract prices. If the Fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline during the period between the Fund's entering into a
forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the Fund will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Fund will suffer a loss to the extent of the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange contracts will generally be limited to the transactions described above. However, the Fund reserves the right to enter into forward foreign currency contracts for different purposes and under different circumstances. Of course, the Fund is not required to enter into forward contracts with regard to its foreign currency-denominated securities and will not do so unless deemed appropriate by T. Rowe Price. It also should be realized that this method of hedging against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange at a future date. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time, they tend to limit any potential gain which might result from an increase in the value of that currency.
Although the Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. It will do so from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference (the "spread") between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of exchange should the Fund desire to resell that currency to the dealer.
Federal Tax Treatment of Options, Futures Contracts and Forward Foreign Exchange Contracts
The Fund may enter into certain option, futures, and forward foreign exchange contracts, including options and futures on currencies, which will be treated as Section 1256 contracts or straddles.
Transactions which are considered Section 1256 contracts will be considered to have been closed at the end of the Fund's fiscal year and any gains or losses will be recognized for tax purposes at that time. Such gains or losses from the normal closing or settlement of such transactions will be characterized
as 60% long-term capital gain or loss and 40% short-term capital gain or loss regardless of the holding period of the instrument. The Fund will be required to distribute net gains on such transactions to shareholders even though it may not have closed the transaction and received cash to pay such distributions.
Options, futures and forward foreign exchange contracts, including options and futures on currencies, which offset a foreign dollar denominated bond or currency position may be considered straddles for tax purposes in which case a loss on any position in a straddle will be subject to deferral to the extent of unrealized gain in an offsetting position. The holding period of the securities or currencies comprising the straddle will be deemed not to begin until the straddle is terminated. For securities offsetting a purchased put, this adjustment of the holding period may increase the gain from sales of securities held less than three months. The holding period of the security offsetting an "in-the-money qualified covered call" option on an equity security will not include the period of time the option is outstanding.
Losses on written covered calls and purchased puts on securities, excluding certain "qualified covered call" options on equity securities, may be long-term capital loss, if the security covering the option was held for more than twelve months prior to the writing of the option.
In order for the Fund to continue to qualify for federal
income tax treatment as a regulated investment company, at least
90% of its gross income for a taxable year must be derived from
qualifying income; i.e., dividends, interest, income derived from
loans of securities, and gains from the sale of securities or
currencies. Pending tax regulations could limit the extent that
net gain realized from option, futures or foreign forward
exchange contracts on currencies is qualifying income for
purposes of the 90% requirement. In addition, gains realized on
the sale or other disposition of securities, including option,
futures or foreign forward exchange contracts on securities or
securities indexes and, in some cases, currencies, held for less
than three months, must be limited to less than 30% of the Fund's
annual gross income. In order to avoid realizing excessive gains
on securities or currencies held less than three months, the Fund
may be required to defer the closing out of option, futures or
foreign forward exchange contracts) beyond the time when it would
otherwise be advantageous to do so. It is anticipated that
unrealized gains on Section 1256 option, futures and foreign
forward exchange contracts, which have been open for less than
three months as of the end of the Fund's fiscal year and which
are recognized for tax purposes, will not be considered gains on
securities or currencies held less than three months for purposes
of the 30% test.
INVESTMENT RESTRICTIONS
Fundamental policies may not be changed without the approval of the lesser of (1) 67% of the Fund's shares present at a meeting of shareholders if the holders of more than 50% of the outstanding shares are present in person or by proxy or (2) more than 50% of the Fund's outstanding shares. Other restrictions in the form of operating policies are subject to change by the Fund's Board of Directors/Trustees without shareholder approval. Any investment restriction which involves a maximum percentage of securities or assets shall not be considered to be violated unless an excess over the percentage occurs immediately after, and is caused by, an acquisition of securities or assets of, or borrowings by, the Fund.
Fundamental Policies
As a matter of fundamental policy, the Fund may not:
(1) Borrowing. Borrow money except that the Fund may
(i) borrow for non-leveraging, temporary or
emergency purposes and (ii) engage in reverse
repurchase agreements and make other investments
or engage in other transactions, which may involve
a borrowing, in a manner consistent with the
Fund's investment objective and program, provided
that the combination of (i) and (ii) shall not
exceed 33 1/3% of the value of the Fund's total
assets (including the amount borrowed) less
liabilities (other than borrowings) or such other
percentage permitted by law. Any borrowings which
come to exceed this amount will be reduced in
accordance with applicable law. The Fund may
borrow from banks, other Price Funds or other
persons to the extent permitted by applicable law;
(2) Commodities. Purchase or sell physical commodities; except that it may enter into futures contracts and options thereon;
(3) Industry Concentration. Purchase the securities of any issuer if, as a result, more than 25% of the value of the Fund's total assets would be invested in the securities of issuers having their principal business activities in the same industry;
(4) Loans. Make loans, although the Fund may (i) lend
portfolio securities and participate in an
interfund lending program with other Price Funds
provided that no such loan may be made if, as a
result, the aggregate of such loans would exceed
33 1/3% of the value of the Fund's total assets;
(ii) purchase money market securities and enter
into repurchase agreements; and (iii) acquire
publicly-distributed or privately-placed debt
securities and purchase debt;
(5) Percent Limit on Assets Invested in Any One Issuer. Purchase a security if, as a result, with respect to 75% of the value of its total assets, more than 5% of the value of the Fund's total assets would be invested in the securities of a single issuer, except securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities;
(6) Percent Limit on Share Ownership of Any One Issuer. Purchase a security if, as a result, with respect to 75% of the value of the Fund's total assets, more than 10% of the outstanding voting securities of any issuer would be held by the Fund (other than obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities);
(7) Real Estate. Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business);
(8) Senior Securities. Issue senior securities except in compliance with the Investment Company Act of 1940; or
(9) Underwriting. Underwrite securities issued by other persons, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment program.
With respect to investment restrictions (1) and (4), the Fund will not borrow from or lend to any other Price
Fund unless they apply for and receive an exemptive order from the SEC or the SEC issues rules permitting such transactions. The Fund has no current intention of engaging in any such activity and there is no assurance the SEC would grant any order requested by the Fund or promulgate any rules allowing the transactions.
With respect to investment restriction (2), the Fund does not consider currency contracts or hybrid investments to be commodities.
For purposes of investment restriction (3), U.S., state or local governments, or related agencies or instrumentalities, are not considered an industry.
For purposes of investment restriction (4), the Fund will consider the acquisition of a debt security to include the execution of a vote or other evidence of an extension of credit with a term of more than nine months.
Operating Policies
As a matter of operating policy, the Fund may not:
(1) Borrowing. The Fund will not purchase additional securities when money borrowed exceeds 5% of its total assets;
(2) Control of Portfolio Companies. Invest in companies for the purpose of exercising management or control;
(3) Futures Contracts. Purchase a futures contract or an option thereon if, with respect to positions in futures or options on futures which do not represent bona fide hedging, the aggregate initial margin and premiums on such options would exceed 5% of the Fund's net asset value;
(4) Illiquid Securities. Purchase illiquid securities and securities of unseasoned issuers if, as a result, more than 15% of its net assets would be invested in such securities, provided that the Fund will not invest more than 5% of its total assets in restricted securities and not more than 5% in securities of unseasoned issuers. Securities eligible for resale under Rule 144A of the Securities Act of 1933 are not included in the 5% limitation but are subject to the 15% limitation;
(5) Investment Companies. Purchase securities of open-end or closed-end investment companies except in compliance with the Investment Company Act of 1940 and applicable state law. Duplicate fees may result from such purchases;
(6) Margin. Purchase securities on margin, except (i)
for use of short-term credit necessary for
clearance of purchases of portfolio securities and
(ii) it may make margin deposits in connection
with futures contracts or other permissible
investments;
(7) Mortgaging. Mortgage, pledge, hypothecate or, in any manner, transfer any security owned by the Fund as security for indebtedness except as may be necessary in connection with permissible borrowings or investments and then such mortgaging, pledging or hypothecating may not exceed 33 1/3% of the Fund's total assets at the time of borrowing or investment;
(8) Oil and Gas Programs. Purchase participations or other direct interests in or enter into leases with respect to, oil, gas, or other mineral exploration or development programs;
(9) Options, Etc. Invest in puts, calls, straddles, spreads, or any combination thereof, except to the extent permitted by the prospectus and Statement of Additional Information;
(10) Ownership of Portfolio Securities by Officers and Directors/Trustees. Purchase or retain the securities of any issuer if, to the knowledge of the Fund's management, those officers and directors of the Fund, and of its investment manager, who each owns beneficially more than .5% of the outstanding securities of such issuer, together own beneficially more than 5% of such securities;
(11) Short Sales. Effect short sales of securities;
(12) Unseasoned Issuers. Purchase a security (other than obligations issued or guaranteed by the U.S., any foreign, state or local government, their agencies or instrumentalities) if, as a result, more than 5% of the value of the Fund's total assets would be invested in the securities of
issuers which at the time of purchase had been in operation for less than three years (for this purpose, the period of operation of any issuer shall include the period of operation of any predecessor or unconditional guarantor of such issuer). This restriction does not apply to securities of pooled investment vehicles or mortgage or asset-backed securities; or
(13) Warrants. Invest in warrants if, as a result thereof, more than 2% of the value of the total assets of the Fund would be invested in warrants which are not listed on the New York Stock Exchange, the American Stock Exchange, or a recognized foreign exchange, or more than 5% of the value of the total assets of the Fund would be invested in warrants whether or not so listed. For purposes of these percentage limitations, the warrants will be valued at the lower of cost or market and warrants acquired by the Fund in units or attached to securities may be deemed to be without value.
For purposes of investment restriction (5), the Fund has no current intention of purchasing the securities of other investment companies.
Blue Chip Growth Fund
Notwithstanding anything in the above fundamental and operating restrictions to the contrary, the Fund may invest all of its assets in a single investment company or a series thereof in connection with a "master-feeder" arrangement. Such an investment would be made where the Fund (a "Feeder"), and one or more other Funds with the same investment objective and program as the Fund, sought to accomplish its investment objective and program by investing all of its assets in the shares of another investment company (the "Master"). The Master would, in turn, have the same investment objective and program as the Fund. The Fund would invest in this manner in an effort to achieve the economies of scale associated with having a Master fund make investments in portfolio companies on behalf of a number of Feeder funds. In the event that the Fund exercises its right to convert to a Master Fund/Feeder Fund structure, it will do so in compliance with the Guidelines for Registration of a Master Fund/Feeder Fund as established by the North American Securities Administrators Association, Inc. ("NASAA").
MANAGEMENT OF FUND
The officers and directors of the Fund are listed below.
Unless otherwise noted, the address of each is 100 East Pratt
Street, Baltimore, Maryland 21202. Except as indicated, each has
been an employee of T. Rowe Price for more than five years. In
the list below, the Fund's directors who are considered
"interested persons" of T. Rowe Price as defined under
Section 2(a)(19) of the Investment Company Act of 1940 are noted
with an asterisk (*). These directors are referred to as inside
directors by virtue of their officership, directorship, and/or
employment with T. Rowe Price.
All Funds
Independent Directors/Trustees
LEO C. BAILEY, Retired; Address: 3396 South Placita Fabula, Green
Valley, Arizona 85614
DONALD W. DICK, JR., Principal, Overseas Partners, Inc., a
financial investment firm; formerly (6/65-3/89) Director and Vice
President-Consumer Products Division, McCormick & Company, Inc.,
international food processors; Director, Waverly Press, Inc.,
Baltimore, Maryland; Address: 375 Park Avenue, Suite 2201, New
York, New York 10152
DAVID K. FAGIN, Chairman, Chief Executive Officer and Director,
Golden Star Resources, Ltd.; formerly (1986-7/91) President,
Chief Operating Officer and Director, Homestake Mining Company;
Address: One Norwest Center, 1700 Lincoln Street, Suite 1950,
Denver, Colorado 80203
ADDISON LANIER, Financial management; President and Director,
Thomas Emery's Sons, Inc., and Emery Group, Inc.; Director,
Scinet Development and Holdings, Inc.; Address: 441 Vine Street,
#2310, Cincinnati, Ohio 45202-2913
JOHN K. MAJOR, Chairman of the Board and President, KCMA
Incorporated, Tulsa, Oklahoma; Address: 126 E. 26 Place, Tulsa,
Oklahoma 74114-2422
HANNE M. MERRIMAN, Retail business consultant; formerly,
President and Chief Operating Officer, Nan Duskin, Inc., a
women's specialty store, Director and Chairman Federal Reserve
Bank of Richmond, and President and Chief Executive Officer,
Honeybee, Inc., a division of Spiegel, Inc; Director, Ann Taylor
Stores Corporation, Central Illinois Public Service Company,
CIPSCO Incorporated, The Rouse Company, State Farm Mutual
Automobile Insurance Company and USAir Group, Inc., Member,
National Women's Forum; Trustee, American-Scandinavian Foundation
HUBERT D. VOS, President, Stonington Capital Corporation, a
private investment company; Address: 1231 State Street, Suite
210, Santa Barbara, CA 93190-0409
PAUL M. WYTHES, Founding General Partner, Sutter Hill Ventures, a
venture capital limited partnership providing equity capital to
young high technology companies throughout the United States;
Director, Teltone Corporation, Interventional Technologies Inc., and Stuart Medical, Inc.; Address: 755 Page Mill Road, Suite A200, Palo Alto, California 94304
Officers
HENRY H. HOPKINS, Vice President--Managing Director, T. Rowe
Price; Vice President and Director, T. Rowe Price Investment
Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price
Trust Company; Vice President, Rowe Price-Fleming International,
Inc. and T. Rowe Price Retirement Plan Services, Inc.
LENORA V. HORNUNG, Secretary--Vice President, T. Rowe Price
CARMEN F. DEYESU, Treasurer--Vice President, T. Rowe Price, T.
Rowe Price Services, Inc., and T. Rowe Price Trust Company
DAVID S. MIDDLETON, Controller--Vice President, T. Rowe Price, T.
Rowe Price Services, Inc., and T. Rowe Price Trust Company
ROGER L. FIERY, Assistant Vice President--Vice President, Rowe
Price-Fleming International, Inc.
EDWARD T. SCHNEIDER, Assistant Vice President--Vice President, T.
Rowe Price Services, Inc.
INGRID I. VORDEMBERGE, Assistant Vice President--Employee, T.
Rowe Price
Balanced Fund
*JAMES S. RIEPE, Chairman of the Board--Managing Director, T.
Rowe Price; Chairman of the Board, T. Rowe Price Services, Inc.,
T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price
Trust Company; President and Director, T. Rowe Price Investment
Services, Inc; Director, Rhone-Poulenc Rorer, Inc.
*M. DAVID TESTA, Vice President and Director--Managing Director
of T. Rowe Price; Chairman of the Board, Rowe Price-Fleming
International, Inc.; Vice President and Director, T. Rowe Price
Trust Company; Chartered Financial Analyst
RICHARD T. WHITNEY, President--Vice President of T. Rowe Price
and T. Rowe Price Trust Company
STEPHEN W. BOESEL, Vice President--Managing Director, T. Rowe
Price
ANDREW M. BROOKS, Vice President--Vice President, T. Rowe Price
JONATHAN M. GREENE, Vice President--Vice President of T. Rowe
Price and T. Rowe Price Trust Company
JAMES A.C. KENNEDY, III, Vice President--Managing Director of T.
Rowe Price
EDMUND M. NOTZON, Vice President--Vice President, T. Rowe Price
and T. Rowe Price Trust Company; formerly, (1972-1989) charter
member of the U.S. Senior Executive Services and Director,
Analysis and Evaluation Division in the Office of Water
Regulations and Standards of the U.S. Environmental Protection
Agency
PETER VAN DYKE, Vice President--Managing Director, T. Rowe Price; Vice President of Rowe Price-Fleming International, Inc. and T. Rowe Price Trust Company
Blue Chip Growth Fund
*THOMAS H. BROADUS, JR., President and Director--Managing
Director, T. Rowe Price; Chartered Financial Analyst and
Chartered Investment Counselor
*JAMES S. RIEPE, Vice President and Director--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc; Director, Rhone-Paulenc Rorer, Inc.
*M. DAVID TESTA, Director--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
LARRY J. PUGLIA, Vice President--Vice President, T. Rowe Price
Capital Appreciation Fund
*GEORGE J. COLLINS, Chairman of the Board--President, Chief
Executive Officer and Managing Director, T. Rowe Price; Director,
Rowe Price-Fleming International, Inc., T. Rowe Price Retirement
Plan Services, Inc. and T. Rowe Price Trust Company; Chartered
Investment Counselor
*JAMES S. RIEPE, Vice President and Trustee--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., T. Rowe Price
Trust Company; President and Director, T. Rowe Price Investment
Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
*GEORGE A. ROCHE, Director - Managing Director and Chief
Financial Officer, T. Rowe Price; Vice President and Director,
Rowe Price-Fleming International, Inc.
RICHARD P. HOWARD, President--Vice President of T. Rowe Price;
Chartered Financial Analyst
ARTHUR B. CECIL, III, Vice President--Vice President of T. Rowe
Price
CHARLES A. MORRIS, Vice President--Vice President of T. Rowe
Price
DAVID A. REA, Vice President--Vice President, T. Rowe Price
ALAN R. STUART, Vice President--Vice President of T. Rowe Price
Dividend Growth Fund
*JAMES S. RIEPE, Vice President and Director--Managing Director, T. Rowe Price; Chairman of the Board, T. Rowe Price Services, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Trust Company; President and Director, T. Rowe Price Investment Services, Inc; Director, Rhone-Paulenc Rorer, Inc.
*M. DAVID TESTA, Director--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
BRIAN C. ROGERS, President--Managing Director, T. Rowe Price
WILLIAM J. STROMBERG, Executive Vice President--Vice President,
T. Rowe Price
LARRY J. PUGLIA, Vice President--Vice President, T. Rowe Price;
formerly (7/82-8/88) Senior Manager, Peat Marwick Main & Co.
ALAN R. STUART, Vice President--Vice President, T. Rowe Price
Equity Income Fund
*THOMAS H. BROADUS, JR., Vice President and Chairman of the
Board--Managing Director, T. Rowe Price; Chartered Financial
Analyst and Chartered Investment Counselor
*JAMES S. RIEPE, Vice President and Trustee--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc. and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
*M. DAVID TESTA, Trustee--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
BRIAN C. ROGERS, President--Managing Director, T. Rowe Price
ANDREW M. BROOKS, Vice President--Vice President, T. Rowe Price
RICHARD P. HOWARD, Vice President--Vice President, T. Rowe Price;
Chartered Financial Analyst
DENISE S. JEVNE, Vice President-Vice President, T. Rowe Price
ROBERT W. SMITH, Vice President-Vice President, T. Rowe Price;
formerly (1987-1992) Investment Analyst, Massachusetts Financial
Services, Inc., Boston, Massachusetts
WILLIAM J. STROMBERG, Vice President--Vice President, T. Rowe
Price
MARK J. VASELKIV, Vice President-Vice President, T. Rowe Price
Growth & Income Fund
*STEPHEN W. BOESEL, President and Director - Vice President, T.
Rowe Price
*JAMES S. RIEPE, Chairman of the Board - Managing Director, T.
Rowe Price; Chairman of the Board, T. Rowe Price Services, Inc.,
T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price
Trust Company; President and Director, T. Rowe Price Investment
Services, Inc.; Director, Rhone-Paulenc Rorer, Inc.
*M. DAVID TESTA, Director--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
ANDREW M. BROOKS, Vice President - Vice President, T. Rowe Price
ARTHUR B. CECIL, III, Vice President - Vice President, T. Rowe
Price; Chartered Financial Analyst
BRENT W. CLUM, Vice President - Vice President, T. Rowe Price;
formerly (1985-1988) Senior Tax Consultant, Arthur Andersen and
Company
GREGORY A. MCCRICKARD, Vice President - Vice President, T. Rowe
Price
LARRY J. PUGLIA, Vice President - Vice President, T. Rowe Price
RICHARD T. WHITNEY, Vice President - Vice President, T. Rowe
Price; Chartered Financial Analyst
Growth Stock Fund
*JAMES S. RIEPE, Vice President and Director - Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Paulenc Rorer, Inc.
*M. DAVID TESTA, Chairman of the Board - Managing Director, T.
Rowe Price; Chairman of the Board, Rowe Price-Fleming
International, Inc.; Vice President and Director, T. Rowe Price
Trust Company; Chartered Financial Analyst
JOHN D. GILLESPIE, President - Vice President, T. Rowe Price
CARTER O. HOFFMAN, Vice President - Managing Director, T. Rowe
Price; Chartered Investment Counselor
JAMES A.C. KENNEDY, Vice President - Managing Director, T. Rowe
Price
BRIAN C. ROGERS, Vice President - Managing Director, T. Rowe
Price
ALAN R. STUART, Vice President - Vice President, T. Rowe Price
Equity Index Fund
*JAMES S. RIEPE, Vice President and Director--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc. and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
*M. DAVID TESTA, Director--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
RICHARD T. WHITNEY, President--Vice President, T. Rowe Price
KRISTEN D. FARROW, Vice President--Assistant Vice President, T.
Rowe Price; formerly (9/84-6/89) Teacher at Wilbraham & Munson
Academy, Boston, Massachusetts and Bwyrn Mawr School, Baltimore,
Maryland
JONATHAN M. GREENE, Vice President--Vice President, T. Rowe Price
ALAN R. STUART, Vice President-Vice President, T. Rowe Price
Mid-Cap Growth Fund
*JOHN H. LAPORTE, JR., Chairman of the Board--Managing Director,
T. Rowe Price; Chartered Financial Analyst
*JAMES A. C. KENNEDY, III, Director--Managing Director, T. Rowe
Price
*JAMES S. RIEPE, Chairman of the Board--Managing Director, T.
Rowe Price; Chairman of the Board, T. Rowe Price Services, Inc.,
T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price
Trust Company; President and Director, T. Rowe Price Investment
Services, Inc; Director, Rhone-Poulenc Rorer, Inc.
BRIAN W. H. BERGHUIS, President--Vice President, T. Rowe Price
MARCY L. FISHER, Vice President-Assistant Vice President, T. Rowe
Price
JOHN F. WAKEMAN, Vice President--Vice President, T. Rowe Price
RICHARD T. WHITNEY, Vice President--Vice President, T. Rowe Price
New America Growth Fund
*JOHN H. LAPORTE, JR., President and Trustee--Managing Director
of T. Rowe Price; Chartered Financial Analyst
*JAMES S. RIEPE, Vice President and Trustee--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
BRIAN W. H. BERGHUIS, Executive Vice President--Vice President of
T. Rowe Price
GREGORY V. DONOVAN, Vice President--Vice President of T. Rowe
Price
JOHN WAKEMAN, Vice President--Vice President of T. Rowe Price
New Era Fund
*GEORGE J. COLLINS, Director - President, Managing Director, and
Chief Executive Officer, T. Rowe Price; Director, Rowe
Price-Fleming International, Inc., T. Rowe Price Trust Company,
and T. Rowe Price Retirement Plan Services, Inc.; Chartered
Investment Counselor
*CARTER O. HOFFMAN, Director - Managing Director, T. Rowe Price;
Chartered Investment Counselor
*JAMES S. RIEPE, Vice President - Managing Director, T. Rowe
Price; Chairman of the Board, T. Rowe Price Services, Inc., T.
Rowe Price Retirement Plan Services, Inc., and T. Rowe Price
Trust Company; President and Director, T. Rowe Price Investment
Services, Inc.; Director, Rhone-Paulenc Rorer, Inc.
*GEORGE A. ROCHE, President and Director - Managing Director and
Chief Financial Officer, T. Rowe Price; Vice President and
Director, Rowe Price-Fleming International, Inc.
STEPHEN W. BOESEL, Vice President - Vice President, T. Rowe Price
HUGH M. EVANS, III, Vice President - Employee, T. Rowe Price;
formerly (7/1/88-7/1/90) Analyst, Morgan Stanley & Co., Inc., New
York, New York
RICHARD P. HOWARD, Vice President - Vice President, T. Rowe
Price; Chartered Financial Analyst
JAMES A.C. KENNEDY, III, Vice President - Managing Director, T.
Rowe Price
CHARLES M. OBER, Vice President - Vice President, T. Rowe Price;
Chartered Financial Analyst DAVID L. REA, Vice President - Vice
President, T. Rowe Price
ALAN R. STUART, Vice President - Vice President, T. Rowe Price
DAVID J. WALLACK, Vice President - Vice President, T. Rowe Price;
formerly (9/89-7/90) attended Carnegie Mellon Graduate School and
(4/84-9/88) Fund Raising Project Manager, J. Paul Getty Trust and
Harvard University
New Horizons Fund
*JOHN H. LAPORTE, President and Director - Managing Director of
T. Rowe Price; Chartered Financial Analyst
*JAMES S. RIEPE, Vice President and Director - Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
*M. DAVID TESTA, Director--Managing Director, T. Rowe Price;
Chairman of the Board, Rowe Price-Fleming International, Inc.;
Vice President and Director, T. Rowe Price Trust Company;
Chartered Financial Analyst
PRESTON G. ATHEY, Vice President - Vice President of T. Rowe
Price
BRIAN W. H. BERGHUIS, Vice President - Vice President of T. Rowe
Price
BRENT W. CLUM, Vice President - Vice President, T. Rowe Price;
formerly (1985-1988) Senior Tax Consultant, Arthur Anderson & Co.
GREGORY V. DONOVAN, Vice President - Vice President of T. Rowe
Price
MARCY L. FISHER, Vice President - Assistant Vice President of T.
Rowe Price
JILL L. HAUSER, Vice President - Vice President of T. Rowe Price
DENISE E. JEVNE, Vice President - Vice President of T. Rowe Price
JOSEPH KLEIN, III, Vice President - Vice President, T. Rowe Price
CHARLES A. MORRIS, Vice President - Vice President of T. Rowe
Price
BRIAN D. STANSKY, Vice President - Vice President of T. Rowe
Price
JOHN WAKEMAN, Vice President - Vice President of T. Rowe Price
OTC Fund
*JOHN H. LAPORTE, JR., Chairman of the Board--Managing Director
of T. Rowe Price; Chartered Financial Analyst
*JAMES S. RIEPE, Vice President and Director--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc. and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Poulenc Rorer, Inc.
GREGORY A. McCRICKARD, President--Vice President, T. Rowe Price
MARCY L. FISHER, Vice President--Assistant Vice President, T.
Rowe Price
JAMES A. C. KENNEDY, III, Vice President--Managing Director of T.
Rowe Price
BRIAN D. STANSKY, Vice President--Vice President, T. Rowe Price
RICHARD T. WHITNEY, Vice President--Vice President, T. Rowe
Price; Chartered Financial Analyst
Science & Technology Fund
*JOHN H. LAPORTE, JR., Chairman of the Board - Managing Director,
T. Rowe Price; Chartered Financial Analyst
*JAMES S. RIEPE, Vice President and Director - Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Paulenc Rorer, Inc.
CHARLES A. MORRIS, President - Vice President, T. Rowe Price
LISE J. BUYER, Vice President - Vice President, T. Rowe Price;
formerly (4/91-4/92) PC Analyst, Cowen & Co., (2/90-4/92) PC
Analyst, Needham & Co., and (2/87-1/90) Analyst, Prudential Bache
Securities
GREGORY V. DONOVAN, Vice President - Vice President, T. Rowe
Price
MARCY L. FISHER, Vice President - Assistant Vice President, T.
Rowe Price
JILL L. HAUSER, Vice President - Vice President, T. Rowe Price
JOSEPH KLEIN, III, Vice President - Vice President, T. Rowe Price
BRIAN D. STANSKY, Vice President - Vice President, T. Rowe Price
Small-Cap Value Fund
*JOHN H. LAPORTE, JR., Chairman of the Board--Managing Director
of T. Rowe Price; Chartered Financial Analyst
*JAMES S. RIEPE, Vice President and Director--Managing Director,
T. Rowe Price; Chairman of the Board, T. Rowe Price Services,
Inc., T. Rowe Price Retirement Plan Services, Inc. and T. Rowe
Price Trust Company; President and Director, T. Rowe Price
Investment Services, Inc.; Director, Rhone-Paulenc Rorer, Inc.
*GEORGE A. ROCHE, Director - Managing Director and Chief
Financial Officer, T. Rowe Price; Vice President and Director,
Rowe Price-Fleming International, Inc.
PRESTON G. ATHEY, President--Vice President, T. Rowe Price
MARCY L. FISHER, Vice President--Assistant Vice President, T.
Rowe Price
JONATHAN M. GREENE, Vice President--Vice President of T. Rowe
Price and T. Rowe Price Trust Company
GREGORY A. MCCRICKARD, Vice President--Vice President, T. Rowe
Price
RICHARD T. WHITNEY, Vice President--Vice President, T. Rowe Price
and T. Rowe Price Trust Company; Chartered Financial Analyst
The Fund's Executive Committee, consisting of the Fund's interested directors/trustees, has been authorized by its respective Board of Directors/Trustees to exercise all powers of the Board to manage the Fund in the intervals between meetings of the Board, except the powers prohibited by statute from being delegated.
PRINCIPAL HOLDERS OF SECURITIES
As of the date of the prospectus, the officers and directors of the Fund, as a group, owned less than 1% of the outstanding shares of the Fund.
INVESTMENT MANAGEMENT SERVICES
Services
Under the Management Agreement, T. Rowe Price provides the
Fund with discretionary investment services. Specifically, T.
Rowe Price is responsible for supervising and directing the
investments of the Fund in accordance with the Fund's investment
objectives, program, and restrictions as provided in its
prospectus and this Statement of Additional Information. T. Rowe
Price is also responsible for effecting all security transactions
on behalf of the Fund, including the negotiation of commissions
and the allocation of principal business and portfolio brokerage.
In addition to these services, T. Rowe Price provides the Fund
with certain corporate administrative services, including:
maintaining the Fund's corporate existence and corporate records;
registering and qualifying Fund shares under federal and state
laws; monitoring the financial, accounting, and administrative
functions of the Fund; maintaining liaison with the agents
employed by the Fund such as the Fund's custodian and transfer
agent; assisting the Fund in the coordination of such agents'
activities; and permitting T. Rowe Price's employees to serve as
officers, directors, and committee members of the Fund without
cost to the Fund.
The Management Agreement also provides that T. Rowe Price, 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.
All Funds Except Equity Index Fund
Management Fee
The Fund pays T. Rowe Price a fee ("Fee") which consists of two components: a Group Management Fee ("Group Fee") and an Individual Fund Fee ("Fund Fee"). The Fee is paid monthly to T. Rowe Price on the first business day of the next succeeding calendar month and is calculated as described below.
The monthly Group Fee ("Monthly Group Fee") is the sum of the daily Group Fee accruals ("Daily Group Fee Accruals") for each month. The Daily Group Fee Accrual for any particular day is computed by multiplying the Price Funds' group fee accrual as determined below ("Daily Price Funds' Group Fee Accrual") by the ratio of 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 is calculated by multiplying the fraction of one (1) over the number of calendar days in the year by the annualized Daily Price Funds' Group Fee Accrual for that day as determined in accordance with the following schedule:
Price Funds'
Annual Group Base Fee Rate for Each Level of Assets
0.480% First $1 billion 0.450% Next $1 billion 0.420% Next $1 billion 0.390% Next $1 billion 0.370% Next $1 billion 0.360% Next $2 billion 0.350% Next $2 billion 0.340% Next $5 billion 0.330% Next $10 billion 0.320% Next $10 billion 0.310% Thereafter |
For the purpose of calculating the Group Fee, the Price Funds include all the mutual funds distributed by T. Rowe Price Investment Services, Inc., (excluding T. Rowe Price Spectrum Fund, Inc. and any institutional or private label mutual funds). For the purpose of calculating the Daily Price Funds' Group Fee
Accrual for any particular day, the net assets of each Price Fund are determined in accordance with the Fund's prospectus as of the close of business on the previous business day on which the Fund was open for business.
The monthly Fund Fee ("Monthly Fund Fee") is the sum of the daily Fund Fee accruals ("Daily Fund Fee Accruals") for each month. The Daily Fund Fee Accrual for any particular day is computed by multiplying the fraction of one (1) over the number of calendar days in the year by the individual Fund Fee Rate and multiplying this product by the net assets of the Fund for that day, as determined in accordance with the Fund's prospectus as of the close of business on the previous business day on which the Fund was open for business. The individual fund fees for each Fund are listed in the chart below:
Individual Fund Fees
Balanced Fund 0.15%
Blue Chip Growth Fund 0.30%
Capital Appreciation Fund 0.30%
Dividend Growth Fund 0.20%
Equity Income Fund 0.25%
Growth & Income Fund 0.15%
Growth Stock Fund 0.25%
Equity Index Fund 0.20%
Mid-Cap Growth Fund 0.35%
New America Growth Fund 0.35%
New Era Fund 0.25%
New Horizons Fund 0.35%
OTC Fund 0.45%
Science & Technology Fund 0.35%
Small-Cap Value Fund 0.35%
|
The following chart sets forth the total management fees, if any, paid to T. Rowe Price by each Fund, during the last three years:
Fund 1993 1992 1991 Balanced $ 1,169,038 $ 158,000 * Blue Chip Growth --** * * Capital Appreciation 2,740,545 1,539,000 1,119,000 Dividend Growth --** * * Equity Income 15,154,800 10,430,000 6,829,000 Growth & Income 5,209,477 3,693,000 2,991,000 Growth Stock 11,117,706 11,217,000 9,367,000 Equity Index --** --** --** Mid-Cap Growth 152,853 --** * New America Growth 3,988,797 2,385,000 1,166,000 New Era 4,365,990 4,337,000 4,660,000 PAGE 53 New Horizons 10,367,727 9,589,000 8,089,000 OTC 1,547,061 1,858,000 2,126,495 Science & Technology 2,841,791 1,479,000 809,000 Small-Cap Value 2,963,580 1,165,000 119,000 |
* Prior to commencement of operations. ** Due to each Fund's expense limitation in effect at that time, no management fees were paid by the Funds to T. Rowe Price.
Limitation on Fund Expenses
The Management Agreement between the Fund and T. Rowe Price provides that the Fund will bear all expenses of its operations not specifically assumed by T. Rowe Price. However, in compliance with certain state regulations, T. Rowe Price will reimburse the Fund for certain expenses which in any year exceed the limits prescribed by any state in which the Fund's shares are qualified for sale. Presently, the most restrictive expense ratio limitation imposed by any state is 2.5% of the first $30 million of the Fund's average daily net assets, 2% of the next $70 million of the Fund's assets, and 1.5% of net assets in excess of $100 million. Reimbursement by the Fund to T. Rowe Price of any expenses paid or assumed under a state expense limitation may not be made more than two years after the end of the fiscal year in which the expenses were paid or assumed.
Balanced, Blue Chip Growth, Capital Appreciation, Dividend Growth, Equity Index, Mid-Cap Growth, New America Growth, Science & Technology and Small-Cap Value Funds
The following chart sets forth expense ratio limitations and the periods for which they are effective. For each, T. Rowe Price has agreed to bear any Fund expenses which would cause the Fund's ratio of expenses to average net assets to exceed the indicated percentage limitations. The expenses borne by T. Rowe Price are subject to reimbursement by the Fund through the indicated reimbursement date, provided no reimbursement will be made if it would result in the Fund's expense ratio exceeding its applicable limitation.
Expense
Limitation Ratio Reimbursement
Fund Period Limitation Date
Balanced+ January 1, 1993- 1.00% December 31, 1996
December 31, 1994
Blue Chip Growth June 30, 1993- 1.25% December 31, 1996
December 31, 1994
Capital
Appreciation January 1, 1990- 1.25% December 31, 1995
December 31, 1993
PAGE 54
Dividend Growth December 30, 1992- 1.00% December 31, 1996
December 31, 1994
Equity Index++ January 1, 1994- 0.45% December 31, 1997
December 31, 1995
Mid-Cap Growth* January 1, 1994- 1.25% December 31, 1997
December 31, 1995
New America
Growth January 1, 1990- 1.25% December 31, 1995
December 31, 1993
Science &
Technology January 1, 1992- 1.25% December 31, 1995
December 31, 1993
Small-Cap
Value January 1, 1992- 1.25% December 31, 1995
December 31, 1993
|
+ The Balanced Fund previously operated under a 1.00%
limitation that expired December 31, 1992. The reimbursement
period for this limitation extends through December 31, 1994.
++ The Equity Index Fund previously operated under a 0.45%
limitation that expired December 31, 1993. The reimbursement
period for this limitation extends through December 31, 1995.
* The Mid-Cap Growth Fund previously operated under a 1.25%
limitation that expired December 31, 1993. The reimbursement
period for this limitation extends through December 31, 1995.
Each of the above-referenced Fund's Management Agreement also provides that one or more additional expense limitation periods (of the same or different time periods) may be implemented after the expiration of the current expense limitation, and that with respect to any such additional limitation period, the Fund may reimburse T. Rowe Price, provided the reimbursement does not result in the Fund's aggregate expenses exceeding the additional expense limitation.
Pursuant to the Balanced Fund's current expense limitation, $280,000 of management fees were not accrued by the Fund for the year ended December 31, 1993. Pursuant to the previous expense limitation, $571,000 remains subject to reimbursement through December 31, 1994.
Pursuant to the Blue Chip Growth Fund's current expense limitation, $53,000 of management fees were not accrued by the Fund for the period ended December 31, 1993, and $30,000 of other expenses were borne by T. Rowe Price and subject to further reimbursement.
Pursuant to the Dividend Growth Fund's current expense limitation, $145,000 of management fees were not accrued by he Fund for the period ended December 31, 1993, and $84,000 of other
Fund expenses borne by T. Rowe Price and are subject to future reimbursement.
Pursuant to the Equity Index Fund's current expense limitation, $293,000 of management fees were not accrued by the Fund for the year ended December 31, 1993, and $20,000 of other expenses were borne by T. Rowe Price. Additionally, $338,000 of unaccrued fees and expenses remain subject to future reimbursement. Pursuant to a previous expense limitation, $421,000 of unaccrued fees and expenses from 1990-1991 have been permanently waived.
Pursuant to Mid-Cap Growth Fund's current expense limitation, $136,000 of management fees were not accrued by the Fund for the year ended December 31, 1993. Additionally, $92,000 of unaccrued fees and expenses from 1992 are subject to future reimbursement.
For New America Growth Fund, during the year ended December 31, 1987, $326,000 of management fees were not accrued by the Fund pursuant to an annual state limitation. In 1988, the Fund obtained a variance from this limitation which permitted the 1987 fees to be reimbursed to T. Rowe Price. The unaccrued fees from 1987 were to be reimbursed to T. Rowe Price only to the extent that doing so would not cause the Fund's ratio of expenses to average net assets to exceed any expense limitation then in effect. Pursuant to these provisions, the remaining $278,000 of fees were reimbursed to T. Rowe Price during the year ended December 31, 1993.
Pursuant to Science & Technology Fund's previous expense limitation, $264,000 of unaccrued 1990-1991 fees were repaid during the year ended December 31, 1993, and $170,000 of 1990- 1991 fees have been permanently waived.
Pursuant to Small-Cap Value Fund's current and previous expense limitations, $180,000 of unaccrued 1990-1991 fees, representing the entire unaccrued balance, were reimbursed to the Manager during the year ended December 31, 1993.
Capital Appreciation Fund
Management Fee
The Fund pays T. Rowe Price a fee ("Fee") which consists of three components: a Group Management Fee ("Group Fee"), an Individual Fund Fee ("Fund Fee") and a performance fee adjustment ("Performance Fee Adjustment") based on the performance of the Fund relative to the Standard & Poor's 500 Stock Index (the "Index"). The Fee is paid monthly to T. Rowe Price on the first business day of the next succeeding calendar month and is calculated as described below. The performance adjustment for
the year ended December 31, 1993, decreased management fees by $220,000.
The Monthly Group Fee and Monthly Fund Fee are combined (the "Combined Fee") and are subject to a Performance Fee Adjustment, depending on the total return investment performance of the Fund relative to the total return performance of the Standard & Poor's 500 Stock Composite Index (the "Index") during the previous thirty-six (36) months. The Performance Fee Adjustment is computed as of the end of each month and if an adjustment results, is added to, or subtracted from the Combined Fee. No Performance Fee Adjustment is made to the Combined Fee unless the investment performance ("Investment Performance") of the Fund (stated as a percent) exceeds, or is exceeded by, the investment record ("Investment Record") of the Index (stated as a percent) by at least one full point. (The difference between the Investment Performance and Investment Record will be referred to as the Investment Performance Differential.) The Performance Fee Adjustment for any month is calculated by multiplying the rate of the Performance Fee Adjustment ("Performance Fee Adjustment") (as determined below) achieved for the 36-month period, times the average daily net assets of the Fund for such 36-month period and dividing the product by 12. The Performance Fee Adjustment Rate is calculated by multiplying the Investment Performance Differential (rounded downward to the nearest full point) times a factor of .02%. Regardless of the Investment Performance Differential, the Performance Fee Adjustment Rate shall not exceed .30%. the same period.
Example
For example, if the Investment Performance Differential was 11.6, it would be rounded to 11. The Investment Performance Differential of 11 would be multiplied by .02% to arrive at the Performance Fee Adjustment Rate of .22%. The .22% Performance Fee Adjustment Rate would be multiplied by the fraction of 1/12 and that product would be multiplied by the Fund's average daily net assets for the 36-month period to arrive at the Performance Fee Adjustment.
The computation of the Investment Performance of the Fund and the Investment Record of the Index will be made in accordance with Rule 205-1 under the Investment Advisers Act of 1940 or any other applicable rule as, from time to time, may be adopted or amended. These terms are currently defined as follows:
The Investment Performance of the Fund is the sum of: (i) the
change in the Fund's net asset value per share during the period;
(ii) the value of the Fund's cash distributions per share having
an exdividend date occurring within the period; and (iii) the per share amount of any capital gains taxes paid or accrued during such period by the Fund for undistributed, realized long-term capital gains.
The Investment Record of the Index is the sum of: (i) the change in the level of the Index during the period; and (ii) the value, computed consistently with the Index, of cash distributions having an exdividend date occurring within the period made by companies whose securities comprise the Index.
Equity Index Fund
Management Fee
The Fund pays T. Rowe Price an annual investment management fee in monthly installments of .20% of the average daily net asset value of the Fund. Due to the effect of the Fund's expense limitation, for the years ended December 31, 1992, December 31, 1991 and for the fiscal period ended December 31, 1990, the Fund did not pay T. Rowe Price an investment management fee.
Equity Income, Growth & Income, Growth Stock, New Era, and New Horizons Funds
T. Rowe Price Spectrum Fund, Inc.
The Fund is a party to a Special Servicing Agreement ("Agreement") between and among T. Rowe Price Spectrum Fund, Inc. ("Spectrum Fund"), T. Rowe Price, T. Rowe Price Services, Inc. and various other T. Rowe Price funds which, along with the Fund, are funds in which Spectrum Fund invests (collectively all such funds "Underlying Price Funds").
The Agreement provides that, if the Board of
Directors/Trustees of any Underlying Price Fund determines that
such Underlying Fund's share of the aggregate expenses of
Spectrum Fund is less than the estimated savings to the
Underlying Price Fund from the operation of Spectrum Fund, the
Underlying Price Fund will bear those expenses in proportion to
the average daily value of its shares owned by Spectrum Fund,
provided further that no Underlying Price Fund will bear such
expenses in excess of the estimated savings to it. Such savings
are expected to result primarily from the elimination of numerous
separate shareholder accounts which are or would have been
invested directly in the Underlying Price Funds and the resulting
reduction in shareholder servicing costs. Although such cost
savings are not certain, the estimated savings to the Underlying
Price Funds generated by the operation of Spectrum Fund are
expected to be sufficient to offset most, if not all, of the
expenses incurred by Spectrum Fund.
All Funds
DISTRIBUTOR FOR FUND
T. Rowe Price Investment Services, Inc. ("Investment Services"), a Maryland corporation formed in 1980 as a wholly- owned subsidiary of T. Rowe Price, serves as the Fund's distributor. Investment Services is registered as a broker- dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The offering of the Fund's shares is continuous.
Investment Services is located at the same address as the Fund and T. Rowe Price -- 100 East Pratt Street, Baltimore, Maryland 21202.
Investment Services serves as distributor to the Fund pursuant to an Underwriting Agreement ("Underwriting Agreement"), which provides that the Fund will pay all fees and expenses in connection with: registering and qualifying its shares under the various state "blue sky" laws; preparing, setting in type, printing, and mailing its prospectuses and reports to shareholders; and issuing its shares, including expenses of confirming purchase orders.
The Underwriting Agreement provides that Investment Services will pay all fees and expenses in connection with: printing and distributing prospectuses and reports for use in offering and selling Fund shares; preparing, setting in type, printing, and mailing all sales literature and advertising; Investment Services' federal and state registrations as a broker-dealer; and offering and selling Fund shares, except for those fees and expenses specifically assumed by the Fund. Investment Services' expenses are paid by T. Rowe Price.
Investment Services acts as the agent of the Fund in connection with the sale of its shares in all states in which the shares are qualified and in which Investment Services is qualified as a broker-dealer. Under the Underwriting Agreement, Investment Services accepts orders for Fund shares at net asset value. No sales charges are paid by investors or the Fund.
All Funds
CUSTODIAN
State Street Bank and Trust Company is the custodian for the Fund's securities and cash, but it does not participate in the Fund's investment decisions. Portfolio securities purchased in the U.S. are maintained in the custody of the Bank and may be
entered into the Federal Reserve Book Entry System, or the security depository system of the Depository Trust Corporation. The Fund has entered into a Custodian Agreement with The Chase Manhattan Bank, N.A., London, pursuant to which portfolio securities which are purchased outside the United States are maintained in the custody of various foreign branches of The Chase Manhattan Bank and such other custodians, including foreign banks and foreign securities depositories as are approved by the Fund's Board of Directors/Trustees in accordance with regulations under the Investment Company Act of 1940. The Bank's main office is at 225 Franklin Street, Boston, Massachusetts 02110. The address for The Chase Manhattan Bank, N.A., London is Woolgate House, Coleman Street, London, EC2P 2HD, England.
PORTFOLIO TRANSACTIONS
Investment or Brokerage Discretion
Decisions with respect to the purchase and sale of portfolio securities on behalf of the Fund are made by T. Rowe Price. T. Rowe Price is also responsible for implementing these decisions, including the negotiation of commissions and the allocation of portfolio brokerage and principal business.
How Brokers and Dealers are Selected
Equity Securities
In purchasing and selling the Fund's portfolio securities, it is T. Rowe Price's policy to obtain quality execution at the most favorable prices through responsible brokers and dealers and, in the case of agency transactions, at competitive commission rates. However, under certain conditions, the Fund may pay higher brokerage commissions in return for brokerage and research services. As a general practice, over-the-counter orders are executed with market-makers. In selecting among market-makers, T. Rowe Price generally seeks to select those it believes to be actively and effectively trading the security being purchased or sold. In selecting broker-dealers to execute the Fund's portfolio transactions, consideration is given to such factors as the price of the security, the rate of the commission, the size and difficulty of the order, the reliability, integrity, financial condition, general execution and operational capabilities of competing brokers and dealers, and brokerage and research services provided by them. It is not the policy of T. Rowe Price to seek the lowest available commission rate where it is believed that a broker or dealer charging a higher commission rate would offer greater reliability or provide better price or execution.
Fixed Income Securities
Fixed income securities are generally purchased from the issuer or a primary market-maker acting as principal for the securities on a net basis, with no brokerage commission being paid by the client. Transactions placed through dealers serving as primary market-makers reflect the spread between the bid and asked prices. Securities may also be purchased from underwriters at prices which include underwriting fees.
With respect to equity and fixed income securities, T. Rowe Price may effect principal transactions on behalf of the Fund with a broker or dealer who furnishes brokerage and/or research services, designate any such broker or dealer to receive selling concessions, discounts or other allowances, or otherwise deal with any such broker or dealer in connection with the acquisition of securities in underwritings.
How Evaluations are Made of the Overall Reasonableness of Brokerage Commissions Paid
On a continuing basis, T. Rowe Price seeks to determine what levels of commission rates are reasonable in the marketplace for transactions executed on behalf of the Fund. In evaluating the reasonableness of commission rates, T. Rowe Price considers: (a) historical commission rates, both before and since rates have been fully negotiable; (b) rates which other institutional investors are paying, based on available public information; (c) rates quoted by brokers and dealers; (d) the size of a particular transaction, in terms of the number of shares, dollar amount, and number of clients involved; (e) the complexity of a particular transaction in terms of both execution and settlement; (f) the level and type of business done with a particular firm over a period of time; and (g) the extent to which the broker or dealer has capital at risk in the transaction.
Description of Research Services Received from Brokers and Dealers
T. Rowe Price receives a wide range of research services from brokers and dealers. These services include information on the economy, industries, groups of securities, individual companies, statistical information, accounting and tax law interpretations, political developments, legal developments affecting portfolio securities, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance analysis and analysis of corporate responsibility issues. These services provide both domestic and international perspective. Research services are received primarily in the form of written reports, computer generated services, telephone contacts and personal meetings with security analysts. In addition, such
services may be provided in the form of meetings arranged with corporate and industry spokespersons, economists, academicians and government representatives. In some cases, research services are generated by third parties but are provided to T. Rowe Price by or through broker-dealers.
Research services received from brokers and dealers are supplemental to T. Rowe Price's own research effort and, when utilized, are subject to internal analysis before being incorporated by T. Rowe Price into its investment process. As a practical matter, it would not be possible for T. Rowe Price's Equity Research Division to generate all of the information presently provided by brokers and dealers. T. Rowe Price pays cash for certain research services received from external sources. T. Rowe Price also allocates brokerage for research services which are available for cash. While receipt of research services from brokerage firms has not reduced T. Rowe Price's normal research activities, the expenses of T. Rowe Price could be materially increased if it attempted to generate such additional information through its own staff. To the extent that research services of value are provided by brokers or dealers, T. Rowe Price may be relieved of expenses which it might otherwise bear.
T. Rowe Price has a policy of not allocating brokerage
business in return for products or services other than brokerage
or research services. In accordance with the provisions of
Section 28(e) of the Securities Exchange Act of 1934, T. Rowe
Price may from time to time receive services and products which
serve both research and non-research functions. In such event,
T. Rowe Price makes a good faith determination of the anticipated
research and non-research use of the product or service and
allocates brokerage only with respect to the research component.
Commissions to Brokers who Furnish Research Services
Certain brokers who provide quality execution services also furnish research services to T. Rowe Price. In order to be assured of continuing to receive research services considered of value to its clients, T. Rowe Price has adopted a brokerage allocation policy embodying the concepts of Section 28(e) of the Securities Exchange Act of 1934, which permits an investment adviser to cause an account to pay commission rates in excess of those another broker or dealer would have charged for effecting the same transaction, if the adviser determines in good faith that the commission paid is reasonable in relation to the value of the brokerage and research services provided. The determination may be viewed in terms of either the particular transaction involved or the overall responsibilities of the adviser with respect to the accounts over which it exercises investment discretion. Accordingly, while T. Rowe Price cannot
readily determine the extent to which commission rates or net prices charged by broker-dealers reflect the value of their research services, T. Rowe Price would expect to assess the reasonableness of commissions in light of the total brokerage and research services provided by each particular broker.
Internal Allocation Procedures
T. Rowe Price has a policy of not precommitting a specific amount of business to any broker or dealer over any specific time period. Historically, the majority of brokerage placement has been determined by the needs of a specific transaction such as market-making, availability of a buyer or seller of a particular security, or specialized execution skills. However, T. Rowe Price does have an internal brokerage allocation procedure for that portion of its discretionary client brokerage business where special needs do not exist, or where the business may be allocated among several brokers which are able to meet the needs of the transaction.
Each year, T. Rowe Price assesses the contribution of the brokerage and research services provided by brokers, and attempts to allocate a portion of its brokerage business in response to these assessments. Research analysts, counselors, various investment committees, and the Trading Department each seek to evaluate the brokerage and research services they receive from brokers and make judgments as to the level of business which would recognize such services. In addition, brokers sometimes suggest a level of business they would like to receive in return for the various brokerage and research services they provide. Actual brokerage received by any firm may be less than the suggested allocations but can, and often does, exceed the suggestions, because the total brokerage business is allocated on the basis of all the considerations described above. In no case is a broker excluded from receiving business from T. Rowe Price because it has not been identified as providing research services.
Miscellaneous
T. Rowe Price's brokerage allocation policy is consistently applied to all its fully discretionary accounts, which represent a substantial majority of all assets under management. Research services furnished by brokers through which T. Rowe Price effects securities transactions may be used in servicing all accounts (including non-Fund accounts) managed by T. Rowe Price. Conversely, research services received from brokers which execute transactions for the Fund are not necessarily used by T. Rowe Price exclusively in connection with the management of the Fund.
From time to time, orders for clients may be placed through a computerized transaction network.
The Fund does not allocate business to any broker-dealer on the basis of its sales of the Fund's shares. However, this does not mean that broker-dealers who purchase Fund shares for their clients will not receive business from the Fund.
Some of T. Rowe Price's other clients have investment objectives and programs similar to those of the Fund. T. Rowe Price may occasionally make recommendations to other clients which result in their purchasing or selling securities simultaneously with the Fund. As a result, the demand for securities being purchased or the supply of securities being sold may increase, and this could have an adverse effect on the price of those securities. It is T. Rowe Price's policy not to favor one client over another in making recommendations or in placing orders. T. Rowe Price frequently follows the practice of grouping orders of various clients for execution which generally results in lower commission rates being attained. In certain cases, where the aggregate order is executed in a series of transactions at various prices on a given day, each participating client's proportionate share of such order reflects the average price paid or received with respect to the total order. T. Rowe Price has established a general investment policy that it will ordinarily not make additional purchases of a common stock of a company for its clients (including the T. Rowe Price Funds) if, as a result of such purchases, 10% or more of the outstanding common stock of such company would be held by its clients in the aggregate.
To the extent possible, T. Rowe Price intends to recapture solicitation fees paid in connection with tender offers through T. Rowe Price Investment Services, Inc., the Fund's distributor. At the present time, T. Rowe Price does not recapture commissions or underwriting discounts or selling group concessions in connection with taxable securities acquired in underwritten offerings. T. Rowe Price does, however, attempt to negotiate elimination of all or a portion of the selling-group concession or underwriting discount when purchasing tax-exempt municipal securities on behalf of its clients in underwritten offerings.
Transactions with Related Brokers and Dealers
As provided in the Investment Management Agreement between the Fund and T. Rowe Price, T. Rowe Price is responsible not only for making decisions with respect to the purchase and sale of the Fund's portfolio securities, but also for implementing these decisions, including the negotiation of commissions and the allocation of portfolio brokerage and principal business. It is expected that T. Rowe Price may place orders for the Fund's
portfolio transactions with broker-dealers through the same trading desk T. Rowe Price uses for portfolio transactions in domestic securities. The trading desk accesses brokers and dealers in various markets in which the Fund's foreign securities are located. These brokers and dealers may include certain affiliates of Robert Fleming Holdings Limited ("Robert Fleming Holdings") and Jardine Fleming Group Limited ("JFG"), persons indirectly related to T. Rowe Price. Robert Fleming Holdings, through Copthall Overseas Limited, a wholly-owned subsidiary, owns 25% of the common stock of Rowe Price-Fleming International, Inc. ("RPFI"), an investment adviser registered under the Investment Advisers Act of 1940. Fifty percent of the common stock of RPFI is owned by TRP Finance, Inc., a wholly-owned subsidiary of T. Rowe Price, and the remaining 25% is owned by Jardine Fleming Holdings Limited, a subsidiary of JFG. JFG is 50% owned by Robert Fleming Holdings and 50% owned by Jardine Matheson Holdings Limited. Orders for the Fund's portfolio transactions placed with affiliates of Robert Fleming Holdings and JFG will result in commissions being received by such affiliates.
The Board of Directors/Trustees of the Fund has authorized T. Rowe Price to utilize certain affiliates of Robert Fleming and JFG in the capacity of broker in connection with the execution of the Fund's portfolio transactions. These affiliates include, but are not limited to, Jardine Fleming Securities Limited ("JFS"), a wholly-owned subsidiary of JFG, Robert Fleming & Co. Limited ("RF&Co."), Jardine Fleming Australia Securities Limited, and Robert Fleming, Inc. (a New York brokerage firm). Other affiliates of Robert Fleming Holding and JFG also may be used. Although it does not believe that the Fund's use of these brokers would be subject to Section 17(e) of the Investment Company Act of 1940, the Board of Directors/Trustees of the Fund has agreed that the procedures set forth in Rule 17(e)(1) under that Act will be followed when using such brokers.
Other
For the years 1993, 1992, and 1991, the total brokerage commissions paid by each Fund including the discounts received by securities dealers in connection with underwritings, and the percentage of these commissions, paid to firms which provided research, statistical, or other services to T. Rowe Price in connection with the management of each Fund, or, in some cases, to each Fund, as shown below.
1993 1992 1991
Fund Commissions % Commissions % Commissions %
Balanced $ 91,678 46.1% $ 162,000 46%$ 122,000 65%
PAGE 65
Blue Chip
Growth 177,317 10% * * * *
Capital
Apprec-
iation 1,141,732 45.28% 439,000 55% 478,000 59%
Dividend
Growth 282,409 22% * * * *
Equity
Income 4,660,406 42.12% 3,419,000 37% 3,087,000 36%
Growth &
Income 2,814,544 26.9% 2,218,000 24% 2,051,000 31%
Growth
Stock 3,983,572 40.4% 3,392,000 41% 1,753,000 65%
Equity
Index 20,978 8.6% 39,000 2.8% 10,000 *
Mid-Cap
Growth 441,166 18.9% 119,000 39% *
New America
Growth 2,345,540 17.6% 1,349,00 20% 1,435,000 24%
New Era 1,758,270 28.03% 299,000 95% 451,000 63%
New
Horizons 7,336,582 8.2% 4,810,000 13% 4,239,000 14%
OTC 776,333 6.68% 120,000 35.83% 51,000 None
Science &
Tech-
nology 2,186,853 23.97% 861,000 19% 909,000 16%
Small-Cap
Value 995,993 11.4% 661,000 26.2% 117,000 12.8%
|
On December 31, 1993, the Balanced Fund held 38,200 shares of the common stock of J.P. Morgan with a value of $2,650,000. In 1993, J.P. Morgan was among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
On December 31, 1993, the Capital Appreciation Fund held commercial paper of the following regular brokers or dealers of the Fund Bear Stearns, BT Securities, Goldman Sachs Group, Merrill Lynch, and Morgan Stanley Group, respectively, with a value of $5,000,000, $5,834,000, $5,000,000, $5,000,000, and $5,012,000, respectively. In 1993, Bear Stearns, BT Securities, Goldman Sachs Group, Merrill Lynch, and Morgan Stanley Group were among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
On December 31, 1993, the Equity Income Fund held 250,000 shares of the common stock of J.P. Morgan with a value of $17,344,000. In 1993, J.P. Morgan was among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
On December 31, 1993, the Growth Stock Fund held 150,000 shares of the common stock of J.P. Morgan with a value of $10,406,000. In 1993, J.P. Morgan was among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
On December 31, 1993, the New Era Fund held commercial paper of the following regular brokers or dealers of the Fund BT Securities, Citicorp, Goldman Sachs Group, Merrill Lynch, and Morgan Stanley Group, respectively, with a value of $639,000, $4,997,000, $5,000,000, $5,000,000, and $5,000,000, respectively. In 1993, Bear Stearns, BT Securities, Goldman Sachs Group, Merrill Lynch, and Morgan Stanley Group were among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
On December 31, 1993, the Science & Technology Fund held commercial paper of the following regular brokers or dealers of the Fund Bankers Trust Company with a value of $5,598,000. In 1993, Bankers Trust Company was among the Fund's regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act of 1940.
The portfolio turnover rate for each Fund for the years ended 1993, 1992, and 1991, was as follows:
Fund 1993 1992 1991 Balanced 8.7% 207.7% 239.9% Blue Chip Growth 152.5% * * Capital Appreciation 39.4% 30.3% 50.7% Dividend Growth 51.2% * * Equity Income 31.2% 30% 33.5% Growth & Income 22.4% 29.9% 47.9% Growth Stock 35.3% 27.4% 31.8% Equity Index .80% 0.1% 5.8% Mid-Cap Growth 62.4% 51.9% * New America Growth 43.7% 26.4% 42.3% New Era 24.7% 16.9% 9.0% New Horizons 49.4% 49.6% 32.5% OTC 40.8% 30.7% 31% Science & Technology 163.4% 144% 148% Small-Cap Value 11.8% 12% 31% |
All Funds, Except Equity Index Fund
PRICING OF SECURITIES
Equity securities listed or regularly traded on a securities exchange (including NASDAQ) are valued at the last quoted sales price on the day the valuations are made. A security which is
listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Other equity securities and those listed securities that are not traded on a particular day are valued at a price within the limits of the latest bid and asked prices deemed by the Board of Directors/Trustees, or by persons delegated by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and are valued at a price deemed best to reflect fair value as quoted by dealers who make markets in these securities or by an independent pricing service. Short-term debt securities are valued at their cost in local currency which, when combined with accrued interest, approximates fair value.
For purposes of determining the Fund's net asset value per share, all assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at the mean of the bid and offer prices of such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by or under the supervision of the officers of the Fund, as authorized by the Board of Directors/Trustees.
All Funds
NET ASSET VALUE PER SHARE
The purchase and redemption price of the Fund's shares is equal to the Fund's net asset value per share or share price. The Fund determines its net asset value per share by subtracting the Fund's liabilities (including accrued expenses and dividends payable) from its total assets (the market value of the securities the Fund holds plus cash and other assets, including income accrued but not yet received) and dividing the result by the total number of shares outstanding. The net asset value per share of the Fund is calculated as of the close of trading on the New York Stock Exchange ("NYSE") every day the NYSE is open for trading. The NYSE is closed on the following days: New Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Determination of net asset value (and the offering, sale redemption and repurchase of shares) for the Fund may be suspended at times (a) during which the NYSE is closed, other than customary weekend and holiday closings, (b) during which trading on the NYSE is restricted, (c) during which an emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net
assets, or (d) during which a governmental body having
jurisdiction over the Fund may by order permit such a suspension
for the protection of the Fund's shareholders; provided that
applicable rules and regulations of the Securities and Exchange
Commission (or any succeeding governmental authority) shall
govern as to whether the conditions prescribed in (b), (c), or
(d) exist.
DIVIDENDS AND DISTRIBUTIONS
Unless you elect otherwise, the Fund's annual capital gain distribution, if any, will be reinvested on the reinvestment date using the NAV per share of that date. The reinvestment date normally precedes the payment date by about 10 days although the exact timing is subject to change.
TAX STATUS
The Fund intends to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended ("Code").
A portion of the dividends paid by the Fund may be eligible for the dividends-received deduction for corporate shareholders. For tax purposes, it does not make any difference whether dividends and capital gain distributions are paid in cash or in additional shares. The Fund must declare dividends equal to at least 98% of ordinary income (as of December 31) and capital gains (as of October 31) in order to avoid a federal excise tax and distribute 100% of ordinary income and capital gains as of December 31 to avoid federal income tax.
At the time of your purchase, the Fund's net asset value may reflect undistributed capital gains or net unrealized appreciation of securities held by the Fund. A subsequent distribution to you of such amounts, although constituting a return of your investment, would be taxable as a capital gain distribution. For federal income tax purposes, the Fund is permitted to carry forward its net realized capital losses, if any, for eight years and realize net capital gains up to the amount of such losses without being required to pay taxes on, or distribute such gains. On March 31, 1993, the books of each Fund indicated that each Fund's aggregate net assets included undistributed net income, net realized capital gains, and unrealized appreciation which are listed below.
Fund Net Income Capital Gains Appreciation Balanced $ 55,090 $ 1,025,471 $ 20,061,385 Blue Chip Growth * * * Capital Appreciation 2,626,042 1,647,801 32,963,924 Dividend Growth * 111,317 472,825 Equity Income 866,534 38,535,200 228,065,617 Growth & Income * 11,728,721 192,399,318 Growth Stock 24,655 117,447,447 529,184,587 Equity Index 94,324 156,485 12,347,027 Mid-Cap Growth 13,735 397,973 3,277,481 New America Growth * 17,060,459 99,156,580 New Era 3,474,540 15,966,158 176,906,351 New Horizons * 81,970,386 410,188,247 OTC * * * Science & Technology * 13,147,068 42,558,089 Small-Cap Value 1,309,191 2,408,380 54,441,208 |
If, in any taxable year, the Fund should not qualify as a regulated investment company under the Code: (i) the Fund would be taxed at normal corporate rates on the entire amount of its taxable income, if any, without deduction for dividends or other distributions to shareholders; and (ii) the Fund's distributions to the extent made out of the Fund's current or accumulated earnings and profits would be taxable to shareholders as ordinary dividends (regardless of whether they would otherwise have been considered capital gain dividends).
Taxation of Foreign Shareholders
The Code provides that dividends from net income will be subject to U.S. tax. For shareholders who are not engaged in a business in the U.S., this tax would be imposed at the rate of 30% upon the gross amount of the dividends in the absence of a Tax Treaty providing for a reduced rate or exemption from U.S. taxation. Distributions of net long-term capital gains realized by the Fund are not subject to tax unless the foreign shareholder is a nonresident alien individual who was physically present in the U.S. during the tax year for more than 182 days.
All Funds Except Equity Index Fund
To the extent the Fund invests in foreign securities, the following would apply:
Passive Foreign Investment Companies
The Fund may purchase the securities of certain foreign investment funds or trusts called passive foreign investment companies. Capital gains on the sale of such holdings will be
deemed to be ordinary income regardless of how long the Fund holds its investment. In addition to bearing their proportionate share of the funds expenses (management fees and operating expenses) shareholders will also indirectly bear similar expenses of such funds. In addition, the Fund may be subject to corporate income tax and an interest charge on certain dividends and capital gains earned from these investments, regardless of whether such income and gains were distributed to shareholders.
In accordance with tax regulations, the Fund intends to treat these securities as sold on the last day of the Fund's fiscal year and recognize any gains for tax purposes at that time; losses will not be recognized. Such gains will be considered ordinary income which the Fund will be required to distribute even though it has not sold the security and received cash to pay such distributions.
Foreign Currency Gains and Losses
Foreign currency gains and losses, including the portion of gain or loss on the sale of debt securities attributable to foreign exchange rate fluctuations, are taxable as ordinary income. If the net effect of these transactions is a gain, the dividend paid by the Fund will be increased; if the result is a loss, the income dividend paid by the Fund will be decreased. Adjustments to reflect these gains and losses will be made at the end of the Fund's taxable year.
Balanced Fund
YIELD INFORMATION
From time to time, the Fund may advertise a yield figure calculated in the following manner:
An income factor is calculated for each security in the portfolio, which in the case of bonds is based upon the security's market value at the beginning of the period and yield- to-maturity as determined in conformity with regulations of the Securities and Exchange Commission, and in the case of stocks is based upon the stated dividend rate. The income factors are then totalled for all securities in the portfolio. Next, expenses of the Fund for the period net of expected reimbursements are deducted from the income to arrive at net income, which is then converted to a per-share amount by dividing net income by the average number of shares outstanding during the period. The net income per share is divided by the net asset value on the last day of the period to produce a monthly yield which is then annualized. Quoted yield factors are for comparison purposes only, and are not intended to indicate future performance or forecast the dividend per share of the Fund.
All Funds
INVESTMENT PERFORMANCE
Total Return Performance
The Fund's calculation of total return performance includes the reinvestment of all capital gain distributions and income dividends for the period or periods indicated, without regard to tax consequences to a shareholder in the Fund. Total return is calculated as the percentage change between the beginning value of a static account in the Fund and the ending value of that account measured by the then current net asset value, including all shares acquired through reinvestment of income and capital gains dividends. The results shown are historical and should not be considered indicative of the future performance of the Fund. Each average annual compound rate of return is derived from the cumulative performance of the Fund over the time period specified. The annual compound rate of return for the Fund over any other period of time will vary from the average.
Cumulative Performance Percentage Change
1 Yr. 5 Yrs. 10 Yrs. Since
Ended Ended Ended Inception
12/31/93 12/31/93 12/31/93 12/31/93
S&P 500 10.07% 97.34% 301.77%
Dow Jones
Industrial Avg. 16.99 105.25 333.86
CPI 2.75 21.00 43.93
Equity Index Fund 9.42 52.02%
3/30/92
Dividend Growth Fund 19.41 19.41
12/30/92
Blue Chip Growth Fund 14.32
6/30/93
Growth Stock Fund 15.56 96.73 251.42 10,472.21
4/11/50
New America Growth Fund 17.44 153.87 269.31
9/30/85
Lipper Growth
Fund Index 14.19 102.77 248.11 219.09
Equity Income Fund 14.84 74.08 220.77
10/31/85
Lipper Equity Income
Fund Average 13.38 78.00 160.86
PAGE 72
Growth & Income Fund 12.96 81.64 186.93 292.39
12/21/82
Lipper Growth and Income
Fund Index 14.86 87.67 252.07 334.61
Capital Appreciation Fund15.66 84.41 156.43
6/30/86
Lipper Capital Appreciation
Funds Average 15.16 107.86 120.81
New Era Fund 15.33 53.18 194.60 1,040.50
1/20/69
Lipper Natural Resources
Funds Average 22.94 55.30 119.33 N/A
Science & Technology Fund24.25 228.01 199.48
9/30/87
Lipper Science and
Technology Index 23.55 130.75 88.59
Balanced Fund 13.35% 92.62% 253.40% 20,369.52%
12/31/39
Lipper Balanced
Fund Index 11.70 82.55 219.63 N/A
Lehman Brothers
Aggregate Index 9.75 70.64 206.56 N/A
Salomon Brothers Broad
Investment Grade Index 9.92 71.22 207.91 N/A
New Horizons Fund 22.01 134.34 178.05 3,587.41
6/3/60
OTC Fund 18.40 77.10 172.23% 14,347.80
6/1/56
Small-Cap Value Fund 23.30 109.51 101.51
6/30/88
NASDAQ Composite 14.75 103.68 178.82 N/A
Lipper Small Company
Growth Funds Average 16.93 121.43 228.73 N/A
Mid-Cap Growth Fund 26.24 57.21
6/30/92
S&P 400 Mid-Cap Index 13.96 32.29
NASDAQ 14.75 37.83
Lipper Growth
Fund Index 14.19 26.77
Lipper Growth Fund
Category Average 10.61 24.43
|
Average Annual Compound Rates of Return
1 Yr. 5 Yrs. 10 Yrs. Since
Ended Ended Ended Inception
12/31/93 12/31/93 12/31/93 12/31/93
S&P 500 10.07% 14.56% 14.92%
Dow Jones
Industrial Avg. 16.99 15.47 15.81
CPI 2.75 3.89 3.71
Equity Index Fund 9.42 11.81%
3/30/92
Dividend Growth Fund 19.41 19.41
12/30/92
Blue Chip Growth Fund 14.32
6/30/93
Growth Stock Fund 15.56 14.49 13.39 11.25
4/11/50
New America Growth Fund 17.44 20.48 17.16
9/30/85
Lipper Growth
Fund Index 14.19 15.19 13.28 N/A
Equity Income Fund 14.84 11.72 15.34
10/31/85
Lipper Equity Income
Fund Average 13.38 12.14 12.17
Growth & Income Fund 12.96 12.68 11.12 13.20
12/21/82
Lipper Growth and Income
Fund Index 14.86 13.42 13.41 14.29
Capital Appreciation Fund15.66 13.02 13.37
6/30/86
Lipper Capital Appreciation
Funds Average 15.16 15.24 10.59
New Era Fund 15.33 8.90 11.41 10.25
1/20/69
Lipper Natural Resources
Funds Average 22.94 8.98 7.72 N/A
Science & Technology Fund24.25 26.82 19.18
9/30/87
Lipper Science and
Technology Index 23.55 18.20 10.68
Balanced Fund 13.35 14.01 13.45 10.36
12/31/39
PAGE 74
Lipper Balanced
Fund Index 11.70 12.79 12.32 N/A
Lehman Brothers
Aggregate Index 9.75 11.28 11.85 N/A
Salomon Brothers Broad
Investment Grade Index 9.92 11.36 11.90 N/A
New Horizons Fund 22.01 18.57 10.77 11.34
6/3/60
OTC Fund 18.40 12.11 10.53 14.15
6/1/56
Small-Cap Value Fund 23.30 15.94 13.58
6/30/88
NASDAQ Composite 14.75 15.29 10.80 N/A
Lipper Small Company
Growth Funds Average 16.93 16.76 12.16 N/A
Mid-Cap Growth Fund 26.24 35.06
6/30/92
S&P 400 Mid-Cap Index 13.96 11.61
NASDAQ 14.75 23.78
Lipper Growth
Fund Index 14.19 17.13
Lipper Growth Fund
Category Average 10.61 15.57
|
From time to time, in reports and promotions literature: (1) the Fund's total return performance or P/E ratio may be compared to any one or combination of the following: (i) the Standard & Poor's 500 Stock Index so that you may compare the Fund's results with those of a group of unmanaged securities widely regarded by investors as representative of the stock market in general; (ii) other groups of mutual funds, including T. Rowe Price Funds, tracked by: (A) Lipper Analytical Services, a widely used independent research firm which ranks mutual funds by overall performance, investment objectives, and assets; (B) Morningstar, Inc., another widely used independent research firm which ranks mutual funds; or (C) other financial or business publications, such as Business Week, Money Magazine, Forbes and Barron's, which provide similar information; (iii) indices of stocks comparable to those in which the Fund invests; (2) the Consumer Price Index (measure for inflation) may be used to assess the real rate of return from an investment in the Fund; (3) other government statistics such as GNP, and net import and export figures derived from governmental publications, e.g., The Survey of Current Business, may be used to illustrate investment attributes of the Fund or the general economic, business, investment, or financial environment in which the Fund operates; (4) the effect of tax- deferred compounding on the Fund's investment returns, or on returns in general, may be illustrated by graphs, charts, etc. where such graphs or charts would compare, at various points in
time, the return from an investment in the Fund (or returns in general) on a tax-deferred basis (assuming reinvestment of capital gains and dividends and assuming one or more tax rates) with the return on a taxable basis; and (5) the sectors or industries in which the Fund invests may be compared to relevant indices or surveys (e.g., S&P Industry Surveys) in order to evaluate the Fund's historical performance or current or potential value with respect to the particular industry or sector. In connection with (4) above, information derived from the following chart may be used:
IRA Versus Taxable Return
Assuming 9% annual rate of return, $2,000 annual contribution and 28% tax bracket.
Year Taxable Tax Deferred 10 $ 28,700 $ 33,100 15 51,400 64,000 20 82,500 111,500 25 125,100 184,600 30 183,300 297,200 |
IRAs
An IRA is a long-term investment whose objective is to accumulate personal savings for retirement. Due to the long-term nature of the investment, even slight differences in performance will result in significantly different assets at retirement. Mutual funds, with their diversity of choice, can be used for IRA investments. Generally, individuals may need to adjust their underlying IRA investments as their time to retirement and tolerance for risk changes.
Other Features and Benefits
The Fund is a member of the T. Rowe Price Family of Funds and may help investors achieve various long-term investment goals, such as investing money for retirement, saving for a down payment on a home, or paying college costs. To explain how the Fund could be used to assist investors in planning for these goals and to illustrate basic principles of investing, various worksheets and guides prepared by T. Rowe Price Associates, Inc. and/or T. Rowe Price Investment Services, Inc. may be made available. These currently include: the Asset Mix Worksheet which is designed to show shareholders how to reduce their investment risk by developing a diversified investment plan; the College Planning Guide which discusses various aspects of financial planning to meet college expenses and assists parents in projecting the costs of a college education for their
children; the Retirement Planning Kit (also available in a PC version) includes a detailed workbook to determine how much money you may need for retirement and suggests how you might invest to achieve your objectives; and the Retirees Financial Guide which includes a detailed workbook to determine how much money you can afford to spend and still preserve your purchasing power and suggests how you might invest to reach your goal. From time to time, other worksheets and guides may be made available as well. Of course, an investment in the Fund cannot guarantee that such goals will be met.
To assist investors in understanding the different returns and risk characteristics of various investments, the aforementioned guides will include presentation of historical returns of various investments using published indices. An example of this is shown below.
Historical Returns for Different Investments
Annualized returns for periods ended 12/31/93
50 years 20 years 10 years 5 years
Small-Company Stocks 15.3% 18.8% 10.0% 13.3%
Large-Company Stocks 12.3 12.8 14.9 14.5
Foreign Stocks N/A 14.4 17.9 2.3
Long-Term Corporate Bonds 5.6 10.2 14.0 13.0
Intermediate-Term U.S.
Gov't. Bonds 5.7 9.8 11.4 11.3
Treasury Bills 4.6 7.5 6.4 5.6
U.S. Inflation 4.3 5.9 3.7 3.9
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Sources: Ibbotson Associates, Morgan Stanley. Foreign stocks reflect performance of The Morgan Stanley Capital International EAFE Index, which includes some 1,000 companies representing the stock markets of Europe, Australia, New Zealand, and the Far East. This chart is for illustrative purposes only and should not be considered as performance for, or the annualized return of, any T. Rowe Price Fund. Past performance does not guarantee future results.
Also included will be various portfolios demonstrating how these historical indices would have performed in various
combinations over a specified time period in terms of return. An example of this is shown below.
Performance of Retirement Portfolios*
Asset Mix Average Annualized Value
Returns 20 Years of
Ended 12/31/93 $10,000
Investment
After Period
___________________________________________ ____________
Nominal Real Best Worst
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PortfolioGrowthIncomeSafetyReturnReturn**Year Year
I. Low Risk 40% 40% 20% 11.3% 5.4% 24.9% -9.3%$ 79,775
II. Moderate
Risk 60% 30% 10% 12.1% 6.2% 29.1%-15.6%$ 90,248
III. High
Risk 80% 20% 0% 12.9% 7.0% 33.4%-21.9%$100,031
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Source: T. Rowe Price Associates; data supplied by Lehman Brothers, Wilshire Associates, and Ibbotson Associates.
* Based on actual performance for the 20 years ended 1993 of
stocks (85% Wilshire 5000 and 15% Europe, Australia, Far East
[EAFE] Index), bonds (Lehman Brothers Aggregate Bond Index
from 1976-93 and Lehman Brothers Government/Corporate Bond
Index from 1974-75), and 30-day Treasury bills from January
1974 through December 1993. Past performance does not
guarantee future results. Figures include changes in
principal value and reinvested dividends and assume the same
asset mix is maintained each year. This exhibit is for
illustrative purposes only and is not representative of the
performance of any T. Rowe Price fund.
** Based on inflation rate of 5.9% for the 20-year period ended
12/31/93.
From time to time, Insights, a T. Rowe Price publication of reports on specific investment topics and strategies, may be included in the Fund's fulfillment kit. Such reports may include information concerning: calculating taxable gains and losses on mutual fund transactions, coping with stock market volatility, benefiting from dollar cost averaging, understanding international markets, investing in high-yield "junk" bonds, growth stock investing, conservative stock investing, value investing, investing in small companies, tax-free investing,
fixed income investing, investing in mortgage-backed securities, as well as other topics and strategies.
Dividend Growth Fund
Growing income from rising dividends
A line graph titled "Growing income from rising dividends" which depicts hypothetical income and yield on a original investment of $10,000 in a stock currently yielding 3% and whose dividends grow 8% a year. The chart shows a range of yields from 0% to 15% and income from $0 to $1,500, for five year periods from zero to 20. The yield and income for each of the periods are approximately as listed below.
5 Years 10 Years 15 Years 20 Years
Yield 4% 6% 9% 14%
Income $400 $600 $900 $1,400
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Chart depicts hypothetical income and yield on an original investment of $10,000 in a stock currently yielding 3% and whose dividends grow 8% a year. Example is for illustrative purposes only and is not indicative of an investment in the T. Rowe Price Dividend Growth Fund.
New Horizons and OTC Fund
PERFORMANCE OF LARGE VS. SMALL COMPANY
STOCKS FOLLOWING RECESSIONS
(Total Return For 12 Months After Recession)
Bar graph appears here comparing large and small company stocks during eight post-recession periods.
Large Company Stocks
Post- 5/54- 4/58- 2/61- 11/70- 3/75- 7/80-11/82- 3/91-
Recession5/55 4/59 2/62 11/71 3/76 7/81 11/83 3/92 Periods _________________________________________________________________ |
Small Company Stocks
Post- 5/54- 4/58- 2/61- 11/70- 3/75- 7/80-11/82- 3/91-
Recession5/55 4/59 2/62 11/71 3/76 7/81 11/83 3/92 PAGE 79 Periods _________________________________________________________________ |
Data supplied by Ibbotson Associates
The average price-earnings (p/e) ratio of the T. Rowe Price New Horizons Fund is a valuation measure widely used by the investment community with respect to small company stocks, and, in the opinion of T. Rowe Price, has been a good indicator of future small-cap stock performance. The following chart is intended to show the history of the average (unweighted) p/e ratio of the New Horizons Fund's portfolio companies compared with the p/e ratio of the Standard & Poor's 500 Index. Of course, the portfolio of the OTC Fund will differ from the portfolio of the New Horizons Fund. Earnings per share are estimated by T. Rowe Price for each quarter end.
T. ROWE PRICE NEW HORIZONS FUND, INC.
P/E Ratio of Fund's Portfolio Securities
Relative To The S & P "500" P/E Ratio (12 Months Forward) January 31, 1993
This is a one line chart that shows the p/e ratio of the New Horizons Fund relative to the p/e ratio of the S&P 500 Stock Index. The ratio between the two p/e's is depicted quarterly from 1/31/61 to 1/31/93.
The horizontal axis is divided into two year periods. The vertical axis indicates the relative p/e ratio with 0.5, 1, 1.5, 2, and 2.5 indicated by horizontal lines. The ratio at 12/31/61 is 2, is at the lowest point in the first quarter of 1977 at approximately 0.95, is at the highest point near the end of 1983 at approximately 2.2, and is at 1.22 on January 31, 1993.
Source: T. Rowe Price Associates, Inc.
Science & Technology Fund
No-Load Versus Load and 12b-1 Funds
Unlike the T. Rowe Price funds, many mutual funds charge sales fees to investors or use fund assets to finance distribution activities. These fees are in addition to the normal advisory fees and expenses charged by all mutual funds. There are several types of fees charged which vary in magnitude
and which may often be used in combination. A sales charge (or "load") can be charged at the time the fund is purchased (front-end load) or at the time of redemption (back-end load). Front-end loads are charged on the total amount invested. Back-end loads or "redemption fees" are charged either on the amount originally invested or on the amount redeemed. 12b-1 plans allow for the payment of marketing and sales expenses from fund assets. These expenses are usually computed daily as a fixed percentage of assets.
The Fund is a no-load fund which imposes no sales charges or 12b-1 fees. No-load funds are generally sold directly to the public without the use of commissioned sales representatives. This means that 100% of your purchase is invested for you.
The examples in the attached table show the impact on investment performance of the most common types of sales charges. For each example the investor has $10,000 to invest and each fund performs at a compound annual rate of 6% per year (net of fund expenses, including management fees) for ten years. The "Total After 10 Years" shows the amount the investor would receive from the fund after ten years. Net charges are the total sales fee(s) paid by the investor or charged to the fund's assets. Figures for total return are net of Fund expenses including management fees.
The table is for illustrative purposes and is not intended to reflect the anticipated performance of the Fund.
If a $10,000 investment produced a 6% annual total return for ten years in a mutual fund that has . . .
A Sales 1 1.00%
Charge 12b-1
No A of 2% A Plan
Sales Redemp- With a Sales Distri-
Charge tion Fee 1% Redemp- Charge bution
"No-Load" of 1% tion Fee of 8.5% Fee
_________ ________ __________ _______ _______
Original
Investment $10,000 $10,000 $10,000 $10,000 $10,000
(Sales Charge) N/C 2 N/C (200) (850) N/C
_______ _______ _______ _______ _______
Amount Credited
to Account $10,000 $10,000 $ 9,800 $ 9,150 $10,000
Compounded at 6%
For Ten Years $17,908 $17,908 $17,550 $16,386 $16,196
Less Redemption Fee N/C (179) (176) N/C N/C
_______ _______ _______ _______ _______
PAGE 81
Total After
10 Years $17,908 $17,729 $17,374 $16,386 $16,196
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Net Charges $0 ($179) ($376) ($850)($1,332)
1 Figures have been rounded
2 N/C - No charge
3 Net of 12b-1 plan distribution charges
Small-Cap Value Fund
T. ROWE PRICE NEW HORIZONS FUND, INC.
P/E Ratio of Fund's Portfolio Securities
Relative to the S&P "500" P/E Ratio (12 Months Forward) January 31, 1993
This is a one-line chart that shows the p/e ratio of the New Horizons Fund relative to the p/e ratio of the S&P 500 Stock Index. The ratio between the two p/e's is depicted quarterly from 1/31/61 to 1/31/93.
The horizontal axis is divided into four year periods. The vertical axis indicates the relative p/e ratio with 0.5, 1, 1.5, 2, and 2.5 indicated by horizontal lines. The ratio at 12/31/61 is 2, is at the lowest point in the first quarter of 1977 at approximately 0.95, is at the highest point near the end of 1993 at approximately 2.2, and is at 1.22 on January 31, 1993.
Redemptions in Kind
In the unlikely event a shareholder were to receive an in kind redemption of portfolio securities of the Fund, brokerage fees could be incurred by the shareholder in a subsequent sale of such securities.
Issuance of Fund Shares for Securities
Transactions involving issuance of Fund shares for securities or assets other than cash will be limited to (1) bona fide reorganizations; (2) statutory mergers; or (3) other acquisitions of portfolio securities that: (a) meet the investment objective and policies of the Fund; (b) are acquired for investment and not for resale except in accordance with applicable law; (c) have a value that is readily ascertainable via listing on or trading in a recognized United States or international exchange or market; and (d) are not illiquid.
Balanced Fund
From time to time, in reports and promotional literature, the Fund, may compare its performance or yield to Overnight
Government Repurchase Agreements, Treasury bills, notes, and bonds, certificates of deposit, and six-month money market certificates. Performance or yield may also be compared to (1) indices of broad groups of managed and unmanaged securities considered to be representative of or similar to Fund portfolio holdings (2) other mutual funds or (3) other measures of performance set forth on publications such as:
Advertising News Service, Inc., "Bank Rate Monitor - The Weekly Financial Rate Reporter" is a weekly publication which lists the yields on various money market instruments offered to the public by 100 leading banks and thrift institutions in the U.S., including loan rates offered by these banks. Bank certificates of deposit differ from mutual funds in several ways: the interest rate established by the sponsoring bank is fixed for the term of a CD; there are penalties for early withdrawal from CDs, and the principal on a CD is insured.
Donoghue Organization, Inc., "Donoghue's Money Fund Report" is a weekly publication which tracks net assets, yield, maturity, and portfolio holdings on approximately 380 money market mutual funds offered in the U.S. These funds are broken down into various categories such as U.S. Treasury, Domestic Prime and Euros, Domestic Prime and Euros and Yankees, and Aggressive.
Lipper Analytical Services, Inc. Average of Balanced Funds - a widely used independent research firm which ranks mutual funds by overall performance, investment objectives, and assets.
Lipper Analytical Services, Inc., "Lipper Mutual Fund
Performance Analysis" is a monthly publication which
tracks net assets, total return, principal return and
yield on approximately 950 fixed income mutual funds
offered in the United States. Fund categories include:
Growth, Mixed Income, and Flexible Portfolios.
Major Competitors - the average of the following mutual funds: Fidelity Puritan, Vanguard Wellington, Twentieth Century Balanced, or other similar mutual funds.
Merrill Lynch, Pierce, Fenner & Smith, Inc., "Taxable Bond Indices" is a monthly publication which lists principal, coupon and total return on over 100 different taxable bond indices tracked by Merrill Lynch, together with the par weighted characteristics of each Index. The index used as a benchmark for the High Yield Fund is the High Yield Index. The two indices used as benchmarks for
the Short-Term Bond Fund are the 91-Day Treasury Bill Index and the 1-2.99 Year Treasury Note Index.
Morningstar, Inc., is a widely used independent research firm which rates mutual funds by overall performance, investment objectives and assets.
Mutual Fund Values, published by Morningstar, Inc., is a mutual fund tracking system which provides a top performer list every two weeks based on performanced and risk measurements.
Salomon Brothers Inc., "Market Performance" - a monthly publication which tracks principal return, total return and yield on the Salomon Brothers Broad Investment Grade Bond Index and the components of the Index.
Salomon Brothers Broad Investment Grade Index - a widely used index composed of U.S. domestic government, corporate, and mortgage-backed fixed income securities.
Shearson Lehman Brothers, Inc. "The Bond Market Report" - a monthly publication which tracks principal, coupon and total return on the Shearson Lehman Govt./Corp. Index and Shearson Lehman Aggregate Bond Index, as well as all the components of these Indices.
Telerate Systems, Inc., a market data distribution network computer system to which we subscribe which tracks a broad range of financial markets including, the daily rates on money market instruments, public corporate debt obligations and public obligations of the U.S. Treasury and agencies of the U.S. Government.
Wall Street Journal, is a national daily financial news publication which lists the yields and current market values on money market instruments, public corporate debt obligations, public obligations of the U.S. Treasury and agencies of the U.S. government as well as common stocks, preferred stocks, convertible preferred stocks, options and commodities; in addition to indices prepared by the research departments of such financial organizations as Shearson Lehman/American Express Inc. and Merrill Lynch, Pierce, Fenner and Smith, Inc., including information provided by the Federal Reserve Board.
Balanced Fund
On August 31, 1992, the T. Rowe Price Balanced Fund acquired substantially all of the assets of the Axe-Houghton Fund B, a series of Axe-Houghton Funds, Inc. As a result of this
acquisition, the Securities & Exchange Commission requires that the historical performance information of the Balanced Fund be based on the performance of Fund B. Therefore, all performance information of the Balanced Fund prior to September 1, 1992, reflects the performance of Fund B and investment managers other than T. Rowe Price. Performance information after August 31, 1992, reflects the combined assets of the Balanced Fund and Fund B.
All Funds, Except Capital Appreciation, Equity Income and New America Growth Funds
CAPITAL STOCK
The Fund's Charter authorizes the Board of Directors to classify and reclassify any and all shares which are then unissued, including unissued shares of capital stock into any number of classes or series, each class or series consisting of such number of shares and having such designations, such powers, preferences, rights, qualifications, limitations, and restrictions, as shall be determined by the Board subject to the Investment Company Act and other applicable law. The shares of any such additional classes or series might therefore differ from the shares of the present class and series of capital stock and from each other as to preferences, conversions or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption, subject to applicable law, and might thus be superior or inferior to the capital stock or to other classes or series in various characteristics. The Board of Directors may increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Fund has authorized to issue without shareholder approval.
Except to the extent that the Fund's Board of Directors
might provide by resolution that holders of shares of a
particular class are entitled to vote as a class on specified
matters presented for a vote of the holders of all shares
entitled to vote on such matters, there would be no right of
class vote unless and to the extent that such a right might be
construed to exist under Maryland law. The Charter contains no
provision entitling the holders of the present class of capital
stock to a vote as a class on any matter. Accordingly, the
preferences, rights, and other characteristics attaching to any
class of shares, including the present class of capital stock,
might be altered or eliminated, or the class might be combined
with another class or classes, by action approved by the vote of
the holders of a majority of all the shares of all classes
entitled to be voted on the proposal, without any additional
right to vote as a class by the holders of the capital stock or
of another affected class or classes.
Shareholders are entitled to one vote for each full share
held (and fractional votes for fractional shares held) and will
vote in the election of or removal of directors (to the extent
hereinafter provided) and on other matters submitted to the vote
of shareholders. There will normally be no meetings of
shareholders for the purpose of electing directors unless and
until such time as less than a majority of the directors holding
office have been elected by shareholders, at which time the
directors then in office will call a shareholders' meeting for
the election of directors. Except as set forth above, the
directors shall continue to hold office and may appoint successor
directors. Voting rights are not cumulative, so that the holders
of more than 50% of the shares voting in the election of
directors can, if they choose to do so, elect all the directors
of the Fund, in which event the holders of the remaining shares
will be unable to elect any person as a director. As set forth
in the By-Laws of the Fund, a special meeting of shareholders of
the Fund shall be called by the Secretary of the Fund on the
written request of shareholders entitled to cast at least 10% of
all the votes of the Fund entitled to be cast at such meeting.
Shareholders requesting such a meeting must pay to the Fund the
reasonably estimated costs of preparing and mailing the notice of
the meeting. The Fund, however, will otherwise assist the
shareholders seeking to hold the special meeting in communicating
to the other shareholders of the Fund to the extent required by
Section 16(c) of the Investment Company Act of 1940.
Capital Appreciation, Equity Income and New America Growth Funds
ORGANIZATION OF THE FUND
For tax and business reasons, the Fund's were organized as Massachusetts Business Trusts in 1985 for the Equity Income and New America Growth Funds and 1986 for the Capital Appreciation Fund, and are registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as a diversified, open-end investment company, commonly known as a "mutual fund."
The Declaration of Trust permits the Board of Trustees to issue an unlimited number of full and fractional shares of a single class. The Declaration of Trust also provides that the Board of Trustees may issue additional series or classes of shares. Each share represents an equal proportionate beneficial interest in the Fund. In the event of the liquidation of the Fund, each share is entitled to a pro rata share of the net assets of the Fund.
Shareholders are entitled to one vote for each full share held (and fractional votes for fractional shares held) and will vote in the election of or removal of trustees (to the extent hereinafter provided) and on other matters submitted to the vote of shareholders. There will normally be no meetings of shareholders for the purpose of electing trustees unless and until such time as less than a majority of the trustees holding office have been elected by shareholders, at which time the trustees then in office will call a shareholders' meeting for the election of trustees. Pursuant to Section 16(c) of the Investment Company Act of 1940, holders of record of not less than two-thirds of the outstanding shares of the Fund may remove a trustee by a vote cast in person or by proxy at a meeting called for that purpose. Except as set forth above, the trustees shall continue to hold office and may appoint successor trustees. Voting rights are not cumulative, so that the holders of more than 50% of the shares voting in the election of trustees can, if they choose to do so, elect all the trustees of the Trust, in which event the holders of the remaining shares will be unable to elect any person as a trustee. No amendments may be made to the Declaration of Trust without the affirmative vote of a majority of the outstanding shares of the Trust.
Shares have no preemptive or conversion rights; the right of redemption and the privilege of exchange are described in the prospectus. Shares are fully paid and nonassessable, except as set forth below. The Trust may be terminated (i) upon the sale of its assets to another diversified, open-end management investment company, if approved by the vote of the holders of two-thirds of the outstanding shares of the Trust, or (ii) upon liquidation and distribution of the assets of the Trust, if approved by the vote of the holders of a majority of the outstanding shares of the Trust. If not so terminated, the Trust will continue indefinitely.
Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Fund. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Fund and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Fund or a Trustee. The Declaration of Trust provides for indemnification from Fund property for all losses and expenses of any shareholder held personally liable for the obligations of the Fund. Thus, the risk of a shareholder's incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund itself would be unable to meet its obligations, a possibility which T. Rowe Price believes is remote. Upon payment of any liability incurred by the Fund, the shareholders of the Fund paying such liability will be entitled to reimbursement from the general assets of the Fund. The Trustees
intend to conduct the operations of the Fund in such a way so as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of such Fund.
FEDERAL AND STATE REGISTRATION OF SHARES
The Fund's shares are registered for sale under the Securities Act of 1933, and the Fund or its shares are registered under the laws of all states which require registration, as well as the District of Columbia and Puerto Rico.
LEGAL COUNSEL
Shereff, Friedman, Hoffman, & Goodman, whose address is 919 Third Avenue, New York, New York 10022, is legal counsel to the Fund.
INDEPENDENT ACCOUNTANTS
Blue Chip Growth, Dividend Growth, Equity Income, Growth & Income, Mid-Cap Growth, New America Growth, and New Era Funds
Price Waterhouse, 7 St. Paul Street, Suite 1700, Baltimore, Maryland 21202, are independent accountants to the Fund.
Balanced, Capital Appreciation, Growth Stock, Equity Index Fund, New Horizons, OTC, Science & Technology, and Small-Cap Value Funds
Coopers & Lybrand, 217 East Redwood Street, Baltimore, Maryland 21202, are independent accountants to the Fund.
Financial Statements
Blue Chip Growth Fund
The financial statements of the Fund for the period ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the period ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the period ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
PAGE 88 Annual
Report Page
Report of Independent Accountants 11
Statement of Net Assets, December 31, 1993 5-7
Statement of Operations, June 30, 1993
(Commencement of Operations) to
December 31, 1993 7
Statement of Changes in Net Assets, June 30,
1993 (Commencement of Operations) to
December 31, 1993 8
Notes to Financial Statements, December 31, 1993 8-9
Financial Highlights, June 30, 1993
(Commencement of Operations) to
December 31, 1993 10
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Dividend Growth Fund
The financial statements of the Fund for the period ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the period ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the period ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual
Report Page
Report of Independent Accountants 11
Statement of Net Assets, December 31, 1993 4-6
Statement of Operations, December 30, 1992
(Commencement of Operations) to
December 31, 1993 7
Statement of Changes in Net Assets, December 30,
1992 (Commencement of Operations) to
December 31, 1993 8
Notes to Financial Statements, December 31, 1993 8-10
Financial Highlights, December 30, 1992
(Commencement of Operations) to
December 31, 1993 10
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Equity Income Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the year ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements
and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993 are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
____________
Report of Independent Accountants 15
Statement of Net Assets, December 31, 1993 5-9
Statement of Operations, year ended
December 31, 1993 10
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 11
Notes to Financial Statements, December 31, 1993 12-13
Financial Highlights 14
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Growth & Income Fund
The financial statements of the Fund for the year ended December 31, 1993 and the report of independent accountants are included in the Fund's Annual Report for the year ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993 are incorporated into this Statement of Additional Information by reference:
Annual Report Page
__________________
Report of Independent Accountants 15
Statement of Net Assets, December 31, 1993 6-9
Statement of Operations, year ended
December 31, 1993 10
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 11
Notes to Financial Statements, December 31, 1993 12-13
Financial Highlights 14
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Mid-Cap Growth Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the year ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual
Report Page
Report of Independent Accountants 11
Statement of Net Assets, December 31, 1993 5-7
Statement of Operations, December 31, 1993 7
Statement of Changes in Net Assets,
year ended December 31, 1993 and
June 30, 1992 (Commencement of Operations)
to December 31, 1992 8
Notes to Financial Statements, December 31, 1993 8-10
Financial Highlights, year ended December 31, 1993
and June 30, 1992 (Commencement of Operations)
to December 31, 1992 10
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New America Growth Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the year ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993 are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
Report of Independent Accountants 13
Statement of Net Assets, December 31, 1993 7-8
Statement of Operations, year ended
December 31, 1993 9
Statement of Changes in Net Assets,
years ended December 31, 1993 and
December 31, 1992 10
Notes to Financial Statements
December 31, 1993 10-11
Financial Highlights 12
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New Era Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report for the year ended December 31, 1993. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
_____________
Report of Independent Accountants 14
Statement of Net Assets, December 31, 1993 7-8
Statement of Operations, year ended
December 31, 1993 9
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 10
Notes to Financial Statements,
December 31, 1993 11-12
Financial Highlights 13
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Balanced Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants, are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993 and are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
Report of Independent Accountants 18
Statement of Net Assets, December 31, 1993 6-12
Statement of Operations, year ended
December 31, 1993 13
Statement of Changes in Net Assets, December 31, 1993,
two-months ended December 31, 1992 and year ended
October 31, 1992 14
Notes to Financial Statements, December 31, 1993 15-16
Financial Highlights 17
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Capital Appreciation Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference.
Annual Report
Page
_____________
Report of Independent Accountants 16
Statement of Net Assets, December 31, 1993 7-10
Statement of Operations, year ended
December 31, 1993 11
Statement of Changes in Net Assets,
years ended December 31, 1993 and
December 31, 1992 12
Notes to Financial Statements
December 31, 1993 13-14
Financial Highlights 15
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Growth Stock Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
_____________
Report of Independent Accountants 15
Statement of Net Assets, December 31, 1993 6-10
Statement of Operations, year ended December 31, 1993 10
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 11
Notes to Financial Statements 11-13
Financial Highlights 14
|
Equity Index Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual
Report Page
___________
Report of Independent Accountants 15
Statement of Net Assets, December 31, 1993 6-11
Statement of Operations, year ended December 31, 1993 11
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 12
Notes to Financial Statements, December 31, 1993 12-14
Financial Highlights 14
|
New Horizons Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual Report
Page
_____________
Report of Independent Accountants 18
Portfolio of Investments, December 31, 1993 8-11
Statement of Assets and Liabilities, December 31, 199312
Statement of Operations, year ended
December 31, 1993 13
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 14
Notes to Financial Statements 15-16
Financial Highlights 17
|
OTC Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual Report Page
__________________
Report of Independent Accountants 11
Statement of Net Assets, December 31, 1993 4-6
Statement of Operations, year ended December 31, 1993 7
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 8
Notes to Financial Statements 8-9
Financial Highlights 10
|
Science & Technology Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants, are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference.
Annual Report Page
__________________
Report of Independent Accountants 14
Portfolio of Investments, December 31, 1993 7-8
Statement of Assets and Liabilities, December 31, 1993 8
Statement of Operations, year ended
December 31, 1993 9
Statement of Changes in Net Assets, years
ended December 31, 1993 and December 31, 1992 10
Notes to Financial Statements 11-12
Financial Highlights 13
|
Small-Cap Value Fund
The financial statements of the Fund for the year ended December 31, 1993, and the report of independent accountants are included in the Fund's Annual Report. A copy of the Annual Report accompanies this Statement of Additional Information. The following financial statements and the report of independent accountants appearing in the Annual Report for the year ended December 31, 1993, are incorporated into this Statement of Additional Information by reference:
Annual Report Page
__________________
Report of Independent Accountants 15
Portfolio of Investments, December 31, 1993 5-8
Statement of Assets and Liabilities,
PAGE 95
December 31, 1993 9
Statement of Operations, year ended
December 31, 1993 10
Statement of Changes in Net Assets, years ended
December 31, 1993 and December 31, 1992 11
Notes to Financial Statements 12-13
Financial Highlights 14
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RATINGS OF CORPORATE DEBT SECURITIES
Moody's Investors Services, Inc. (Moody's)
Aaa-Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge."
Aa-Bonds rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds.
A-Bonds rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations.
Baa-Bonds rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba-Bonds rated Ba are judged to have speculative elements:
their futures cannot be considered as well assured. Often the
protection of interest and principal payments may be very
moderate and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterize
bonds in this class.
B-Bonds rated B generally lack the characteristics of a desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa-Bonds rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca-Bonds rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings.
Standard & Poor's Corporation (S&P)
AAA-This is the highest rating assigned by Standard & Poor's to a debt obligation and indicates an extremely strong capacity to pay principal and interest.
AA-Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay principal and interest is very strong.
A-Bonds rated A have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this category than for bonds in the A category.
BB, C, CCC, CC-Bonds rated BB, B, CCC, and CC are regarded on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal. BB indicates the lowest degree of speculation and CC the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
Fitch Investors Service, Inc.
AAA-High grade, broadly marketable, suitable for investment by trustees and fiduciary institutions, and liable to but slight market fluctuation other than through changes in the money rate. The prime feature of a "AAA" bond is the showing of earnings several times or many times interest requirements for such stability of applicable interest that safety is beyond reasonable question whenever changes occur in conditions. Other features may enter, such as a wide margin of protection through collateral, security or direct lien on specific property. Sinking funds or voluntary reduction of debt by call or purchase or often factors, while guarantee or assumption by parties other than the original debtor may influence their rating.
AA-Of safety virtually beyond question and readily salable. Their merits are not greatly unlike those of "AAA" class but a bond so rated may be junior though of strong lien, or the margin of safety is less strikingly broad. The issue may be the obligation of a small company, strongly secured, but influenced as to rating by the lesser financial power of the enterprise and more local type of market.
Item 24 - Financial Statements and Exhibits
(a) Financial Statements. The Condensed Financial Information (Financial Highlights table) is included in Part A of the Registration Statement. Statement of Net Assets, Statement of Operations, and Statement of Changes in Net Assets are included in the Annual Report to Shareholders, the pertinent portions of which are incorporated in Part B of the Registration Statement.
(b) Exhibits
(1) Articles of Incorporation of Registration, dated August 5, 1968
(2) By-Laws of Registrant, as amended May 1, 1991
(3) Inapplicable
(4) Specimen Stock Certificate (filed with Amendment No. 3)
(5) Investment Management Agreement between Registrant and T. Rowe Price Associates, Inc. dated May 1, 1987
(6) Underwriting Agreement between Registrant and T. Rowe Price Investment Services, Inc. dated May 1, 1981
(7) Inapplicable
(8)(a) Custodian Agreement between T. Rowe Price Funds and State Street Bank and Trust Company, dated September 28, 1987, as amended to June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, December 21, 1992, January 28, 1993, April 22, 1993, September 16, 1993, and November 3, 1993
(8)(b) Subcustodian Agreement between the Registrant, State Street Bank and Trust Company and The Chase Manhattan Bank, N.A., dated January 1, 1989
(9)(a) Transfer Agency and Service Agreement between T. Rowe Price Services, Inc. and T. Rowe Price Funds, dated January 1, 1994
(9)(b) Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price Funds for Fund Accounting Services, dated January 1, 1994
(9)(c) Agreement between T. Rowe Price Retirement Plan Services, Inc. and the Taxable Funds, dated January 1, 1994
(10) Inapplicable
(11) Consent of Independent Accountants
(12) Inapplicable
(13) Inapplicable
(14) Inapplicable
(15) Inapplicable
(16) Total Return Performance Methodology
Item 25. Persons Controlled by or Under Common Control.
None.
Item 26. Number of Holders of Securities
As of December 31, 1993, there were 36,000 shareholders in the Fund.
Item 27. Indemnification
The Registrant maintains comprehensive Errors and Omissions and Officers and Directors insurance policies written by the Evanston Insurance Company, The Chubb Group, and ICI Mutual Insurance Co. These policies provide coverage for the named insureds, which include T. Rowe Price Associates, Inc. ("Manager"), Rowe Price-Fleming International, Inc. ("Price-Fleming"), T. Rowe Price Investment Services, Inc., T. Rowe Price Services, Inc., T. Rowe Price Trust Company, T. Rowe Price Stable Asset Management, Inc., RPF International Bond Fund and thirty-three other investment companies, namely, T. Rowe Price Growth Stock Fund, Inc., T. Rowe Price New Horizons Fund, Inc., T. Rowe Price New Income Fund, Inc., T. Rowe Price Prime Reserve Fund, Inc., T. Rowe Price Tax-Free Income Fund, Inc., T. Rowe Price Tax-Exempt Money Fund, Inc., T. Rowe Price International Funds, Inc., T. Rowe Price Growth & Income Fund, Inc., T. Rowe Price Tax-Free Short-Intermediate Fund, Inc., T. Rowe Price Short-Term Bond Fund, Inc., T. Rowe Price High Yield Fund, Inc., T. Rowe Price
Tax-Free High Yield Fund, Inc., T. Rowe Price New America Growth Fund, T. Rowe Price Equity Income Fund, T. Rowe Price GNMA Fund, T. Rowe Price Capital Appreciation Fund, T. Rowe Price State Tax-Free Income Trust, T. Rowe Price California Tax-Free Income Trust, T. Rowe Price Science & Technology Fund, Inc., T. Rowe Price Small-Cap Value Fund, Inc., Institutional International Funds, Inc., T. Rowe Price U.S. Treasury Funds, Inc., T. Rowe Price Index Trust, Inc., T. Rowe Price Spectrum Fund, Inc., T. Rowe Price Balanced Fund, Inc., T. Rowe Price Adjustable Rate U.S. Government Fund, Inc., T. Rowe Price Mid-Cap Growth Fund, Inc., T. Rowe Price OTC Fund, Inc., T. Rowe Price Tax-Free Insured Intermediate Bond Fund, Inc., T. Rowe Price Dividend Growth Fund, Inc., T. Rowe Price Blue Chip Growth Fund, Inc., T. Rowe Price Summit Funds, Inc., and T. Rowe Price Summit Municipal Funds, Inc. The Registrant and the thirty-three investment companies listed above, with the exception of Institutional International Funds, Inc. and T. Rowe Price Index Trust, Inc. will be collectively referred to as the Price Funds. The investment manager for the Price Funds, including T. Rowe Price Index Trust, Inc., is the Manager. Price-Fleming is the investment manager to the T. Rowe Price International Funds, Inc. and
Institutional International Funds, Inc., and is 50% owned by TRP Finance, Inc., a wholly-owned subsidiary of the Manager, 25% owned by Copthall Overseas Limited, a wholly-owned subsidiary of Robert Fleming Holdings Limited, and 25% owned by Jardine Fleming International Holdings Limited. In addition to the corporate insureds, the policies also cover the officers, directors, and employees of each of the named insureds. The premium is allocated among the named corporate insureds in accordance with the provisions of Rule l7d-1(d)(7) under the Investment Company Act of 1940.
Article X, Section 1 of the Registrant's By-Laws provides as follows:
Section 1. Indemnification and Payment of
Expenses in Advance.
The Corporation shall indemnify any individual
("Indemnitee") who is a present or former director, officer,
employee, or agent of the Corporation, or who is or has been
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, who, by reason of his
position was, is, or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative
(hereinafter collectively referred to as a "Proceeding") against
any judgments, penalties, fines, settlements, and reasonable
expenses (including attorneys' fees) incurred by such Indemnitee
in connection with any Proceeding, to the fullest extent that
such indemnification may be lawful under applicable Maryland law,
as from time to time amended. The Corporation shall pay any
reasonable expenses so incurred by such Indemnitee in defending
a Proceeding in advance of the final disposition thereof to the
fullest extent that such advance payment may be lawful under
applicable Maryland law, as from time to time amended. Subject
to any applicable limitations and requirements set forth in the
Corporation's Articles of Incorporation and in these By-Laws, any
payment of indemnification or advance of expenses shall be made
in accordance with the procedures set forth in applicable
Maryland law, as from time to time amended.
Notwithstanding the foregoing, nothing herein shall protect or purport to protect any Indemnitee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office ("Disabling Conduct").
Anything in this Article X to the contrary notwithstanding, no indemnification shall be made by the
Corporation to any Indemnitee unless:
(a) there is a final decision on the merits by a court or other body before whom the Proceeding was brought that the Indemnitee was not liable by reason of Disabling Conduct; or
(b) in the absence of such a decision, there is a reasonable determination, based upon a review of the facts, that the Indemnitee was not liable by reason of Disabling Conduct, which determination shall be made by:
(i) The vote of a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
Anything in this Article X to the contrary notwithstanding, any advance of expenses by the Corporation to any Indemnitee shall be made only upon the undertaking by such Indemnitee to repay the advance unless it is ultimately determined that such Indemnitee is entitled to indemnification as above provided, and only if one of the following conditions is met:
(a) the Indemnitee provides a security for his undertaking; or
(b) the Corporation shall be insured against losses arising by reason of any lawful advances; or
(c) there is a determination, based on a review of readily available facts, that there is reason to believe that the Indemnitee will ultimately be found entitled to indemnification, which determination shall be made by:
(i) a majority of a quorum of directors who
are neither "interested persons" of the Corporation as defined in
Section 2(a)(l9) of the Investment Company Act of l940, nor
parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
Section 2 of Registrant's By-Laws provides as follows:
Section 2. Insurance of Officers, Directors,
Employees and Agents.
To the fullest extent permitted by applicable Maryland
law and by Section 17(h) of the Investment Company Act of 1940,
as from time to time amended, the Corporation may purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the Corporation, or who
is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against
any liability asserted against him and incurred by him in or
arising out of his position, whether or not the Corporation would
have the power to indemnify him against such liability.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Manager.
Rowe Price-Fleming International, Inc. ("Price-Fleming"), a Maryland corporation, is a corporate joint venture 50% owned by TRP Finance, Inc., a wholly-owned subsidiary of the Manager, and was organized in 1979 to provide investment counsel service with respect to foreign securities for institutional investors in the United States. Price-Fleming, in addition to managing private counsel client accounts, also sponsors registered investment companies which invest in foreign securities, serves as general partner of RPFI International Partners, Limited Partnership, and provides investment advice to the T. Rowe Price Trust Company, trustee of the International Common Trust Fund.
T. Rowe Price Investment Services, Inc. ("Investment Services"), a wholly- owned subsidiary of the Manager, is a Maryland corporation organized in 1980 for the purpose of acting as the
principal underwriter and distributor for the Price Funds. Investment Services is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. In 1984, Investment Services expanded its activities to include a discount brokerage service.
TRP Distribution, Inc., a wholly-owned subsidiary of Investment Services, is a Maryland corporation organized in 1991. It was organized for and engages in the sale of certain investment related products prepared by Investment Services.
T. Rowe Price Associates Foundation, Inc., was organized in 1981 for the purpose of making charitable contributions to religious, charitable, scientific, literary and educational organizations. The Foundation (which is not a subsidiary of the Manager) is funded solely by contributions from the Manager and income from investments.
T. Rowe Price Services, Inc. ("Price Services"), a wholly-owned subsidiary of the Manager, is a Maryland corporation organized in 1982 and is registered as a transfer agent under the Securities Exchange Act of 1934. Price Services provides transfer agent, dividend disbursing, and certain other services, including shareholder services, to the Price Funds.
T. Rowe Price Retirement Plan Services, Inc. ("RPS"), a wholly-owned subsidiary of the Manager, was incorporated in Maryland in 1991 and is registered as a transfer agent under the Securities Exchange Act of 1934. RPS provides administrative, recordkeeping, and subaccounting services to administrators of employee benefit plans.
T. Rowe Price Trust Company ("Trust Company"), a wholly-owned
subsidiary of the Manager, is a Maryland chartered limited
purpose trust company, organized
in 1983 for the purpose of providing fiduciary services. The
Trust Company serves as trustee/custodian for employee benefit
plans, common trust funds and a few trusts.
T. Rowe Price Threshold Fund II, L.P., a Delaware limited partnership, was organized in 1986 by the Manager, and invests in private financings of small companies with high growth potential; the Manager is the General Partner of the partnership.
RPFI International Partners, Limited Partnership, is a Delaware
limited partnership organized in 1985 for the purpose of
investing in a diversified group of small and medium-sized
rapidly growing non-U.S. companies.
Price-Fleming is the general partner of this partnership, and
certain clients of Price-Fleming are its limited partners.
T. Rowe Price Real Estate Group, Inc. ("Real Estate Group"), is a Maryland corporation and a wholly-owned subsidiary of the Manager established in 1986 to provide real estate services. Subsidiaries of Real Estate Group are: T. Rowe Price Realty Income Fund I Management, Inc., a Maryland corporation (General Partner of T. Rowe Price Realty Income Fund I, A No-Load Limited Partnership), T. Rowe Price Realty Income Fund II Management, Inc., a Maryland corporation (General Partner of T. Rowe Price Realty Income Fund II, America's Sales-Commission-Free Real Estate Limited Partnership), T. Rowe Price Realty Income Fund III Management, Inc., a Maryland corporation (General Partner of T. Rowe Price Realty Income Fund III, America's Sales-Commission-Free Real Estate Limited Partnership, a Delaware limited partnership), and T. Rowe Price Realty Income Fund IV Management, Inc., a Maryland corporation (General Partner of T. Rowe Price Realty Income Fund IV, America's Sales-Commission-Free Real Estate Limited Partnership). Real Estate Group serves as investment manager to T. Rowe Price Renaissance Fund, Ltd., A Sales-Commission-Free Real Estate Investment, established in 1989 as a Maryland corporation which qualifies as a REIT.
T. Rowe Price Stable Asset Management, Inc. ("Stable Asset Management") is a Maryland corporation organized in 1988 as a wholly-owned subsidiary of the Manager. Stable Asset Management, which is registered as an investment adviser under the Investment Advisers Act of 1940, specializes in the management of investment portfolios which seek stable and consistent investment returns through the use of guaranteed investment contracts, bank investment contracts, structured or synthetic investment contracts, and short-term fixed-income securities.
T. Rowe Price Recovery Fund Associates, Inc., a Maryland corporation, is a wholly-owned subsidiary of the Manager organized in 1988 for the purpose of serving as the General Partner of T. Rowe Price Recovery Fund, L.P., a Delaware limited partnership which invests in financially distressed companies.
T. Rowe Price (Canada), Inc. is a Maryland corporation organized in 1988 as a wholly-owned subsidiary of the Manager. This entity is registered as an investment adviser under the Investment Advisers Act of 1940, and may apply for registration as an investment manager under the Securities Act of Ontario in order to be eligible to provide certain services to the RPF International Bond Fund, a trust (whose shares are sold in Canada) which Price-Fleming serves as investment adviser.
Since 1983, the Manager has organized several distinct Maryland limited partnerships, which are informally called the Pratt
Street Ventures partnerships, for the purpose of acquiring interests in growth-oriented businesses.
Tower Venture, Inc., a wholly-owned subsidiary of the Manager, is a Maryland corporation organized in 1989 for the purpose of serving as a general partner of 100 East Pratt St., L.P., a Maryland limited partnership whose limited partners also include the Manager. The purpose of the partnership is to further develop and improve the property at 100 East Pratt Street, the site of the Manager's headquarters, through the construction of additional office, retail and parking space.
TRP Suburban, Inc. is a Maryland corporation organized in 1990 as a wholly-owned subsidiary of the Manager. TRP Suburban has entered into agreements with McDonogh School and CMANE-McDonogh-Rowe Limited Partnership to construct an office building in Owings Mills, Maryland, which houses the Manager's transfer agent, plan administrative services, retirement plan services and operations support functions.
TRP Finance, Inc. and TRP Finance MRT, Inc., wholly-owned subsidiaries of the Manager, are Delaware corporations organized in 1990 to manage certain passive corporate investments and other intangible assets. TRP Finance MRT, Inc. was dissolved on October 4, 1993.
T. Rowe Price Strategic Partners Fund, L.P. is a Delaware limited partnership organized in 1990 for the purpose of investing in small public and private companies seeking capital for expansion or undergoing a restructuring of ownership. The general partner of the Fund is T. Rowe Price Strategic Partners, L.P., a Delaware limited partnership whose general partner is T. Rowe Price Strategic Partners Associates, Inc., ("Strategic Associates"), a Maryland corporation which is a wholly-owned subsidiary of the Manager. Strategic Associates also serves as the general partner of T. Rowe Price Strategic Partners II, L.P., a Delaware limited partnership established in 1992, which in turn serves as general partner of T. Rowe price Strategic Partners Fund II, L.P., a Delaware limited partnership organized in 1992.
Listed below are the directors of the Manager who have other substantial businesses, professions, vocations, or employment aside from that of Director of the Manager:
JAMES E. HALBKAT, JR., Director of the Manager. 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.
JOHN W. ROSENBLUM, Director of the Manager. Mr. Rosenblum is the
Tayloe Murphy Professor at the University of Virginia, and a director of: Chesapeake Corporation, a manufacturer of paper products, Cadmus Communications Corp., a provider of printing and communication services; Comdial Corporation, a manufacturer of telephone systems for businesses; and Cone Mills Corporation, a textiles producer. Mr. Rosenblum's address is: P.O. Box 6550, Charlottesville, Virginia 22906.
ROBERT L. STRICKLAND, Director of the Manager. Mr. Strickland is Chairman of Lowe's Companies, Inc., a retailer of specialty home supplies. Mr. Strickland's address is 604 Two Piedmont Plaza Building, Winston-Salem, North Carolina 27104.
PHILIP C. WALSH, Director of the Manager. Mr. Walsh is a Consultant to Cyprus Amax Minerals Company, Englewood, Colorado, and a director of Piedmont Mining Company, Inc., Charlotte, North Carolina. Mr. Walsh's address is: Blue Mill Road, Morristown, New Jersey 07960.
With the exception of Messrs. Halbkat, Rosenblum, Strickland, and Walsh, all of the directors of the Manager are employees of the Manager.
George J. Collins, who is Chief Executive Officer, President, and a Managing Director of the Manager, is a Director of Price-Fleming.
George A. Roche, who is Chief Financial Officer and a Managing Director of the Manager, is a Vice President and a Director of Price-Fleming.
M. David Testa, who is a Managing Director of the Manager, is Chairman of the Board of Price-Fleming.
Charles H. Salisbury, Jr., who is a Managing Director of the Manager, is a Vice President and a Director of Price-Fleming.
Henry H. Hopkins, Charles P. Smith, and Peter Van Dyke, who are Managing Directors of the Manager, are Vice Presidents of Price-Fleming.
Robert P. Campbell, Robert C. Howe, Veena A. Kutler, Heather R.
Landon, George A. Murnaghan, William F. Wendler, II, and Edward
A. Wiese, who are Vice Presidents of the Manager, are Vice
Presidents of Price-Fleming.
Alvin M. Younger, Jr., who is a Managing Director and the Secretary and Treasurer of the Manager, is Secretary and Treasurer of Price-Fleming.
Joseph P. Croteau, who is a Vice President of the Manager, is Controller of Price-Fleming.
Nolan L. North, who is a Vice President and Assistant Treasurer of the Manager, is Assistant Treasurer of Price-Fleming.
Leah P. Holmes, who is an Assistant Vice President of the Manager, is a Vice President of Price-Fleming.
Barbara A. Van Horn, who is Assistant Secretary of the Manager, is Assistant Secretary of Price-Fleming.
Certain directors and officers of the Manager are also officers and/or directors of one or more of the Price Funds and/or one or more of the affiliated entities listed herein.
See also "Management of Fund," in Registrant's Statement of Additional Information.
Item 29. Principal Underwriters.
(a) The principal underwriter for the Registrant is Investment Services. Investment Services acts as the principal underwriter for the other thirty-three Price Funds. Investment Services is a wholly-owned subsidiary of the Manager, is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Investment Services was formed for the limited purpose of distributing the shares of the Price Funds and will not engage in the general securities business. Since the Price Funds are sold on a no-load basis, Investment Services does not receive any commission or other compensation for acting as principal underwriter.
(b) The address of each of the directors and officers of Investment Services listed below is 100 East Pratt Street, Baltimore, Maryland 21202.
Name and Principal Positions and Offices
Offices
Business Address With Underwriter With
Registrant
__________________ _____________________
_______________
James Sellers Riepe President and Director Vice
President
Henry Holt Hopkins Vice President and Vice
President
Director
Mark E. Rayford Director None
Charles E. Vieth Vice President and None
Director
Patricia Magdalene Archer Vice President None
Edward C. Bernard Vice President None
Joseph Charles Bonasorte Vice President None
Meredith C. Callanan Vice President None
Victoria C. Collins Vice President None
Christopher W. Dyer Vice President None
Mark S. Finn Vice President and None
Assistant Controller
Forrest R. Foss Vice President None
PAGE 18
Patricia O'Neil Goodyear Vice President None
James W. Graves Vice President None
Andrea G. Griffin Vice President None
Thomas Grizzard Vice President None
David J. Healy Vice President None
Joseph P. Healy Vice President None
Walter J. Helmlinger Vice President None
Eric G. Knauss Vice President None
Doulgas G. Kremer Vice President None
Sharon Renae Krieger Vice President None
Keith Wayne Lewis Vice President None
David L. Lyons Vice President None
Sarah McCafferty Vice President None
Maurice Albert Minerbi Vice President None
George A. Murnaghan Vice President None
Steven Ellis Norwitz Vice President None
Kathleen M. O'Brien Vice President None
Charles S. Peterson Vice President None
Pamela D. Preston Vice President None
Lucy Beth Robins Vice President None
John Richard Rockwell Vice President None
William F. Wendler, II Vice President None
Jane F. White Vice President None
Thomas R. Woolley Vice President None
Alvin M. Younger, Jr. Secretary and Treasurer None
Joseph P. Croteau Controller None
Catherine L. Berkenkemper Assistant Vice President None
Patricia Sue Butcher Assistant Vice President None
Laura H. Chasney Assistant Vice President None
George G. Finney Assistant Vice President None
John A. Galateria Assistant Vice President None
Keith J. Langrehr Assistant Vice President None
Charlotte Lillian Matthews Assistant Vice President None
Tom J. Mauer Assistant Vice President None
Janice D. McCrory Assistant Vice President None
Sandrah J. McHenry Assistant Vice President None
JeanneMarie B. Patella Assistant Vice President None
Arthur J. Silber Assistant Vice President None
Mary A. Tamberrino Assistant Vice President None
Monica R. Tucker Assistant Vice President None
Linda C. Wright Assistant Vice President None
Nolan L. North Assistant Treasurer None
Barbara A. VanHorn Assistant Secretary None
|
(c) Not applicable. Investment Services will not receive any compensation with respect to its activities as underwriter for the Price Funds since the Price Funds are sold on a no-load basis.
Item 30. Location of Accounts and Records.
All accounts, books, and other documents required to be
maintained by T. Rowe
Price New Era Fund, Inc., under Section 31(a) of the Investment
Company Act of
1940 and the rules thereunder will be maintained by T. Rowe Price
New Era
Fund, Inc. at its offices at 100 East Pratt Street, Baltimore,
Maryland 21202. Transfer, dividend disbursing, and shareholder
service activities are
performed by T. Rowe Price Services, Inc., at 100 East Pratt
Street,
Baltimore, Maryland 21202. Custodian activities for T. Rowe
Price New Era
Fund, Inc. are performed at State Street Bank and Trust Company's
Service
Center (State Street South), 1776 Heritage Drive, Quincy, Massachusetts 02171.
Item 31. Management Services.
The Registrant is not a party to any management-related service
contract,
other than as set forth in the Prospectus.
Item 32. Undertakings.
(a) Inapplicable.
(b) Inapplicable.
(c) If requested to do so by the holders of at least 10% of all votes entitled to be cast, the Registrant will call a meeting of shareholders for the purpose of voting on the question of removal of a trustee or trustees and will assist in communications with other shareholders to the extent required by Section 16(c).
(d) The Fund agrees to furnish, upon request and without charge, a copy of its Annual Report to each person to whom a prospectus is delivered.
Pursuant to the requirements of the Securities Act of 1933,
as amended,
and the Investment Company Act of 1940, as amended, the
Registrant has
duly caused this Registration Statement to be signed on its
behalf by the
undersigned, thereunto duly authorized, in the City of Baltimore,
State of
Maryland, this 28th day of February, 1994.
T. ROWE PRICE NEW
ERA FUND, INC.
/s/George A. Roche
George A. Roche,
President
and Director
|
Pursuant to the requirements of the Securities Act of 1933,
as amended,
this Registration Statement has been signed below by the
following persons in
the capacities and on the dates indicated:
/s/George A. Roche
George A. Roche President and Director February 28, 1994
(Chief Executive Officer)
/s/Carmen F. Deyesu
Carmen F. Deyesu Treasurer February 28, 1994
(Chief Financial Officer)
/s/Leo C. Bailey
Leo C. Bailey Director February 28, 1994
/s/George J. Collins
George J. Collins Director February 28, 1994
/s/David K. Fagin
David K. Fagin Director February 28, 1994
/s/Carter O. Hoffman
Carter O. Hoffman Director February 28, 1994
/s/John K. Major
John K. Major Director February 28, 1994
/s/Hubert D. Vos
Hubert D. Vos Director February 28, 1994
|
ARTICLES OF INCORPORATION
OF
T. ROWE PRICE NEW ERA FUND, INC.
Dated
August 5, 1968
Amended To:
May 20, 1969
April 13, 1973
April 9, 1974
May 1, 1981
May 1, 1982
May 1, 1983
May 1, 1986
OF
ROWE PRICE INFLATION FUND, INC.
* * * * *
FIRST: We, the undersigned, STANLEY J. FRIEDMAN, ALAN M.
HOFFMAN and LAWRENCE G. GOODMAN, each of whose post-office
address is 26 Broadway, New York, New York 10004, and each of
whom is of full legal age, do hereby associate ourselves as
incorporators with the intention of forming a corporation under
and by virtue of the General Laws of the State of Maryland
authorizing the formation of corporations.
SECOND: The name of the corporation is
ROWE PRICE INFLATION FUND, INC.
THIRD: The purposes for which the corporation is formed
are:
1. To hold, invest and reinvest its funds, and to
purchase or otherwise acquire, hold for investment or
otherwise, sell, assign, negotiate, transfer, exchange or
otherwise dispose of or turn to account or realize upon,
securities (which term securities' shall for the purposes
hereof, without limitation of the generality thereof, be
deemed to include any stocks, shares, bonds, debentures,
notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights
to receive, purchase or subscribe for the same or evidencing
or representing any other rights or interests therein, or in
any property or assets) created or issued by any persons,
firms, associations, corporations, syndicates, combinations,
organizations, governments or subdivisions thereof; to
exercise, as owner or holder of any securities, all rights,
powers and privileges in respect thereof; and to do any and
all acts and things for the preservation, protection,
improvement and enhancement in value of any and all such
securities.
2. At any time and from time to time, to hold all or any part of its assets in cash and to deposit any part of its funds, without limit as to amount, in any bank or trust company which shall have been appointed custodian pursuant to the provisions of Section 8 of Article SEVENTH hereof.
3. To buy, sell, exchange, own, hold and otherwise acquire and dispose of other property and, while the owner of such other property, to exercise all the rights add privileges of ownership thereof.
4. To purchase or otherwise acquire, hold, dispose of, resell, transfer, reissue, purchase, redeem, retire or cancel (all without the vote or consent of the stockholders of the Corporation) shares of its capital stock, in any manner and to the extent now or hereafter permitted by the laws of Maryland and the Charter of the Corporation.
5. To have one or more offices and to carry on all or any of its operations and business in any of the States, Districts, Territories, colonies and possessions of the United States and in any and all foreign countries, subject, in each case, to the laws thereof.
6. To carry out all or any of the foregoing objects and purposes as principal or agent, or otherwise, either alone or through or in conjunction with any corporation, joint stock company, syndicate, association, firm, trust or person, public or private, and, in carrying on its business and for the purpose of attaining or furthering any of its objects and purposes, to exercise any powers suitable, convenient or proper for the accomplishment of any of the objects and purposes herein enumerated or incidental to the powers herein specified, or which at any time may appear conducive to or expedient for the accomplishment of any of such objects and purposes.
7. In general, unless prohibited by law, to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do.
8. Anything in this Article THIRD or elsewhere in the Charter of the Corporation to the contrary notwithstanding, the Corporation may not and shall not:
(a) Borrow money except as a temporary measure for extraordinary or emergency purposes, and then only in amounts not in excess of 10 per cent of its total assets taken at cost.
(b) Purchase securities on margin; provided, however, that nothing herein contained shall be construed to prevent the Corporation from obtaining such short-term credits as may be necessary for the clearance of transactions in securities.
(c) Effect short sales of securities.
(d) Lend money or securities to any person other than through the acquisition of bonds, debentures, notes and other securities as hereinbefore authorized.
(e) Mortgage, pledge or hypothecate securities in any manner whatsoever other than in connection with a borrowing of the type referred to in subparagraph (a) of this Section 8.
(f) Underwrite the sale of, or participate in any underwriting or selling group in connection with the public distribution of, any securities (other than the capital stock of the Corporation), except to the extent that the Corporation may technically be deemed to be an underwriter under any applicable law or regulation by virtue of the disposition of any particular block of securities; provided, however, that nothing herein contained shall be construed to prevent or limit in any manner the power of the Corporation to purchase securities for investment as hereinbefore provided.
(g) Purchase or sell real estate or commodities or commodity contracts.
(h) Invest in any security of any one issuer if immediately after and wholly or partially as a result of such investment the market value of the securities of such issuer owned by the Corporation shall exceed 5 per cent of the market value of the total assets of the Corporation, or the Corporation shall own more than 10 per cent of any class of outstanding securities of such issuer; provided, however, that the limitations set forth above shall not apply to investments and obligations of the United States of America or any bonds, bills or notes guaranteed as to both principal and interest by the United States of America, or limit or restrict the amount which the Corporation may at any time deposit in any bank or trust company, whether or not the same be represented by certificates of deposit.
(i) Invest in the securities of any issuer which shall have a record of less than three (3) years of
continuous operation (including the operation of any predecessor) if immediately after and wholly or partially as a result of such investment more than 5 per cent of the total assets of the Corporation taken at cost shall be invested in the securities of such issuers.
(j) Purchase or retain in its portfolio any securities issued by an issuer any of whose officers, directors or security holders is an officer or director of the Corporation or a member, officer or director of any partnership, corporation or other organization deemed to be an investment advisor to the Corporation for purposes of the federal Investment Company Act of 1940, if at the time of or after such purchase any officer or director of the Corporation or any member, officer or director of any such investment advisor to the Corporation shall own beneficially more than one- half of 1 per cent (1/2%) of the shares or securities, or both, of such issuer and all such officers, directors and members owning beneficially more than one-half of 1 per cent (1/2%) of such shares or securities shall together own beneficially more than 5 per cent thereof.
(k) invest any of its assets in the securities of any investment trust or of any other investment company except by purchase thereof in the open market where to the best information of the Corporation no commission or profit to any sponsor or dealer results from such purchase other than the customary broker's commission, or except when such investment results from a merger, consolidation, reorganization or purchase of assets approved by the stockholders of the Corporation.
(l) Participate on a joint or joint and several basis in any securities trading account.
9. Except as hereinbefore provided, the objects and purposes specified in the foregoing sections shall be in no wise limited or restricted by reference to, or inference from, the terms of any other provision of the Charter, but the objects and purposes specified in each of the foregoing sections of this Article shall be regarded as independent objects and purposes and shall be construed as powers as well as objects and purposes.
10. Except as hereinbefore provided, the Corporation shall be authorized to exercise and enjoy all the powers, rights and privileges granted to, or conferred upon, corporations of a similar character by the General Laws of
the State of Maryland now or hereafter in force, and the enumeration of the foregoing powers shall not be deemed to exclude any powers, rights or privileges so granted or conferred or to limit or restrict in any manner the general or implied powers of the Corporation.
FOURTH: The post-office address of the principal office of
the Corporation in the State of Maryland is One Charles Center,
Baltimore, Maryland 21201. The resident agent of the Corporation
in the State of Maryland is Raymond L. Scott, who is a citizen
of, and who actually resides in, the State of Maryland, and whose
post-office address is One Charles Center, Baltimore, Maryland
21201.
FIFTH: 1. The total number of shares of stock which the
Corporation shall have authority to issue is Twenty-Five Million
(25,000,000) shares, all of one class to be designated "capital
stock" of the par value of One Dollar ($1.00) each, and of the
aggregate par value of Twenty-Five Million Dollars ($25,000,000).
Any fractional share of such stock shall be entitled to its
proportionate part of the rights of a whole share to receive
dividends and to participate in the assets of the Corporation in
the event of liquidation, but shall not be entitled to vote.
2. Upon the sale of each share of its capital stock,
except as otherwise permitted by the federal Investment Company
Act of 1940, the Corporation shall receive in cash, or in
corporate securities valued as hereinafter provided, not less
than the current net asset value thereof, exclusive of any
distributing commission or discount, and in no event less than
the par value thereof.
3. The net asset value of a share of capital stock of
the Corporation shall be determined by such persons and at such
time or times as shall from time to time be specified by the
Board of Directors of the Corporation. Each such determination
shall be made by subtracting from the value of the assets of the
Corporation the amount of its liabilities, dividing the remainder
by the number of shares of capital stock issued and outstanding,
and adjusting the results to the nearest full cent per share.
For purposes of such determination:
(a) Securities listed or commonly dealt in on the New
York Stock Exchange or the American Stock Exchange shall be
valued at the latest sale prices on such exchanges. If
there be no sale of any particular security on any day, such
security shall be valued on that day at the price, within
the limits of the latest bid and asked prices, which shall
be deemed by the persons making such determination best to
reflect the fair value thereof.
(b) Other securities, to the extent that market
quotations are readily available, shall be valued in the
same manner as securities listed or commonly dealt in on the
New York or American Stock Exchanges.
(c) All other securities and assets (other than good
will, which shall not be taken into account) shall be valued
on the basis of such information as shall be available and
in such manner as shall from time to time be deemed by the
persons making such determination best to reflect the fair
value thereof.
(d) All quotations, sale prices, bid and asked prices
and other information shall be obtained from such sources as
the persons making such determination believe to be
reliable; and any determination of net asset value based
thereon shall be conclusive.
(e) Securities purchased shall be included among the
assets of the Corporation, and the cost thereof shall
simultaneously be regarded as a liability, not later than
the day following the date of purchase; and securities sold
shall be excluded from such assets, and the amount
receivable therefor shall simultaneously be included as an
asset, not later than the day following the date of sale.
(f) Liabilities shall include expenses and reserves,
accrued and determined in such manner or pursuant to such
rules as may from time to time be approved by the Board of
Directors, and the amount necessary to pay any dividend or
dividends declared and unpaid.
(g) Shares of the capital stock of the Corporation
sold but not yet issued at the close of business on any day
shall be considered as issued and outstanding not later than
the following day, and the amount receivable therefor shall
simultaneously be included among the assets of the
Corporation.
(h) Shares of capital stock of the Corporation
delivered or offered for redemption on any day shall be
considered as no longer outstanding not later than the
following business day on which the New York Stock Exchange
is open, and the amount of money payable on such redemption
shall simultaneously be considered as a liability.
4. The registered holders of the capital stock of the
Corporation shall be entitled to receive dividends when and
as declared by the Board of Directors in accordance with the
laws of Maryland; and such dividends may be paid in cash, in
securities or other property, or in capital stock of the
Corporation, as the Board of Directors shall from time to
time determine. In determining the amount of accumulated
net earnings, or net earnings for the current fiscal year,
available for the payment of dividends therefrom, the Board
of Directors may, in its discretion: (a) exclude gains and
losses from the sales of securities; (b) add that portion of
the sale price of each share of capital stock sold which is
equivalent to accrued net earnings per share to the day of
sale thereof; and in that event shall (c) deduct that
portion of the redemption price of any share of capital
stock redeemed by the Corporation which is equivalent to accrued
net earnings per share to the day of redemption. Whenever
dividends are paid out of capital gains, the stockholders of the
Corporation shall be apprised of such fact.
5. All shares of capital stock of the Corporation now
or hereafter authorized shall be subject to redemption and
shall be redeemable as hereafter set forth:
(a) Any person whose name appears on the books of the
Corporation as a holder of shares of its capital stock may
on any business day deliver to the Corporation for
redemption a certificate or certificates registered in his
name evidencing shares of such capital stock, or, whether or
not any such certificate has beef issued, offer such shares
to the Corporation for redemption in such manner as may be
authorized by its Board of Directors. The Corporation shall
redeem the shares evidenced by the certificate or
certificates so delivered, or the shares so offered,
provided that the Corporation has funds legally available
for such purpose, by paying to such holder, in cash, the net
asset value of such shares. Such net asset value shall be
the value determined in accordance with Section 3 of this
Article FIFTH as of any time between the time of such
delivery or offer and the close of business on the next
succeeding business day on which the New York Stock Exchange
is open, as the Corporation in its discretion may decide;
provided, however, that the Corporation in its discretion
may adopt for this purpose the net asset value in effect for
the purpose of the sale of shares of its capital stock at
the time of such delivery or offer; and provided further,
that all shares for which certificates are delivered for
redemption or which are offered for redemption as above
provided, within the same time period on any day, shall be
valued as of the same time and in the same manner, without
discrimination.
(b) The Corporation may, in its discretion, accept
written obligations to deliver a certificate or certificates
evidencing shares of capital stock of the Corporation,
executed by any agency which the Corporation may authorize
or employ to maintain services to facilitate redemptions, as
delivery of a certificate or certificates evidencing the
shares referred to therein; and the term "deliver",
"delivered", or "delivery", as used in this Section 5, shall
be deemed to include the receipt of such written obligation.
Notwithstanding the foregoing, the Corporation shall not pay
out any cash for the redemption pursuant to this Section 5
of any share of its capital stock for which a certificate
has been issued until the actual receipt by the Corporation
of a certificate, properly endorsed, evidencing such share;
and payment for such share shall be made not later than the
expiration of seven (7) business days on which the New York
Stock Exchange is open, following the day of actual receipt of
such certificate. Payment for shares for which no certificate
has been issued, shall be made within such seven (7) day period
following today the offer for redemption thereof was made.
(c) The right to have shares of the capital stock of
the Corporation redeemed as provided for in this, Section 5
may be suspended, or the date of payment for shares redeemed
pursuant to this Section 5 may be postponed: (i) for any
period during which the New York Stock Exchange is closed
other than customary weekend and holiday closings, or during
which the Securities and Exchange Commission shall determine
that trading on said Exchange is restricted; (ii) for any
period during which the Securities and Exchange Commission
shall determine that an emergency exists as a result of
which disposal by the Corporation of securities owned by it
is not reasonably practicable, or it is not reasonably
practicable for the Corporation fairly to determine the
value of its net assets; or (iii) for such other periods as
the Securities and Exchange Commission may by order permit
for the protection of stockholders of the Corporation.
SIXTH: 1. The number of directors of the Corporation shall
be three (3) or such other number not less than three (3) as may
from time to time be specified in or fixed in the manner
prescribed by the by-laws of the Corporation. The by-laws of the
Corporation shall also specify the number of directors which
shall be necessary to and shall constitute a quorum; provided,
however, that in no case shall a quorum be less than one-third
(1/3) of the total number of directors or less than two (2)
directors. Unless otherwise provided by the by-laws of the
Corporation, directors need not be stockholders thereof.
2. Unless otherwise provided by the by-laws of the
Corporation and except as otherwise provided by law, any vacancy
occurring in the Board of Directors for any cause other than by
reason of an increase in the number of directors may be filled by
a majority of the remaining members of the Board of Directors,
and any vacancy occurring by reason of an increase in the number
of directors may be filled by a majority of the entire Board of
Directors.
3. The names of the directors who shall act until the
first annual meeting or until their successors are duly chosen
and qualify are:
Stanley J. Friedman
Alan M. Hoffman
Lawrence G. Goodman
SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Corporation and of the directors, officers and stockholders:
1. No stockholder of the Corporation shall have any
pre-emptive or preferential right of subscription to any
shares of any class of stock of the Corporation, whether now
or hereafter authorized, other than such, if any, and at
such price as the Board of Directors, in its discretion,
from time to time, may determine, and the Board of Directors
may issue shares of the capital stock of the Corporation
without offering the same, either in whole or in part to the
stockholders.
2. Subject to the provisions of Section 4 of this
Article SEVENTH and to the limitations hereinafter set
forth, stock of the Corporation may be purchased, held and
disposed of by officers and directors of the Corporation, by
partnerships of which any such officer or director is a
member, and by other corporations of which any officer or
director of the Corporation is an officer, director or
security holder. Except as hereinabove set forth, the
officers and directors of the Corporation and partnerships
or corporations with which they are affiliated may not deal
with the Corporation as principals in the purchase or sale
of any securities or other property.
3. The Corporation may employ by contract or
otherwise any person, partnership or corporation for any
purpose, whether or not such person or any member, officer,
director or stockholder of such partnership or corporation,
is an officer, director or stockholder of the Corporation;
provided that:
(a) If any person, partnership or corporation
employed as counsel, registrar, transfer agent,
dividend disbursing agent or custodian is or has a
partner, officer or director who is an officer or
director of the Corporation, only customary fees shall
be charged for the services rendered to or for the
benefit of the Corporation.
(b) If any person, partnership or corporation
from or through whom securities are purchased for the
investment portfolio of the Corporation, or to or
through whom securities held in such portfolio are
sold, is or has a member, officer or director who is an
officer or director of the Corporation, such person,
partnership or corporation shall act only as agent or
broker, and not as principal, and the commission or
other compensation paid by the Corporation shall not
exceed customary brokerage charges for such service.
4. The Corporation shall not enter into or operate
under any contract pursuant to which any person,
partnership, corporation or other organization deemed to be
a principal underwriter for or an investment adviser to the
Corporation for purposes of the federal Investment Company
Act of 1940 is appointed to serve the Corporation in that
capacity unless such contract shall contain an agreement on the
part of such principal underwriter or investment adviser that
neither such principal underwriter or investment adviser nor any
of its members, officers or directors shall take any long or
short position in the capital stock of the Corporation; provided,
however:
(a) That such prohibition shall not prevent any
such principal underwriter from purchasing shares of
the capital stock of the Corporation if orders to
purchase such shares are placed upon the receipt by the
distributor purchase orders for such shares and are not
in excess of purchase orders received by the
distributor.
(b) That such prohibition shall not prevent any
such principal underwriter from maintaining a market
for the capital stock of the Corporation in the
capacity of agent for the Corporation.
(c) That such prohibition shall not prevent the
purchase of shares of the capital stock of the
Corporation by any of the persons above described, at
the price at which such shares are available to the
public at the time of purchase.
5. The Corporation shall not enter into any contract
pursuant to which any person, partnership, corporation or
other organization deemed to be an investment adviser to the
Corporation for purposes of the federal Investment Company
Act of 1940 is appointed to serve the Corporation in that
capacity unless the form and terms of such contract shall
have been approved by the vote of a majority of the
outstanding shares of capital stock of the Corporation and
unless such contract:
(a) Precisely describes all compensation to be
paid thereunder;
(b) Shall continue in effect for a period more
than two (2) years from the date of its execution, only
so long as such continuance is specifically approved at
least annually by the Board of Directors, including the
vote of a majority of the directors who are not parties
to such contract or "affiliated persons" of any such
party as defined in the federal Investment Company Act
of 1940; or by vote of a majority of the outstanding
voting securities of the Corporation;
(c) Provides, in substance, that it may be
terminated at any time, without the payment of any
penalty, by the Board of Directors of the Corporation
or by vote of a majority of the outstanding voting
securities of the Corporation on not more than sixty
(60) days' written notice to the investment adviser;
and
(d) Provides, in substance, for its automatic
termination in the event of its assignment by the
investment adviser.
6. The Corporation shall not enter into any contract
pursuant to which any person, partnership, corporation or
other organization deemed to be a principal underwriter for
the Corporation for purposes of the federal Investment
Company Act of 1940 is appointed to serve the Corporation in
that capacity unless such contract:
(a) Restricts the maximum load or commission to
be charged upon the sale of capital stock of the
Corporation to not more than 9 per cent of the offering
price of such stock to the public;
(b) Shall continue in effect for a period more
than two (2) years from the date of its execution only
so long as such continuance is specifically approved at
least annually by the Board of Directors including the
vote of a majority of the directors who are not parties
to such contract or "affiliated persons" of any such
party as defined in the federal Investment Company Act
of 1940, or by a vote of a majority of the outstanding
voting securities of the Corporation; and
(c) Provides, in substance, for its automatic
termination in the event of its assignment by the
principal underwriter.
7. Except as otherwise provided by law or by the
Charter of the Corporation, no contract or other transaction
between the Corporation and any partnership or corporation,
and no act of the Corporation shall in any way be affected
or invalidated by the fact that any officer or director of
the Corporation is pecuniarily or otherwise interested
therein or is a member, officer or director of such
partnership or other corporation, provided that the fact of
such interest shall be known to the Board of Directors of
the Corporation. Specifically, but without limitation of
the foregoing, the Corporation may enter into one or more
contracts appointing Rowe Price Management Company, Inc.
investment adviser to the Corporation, and may otherwise do
business with Rowe Price Management Company, Inc.,
notwithstanding the fact that one or more of the directors
of the Corporation and some or all of its officers are, have
been or may become members, directors, officers, employees,
or stockholders of Rowe Price Management Company, Inc., and
in the absence of fraud, the Corporation and Rowe Price
Management Company, Inc. may deal freely with each other,
and neither such contract appointing Rowe Price Management
Company, Inc. investment adviser to the Corporation nor any
other contract or transaction between the Corporation and
Rowe Price Management Company, Inc. shall be invalidated or
in any wise affected thereby, nor shall any director or
officer of the Corporation by reason thereof be liable to the
Corporation or to any stockholder or creditor of the Corporation
or to any other person for any loss incurred under or by reason
of any such contract or transaction. For purposes of this
paragraph 7, any reference to "Rowe Price Management Company,
Inc." shall be deemed to include said company and any parent
subsidiary, or affiliate of said Company and any successor (by
merger, consolidation or otherwise) to said company.
8. All securities from time to time owned by the
Corporation shall be deposited with a bank or trust company
having not less than Ten Million Dollars ($10,000,000)
aggregate capital, surplus and undivided profits, as
custodian, and shall be delivered by the custodian only upon
sale for the account of the Corporation and receipt of
payment therefor by the custodian, or in exchange for or for
conversion into other securities, or for redemption or
collection, all in accordance with certificates or written
instructions of the Corporation. All money of the
Corporation shall at all times be deposited with such
custodian in the name of the custodian and subject to
disbursement only by the custodian pursuant to certificates
or written instructions of the Corporation setting forth the
name and address of the person to whom payment is to be
made, the amount to be paid and the corporate purpose for
which the payment is to be made. In the event of the
resignation, inability to serve, or removal of any
custodian, the Corporation shall forthwith appoint as
successor a bank or trust company having the qualifications
stated above, under a custody agreement containing the
provisions hereinbefore set forth, and shall require that
the money and securities owned by the Corporation be
delivered directly to such successor custodian.
9. Each director and officer (and his heirs,
executors and administrators) shall be indemnified by the
Corporation against reasonable costs add expenses incurred
by him in connection with any action, suit or proceeding to
which he may be made a party by reason of his being or
having been a director or officer of the Corporation, except
in relation to any action, suits or proceedings in which he
has been adjudged liable because of negligence or
misconduct, which shall be deemed to include willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office. In the absence of an adjudication which expressly
finds that the director or officer is liable for negligence
or misconduct, within the meaning thereof as used herein, or
which expressly absolves him of liability for negligence and
misconduct, or in the event of a settlement, each director
and officer (and his heirs, executors and administrators)
shall be indemnified by the Corporation against payments
made, including reasonable costs and expenses, provided that such
indemnity shall be conditioned upon the prior determination by a
resolution of two-thirds of those members of the Board of
Directors of the Corporation who are not involved in the action,
suit or proceeding that the director or officer has no liability
by reason of negligence or misconduct, within the meaning thereof
as used herein, and provided further that if a majority of the
members of the Board of Directors of the Corporation are involved
in the action, suit or proceeding, such determination shall have
been made by a written opinion of independent counsel. Amounts
paid in settlement shall not exceed costs, fees and expenses
which would have been reasonably incurred if the action, suit or
proceeding had been litigated to a conclusion. Such a
determination by the Board of Directors or by independent
counsel, and the payments of amounts by the Corporation on the
basis thereof shall not prevent a stockholder from challenging
such indemnification by appropriate legal proceedings on the
grounds that the person indemnified was liable to the Corporation
or its security holders by reason of negligence or misconduct,
within the meaning thereof as used herein. The foregoing
provisions shall be exclusive of any other rights of
indemnification to which the officers and directors might
otherwise be entitled.
10. The Board of Directors of the Corporation is
hereby empowered to authorize the issuance from time to time
of shares of any class of stock of the Corporation whether
now or hereafter authorized; to make, alter, amend or repeal
the by-laws of the Corporation; and to adopt from time to
time reasonable regulations, not contrary to Maryland law,
as to whether and to what extent, and at what times and
places, and under what conditions and regulations, the
holders of shares of the capital stock of the Corporation
may inspect and copy the accounts and records of the
Corporation.
11. Notwithstanding any provision of law requiring a
greater proportion than a majority of the votes of all
classes or of any class of stock entitled to be cast, to
take or authorize any action, the Corporation may take or
authorize any such action upon the concurrence of a majority
of the aggregate number of the votes entitled to be cast
thereon.
12. The Corporation reserves the right from time to
time to make any amendment of its charter now or hereafter
authorized by law, including any amendment which alters the
contract rights, as expressly set forth in its charter, of
any outstanding stock.
EIGHTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, we have signed these articles of
incorporation on the 5th day of August, 1968.
/s/Stanley J. Friedman Stanley J. Friedman /s/Alan M. Hoffman Alan M. Hoffman /s/Lawrence G. Goodman Lawrence G. Goodman |
Witness:
/s/
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
|
I hereby certify that on August 5th, 1968, before me, the
subscriber, a notary public of the State of New York, in and for
the County of New York, personally appeared STANLEY J. FRIEDMAN,
ALAN M. HOFFMAN and LAWRENCE G. GOODMAN, and severally
acknowledged the foregoing Articles of Incorporation to their
act.
WITNESS my hand and notarial seal the day and year last
above written.
/s/ Notary Public |
ARTICLES OF AMENDMENT
ROWE PRICE INFLATION FUND, INC., a Maryland corporation, having its principal office in the City of Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by striking out Article SECOND of the Articles of Incorporation and inserting in lieu thereof a new Article SECOND, to read in full as follows:
"SECOND: The name of the corporation is
ROWE PRICE NEW ERA FUND, INC."
SECOND: The Board of Directors of the Corporation on May 15,
1969, duly adopted a resolution in which was set forth the
foregoing amendment to the Charter of the Corporation, declaring
that the said amendment of the Charter as proposed was advisable
and directing that it be submitted for consent of the
stockholders of the Corporation in accordance with the provisions
of Section 47 of Article 23 of the Annotated Code of Maryland.
THIRD: The said amendment has been consented to and
authorized by the holders of all of the issued and outstanding
stock of the Corporation entitled to vote by written consents
given in accordance with the provisions of Section 47 of Article
23 of the Annotated Code of Maryland, and filed with the
Corporation.
FOURTH: The amendment of the Charter of the Corporation as
hereinabove set forth has been duly advised by the Board of
Directors and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, ROWE PRICE INFLATION FUND, INC. has caused these presents to be signed in its name and on its behalf by its President and its corporate seal to be hereunto affixed and attested by its Secretary on May 20, 1969.
ROWE PRICE INFLATION FUND, INC.
By: /s/T. Rowe Price
T. Rowe Price, President
[SEAL]
ATTEST:
/s/Raymond L. Scott
Raymond L. Scott, Secretary
|
STATE OF MARYLAND )
: ss.:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY that on May 20, 1969, before me, the subscriber, a Notary Public of the State of Maryland in and for the City of Baltimore, personally appeared T. ROWE PRICE, President of Rowe Price Inflation Fund, Inc., a Maryland corporation, and in the name and on behalf of said Corporation acknowledged the foregoing Articles of Amendment to be the corporate act of said Corporation; and at the same time personally appeared RAYMOND L. SCOTT and made oath in due form of law that he was secretary of the meeting of the directors of the Corporation at which the amendment of the Charter of the
Corporation was deemed advisable and was directed to be submitted
to the stockholders for action, and that the matters and facts
set forth in said Articles of Amendment with respect to the
approval of the said amendment are true to the best of his
knowledge, information and belief.
WITNESS my hand and notarial seal or stamp, the day and year
last above written.
/s/Helen E. Monroe Helen E. Monroe Notary Public |
ARTICLES OF AMENDMENT
* * * *
ROWE PRICE NEW ERA FUND, INC., a Maryland corporation,
having its principal office in the City of Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland, that:
FIRST: The Charter of the Corporation is hereby amended by
striking out Section 8 of Article SEVENTH therefrom and inserting
in lieu thereof a new Section 8 of Article SEVENTH to read in
full as follows:
"8. All securities from time to time owned by the
Corporation shall be deposited with a bank or trust company
having not less than Ten Million Dollars ($10,000,000)
aggregate capital, surplus and undivided profits, as
custodian, and shall be delivered by such custodian only
upon sale for the account of the Corporation and receipt of
payment therefor by such custodian, or in exchange for or
for conversion into other securities, or for redemption or
collection, all in accordance with certificates or written
instructions of the Corporation; provided, that subject to
any applicable rules, regulations and orders adopted by the
Securities and Exchange Commission, and to all applicable
agreements with and instructions from the Corporation, such
custodian may deposit all or any part of the securities
owned by the Corporation in one or more systems for the
central handling of securities established by a national
securities exchange or national securities association
registered with the Securities and Exchange Commission under
the Securities Exchange Act of 1934, or by such other person
as may be permitted by the Securities and Exchange
Commission, pursuant to which all securities or any
particular class or series of any issuer deposited within
such system are treated as fungible and may be transferred
or pledged by bookkeeping entry without physical delivery of
such securities, and may use the facilities of any such
system to effect the receipt, delivery, transfer, exchange,
conversion, redemption and collection of securities
purchased, owned and sold by the Corporation."
SECOND: The Board of Directors of the Corporation, on
January 16, 1973, duly adopted a resolution in which was set
forth the foregoing amendment to Section 8 of Article SEVENTH of
the Charter, declaring that the said Amendment to the Charter as
proposed was advisable and directing that it be submitted for
action thereon by the stockholders of the Corporation at the
annual meeting of stockholders to be held on April 10, 1973.
THIRD: Notice setting forth a summary of the change to be
effected by said amendment of the Charter and stating that a
purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all
stockholders entitled to vote thereon.
FOURTH: The amendment of the Charter of the Corporation as
hereinabove set forth was approved by the stockholders of the
Corporation at said meeting by the affirmative vote of a majority
of all the votes entitled to be cast thereon.
FIFTH: The amendment of the Charter of the Corporation as
hereinabove set forth has been duly advised by the Board of
Directors and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, ROWE PRICE NEW ERA FUND, INC. has caused
these presents to be signed in its name and on its behalf by its
President or one of its Vice Presidents and its corporate seal to
be hereunto affixed and attested by its Secretary or one of its
Assistant Secretaries, on April 10, 1973.
/s/Howard P. Colhoun
Howard P. Colhoun, President
ATTEST:
/s/Lenora V. Hornung
Lenora V. Hornung, Secretary
|
STATE OF MARYLAND )
) ss.:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY that on April 10, 1973, before me, the
subscriber, a Notary Public of the State of Maryland, in and for
the City of Baltimore, personally appeared HOWARD P. COLHOUN,
President of ROWE PRICE NEW ERA FUND, INC. a Maryland
corporation, and in the name and on behalf of said Corporation
acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time
personally appeared LENORA V. HORNUNG and made oath in due form
of law that she was Secretary of the meeting of the stockholders
of said Corporation at which the Amendment of the Charter of the
Corporation therein set forth was approved an that the matters
and facts set forth in said Articles of Amendment with respect to
the approval of the said Amendment are true to the best of her
knowledge, information and belief.
WITNESS my hand and notarial seal or stamp, the day and year
last above written.
/s/Ilene Lang Ilene Lang Notary Public |
ARTICLES OF AMENDMENT
* * * * * * *
ROWE PRICE NEW ERA FUND, INC., a Maryland corporation,
having its principal office in the City of Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland, that:
FIRST: The Charter of the Corporation is hereby amended by
striking out Section 1 of Article FIFTH therefrom in entirety and
inserting in lieu thereof a new Section 1 of Article FIFTH to
read in full as follows:
"FIFTH: 1. The total number of shares of stock which
the Corporation shall have authority to issue is One Hundred
Million (100,000,000) shares, all of one class, of the par
value of One Dollar ($1.00) each, and of the aggregate par
value of One Hundred Million Dollars ($100,000,000). Any
fractional share of such stock shall be entitled to its
proportionate part of the rights of a whole share to receive
dividends, to participate in the assets of the Corporation
in the event of liquidation, and to vote."
SECOND: The Board of Directors of the Corporation, on
January 16, 1974, duly adopted a resolution in which was set
forth the foregoing amendment to the Charter, declaring that the
said amendment to the Charter as proposed was advisable and
directing that it be submitted for action thereon by the
stockholders of the Corporation at the annual meeting of
stockholders to be held on April 9, 1974.
THIRD: Notice setting forth a summary of the changes to be
effected by said amendment to the Charter, and stating that a
purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all
stockholders entitled to vote thereon.
FOURTH: The amendment to the Charter of the Corporation, as
hereinabove set forth, was approved by the stockholders of the
Corporation at said meeting by the affirmative vote of a majority
of all the votes entitled to be cast thereon.
FIFTH: The amendment to the Charter of the Corporation as
hereinabove set forth has been duly advised by the Board of
Directors and approved by the stockholders of the Corporation.
SIXTH: (a) The total number of shares of stock which the
Corporation was heretofore authorized by its Charter to issue was
Twenty-Five Million (25,000,000) shares, all of one class, of the
par value of One Dollar ($1.00) each.
(b) The total number of shares of stock which the
Corporation is to be hereafter authorized to issue is One Hundred
Million (100,000,000) shares, all of one class, of the par value
of One Dollar ($1.00) each.
(c) The stock of the Corporation is not divided into
classes.
IN WITNESS WHEREOF, ROWE PRICE NEW ERA FUND, INC. has caused
these presents to be signed in its name and on its behalf by its
President or one of its Vice Presidents and its corporate seal to
be hereunto affixed and attested by its Secretary or one of its
Assistant Secretaries, on April 9, 1974.
/s/Howard P. Colhoun
Howard P. Colhoun, President
ATTEST
/s/Lenora V. Hornung
Lenora V. Hornung, Secretary
|
STATE OF MARYLAND )
) SS:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY, that on April 9, 1974, before me the
subscriber, a Notary Public of the State of Maryland, in and for
the City of Baltimore, personally appeared HOWARD P. COLHOUN,
President of ROWE PRICE NEW ERA FUND, INC., a Maryland
corporation, and in the name and on behalf of said Corporation
acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time
personally appeared LENORA V. HORNUNG and made oath in due form
of law that she was Secretary of the meeting of the stockholders
of said Corporation at which the amendment of the Charter of the
Corporation therein set forth was approved and that the matters
and facts set forth in said Articles with respect to the approval
of said amendment are true to the best of her knowledge,
information and belief.
WITNESS my hand and notarial seal or stamp, the day and year
last above written.
/s/Ilene Lang Ilene Lang Notary Public |
ARTICLES OF AMENDMENT
Rowe Price New Era Fund, Inc., a Maryland corporation having
its principal office in the City of Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by
deleting there from Article SECOND and inserting in lieu thereof
a new Article SECOND to read in full as follows:
"SECOND: The name of the Corporation is:
T. ROWE PRICE NEW ERA FUND, INC."
SECOND: The Board of Directors of the Corporation, on
January 21, 1981, duly adopted resolutions in which were set
forth the foregoing amendment to Article SECOND of the Charter of
the Corporation, declaring that the said amendment as proposed
was advisable and directing that it be submitted for action
thereon by the shareholders of the Corporation at the annual
meeting of shareholders to be held on April 15, 1981.
THIRD: Notice setting forth a summary of the changes to be
effected by said amendments of the Charter, and stating that a
purpose of said meeting of shareholders would be to take action
thereon, was given, as required by law, to all shareholders
entitled to vote thereon.
FOURTH: The amendment to Article SECOND of the Charter as
hereinabove set forth was approved by the shareholders of the
Corporation at said meeting on April 15, 1981, by the affirmative
vote of 14,501,431.813 shares of the 23,653,650.929 shares of
common stock issued and outstanding, or 61.31% of the votes
entitled to be cast thereon, which vote was sufficient to approve
such amendment pursuant to the provisions of the Charter of the
Corporation which requires the approval of a majority of the
votes entitled to be cast on any such amendment, notwithstanding
any provision of the law requiring a greater proportion.
FIFTH: The amendment of the Charter as hereinabove set
forth has been duly advised by the Board of Directors and
approved by the shareholders of the Corporation.
IN WITNESS WHEREOF, ROWE PRICE NEW ERA FUND, INC. has caused
these presents to be signed in its name and on its behalf by its
Vice President, and its corporate seal to be hereunto affixed and
attested by its Secretary, on May 1, 1981.
ROWE PRICE NEW ERA FUND, INC.
By: /s/George A. Roche
George A. Roche, President
ATTEST:
/s/Lenora V. Hornung
Lenora V. Hornung, Secretary
|
STATE OF MARYLAND )
) SS.:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY that on May 1, 1981, before me the
subscriber, a Notary Public of the State of Maryland, in and for
the City of Baltimore, personally appeared George A. Roche,
President of ROWE PRICE NEW ERA FUND, INC., a Maryland
corporation, and in the name and on behalf of said Corporation
acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time made oath
in due form of law that the matters and facts set forth in said
Articles of Amendment with respect to the approval of the said
amendments are true to the best of his knowledge, information and
belief.
WITNESS my hand and notarial seal, the day and year last
above written.
/s/Catherine L. Boch
Catherine L. Boch
Notary Public
My commission expires:
July 1, 1982
|
ARTICLES OF AMENDMENT
T. Rowe Price New Era Fund, Inc., a Maryland corporation,
having its principal office in the City of Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by
deleting Section 9, in its entirety, from Article SEVENTH.
SECOND: The Board of Directors of the Corporation, on
January 20, 1982, duly adopted a resolution which set forth the
foregoing amendment to Article SEVENTH of the Charter of the
Corporation, declaring that the said amendment as proposed was
advisable and directing that it be submitted for action thereon
by the shareholders of the Corporation at the annual meeting of
shareholders to be held on April 14, 1982.
THIRD: Notice setting forth a summary of the change to be
effected by said amendment of the Charter, and stating that a
purpose of said meeting of shareholders would be to take action
thereon, was given, as required by law, to all shareholders
entitled to vote thereon.
FOURTH: The amendment to Article SEVENTH of the Charter as
hereinabove set forth was approved by the shareholders of the
Corporation at said meeting on April 14, 1982, by the affirmative
vote of 16,393,654.638 shares of the 27,874,723.732 shares of
common stock issued and outstanding, or 58.82% of the votes
entitled to be cast thereon, which vote was sufficient to approve
such amendment pursuant to the provisions of the Charter of the
Corporation which requires the approval of a majority of the
votes entitled to be cast on any such amendment, notwithstanding
any provision of the law requiring a greater proportion.
FIFTH: The amendment of the Charter as hereinabove set
forth has been duly advised by the Board of Directors and
approved by the shareholders of the Corporation.
IN WITNESS WHEREOF, T. ROWE PRICE NEW ERA FUND, INC. has
caused these presents to be signed in its name and on its behalf
by its Vice President, and its corporate seal to be hereunto
affixed and attested by its Secretary, on April 30, 1982.
T. ROWE PRICE NEW ERA FUND, INC.
By: /s/James S. Riepe
James S. Riepe, Vice President
ATTEST:
/s/Lenora V. Hornung
Lenora V. Hornung, Secretary
|
STATE OF MARYLAND )
) SS.:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY that on April 30, 1982, before me the subscriber, a Notary Public of the State of Maryland, in and for the City of Baltimore, personally appeared James S. Riepe, Vice
President of T. ROWE PRICE NEW ERA FUND, INC., a Maryland
corporation, and in the name and on behalf of said Corporation
acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time made oath
in due form of law that the matters and facts set forth in said
Articles of Amendment with respect to the approval of the said
amendments are true to the best of his knowledge, information and
belief.
WITNESS my hand and notarial seal, the day and year last
above written.
/s/Catherine L. Boch
Catherine L. Boch
Notary Public
My commission expires:
July 1, 1982
|
ARTICLES OF AMENDMENT
T. Rowe Price New Era Fund, Inc., a Maryland corporation,
having its principal office in the City of Baltimore, Maryland
(hereinafter called the, "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by
deleting the following language, in its entirety, from Article
THIRD, Section 8:
"(d) Lend money or securities to any person other than
through the acquisition of bonds, debentures, notes and
other securities as hereinbefore authorized."
SECOND: The Charter of the Corporation is hereby amended by
deleting therefrom Section 1 of Article FIFTH and inserting in
lieu thereof a new Section 1 to read in full as follows:
"FIFTH: l. The total number of shares of stock
which the Corporation shall have authority to issue is
Two Hundred Million (200,000,000) shares, all of one
class, of the par value of One Dollar ($1.00) each, and
of the aggregate par value of Two Hundred Million
Dollars ($200,000,000). Any fractional share of such
stock shall be entitled to its proportionate part of
the rights of a whole share to receive dividends, to
participate in the assets of the Corporation in the
event of liquidation, and to vote."
THIRD: The Charter of the Corporation is hereby amended by
deleting therefrom Section 5(a) of Article FIFTH and inserting in
lieu thereof a new Section 5(a) to read in full as follows:
"Any person whose name appears on the books of the
Corporation as a holder of shares of its capital stock
may on any business day deliver to the Corporation for
redemption a certificate or certificates registered in his name
evidencing such shares of capital stock, or, whether or not any
such certificate has been issued, offer such shares to the
Corporation for redemption in such manner as may be authorized by
its Board of Directors. The Corporation shall redeem the shares
evidenced by the certificate or certificates so delivered, or the
shares so offered, provided that the Corporation has funds
legally available for such purpose, by paying to such holder, in
cash or other assets of the corporation or both, as the Board of
Directors shall prescribe, the net asset value of such shares.
Such net asset value shall be the value determined in accordance
with Section 3 of this Article FIFTH as of any time between the
time of such delivery or offer and the close of business on the
next successive business day as the Corporation in its discretion
may decide; provided, however, that the Corporation in its
discretion may adopt for this purpose the net asset value in
effect for the purpose of the sale of shares of its capital stock
at the time of such delivery or offer; and provided further, that
all shares for which certificates are delivered for redemption or
which are offered for redemption as above provided, within the
same time period on any day, shall be valued as of the same time
and in the same manner, without discrimination."
FOURTH: The Board of Directors of the Corporation, on
January 20, 1983, duly adopted resolutions in which were set
forth the foregoing amendments of the Charter of the Corporation,
declaring that said amendments as proposed were advisable and
directing that they be submitted for action thereon by the
shareholderS of the Corporation at the annual meeting of
shareholders to be held on April 19, 1983.
FIFTH: Notice setting forth a summary of the changes to be
effected by said amendments of the Charter, and stating that a
purpose of said meeting of shareholders would be to take action
thereon, was given, as required by law, to all shareholders
entitled to vote thereon.
SIXTH: The amendment to Article THIRD of the Charter as
hereinabove set forth was approved by the shareholders of the
Corporation at said meeting on April 19, 1983, by the affirmative
vote of 15,383,708.653 shares of the 28,171,288.667 shares of
common stock issued and outstanding, or 54.61% of the votes
entitled to be cast thereon, which vote was sufficient to approve
such amendment pursuant to the provisions of the Charter of the
Corporation which require the approval of a majority of the votes
entitled to be cast on any such amendment, notwithstanding any
provision of the law requiring a greater proportion.
SEVENTH: The amendment to Section 1 of Article FIFTH of the
Charter as hereinabove set forth was approved by the shareholders
of the Corporation at said meeting on April 19, 1983, by the
affirmative vote of 16,184,756.205 shares of the 28,171,288.667
shares of common stock issued and outstanding, or 57.45% of the
votes entitled to be cast thereon, which vote was sufficient to
approve such amendment pursuant to the provisions of the Charter
of the Corporation which require the approval of a majority of
the votes entitled to be cat on any such amendment,
notwithstanding any provision of the law requiring a greater
proportion.
EIGHTH: The amendment to Section 5 (a) of Article FIFTH of
the Charter as hereinabove set forth was approved by the
shareholders of the Corporation at said meeting on April 19,
1983, by the affirmative vote of 15,497,720.151 shares of the
28,171,288.667 shares of common stock issued and outstanding, or
55.01% of the votes entitled to be cast thereon, which vote was
sufficient to approve such amendment pursuant to the provisions
to the Charter of the Corporation which require the approval of a
majority of the votes entitled to be cast on any such amendment,
notwithstanding any provision of the law requiring a greater
proportion.
NINTH: The amendments of the Charter as hereinabove set
forth have been duly advised by the Board of Directors and
approved by the shareholders of the Corporation.
TENTH: (a) The total number of shares of stock which the
Corporation was heretofore authorized by its Charter to issue was
One Hundred Million (100,000,000) shares, all of one class, of
the par value of One Dollar ($1.00) each.
(b) The total number of shares of stock which the
Corporation is to be hereafter authorized to issue is Two Hundred
Million (200,000,000) shares, all of one class, of the par value
of One Dollar ($1.00) each.
(c) The stock of the Corporation is not divided into
classes.
IN WITNESS WHEREOF, T. ROWE PRICE NEW ERA FUND, INC. has
caused these presents to be signed in its name and on its behalf
by its Vice President, and its corporate seal to be hereunto
affixed and attested by its Secretary, on May 4, 1983.
T. ROWE PRICE NEW ERA FUND, INC.
By: /s/James S. Riepe |
ATTEST:
/s/Lenora V. Hornung Lenora V. Hornung, Secretary |
STATE OF MARYLAND )
) SS.:
CITY OF BALTIMORE )
|
I HEREBY CERTIFY that on May 4, 1983, before me the
subscriber, a Notary Public of the State of Maryland, in and for
the City of Baltimore, personally appeared James S. Riepe, Vice
President of T. ROWE PRICE NEW ERA FUND, INC., a Maryland
corporation, and in the name and on behalf of said Corporation
acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time made oath
in due form of law that the matters and facts set forth in said
Articles of Amendment with respect to the approval of the said
amendments are true to the best of his knowledge, information and
belief.
WITNESS my hand and notarial seal, the day and year
last above written.
/s/
Notary Public
My commission expires:
_______________________
|
BY-LAWS
OF
T. ROWE PRICE NEW ERA FUND, INC.
AS AMENDED:
JULY 11, 1973
APRIL 9, 1974
JANUARY 28, 1977
APRIL 20, 1979
JANUARY 20, 1982
FEBRUARY 24, 1983
JANUARY 21, 1988
APRIL 19, 1990
MAY 1, 1991
JULY 21, 1993
ARTICLE I
OFFICES
Section 1.1.Principal Office. The principal office of the
corporation shall be within the City of Baltimore, State of
Maryland.
Section 1.2.Other Offices. The corporation may also have
offices at such other places within or without the State of
Maryland as the board of directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1.Place of Meetings. All meetings of
stockholders shall be held at the office of the corporation in
the City of Baltimore, State of Maryland, or at such other place
in the United States as the board of directors may determine.
(Section 2.1. Place of Meetings, as amended July 11, 1973)
Section 2.2.Annual Meetings. The Corporation shall not be
required to hold an annual meeting of its shareholders in any
year unless the Investment Company Act of 1940 requires an
election of directors by shareholders. In the event that the
Corporation shall be so required to hold an annual meeting, such
meeting shall be held at a date and time set by the Board of
Directors, which date shall be no later than 120 days after the
occurrence of the event requiring the meeting. Any shareholders'
meeting held in accordance with the preceding sentence shall for
all purposes
constitute the annual meeting of shareholders for the fiscal year
of the Corporation in which the meeting is held. At any such
meeting, the shareholders shall elect directors to hold the
offices of any directors who have held office for more than one
year or who have been elected by the Board of Directors to fill
vacancies which result from any cause. Except as the Articles of
Incorporation or statute provides otherwise, Directors may
transact any business within the powers of the Corporation as may
properly come before the meeting. Any business of the
Corporation may be transacted at the annual meeting without being
specially designated in the notice, except such business as is
specifically required by statute to be stated in the notice. [
MGCL, Section 2-501 ]
(Section 2.2. Annual Meetings, as amended April 19, 1990.)
Section 2.3.Special Meetings: Special meetings of the
shareholders may be called at any time by the Chairman of the
Board, the President, any Vice President, or by a majority of the
Board of Directors. Special meetings of the shareholders shall
be called by the Secretary on the written request of shareholders
entitled to cast at least ten (10) percent of all the votes
entitled to be cast at such meeting, provided that (a) such
request shall state the purpose or purposes of the meeting and
the matters proposed to be acted on, and (b) the shareholders
requesting the meeting shall have paid to the Corporation the
reasonably estimated cost of preparing and mailing the notice
thereof, which the Secretary shall determine and specify to such
shareholders. Unless requested by shareholders entitled to cast
a majority of all the votes entitled to be cast at the meeting, a
special meeting need not be called to consider any matter which
is substantially the same as a matter voted upon at any special
meeting of the shareholders held during the preceding twelve (12)
months. [ MGCL, Section 2-502 ]
(Section 2.3. Special Meetings, as amended July 21, 1993)
Section 2.5.Quorum. At any meeting of stockholders the
presence in person or by proxy of stockholders entitled to cast a
majority of the votes thereat shall constitute a quorum; but this
section shall not affect any requirement of the statute or the
charter with respect to the vote
necessary for the adoption of any measure. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 2.6.Vote Required. A majority of the votes cast at
a meeting of stockholders, duly called and at which a quorum is
present, shall be sufficient to take or authorize action upon any
matter which may properly come before the meeting, except as
otherwise provided by statute, by the charter, or by these by-
laws.
Section 2.7.Voting Rights: Proxies. Each outstanding share
of stock shall be entitled to one vote on each matter submitted
to a vote at a meeting of stockholders; but no share shall be
entitled to vote if any installment payable thereon is overdue
and unpaid. Fractional shares shall be entitled to fractional
votes. A stockholder may vote the shares owned of record by him
either in person or by proxy executed in writing by the
stockholder or his duly authorized attorney-in-fact. No proxy
shall be valid after eleven months from its date, unless
otherwise provided in the proxy. At all meetings of
stockholders, unless the voting is conducted by inspectors, all
questions relating to the qualification of voters and the
validity of proxies and the acceptance or rejection of votes
shall be decided by the chairman of the meeting.
(Section 2.7. Voting Rights: Proxies, as amended April 9, 1974.)
Section 2.8.Unanimous Written Consents. Any action
required or permitted to be taken at any meeting of stockholders
may be taken without a meeting, if a consent in writing, setting
forth such action, is signed by all the stockholders entitled to
vote on the subject matter thereof, and such consent is filed
with the records of the corporation.
ARTICLE III
DIRECTORS
Section 3.1.Number. The number of directors of the
corporation shall be not less than three (3) nor more than
fifteen (15), as fixed from time to time by vote of a majority of
the entire board of directors. The tenure of office of an
incumbent director shall not be affected by any decrease in the
number of directors so made by the board. At each annual
meeting, the stockholders shall elect a board of directors to
hold office until the next annual meeting or until their
successors are elected and qualify. Directors need not be
stockholders of the corporation.
Section 3.2.Vacancies. Except as otherwise provided by
law:
(a) any vacancy occurring in the board of directors for
any cause other than by reason of an increase in the number of
directors may be filled by a majority of the remaining members of
the board of directors, although such majority is less than a
quorum;
(b) any vacancy occurring by reason of an increase in
the number of directors may be filled by action of a majority of
the entire board of directors; and
(c) a director elected by the board of directors to fill
a vacancy shall be elected to hold office until the next annual
meeting of stockholders or until his successor is elected and
qualifies.
Section 3.3.Duties and Powers. The business and affairs of
the corporation shall be managed by its board of directors, which
may exercise all of the powers of the corporation, except such as
are by law or by the charter or by these by-laws conferred upon
or reserved to the stockholders.
Section 3.4.Removal. At any meeting of stockholders, duly
called and at which a quorum is present, the stockholders may, by
the affirmative vote of the holders of a majority of the votes
entitled to be cast thereon, remove any director or directors
from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of removed directors.
Section 3.5.Place of Meetings. Meetings of the board of
directors, regular or special, may be held at such place within
or without the State of Maryland as the board may from time to
time determine or as shall be specified in the notice of meeting.
Section 3.6.First Meeting. Until the first annual meeting
of stockholders or until successors are duly elected and
qualified, the Board of Directors shall consist of the persons
named as such in the Articles of Incorporation. Thereafter,
except as otherwise provided in Sections 3.2 and 3.4 hereof, at
each annual meeting, the stockholders shall elect Directors to
hold office until the next annual meeting and/or until their
successors are elected and qualify. In the event that Directors
are not elected at an annual stockholders' meeting, then
Directors may be elected at a special stockholders' meeting.
Directors shall be elected by vote of the holders of a majority
of the shares present in person or by proxy and entitled to vote
thereon.
(Section 3.6. First Meeting, as amended January 21, 1988.)
Section 3.7.Regular Meetings. Regular meetings of the
board of directors may be held without notice at such time and
place as shall from time to time be determined by the board of
directors.
Section 3.8.Special Meetings. Special meetings of the
board of directors may be called at any time by the board of
directors or by the president or by a majority of the directors.
Section 3.9.Notice of Special Meetings. Notice of the
place and time of every special meeting of the board of directors
shall be served on each director or sent to him by telegraph or
by mail, or by leaving the same at his residence or usual place
of business, at least two (2) days before the date of the
meeting. If mailed, such notice shall be deemed to be given when
deposited in the United States mail addressed to the director at
his post office address as it appears on the records of the
corporation, with postage thereon prepaid.
Section 3.10.Quorum and Voting. At all meetings of the
Board of Directors the presence of one-third of the total number
of Directors authorized, but not less than two Directors, shall
constitute a quorum for the transaction of business. In the
absence of a quorum, a majority of the Directors present may
adjourn the meeting, from time to time, until a quorum shall be
present The action of a majority of the Directors present at a
meeting at which a quorum is present shall be the action of the
Board of Directors unless the concurrence of a greater proportion
is required for such action by law, by the Articles of
Incorporation or by these By-Laws.
(Section 3.10. Quorum and Voting, as amended January 28, 1977.)
Section 3.11.Unanimous Written Consents. Any action
required or permitted to be taken at any meeting of the board of
directors or of any committee thereof may be taken without a
meeting, if a written consent to such action is signed by all
members of the board or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings
of the board or committee.
Section 3.12.Committees. By resolution adopted by the
board of directors, the board may appoint from among its members
one or more committees, including an executive committee, each
consisting of at least two directors. Each member of the
committee shall hold office during the pleasure of the board.
The President shall be a member of the executive committee.
Unless otherwise provided by resolution of the board of
directors, the executive committee, in the intervals between
meetings of the board of directors, shall have and may exercise
all the powers of the board of directors except the power to: (a)
declare dividends or distributions on stocks; (b) issue stock
other than as provided in Section 2-411(b) of Article
Corporations and Associations of the Annotated Code of Maryland;
(c) recommend to the stockholders any action which requires
stockholder approval; (d) amend the By-Laws; or (e) approve any
merger or share exchange which does not require shareholder
approval. To the extent provided by resolution of the board,
other committees shall have and may exercise any of the powers
that may lawfully be granted to the executive committee. In the
absence of appropriate resolution of the board of directors each
committee may adopt such rules ad regulations governing its
proceedings, quorum and manner of acting as it shall deem proper
and desirable, provided that the quorum shall not be less than
two directors. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or
not they constitute a quorum, may appoint a member of the board
of directors to act in the place of such absent member. The
board of directors may appoint other committees, each consisting
of one or more persons who need not be directors. Each such
committee shall have such powers and perform such duties as may
be assigned to it form time to time by the board of directors,
but shall not exercise any power which may lawfully be exercised
only by the board of directors or a committee thereof.
(Section 3.12. Committees, as amended April 20, 1979.)
Section 3.13.Fees and Expenses. Directors as such shall
not receive any stated salary for their services, but may be
allowed such directors' fees and such expenses for attendance at
meetings as the board of directors may from time to time
determine to be appropriate; but nothing herein contained shall
be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation
therefor.
Section 3.14.Director Emeritus. Upon the retirement of a
Director of the Corporation, the Board of Directors may designate
such retired Director as a Director Emeritus. The position of
Director Emeritus shall be honorary only and shall not confer
upon such Director Emeritus any responsibility, or voting
authority, whatsoever with respect to the Corporation. A
Director Emeritus may, but shall not be required to attend the
meetings of the Board of Directors and receive materials normally
provided Directors relating to the Corporation. The Board of
Directors may establish such compensation as it may deem
appropriate under the circumstances to be paid by the Fund to a
Director Emeritus.
(Section 3.14. Director Emeritus added February 24, 1983.)
Section 4.1. The board of directors may appoint an advisory committee which shall be composed of persons who do not serve the corporation in any other capacity and which shall have advisory functions with respect to the investments of the corporation, but shall have no power to determine that any security or other investment shall be purchased, sold or otherwise disposed of by the corporation. The number of persons constituting any such advisory committee shall be determined from time to time by the board of directors. The members of any such advisory committee shall not receive any fixed compensation for their services but may be allowed such fees and such expenses for the attendance at meetings as the board of directors may from time to time determine to be appropriate.
ARTICLE V
NOTICES
Section 5.1. Whenever any notice of the time, place or
purpose of any meeting of stockholders, directors or of any
committee is required to be given under the provisions of the
statute or under the provisions of the charter or these by-laws,
a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the
meeting, whether before or after the holding thereof, or actual
attendance at the meeting of stockholders in person or by proxy,
or at the meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such person.
ARTICLE VI
OFFICERS
Section 6.1.Executive Officers. The executive officers of
the corporation shall be a president, one or more vice-
presidents, a secretary and a treasurer. Two or more offices,
except those of president and vice-president, may be held by the
same person, but no officer shall execute, acknowledge or verify
any instrument in more than one capacity. The executive officers
of the corporation shall be elected annually by the board of
directors at its first meeting and thereafter at each annual
meeting of the Board.
(Section 6.1. Executive Officers., as amended on January 21,
1988.)
Section 6.2.Other Officers and Agents. The board of
directors may also elect a Chairman of the Board, one or more
assistant vice-presidents, assistant secretaries and assistant
treasurers and may elect, or delegate to the president the power
to appoint and fix the compensation of such other officers and
agents as the board of directors shall at any time or from time
to time deem advisable; and any person so elected by the board or
appointed by the president shall hold office for such term as
shall from time to time be determined by the board or the officer
who made such appointment.
Section 6.3.Authority and Duties. All officers and agents
of the corporation, as between themselves and the corporation,
shall have such authority and perform such duties in the
management of the corporation as may be provided in or pursuant
to these by-laws, or, to the extent not so provided, as may be
prescribed by resolution of the board of directors.
Section 6.4.Compensation. The compensation of all officers
and agents of the corporation shall be fixed by or in the manner
determined by the board of directors.
Section 6.5.Tenure; Removal; Vacancies. The officers of
the corporation shall hold office until their respective
successors are chosen and qualify in their stead. Any officer or
agent may be removed by the board of directors whenever, in its
judgment, the best interests of the corporation will be served
thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed. If the
office of any officer becomes vacant for any reason, the vacancy
may be filled by the board of directors.
Section 6.6.The Chairman of the Board. The chairman of the
board, if there be a chairman, shall preside at all meetings of
the directors and of the stockholders, and shall perform such
other duties as the board of directors shall from time to time
prescribe.
Section 6.7.The President. The president shall be the
chief executive officer of the corporation. He shall be ex
officio a member of all standing committees. He shall have
general and active management of the business of the corporation,
shall see that all orders and resolutions of the board are
carried into effect, and in connection therewith, shall be
authorized to delegate to a vice-president such of his powers and
duties as president at such times and in such manner as he may
deem advisable. In the absence of the chairman, or if there be
no chairman, he shall preside at all meetings of stockholders and
directors.
Section 6.8.Execution of Documents. Except as otherwise
required by law or by these by-laws, the president shall have the
authority to execute, in the name and on behalf of the
corporation, all deeds, mortgages, bonds, contracts and other
instruments requiring a seal, under the seal of the corporation,
unless the signing and execution thereof shall have been
expressly delegated by the board of directors exclusively to some
other officer or agent of the corporation.
Section 6.9.The Vice-Presidents. The board of directors
may designate one or more of the vice-presidents as executive
vice-presidents, and may grant to others of the vice-presidents
such titles as shall describe their functions. The vice-
president, or if there be more than one, the vice-presidents in
the order of their seniority as determined by the board of
directors, shall, in the absence or disability of the president,
exercise the powers and perform the duties of the president; and
he or they shall perform such other duties as the board of
directors or the president may from time to time prescribe.
Section 6.10.The Assistant Vice-Presidents. The assistant
vice-president, or if there shall be more than one, the assistant
vice-presidents, shall perform such duties and have such powers
as the board of directors or the president shall from time to
time prescribe.
Section 6.11.The Secretary. The secretary shall attend all
meetings of the board of directors and all meetings of the
stockholders and record all the proceedings of the meetings of
the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the board of directors, and perform such other duties
as may be prescribed by the board of directors, the chairman of
the board or the president, under whose supervision he shall be.
He shall keep in safe custody the seal of the corporation and,
when authorized by the board of directors, affix the same to any
instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of an assistant
secretary.
Section 6.12.The Assistant Secretaries. The assistant
secretary, or if there be more than one, the assistant
secretaries in the order determined by the board of directors or
the president, shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other
powers as the board of directors or the president may from time
to time prescribe.
Section 6.13.The Treasurer.
(a) The treasurer shall be the chief financial officer
of the corporation. He shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation
and he shall render to the president and the board of directors,
at its regular meetings or when the board of directors or the
president so require, an account of all his transactions as
treasurer and of the financial condition of the corporation.
(b) The treasurer shall cause all of the securities from
time to time owned by the corporation, and all of its funds, to
be deposited with the bank or trust company which shall have been
appointed custodian pursuant to the provisions of the charter of
the corporation.
(c) If required by the board of directors, the treasurer
shall give the corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of his
office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the
corporation.
Section 6.14.The Assistant Treasurers. The assistant
treasurer, or if there shall be more than one, the assistant
treasurers in the order determined by the board of directors or
the president, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other
powers as the board of directors or the president may from time
to time prescribe.
ARTICLE VII
CAPITAL STOCK
Section 7.1.Ownership of Shares.
(a) Certificates certifying the ownership of shares will
not be issued for shares purchased or otherwise acquired after
May 1, 1991. The ownership of shares, full or fractional, shall
be recorded on the books of the Corporation or its agent. The
record books of the Corporation as kept by the Corporation or its
agent, as the case may be, shall be conclusive as to the number
of shares held from time to time by each such shareholder. The
Corporation reserves the right to require the surrender of
outstanding certificates if the Board of Directors so determines.
(b) Every certificate exchanged, surrendered for
redemption or otherwise returned to the Corporation shall be
marked "Cancelled" with the date of cancellation.
(Section 7.1. Ownership of Shares, as amended May 1, 1991)
Section 7.2.Lost Certificates. If a certificate for stock
of the Corporation is alleged to have been lost, stolen or
destroyed, no new certificate will be issued. Instead, ownership
of the shares formerly represented by the lost, stolen or
destroyed certificate shall be recorded on the books of the
Corporation or its agent, in accordance with the provisions of
Section 7.1 of this Article. Before recording ownership of such
shares, the Board of Directors, or any officer authorized by the
Board, may, in its discretion, require the owner of the lost,
stolen, or destroyed certificate (or his legal representative) to
give the Corporation a bond or other indemnity, in such form and
in such amount as the Board or any such officer may direct and
with such surety or sureties as may be satisfactory to the Board
or any such officer, sufficient to indemnify the Corporation
against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate.
(Section 7.2. Lost Certificates, as amended May 1, 1991)
Section 7.3.Transfer of Stock. Shares of stock of the
Corporation shall be transferable only upon the books of the
Corporation kept for such purpose and, if one or more
certificates representing such shares have been issued, upon
surrender to the Corporation or its transfer agent or agents of
such certificate or certificates duly endorsed, or accompanied by
appropriate evidence of assignment, transfer, succession, or
authority to transfer.
(Section 7.3. Transfer of Stock, as amended May 1, 1991)
Section 7.4.Fixing of Record Date. The Board of Directors
may fix in advance a date as a record date for the determination
of the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or to
receive payment of any dividend or other distribution or
allotment of any rights, or to exercise any rights in respect of
any change, conversion or exchange of stock, or for any other
proper purpose, provided that such record date shall be a date
not more than 60 days nor, in the case of a meeting of
stockholders, less than 10 days prior to the date on which the
particular action, requiring such determination of stockholders,
is to be taken. In such case, only such stockholders as shall be
stockholders of record on the record date so fixed shall be
entitled to such notice of, and to vote at, such meeting or
adjournment, or to give such consent, or to receive payment of
such dividend or other distribution, or to receive such allotment
of rights, or to exercise such rights, or to take other action,
as the case may be, notwithstanding any transfer of any shares on
the books of the Corporation after any such record date. If no
record date has been fixed for the determination of stockholders,
the record date for the determination of stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day on which notice of the meeting is
mailed or the thirtieth day before the meeting, whichever is the
closer date to the meeting, or, if notice is waived by all
stockholders, at the close of business on the tenth day next
preceding the day on which the meeting is held.
(Section 7.4. as amended January 28, 1977)
Section 7.5.Registered Owners of Stock. The corporation
shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares of stock to
receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the
owner of shares of stock, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of Maryland.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1.Declaration of Dividends. Dividends upon the
capital stock of the corporation may be declared by the board of
directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in its own shares,
subject to the provisions of the statute and of the charter.
Section 8.2.Cash Distributions. The provisions of Section
8.1 hereof notwithstanding, the total of cash distributions to
the stockholders paid in any one fiscal year, subject to the
exceptions noted below, may be approximately the sum of
(a) the net income for such fiscal year, determined in
accordance with good accounting practice (which, if the board of
directors so determines, may include accrued net income in the
price of shares of capital stock of the corporation issued or
repurchased), exclusive of profits of losses realized upon the
sale of securities or other property; plus
(b) the excess of profits over losses on sales of
securities or other property for such fiscal year. Inasmuch as
the computation of net income and gains for federal income tax
purposes may vary from the computation thereof on the books, the
above provision shall be interpreted to give to the board of
directors the power in its discretion to distribute for any
fiscal year as ordinary dividends and as capital gain
distributions, respectively, amounts sufficient to enable the
corporation to avoid or reduce liability for federal income or
other taxes.
Section 8.3.Annual Statement. The president or a vice
president or the treasurer shall prepare or cause to be prepared
annually a full and correct statement of the affairs of the
corporation, including a balance sheet and a financial statement
of operations for the preceding fiscal year, which shall be
submitted at the annual meeting of stockholders, if any, and
shall be filed within twenty days thereafter at the principal
office of the corporation in the State of Maryland (or, in the
absence of an annual meeting, within twenty days after the month
of April following the end of the fiscal year).
(Section 8.3. Annual Statement, as amended on January 21, 1988.)
Section 8.4.Checks; Evidences of Indebtedness. All
certificates, orders or instructions for the payment of money of
the corporation, and all notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such
officer or officers or such other person or persons as the board
of directors may from time to time designate, or as may be
specified in or pursuant to the agreement between the corporation
and the bank or trust company appointed as custodian pursuant to
the provisions of the charter of the corporation.
Section 8.5.Participation in Certain Investment Decisions.
In any case in which an officer or director of the corporation or
of the investment adviser of the corporation, or a member of the
advisory board or of any committee of the corporation, is also an
officer or director of another corporation, and the purchase or
sale of shares issued by such other corporation is under
consideration, the officer or director or advisory board or
committee member concerned shall abstain from participating in
any decision made on behalf of the corporation to purchase or
sell any securities issued by such other corporation.
Section 8.6.Fiscal Year. The fiscal year of the
corporation shall end on the last day of December in each year or
on such other day as shall be prescribed by its board of
directors.
Section 8.7.Seal. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its organization
and the words "Corporate Seal, Maryland". The seal may be used
by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
Section 8.8.Stock Ledgers. The corporation shall maintain
at the office of its transfer agent an original stock ledger
containing the names and addresses of all stockholders and the
number of shares held by each stockholder.
ARTICLE IX
AMENDMENTS
Section 9.1. These by-laws may be amended or repealed, and any new by-law may be adopted by vote of the stockholders of the corporation at any annual meeting or any special meeting called for the purpose, or by vote of a majority of the entire board of directors at any regular or special meeting; provided, however, that any by-law or amendment to the by-laws adopted by the board of directors may be amended or repealed, and any by-law repealed by the board of directors may be reinstated by vote of the stockholders of the corporation.
ARTICLE X
INDEMNIFICATION AND INSURANCE
Section 10.1.Indemnification and Payment of Expenses in Advance. The Corporation shall indemnify any individual ("Indemnitee") who is a present or former director, officer, employee, or agent of the Corporation, or who is or has been
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, who, by reason of his
position was, is, or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative
(hereinafter collectively referred to as a "Proceeding") against
any judgments, penalties fines, settlements, and reasonable
expenses (including attorneys' fees) incurred by such Indemnitee
in connection with any Proceeding, to the fullest extent that
such indemnification may be lawful under applicable Maryland law,
as from time to time amended. The Corporation shall pay any
reasonable expenses so incurred by such Indemnitee in defending a
Proceeding in advance of the final disposition thereof to the
fullest extent that such advance payment may be lawful under
applicable Maryland law, as from time to time amended. Subject
to any applicable limitations and requirements set forth in the
Corporation's Articles of Incorporation and in these By-Laws, any
payment of indemnification or advance of expenses shall be made
in accordance with the procedures set forth in applicable
Maryland law, as from time to time amended.
Notwithstanding the foregoing, nothing herein shall protect
or purport to protect any Indemnitee against any liability to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of his office ("Disabling
Conduct").
Anything in this Article X to the contrary notwithstanding,
no indemnification shall be made by the Corporation to any
Indemnitee unless:
(a) there is a final decision on the merits by a court
or other body before whom the Proceeding was brought
that the Indemnitee was not liable by reason of
Disabling Conduct; or
(b) in the absence of such a decision, there is a
reasonable determination, based upon a review of the
facts, that the Indemnitee was not liable by reason of
Disabling Conduct, which determination shall be made by:
(i) the vote of a majority of a quorum of directors who
are neither "interested persons" of the Corporation, as
defined in Section 2(a)(19) of the Investment Company
Act of 1940, nor parties to the Proceeding; or
(ii) an independent legal counsel in a written
opinion.
Anything in this Article X to the contrary notwithstanding,
any advance of expenses by the Corporation to any Indemnitee
shall be made only upon the undertaking by such Indemnitee to
repay the advance unless it is ultimately determined that such
Indemnitee is entitled to indemnification as above provided, and
only if one of the following conditions is met:
(a) the Indemnitee provides a security for his
undertaking; or
(b) the Corporation shall be insured against losses
arising by reason of any lawful advances; or
(c) there is a determination, based on a review of
readily available facts, that there is reason to believe
that the Indemnitee will ultimately be found entitled to
indemnification, which determination shall be made by:
(i) a majority of a quorum of directors who are
neither "interested persons" of the Corporation as
defined in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the Proceeding;
or
(ii)an independent legal counsel in a written
opinion.
Section 2. Insurance of Officers, Directors, Employees and
Agents. To the fullest extent permitted by applicable Maryland
law and by Section 17(h) of the Investment Company Act of 1940,
as from time to time amended, the Corporation may purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the Corporation, or who
is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against
any liability asserted against him and incurred by him in or
arising out of his position, whether or not the Corporation would
have the power to indemnify him against such liability. [MGCL,
Section 2-418(k)]
(ARTICLE X-INDEMNIFICATION AND INSURANCE - as added to By-Laws
January 20, 1982.)
ARTICLE XI
MISCELLANEOUS
SECTION 11.1.Use of the Term "Annual Meeting". The use of
the term "annual meeting" in these By-Laws shall not be construed
as implying a requirement that a shareholder meeting be held
annually.
(ARTICLE XI. MISCELLANEOUS, added January 21, 1988.)
LAW\AGMTS\BYLAWS.NEF
INVESTMENT MANAGEMENT AGREEMENT
Between
T. ROWE PRICE NEW ERA FUND, INC.
and
T. ROWE PRICE ASSOCIATES, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the 1st day of May, 1987, by and between T. ROWE PRICE NEW ERA FUND, INC., a corporation organized and existing under the laws of the State of Maryland (hereinafter called the "Fund"), and T. ROWE PRICE ASSOCIATES, 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 Fund is engaged in business as an open-end management investment company and is registered as such under the federal Investment Company Act of l940, as amended (the "Act"); and
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 l940, 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 Advisory 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 its prospectus, as amended from time to time, and such other limitations as the Fund 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 Fund, is authorized, in its discretion and without prior consultation with the Fund, to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any stocks, bonds, and other securities or assets; and
(ii) 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 corporate existence and corporate records of the Fund; 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 by the Fund (including the Fund'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 Fund such information, reports, evaluations, analyses and opinions as the Fund 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 the Fund 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 Fund, without remuneration from or other cost to the Fund.
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.
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 Fund 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 Fund that the Manager is not required by this Agreement to pay or assume shall not obligate the Manager to pay or assume the same or any similar expense of the Fund on any subsequent occasion.
B. Expenses Paid by Fund. The Fund 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 Fund shall pay:
(1) Custody and Accounting Services. All expenses of the transfer, receipt, safekeeping, servicing and accounting for the Fund's cash, securities, and other property, 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 of the Fund's transfer, shareholder recordkeeping, dividend disbursing, redemption, and other agents, 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 Fund and the custodian, transfer agent or any other agent selected by the Fund;
(8) Legal and Accounting Fees and Expenses. All charges for services and expenses of the Fund's legal counsel and independent auditors;
(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 Fund 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 Registration Fees. All fees and expenses of qualifying and maintaining qualification of the Fund and of the Fund's shares for sale under securities laws of various states or jurisdictions, and of registration and qualification of the Fund 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 Fund shares, including
the expense of confirming all share transactions, and
of preparing and transmitting the Fund's stock
certificates;
(13) Bonding and Insurance. All expenses of bond,
liability, and other insurance coverage required by
law or deemed advisable by the Fund'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 Fund 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 Fund's 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 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. Management Fee. 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:
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% Thereafter |
The Price Funds shall include all the mutual funds distributed by T. Rowe Price Investment Services, Inc. (except for the T. Rowe Price Institutional Trust and any private label mutual funds). For the purpose of calculating the Daily Price Funds' Group Fee Accrual for any particular day, the net assets of each Price Fund 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 of 0.25% 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.
C. Expense Limitation. To the extent that the aggregate expenses of every character incurred by the Fund in any fiscal year, 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, shall exceed the limit ("State Expense Limit") prescribed by any state in which the Fund's shares are qualified for sale, such excess amount shall be the liability of the Manager to pay in the manner specified below. To determine the Manager's liability for the Fund's expenses, the expenses of the Fund shall be annualized monthly as of the last day of the month. If the annualized expenses for any month exceed the State Expense Limit, the payment of the Fee for such month (if there be any) shall be reduced by such excess ("Excess Amount") and in the event the Excess Amount exceeds the amount due as the Fee, the Manager shall remit to the Fund the difference between the Excess Amount and the amount due as the Fee; provided, however, that an adjustment shall be made on or before the last day of the first month of the next succeeding fiscal year if the aggregate expenses for the fiscal year do not exceed the State Expense Limit.
D. Proration of Fee. 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 of the Fund, the Manager, in carrying out its duties under Paragraph 1.A., may cause 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 l934, 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 Fund 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 Fund, 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 Fund pursuant to the provisions of rules or regulations of the Securities and Exchange Commission under Section 3l(a) of the Act and maintained and preserved by the Manager on behalf of the Fund are the property of the Fund and will be surrendered by the Manager promptly on request by the Fund.
7. Reports to Manager. The Fund 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 Fund 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 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 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 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 Fund or from reckless disregard by the Manager or any such person of the duties of the Manager under this Agreement.
0. Use of Manager's Name. The Fund may use the name "T. Rowe Price New Era Fund, 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 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.
1. 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, l988. Thereafter, this Agreement shall continue in effect from year to year, subject to the termination provisions and all other terms and conditions hereof, so long as: (a) such continuation shall be specifically approved at least annually by the board of directors of the Fund or by vote of a majority of the outstanding voting securities of the Fund and, concurrently with such approval by the board of directors or prior to such approval by the holders of the outstanding voting securities of the Fund, as the case may be, 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 Fund who are not parties to this Agreement or interested persons of any such party; and (b) the Manager shall not have notified the Fund, in writing, at least 60 days prior to April 30, l988 or prior to April 30th of any year thereafter, that it does not desire such continuation. The Manager shall furnish to the Fund, 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.
2. 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.
3. 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 Fund such action shall have been authorized by resolution of a majority of the directors of the Fund 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.
4. 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 Fund 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 Fund 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, 11, 12, and 13 hereof, shall have the meanings assigned to them by Section 2(a) of the Act. In addition, where the effect of a requirement of the Act reflected in any provision of this Agreement is relaxed by a rule, regulation or order of the Securities and Exchange Commission, whether of special or of 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 corporate seals to be hereunto affixed, as of the day and year first above written.
Attest: T. ROWE PRICE NEW ERA FUND, INC.
By:
Secretary
Attest: T. ROWE PRICE ASSOCIATES, INC.
By:
Secretary
The Custodian Agreement dated September 28, 1987, as amended, between State Street Bank and Trust Company and T. Rowe Price Funds should be inserted here.
FRF 07/87
1. Employment of Custodian and Property to be Held By It. . . . . . . . .1
2. Duties of the Custodian with Respect to Property of the Fund
Held by the Custodian in the United States.. . . . . . . . . . . . .2
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . .2
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . .2
1) Sale . . . . . . . . . . . . . . . . . . . . . . . . . .2
2) Repurchase Agreement . . . . . . . . . . . . . . . . . .2
3) Securities System. . . . . . . . . . . . . . . . . . . .3
4) Tender Offer . . . . . . . . . . . . . . . . . . . . . .3
5) Redemption by Issuer . . . . . . . . . . . . . . . . . .3
6) Transfer to Issuer, Nominee, Exchange. . . . . . . . . .3
7) Sale to Broker . . . . . . . . . . . . . . . . . . . . .3
8) Exchange or Conversion . . . . . . . . . . . . . . . . .4
9) Warrants, Rights . . . . . . . . . . . . . . . . . . . .4
10) Loans of Securities. . . . . . . . . . . . . . . . . . .4
11) Borrowings . . . . . . . . . . . . . . . . . . . . . . .4
12) Options. . . . . . . . . . . . . . . . . . . . . . . . .5
13) Futures. . . . . . . . . . . . . . . . . . . . . . . . .5
14) In-Kind Distributions. . . . . . . . . . . . . . . . . .5
15) Miscellaneous. . . . . . . . . . . . . . . . . . . . . .5
16) Type of Payment. . . . . . . . . . . . . . . . . . . . .6
2.3 Registration of Securities . . . . . . . . . . . . . . . . . .6
2.4 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . .7
2.5 Sale of Shares and Availability of Federal Funds . . . . . . .7
2.6 Collection of Income, Dividends. . . . . . . . . . . . . . . .7
2.7 Payment of Fund Monies . . . . . . . . . . . . . . . . . . . .8
1) Purchases. . . . . . . . . . . . . . . . . . . . . . . .8
2) Exchanges. . . . . . . . . . . . . . . . . . . . . . . .9
3) Redemptions. . . . . . . . . . . . . . . . . . . . . . .9
4) Expense and Liability. . . . . . . . . . . . . . . . . .9
5) Dividends. . . . . . . . . . . . . . . . . . . . . . . .9
6) Short Sale Dividend. . . . . . . . . . . . . . . . . . .10
7) Loan . . . . . . . . . . . . . . . . . . . . . . . . . .10
8) Miscellaneous. . . . . . . . . . . . . . . . . . . . . .10
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . . .10
2.9 Appointment of Agents. . . . . . . . . . . . . . . . . . . . .10
2.10 Deposit of Securities in Securities System . . . . . . . . . .10
1) Account of Custodian . . . . . . . . . . . . . . . . . .11
2) Records. . . . . . . . . . . . . . . . . . . . . . . . .11
3) Payment of Fund Monies, Delivery of
Securities . . . . . . . . . . . . . . . . . . . . . .11
4) Reports. . . . . . . . . . . . . . . . . . . . . . . . .12
5) Annual Certificate . . . . . . . . . . . . . . . . . . .12
6) Indemnification. . . . . . . . . . . . . . . . . . . . .12
2.11 Fund Assets Held in the Custodian's Direct Paper
System . . . . . . . . . . . . . . . . . . . . . . . . . . .13
2.12 Segregated Account . . . . . . . . . . . . . . . . . . . . . .14
PAGE 3
2.13 Ownership Certificates for Tax Purposes. . . . . . . . . . . .15
2.14 Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . .15
2.15 Communications Relating to Fund Portfolio
Securities . . . . . . . . . . . . . . . . . . . . . . . . .15
2.16 Reports to Fund by Independent Public Accountants. . . . . . .16
3. Duties of the Custodian with Respect to Property
of the Fund Held Outside of the United States. . . . . . . . . . . .16
3.1 Appointment of Foreign Sub-Custodians. . . . . . . . . . . . .16
3.2 Assets to be Held. . . . . . . . . . . . . . . . . . . . . . .17
3.3 Foreign Securities Depositories. . . . . . . . . . . . . . . .17
3.4 Segregation of Securities. . . . . . . . . . . . . . . . . . .17
3.5 Access of Independent Accountants of the Fund. . . . . . . . .17
3.6 Reports by Custodian . . . . . . . . . . . . . . . . . . . . .18
3.7 Transactions in Foreign Assets of the Fund . . . . . . . . . .18
3.8 Responsibility of Custodian, Sub-Custodian and
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.9 Monitoring Responsibilities. . . . . . . . . . . . . . . . . .19
3.10 Branches of U.S. Banks . . . . . . . . . . . . . . . . . . . .19
4. Payments for Repurchases or Redemptions and Sales of
Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . . .19
5. Proper Instructions. . . . . . . . . . . . . . . . . . . . . . . . . .20
6. Actions Permitted Without Express Authority. . . . . . . . . . . . . .21
7. Evidence of Authority, Reliance on Documents . . . . . . . . . . . . .21
8. Duties of Custodian with Respect to the Books of Account
and Calculations of Net Asset Value and Net Income . . . . . . . . .22
9. Records, Inventory . . . . . . . . . . . . . . . . . . . . . . . . . .22
10. Opinion of Fund's Independent Accountant . . . . . . . . . . . . . . .23
11. Compensation of Custodian. . . . . . . . . . . . . . . . . . . . . . .23
12. Responsibility of Custodian. . . . . . . . . . . . . . . . . . . . . .23
13. Effective Period, Termination and Amendment. . . . . . . . . . . . . .25
14. Successor Custodian. . . . . . . . . . . . . . . . . . . . . . . . . .26
15. Interpretive and Additional Provisions . . . . . . . . . . . . . . . .28
16. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
17. Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
18. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . .29
19. Exemption from Liens . . . . . . . . . . . . . . . . . . . . . . . . .29
20. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . .29
21. Prior Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . .29
22. The Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
23. Governing Documents. . . . . . . . . . . . . . . . . . . . . . . . . .30
24. Subcustodian Agreement . . . . . . . . . . . . . . . . . . . . . . . .30
25. Directors and Trustees . . . . . . . . . . . . . . . . . . . . . . . .30
26. Massachusetts Business Trust . . . . . . . . . . . . . . . . . . . . .30
27. Successors of Parties. . . . . . . . . . . . . . . . . . . . . . . . .31
|
This Contract by and between State Street Bank and Trust Company, a Massachusetts trust company, having its principal place of business at 225 Franklin Street, Boston, Massachusetts, 02110 (hereinafter called the "Custodian"), and each fund which is listed on Appendix A (as such Appendix may be amended from time to time) and which evidences its agreement to be bound hereby by executing a copy of this Contract (each such fund individually hereinafter called the "Fund," whose definition may be found in Section 22),
WITNESSETH: That in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as
follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of
its assets, including securities it desires to be held in places
within the United States ("domestic securities") and securities
it desires to be held outside the United States ("foreign
securities") pursuant to the Governing Documents of the Fund.
The Fund agrees to deliver to the Custodian all securities and
cash now or hereafter owned or acquired by it, and all payments
of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for
such new or treasury shares of capital stock ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian
shall not be responsible for any property of the Fund held or
received by the Fund and not delivered to the Custodian.
With respect to domestic securities, upon receipt of "Proper
Instructions" (within the meaning of Article 5), the Custodian
shall from time to time employ one or more sub-custodians located
in the United States, but only in accordance with an applicable
vote by the Board of Directors/Trustees of the Fund, and provided
that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of
any sub-custodian so employed than any such sub-custodian has to
the Custodian, and further provided that the Custodian shall not
release the sub-custodian from any responsibility or liability
unless mutually agreed upon by the parties in writing. With
respect to foreign securities and other assets of the Fund held
outside the United States, the Custodian shall employ Chase
Manhattan Bank, N.A., as a sub-custodian for the Fund in
accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund
Held By the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and
physically segregate for the account of the Fund all
non-cash property, to be held by it in the United States,
including all domestic securities owned by the Fund, other
than (a) securities which are maintained pursuant to Section
2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein
as "Securities System," and (b) commercial paper of an
issuer for which the Custodian acts as issuing and paying
agent ("Direct Paper") which is deposited and/or maintained
in the Direct Paper System of the Custodian pursuant to
Section 2.11.
2.2 Delivery of Securities. The Custodian shall release
and deliver domestic securities owned by the Fund held by
the Custodian or in a Securities System account of the
Custodian or in the Custodian's Direct Paper book entry
system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by mutual agreement of
the parties, and only in the following cases:
1) Sale. Upon sale of such securities for the
account of the Fund and receipt of payment
therefor;
2) Repurchase Agreement. Upon the receipt of payment
in connection with any repurchase agreement
related to such securities entered into by the
Fund;
3) Securities System. In the case of a sale effected
through a Securities System, in accordance with
the provisions of Section 2.10 hereof;
4) Tender Offer. To the depository agent or other
receiving agent in connection with tender or other
similar offers for portfolio securities of the
Fund;
5) Redemption by Issuer. To the issuer thereof or
its agent when such securities are called,
redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) Transfer to Issuer, Nominee. Exchange. To the
issuer thereof, or its agent, for transfer into
the name of the Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or
nominee name of any sub-custodian appointed
pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units and bearing the same
interest rate, maturity date and call provisions,
7) Sale to Broker or Dealer. Upon the sale of such
securities for the account of the Fund, to the
broker or its clearing agent or dealer, against a
receipt, for examination in accordance with
"street delivery" custom; provided that in any
such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as
may arise from the Custodian's failure to act in
accordance with its duties as set forth in
Section 12.
8) Exchange or Conversion. For exchange or
conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization,
split-up of shares, change of par value or
readjustment of the securities of the issuer of
such securities, or pursuant to provisions for
conversion contained in such securities, or
pursuant to any deposit agreement provided that,
in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
9) Warrants, Rights. In the case of warrants, rights
or similar securities, the surrender thereof in
the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or
temporary securities for definitive securities;
provided that, in any such case, the new
securities and cash, if any, are to be delivered
to the Custodian;
10) Loans of Securities. For delivery in connection
with any loans of securities made by the Fund, but
only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and
the Fund, which may be in the form of cash,
obligations issued by the United States
government, its agencies or instrumentalities, or
such other property as mutually agreed by the
parties, except that in connection with any loans
for which collateral is to be credited to the
Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or
responsible for the delivery of securities owned
by the Fund prior to the receipt of such
collateral, unless the Custodian fails to act in
accordance with its duties set forth in
Article 12;
11) Borrowings. For delivery as security in
connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed, except where
additional collateral is required to secure a
borrowing already made, subject to Proper
Instructions, further securities may be released
for that purpose;
12) Options. For delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing
Corporation, any registered national securities
exchange, any similar organization or
organizations, or the Investment Company Act of
1940, regarding escrow or other arrangements in
connection with transactions by the Fund;
13) Futures. For delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act,
relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, any similar organization or
organizations, or the Investment Company Act of
1940, regarding account deposits in connection
with transactions by the Fund;
14) In-Kind Distributions. Upon receipt of
instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be
described from time to time in the Fund's
currently effective prospectus and statement of
additional information ("prospectus"), in
satisfaction of requests by holders of Shares for
repurchase or redemption;
15) Miscellaneous. For any other proper corporate
purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a
resolution of the Board of Directors/Trustees or
of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities to
be delivered, setting forth the purpose for which
such delivery is to be made, declaring such
16) Type of Payment. In any or all of the above
cases, payments to the Fund shall be made in cash,
by a certified check upon or a treasurer's or
cashier's check of a bank, by effective bank wire
transfer through the Federal Reserve Wire System
or, if appropriate, outside of the Federal Reserve
Wire System and subsequent credit to the Fund's
Custodian account, or, in case of delivery through
a stock clearing company, by book-entry credit by
the stock clearing company in accordance with the
then current street custom, or such other form of
payment as may be mutually agreed by the parties,
in all such cases collected funds to be promptly
credited to the Fund.
2.3 Registration of Securities. Domestic securities held
by the Custodian (other than bearer securities) shall be
registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless
the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered
investment companies having the same investment adviser as
the Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.9 or in the name or nominee
name of any sub-custodian appointed pursuant to Article 1.
All securities accepted by the Custodian on behalf of the
Fund under the terms of this Contract shall be in "street
name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in
the name of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and
shall hold in such account or accounts, subject to the
provisions hereof all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund
in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds
held by the Custodian for the Fund may be deposited for the
Fund's credit in the Banking Department of the Custodian or
in such other banks or trust companies as the Custodian may
in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of
Directors/Trustees of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that
capacity.
2.5 Sale of Shares and Availability of Federal Funds. Upon
mutual agreement between the Fund and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for
Shares of the Fund which are deposited into the Fund's
account.
2.6 Collection of Income, Dividends. The Custodian shall
collect on a timely basis all income and other payments with
respect to United States registered securities held
hereunder to which the Fund shall be entitled either by law
or pursuant to custom in the securities business, and shall
collect on a timely basis all income and other payments with
respect to United States bearer securities if, on the date
of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such income
or other payments, as collected, to the Fund's custodian
account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on
securities held hereunder. The Custodian will also receive
and collect all stock dividends, rights and other items of
like nature as and when they become due or payable. Income
due the Fund on United States securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty
or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is
properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper
Instructions,
which may be continuing instructions when deemed appropriate
by mutual agreement of the parties, the Custodian shall pay
out monies of the Fund in the following cases only:
1) Purchases. Upon the purchase of domestic
securities, options, futures contracts or options
on futures contracts for the account of the Fund
but only (a) against the delivery of such
securities, or evidence of title to such options,
futures contracts or options on futures contracts,
to the Custodian (or any bank, banking firm or
trust company doing business in the United States
or abroad which is qualified under the Investment
2) Exchanges. In connection with conversion,
exchange or surrender of securities owned by the
Fund as set forth in Section 2.2 hereof;
3) Redemptions. For the redemption or repurchase of
Shares issued by the Fund as set forth in Article
4 hereof;
4) Expense and Liability. For the payment of any
expense or liability incurred by the Fund,
including but not limited to the following
payments for the account of the Fund: interest,
taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund
whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
5) Dividends. For the payment of any dividends or
other distributions to shareholders declared
pursuant to the Governing Documents of the Fund;
6) Short Sale Dividend. For payment of the amount of
dividends received in respect of securities sold
short;
7) Loan. For repayment of a loan upon redelivery of
pledged securities and upon surrender of the
8) Miscellaneous. For any other proper purpose, but
only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Board of Directors/Trustees or of the
Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary
or an Assistant Secretary, specifying the amount
of such payment, setting forth the purpose for
which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be
made.
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where payment
for purchase of domestic securities for the account of the
Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written
instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any time
remove) any other bank or trust company, which is itself
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian, as its agent to carry out
such of the provisions of this Article 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain domestic securities
owned by the Fund in a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal
agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and
regulations, if any, and subject to the following
provisions:
1) Account of Custodian. The Custodian may keep
domestic securities of the Fund in a Securities
System provided that such securities are
represented in an account ("Account") of the
Custodian in the Securities System which shall not
include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
2) Records. The records of the Custodian, with
respect to domestic securities of the Fund which
are maintained in a Securities System, shall
identify by book-entry those securities belonging
to the Fund;
3) Payment of Fund Monies, Delivery of Securities.
Subject to Section 2.7, the Custodian shall pay
for domestic securities purchased for the account
of the Fund upon (i) receipt of advice from the
Securities System that such securities have been
transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to
reflect such payment and transfer for the account
of the Fund. Subject to Section 2.2, the
Custodian shall transfer domestic securities sold
for the account of the Fund upon (i) receipt of
advice from the Securities System that payment for
such securities has been transferred to the
Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies
of all advices from the Securities System of
transfers of domestic securities for the account
of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be provided to
the Fund at its request. The Custodian shall
furnish the Fund confirmation of each transfer to
or from the account of the Fund in the form of a
written advice or notice and shall furnish to the
Fund copies of daily transaction sheets reflecting
each day's transactions in the Securities System
for the account of the Fund;
4) Reports. The Custodian shall provide the Fund
with any report obtained by the Custodian on the
Securities System's accounting system, internal
accounting control and procedures for safeguarding
domestic securities deposited in the Securities
System, and further agrees to provide the Fund
with copies of any documentation it has relating
to its arrangements with the Securities Systems as
set forth in this Agreement or as otherwise
required by the Securities and Exchange
Commission;
5) Annual Certificate. The Custodian shall have
received the initial or annual certificate, as the
case may be, required by Article 13 hereof;
6) Indemnification. Anything to the contrary in this
Contract notwithstanding, the Custodian shall be
liable to the Fund for any loss or expense,
2.11 Fund Assets Held in the Custodian's Direct Paper
System. The Custodian may deposit and/or maintain
securities owned by the Fund in the Direct Paper System of
the Custodian subject to the following provisions:
1) No transaction relating to securities in the
Direct Paper System will be effected in the
absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in
the Direct Paper System only if such securities
are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the Fund which are maintained in the
Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased
for the account of the Fund upon the making of an
entry on the records of the Custodian to reflect
such payment and transfer of securities to the
account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation
of each transfer to or from the account of the
Fund, in the form of a written advice or notice,
of Direct Paper on the next business day following
such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's
transaction in the Securities System for the
account of the Fund;
6) The Custodian shall provide the Fund with any
report on its system of internal accounting
control as the Fund may reasonably request from
time to time;
2.12 Segregated Account. The Custodian shall, upon receipt
of Proper Instructions, which may be of a continuing nature
where deemed appropriate by mutual agreement of the parties,
establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts
may be transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian
and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes
of segregating cash or government securities in connection
with options purchased, sold or written by the Fund or
commodity futures contracts or options thereon purchased or
sold by the Fund, (iii) for the purposes of compliance by
the Fund with the procedures required by Investment Company
Act Release No. 10666, or any subsequent release, rule or
policy, of the Securities and Exchange Commission relating
to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Directors/Trustees or of the
Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in
connection with transfers of such securities.
2.14 Proxies. If the securities are registered other than
in the name of the Fund or a nominee of the Fund, the
Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the
registered holder of such securities, all proxies, without
indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Fund such proxies,
all proxy soliciting materials and all notices relating to
such securities.
2.15 Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Fund all
written information (including, without limitation, pendency
of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the domestic
securities being held for the Fund by the Custodian, an
agent appointed under Section 2.9, or sub-custodian
appointed under Section 1. With respect to tender or
exchange offers, the Custodian shall transmit promptly to
the Fund all written information received by the Custodian,
an agent appointed under Section 2.9, or sub-custodian
appointed under Section 1 from issuers of the domestic
securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian of such
desired action at least 72 hours (excluding holidays and
weekends) prior to the time such action must be taken under
the terms of the tender, exchange offer, or other similar
transaction, and it will be the responsibility of the
Custodian to timely transmit to the appropriate person(s)
the Fund's notice. Where the Fund does not notify the
Custodian of its desired action within the aforesaid 72 hour
period, the Custodian shall use its best efforts to timely
transmit the Fund's notice to the appropriate person.
2.16 Reports to Fund by Independent Public Accountants. The
Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with reports by independent public
accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including
domestic securities deposited and/or maintained in a
Securities System, relating to the services provided by the
Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may reasonably
be required by the Fund to provide reasonable assurance that
any material inadequacies existing or arising since the
prior examination would be disclosed by such examination.
The reports must describe any material inadequacies
disclosed and, if there are no such inadequacies, the
reports shall so state.
3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Custodian
is authorized and instructed to employ Chase Manhattan Bank,
N.A, ("Chase") as sub-custodian for the Fund's securities,
cash and other assets maintained outside of the United
States ("foreign assets") all as described in the
Subcustodian Agreement between the Custodian and Chase.
Upon receipt of "Proper Instructions", together with a
certified resolution of the Fund's Board of
Directors/Trustees, the Custodian and the Fund may agree to
designate additional proper institutions and foreign
securities depositories to act as sub-custodians of the
Fund's foreign assets. Upon receipt of Proper Instructions
from the Fund, the Custodian shall cease the employment of
any one or more of such sub-custodians for maintaining
custody of the Fund's foreign assets.
3.2 Assets to be Held. The Custodian shall limit the
foreign assets maintained in the custody of foreign sub-
custodians to foreign assets specified under the terms of
the Subcustodian Agreement between the Custodian and Chase.
3.3 Foreign Securities Depositories. Except as may
otherwise be agreed upon in writing by the Custodian and the
Fund, foreign assets of the Fund shall be maintained in
foreign securities depositories only through arrangements
implemented by the banking institutions serving as sub-
custodians pursuant to the terms hereof.
3.4 Segregation of Securities. The Custodian shall
identify on its books as belonging to the Fund, the foreign
assets of the Fund held by Chase and by each foreign sub-
custodian.
3.5 Access of Independent Accountants of the Fund. Upon
request of the Fund, the Custodian will use its best efforts
(subject to applicable law) to arrange for the independent
accountants, officers or other representatives of the Fund
or the Custodian to be afforded access to the books and
records of Chase and any banking or other institution
employed as a sub-custodian for the Fund by Chase or the
Custodian insofar as such books and records relate to the
performance of Chase or such banking or other institution
under any agreement with the Custodian or Chase. Upon
request of the Fund, the Custodian shall furnish to the Fund
such reports (or portions thereof) of Chase's external
auditors as are available to the Custodian and which relate
directly to Chase's system of internal accounting controls
applicable to Chase's duties as a subcustodian or which
relate to the internal accounting controls of any
subcustodian employed by Chase with respect to foreign
assets of the Fund.
3.6 Reports by Custodian. The Custodian will supply to the
Fund from time to time, as mutually agreed upon, statements
in respect of the foreign assets of the Fund held pursuant
to the terms of the Subcustodian Agreement between the
Custodian and Chase, including but not limited, to an
identification of entities having possession of the Fund's
foreign assets and advices or notifications of any transfers
of foreign assets to or from each custodial account
maintained by any sub-custodian on behalf of the Fund
indicating, as to foreign assets acquired for the Fund, the
identity of the entity having physical possession of such
foreign assets.
3.7 Transactions in Foreign Assets of the Fund. All
transactions with respect to the Fund's foreign assets shall
be in accordance with, and subject to, the provisions of the
Subcustodian Agreement between Chase and the Custodian.
3.8 Responsibility of Custodian, Sub-Custodian, and Fund.
Notwithstanding anything to the contrary in this Custodian
Contract, the Custodian shall not be liable to the Fund for
any loss, damage, cost, expense, liability or claim arising
out of or in connection with the maintenance of custody of
the Fund's foreign assets by Chase or by any other banking
institution or securities depository employed pursuant to
the terms of any Subcustodian Agreement between Chase and
the Custodian, except that the Custodian shall be liable for
any such loss, damage, cost, expense, liability or claim to
the extent provided in the Subcustodian Agreement between
Chase and the Custodian or attributable to the failure of
the Custodian to exercise the standard of care set forth in
Article 12 hereof in the performance of its duties under
this Contract or such Subcustodian Agreement. At the
election of the Fund, the Fund shall be entitled to be
subrogated to the rights of the Custodian under the
Subcustodian Agreement with respect to any claims arising
thereunder against Chase or any other banking institution or
securities depository employed by Chase if and to the extent
that the Fund has not been made whole therefor. As between
the Fund and the Custodian, the Fund shall be solely
responsible to assure that the maintenance of foreign
securities and cash pursuant to the terms of the
Subcustodian Agreement complies with all applicable rules,
regulations, interpretations and orders of the Securities
and Exchange Commission, and the Custodian assumes no
responsibility and makes no representations as to such
compliance.
3.9 Monitoring Responsibilities. With respect to the
Fund's foreign assets, the Custodian shall furnish annually
to the Fund, during the month of June, information
concerning the sub-custodians employed by the Custodian.
Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial
approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian
learns of a material adverse change in the financial
condition of a sub-custodian.
3.10 Branches of U.S. Banks. Except as otherwise set forth
in this Contract, the provisions of this Article 3 shall not
apply where the custody of the Fund's assets is maintained
in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment
Company Act of 1940 which meets the qualification set forth
in Section 26(a) of said Act. The appointment of any such
branch as a sub-custodian shall be governed by Section 1 of
this Contract.
4. Payments for Repurchases or Redemptions and Sales of Shares
of the Fund
From such funds as may be available for the purpose but
subject to the limitations of the Governing Documents of the Fund
and any applicable votes of the Board of Directors/Trustees of
the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares of the
Fund, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholder. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian
shall honor checks drawn on the Custodian by a holder of Shares,
which checks have been furnished by the Fund to the holder of
Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to
time between the Fund and the Custodian.
The Custodian shall receive from the distributor for the
Fund's Shares or from the Transfer Agent of the Fund and deposit
as received into the Fund's account such payments as are received
for Shares of the Fund issued or sold from time to time by the
Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for
Shares of the Fund.
5. Proper Instructions
Proper Instructions as used herein means a writing signed or
initialled by one or more person or persons as the Board of
Directors/Trustees shall have from time to time authorized. Each
such writing shall set forth the specific transaction or type of
transaction involved, including a specific statement of the
purpose for which such action is requested, or shall be a blanket
instruction authorizing specific transactions of a repeated or
routine nature. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Directors/Trustees of the Fund
accompanied by a detailed description of procedures approved by
the Board of Directors/Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or
electronic devices provided that the Board of Directors/Trustees
and the Custodian are satisfied that such procedures afford
adequate safeguards for the Fund's assets.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express
authority from the Fund:
1) make payments to itself or others for minor
expenses of handling securities or other similar
items relating to its duties under this Contract,
provided that all such payments shall be accounted
for to the Fund;
2) surrender securities in temporary form for
securities in definitive form;
3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments on
the same day as received; and
4) in general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of the
Fund except as otherwise directed by the Board of
Directors/Trustees of the Fund.
7. Evidence of Authority, Reliance on Documents
The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other
instrument or paper reasonably and in good faith believed by it
to be genuine and to have been properly executed by or on behalf
of the Fund in accordance with Article 5 hereof. The Custodian
may receive and accept a certified copy of a vote of the Board of
Directors/Trustees of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or
(b) of any determination or of any action by the Board of
Directors/Trustees pursuant to the Governing Documents of the
Fund as described in such vote, and such vote may be considered
as in full force and effect until receipt by the Custodian of
written notice to the contrary. So long as and to the extent
that it is in the exercise of the standard of care set forth in
Article 12 hereof, the Custodian shall not be responsible for the
title, validity or genuineness of any property or evidence of
title thereto received by it or delivered by it pursuant to this
Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party
or parties.
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary
information to the person or persons appointed by the Board of
Directors/Trustees of the Fund to keep the books of account of
the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do
so by the Fund, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Fund
as described in the Fund's currently effective prospectus and
shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various
components. The calculations of the net asset value per share
and the daily income of the Fund shall be made at the time or
times and in the manner described from time to time in the Fund's
currently effective prospectus.
9. Records, Inventory
The Custodian shall create and maintain all records relating
to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the
Fund. All such records shall be the property of the Fund and
shall at all times during the regular business hours of the
Custodian be open for inspection and audit by duly authorized
officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission, and, in the
event of termination of this Agreement, will be delivered in
accordance with Section 14 hereof. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities
owned by the Fund and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall
be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations. The Custodian shall
conduct a periodic inventory of all securities and other property
subject to this Agreement and provide to the Fund a periodic
reconciliation of the vaulted position of the Fund to the
appraised position of the Fund. The Custodian will promptly
report to the Fund the results of the reconciliation, indicating
any shortages or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or discrepancies.
10. Opinion of Fund's Independent Accountant
The Custodian shall cooperate with the Fund's independent
public accountants in connection with the annual and other audits
of the books and records of the Fund and take all reasonable
action, as the Fund may from time to time request, to provide
from year to year the necessary information to such accountants
for the expression of their opinion without any qualification as
to the scope of their examination, including but not limited to,
any opinion in connection with the preparation of the Fund's Form
N-lA, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other
requirements of such Commission.
11. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation
for its services and expenses as Custodian, as agreed upon from
time to time between the Fund and the Custodian.
12. Responsibility of Custodian
Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Contract, but shall be kept
indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence.
In order for the indemnification provision contained in this
Section to apply, it is understood that if in any case the Fund
may be asked to indemnify or save the Custodian harmless, the
Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that the Custodian will use all reasonable care to
identify and notify the Fund promptly concerning any situation
which presents or appears likely to present the probability of
such a claim for indemnification against the Fund. The Fund,
shall have the option to defend the Custodian against any claim
which may be the subject of this indemnification, and in the
event that the Fund so elects, it will so notify the Custodian,
and thereupon the Fund shall take over complete defense of the
claim and the Custodian shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall in no
case confess any claim or make any compromise in any case in
which the Fund will be asked to indemnify the Custodian except
with the Fund's prior written consent. Nothing herein shall be
construed to limit any right or cause of action on the part of
the Custodian under this Contract which is independent of any
right or cause of action on the part of the Fund. The Custodian
shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Fund or such other counsel as may be
agreed to by the parties) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. Notwithstanding the foregoing, the responsibility
of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with
respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in
the Custodian or its nominee assigned to the Fund being liable
for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or
securities for any purpose or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the
account of the Fund shall be security therefor and should the
Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's
assets to the extent necessary to obtain reimbursement, provided
that the Custodian gives the Fund reasonable notice to repay such
cash or securities advanced, however, such notice shall not
preclude the Custodian's right to assert any lien under this
provision.
13. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either
party by an instrument in writing delivered or mailed, postage
prepaid to the other party, such termination to take effect not
sooner than sixty (60) days after the date of such delivery or
mailing in the case of a termination by the Fund, and not sooner
than 180 days after the date of such delivery or mailing in the
case of a termination by the Custodian; provided, however that
the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Directors/Trustees of
the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary
or an Assistant Secretary that the Board of Directors/Trustees
has reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company
Act of 1940, as amended and that the Custodian shall not act
under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the
Board of Directors/Trustees has approved the initial use of the
Direct Paper System and the receipt of an annual certificate of
the Secretary or an Assistant Secretary that the Board of
Directors/Trustees has reviewed the use by the Fund of the Direct
Paper System; provided further, however, that the Fund shall not
amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the
Governing Documents of the Fund, and further provided, that the
Fund may at any time by action of its Board of Directors/Trustees
(i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event
at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements, provided that the Custodian
shall not incur any costs, expenses or disbursements specifically
in connection with such termination unless it has received prior
approval from the Fund, which approval shall not be unreasonably
withheld.
14. Successor Custodian
If a successor custodian shall be appointed by the Board of
Directors/Trustees of the Fund, the Custodian shall, upon
termination, deliver to such successor custodian at the office of
the Custodian, duly endorsed and in the form for transfer, all
securities, funds and other properties then held by it hereunder
and shall transfer to an account of the successor custodian all
of the Fund's securities held in a Securities System. The
Custodian shall also use its best efforts to assure that the
successor custodian will continue any subcustodian agreement
entered into by the Custodian and any subcustodian on behalf of
the Fund.
If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of a certified copy of a vote of the Board of Directors/Trustees of the Fund, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or certified copy of a vote of the Board of Directors/Trustees shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the Investment Company Act of 1940, doing business in Boston, Massachusetts, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not
less than $25,000,000, all securities, funds and other properties held by the Custodian and all instruments held by the Custodian relative thereto and all other property held by it under this Contract and to transfer to an account of such successor custodian all of the Fund's securities held in any Securities System. Thereafter, such bank or trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to procure the
certified copy of the vote referred to or of the Board of
Directors/Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this
Contract relating to the duties and obligations of the Custodian
shall remain in full force and effect. If while this Contract is
in force the Fund shall be liquidated pursuant to law, the
Custodian shall distribute, either in cash or (if the Fund so
orders) in the portfolio securities and other assets of the Fund,
pro rata among the holders of shares of the Fund as certified by
the Transfer Agent, the property of the Fund which remains after
paying or satisfying all expenses and liabilities of the Fund.
Section 12 hereof shall survive any termination of this Contract.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the
Custodian and the Fund may from time to time agree on such
provisions interpretive of or in addition to the provisions of
this Contract as may in their joint opinion be consistent with
the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
Governing Documents of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
16. Notice
Any notice shall be sufficiently given when sent by
registered or certified mail, or by such other means as the
parties shall agree, to the other party at the address of such
party set forth above or at such other address as such party may
from time to time specify in writing to the other party.
17. Bond
The Custodian shall, at all times, maintain a bond in such
form and amount as is acceptable to the Fund which shall be
issued by a reputable fidelity insurance company authorized to do
business in the place where such bond is issued against larceny
and embezzlement, covering each officer and employee of the
Custodian who may, singly or jointly with others, have access to
securities or funds of the Fund, either directly or through
authority to receive and carry out any certificate instruction,
order request, note or other instrument required or permitted by
this Agreement. The Custodian agrees that it shall not cancel,
terminate or modify such bond insofar as it adversely affects the
Fund except after written notice given to the Fund not less than
10 days prior to the effective date of such cancellation,
termination or modification. The Custodian shall furnish to the
Fund a copy of each such bond and each amendment thereto.
18. Confidentiality
The Custodian agrees to treat all records and other
information relative to the Fund and its prior, present or future
shareholders as confidential, and the Custodian, on behalf of
itself and its employees, agrees to keep confidential all such
information except, after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
19. Exemption from Liens
The securities and other assets held by the Custodian for
the Fund shall be subject to no lien or charge of any kind in
favor of the Custodian or any person claiming through the
Custodian, but nothing herein shall be deemed to deprive the
Custodian of its right to invoke any and all remedies available
at law or equity to collect amounts due it under this Agreement.
Neither the Custodian nor any sub-custodian appointed pursuant to
Section 1 hereof shall have any power or authority to assign,
hypothecate, pledge or otherwise dispose of any securities held
by it for the Fund, except upon the direction of the Fund, duly
given as herein provided, and only for the account of the Fund.
20. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
21. Prior Contracts
Without derogating any of the rights established by such
contracts, this Contract supersedes and terminates, as of the
date hereof, all prior contracts between the Fund and the
Custodian relating to the custody of the Fund's assets.
22. The Parties
All references herein to "the Fund" are to each of the funds
listed on Appendix A individually, as if this Contract were
between such individual fund and the Custodian. In the case of a
series fund or trust, all references to "the Fund" are to the
individual series or portfolio of such fund or trust, or to such
fund or trust on behalf of the individual series or portfolio, as
appropriate. Any reference in this Contract to "the parties"
shall mean the Custodian and such other individual Fund as to
which the matter pertains.
23. Governing Documents.
The term "Governing Documents" means the Articles of
Incorporation, Agreement of Trust, By-Laws and Registration
Statement filed under the Securities Act of 1933, as amended from
time to time.
24. Subcustodian Agreement.
Reference to the "Subcustodian Agreement" between the
Custodian and Chase shall mean any such agreement which shall be
in effect from time to time between Chase and the Custodian with
respect to foreign assets of the Fund.
25. Directors and Trustees.
It is understood and is expressly stipulated that neither
the holders of shares in the Fund nor any Directors or Trustees
of the Fund shall be personally liable hereunder.
26. Massachusetts Business Trust
With respect to any Fund which is a party to this Contract
and which is organized as a Massachusetts business trust, the
term Fund means and refers to the trustees from time to time
serving under the applicable trust agreement (Declaration of
Trust) of such Trust as the same may be amended from time to
time. It is expressly agreed that the obligations of any such
Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the
Trust, personally, but bind only the trust property of the Trust,
as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Contract has been authorized by
the trustees and signed by an authorized officer of the Trust,
acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed
to have been made by any of them but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
27. Successors of Parties.
This Contract shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective
successors.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative and its seal to be hereunder affixed as of the dates indicated below.
STATE STREET BANK AND TRUST
COMPANY
ATTEST:
/s/Kathleen M. Kubit By/s/Charles Cassidy
_____________________ _________________________________
Assistant Secretary Vice President
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Stock Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
PAGE 28
(SIGNATURES CONTINUED)
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Money Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
New York Tax-Free Bond Fund
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
DATED: September 28, 1987
|
ATTEST:
The following Funds are parties to this Agreement and have so indicated their intention to be bound by such Agreement by executing the Agreement on the dates indicated thereon.
T. Rowe Price California Tax-Free Income Trust on behalf of
the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Institutional Trust on behalf of the
Tax-Exempt Reserve Portfolio
T. Rowe Price International Trust on behalf of the
T. Rowe Price International Bond Fund and
T. Rowe Price International Stock Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price State Tax-Free Income Trust on behalf of the
Maryland Tax-Free Bond Fund,
New York Tax-Free Bond Fund and
New York Tax-Free Money Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
T. Rowe Price U.S. Treasury Money Fund, Inc.
THIS AGREEMENT, made as of this 24th day of June, 1988, by and between: T. Rowe Price Growth Stock Fund, Inc., T. Rowe Price New Horizons Fund, Inc., T. Rowe Price New Era Fund, Inc., T. Rowe Price New Income Fund, Inc., T. Rowe Price Prime Reserve Fund, Inc., T. Rowe Price International Trust, T. Rowe Price U.S. Treasury Money Fund, Inc., T. Rowe Price Growth & Income Fund, Inc., T. Rowe Price Tax-Exempt Money Fund, Inc., T. Rowe Price Tax-Free Income Fund, Inc., T. Rowe Price Tax-Free Short- Intermediate Fund, Inc., T. Rowe Price Short-Term Bond Fund, Inc., T. Rowe Price High Yield Fund, Inc., T. Rowe Price Tax-Free High Yield Fund, Inc., T. Rowe Price New America Growth Fund, T. Rowe Price Equity Income Fund, T. Rowe Price GNMA Fund, T. Rowe Price Capital Appreciation Fund, T. Rowe Price Institutional Trust, T. Rowe Price State Tax-Free Income Trust, T. Rowe Price California Tax-Free Income Trust, T. Rowe Price Science & Technology Fund, Inc., (hereinafter together called the "Funds" and individually "Fund") and State Street Bank and Trust Company, a Massachusetts trust,
W I T N E S S E T H:
It is mutually agreed that the Custodian Contract made by the parties on the 28th day of September, 1987, is hereby amended by adding thereto the T. Rowe Price Small-Cap Value Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE NEW HORIZONS FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE NEW ERA FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE NEW INCOME FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE PRIME RESERVE FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE INTERNATIONAL TRUST
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
/s/Henry H.Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE GROWTH & INCOME FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE HIGH YIELD FUND, INC.
/s/ Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE NEW AMERICA GROWTH FUND
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE EQUITY INCOME FUND
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE GNMA FUND
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE CAPITAL APPRECIATION FUND
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE INSTITUTIONAL TRUST
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/William Blackwell ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of October 19, 1988, by adding thereto the T. Rowe Price International Discovery Fund, Inc., a separate series of T. Rowe Price International Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/Guy R. Sturgeon ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988 and October 19, 1988, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 22, 1989, by adding thereto the T. Rowe Price International Equity Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/K. Donelson ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988 and February 22, 1989, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of July 19, 1989, by adding thereto the Institutional International Funds, Inc., on behalf of the Foreign Equity Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, and July 19, 1989 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of September 15, 1989, by adding thereto the T. Rowe Price U.S. Treasury Funds, Inc., on behalf of the U.S. Treasury Intermediate Fund and the U.S. Treasury Long-Term Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended
June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989
and September 15, 1989, between State Street Bank and Trust
Company and each of the Parties listed on Appendix A thereto is
hereby further amended, as of December 15, 1989, by restating
Section 2.15 as follows:
2.15 Communications Relating to Fund Portfolio Securities. The Custodian shall transmit promptly to the Fund all written information (including, without limitation, pendency of calls and maturities of domestic securities and expirations of rights in connection therewith and notices of exercise of call and put options written by the Fund and the maturity of futures contracts purchased or sold by the Fund) received by the Custodian from issuers of the domestic securities being held for the Fund by the Custodian, an agent appointed under Section 2.9, or sub-custodian appointed under Section 1. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund all written information received by the Custodian, an agent appointed under Section 2.9, or sub-custodian appointed under Section 1 from issuers of the domestic securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If the Fund desires to take action with respect to any tender offer, exchange offer or any other similar transaction, the Fund shall notify the Custodian of such desired action at least 48 hours (excluding holidays and weekends) prior to the time such action must be taken under the terms of the tender, exchange offer, or other similar transaction, and it will be the responsibility of the Custodian to timely transmit to the appropriate person(s) the Fund's notice. Where the Fund does not notify the custodian of its desired action within the aforesaid 48 hour period, the Custodian shall use its best efforts to timely transmit the Fund's notice to the appropriate person. It is expressely noted that the parties may negotiate and agree to alternative procedures with respect to such 48 hour notice period on a selective and individual basis.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U. S. TREASURY FUNDS, INC.
U. S. Treasury Intermediate Fund
U. S. Treasury Long-Term Fund
/s/Carmen F. Deyesu
______________________________________________
By: Carmen F. Deyesu,
Treasurer
|
STATE STREET BANK AND TRUST COMPANY
/s/ E. D. Hawkes, Jr.
______________________________________________
By: E. D. Hawkes, Jr.
Vice President
|
Amendment No. 7 filed on Form SE January 25, 1990 with International Trust (CIK 313212) Post Effective Amendment No. 17.
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, and December 20, 1989, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of January 25, 1990, by adding thereto the T. Rowe Price European Stock Fund, a separate series of T. Rowe Price International Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, and January 25, 1990 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 21, 1990, by adding thereto the T. Rowe Price Index Trust, Inc., on behalf of the T. Rowe Price Equity Index Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
/s/Henry H. Hopkins
__________________________________________
By: Henry H. Hopkins
Vice President
|
STATE STREET BANK AND TRUST COMPANY
/s/ ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of June 12, 1990, by adding thereto the T. Rowe Price Spectrum Fund, Inc., on behalf of the Spectrum Growth Fund and the Spectrum Income Fund.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL TRUST
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. ROWE PRICE U.S. TREASURY MONEY FUND, INC.
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, and June 12, 1990 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of July 18, 1990, by adding thereto the T. Rowe Price New Asia Fund, a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ Guy R. Sturgeon ___________________________________________ By: Guy R. Sturgeon |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, and July 18, 1990 between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of October 15, 1990, by adding thereto the T. Rowe Price Global Government Bond Fund, a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE INSTITUTIONAL TRUST
Tax-Exempt Reserve Portfolio
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ Guy R. Sturgeon ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, and October 15, 1990, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of February 13, 1991, by adding thereto the Virginia Tax-Free Bond Fund and New Jersey Tax-Free Bond Fund, two separate series of the T. Rowe Price State Tax- Free Income Trust
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ Guy Sturgeon ___________________________________________ By: Vice President |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, and February 13, 1991, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of March 6, 1991, by adding thereto the T. Rowe Price Balanced Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, and March 6, 1991, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of September 12, 1991, by adding thereto the T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S.
GOVERNMENT FUND, INC.
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
/s/ ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991 and September 12, 1991, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of November 6, 1991, by adding thereto the T. Rowe Price Japan Fund, a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY
FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL
EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S.
GOVERNMENT FUND, INC.
/s/Henry H. Hopkins __________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ___________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991 and November 6, 1991, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of April 23, 1992, by adding thereto the T. Rowe Price Mid-Cap Growth Fund, Inc. and T. Rowe Price Short-Term Global Income Fund, a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE INTERNATIONAL EQUITY FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
/s/Henry H. Hopkins __________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, and April 23, 1992, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of September 2, 1992, by adding thereto the T. Rowe Price OTC Fund, a series of the T. Rowe Price OTC Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _____________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, and September 2, 1992, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of November 3, 1992, by adding thereto the T. Rowe Price Tax-Free Insured Intermediate Bond Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, and November 3, 1992, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of December 16, 1992, by adding thereto the T. Rowe Price Dividend Growth Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, and December 16, 1992, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of December 21, 1992, by adding thereto the Maryland Short-Term Tax-Free Bond Fund, an additional series to the T. Rowe Price State Tax-Free Income Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, and December 21, 1992, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of January 28, 1993, by adding thereto the Georgia Tax-Free Bond Fund and the Florida Insured Intermediate Tax-Free Fund, additional series to the T. Rowe Price State Tax-Free Income Trust.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ ______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, December 21, 1992, and January 28, 1993, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of April 22, 1993, by adding thereto the T. Rowe Price Blue Chip Growth Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
/s/Henry H. Hopkins ______________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _______________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, December 21, 1992, January 28, 1993, and April 22, 1993, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of June 30, 1993, by adding thereto the Spectrum Balanced Fund, a series of the T. Rowe Price Spectrum Fund, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
/s/Henry H. Hopkins _____________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _____________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, December 21, 1992, January 28, 1993, April 22, 1993, and June 30, 1993, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of September 16, 1993, by adding thereto the T. Rowe Price Summit Funds, Inc. and T. Rowe Price Summit Municipal Funds, Inc.
Notwithstanding anything to the contrary herein, it is understood that the T. Rowe Price Summit Funds, Inc. and T. Rowe Price Summit Municipal Funds, Inc. (collectively referred to as the "Funds") shall not be responsible for paying any of the fees or expenses set forth herein but that, in accordance with the Investment Management Agreement, dated September 16, 1993, between the Funds and T. Rowe Price Associates, Inc. ("T. Rowe Price"), the Funds will require T. Rowe Price to pay all such fees and expenses.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND,
INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT
FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
/s/Henry H. Hopkins _____________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _____________________________________________ By: |
W I T N E S S E T H:
The Custodian Contract of September 28, 1987, as amended June 24, 1988, October 19, 1988, February 22, 1989, July 19, 1989, September 15, 1989, December 15, 1989, December 20, 1989, January 25, 1990, February 21, 1990, June 12, 1990, July 18, 1990, October 15, 1990, February 13, 1991, March 6, 1991, September 12, 1991, November 6, 1991, April 23, 1992, September 2, 1992, November 3, 1992, December 16, 1992, December 21, 1992, January 28, 1993, April 22, 1993, June 30, 1993, and September 16, 1993, between State Street Bank and Trust Company and each of the Parties listed on Appendix A thereto is hereby further amended, as of November 3, 1993, by adding thereto the T. Rowe Price Latin America Fund, a separate series of the T. Rowe Price International Funds, Inc.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE NEW HORIZONS FUND, INC.
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Income Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
Virginia Tax-Free Bond Fund
New Jersey Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
Spectrum Balanced Fund
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. Rowe Price OTC Fund
T. ROWE PRICE TAX-FREE INSURED INTEREMEDIATE
BOND FUND, INC.
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE SUMMIT FUNDS, INC.
T. Rowe Price Summit Cash Reserves Fund
T. Rowe Price Summit Limited-Term Bond Fund
T. Rowe Price Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
T. Rowe Price Summit Municipal Money Market
Fund
T. Rowe Price Summit Municipal Intermediate
Fund
T. Rowe Price Summit Municipal Income Fund
/s/Henry H. Hopkins _____________________________________________ By: Henry H. Hopkins, Vice President |
STATE STREET BANK AND TRUST COMPANY
/s/ _____________________________________________ By: |
Between
T. ROWE PRICE NEW ERA FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
and
THE CHASE MANHATTAN BANK, N.A.
Dated: January 1, 1989
AGREEMENT effective January 1, 1989 between THE CHASE MANHATTAN
BANK, N.A. ("Chase"), the T. ROWE PRICE NEW ERA FUND, INC.
("Fund"); and STATE STREET BANK AND TRUST COMPANY ("State
Street").
WHEREAS, State Street serves as the custodian in the United States for the securities and other assets of the Fund; and
WHEREAS, the Fund desires to use the services of Chase in connection with the custody of securities and other assets outside the United States, which services currently are administered through the offices of the Chase branch in London, England;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein, the parties hereto hereby agree as follows.
1. Custody Account. Chase agrees to establish and
maintain (a) a custody account in the name of State Street,
acting as custodian for the Fund ("Custody Account") for any and
all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money and any certificates,
receipts, warrants or other instruments representing rights to
receive, purchase or subscribe for the same or evidencing or
representing any other rights or interests therein and other
similar property issued and sold primarily outside the United
States by a foreign government, a national of any foreign country
or a corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued or
guaranteed by the Government of the United States or by any state
or any political subdivision thereof or by any agency thereof or
by any entity organized under the laws of the United States or of
any state thereof which have been issued and sold primarily
outside the United States (hereinafter called "Securities") from
time to time received by Chase or its subcustodian (as defined in
subparagraph (b) (iv) of Section 3) for the account of State
Street, and (b) a deposit account in the name of State Street
acting as custodian for the Fund ("Deposit Account") for any and
all cash and cash equivalents (hereinafter called "Cash") in any
currency received by Chase or its subcustodian for the account of
State Street, which Cash shall not be subject to withdrawal by
draft or check.
2. Maintenance of Securities and Cash Abroad.
(a) Securities in the Custody Account shall be held in such
country or other jurisdiction as shall be approved by the Board
of Directors of the Fund and specified from time to time in
Instructions, provided that such country or other jurisdiction
shall be one in which (i) the principal trading market for such
Securities is located, (ii) such Securities are to be presented
for payment, or (iii) such Securities are acquired for the
Custody Account.
(b) Cash in the Deposit Account shall be credited to an
account as held in the name of Chase in such amounts and in such
country or other jurisdiction as shall be approved by the Board
of Directors of the Fund and so specified from time to time in
Instructions, provided that such country or other jurisdiction
shall be one in which such Cash is the legal currency for the
payment of public or private debts.
3. Eligible Foreign Custodians and Securities
Depositories.
(a) State Street authorizes Chase to hold the Securities in
the Custody Account and the Cash in the Deposit Account in
custody and deposit accounts, respectively, which have been
established by Chase with (i) one of its branches, (ii) a branch
of a qualified U.S. bank, (iii) an eligible foreign custodian, or
(iv) an eligible foreign securities depository; provided,
however, that the Board of Directors of the Fund has approved the
use of and the terms of, and Chase's contract with, each such
eligible foreign custodian or eligible foreign securities
depository by resolution, and Instructions to such effect have
been provided to Chase; and provided further, that any one of its
branches, a branch of a qualified U.S. bank or an eligible
foreign custodian selected to act as Chase's subcustodian is
authorized to hold such Securities or Cash in its account with
any eligible foreign securities depository in which it
participates.
(b) For purposes of this Agreement:
(i) "qualified U.S. bank" shall mean a qualified
U.S. bank as defined in Rule 17f-5 under the Investment
Company Act of 1940;
(ii) "eligible foreign custodian" shall mean (A) a
banking institution or trust company, incorporated or
organized under the laws of a country other than the United
States, that is regulated as such by that country's
government or an agency thereof and that has shareholders'
equity in excess of $200 million in U.S. currency (or a
foreign currency equivalent thereof), (B) a majority-owned
direct or indirect subsidiary of a qualified U.S. bank or
bank-holding company that is incorporated or organized under
the laws of a country other than the United States and that
has shareholders' equity in excess of $100 million in U.S.
currency (or a foreign currency equivalent thereof), or (C)
a banking institution or trust company, incorporated or
organized under the laws of a country other than the United
States or a majority owned direct or indirect subsidiary of
a qualified U.S. bank or bank-holding company that is
incorporated or organized under the laws of a country other
than the United States, which has been approved for use by
registered investment companies as a foreign custodian
pursuant to an exemptive order issued by the Securities and
Exchange Commission;
(iii) "eligible foreign securities depository" shall
mean a securities depository or clearing agency,
incorporated or organized under the laws of a country other
than the United States, which operates (A) the central
system for handling of securities or equivalent book-entries
in that country, or (B) a transnational system for the
central handling of securities or equivalent book-entries;
and
(iv) "subcustodian" shall mean any branch of a
qualified U.S. bank, any eligible foreign custodian or any
eligible foreign securities depository with which Chase has
entered an agreement of the type contemplated hereunder
regarding Securities and/or Cash held in or to be acquired
for the Custody Account or the Deposit Account.
4. Use of Subcustodian. With respect to Securities in the
Custody Account and Cash in the Deposit Account which are held by
a subcustodian pursuant to Section 3,
(a) Chase will identify on its books as belonging to the
Fund any Securities or Cash, as the case may be, held by such
subcustodian.
(b) In the event that a subcustodian permits any of the
Securities or Cash, as the case may be, placed in its care to be
held in an eligible foreign securities depository, such
subcustodian will be required by its agreement with Chase to
identify on its books such Securities or Cash, as the case may
be, as being held for the account of Chase as a Custodian for its
customers.
(c) Any Securities in the Custody Account or Cash in the
Deposit Account held by a subcustodian of Chase will be subject
only to the instructions of Chase or its agents; and any
Securities or cash, as the case may be, held in an eligible
foreign securities depository for the account of a subcustodian
will be subject only to the instructions of such subcustodian.
(d) Chase will only deposit Securities or Cash, as the case
may be, in an account with a subcustodian which includes
exclusively the assets held by Chase for its customers, and Chase
will cause such account to be designated by such subcustodian as
a special custody account for the exclusive benefit of customers
of Chase.
(e) Any agreement Chase shall enter into with a
subcustodian with respect to the holding of Securities or Cash
shall require that: (i) the Securities or cash, as the case may
be, are not subject to any right, charge, security interest, lien
or claim of any kind in favor or such subcustodian or its
creditors except a claim of payment for their safe custody or
administration, and (ii) beneficial ownership of such Securities
or Cash, as the case may be, is freely transferable without the
payment of money or value other than for safe custody or
administration; provided, however, that the foregoing shall not
apply to the extent that any of the above-mentioned rights or
charges result from any arrangements by the Fund or State Street
on behalf of the Fund with any subcustodian.
(f) Chase shall allow officers of, independent public
accountants engaged by, or other representatives of the Fund or
State Street access at reasonable times to the records of Chase
relating to the Securities held in the Custody Account and Cash
held in the Deposit Account as is required by such officers,
accountants or representatives in connection with their
examination of the books and records pertaining to the affairs of
the Fund or State Street. Subject to restrictions under
applicable law, any agreement Chase shall enter into with any
subcustodian shall require any subcustodian holding any
Securities in the Custody Account or Cash in the Deposit Account
to permit officers of, independent public accountants employed
by, or other representatives of, the Fund or State Street access
at reasonable times to the records of such subcustodian as may be
required in connection with their examination of the books and
records pertaining to the affairs of the Fund or State Street.
Upon a request from State Street, Chase shall furnish to the Fund
and State Street such reports (or portions thereof) of Chase's
external auditors as relate directly to Chase's system of
internal accounting controls applicable to Chase's duties under
this Agreement. Chase shall use its best efforts to obtain and
furnish the Fund and State Street with such similar reports as
the Fund or State Street may request with respect to each
subcustodian holding Securities and Cash.
(g) Chase shall supply to the Fund and State Street no less
than monthly a statement in respect to any Securities in the
Custody Account and Cash in the Deposit Account held by a
subcustodian, including an identification of the entity having
possession of the Securities or Cash, as the case may be, and
including a description thereof. Chase shall send to the Fund
and State Street an advice or notification of any transfers of
Securities to or from the Custody Account, indicating, as to
Securities acquired for the account of State Street for the Fund,
the identity of the entity having physical possession of such
Securities and with respect to transfers of Securities to or from
the Custody Account shall include appropriate statements, reports
and/or advices, as the case may be, reflecting transactions in
the Deposit Account.
(h) Chase hereby represents and warrants to the Fund that
in its opinion, after due inquiry, the established procedures to
be followed by each of its branches, each branch of a qualified
U.S. bank, each eligible foreign custodian and each eligible
foreign securities depository holding Securities of the Fund in
the account of State Street pursuant to this Agreement afford
protection for such Securities at least equal to that afforded by
Chase's established procedures with respect to similar securities
held by Chase (and its securities depositories) in New York.
5. Deposit Account Payments. Subject to the provisions of
Section 7, Chase shall make, or cause its subcustodians to make,
payments of Cash credited to the Deposit Account only
(a) in connection with the purchase of Securities for the
Fund in the account of State Street and the delivery of such
Securities to, or the crediting of such Securities to the account
of, Chase or its subcustodian, each such payment to be made at
prices as confirmed by Instructions (as defined in Section 9
hereof) from Authorized Persons (as defined in Section 10
hereof);
(b) for the payments to be made in connection with the
conversion, exchange or surrender of Securities held in the
Custody Account;
(c) for other proper corporate purposes of the Fund; or
(d) upon the termination of this Custody Agreement as
hereinafter set forth.
All payments of cash for a purpose permitted by subsection
(a) or (b) of this Section 5 will be made only upon receipt by
Chase of Instructions from Authorized Persons which shall specify
the purpose for which the payment is to be made. In the case of
any payment to be made for the purpose permitted by subsection
(c) of this Section 5, Chase must first receive a certified copy
of a resolution of the Board of Directors of the Fund adequately
describing such payment, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such
payment is to be made. Any payment pursuant to subsection (d) of
this Section 5 will be made in accordance with Section 17.
In the event that any payment made under this Section 5
exceeds the funds available in the Deposit Account, Chase may, in
its discretion, advance the Fund an amount equal to such excess
and such advance shall be deemed a loan from Chase to the Fund,
payable on demand, bearing interest at the rate of interest
customarily charged by Chase on similar loans.
If Chase causes the Deposit Account to be credited on the
payable date for interest, dividends or redemptions, State Street
will promptly return to Chase any such amount or property so
credited upon oral or written notification that neither Chase not
its subcustodian can collect such amount or property in the
ordinary course of business. Except for such actions as Chase
may lawfully perform pursuant to Instructions of Authorized
Persons, Chase or its subcustodian, as the case may be, shall
have no duty or obligation to institute legal proceedings, file a
claim or proof of claim in any insolvency proceeding or take any
other action with respect to the collection of such amount or
property.
6. Custody Account Transactions. Subject to the
provisions of Section 7, Securities in the Custody Account will
be transferred, exchanged or delivered by Chase or its
subcustodians only
(a) upon sale of such Securities held for the Fund in the
account of State Street and receipt by Chase or its subcustodian
only of payment therefor, each such payment to be in the amount
confirmed by Instructions from Authorized Persons;
(b) when such Securities are called, redeemed or retired,
or otherwise become payable;
(c) in exchange for or upon conversion into other
Securities alone, other Securities and Cash or Cash alone
pursuant to any plan or merger, consolidation, reorganization,
recapitalization, tender offer, exchange offer, or readjustment;
(d) upon conversion of such Securities pursuant to their
terms into other Securities;
(e) upon exercise of subscription, purchase or other
similar rights represented by such Securities;
(f) for the purpose of exchanging interim receipts or
temporary Securities for definitive Securities;
(g) for the purpose of redeeming in kind shares of the
capital stock of the Fund against delivery to Chase or its
subcustodian of such shares to be so redeemed;
(h) for other proper corporate purposes of the Fund; or
(i) upon the termination of this Custody Agreement as
hereinafter set forth.
All transfers, exchanges or deliveries of Securities in the
Custody Account for a purpose permitted by either subsection (a),
(b), (c), (d), (e), or (f) of this Section 6 will be made, except
as provided in Section 8, only upon receipt by Chase of
Instructions from Authorized Persons which shall specify the
purpose of the transfer, exchange or delivery to be made. In the
case of any transfer or delivery to be made for the purpose
permitted by subsection (g) of this Section 6, Chase must first
receive Instructions from Authorized Persons specifying the
shares held by Chase or its subcustodian to be so transferred or
delivered and naming the person or persons to whom transfers or
delivery of such shares shall be made. In the case of any
transfer, exchange or delivery to be made for the purpose
permitted by subsection (h) of this Section 6, Chase must first
receive a certified copy of a resolution of the Board of
Directors of the Fund adequately describing such transfer,
exchange or delivery, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such Securities shall be made. Any transfer or
delivery pursuant to subsection (i) of this Section 6 will be
made in accordance with Section 17 of this Agreement.
7. Custody Account Procedures. With respect to any
transaction involving Securities held in or to be acquired for
the Custody Account, Chase in its discretion may cause the
Deposit Account to be credited on the contractual settlement date
with the proceeds of any sale or exchange of Securities from the
Custody Account and to be debited on the contractual settlement
date for the cost of Securities purchased or acquired for the
Custody Account. Chase may reverse any such credit or debit if
the transaction with respect to which such credit or debit were
made fails to settle within a reasonable period, determined by
Chase in its discretion, after the contractual settlement date,
except that if any Securities delivered pursuant to this Section
7 are returned by the recipient thereof, Chase may cause any such
credits and debits to be reversed at any time. With respect to
any transaction as to which Chase does not determine so to credit
or debit the Deposit Account, the proceeds from the sale or
exchange of Securities will be credited and the cost of such
Securities purchased or acquired will be debited to the Deposit
Account on the date such proceeds or Securities are received by
Chase.
Notwithstanding the preceding paragraph, settlement and
payment for Securities received for, and delivery of Securities
out of, the Custody Account may be effected in accordance with
the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market
in which the transaction occurs, including, without limitation,
delivering Securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such
Securities from such purchaser or dealer.
8. Actions of Chase. Until Chase receives Instructions
from Authorized Persons to the contrary, Chase will, or will
instruct its subcustodian, to
(a) present for payment any Securities in the Custody
Account which are called, redeemed or retired or otherwise become
payable and all coupons and other income items which call for
payment upon presentation to the extent that Chase or
subcustodian is aware of such opportunities for payment, and hold
cash received upon presentation of such Securities in accordance
with the provisions of Sections 2, 3 and 4 of this Agreement;
(b) in respect of Securities in the Custody Account,
execute in the name of State Street or the Fund such ownership
and other certificates as may be required to obtain payments in
respect thereof; and
(c) exchange interim receipts or temporary Securities in
the Custody Account for definitive Securities.
9. Instructions. As used in this Agreement, the term
"Instructions" means instructions of the Fund received by Chase,
via telephone, telex, TWX, facsimile transmission, bank wire or
other teleprocess or electronic instruction system acceptable to
Chase which Chase reasonably believes in good faith to have been
given by Authorized Persons or which are transmitted with proper
testing or authentication pursuant to terms and conditions which
Chase may specify.
Any Instructions delivered to Chase by telephone shall
promptly thereafter be confirmed in writing by an Authorized
Person (which confirmation may bear the facsimile signature of
such Person), but the Fund will hold Chase harmless for the
Fund's failure to send such confirmation in writing or the
failure of such confirmation to conform to the telephone
instructions received. Unless otherwise expressly provided, all
Instructions shall continue in full force and effect until
cancelled or superseded. If Chase requires test arrangements,
authentication methods or other security devices to be used with
respect to Instructions, any Instructions given by the Fund
thereafter shall be given and processed in accordance with such
terms and conditions for the use of such arrangements, methods or
devices as Chase may put into effect and modify from time to
time. The Fund shall safeguard any testkeys, identification codes
or other security devices which Chase shall make available to
them. Chase may electronically record any Instructions given by
telephone, and any other telephone discussions, with respect to
the Custody Account.
10. Authorized Persons. As used in this Agreement, the
term "Authorized Persons" means such officers or such agents of
the Fund as have been designated by a resolution of the Board of
Directors of the Fund, a certified copy of which has been
provided to Chase, to act on behalf of the Fund or State Street
in the performance of any acts which Authorized Persons may do
under this Agreement. Such persons shall continue to be
Authorized Persons until such time as Chase receives Instructions
from Authorized Persons that any such officer or agent is no
longer an Authorized Person.
11. Nominees. Securities in the Custody Account which are
ordinarily held in registered form may be registered in the name
of Chase's nominee or, as to any Securities in the possession of
an entity other than Chase, in the name of such entity's nominee.
The Fund agrees to hold any such nominee harmless from any
liability as a holder of record of such Securities, except for
the negligence, fraud or willful misconduct of such nominee.
Chase may without notice cause any such Securities to cease to be
registered in the name of any such nominee and to be registered
in the name of the Fund or State Street. In the event that any
Securities registered in the name of Chase's nominee or held by
one of its subcustodians and registered in the name of such
subcustodian's nominee are called for partial redemption by the
issuer of such Security, Chase may allot, or cause to be
allotted, the called portion to the respective beneficial holders
of such class of security in any manner Chase deems to be fair
and equitable.
12. Standard of Care. Chase shall be responsible for the
performance of only such duties as are contemplated or set forth
herein or contained in Instructions given to Chase by Authorized
Persons which are not contrary to the provisions of this
Agreement. Chase will use reasonable care in the performance of
its duties hereunder, including, without limitation, the
safekeeping of Securities in the Custody Account and of Cash in
the Deposit Account. Chase shall be liable to and shall
indemnify and hold the Fund harmless for any loss which shall
occur as the result of the failure of a subcustodian to exercise
reasonable care with respect to the safekeeping of such
Securities and Cash to the same extent that Chase would be liable
to the Fund if Chase, as the Fund's custodian or subcustodian,
were holding such Securities and Cash for the benefit of the Fund
in New York. In the event of any loss to the Fund by reason of
the failure of Chase or its subcustodian to utilize reasonable
care, Chase shall be liable to the Fund to the extent of the
Fund's damages, in an amount to be mutually agreed upon in good
faith by Chase and the Fund. Chase shall be held to the exercise
of reasonable care in carrying out this Agreement but shall be
indemnified by, and shall be without liability to, the Fund for
any action taken or omitted by Chase in good faith without
negligence, fraud or willful misconduct. Chase shall be entitled
to rely, and may act, on advice of counsel (who may be counsel
for the Fund) on all matters and shall be without liability for
any action reasonably taken or omitted pursuant to such advice.
All collections of funds or other property paid or
distributed in respect of Securities in the Custody Account shall
be made at the risk of the Fund. Chase shall have no liability
for any loss occasioned by delay in the actual receipt of notice
by Chase or by its subcustodian of any payment, redemption or
other transaction regarding Securities in the Custody Account in
respect of which Chase has agreed to take action as provided in
Section 8 hereof, unless such loss results from the negligence,
fraud or willful misconduct of Chase or its subcustodian. Chase
shall not be liable for any action taken in good faith upon
Instructions or upon any certified copy of any resolution and may
rely on the genuineness of any such documents which it may in
good faith believe to be validly executed. Chase shall not be
liable for any loss resulting from, or caused by, the direction
of the Fund to maintain custody of any Securities or cash in a
foreign country including, but not limited to, nationalization,
expropriation, currency restrictions, acts of war or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation,
or acts of God.
13. Insurance. Chase represents and warrants that it
currently maintains a banker's blanket bond which provides
standard fidelity and non-negligent loss coverage with respect to
the Securities and Cash which may be held by subcustodians
pursuant to this Agreement. Chase agrees that if at any time it
for any reason discontinues such coverage, it shall immediately
give 60 days' prior written notice to State Street and the Fund.
Chase need not maintain any insurance for the benefit of the Fund
or State Street.
14. Corporate Actions; Proxies. Whenever Chase receives
information concerning the Securities which requires
discretionary action by the beneficial owner of the Securities
and affects the value of the Securities (other than a proxy),
such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended
to be transmitted to securities holders ("Corporate Actions"),
Chase will give the Fund notice of such Corporate Actions to the
extent that Chase's central corporate actions department has
actual knowledge of a Corporate Action in time to notify its
customers.
When a rights entitlement or a fractional interest resulting
from a rights issue, stock dividend, stock split or similar
Corporate Action is received which bears an expiration date,
Chase will endeavor to obtain Instructions from the Fund but if
Instructions are not received in time for Chase to take timely
action (or actual notice of such Corporate Action was received
too late to seek Instructions), Chase is authorized to sell such
rights entitlement or fractional interest and to credit the
Deposit Account with the Proceeds.
Chase shall promptly forward to the Fund proxies relative to
the Securities in the Custody Account (pursuant to any operating
agreement in effect between Chase and the Fund) by means as shall
permit, to the extent reasonably practicable under the
circumstances, the Fund to take timely action. Subject to the
above, Chase will cause its nominee to execute and deliver to the
Fund proxies relating to Securities in the Custody Account
registered in the name of such nominee but without indicating the
manner in which such proxies are to be voted. Proxies relating
to bearer Securities will be delivered in accordance with written
instructions from Authorized Persons.
15. Fees and Expenses. The Fund agrees to pay to Chase
from time to time such compensation for its services pursuant to
this Agreement and Chase's out-of-pocket or incidental expenses,
including (but without limitation) reasonable legal fees, as may
be mutually agreed upon in writing from time to time. The Fund
hereby agrees to hold Chase harmless from any liability or loss
resulting from any taxes or other governmental charges, and any
expenses related thereto, which may be imposed, or assessed with
respect to the Custody Account or any Securities in the Custody
Account and also agrees to hold Chase, its subcustodians, and
their respective nominees harmless from any liability as a record
holder of Securities in the Custody Accounts, except for its or
their negligence; provided, however, that the Fund shall not be
liable for any assessments of taxes or other governmental
charges, and any expenses related there to as result from the
negligence, fraud or willful misconduct of Chase, or any of its
subcustodians or their respective nominees. Chase is authorized
to charge any account of State Street on behalf of the Fund for
such items and Chase shall have a lien on Securities in the
Custody Account and on Cash in the Deposit Account for any amount
owing to Chase from time to time under this Agreement, as long as
such lien would not contravene the provisions of the Order of the
Securities and Exchange Commission contained in Release No.
12053, dated November 20, 1981, as the same may be amended from
time to time.
16. Effectiveness. This Agreement shall be effective on
the date first noted above.
17. Termination. This Agreement may be terminated by the
Fund, State Street or Chase by 60 days' written notice to the
others, sent by registered mail, provided that any termination by
State Street shall be authorized by a resolution of the Board of
Directors of the Fund, a certified copy of which shall accompany
such notice of termination, and provided further, that such
resolution shall specify the names of the persons to whom Chase
shall deliver the Securities in the Custody Account and to whom
the Cash in the Deposit Account shall be paid. If notice of
termination is given by Chase, State Street shall, within 90 days
following the giving of such notice, deliver to Chase a certified
copy of a resolution of the Board of Directors of the Fund
specifying the names of the persons to whom Chase shall deliver
the Securities in the Custody Account and to whom the Cash in the
Deposit Account shall be paid. In either case, Chase will deliver
such Securities and cash to the persons so specified, after
deducting therefrom any amounts which Chase determines in good
faith to be owed to it under Section 15. If within 90 days
following the giving of a notice of termination by Chase, Chase
does not receive from State Street a certified copy of a
resolution of the Board of Directors of the Fund specifying the
names of the persons to whom Chase shall deliver the Securities
in the Custody Account and to whom the Cash in the Cash Account
shall be paid, Chase, at its election, may deliver such
Securities and pay such Cash to a bank or trust company doing
business in the State of New York to be held and disposed of
pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold such Securities and Cash until a
certified copy of one or more resolutions as aforesaid is
delivered to Chase. The obligations of the parties here to
regarding the use of reasonable care, indemnities and payment of
fees and expenses shall survive the termination of this
Agreement.
18. Notices. Any notice or other communication to Chase is
to be sent to the office of Chase at 1211 Avenue of the Americas
(33rd floor), New York, New York, 10036, Attention Global Custody
Division; to the Fund at 100 East Pratt Street, Baltimore,
Maryland, 21202 Attn: Treasurer; and to State Street at P.O. Box
1713, Boston, Massachusetts 02105, attention Mutual Fund
Services, or as such addresses may hereafter be changed on the
parties records in accordance with notice under this provision.
19. Governing Law and Successors and Assigns. This
Agreement shall be governed by the law of the State of New York
and shall not be assignable by either party, but shall bind the
successors and assigns of the Fund, State Street and Chase.
20. Headings. The headings of the paragraphs hereof are
included for convenience of reference only and do not form a part
of this Agreement.
21. Relationship of the Parties. Chase, State Street and
the Fund expressly agree that the establishment and maintenance
of the Custody Account and Deposit Account, in the name of State
Street, shall not adversely affect the rights of the Fund under
this Agreement, and further agree that the Fund, in addition to
any rights it has in its own right against Chase, will have the
same rights as State Street has against Chase.
T. ROWE PRICE NEW ERA FUND, INC.
By:/s/Carmen F. Deyesu Carmen F. Deyesu Treasurer |
STATE STREET BANK AND TRUST COMPANY
By:/s/Robert F. ________ Robert F. __________ Vice President |
THE CHASE MANHATTAN BANK, N.A.
By:/s/Richard A. Samuel Richard A. Samuel Second Vice President |
The Transfer Agency and Service Agreement between T. Rowe Price Services, Inc. and T. Rowe Price Funds, dated January 1, 1994, should be inserted here.
TRANSFER AGENCY AND SERVICE AGREEMENT
between
T. ROWE PRICE SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
TABLE OF CONTENTS
Page
Article A Terms of Appointment . . . . . . . . . . . . . .2
Article B Duties of Price Services . . . . . . . . . . . .3
1. Receipt of Orders/Payments. . . . . . . . .3
2. Written Redemptions . . . . . . . . . . . .4
3. Transfers . . . . . . . . . . . . . . . . .6
4. Confirmations . . . . . . . . . . . . . . .6
5. Issuance of Share Certificates. . . . . . .6
6. Returned Checks and ACH Debits. . . . . . 7
7. Redemptions of Shares under Ten Day Hold. 7
8. Dividends, Distributions and Other
Corporate Actions. . . . . . . . . . . . 9
9. Unclaimed Payments and Certificates . . .10
|
10. Books and Records . . . . . . . . . . . .10
11. Authorized Issued and Outstanding Shares.12
12. Tax Information . . . . . . . . . . . . .13
13. Information to be Furnished to the Fund .13
14. Correspondence. . . . . . . . . . . . . .13 15. Lost or Stolen Securities . . . . . . . .14 16. Telephone Services . . . . . . . . . . .14 17. Proxies . . . . . . . . . . . . . . . . .14 18. Form N-SAR. . . . . . . . . . . . . . . .15 19. Cooperation With Accountants. . . . . . .15 20. Blue Sky. . . . . . . . . . . . . . . . .15 21. Other Services. . . . . . . . . . . . . .15 22. Fees and Out-of-Pocket Expenses . . . . .15 |
Article C Representations and Warranties of the Price Services. . . . . . . . . . . . . . . . . . .17 Article D Representations and Warranties of the Fund . .18
Article E Standard of Care/Indemnification . . . . . . .18
Article F Dual Interests . . . . . . . . . . . . . . . . 20
Article G Documentation. . . . . . . . . . . . . . . . . 20
Article H References to Price Services . . . . . . . . . 22
Article I Compliance with Governmental Rules and
Regulations . . . . . . . . . . . . . . . . . 22
Article J Ownership of Software and Related Material . . 22
PAGE 3
Article K Quality Service Standards. . . . . . . . . . . 23
Article L As of Transactions . . . . . . . . . . . . . . 23
Article M Term and Termination of Agreement. . . . . . . 26
Article N Notice . . . . . . . . . . . . . . . . . . . . 26
Article O Assignment . . . . . . . . . . . . . . . . . . 26
Article P Amendment/Interpretive Provisions. . . . . . . 26
Article Q Further Assurances . . . . . . . . . . . . . . 27
Article R Maryland Law to Apply. . . . . . . . . . . . . 27
Article S Merger of Agreement. . . . . . . . . . . . . . 27
Article T Counterparts . . . . . . . . . . . . . . . . . 27
Article U The Parties. . . . . . . . . . . . . . . . . . 27
|
Article V Directors, Trustees, Shareholders and Massachusetts Business Trust . . . . . . . . . . . . . . . . 28 Article W Captions . . . . . . . . . . . . . . . . . . . 28
AGREEMENT made as of the first day of January, 1994, by and
between T. ROWE PRICE SERVICES, INC., a Maryland corporation
having its principal office and place of business at 100 East
Pratt Street, Baltimore, Maryland 21202 ("Price Services"), and
EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each such
Fund individually hereinafter referred to as "the Fund", whose
definition may be found in Article U);
WHEREAS, the Fund desires to appoint Price Services as its
transfer agent, dividend disbursing agent and agent in connection
with certain other activities, and Price Services desires to
accept such appointment;
WHEREAS, Price Services represents that it is registered
with the Securities and Exchange Commission as a Transfer Agent
under Section 17A of the Securities Exchange Act of 1934 ("'34
Act") and will notify each Fund promptly if such registration is
revoked or if any proceeding is commenced before the Securities
and Exchange Commission which may lead to such revocation;
WHEREAS, certain of the Funds are named investment options
under various tax-sheltered retirement plans including, but not
limited to, individual retirement accounts, simplified employee
pension plans, deferred compensation plans, 403(b) plans, and
profit sharing, thrift, and money purchase pension plans for
self-employed individuals and professional partnerships and
corporations, (collectively referred to as "Retirement Plans");
WHEREAS, Price Services has the capability of providing
special services, on behalf of the Funds, for the accounts of
shareholders participating in these Retirement Plans ("Retirement
Accounts").
WHEREAS, Price Services may subcontract or jointly contract
with other parties, on behalf of the Funds, including, but not
limited to, DST, SRI, Moore Business Forms, Boston Financial Data
Services, Inc., and the 440 Financial Group, to perform certain
of the functions and services described herein including services
to Retirement Plans and Retirement Accounts. Price Services may
also enter into, on behalf of the Funds, certain banking
relationships to perform various banking services including, but
not limited to, check deposits, check disbursements, automated
clearing house transactions ("ACH") and wire transfers. Subject
to guidelines mutually agreed upon by the Funds and Price
Services, excess balances, if any, resulting from these banking
relationships will be invested and the income therefrom will be
used to offset fees which would otherwise be charged to the Funds
under this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
A. Terms of Appointment
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Price Services to
act, and Price Services agrees to act, as the Fund's transfer
agent, dividend disbursing agent and agent in connection with:
(1) the Fund's authorized and issued shares of its common stock
or shares of beneficial interest (all such stock and shares to be
referred to as "Shares"); (2) any accumulation, open-account or
similar plans provided to the shareholders of the Fund
("Shareholders"), including, without limitation, any periodic
investment plan or periodic withdrawal program; and (3) certain
Retirement Plan and Retirement Accounts as agreed upon by the
parties.
The parties to the Agreement hereby acknowledge that from
time to time, Price Services and T. Rowe Price Trust Company may
enter into contracts ("Other Contracts") with employee benefit
plans and/or their sponsors for the provision of certain plan
participant services to Retirement Plans and Retirement Accounts.
Compensation paid to Price Services pursuant to this Agreement
is with respect to the services described herein and not with
respect to services provided under Other Contracts.
B. Duties of Price Services
Price Services agrees that it will perform the following
services:
1. Receipt of Orders/Payments
Receive for acceptance, orders/payments for the
purchase of Shares and promptly deliver payment and
appropriate documentation thereof to the authorized
custodian of the Fund (the "Custodian"). Upon receipt of
any check or other instrument drawn or endorsed to it as
agent for, or identified as being for the account of, the
Fund, Price Services will process the order as follows:
o Examine the check to determine if the check conforms to
the Funds' acceptance procedures (including certain
third-party check procedures). If the check conforms,
Price Services will endorse the check and include the
date of receipt, will process the same for payment, and
deposit the net amount to the parties agreed upon
designated bank account prior to such deposit in the
Custodial account, and will notify the Fund and the
Custodian, respectively, of such deposits (such
notification to be given on a daily basis of the total
amount deposited to said accounts during the prior
business day);
o Open a new account, if necessary, and credit the
account of the investor with the number of Shares to be
purchased according to the price of the Fund's Shares
in effect for purchases made on that date, subject to
any instructions which the Fund may have given to Price
Services with respect to acceptance of orders for
Shares relating to payments so received by it;
o Maintain a record of all unpaid purchases and report
such information to the Fund daily;
o Process periodic payment orders, as authorized by
investors, in accordance with the payment procedures
for pre-authorized checking ("PAC") and ACH purchases
mutually agreed upon by both parties;
o Receive monies from Retirement Plans and determine the
proper allocation of such monies to the Retirement
Accounts based upon instructions received from
Retirement Plan participants or Retirement Plan
administrators ("Administrators"); and
o Process telephone orders for purchases of Fund shares
from the Shareholder's bank account (via wire or ACH)
to the Fund in accordance with procedures mutually
agreed upon by both parties.
Upon receipt of funds through the Federal Reserve Wire
System that are designated for purchases in Funds which
declare dividends at 12:00 p.m. (or such time as set forth
in the Fund's current prospectus), Price Services shall
promptly notify the Fund and the Custodian of such deposit.
2. Redemptions
Receive for acceptance redemption requests, including
telephone redemptions and requests received from
Administrators for distributions to participants or their
designated beneficiaries or for payment of fees due the
Administrator or such other person, including Price
Services, and deliver the appropriate documentation
thereofto the Custodian. Price Services shall receive and
stamp with the date of receipt, all requests for redemptions
of Shares (including all certificates delivered to it for
redemption) and shall process said redemption requests as
follows, subject to the provisions of Section 7 hereof:
o Examine the redemption request and, for written
redemptions, the supporting documentation, to determine
that the request is in good order and all requirements
have been met;
o Notify the Fund on the next business day of the total
number of Shares presented and covered by all such
requests;
o As set forth in the prospectus of the Fund, and in any
event, on or prior to the seventh (7th) calendar day
succeeding any such request for redemption, Price
Services shall, from funds available in the accounts
maintained by Price Services as agent for the Funds,
pay the applicable redemption price in accordance with
the current prospectus of the Fund, to the investor,
participant, beneficiary, Administrator or such other
person, as the case may be;
o If any request for redemption does not comply with the
Fund's requirements, Price Services shall promptly
notify the investor of such fact, together with the
reason therefore, and shall effect such redemption at
the price in effect at the time of receipt of all
appropriate documents;
o Make such withholdings as may be required under
applicable Federal and State tax law;
o In the event redemption proceeds for the payment of
fees are to be wired through the Federal Reserve Wire
System or by bank wire, Price Services shall cause such
proceeds to be wired in Federal funds to the bank
account designated; and
o Process periodic redemption orders as authorized by the
investor in accordance with the periodic withdrawal
procedures for Systematic Withdrawal Plan ("SWP") and
systematic ACH redemptions mutually agreed upon by both
parties.
Procedures and requirements for effecting and accepting
redemption orders from investors by telephone, Tele*Access,
Mailgram, or written instructions shall be established by
mutual agreement between Price Services and the Fund
consistent with the Fund's current prospectus.
3. Transfers
Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions and
documentation and examine such instructions for conformance
with appropriate procedures and requirements. In this
regard, Price Services, upon receipt of a proper request for
transfer, including any transfer involving the surrender of
certificates of Shares, is authorized to transfer, on the
records of the Fund, Shares of the Fund, including
cancellation of surrendered certificates, if any, to credit
a like amount of Shares to the transferee and to
countersign, issue and deliver new certificates, if
requested, for those Funds issuing certificates.
4. Confirmations
Mail all confirmations and other enclosures requested
by the Fund to the shareholder, and in the case of
Retirement Accounts, to the Administrators, as may be
required by the Funds or by applicable Federal or state law.
5. Issuance of Share Certificates
o Those Funds which issue stock certificates shall supply
Price Services with a sufficient supply of blank stock
certificates and shall renew such supply upon request
of Price Services. Such blank stock certificates shall
be properly signed, manually or facsimile, if
authorized by the Fund, and shall bear the seal or
facsimile thereof of the Fund; and notwithstanding the
death, resignation or removal of any officers of the
Fund authorized to sign certificates of stock, on
behalf of the Fund, Price Services may continue to
countersign certificates which bear the manual or
facsimile signature of such officer until otherwise
directed by the Fund.
o If an investor requests a share certificate of a Fund
which issues stock certificates (except shares in
Retirement Plans and Retirement Accounts which will be
non certificated), Price Services will countersign and
mail by first class mail, a share certificate to the
investor at his address as set forth on the transfer
books of the Fund, subject to any other instructions
for delivery of certificates which the Fund may give to
Price Services with respect to certificates
representing newly purchased Shares.
6. Returned Checks and ACH Debits
In order to minimize the risk of loss to the Fund by
reason of any check being returned unpaid, Price Services
will promptly identify and follow-up on any check or ACH
debit returned unpaid. For items returned, Price Services
may telephone the investor and/or redeposit the check or
debit for collection or cancel the purchase, as deemed
appropriate.
7. Redemption of Shares under Ten Day Hold
o Uncollected Funds
Shares purchased by personal, corporate, or
governmental check, or by ACH will be considered
uncollected until the tenth calendar date following the
trade date of the trade ("Uncollected Funds");
o Good Funds
Share purchased by treasurer's, cashier, certified, or
official check, or by wire transfer will be considered
collected immediately ("Good Funds"). Absent
information to the contrary (i.e., notification from
the payee institution), Uncollected Funds will be
considered Good Funds on the tenth calendar day
following trade date.
o Redemption of Uncollected Funds
o Shareholders making telephone requests for
redemption of shares purchased with Uncollected
Funds will be given two options:
1. The Shareholder will be permitted to exchange
to a money market fund to preserve principal until
the funds are deemed Good Funds,
2. The redemption can be processed utilizing the
same procedures for written redemptions described
below.
o If a written redemption request is made for shares
where any portion of the payment for said shares
is in Uncollected Funds, and the request is in
good order, Price Services will promptly obtain
the information relative to the payment necessary
to determine when the payment becomes Good Funds.
The redemption will be processed in accordance
with normal procedures, and the proceeds will be
held until confirmation that the payment is Good
Funds. On the seventh (7th) calendar day after
trade date, and each day thereafter until either
confirmation is received or the tenth (10th)
calendar day, Price Services will call the paying
institution to request confirmation that the check
or ACH in question has been paid. On the tenth
calendar day after trade date, the redemption
proceeds will be released, regardless of whether
confirmation has been received.
o Checkwriting Redemptions.
o Daily, all checkwriting redemptions $10,000 and
over reported as Uncollected Funds or insufficient
funds will be reviewed. An attempt will be made
to contact the shareholder to make good the funds
(through wire, exchange, transfer). Generally by
12:00 p.m. the same day, if the matter has not
been resolved, the redemption request will be
rejected and the check returned to the
Shareholder.
o All checkwriting redemptions under $10,000
reported as Uncollected or insufficient funds will
be rejected and the check returned to the
Shareholder.
o Confirmations of Available Funds
The Fund expects that situations may develop whereby it
would be beneficial to determine if a person who has
placed an order for Shares has sufficient funds in his
or her checking account to cover the payment for the
Shares purchased. When this situation occurs, Price
Services may call the bank in question and request that
it confirm that sufficient funds to cover the purchase
are currently credited to the account in question.
Price Services will maintain written documentation or a
recording of each telephone call which is made under
the procedures outlined above. None of the above
procedures shall preclude Price Services from inquiring
as to the status of any check received by it in payment
for the Fund's Shares as Price Services may deem
appropriate or necessary to protect both the Fund and
Price Services. If a conflict arises between Section 2
and this Section 7, Section 7 will govern.
8. Dividends, Distributions and Other Corporate Actions
o The Fund will promptly inform Price Services of the
declaration of any dividend, distribution, stock split
or any other distributions of a similar kind on account
of its Capital Stock.
o Price Services shall act as Dividend Disbursing Agent
for the Fund, and as such, shall prepare and make
income and capital gain payments to investors. As
Dividend Disbursing Agent, Price Services will on or
before the payment date of any such dividend or
distribution, notify the Custodian of the estimated
amount required to pay any portion of said dividend or
distribution which is payable in cash, and the Fund
agrees that on or before the payment date of such
distribution, it shall instruct the Custodian to make
available to Price Services sufficient funds for the
cash amount to be paid out. If an investor is entitled
to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits will be
made to his or her account.
9. Unclaimed Payments and Certificates
In accordance with procedures agreed upon by both
parties, report abandoned property to appropriate state and
governmental authorities of the Fund. Price Services shall,
90 days prior to the annual reporting of abandoned property
to each of the states, make reasonable attempts to locate
Shareholders for which (a) checks or share certificates have
been returned; (b) for which accounts have aged outstanding
checks; or (c) accounts with unissued shares that have been
coded with stop mail and meet the dormancy period guidelines
specified in the individual states. Price Services shall
make reasonable attempts to contact shareholders for those
accounts which have significant aged outstanding checks.
10. Books and Records
Maintain records showing for each Shareholder's
account, Retirement Plan or Retirement Account, as the case
may be, the following:
o Names, address and tax identification number;
o Number of Shares held;
o Certain historical information regarding the
account of each Shareholder, including dividends
and distributions distributed in cash or invested
in Shares;
o Pertinent information regarding the establishment
and maintenance of Retirement Plans and Retirement
Accounts necessary to properly administer each
account;
o Information with respect to the source of
dividends and distributions allocated among income
(taxable and nontaxable income), realized short-
term gains and realized long-term gains;
o Any stop or restraining order placed against a
Shareholder's account;
o Information with respect to withholdings on
domestic and foreign accounts;
o Any instructions from a Shareholder including, all
forms furnished by the Fund and executed by a
Shareholder with respect to (i) dividend or
distribution elections, and (ii) elections with
respect to payment options in connection with the
redemption of Shares;
o Any correspondence relating to the current
maintenance of a Shareholder's account;
o Certificate numbers and denominations for any
Shareholder holding certificates;
o Any information required in order for Price
Services to perform the calculations contemplated
under this Agreement.
Price Services shall maintain files and furnish
statistical and other information as required under this
Agreement and as may be agreed upon from time to time by
both parties or required by applicable law. However, Price
Services reserves the right to delete, change or add any
information to the files maintained; provided such
deletions, changes or additions do not contravene the terms
of this Agreement or applicable law and do not materially
reduce the level of services described in this Agreement.
Price Services shall also use its best efforts to obtain
additional statistical and other information as each Fund
may reasonably request for additional fees as may be agreed
to by both parties.
Any such records maintained pursuant to Rule 31a-1
under the Investment Company Act of 1940 ("the Act") will be
preserved for the periods and maintained in a manner
prescribed in Rule 31a-2 thereunder. Disposition of such
records after such prescribed periods shall be as mutually
agreed upon by the Fund and Price Services. The retention
of such records, which may be inspected by the Fund at
reasonable times, shall be at the expense of the Fund. All
records maintained by Price Services in connection with the
performance of its duties under this Agreement will remain
the property of the Fund and, in the event of termination of
this Agreement, will be delivered to the Fund as of the date
of termination or at such other time as may be mutually
agreed upon.
All books, records, information and data pertaining to
the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of
this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except after
prior notification to and approval by the other party
hereto, which approval shall not be unreasonably withheld
and may not be withheld where Price Services or the Fund may
be exposed to civil or criminal contempt proceedings for
failure to comply; when requested to divulge such
information by duly constituted governmental authorities; or
after so requested by the other party hereto.
11. Authorized Issued and Outstanding Shares
Record the issuance of Shares of the Fund and maintain,
pursuant to Rule 17Ad-10(e) of the '34 Act, a record of the
total number of Shares of the Fund which are authorized,
issued and outstanding, based upon data provided to it by
the Fund. Price Services shall also provide the Fund on a
regular basis the total number of Shares which are
authorized and issued and outstanding. Price Services shall
have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance
of any laws relating to the issuance or sale of such Shares.
12. Tax Information
Prepare and file with the Internal Revenue Service and
with other appropriate state agencies and, if required, mail
to investors, those returns for reporting dividends and
distributions paid as required to be so filed and mailed,
and shall withhold such sums required to be withheld under
applicable Federal and state income tax laws, rules, and
regulations. Additionally, Price Services will file and, as
applicable, mail to investors, any appropriate information
returns required to be filed in connection with Retirement
Plan processing, such as 1099R, 5498, as well as any other
appropriate forms that the Fund or Price Services may deem
necessary. The Fund and Price Services shall agree to
procedures to be followed with respect to Price Services'
responsibilities in connection with compliance with back-up
withholding and other tax laws.
13. Information to be Furnished to the Fund
Furnish to the Fund such information as may be agreed
upon between the Fund and Price Services including any
information that the Fund and Price Services agree is
necessary to the daily operations of the business.
14. Correspondence
Promptly and fully answer correspondence from
shareholders and Administrators relating to Shareholder
Accounts, Retirement Accounts, transfer agent procedures,
and such other correspondence as may from time to time be
mutually agreed upon with the Funds. Unless otherwise
instructed, copies of all correspondence will be retained by
Price Services in accordance with applicable law and
procedures.
15. Lost or Stolen Securities
Pursuant to Rule 17f-1 of the '34 Act, report to the
Securities Information Center and/or the FBI or other
appropriate person on Form X-17-F-1A all lost, stolen,
missing or counterfeit securities. Provide any other
services relating to lost, stolen or missing securities as
may be mutually agreed upon by both parties.
16. Telephone Services
Maintain a Telephone Servicing Staff of representatives
("Representatives") sufficient to timely respond to all
telephonic inquiries reasonably foreseeable. The
Representatives will also effect telephone purchases,
redemptions, exchanges, and other transactions mutually
agreed upon by both parties, for those Shareholders who have
authorized telephone services. The Reprentatives shall
require each Shareholder effecting a telephone transaction
to properly identify themself before the transaction is
effected, in accordance with procedures agreed upon between
by both parties. Procedures for processing telephone
transactions will be mutually agreed upon by both parties.
Price Services will also be responsible for providing
Tele*Access, PC*Access and such other Services as may be
offered by the Funds from time to time. Price Services will
maintain a special Shareholder Servicing staff to service
certain Shareholders with substantial relationships with the
Funds.
17. Proxies
Monitor the mailing of proxy cards and other material
supplied to it by the Fund in connection with Shareholder
meetings of the Fund and shall coordinate the receipt,
examination and tabulation of returned proxies and the
certification of the vote to the Fund.
18. Form N-SAR
Maintain such records, if any, as shall enable the Fund
to fulfill the requirements of Form N-SAR.
19. Cooperation With Accountants
Cooperate with each Fund's independent public
accountants and take all reasonable action in the
performance of its obligations under the Agreement to assure
that the necessary information is made available to such
accountants for the expression of their opinion without any
qualification as to the scope of their examination,
including, but not limited to, their opinion included in
each such Fund's annual report on Form N-SAR and annual
amendment to Form N-1A.
20. Blue Sky
Provide to the Fund or its agent, on a daily, weekly,
monthly and quarterly basis, and for each state in which the
Fund's Shares are sold, sales reports and other materials
for blue sky compliance purposes as shall be agreed upon by
the parties.
21. Other Services
Provide such other services as may be mutually agreed
upon between Price Services and the Fund.
22. Fees and Out-of-Pocket Expenses
Each Fund shall pay to Price Services and/or its agents
for its Transfer Agent Services hereunder, fees computed as
set forth in Schedule A attached. Except as provided below,
Price Services will be responsible for all expenses relating
to the providing of Services. Each Fund, however, will
reimburse Price Services for the following out-of-pocket
expenses and charges incurred in providing Services:
o Postage. The cost of postage and freight for
mailing materials to Shareholders and Retirement
Plan participants, or their agents, including
overnight delivery, UPS and other express mail
services and special courier services required to
transport mail between Price Services locations
and mail processing vendors.
o Proxies. The cost to mail proxy cards and other
material supplied to it by the Fund and costs
related to the receipt, examination and tabulation
of returned proxies and the certification of the
vote to the Fund.
o Communications
o Print. The printed forms used internally and
externally for documentation and processing
Shareholder and Retirement Plan participant,
or their agent's inquiries and requests;
paper and envelope supplies for letters,
notices, and other written communications
sent to Shareholders and Retirement Plan
participants, or their agents.
o Print & Mail House. The cost of internal
and third party printing and mail house
services, including printing of statements
and reports.
o Voice and Data. The cost of equipment
(including associated maintenance), supplies
and services used for communicating to and
from the Shareholders of the Fund and
Retirement Plan participants, or their
agents, the Fund's transfer agent, other Fund
offices, and other agents of either the Fund
or Price Services. These charges shall
include:
o telephone toll charges (both incoming
and outgoing, local, long distance and
mailgrams); and
o data and telephone lines and associated
equipment such as modems, multiplexers,
and facsimile equipment.
o Record Retention. The cost of maintenance
and supplies used to maintain, microfilm,
copy, record, index, display, retrieve, and
store, in microfiche or microfilm form,
documents and records.
o Disaster Recovery. The cost of services,
equipment, facilities and other charges
necessary to provide disaster recovery for
any and all services listed in this
Agreement.
Out-of-pocket costs will be billed at cost to the
Funds. Allocation of monthly costs among the Funds will
generally be made based upon the number of Shareholder and
Retirement Accounts serviced by Price Services each month. Some
invoices for these costs will contain costs for both the Funds
and other funds serviced by Price Services. These costs will be
allocated based on a reasonable allocation mehodology. Where
possible, such as in the case of inbound and outbound WATS
charges, allocation will be made on the actual distribution or
usage.
C. Representations and Warranties of Price Services
Price Services represents and warrants to the Fund that:
1. It is a corporation duly organized and existing and in
good standing under the laws of Maryland;
2. It is duly qualified to carry on its business in
Maryland and California;
3. It is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement;
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
5. It is registered with the Securities and Exchange
Commission as a Transfer Agent pursuant to Section 17A of
the '34 Act; and
6. It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
D. Representations and Warranties of the Fund
The Fund represents and warrants to Price Services that:
1. It is a corporation or business trust duly organized
and existing and in good standing under the laws of Maryland
or Massachusetts, as the case may be;
2. It is empowered under applicable laws and by its
Articles of Incorporation or Declaration of Trust, as the
case may be, and By-Laws to enter into and perform this
Agreement;
3. All proceedings required by said Articles of
Incorporation or Declaration of Trust, as the case may be,
and By-Laws have been taken to authorize it to enter into
and perform this Agreement;
4. It is an investment company registered under the Act;
and
5. A registration statement under the Securities Act of
1933 ("the '33 Act") is currently effective and will remain
effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale.
E. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1. Price Services shall not be liable to any Fund for any
act or failure to act by it or its agents or subcontractors
on behalf of the Fund in carrying or attempting to carry out
the terms and provisions of this Agreement provided Price
Services has acted in good faith and without negligence or
willful misconduct and selected and monitored the
performance of its agents and subcontractors with reasonable
care.
2. The Fund shall indemnify and hold Price Services
harmless from and against all losses, costs, damages,
claims, actions and expenses, including reasonable expenses
for legal counsel, incurred by Price Services resulting
from: (i) any action or omission by Price Services or its
agents or subcontractors in the performance of their duties
hereunder; (ii) Price Services acting upon instructions
believed by it to have been executed by a duly authorized
officer of the Fund; or (iii) Price Services acting upon
information provided by the Fund in form and under policies
agreed to by Price Services and the Fund. Price Services
shall not be entitled to such indemnification in respect of
actions or omissions constituting negligence or willful
misconduct of Price Services or where Price Services has not
exercised reasonable care in selecting or monitoring the
performance of its agents or subcontractors.
3. Except as provided in Article L of this Agreement,
Price Services shall indemnify and hold harmless the Fund
from all losses, costs, damages, claims, actions and
expenses, including reasonable expenses for legal counsel,
incurred by the Fund resulting from the negligence or
willful misconduct of Price Services or which result from
Price Services' failure to exercise reasonable care in
selecting or monitoring the performance of its agents or
subcontractors. The Fund shall not be entitled to such
indemnification in respect of actions or omissions
constituting negligence or willful misconduct of such Fund
or its agents or subcontractors; unless such negligence or
misconduct is attributable to Price Services.
4. In the event either party is unable to perform its
obligations under the terms of this Agreement because of
acts of God, strikes or other causes reasonably beyond its
control, such party shall not be liable to the other party
for any loss, cost, damage, claim, action or expense
resulting from such failure to perform or otherwise from
such causes.
5. In order that the indemnification provisions contained
in this Article E shall apply, upon the assertion of a claim
for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly
notify the other party of such assertion, and shall keep the
other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim,
or to defend against said claim in its own name or in the
name of the other party. The party seeking indemnification
shall in no case confess any claim or make any compromise in
any case in which the other party may be required to
indemnify it except with the other party's prior written
consent.
6. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of
this Agreement.
F. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both the Funds and Price
Services (including Price Services's affiliates), and that the
existence of any such dual interest shall not affect the validity
of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
G. Documentation
o As requested by Price Services, the Fund shall promptly
furnish to Price Services the following:
o A certified copy of the resolution of the
Directors/Trustees of the Fund authorizing the
appointment of Price Services and the execution
and delivery of this Agreement;
o A copy of the Articles of Incorporation or
Declaration of Trust, as the case may be, and By-
Laws of the Fund and all amendments thereto;
o Specimens of all forms of outstanding and new
stock/share certificates in the forms approved by
the Board of Directors/Trustees of the Fund with a
certificate of the Secretary of the Fund as to
such approval;
o All account application forms and other documents
relating to Shareholders' accounts;
o An opinion of counsel for the Fund with respect to
the validity of the stock, the number of Shares
authorized, the status of redeemed Shares, and the
number of Shares with respect to which a
Registration Statement has been filed and is in
effect; and
o A copy of the Fund's current prospectus.
The delivery of any such document for the purpose of any
other agreement to which the Fund and Price Services are or were
parties shall be deemed to be delivery for the purposes of this
Agreement.
o As requested by Price Services, the Fund will also furnish
from time to time the following documents:
o Each resolution of the Board of Directors/Trustees of
the Fund authorizing the original issue of its Shares;
o Each Registration Statement filed with the Securities
and Exchange Commission and amendments and orders
thereto in effect with respect to the sale of Shares
with respect to the Fund;
o A certified copy of each amendment to the Articles of
Incorporation or Declaration of Trust, and the By-Laws
of the Fund;
o Certified copies of each vote of the Board of
Directors/Trustees authorizing officers to give
instructions to the Transfer Agent;
o Specimens of all new certificates accompanied by the
Board of Directors/Trustees' resolutions approving such
forms;
o Such other documents or opinions which Price Services,
in its discretion, may reasonably deem necessary or
appropriate in the proper performance of its duties;
and
o Copies of new prospectuses issued.
Price Services hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for
safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices.
H. References to Price Services
Each Fund agrees not to circulate any printed matter which
contains any reference to Price Services without the prior
approval of Price Services, excepting solely such printed matter
that merely identifies Price Services as agent of the Fund. The
Fund will submit printed matter requiring approval to Price
Services in draft form, allowing sufficient time for review by
Price Services and its legal counsel prior to any deadline for
printing.
I. Compliance With Governmental Rules and Regulations
Except as otherwise provided in the Agreement and except for
the accuracy of information furnished to the Fund by Price
Services, each Fund assumes full responsibility for the
preparation, contents and distribution of its prospectuses and
compliance with all applicable requirements of the Act, the '34
Act, the '33 Act, and any other laws, rules and regulations of
governmental authorities having jurisdiction over the Fund.
Price Services shall be responsible for complying with all laws,
rules and regulations of governmental authorities having
jurisdiction over transfer agents and their activities.
J. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures
and similar items purchased and/or developed and used by Price
Services in performance of the Agreement shall be the property of
Price Services and will not become the property of the Fund.
K. Quality Service Standards
Price Services and the Fund may from time to time agree to
certain quality service standards, as well as incentives and
penalties with respect to Price Services' hereunder.
L. As Of Transactions
For purposes of this Article L, the term "Transaction" shall
mean any single or "related transaction" (as defined below)
involving the purchase or redemption of Shares (including
exchanges) that is processed at a time other than the time of the
computation of the Fund's net asset value per Share next computed
after receipt of any such transaction order by Price Services.
If more than one Transaction ("Related Transaction") in the Fund
is caused by or occurs as a result of the same act or omission,
such transactions shall be aggregated with other transactions in
the Fund and be considered as one Transaction.
o Reporting
Price Services shall:
1. Utilize a system to identify all Transactions, and
shall compute the net effect of such Transactions upon
the Fund on a daily, monthly and rolling 365 day basis.
The monthly and rolling 365 day periods are hereafter
referred to as "Cumulative".
2. Supply to the Fund, from time to time as mutually
agreed upon, a report summarizing the Transactions and
the daily and Cumulative net effects of such
Transactions both in terms of aggregate dilution and
loss ("Dilution") or gain and negative dilution
("Gain") experienced by the Fund, and the impact such
Gain or Dilution has had upon the Fund's net asset
value per Share.
3. With respect to any Transaction which causes
Dilution to the Fund of $25,000 or more, immediately
provide the Fund: (i) a report identifying the
Transaction and the Dilution resulting therefrom, (ii)
the reason such Transaction was processed as described
above, and (iii) the action that Price Services has or
intends to take to prevent the reoccurrence of such as
of processing ("Report").
o Liability
1. It will be the normal practice of the Funds not to
hold Price Services liable with respect to any
Transaction which causes Dilution to any single Fund of
less than $25,000. Price Services will, however,
closely monitor for each Fund the daily and Cumulative
Gain/Dilution which is caused by Transactions of less
than $25,000. When the Cumulative Dilution to any Fund
exceeds 3/10 of 1% per share, Price Services, in
consultation with counsel to the Fund, will make
appropriate inquiry to determine whether it should take
any remedial action. Price Services will report to the
Board of Directors/Trustees of the Fund ("Board") any
action it has taken.
2. Where a Transaction causes Dilution to a Fund of
$25,000 or more ("Significant Transaction"), Price
Services will review with counsel to the Fund the
Report and the circumstances surrounding the underlying
Transaction to determine whether the Transaction was
caused by or occurred as a result of a negligent act or
omission by Price Services. If it is determined that
the Dilution is the result of a negligent action or
omission by Price Services, Price Services and outside
counsel for the Fund will negotiate settlement. All
such Significant Transactions will be reported to the
Board at its next meeting (unless the settlement fully
compensates the Fund for any Dilution). Any
Significant Transaction, however, causing Dilution in
excess of the lesser of $100,000 or a penny per Share
will be promptly reported to the Board. Settlement
will not be entered into with Price Services until
approved by the Board. The factors the Board would be
expected to consider in making any determination
regarding the settlement of a Significant Transaction
would include but not be limited to:
o Procedures and controls adopted by Price Services
to prevent "As Of" processing;
o Whether such procedures and controls were being
followed at the time of the Significant
Transaction;
o The absolute and relative volume of all
transactions processed by Price Services on the
day of the Significant Transaction;
o The number of Transactions processed by Price
Services during prior relevant periods, and the
net Dilution/Gain as a result of all such
transactions to the Fund and to all other Price
Funds;
o The prior response of Price Services to
recommendations made by the Funds regarding
improvement to the Transfer Agent's "As Of"
Processing Procedures.
M. Term and Termination of Agreement
o This Agreement shall run for a period of one (1) year from
the date first written above and will be renewed from year
to year thereafter unless terminated by either party as
provided hereunder.
o This Agreement may be terminated by the Fund upon one
hundred twenty (120) days' written notice to Price Services;
and by Price Services, upon three hundred sixty-five (365)
days' writing notice to the Fund.
o Upon termination hereof, the Fund shall pay to Price
Services such compensation as may be due as of the date of
such termination, and shall likewise reimburse for out-of-
pocket expenses related to its services hereunder.
N. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
O. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party, provided this shall not
preclude Price Services from employing such agents and
subcontractors as it deems appropriate to carry out its
obligations set forth hereunder.
P. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, Price Services and the Fund may
agree from time to time on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions are to
be signed by all parties and annexed hereto, but no such
provision shall contravene any applicable Federal or state law or
regulation and no such interpretive or additional provision shall
be deemed to be an amendment of this Agreement.
Q. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
R. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
S. Merger of Agreement
This Agreement, including the attached Appendices and
Schedules supersedes any prior agreement with respect to the
subject hereof, whether oral or written.
T. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
U. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
between such individual Fund and Price Services. In the case of
a series Fund or trust, all references to "the Fund" are to the
individual series or portfolio of such Fund or trust, or to such
Fund or trust on behalf of the individual series or portfolio, as
appropriate. The "Fund" also includes any T. Rowe Price Funds
which may be established after the execution of this Agreement.
Any reference in this Agreement to "the parties" shall mean Price
Services and such other individual Fund as to which the matter
pertains.
V. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither
the holders of Shares in the Fund nor any Directors or Trustees
of the Fund shall be personally liable hereunder. With respect to
any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund"
means and refers to the trustees from time to time serving under
the applicable trust agreement (Declaration of Trust) of such
Trust as the same may be amended from time to time. It is
expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of
this Agreement has been authorized by the trustees and signed by
an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
W. Captions
The captions in the Agreement are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf under their seals by and through their duly authorized officers.
DATED: 2/18/94 T. ROWE PRICE SERVICES, INC. ATTEST: /s/Barbara A. VanHorn /s/Mark E. Rayford ____________________ BY:___________________________ Barbara A. VanHorn Mark E. Rayford |
T. ROWE PRICE ADJUSTABLE RATE U.S. GOVERNMENT FUND, INC.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE DIVIDEND GROWTH FUND, INC
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND, INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Money Fund
Virginia Tax-Free Money Fund
Florida Insured Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
Summit Cash Reserves Fund
Summit Limited-Term Bond Fund
Summit GNMA Fund
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
Summit Municipal Money Market Fund
Summit Municipal Intermediate Fund
Summit Municipal Income Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND,INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND, INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE INSURED INTERMDIATE BOND FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
DATED: 2/16/94
ATTEST:
/s/Lenora V. Hornung /s/Carmen F. Deyesu _________________________ BY:__________________________ Lenora V. Hornung Carmen F. Deyesu |
The following Funds are parties to this Agreement, and have so indicated their intention to be bound by such Agreement by executing the Agreement on the dates indicated thereon. T. Rowe Price Adjustable Rate U.S. Government Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price California Tax-Free Income Trust on behalf of the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Index Trust, Inc. on behalf of the T. Rowe Price Equity Index Fund
T. Rowe Price Institutional International Funds, Inc. on behalf
of the
Foreign Equity Fund
T. Rowe Price International Funds, Inc. on behalf of the
T. Rowe Price International Bond Fund and
T. Rowe Price International Stock Fund
T. Rowe Price International Discovery Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Fund
T. Rowe Price Latin America Fund
T. Rowe Price Mid-Cap Growth Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price OTC Fund, Inc.
T. Rowe Price Science & Technology Fund, Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Spectrum Fund, Inc. on behalf of the
Spectrum Growth Fund
Spectrum Income Fund
T. Rowe Price State Tax-Free Income Trust on behalf of the
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Georgia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
T. Rowe Price Tax-Exempt Money Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Insured Intermediate Bond Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate Fund, Inc.
T. Rowe Price U.S. Treasury Funds, Inc. on behalf of the
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Summit Funds, Inc. on behalf of the
Summit Cash Reserves Fund
Summit Limited-Term Bond Fund
Summit GNMA Fund
T. Rowe Price Summit Municipal Funds, Inc. on behalf of the
Summit Municipal Money Market Fund
Summit Municipal Intermediate Fund
Summit Municipal Income Fund
Effective January 1, 1994 to December 31, 1994, For the account of:
THE T. ROWE PRICE FUNDS
EQUITY FUNDS
T. Rowe Price New American Growth Fund
T. Rowe Price Growth Stock Fund, Inc. T. Rowe Price New Horizons Fund, Inc. T. Rowe Price New Era Fund, Inc. T. Rowe Price International Stock Fund T. Rowe Price Equity Income Fund T. Rowe Price Growth & Income Fund, Inc. T. Rowe Price Capital Appreciation Fund T. Rowe Price Science & Technology Fund, Inc. T. Rowe Price Small Capital Value Fund, Inc. T. Rowe Price International Discovery Fund Foreign Equity Fund T. Rowe Price Equity Index Fund T. Rowe Price European Stock Fund T. Rowe Price New Asia Fund T. Rowe Price Spectrum Growth Fund T.Rowe Price Japan Fund T. Rowe Price Latin America Fund T. Rowe Price Balanced Fund, Inc. T. Rowe Price Dividend Growth Fund, Inc. T. Rowe Price Mid-Cap Growth Fund, Inc. T. Rowe Price Over-the-Counter Fund, Inc. T. Rowe Price Blue Chip Growth Fund, Inc.
BOND FUNDS
T. Rowe Price New Income Fund, Inc.
T. Rowe Price Tax-Free Income Fund, Inc. T. Rowe Price New Jersey Tax-Free Bond Fund T. Rowe Price Virginia Tax-Free Bond Fund T. Rowe Price Short Term Bond Fund, Inc. T. Rowe Price Tax-Free Short Intermediate Fund, Inc. T. Rowe Price High Yield Fund, Inc. T. Rowe Price Tax-Free High Yield Fund, Inc. T. Rowe Price Adjustable Rate U.S. Government Fund, Inc. T. Rowe Price GNMA Fund T. Rowe Price New York Tax-Free Bond Fund T. Rowe Price California Tax-Free Bond Fund T. Rowe Price International Bond Fund T. Rowe Price Maryland Short-Term Tax-Free Bond Fund T. Rowe Price Maryland Tax-Free Bond Fund T. Rowe Price U.S. Treasury Intermediate Fund T. Rowe Price U.S. Treasury Long-Term Fund T. Rowe Price Global Government Bond Fund
T. Rowe Price Spectrum Income Fund T. Rowe Price Short-term Global Bond Fund T. Rowe Price Tax-Free Insured Intermediate Fund, Inc. T. Rowe Price Georgia Tax-Free Bond Fund T. Rowe Price Florida Insured Intermediate Tax-Free Fund T. Rowe Price Summit Limited-Term Bond Fund T. Rowe Price Summit GNMA Fund T. Rowe Price Summit Municipal Intermediate Fund T. Rowe Price Summit Municipal Income Fund
Money Market Funds
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Tax-Exempt Money Fund, Inc. T. Rowe Price U.S. Treasury Money Fund T. Rowe Price New York Tax-Free Money Fund T. Rowe Price California Tax-Free Money Fund T. Rowe Price Summit Cash Reserves Fund T. Rowe Price Summit Municipal Money Market Fund
The following fees for services provided by T. Rowe Price Services, Inc. (TRPS) and vendors will be billed by TRPS for 1994:
I. T. Rowe Price Services Maintenance and Transaction Charges - Billable Monthly
A. Base Fee
1. Per Fund - Beginning January 1, 1994, chargeable at the rate of $1,000 per month to each Fund shown on the previous page. The fee is waived for new Funds for the first 6 months after effective date.
2. Monthly - $5,987,000 payable in twelve monthly installments of $498,917.
B. Per Account Annual Fee - $3.63 for each Equity, Bond, and Money Market Account serviced.
The Per Account Annual Fee will be billed monthly at a rate of 1/12 of the annual fee for each Fund account serviced during the month. Accounts serviced is defined as all open accounts at month end plus accounts which closed during the month.
C. Transaction Fees
1. New Account Fees
a. $3.00 for every account opened, including fiduciary accounts, excluding those opened by exchange and those established as described in (b) below.
b. A fee of $1.00 will be assessed for accounts established within the model and list functions programs and under the agreement that the registrant's name will be quality controlled subsequent to its establishment.
2. Non-Automated Transactions
a. $1.05 for each non-automated transaction and maintenance item processed for the Fund Group as a whole during a month. The non-automated transaction count will include all manually processed price dependent and maintenance transactions. Also, the number of new account setups will be excluded from the number of non-automated transactions.
b. Fee to be charged to the Funds based on each Fund's number of total non-automated transactions and maintenance.
c. Fee to be billed monthly for that month.
d. NOTE: The transaction count should not include correction of transactions caused by non-shareholder errors.
D. Telephone Fee
Billed at the rate of $5.20 per call for shareholder servicing calls received in excess of 34,000 calls per month. Calls received in Retail Services are allocated to the Funds based on accounts serviced and calls received in Telephone Services are allocated based on actual calls received.
E. Items Scanned
$.29 will be billed for each document page scanned. It will be allocated based on the number of items indexed to each Fund.
F. Tele*Access
Base fee, per month for all calls is $39,000.
G. Institutional Electronic Interface
Maximum fee calculated is 10 basis points or less per Fund.
10 basis points < $500 million
8 basis points > $500 million < $1 billion
5 basis points > $1 billion < $2 billion
3 basis points > $2 billion
H. Correspondence
$4.20 billed for each shareholder correspondence request completed in writing or by phone. Allocated to the Funds based on accounts serviced.
I. Telephone Transaction Fee
Each price dependent transaction initiated through the Telephone Services Group will be charged $.50.
II. Vendor Fees
A. DST
1. Annual Open Account Fee
a. $1.77 for each Equity Fund account serviced.
b. $4.20 for each Bond Fund account serviced.
c. $4.20 for each Money Market Fund account serviced.
The Open Account Fee will be billed monthly at a rate of 1/12 of the annual fee for each Fund account serviced during the month.
2. Closed Account Fee (Annualized)
Payable at an annual rate of $1.44. The Closed Account Fee will be billed monthly at a rate of 1/12 of the annual rate and will be charged in the month following the month during which such account is closed and shall cease to be charged in the month following the Purge Date.
3. Fiduciary Sub-Accounting
Payable at the rate of $1.00 per month for each fiduciary account. Fiduciary accounts closed during the prior year will not be included as billable items.
4. Annual Base Fee Per Fund
Annual Fee of $7,205.88 will be charged at a monthly rate of $600.49. The fee is waived for the first six (6) months after a new Fund is effective. The definition of new Fund excludes Funds created by mergers, purchases, or reorganizations.
5. Bank Account Reconciliation System (Comp/Recon)
Annual charge of $120,000 payable at a rate of $10,000 per month.
6. TRAC 2000 - $7.00 per participant, per year
7. Voice Response Unit
a. $500 Set-up Fee will be charged for each investment company unit.
b. $2,500 Maintenance Fee will be billed each month.
c. $.50 will be billed per call connected to the VRU.
8. Contingent Deferred Sales Charge.
Billed to each Fund utilizing this service at an annual rate of $1.03 per open account.
B. State Street Bank
1. NSCC Settlements
a. $11.30 for net redemptions
b. $ 5.14 per net purchases
2. Checkwriting Fees
$.565 for each checkwriting item processed (i.e. those resulting in either redemptions or returned as non- processable). This includes signature card maintenance and verification, manual or special processing of checks, stop payment processing, settlement functions, and postage and mailing expenses to return canceled checks to shareholders.
3. Stop Payments - Redemption/Distribution Accounts
$15.00 for each manual stop payment placed on a redemption or distribution check.
4. ACH Transactions
$.06 for each ACH transaction processed by the Bank and submitted to the ACH network.
5. Internal Book Transfers
$1.08 billed for money movement between TRP DDA's at the Bank. Money is transferred by debit and credit memos.
6. Wire Fees
$4.00 for each incoming, manual, and internal bank transfer wire; $3.75 for each outgoing transmission wire.
7. Paid checks
$.18 for each paid check processed.
8. DDA Research
$1.03 per request.
9. Special Handling
$2,917 billed per month for the special handling of checks at Marina Bay.
10. Nightly Audits
$.0285 per page for the audit of the DST nightly update.
11. VAX Computer Usage
Billed at the rate of $8,318 per month which covers both:
a. System Fee - for use of sub-systems such as capital stock interface, PDPS, Direct Deposit, etc.
b. Communication Fee - charge for the line, modems, and statistical multiplexers.
12. Abandoned Property
Services based on the following fee schedule:
a. Administrative charge $125/Fund
b. Processing charges $1.00/account
c. Due Diligence Mailings $1.50/account
d. Labor will be charged based on the number of hours
required.
13. Account maintenance $16.00 per account per month
14. Reporting (SSCAN) for selected accounts - $50.00 per account per month
15. FDIC Passthrough - charged at prevailing FDIC rates
C. J.P. Morgan Bank
1. Wire Transfer Fees
Annual Account Maintenance $250.00
Annual MORCOM/CASH
First Account $5,000.00
Subsequent Accounts $3,000.00
Batch File Transfer (BFT)
Transmission $15.00 each
(capped at 10 per month)
BFT Per Outgoing Wire
Peak (8 a.m. and 8 p.m.) $0.064
Off Peak (8 p.m. and 8 a.m.) $0.032
Outgoing Wires
Straight-through (Repetive or Freetype)
80% of total volume $3.25
Book Transfer (IBT) $1.50
Repair (Freeform) $7.00
Zero Balance Transfer $1.00
|
Incoming Wires Fed or CHIPS $3.25 Book (IBT) $1.50 |
FDIC Passthrough - charged at prevailing FDIC rates
2. Controlled Disbursement Fees
Annual Account Maintenance
(capped at 6 accounts) $760.00 per
account
Annual MORCOM Next Day $1,385.00
per account
Annual MORCOM Check $715.00 per
account
Batch File Transfer (BFT)
Transmission (capped at 10 per month) $15.00 each
Same Day Match Pay (Dividend & Redemption Checks)
DCD Match $2,500.00
per account
TRPS Matches .005 per
item
Checks Paid
Up to 500,000 items $0.051
Up to 750,000 items $0.042
Up to 1,000,000 items $0.035
Stops
On-line $3.00
Returned Checks $3.00 per
item
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3. The bank may charge interest at a rate in excess of normal borrowing rates if the TRPS balance is overdrawn or is in a negative collected balance status.
D. Fleet Bank of Massachusetts
1. Demand Deposit Services
a. Monthly Account Maintenance $13.00/
14.00 in
May
PAGE 53
b. Deposit Ticket $.85
c. Deposited Item Fee (all inclusive) $.054
d. Return of a Deposited Item
Redeposit Fee per deposit $1.00
Per redeposited item $.50
Returned item $3.00
2. Treasury Master System
a. Previous Day Balance Reporting
Monthly module charge $60.00
Per Account $10.00
b. Previous Day Detail
Monthly module charge $70.00
Per Transaction $.10
c. Current Day Detail
Monthly module charge $70.00
Per Transaction $.10
d. Depository Transfer
Monthly module charge $75.00
Per Transfer $.25
e. Money Movers per transfer $.50
f. Wire Transfer no addt'l
charge-
normal wire
fees only
3. Wire Transfer
a. Outgoing Repetitive Wire
Placed prior to 1:00 pm $9.00
Placed after 1:00 pm $10.00
b. Outgoing Non-Repetitive Wire
Placed prior to 1:00 pm $12.00
Placed after 1:00 pm $13.00
c. Incoming Wire $6.00
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4. The bank may charge interest at a rate in excess of normal borrowing rates if the TRPS balance is overdrawn or is in a negative collected balance status.
5. FDIC Passthrough - charged at prevailing FDIC rates.
E. First National Bank of Maryland 1. Internal Fund Transfer $5.40 2. Returned Items $2.70 |
3. Deposit Items Charge
varies
4. Deposit Tickets $.45
5. Return/redeposit items $2.25
6. Deposit Corrections $4.50
7. Check copy $9.00
8. First Facts
CDA Repetitive Wire $4.05
System Reports/Per Module $27.00
Per Report Previous Day $1.80
Per Report Current Day $3.60
9. Account maintenance $11.25
10. Debit item $.54
11. Credit transaction $.54
12. Foreign Deposit $4.50
13. ACH Debit $.117
14. Tax Deposits $.90
15. Film - Monthly $121.50
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16. TRPS may be charged interest when TRPS's balance at FNB
is in a negative collected balance status. TRPS may
also receive balance credits on a positive investable
balance
17. FDIC Passthrough charged at prevailing FDIC rates
III. New Funds
Funds added during the term of this contract may have their
Maintenance and Transaction charges and other charges (Section
I) waived for a period of time, as agreed to by TRPS and Fund
Directors, following the establishment of the Fund. Out-of-
pocket expenses will be billed to the Fund from the Fund's
inception.
IN WITNESS WHEREOF, T.Rowe Price Funds and T.Rowe Price Services, Inc. have agreed upon this fee schedule to be executed in their names and on their behalf through their duly authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE SERVICES, INC. /s/Carmen F. Deyesu /s/Mark E. Rayford NAME ____________________ NAME ________________________ Carmen F. Deyesu Mark E. Rayford TITLE Treasurer TITLE President DATE 2/16/94 DATE 2/18/94 |
The Agreement between T. Rowe Price Associates, Inc. and T. Rowe Price Funds for Fund Accounting Services, dated January 1, 1994, should be inserted here.
AGREEMENT
between
T. ROWE PRICE ASSOCIATES, INC.
and
THE T. ROWE PRICE FUNDS
for
FUND ACCOUNTING SERVICES
TABLE OF CONTENTS
Page
Article A Terms of Appointment/Duties of Price Associates .1
Article B Fees and Out-of-Pocket Expenses . . . . . . . . .2
Article C Representations and Warranties of Price Associates3
Article D Representations and Warranties of the Fund. . . .3
Article E Ownership of Software and Related Material. . . .3
Article F Quality Service Standards . . . . . . . . . . . .4
Article G Standard of Care/Indemnification. . . . . . . . .4
Article H Dual Interests. . . . . . . . . . . . . . . . . .5
Article I Documentation . . . . . . . . . . . . . . . . . .5
Article J Recordkeeping/Confidentiality . . . . . . . . . .5
Article K Compliance with Governmental Rules and Regulations6
Article L Terms and Termination of Agreement. . . . . . . .6
Article M Notice. . . . . . . . . . . . . . . . . . . . . . 6
Article N Assignment. . . . . . . . . . . . . . . . . . . . 7
Article O Amendment/Interpretive Provisions . . . . . . . .7
Article P Further Assurances. . . . . . . . . . . . . . . .7
Article Q Maryland Law to Apply . . . . . . . . . . . . . .7
Article R Merger of Agreement . . . . . . . . . . . . . . .7
Article S Counterparts. . . . . . . . . . . . . . . . . . .8
Article T The Parties . . . . . . . . . . . . . . . . . . . 8
Article U Directors, Trustee and Shareholders and Massachusetts
Business Trust. . . . . . . . . . . . . . . . . .8
PAGE 3
Article V Captions. . . . . . . . . . . . . . . . . . . . . 9
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AGREEMENT made as of the first day of January, 1994, by and
between T. ROWE PRICE ASSOCIATES, INC., a Maryland corporation
having its principal office and place of business at 100 East
Pratt Street, Baltimore, Maryland 21202 ("Price Associates"), and
each Fund which is listed on Appendix A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each such
Fund individually hereinafter referred to as "the Fund", whose
definition may be found in Article T);
WHEREAS, Price Associates has the capability of providing the
Funds with certain accounting services ("Accounting Services");
WHEREAS, the Fund desires to appoint Price Associates to
provide these Accounting Services and Price Associates desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
A. Terms of Appointment/Duties of Price Associates
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Price Associates
to provide, and Price Associates agrees to provide, the following
Accounting Services:
a. Maintain for each Fund a daily trial balance, a general
ledger, subsidiary records and capital stock accounts;
b. Maintain for each Fund an investment ledger, including
amortized bond and foreign dollar denominated costs where
applicable;
c. Maintain for each Fund all records relating to the Fund's
income and expenses;
d. Provide for the daily valuation of each Fund's portfolio
securities and the computation of each Fund's daily net
asset value per share. Such daily valuations shall be
made in accordance with the valuation policies established
by each of the Fund's Board of Directors including, but
not limited to, the utilization of such pricing valuation
sources and/or pricing services as determined by the
Boards. Price Associates shall have no liability for any
losses or damages incurred by the Fund as a result of
erroneous portfolio security evaluations provided by such
designated sources and/or pricing services; provided that,
Price Associates reasonably believes the prices are
accurate, has adhered to its normal verification control
procedures, and has otherwise met the standard of care as
set forth in Article G of this Agreement;
e. Provide daily cash flow and transaction status information
to each Fund's adviser;
f. Prepare for each Fund such financial information that is
reasonably necessary for shareholder reports, reports to
the Board of Directors and to the officers of the Fund,
and reports to the Securities and Exchange Commission and
the Internal Revenue Service and other Federal and state
regulatory agencies;
g. Provide each Fund with such advice that may be reasonably
necessary to properly account for all financial
transactions and to maintain the Fund's accounting
procedures and records so as to insure compliance with
generally accepted accounting and tax practices and rules;
h. Maintain for each Fund all records that may be reasonably
required in connection with the audit performed by each
Fund's independent accountant, the Securities and Exchange
Commission, the Internal Revenue Service or such other
Federal or state regulatory agencies; and
i. Cooperate with each Fund's independent public accountants
and take all reasonable action in the performance of its
obligations under the Agreement to assure that the
necessary information is made available to such
accountants for the expression of their opinion without
any qualification as to the scope of their examination
including, but not limited to, their opinion included in
each such Fund's annual report on Form N-SAR and annual
amendment to Form N-1A.
B. Fees and Out-of-Pocket Expenses
Each Fund shall pay to Price Associates for its Accounting
Services hereunder, fees as set forth in the Schedule attached
hereto. In addition, each Fund will reimburse Price Associates
for out-of-pocket expenses such as postage, printed forms, voice
and data transmissions, record retention, disaster recovery,
third party vendors, equipment leases and other similar items as
may be agreed upon between Price Associates and the Fund. Some
invoices will contain costs for both the Funds and other funds
services by Price Associates. In these cases, a reasonable
allocation methodogy will be used to allocate these costs to the
Funds.
C. Representations and Warrantees of Price Associates
Price Associates represents and warrants to the Fund that:
1. It is a corporation duly organized and existing in good
standing under the laws of Maryland.
2. It is duly qualified to carry on its business in Maryland.
3. It is empowered under applicable laws and by its charter
and By-Laws to enter into and perform this Agreement.
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
5. It has, and will continue to have, access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
D. Representations and Warrantees of the Fund
The Fund represents and warrants to Price Associates that:
1. It is a corporation or business trust, as the case may be,
duly organized and existing and in good standing under the laws
of Maryland or Massachusetts, as the case may be.
2. It is empowered under applicable laws and by its Articles
of Incorporation or Declaration of Trust, as the case may be, and
By-Laws have been taken to authorize it to enter into and perform
this Agreement.
3. All proceedings required by said Articles of Incorporation
or Declaration of Trust, as the case may be, and By-Laws have
been taken to authorize it to enter into and perform this
Agreement.
E. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures,
and similar items purchased and/or developed and used by Price
Associates in performance of the Agreement shall be the property
of Price Associates and will not become the property of the
Funds.
F. Quality Service Standards
Price Associates and the Fund may, from time to time, agree
to certain quality service standards, with respect to Price
Associates' services hereunder.
G. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1. Price Associates shall not be liable to any Fund for any
act or failure to act by it or its agents or subcontractors on
behalf of the Fund in carrying or attempting to carry out the
terms and provisions of the Agreement provided Price Associates
has acted in good faith and without negligence or willful
misconduct and selected and monitored the performance of its
agents and subcontractors with reasonable care.
2. The Fund shall indemnify and hold Price Associates
harmless from and against all losses, costs, damages, claims,
actions, and expenses, including reasonable expenses for legal
counsel, incurred by Price Associates resulting from: (i) any
action or omission by Price Associates or its agents or
subcontractors in the performance of their duties hereunder; (ii)
Price Associates acting upon instructions believed by it to have
been executed by a duly authorized officer of the Fund; or (iii)
Price Associates acting upon information provided by the Fund in
form and under policies agreed to by Price Associates and the
Fund. Price Associates shall not be entitled to such
indemnification in respect of actions or omissions constituting
negligence or willful misconduct of Price Associates or where
Price Associates has not exercised reasonable care in selecting
or monitoring the performance of its agents or subcontractors.
3. Price Associates shall indemnify and hold harmless the
Fund from all losses, costs, damages, claims, actions and
expenses, including reasonable expenses for legal counsel,
incurred by the Fund resulting from the negligence or willful
misconduct of Price Associates or which result from Price
Associates' failure to exercise reasonable care in selecting or
monitoring the performance of its agents or subcontractors. The
Fund shall not be entitled to such indemnification with respect
to actions or omissions constituting negligence or willful
misconduct of such Fund or its agents or subcontractors; unless
such negligence or misconduct is attributable to Price
Associates.
4. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of
God, strikes or other causes reasonably beyond its control, such
party shall not be liable to the other party for any loss, cost,
damage, claim, action or expense resulting from such failure to
perform or otherwise from such causes.
5. In order that the indemnification provisions contained in
this Article F shall apply, upon the assertion of a claim for
which either party may be required to indemnify the other, the
party seeking indemnification shall promptly notify the other
party of such assertion, and shall keep the other party advised
with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense
of such claim, or to defend against said claim in its own name or
in the name of the other party. The party seeking
indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required
to indemnify it except with the other party's prior written
consent.
6. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this
Agreement.
H. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both the Fund and Price
Associates (including Price Associates' affiliates), and that the
existence of any such dual interest shall not affect the validity
of this Agreement or of any transactions hereunder except as
otherwise provided by a specific provision of applicable law.
I. Documentation
As requested by Price Associates, the Fund shall promptly
furnish to Price Associates such documents as it may reasonably
request and as are necessary for Price Associates to carry out
its responsibilities hereunder.
J. Recordkeeping/Confidentiality
1. Price Associates shall keep records relating to the
services to be performed hereunder, in the form and manner as it
may deem advisable, provided that Price Associates shall keep all
records in such form and in such manner as required by applicable
law, including the
Investment Company Act of 1940 ("the Act") and the Securities
Exchange Act of 1934 ("the '34 Act").
2. Price Associates and the Fund agree that all books,
records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other
person, except: (a) after prior notification to and approval in
writing by the other party hereto, which approval shall not be
unreasonably withheld and may not be withheld where Price
Associates or Fund may be exposed to civil or criminal contempt
proceedings for failure to comply; (b) when requested to divulge
such information by duly constituted governmental authorities; or
(c) after so requested by the other party hereto.
K. Compliance With Governmental Rules and Regulations
Except as otherwise provided in the Agreement and except for
the accuracy of information furnished to the Funds by Price
Associates, each Fund assumes full responsibility for the
preparation, contents and distribution of its prospectuses, and
for complying with all applicable requirements of the Act, the
'34 Act, the Securities Act of 1933 (the "33 Act"), and any laws,
rules and regulations of governmental authorities having
jurisdiction over the Funds.
L. Term and Termination of Agreement
1. This Agreement shall run for a period of one (1) year from
the date first written above and will be renewed from year to
year thereafter unless terminated by either party as provided
hereunder.
2. This Agreement may be terminated by the Fund upon sixty
(60) days' written notice to Price Associates; and by Price
Associates, upon three hundred sixty-five (365) days' writing
notice to the Fund.
3. Upon termination hereof, the Fund shall pay to Price
Associates such compensation as may be due as of the date of such
termination, and shall likewise reimburse for out-of-pocket
expenses related to its services hereunder.
M. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
N. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party, provided this shall not
preclude Price Associates from employing such agents and
subcontractors as it deems appropriate to carry out its
obligations set forth hereunder.
O. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, Price Associates and the Fund may
agree from time to time on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions are to
be signed by all parties and annexed hereto, but no such
provision shall contravene any applicable Federal or state law or
regulation and no such interpretive or additional provision shall
be deemed to be an amendment of this Agreement.
P. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
Q. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
R. Merger of Agreement
This Agreement, including the attached Appendices and
Schedules supersedes any prior agreement with respect to the
subject hereof, whether oral or written.
S. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
T. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
between such individual Fund and Price Associates. In the case
of a series Fund or trust, all references to "the Fund" are to
the individual series or portfolio of such Fund or trust, or to
such Fund or trust on behalf of the individual series or
portfolio, as appropriate. The "Fund" also includes any T. Rowe
Price Funds which may be established after the execution of this
Agreement. Any reference in this Agreement to "the parties"
shall mean Price Associates and such other individual Fund as to
which the matter pertains.
U. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither the
holders of shares in the Fund nor any Directors or Trustees of
the Fund shall be personally liable hereunder.
With respect to any Fund which is a party to this Agreement
and which is organized as a Massachusetts business trust, the
term "Fund" means and refers to the trustees from time to time
serving under the applicable trust agreement (Declaration of
Trust) of such Trust as the same may be amended from time to
time. It is expressly agreed that the obligations of any such
Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the
Trust, personally, but bind only the trust property of the Trust,
as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Agreement has been authorized by
the trustees and signed by an authorized officer of the Trust,
acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed
to have been made by any of them, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
V. Captions
The captions in the Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under
their seals by and through their duly authorized officers.
DATED: 2/22/94 T. ROWE PRICE ASSOCIATES, INC. ATTEST: /s/Barbara A. VanHorn /s/Alvin M. Younger |
_________________________ BY:___________________________ Barbara A. VanHorn Managing Director
PAGE 17
T. ROWE PRICE ADJUSTABLE RATE U.S.
GOVERNMENT FUND, INC.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND
T. ROWE PRICE CALIFORNIA TAX-FREE INCOME
TRUST
California Tax-Free Bond Fund
California Tax-Free Money Fund
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL EQUITY FUND,
INC.
T. ROWE PRICE INTERNATIONAL FUNDS, INC.
T. Rowe Price International Bond Fund
T. Rowe Price International Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price European Stock Fund
T. Rowe Price New Asia Fund
T. Rowe Price Global Government Bond Fund
T. Rowe Price Japan Fund
T. Rowe Price Short-Term Global Fund
T. Rowe Price Latin America Fund
T. ROWE PRICE MID-CAP GROWTH FUND
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
PAGE 18
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND,
INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE STATE TAX-FREE INCOME TRUST
Maryland Tax-Free Bond Fund
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free Fund
Georgia Tax-Free Bond Fund
T. ROWE PRICE TAX-EXEMPT MONEY FUND, INC.
T. ROWE PRICE TAX-FREE HIGH YIELD FUND,
INC.
T. ROWE PRICE TAX-FREE INCOME FUND, INC.
T. ROWE PRICE TAX-FREE SHORT-INTERMEDIATE
FUND, INC.
T. ROWE PRICE TAX-FREE INSURED
INTERMEDIATE BOND FUND, INC.
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
|
T. ROWE PRICE SUMMIT MUNICIPAL FUNDS, INC.
Summit Municipal Money Market Fund
Summit Municipal Intermediate Fund
Summit Municipal Income Fund
DATED: 2/16/94
ATTEST:
/s/Lenora V. Hornung /s/Carmen F. Deyesu _________________________ BY:______________________________ Lenora V. Hornung Carmen F. Deyesu |
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price Adjustable Rate U.S.
Government Fund, Inc.
T. Rowe Price Blue Chip Growth Fund, Inc.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price California Tax-Free Income
Trust on behalf of the
California Tax-Free Bond Fund and
California Tax-Free Money Fund
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Index Trust, Inc. on behalf
of the T. Rowe Price Equity Index Fund
T. Rowe Price Institutional International
Funds, Inc. on behalf of the
Foreign Equity Fund
T. Rowe Price International Equity Fund,
Inc.
T. Rowe Price Mid-Cap Growth Fund
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price OTC Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund,
Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Spectrum Fund, Inc. on
behalf of the
Spectrum Growth Fund
Spectrum Income Fund
T. Rowe Price State Tax-Free Income Trust
on behalf of the
Maryland Tax-Free Bond Fund,
Maryland Short-Term Tax-Free Bond Fund
New York Tax-Free Bond Fund and
New York Tax-Free Money Fund
New Jersey Tax-Free Bond Fund
Virginia Tax-Free Bond Fund
Florida Insured Intermediate Tax-Free
Bond Fund
Georgia Tax-Free Bond Fund
T. Rowe Price Tax-Free Insured
Intermediate Bond Fund, Inc.
T. Rowe Price Tax-Free High Yield Fund,
Inc.
T. Rowe Price Tax-Free Income Fund, Inc.
T. Rowe Price Tax-Free Short-Intermediate
Fund, Inc.
T. Rowe Price U.S. Treasury Funds, Inc.
on behalf of the
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. Rowe Price Summit Funds, Inc. on
behalf of the
Summit Cash Reserves Fund
Summit Limited-Term Bond Fund
Summit GNMA Fund
T. Rowe Price Summit Municipal Funds,
Inc. on behalf of
Summit Municipal Money Market Fund
Summit Municipal Intermediate Fund
Summit Municipal Income Fund
FUND ACCOUNTING SERVICES
1994 FEE SCHEDULE
A. Fee Structure
1. Base Fee
Domestic Funds $60,000 each
International Funds $100,000 each
Spectrum Funds $35,000 each
Per Fund fee for basic recordkeeping
and financial reporting
2. Individual Fund Fee
Total fees reflecting special $ 883,000
characteristics of each Fund
3. Stock Lending Fee
Allocated to each Fund based $ 75,000
on ratio of net earnings from
stock loans
4. Additional Funds
Domestic Funds $60,000 each
International Funds $100,000 each
Spectrum Funds $35,000 each
|
B. Total Cost Per Fund
Growth Stock Fund $ 114,000
New Horizons Fund 95,000
Equity Income Fund 85,000
New Era Fund 72,000
International Stock Fund 115,000
Growth & Income Fund 85,000
New America Growth Fund 70,000
Capital Appreciation Fund 85,000
Small-Cap Value Fund 60,000
Foreign Equity Fund 105,000
International Discovery Fund 125,000
Science & Technology Fund 60,000
High Yield Fund 165,000
Tax-Free Income Fund 110,000
New Income Fund 100,000
Tax-Free High Yield Fund 110,000
European Stock Fund 100,000
Equity Index Fund 60,000
PAGE 24
New Asia Fund 110,000
Spectrum Growth Fund 35,000
GNMA Fund 120,000
International Bond Fund 125,000
Balanced Fund 90,000
Maryland Bond Fund 81,000
Tax-Free Short Intermediate Fund 85,000
Short-Term Bond Fund 120,000
California Bond Fund 72,000
New York Bond Fund 72,000
U.S. Treasury Short-Intermediate Fund 60,000
U.S. Treasury Long-Term Bond Fund 60,000
Spectrum Income Fund 35,000
Prime Reserve Fund 85,000
Tax-Exempt Money Fund 93,000
U.S. Treasury Money Fund 60,000
California Money Fund 67,000
New York Money Fund 67,000
Adjustable Rate Government Fund 110,000
Virginia Bond Fund 60,000
New Jersey Bond Fund 60,000
Global Government Bond Fund 100,000
OTC Fund 85,000
Japan Fund 100,000
Mid-Cap Growth Fund 60,000
Short-Term Global Fund 100,000
Maryland Short-Term Tax-Free Bond Fund 60,000
Florida Insured Intermediate Tax-Free Fund 60,000
Georgia Tax-Free Bond Fund 60,000
Tax-Free Insured Intermediate Bond Fund 60,000
Blue Chip Growth Fund 60,000
Dividend Growth Fund 65,000
Latin America Fund 100,000
Summit Cash Reserve Fund 60,000
Summit Limited-Term Bond Fund 60,000
Summit GNMA Fund 60,000
Summit Municipal Money Market Fund 60,000
Summit Municipal Intermediate Fund 60,000
Summit Municipal Income Fund 60,000
|
IN WITNESS WHEREOF, T. Rowe Price Funds and T. Rowe Price Associates, Inc. have agreed upon this fee schedule to be executed in their names and on their behalf through their duly authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE ASSOCIATES, INC.
/s/Carmen F. Deyesu /s/Alvin M. Younger Name_________________________ Name__________________________ Carmen F. Deyesu Alvin M. Younger |
Title Treasurer Title Treasurer and Managing
Director
Date 2/16/94 Date 2/16/94
|
The Agreement between T. Rowe Price Retirement Plan Services, Inc. and the Taxable Funds, dated January 1, 1994, should be inserted here.
AGREEMENT
between
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC.
and
EACH OF THE PARTIES INDICATED ON APPENDIX A
Page
Article A Terms of Appointment . . . . . . . . . . . . .2
Article B Duties of RPS. . . . . . . . . . . . . . . . .2
1. Purchases - Retirement Plans and
Retirement Accounts . . . . . . . . . . .2
2. Retirement Plans - Redemptions to Cover
Distributions . . . . . . . . . . . . . .3
3. Exchanges. . . . . . . . . . . . . . . . .4
4. Shares held by Retirement Accounts . . . .4
5. Books and Records. . . . . . . . . . . . .4
6. Tax Information. . . . . . . . . . . . . .5
7. Other Information to be furnished
to the Funds. . . . . . . . . . . . . . .6
8. Correspondence . . . . . . . . . . . . . .6
9. Mailings/Confirmation Statements . . . . .6
10. Proxies. . . . . . . . . . . . . . . . . .6
11. Form N-SAR . . . . . . . . . . . . . . . .6
12. Backup Withholding . . . . . . . . . . . .6
Article C Fee and Out-of-Pocket Expenses . . . . . . . .7
1. Postage. . . . . . . . . . . . . . . . . .7
2. Proxies. . . . . . . . . . . . . . . . . .7
3. Communications . . . . . . . . . . . . . .7
4. Record Retention . . . . . . . . . . . . .8
5. Disaster Recovery. . . . . . . . . . . . .8
Article D Representations and Warranties of RPS. . . . .8
|
Article E Representations and Warranties of the Fund . .8
Article F Standard of Care/Indemnification . . . . . . .9
Article G Dual Interests . . . . . . . . . . . . . . . 11
Article H Documentation. . . . . . . . . . . . . . . . 11
Article I Recordkeeping/Confidentiality. . . . . . . . 12
Article J Ownership of Software and Related Material . 13
Article K As of Transactions . . . . . . . . . . . . . 13
1. Reporting. . . . . . . . . . . . . . . . 13
2. Liability. . . . . . . . . . . . . . . . 14
Article L Term and Termination of Agreement. . . . . . 15
Article M Notice . . . . . . . . . . . . . . . . . . . . 16
Article N Assignment . . . . . . . . . . . . . . . . . . 16
Article O Amendment/Interpretive Provisions. . . . . . 16
Article P Further Assurances . . . . . . . . . . . . . 16
Article Q Maryland Law to Apply. . . . . . . . . . . . 16
Article R Merger of Agreement. . . . . . . . . . . . . 17
Article S Counterparts . . . . . . . . . . . . . . . . 17
Article T The Parties. . . . . . . . . . . . . . . . . . 17
Article U Directors, Trustees and Shareholders and Massachusetts Business Trust. . . . . . . . . . . . . . . 17
Article V Captions . . . . . . . . . . . . . . . . . . . 18
AGREEMENT, made as of the first day of January, 1994, by and
between T. ROWE PRICE RETIREMENT PLAN SERVICES, INC., a Maryland
corporation having its principal office and place of business at
100 East Pratt Street, Baltimore, Maryland 21202 ("RPS"), and
EACH FUND WHICH IS LISTED ON APPENDIX A (as such Appendix may be
amended from time to time) and which evidences its agreement to
be bound hereby by executing a copy of this Agreement (each Fund
hereinafter referred to as "the Fund") whose definition may be
found in Article T;
WHEREAS, the Funds are named investment options under various
tax-sheltered plans, including, but not limited to, state
deferred compensation plans, 403(b) plans, and profit sharing,
thrift, and money purchase pension plans for self-employed
individuals, professional partnerships and corporations,
(collectively referred to as "Retirement Plans"); and the Fund
has determined that such investments of Retirement Plans in the
Funds are in the best long-term interest of the Funds;
WHEREAS, RPS has the capability of providing special
services, on behalf of the Fund, for the accounts ("Retirement
Accounts") of shareholders participating in these Retirement
Plans;
WHEREAS, RPS represents that it is registered with the
Securities and Exchange Commission as a Transfer Agent under
Section 17A of the Securities Exchange Act of 1934 ("the '34
Act").
WHEREAS, RPS may subcontract or jointly contract with other
parties on behalf of the Funds to perform certain of the
functions described herein, RPS may also enter into, on behalf of
the Funds, certain banking relationships to perform various
banking services, including, but not limited to, check deposits,
disbursements, automatic clearing house transactions ("ACH") and
wire transfers. Subject to guidelines mutually agreed upon by
the Funds and RPS, excess balances, if any, resulting from these
banking relationships will be invested and the income therefrom
will be used to offset fees which would otherwise be charged to
the Funds under this Agreement.
WHEREAS, the Fund desires to contract with RPS the foregoing
functions and services described herein in connection with the
Retirement Plans and Retirement Accounts;
NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
A. Terms of Appointment
Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints RPS to perform
the services and functions described herein in connection with
certain Retirement Plan and Retirement Accounts as agreed upon by
the parties.
B. Duties of RPS:
RPS agrees that it will perform the following services:
1. Purchases - Retirement Plans and Retirement Accounts
After RPS has received monies from Retirement Plans and
has determined the proper allocation of such monies to the
Retirement Accounts or Retirement Plan participants
("Participants") based upon instructions received from
Participants, Retirement Plans or their designees, or
Retirement Plan Administrator(s) ("Administrator(s)"), RPS
will, as a responsibility under the Agreement:
a. Transmit by check or wire the aggregate money
allocated to each Fund to the Fund's custodian;
b. In the case of a new Participant, establish and
maintain a Retirement Account for such Participant;
and
c. Compute the number of shares of each Fund to which
the Participant is entitled according to the price of
such Fund shares as provided by such Fund for
purchases made at that time and date, and credit each
such Account with the number of shares of the Fund so
purchased.
2. Retirement Plans - Redemptions to Cover Distributions.
After RPS has received instructions from the Administrator
regarding distributions to be made to Participants or their
designated beneficiaries from Funds designated as investment
options under the Retirement Plan, RPS will, as a
responsibility under the Agreement:
a. Compute the amount due for shares to be redeemed from
each Retirement Account or compute the number of
shares to be redeemed from each such Retirement
Account for such distributions and the total number
of all shares of each Fund to be redeemed in
accordance with the price per share at that time and
date of such Fund as calculated and provided by the
Fund. After such computation, inform the Fund of the
amount necessary to be redeemed. Distribute to
Participants or their designated beneficiaries the
amount to be disbursed.
b. After RPS has received instructions from the
Administrator regarding disbursements to be made
regarding the payment of fees due the Administrator,
or other persons including RPS, RPS will, as a
responsibility under this Agreement:
i. Compute the number of shares to be redeemed from
each Retirement Account to pay for such
disbursements and the total number of all shares
to be redeemed in accordance with the price per
share at that time and date, of such Fund as
calculated and provided by the Fund;
ii. Effect the necessary redemption from the Fund's
custodian to cover such disbursements; and
iii. Mail to the Administrator or such other person as
designated by the Administrator the amount to be
disbursed.
c. Other Provisions
i. If any instruction tendered by an Administrator to
redeem shares in a Retirement Account is not
satisfactory to RPS, RPS shall promptly notify the
Administrator of such fact together with the
reason therefor;
ii. The authority of RPS to perform its
responsibilities under Paragraph B(2) with respect
to each Fund shall be suspended upon receipt of
notification by such Fund of the suspension of the
determination of the Fund's net asset value per
share and shall remain suspended until proper
notification; and
iii. The Fund will promptly inform RPS of the
declaration of any dividend or distribution on
account of the capital stock of any Fund so that
RPS may properly credit income and capital gain
payments to each Retirement Account.
3. Exchanges
Effect exchanges of shares of the Funds upon receipt of
appropriate instructions from the Administrator and/or
Participant.
4. Shares held by Retirement Accounts will be
Noncertificate Shares
RPS will have neither responsibility nor authority to
issue stock certificates evidencing ownership of Fund shares
held by Participants. All shares held in Retirement Accounts
maintained by RPS shall be noncertificated shares.
5. Books and Records
RPS shall maintain records showing for each Retirement
Plan or Retirement Account, the following:
a. Names, addresses and tax identification numbers, when
provided;
b. Number of shares held;
c. Historical information regarding the account of each
Participant and/or Retirement Plan, including
dividends and distributions invested in shares;
d. Pertinent information regarding the establishment and
maintenance of Retirement Plans and Retirement
Accounts necessary to properly administer each
account.
e. Any instructions from a Participant or Administrator
including, all forms furnished by the Fund and
executed by a Participant with respect to
(i) elections with respect to payment options in
connection with the redemption of shares; or
distribution elections, if applicable; and
f. Any information required in order for RPS to perform
the calculations contemplated under this Agreement.
Any such records maintained pursuant to Rule 31a-1 under
the Investment Company Act of 1940 ("the Act") will be
preserved for the periods prescribed in Rule 31a-2
thereunder. Disposition of such records after such
prescribed periods shall be as mutually agreed upon from time
to time by RPS and the Funds. The retention of such records,
which may be inspected by the Fund at reasonable times, shall
be at the expense of the Funds. All records maintained by
RPS in connection with the performance of its duties under
this Agreement will remain the property of the Funds and, in
the event of termination of this Agreement, will be delivered
to the Fund as of the date of termination or at such other
time as may be mutually agreed upon.
6. Tax Information
RPS shall also prepare and file with appropriate federal
and state agencies, such information returns and reports as
required by applicable Federal and State statutes relating to
redemptions effected in Retirement Accounts which constitute
reportable distributions. RPS will also prepare and submit
to Participants, such reports containing information as is
required by applicable Federal and State law.
7. Other Information to be furnished to the Funds
RPS will furnish to the Fund, such information, including
shareholder lists and statistical information as may be
agreed upon from time to time between RPS and the Fund.
8. Correspondence
RPS will promptly and fully answer correspondence from
Administrators and in some cases, Participants, relating to
Retirement Accounts, transfer agent procedures, and such
other correspondence as may from time to time be mutually
agreed upon with the Funds. Unless otherwise instructed,
copies of all correspondence will be retained by RPS in
accordance with applicable law.
9. Mailings/Confirmation Statements
RPS will be responsible for mailing all confirmations and
other enclosures and mailings, as requested by the
Administrators and as may be required of the Funds by
applicable Federal or state law.
10. Proxies
RPS shall monitor the mailing of proxy cards and other
material supplied to it by the Fund in connection with
shareholder meetings of the Fund and shall coordinate the
receipt, examination and tabulation of returned proxies and
the certification of the vote to the Fund.
11. Form N-SAR
RPS shall maintain such records, if any, as shall enable
the Fund to fulfill the requirements of Form N-SAR.
12. Withholding
The Fund and RPS shall agree to procedures to be followed
with respect to RPS's responsibilities in connection with
compliance for federal withholding for Participants.
C. Fees and Out-of-Pocket Expenses
Each Fund shall pay to RPS for its services hereunder fees
computed as set forth in the Schedule attached hereto. Except as
provided below, RPS will be responsible for all expenses relating
to the providing of services. Each Fund, however, will reimburse
RPS for the following out-of-pocket expenses and charges incurred
in providing services:
1. Postage. The cost of postage and freight for mailing
materials to Participants, or their agents, including
overnight delivery, UPS and other express mail services
and special courier services required to transport mail
between RPS locations and mail processing vendors.
2. Proxies. The cost to mail proxy cards and other
material supplied to it by the Fund and costs related to
the receipt, examination and tabulation of returned
proxies and the certification of the vote to the Fund.
3. Communications
a. Print. The printed forms used internally and
externally for documentation and processing
Participant, or their agent's, inquiries and
requests; paper and envelope supplies for letters,
notices, and other written communications sent to
Administrators and Participants, or their agents.
b. Print & Mail House. The cost of internal and third
party printing and mail house services, including
printing of statements and reports.
c. Voice and Data. The cost of equipment (including
associated maintenance), supplies and services used
for communicating to and from the Participants, or
their agents, the Fund's transfer agent, other Fund
offices, and other agents of either the Fund or RPS.
These charges shall include:
o telephone toll charges (both incoming and outgoing,
local, long distance and mailgrams); and
o data and telephone lines and associated equipment
such as modems, multiplexers, and facsimile
equipment.
4. Record Retention. The cost of maintenance and supplies
used to maintain, microfilm, copy, record, index,
display, retrieve, and store, in microfiche or microfilm
form, documents and records.
5. Disaster Recovery. The cost of services, equipment,
facilities and other charges necessary to provide
disaster recovery for any and all services listed in
this Agreement.
D. Representations and Warranties of RPS
RPS represents and warrants to the Fund that:
1. It is a corporation duly organized and existing and in
good standing under the laws of Maryland.
2. It is duly qualified to carry on its business in
Maryland.
3. It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
4. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
5. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
6. It is registered with the Securities and Exchange
Commission as a Transfer Agent pursuant to Section 17A of the
'34 Act.
E. Representations and Warranties of the Fund
The Fund represents and warrants to RPS that:
1. It is a corporation or business trust duly organized and
existing and in good standing under the laws of Maryland, or
Massachusetts, as the case may be.
2. It is empowered under applicable laws and by its
Articles of Incorporation or Declaration of Trust, as the
case may be, and By-Laws to enter into and perform this
Agreement.
3. All proceedings required by said Articles of
Incorporation or Declaration of Trust, as the case may be,
and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4. It is an investment company registered under the Act.
5. A registration statement under the Securities Act of
1933 ("the '33 Act") is currently effective and will remain
effective, and appropriate state securities law filing have
been made and will continue to be made, with respect to all
shares of the Fund being offered for sale.
F. Standard of Care/Indemnification
Notwithstanding anything to the contrary in this Agreement:
1. RPS shall not be liable to the Fund for any act or
failure to act by it or its agents or subcontractors on
behalf of the Fund in carrying or attempting to carry out the
terms and provisions of this Agreement provided RPS has acted
in good faith and without negligence or willful misconduct
and selected and monitored the performance of its agents and
subcontractors with reasonable care.
2. The Fund shall indemnify and hold RPS harmless from and
against all losses, costs, damages, claims, actions and
expenses, including reasonable expenses for legal counsel,
incurred by RPS resulting from: (i) any action or omission by
RPS or its agents or subcontractors in the performance of
their duties hereunder; (ii) RPS acting upon instructions
believed by it to have been executed by a duly authorized
officer of the Fund; or (iii) RPS acting upon information
provided by the Fund in form and under policies agreed to by
RPS and the Fund. RPS shall not be entitled to such
indemnification in respect of actions or omissions
constituting negligence or willful misconduct of RPS or where
RPS has not exercised reasonable care in selecting or
monitoring the performance of its agents or subcontractors.
3. Except as provided in Article K of this Agreement, RPS
shall indemnify and hold harmless the Fund from all losses,
costs, damages, claims, actions and expenses, including
reasonable expenses for legal counsel, incurred by the Fund
resulting from negligence or willful misconduct of RPS or
which result from RPS' failure to exercise reasonable care in
selecting or monitoring the performance of its agents or
subcontractors. The Fund shall not be entitled to such
indemnification in respect of actions or omissions
constituting negligence or willful misconduct of such Fund or
its agents or subcontractors; unless such negligence or
misconduct is attributable to RPS.
4. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts
of God, strikes or other causes reasonably beyond its
control, such party shall not be liable to the other party
for any loss, cost, damage, claims, actions or expense
resulting from such failure to perform or otherwise from such
causes.
5. In order that the indemnification provisions contained
in this Article F shall apply, upon the assertion of a claim
for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly
notify the other party of such assertion, and shall keep the
other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party
seeking indemnification in the defense of such claim, or to
defend against said claim in its own name or in the name of
the other party. The party seeking indemnification shall in
no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it
except with the other party's prior written consent.
6. Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of
this Agreement.
G. Dual Interests
It is understood that some person or persons may be
directors, officers, or shareholders of both RPS and the Fund and
that the existence of any such dual interest shall not affect the
validity of this Agreement or of any transactions hereunder
except as otherwise provided by a specific provision of
applicable law.
H. Documentation
1. As requested by RPS, the Fund shall promptly furnish to
RPS the following:
a. A certified copy of the resolution of the
Directors/Trustees of the Fund authorizing the
appointment of RPS and the execution and delivery of
this Agreement;
b. A copy of the Articles of Incorporation or
Declaration of Trust, as the case may be, and By-Laws
of the Fund and all amendments thereto;
c. Specimens of all forms of outstanding and new
stock/share certificates in the forms approved by the
Board of Directors/Trustees of the Fund with a
certificate of the Secretary of the Fund as to such
approval;
d. All account application forms and other documents
relating to shareholders' accounts;
e. An opinion of counsel for the Fund with respect to
the validity of the stock, the number of Shares
authorized, the status of redeemed Shares, and the
number of Shares with respect to which a Registration
Statement has been filed and is in effect; and
f. A copy of the Fund's current prospectus.
The delivery of any such document for the purpose of any
other agreement to which the Fund and RPS are or were parties
shall be deemed to be delivery for the purposes of this
Agreement.
2. As requested by RPS, the Fund will also furnish from
time to time the following documents:
a. Each resolution of the Board of Directors/Trustees of
the Fund authorizing the original issue of its
shares;
b. Each Registration Statement filed with the Securities
and Exchange Commission and amendments and orders
thereto in effect with respect to the sale of shares
with respect to the Fund;
c. A certified copy of each amendment to the Articles of
Incorporation or Declaration of Trust, and the
By-Laws of the Fund;
d. Certified copies of each vote of the Board of
Directors/Trustees authorizing officers to give
instructions to the Fund;
e. Specimens of all new certificates accompanied by the
Board of Directors/Trustees' resolutions approving
such forms;
f. Such other documents or opinions which RPS, in its
discretion, may reasonably deem necessary or
appropriate in the proper performance of its duties;
and
g. Copies of new prospectuses issued.
3. RPS hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for
safekeeping of check forms and facsimile signature imprinting
devices, if any, and for the preparation or use, and for
keeping account of, such forms and devices.
I. Recordkeeping/Confidentiality
1. RPS shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem
advisable, provided that RPS shall keep all records in such
form and in such manner as required by applicable law,
including the Act and the '34 Act.
2. RPS and the Fund agree that all books, records,
information and data pertaining to the business of the other
party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed
to any other person, except: (a) after prior notification to
and approval in writing by the other party hereto, which
approval shall not be unreasonably withheld and may not be
withheld where RPS or the Fund may be exposed to civil or
criminal contempt proceedings for failure to comply; (b) when
requested to divulge such information by duly constituted
governmental authorities; or (c) after so requested by the
other party hereto.
J. Ownership of Software and Related Material
All computer programs, magnetic tapes, written procedures and
similar items purchased and/or developed and used by RPS in
performance of the Agreement shall be the property of RPS and
will not become the property of the Fund.
K. As Of Transactions
For purposes of this Article K, the term "Transaction" shall
mean any single or "related transaction" (as defined below)
involving the purchase or redemption of shares (including
exchanges) that are processed at a time other than the time of
the computation of the Fund's net asset value per share next
computed after receipt of any such transaction order by RPS. If
more than one Transaction ("Related Transaction") in the Fund is
caused by or occurs as a result of the same act or omission, such
transactions shall be aggregated with other transactions in the
Fund and be considered as one Transaction.
1. Reporting
RPS shall:
a. Utilize a system to identify all Transactions, and
shall compute the net effect of such Transactions
upon the Fund on a daily, monthly and rolling 365 day
basis. The Monthly and rolling 365 day periods are
hereinafter referred to as ("Cumulative").
b. Supply to the Fund, from time to time as mutually
agreed upon, a report summarizing the Transactions
and the daily and Cumulative net effects of such
Transactions both in terms of aggregate dilution and
loss ("Dilution") or gain and negative dilution
("Gain") experienced by the Fund, and the impact such
Gain or Dilution has had upon the Fund's net asset
value per share.
c. With respect to any Transaction which causes Dilution
to the Fund of $25,000 or more, immediately provide
the Fund: (i) a report identifying the Transaction
and the Dilution resulting therefrom, (ii) the reason
such Transaction was processed as described above,
and (iii) the action that RPS has or intends to take
to prevent the reoccurrence of such as of processing
("Report").
2. Liability
a. It will be the normal practice of the Fund not to
hold RPS liable with respect to any Transaction which
causes Dilution to any single Fund of less than
$25,000. RPS will, however, closely monitor for each
Fund the daily and Cumulative Gain/Dilution which is
caused by Transactions of less than $25,000. When
the Cumulative Dilution to any Fund exceeds 3/10 of
1% per share, RPS, in consultation with counsel to
the Fund, will make appropriate inquiry to determine
whether it should take any remedial action. RPS will
report to the Board of Directors/Trustees of the Fund
("Board"), as appropriate, any action it has taken.
b. Where a Transaction causes Dilution to a Fund of
$25,000 or more ("Significant Transaction"), RPS will
review with counsel to the Fund, the Report and the
circumstances surrounding the underlying Transaction
to determine whether the Transaction was caused by or
occurred as a result of a negligent act or omission
by RPS. If it is determined that the Dilution is the
result of a negligent action or omission by RPS, RPS
and outside counsel for the Fund, as appropriate,
will negotiate settlement. All such Significant
Transactions will be reported to the Board at its
next meeting (unless the settlement fully compensates
the Fund for any Dilution). Any Significant
Transaction, however, causing Dilution in excess of
the lesser of $100,000 or a penny per share will be
promptly reported to the Board. Settlement will not
be entered into with RPS until approved by the Board.
The factors the Board or the Funds would be expected
to consider in making any determination regarding the
settlement of a Significant Transaction would include
but not be limited to:
i. Procedures and controls adopted by RPS to prevent
As Of processing;
ii. Whether such procedures and controls were being
followed at the time of the Significant
Transaction;
iii. The absolute and relative volume of all
transactions processed by RPS on the day of the
Significant Transaction;
iv. The number of Transactions processed by RPS during
prior relevant periods, and the net Dilution/Gain
as a result of all such transactions to the Fund
and to all other Price Funds; and
v. The prior response of RPS to recommendations made
by the Funds regarding improvement to the Transfer
Agent's As Of Processing Procedures.
L. Term and Termination of Agreement
1. This Agreement shall run for a period of one (1) year
from the date first written above and will be renewed from
year to year thereafter unless terminated by either party as
provided hereunder.
2. This Agreement may be terminated by the Funds upon one
hundred twenty (120) days' written notice to RPS; and by RPS,
upon three hundred sixty-five (365) days' writing notice to
the Fund.
3. Upon termination hereof, the Fund shall pay to RPS such
compensation as may be due as of the date of such
termination, and shall likewise reimburse for out-of-pocket
expenses related to its services hereunder.
M. Notice
Any notice as required by this Agreement shall be
sufficiently given (i) when sent to an authorized person of the
other party at the address of such party set forth above or at
such other address as such party may from time to time specify in
writing to the other party; or (ii) as otherwise agreed upon by
appropriate officers of the parties hereto.
N. Assignment
Neither this Agreement nor any rights or obligations
hereunder may be assigned either voluntarily or involuntarily, by
operation of law or otherwise, by either party without the prior
written consent of the other party
O. Amendment/Interpretive Provisions
The parties by mutual written agreement may amend this
Agreement at any time. In addition, in connection with the
operation of this Agreement, RPS and the Fund may agree from time
to time on such provisions interpretive of or in addition to the
provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions are to be signed by all
parties and annexed hereto, but no such provision shall
contravene any applicable federal or state law or regulation and
no such interpretive or additional provision shall be deemed to
be an amendment of this Agreement.
P. Further Assurances
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof.
Q. Maryland Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of Maryland.
R. Merger of Agreement
This Agreement, including the attached Schedule supersede any
prior agreement with respect to the subject hereof, whether oral
or written.
S. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instruments.
T. The Parties
All references herein to "the Fund" are to each of the Funds
listed on Appendix A individually, as if this Agreement were
between such individual Fund and RPS. In the case of a series
Fund or trust, all references to "the Fund" are to the individual
series or portfolio of such fund or trust, or to such Fund or
trust on behalf of the individual series or portfolio, as
appropriate. Any reference in this Agreement to "the parties"
shall mean RPS and such other individual Fund as to which the
matter pertains. The "Fund" also includes any T. Rowe Price Fund
which may be established after the date of this Agreement.
Any reference in this Agreement to "the parties" shall mean
the Funds and RPS.
U. Directors, Trustees and Shareholders and Massachusetts
Business Trust
It is understood and is expressly stipulated that neither the
holders of shares in the Fund nor any Directors or Trustees of
the Fund shall be personally liable hereunder. With respect to
any Fund which is a party to this Agreement and which is
organized as a Massachusetts business trust, the term "Fund"
means and refers to the trustees from time to time serving under
the applicable trust agreement (Declaration of Trust) of such
Trust as the same may be amended from time to time. It is
expressly agreed that the obligations of any such Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of
this Agreement has been authorized by the trustees and signed by
an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
V. Captions
The captions in the Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under
their seals by and through their duly authorized officers.
T. ROWE PRICE RETIREMENT PLAN DATED:2/18/94
SERVICES, INC.
ATTEST:
/s/Steve J. Zients
|
By: ________________________ ________________________ Steve J. Zients
T. ROWE PRICE ADJUSTABLE RATE U.S
GOVERNMENT FUND, INC.
T. ROWE PRICE BALANCED FUND, INC.
T. ROWE PRICE BLUE CHIP GROWTH FUND,
INC.
T. ROWE PRICE CAPITAL APPRECIATION FUND
T. ROWE PRICE DIVIDEND GROWTH FUND, INC.
T. ROWE PRICE EQUITY INCOME FUND
T. ROWE PRICE GNMA FUND
T. ROWE PRICE GROWTH & INCOME FUND, INC.
T. ROWE PRICE GROWTH STOCK FUND, INC.
T. ROWE PRICE HIGH YIELD FUND, INC.
T. ROWE PRICE INDEX TRUST, INC.
T. Rowe Price Equity Index Fund
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
Foreign Equity Fund
T. ROWE PRICE INTERNATIONAL EQUITY FUND,
INC.
T. ROWE PRICE MID-CAP GROWTH FUND, INC.
T. ROWE PRICE OTC FUND, INC.
T. ROWE PRICE NEW AMERICA GROWTH FUND
T. ROWE PRICE NEW ERA FUND, INC.
T. ROWE PRICE NEW HORIZONS FUNDS, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
T. ROWE PRICE PRIME RESERVE FUND, INC.
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND,
INC.
T. ROWE PRICE SHORT-TERM BOND FUND, INC.
T. ROWE PRICE SMALL-CAP VALUE FUND, INC.
T. ROWE PRICE SPECTRUM FUND, INC.
Spectrum Growth Fund
Spectrum Income Fund
T. ROWE PRICE U.S. TREASURY FUNDS, INC.
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
T. ROWE PRICE SUMMIT FUNDS, INC.
Summit Cash Reserves Fund
Summit Limited-Term Bond Fund
Summit GNMA Fund
DATED: 2/16/94
ATTEST:
/s/Carmen F. Deyesu
_________________________BY:_____________________________
/s/Carmen F. Deyesu
|
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by
executing the Agreement on the dates indicated thereon.
T. Rowe Price Adjustable Rate U.S.
Government Fund, Inc.
T. Rowe Price Balanced Fund, Inc.
T. Rowe Price Blue Chip Growth Fund,
Inc.
T. Rowe Price Capital Appreciation Fund
T. Rowe Price Dividend Growth Fund, Inc.
T. Rowe Price Equity Income Fund
T. Rowe Price GNMA Fund
T. Rowe Price Growth & Income Fund, Inc.
T. Rowe Price Growth Stock Fund, Inc.
T. Rowe Price High Yield Fund, Inc.
T. Rowe Price Index Trust, Inc. on
behalf of the T. Rowe Price Equity Index
Fund
T. Rowe Price Institutional
International Funds, Inc. on behalf of
the
Foreign Equity Fund
T. Rowe Price International Equity Fund,
Inc.
T. Rowe Price New America Growth Fund
T. Rowe Price New Era Fund, Inc.
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Income Fund, Inc.
T. Rowe Price OTC Fund, Inc.
T. Rowe Price Prime Reserve Fund, Inc.
T. Rowe Price Science & Technology Fund,
Inc.
T. Rowe Price Short-Term Bond Fund, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
T. Rowe Price Spectrum Fund, Inc. on
behalf of the
Spectrum Growth Fund
Spectrum Income Fund
T. Rowe Price U.S. Treasury Funds, Inc.
on behalf of the
U.S. Treasury Intermediate Fund
U.S. Treasury Long-Term Fund
U.S. Treasury Money Fund
FEE SCHEDULE
Fees for transfer agent services performed for retirement plan accounts serviced by T. Rowe Price Retirement Plan Services, Inc. ("RPS").
Effective January 1, 1994 to December 31, 1994.
A. Base Fee
A monthly base fee of $500,000 ($6,000,000 per year) allocated pro rata by account.
B. Per Participant Fee
A monthly per participant fee of $3.752 for each active (non- zero balance) participant being serviced at the end of the month. This fee will be allocated among the Funds based on the relative number of non-zero accounts open at the end of the month.
C. Per Transaction Fee
A fee for each Account transaction will be charged at the rate of $.15 per transaction, except for dividend transactions.
D. Institutional Support Group (ISG) Telephone Call
A fee of $5.24 per ISG telephone call will be charged to the Fund(s) involved in the telephone call.
E. New Participant Fee
A one-time new participant fee of $3.31 will be charged each time a participant is added to the records.
F. Perks Fee
Fees for selected PERKS plans will be $10 per account, maximum $40 per participant, capped at 25 basis points.
G. Billing Procedures
RPS will render to each two monthly invoices (one for PAS and one for PERKS) each of which shall state: the number of participants in existence at month-end and the Fund's pro rata share, the assets by Fund at month-end, the number of transactions recorded during the month for each Fund, the number of new participants added during the month and the fund's pro rata share; the out-of-pocket expenses for which RPS is entitled to reimbursement under the Agreement, and the Fund's pro rata share; and the total compensation due for the month.
H. New Funds
Funds added during the term of this Agreement may have their Maintenance and Transaction charges waived for a period of time agreed upon between RPS and the Funds following the establishment of the Fund. Out-of-pocket expenses will be billed to the Fund from the Fund's inception.
IN WITNESS WHEREOF, T. Rowe Price Funds and T. Rowe Price Retirement Plan Services, Inc. have agreed upon this fee schedule to be executed in their names and on their behalf through their duly authorized officers:
T. ROWE PRICE FUNDS T. ROWE PRICE RETIREMENT PLAN
SERVICES, INC.
Name /s/Carmen F. Deyesu Name /s/Steve J. Zients
Title Treasurer Title Vice President
Date 2/16/94 Date 2/17/94
|
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and Statement of Additional Information constituting parts of this Post-Effective Amendment No. 59 to the Registration Statement on Form N-1A (the "Registration Statement") of our report dated January 19, 1994, relating to the financial statements and selected per share data and ratios appearing in the December 31, 1993 Annual Report to Shareholders of the T. Rowe Price New Era Fund, Inc., which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the heading "Financial Highlights" in the Prospectus and under the heading "Independent Accountants" in the Statement of Additional Information.
/s/Price Waterhouse PRICE WATERHOUSE Baltimore, Maryland February 25, 1994 |
TOTAL RETURN PERFORMANCE
The total return performance of the Fund is measured by using an index of adjusted net asset values that reflect both the assumed investment of one share on the inception date of the Fund and the inclusion of shares received from the reinvestment of all Fund distributions, capital gains and income dividends, during the Fund's history.
As an example, the following index assumes an investment of one share of the T. Rowe Price New Era Fund on January 20, 1969, its inception. Each year, the dividends and capital gains per share were accumulated on the shares held and were reinvested in additional fund shares at the Fund's actual reinvestment price. Each year end, the investment was evaluated at the reported net asset value of the Fund. These valuation points comprise the performance index.
Distributions
Per Share ReinvestmentCumulativeReportedIndex
(Div. & Cap.Share Price Share N.A.V. Total Valuation
Gains) HoldingPer Share HoldingPer Share Value Date
1.00000000 X $10.00 = $10.00000
1/20/69
1.00000000 X 9.73 = 9.73000
12/31/69
1970 ($0.16 X 1.00000000) / $ 9.35 = 0.01711230
1.01711230 X
9.49= 9.65240 12/31/70
1971 ( 0.16 X 1.01711230) / 9.95 = 0.01635557
1.03346787 X
10.33= 10.67572 12/31/71
|
1972 ( 0.16 X 1.03346787) / 10.54 = 0.01568832 1.04915619 X 12.27= 12.87315 12/31/72
1973 (0.243 X 1.04915619) / 11.84 = 0.02153251 1.07068870 X 11.79= 12.62342 12/31/73
1974 (0.2884 X 1.07068870) / 11.43 = 0.02701545 1.09770416 X
8.47= 9.29755 12/31/74
1975 (0.2855 X 1.09770416) / 8.48 = 0.03605690
1.13466106 X
9.94= 11.27853 12/31/75
|
1976 (0.2785 X 1.13466106) / 10.09 = 0.03131844 1.16597951 X 11.74= 13.68860 12/31/76
1977 (0.2745 X 1.16597951) / 11.20 = 0.02857691 1.19455641 X 11.00= 13.14012 12/31/77
1978 (0.57 X 1.19455641) / 10.13 = 0.06721591 1.26177232 X 11.66= 14.71227 12/31/78
1979 (0.768 X 1.26177232) / 11.18 = 0.08667631 1.34844863 X 17.45= 23.53043 12/31/79
1980 (0.8314 X 1.34844863) / 16.71 = 0.06709157 1.41554021 X 25.27= 35.77070 12/31/80
Distributions
Per Share ReinvestmentCumulativeReportedIndex
(Div. & Cap.Share Price Share N.A.V. Total Valuation
Gains) HoldingPer Share HoldingPer Share Value Date
1981 ($2.1612 X 1.41554021)/$21.64 = 0.14137086
1.55691107 X
19.34 = 30.11066 12/31/81
1982 ( 3.9073 X 1.55691107)/ 14.15 = 0.42991651
1.98682758 X
15.53 = 30.85543 12/31/82
1983 ( 0.882 X 1.98682758) / 15.56 = 0.11262095 2.09944853 X
18.44 = 38.71383 12/31/83
1984 ( 1.90 X 2.09944853) / 16.89 = 0.23617242
2.33562095 X
17.13 = 40.00919 12/31/84
1985 ( 2.09 X 2.33562095) / 15.79 = 0.30914805
2.64476900 X
18.67 = 49.37784 12/31/85
|
1986 ( 1.35 X 2.64476900) / 17.74 = 0.20126483 2.84603383
1986 ( 2.40 X 2.84603383) / 18.03 = 0.37883978
3.22487361 X
17.76 = 57.27376 12/31/86
1987 ( 0.92 X 3.22487361) / 19.09 = 0.15541560 3.38028921
1987 ( 1.83 X 3.38028921) / 17.55 = 0.35247460
3.73276381 X
18.08 = 67.48837 12/31/87
Performance for any investment period is calculated as the percentage difference between a beginning index value and an ending index value. The ten-year performance from 12/31/77 to 12/31/87 for the New Era Fund would be calculated as:
67.48837 - 1 X 100 = 413.61% 13.14012
The five-year performance from 12/31/82 to 12/31/87 would be calculated as:
67.48837 - 1 X 100 = 118.72% 30.85543
The one-year performance from 12/31/86 to 12/31/87 would be calculated as:
67.48837 - 1 X 100 = 17.83%
57.27376